,,ii #aafth ,,congress #b;d ,session ,s4 #ddci ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,august #e1 #bjbj,ms4 ,smith 7for herself1 ,mr4 ,merkley1 ,ms4 ,baldwin1 ,mrs4 ,gillibrand1 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 require any ,,covid-#ai drug developed in whole or in part with ,federal support to be affordable and accessible by prohibiting monopolies and price gouging1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,make ,medications ,affordable by ,preventing ,pandemic ,price-gouging ,act of #bjbj or the ,,mmappp ,act of #bjbj4 #b4 ,requirements for licensing of new ,,covid-#ai treatment and prevention technologies to meet domestic and global demand 7a7 ,nonexclusive license required ,any covered license granted by the ,federal ,government shall be an open1 nonexclusive license4 7b7 ,contractor1 assignee1 exclusive licensee ,notwithstanding any other provision of law1 any contractor1 assignee1 or exclusive licensee to an invention developed in whole or in part in work performed under a covered transaction shall grant an open1 non-exclusive license4 ,if any such contractor1 assignee1 or exclusive licensee refuses to grant such license1 the ,federal ,government shall grant the license4 7c7 ,reasonable royalty 7#a7 ,in general ,except as provided in paragraph 7#d71 an entity that accepts an open1 nonexclusive license under this section shall pay a reasonable royalty with respect to sales within the ,united ,states to-- 7,a7 the holder of a patent that claims the ,,covid-#ai related invention2 or 7,b7 the holder of an application approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7 or section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7 for which any ,,fda-granted exclusivity with respect to a drug related to such invention that was terminated under this section4 7#b7 ,royalty ,the reasonable royalty described under paragraph 7#a7 shall be a percentage of sales of the entity paying the royalty1 where the percentage rate is no higher than the average royalty rate estimated from the data provided by the ,internal ,revenue ,service for pharmaceutical manufacturer ,federal income tax returns4 7#c7 ,requirements 7,a7 ,in general ,the royalty described under paragraph 7#b7 shall be subject to the applicable royalty rate requirements of section #cai;,b of the ,public ,health ,service ,act1 as added by section #e of this ,act4 7,b7 ,multiple affected parties ,in the case of more than one recipient of a royalty1 the royalty shall be divided among each such recipient 7including any manufacturer7 in a manner agreed upon by the manufacturer and other recipients1 or1 in the absence of such an agreement1 in a manner the ,secretary determines to be appropriate4 7#d7 ,exception for ,government-owned inventions ,an entity that accepts an open1 nonexclusive license for a federally owned invention described under section #bjg of title #ce1 ,united ,states ,code1 is not required to pay a royalty under this section4 7d7 ,definitions ,in this section3 7#a7 ,covered license ,the term covered license means a license that allows a licensee to make1 use1 offer to sell1 or sell1 export1 or import into the ,united ,states or any other country or territory a ,,covid-#ai related invention pursuant to-- 7,a7 section #bjg of title #ce1 ,united ,states ,code2 and 7,b7 section #ab of the ,stevenson-,wydler ,technology ,innovation ,act of #aihj 7#ae ,u4,s4,c4 #cgaj;a74 7#b7 ,covered transaction ,the term covered transaction means any contract1 funding agreement1 license1 other transaction1 or other arrangement entered into between a party and the ,federal ,government on or after the date of enactment of this ,act with respect to research and development regarding a drug that-- 7,a7 is intended or anticipated to be used to diagnose1 mitigate1 prevent1 or treat ,,covid-#ai2 and 7,b7 consists of-- 7i7 a licensing agreement pursuant to section #bjg of title #ce1 ,united ,states ,code2 7ii7 a cooperative research and development agreement and licensing agreement pursuant to section #ab of the ,stevenson-,wydler ,technology ,innovation ,act of #aihj 7#ae ,u4,s4,c4 #cgaj;a72 7iii7 a funding agreement1 as defined under section #bja of title #ce1 ,united ,states ,code2 or 7iv7 any other transaction entered into pursuant to-- 7,i7 section #cai,l1 #dba1 or #dhj of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bdg;d-#g;e1 #bhe;b-#c1 #bhg;a72 7,,ii7 section #aje of the ,national ,institutes of ,health ,reform ,act of #bjjf 7#db ,u4,s4,c4 #bhdn72 or 7,,iii7 section #bcga of title #aj1 ,united ,states ,code4 7#c7 ,,covid-#ai related invention ,the term ,,covid-#ai related invention means any invention that claims a drug that is manufactured1 used1 designed1 developed1 modified1 licensed1 or procured to diagnose1 mitigate1 prevent1 treat1 or cure ,,covid-#ai2 a use of such drug2 a form of such drug2 a method of use of such drug2 or a method of manufacturing such drug4 7#d7 ,,fda-granted exclusivity ,the term ,,fda-granted exclusivity means prohibitions on the submission or approval of drug applications granted under any of the following3 7,a7 ,clauses 7ii7 through 7v7 of section #eje7;c77#c77;,e7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;c77#c77;,e774 7,b7 ,subsection 7j77#e77;,b77iv7 or clause 7ii71 7iii71 or 7iv7 of subsection 7j77#e77;,f7 of such ,act 7#ba ,u4,s4,c4 #cee7;c77#c77;,e774 7,c7 ,section #eje;,a of such ,act 7#ba ,u4,s4,c4 #cee;a74 7,d7 ,section #eje;,e of such ,act 7#ba ,u4,s4,c4 #cee;f74 7,e7 ,section #ebg of such ,act 7#ba ,u4,s4,c4 #cfj;cc74 7,f7 ,section #cea7k77#g7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7k77#g774 7,g7 ,any other provision of law that provides for marketing or data exclusivity 7or extension of exclusivity7 with respect to a drug4 7#e7 ,open1 nonexclusive license ,the term open1 nonexclusive license means a license that allows a qualified licensee1 subject to the provisions of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cja et seq47 and the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bja et seq47-- 7,a7 to make1 use1 offer to sell1 sell1 export1 or import into the ,united ,states and any other country and territory an invention2 7,b7 to reference or rely upon earlier-submitted regulatory test data or the earlier grant of marketing approval of a treatment or vaccine related to such invention2 and 7,c7 to access and use otherwise confidential know-how relating to the manufacture of such invention4 #c4 ,requirements for reasonable pricing of federally supported ,,covid-#ai drugs 7a7 ,reasonable pricing requirements ,any covered transaction shall include terms and conditions requiring that the pricing of the drug by the party referred to in section #b7;d77#b7 be fair and reasonable1 and facilitate global access1 taking into consideration-- 7#a7 the impact of the price on access to the drug in the ,united ,states1 taking into consideration racial disparities in ,,covid-#ai cases and fatalities and other socioeconomic disparities2 7#b7 the impact of the price on health program spending and budgets in the ,united ,states2 7#c7 the risk adjusted value of ,federal subsidies and investments related to the drug2 7#d7 the costs associated with development and manufacturing of the drug2 7#e7 the size of the affected patient population in the ,united ,states and globally2 and 7#f7 the therapeutic efficacy of the drug4 7b7 ,definitions ,in this section3 7#a7 ,covered transaction ,the term covered transaction has the meaning given to such term in section #b4 7#b7 ,drug ,the term drug has the meaning given to such term in section #bja of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cba74 #d4 ,reporting on the expenditures of manufacturers with respect to ,,covid-#ai drugs 7a7 ,covered drug ,for purposes of this section1 the term covered drug means a drug that is intended or anticipated to be used to diagnose1 mitigate1 prevent1 or treat ,,covid-#ai4 7b7 ,reporting required ,the manufacturer of a covered drug shall submit a report described in subsection 7c7 to the ,secretary upon-- 7#a7 the submission of an application for approval of the drug under subsection 7b7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee72 7#b7 investigational use of the drug under section #eje7;i7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;i77 or section #cea7;a77#c7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7;a77#c772 7#c7 the submission of an application for licensing the drug under subsection 7a7 or 7k7 of section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb72 7#d7 the issuance of an authorization for emergency use of the drug under section #efd of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cfj;bbb-#c72 or 7#e7 the marketing of the drug4 7c7 ,contents ,a report under subsection 7a71 consistent with the standard for disclosures described in section #bac4c7;d7 of title #ab1 ,code of ,federal ,regulations 7as in effect on the date of enactment of this ,act71 shall address the expenditures of the manufacturer with respect to the covered drug and include1 at a minimum-- 7#a7 the sponsor or sponsors of the covered drug2 7#b7 the current wholesale acquisition cost of the covered drug when applicable2 7#c7 the total expenditures of the manufacturer1 specified by individual costs1 on-- 7,a7 materials and manufacturing for the covered drug2 and 7,b7 acquiring patents and licensing for the covered drug2 7#d7 the total amount and percentage of research and development expenditures for the covered drug that was derived from ,federal funds2 7#e7 the total amount of any ,federal benefits received by the manufacturer with respect to the covered drug1 including-- 7,a7 the specific amounts and periods of impact for each such benefit2 7,b7 the specific value of any tax credits1 including benefits from patient assistance programs and donated samples2 7,c7 clinical and preclinical investments2 7,d7 any ,federal benefit toward manufacturing costs1 including building or retrofitting facilities2 7,e7 ,federal grants1 including from the ,national ,institutes of ,health1 the ,centers for ,disease ,control and ,prevention1 the ,department of ,defense1 the ,department of ,energy1 or other ,federal departments or agencies2 7,f7 patent applications that benefitted from such grants2 7,g7 patent extensions2 7,h7 exclusivity periods2 and 7,i7 waivers of fees2 7#f7 the total expenditures of the manufacturer on research and development1 itemized by basic and preclinical research and by clinical research1 reported separately for each clinical trial1 for the covered drug to demonstrate that the covered drug meets applicable statutory standards for approval under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee71 licensure under section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb71 an exemption for investigational use under section #eje7;i7 of the ,federal ,food1 ,drug1 or ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;i77 or section #cea7;a77#c7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7;a77#c771 or authorization under section #efd of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cfj;bbb-#c71 as applicable2 7#g7 the total expenditures of the manufacturer on pursuing new or expanded indications or dosage changes for the covered drug under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7 or section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb72 7#h7 the total expenditures of the manufacturer on carrying out postmarket requirements related to such drug1 including under section #eje7o77#c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7o77#c772 7#i7 the specific expenditures associated with marketing and advertising costs for the covered drug2 7#aj7 any anticipated royalty fees from licensing to other manufacturers2 and 7#aa7 with respect to the manufacturer-- 7,a7 all stock-based performance metrics used by the manufacturer to determine executive compensation over the preceding #ab months2 and 7,b7 any additional information the manufacturer chooses to provide related to drug pricing decisions4 7d7 ,civil monetary penalties 7#a7 ,failure to submit ,any manufacturer of a covered drug that fails to submit a report as required by this section1 following notification by the ,secretary to the manufacturer that the manufacturer is not in compliance with this section1 shall be subject to a civil monetary penalty of #ajj1jjj for each day on which the violation continues4 7#b7 ,false information ,any manufacturer of a covered drug that knowingly provides false information in a report under this section is subject to a civil monetary penalty in an amount not to exceed #ajj1jjj for each item of false information4 7e7 ,public posting 7#a7 ,in general ,subject to paragraph 7#c71 the ,secretary shall post each report submitted under subsection 7b7 on the public website of the ,department of ,health and ,human ,services no later than #cj days after the submission of the report4 7#b7 ,format ,the ,secretary shall ensure that such reports are-- 7,a7 user-friendly to the public2 and 7,b7 written in plain language that consumers can readily understand4 7#c7 ,protected information ,nothing in this section shall be construed to authorize the public disclosure of information submitted by a manufacturer that is prohibited from disclosure by any applicable law concerning the protection of trade secrets1 commercial information1 and other information4 7f7 ,definition ,in this section1 the term drug has the meaning given to such term in section #bja of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cba74 #e4 ,pricing requirements for existing treatments and vaccines in a public health emergency ,title ,,iii of the ,public ,health ,service ,act is amended by inserting after section #cai;,a 7#db ,u4,s4,c4 #bdg;d-#a7 the following new section3 #cai;,b4 ,pricing requirements for treatments and vaccines in a public health emergency 7a7 ,definitions ,for purposes of this section3 7#a7 ,the term covered drug means a drug 7including any vaccine7 used to diagnose1 mitigate1 prevent1 or treat a disease or disorder with respect to which there is or was in effect a declaration of a public health emergency under section #cai4 7#b7 ,the term covered period means the period ending if and when the circumstances which led to an applicable public health emergency cease to exist and are unlikely to recur4 7#c7 ,the term ,,fda-granted exclusivity means prohibitions on the submission or approval of drug applications granted under any of the following3 7,a7 ,clauses 7ii7 through 7v7 of section #eje7;c77#c77;,e7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 7,b7 ,subsection 7j77#e77;,b77iv7 or clause 7ii71 7iii71 or 7iv7 of subsection 7j77#e77;,f7 of such ,act4 7,c7 ,section #eje;,a of such ,act4 7,d7 ,section #eje;,e of such ,act4 7,e7 ,section #ebg of such ,act4 7,f7 ,section #cea7k77#g7 of this ,act4 7,g7 ,any other provision of law that provides for marketing or data exclusivity 7or extension of exclusivity7 with respect to a drug4 7#d7 ,the term wholesale acquisition cost has the meaning given that term in section #ahdg;,a7c77#f77;,b7 of the ,social ,security ,act4 7b7 ,determination of excessive price ,during any covered period with respect to a covered drug1 the ,secretary shall determine that the price of a covered drug is excessive if the wholesale acquisition cost 7or a more relevant measure of price7 of the covered drug is not fair and reasonable1 or does not facilitate global access1 taking into consideration-- 7#a7 the impact of the price on access to the covered drug in the ,united ,states1 taking into consideration racial disparities and other socioeconomic disparities2 7#b7 the impact of the price on health program spending and budgets in the ,united ,states2 7#c7 the risk adjusted value of ,federal subsidies and investments related to the covered drug2 7#d7 the costs associated with development and manufacturing of the covered drug2 7#e7 the size of the affected patient population in the ,united ,states and globally2 and 7#f7 the therapeutic efficacy of the covered drug4 7c7 ,excessive pricing remedy ,if the ,secretary determines pursuant to subsection 7b7 that the price of a covered drug is excessive1 the ,secretary-- 7#a7 shall waive or void any ,,fda-granted exclusivities with respect to the covered drug1 effective on the date that the excessive price determination is made2 and 7#b7 shall grant open1 nonexclusive licenses allowing any person to make1 use1 offer to sell1 or sell1 or import into the ,united ,states such drug1 and to rely upon the regulatory test data of such drug1 and to access and use otherwise confidential information1 including know-how1 related to the manufacture of such drug in accordance with subsection 7d74 7d7 ,reasonable royalty 7#a7 ,in general ,an entity accepting an open1 nonexclusive license under subsection 7c77#b7 shall pay a reasonable royalty with respect to sales within the ,united ,states to the holder of a patent that claims the covered drug or that claims a use of the covered drug or to the holder of an application approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or section #cea of the ,public ,health ,service ,act for which any ,,fda-granted exclusivity with respect to the covered drug was terminated under subsection 7c77#a74 7#b7 ,royalty rate ,such royalty rate shall be-- 7,a7 a percentage of sales1 where the percentage rate is no higher than the average royalty rate estimated from the data provided by the ,internal ,revenue ,service for pharmaceutical manufacturer ,federal income tax returns2 or 7,b7 an amount as determined by the ,secretary1 taking into account-- 7i7 the therapeutic efficacy of the covered drug2 7ii7 the size of the affected patient population in the ,united ,states and globally2 7iii7 the risk adjusted value of ,federal subsidies and investments related to the covered drug2 7iv7 the extent to which the manufacturer of the covered drug has recovered risk adjusted investments related to the covered drug1 including the investments related to the invention1 regulatory test data1 and any other relevant research and development costs2 and 7v7 any other information the ,secretary determines appropriate4 7#c7 ,sales within other countries ,an entity accepting an open1 nonexclusive license under subsection 7c77#b7 shall pay a reasonable royalty with respect to sales within other countries based on the royalty rate paid in the ,united ,states times the ratio between that country's gross domestic product per capita divided by the ,united ,states gross domestic product per capita in the last year such data was available for both countries1 but such royalty shall be due only if there are granted patents or data exclusivity rights in that country at the time of sale4 7e7 ,requirements 7#a7 ,in general ,a royalty rate under subsection 7d7 shall be consistent with making the covered drug available to purchasers1 including governmental and nongovernmental purchasers and individuals1 at prices that are affordable and reasonable4 ,under no condition shall a royalty be set at a rate that would cause a covered drug for which an open1 nonexclusive license was issued under subsection 7c7 to be sold at an excessive price1 as determined under subsection 7b74 7#b7 ,multiple affected parties ,in the case that there is one or more holders or investors in the patented inventions related to the covered drug1 the royalty rate shall be divided among the holders or investors 7including such manufacturer7 in a manner agreed upon by the manufacturer and other holders or investors1 or1 in the absence of such an agreement1 in a manner the ,secretary determines to be appropriate4 7#c7 ,price ,an entity accepting an open1 nonexclusive license under subsection 7c77#b7 shall sell the covered drug at a price not higher than the excessive price determined for the covered drug under subsection 7b74 7f7 ,clarification ,an open1 nonexclusive license under subsection 7c77#b7 shall be liable1 subject to adequate protection of the legitimate interests of any party utilizing the license1 to be terminated only if the circumstances which led to the granting of the open1 nonexclusive license cease to exist and are unlikely to recur4 ,the ,secretary may review1 upon request1 the continued existence of these circumstances4 4