,,ii #aagth ,,congress #ast ,session ,s4 #bbeg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #bd1 #bjba,ms4 ,rosen introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to provide ,federal support for nonprofit generic and essential medicine and device manufacturers to increase the availability of drugs and devices in order to reduce drug or device shortages and drug and device costs4 #a4 ,short title ,this ,act may be cited as the ,expanding ,access to ,affordable ,prescription ,drugs and ,medical ,devices ,act4 #b4 ,supporting nonprofit generic and essential medicines and device manufacturers 7a7 ,in general ,part ,p of title ,,iii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bhj;g et seq47 is amended by adding at the end the following3 #cii,v-#g4 ,supporting nonprofit generic and essential medicines and device manufacturers 7a7 ,in general ,the ,secretary shall award cooperative agreements and low interest revolving loans to1 and waive user fees with respect to1 nonprofit entities to support the manufacture and distribution within the ,united ,states of eligible drugs and eligible devices4 7b7 ,terms of cooperative agreements and loans 7#a7 ,cooperative agreements 7,a7 ,initial awards ,each cooperative agreement awarded under this section shall be for an initial period determined by the ,secretary1 not to exceed #e years1 and shall be in an amount determined by the ,secretary1 not to exceed #e1jjj1jjj4 7,b7 ,subsequent awards ,an entity receiving a cooperative agreement under this section may apply for additional awards with respect to other eligible drugs or eligible devices under this subsection4 ,the ,secretary may award additional cooperative agreements to such entities1 for periods not to exceed #e years1 in amounts not to exceed #e1jjj1jjj4 7,c7 ,extensions ,the ,secretary may extend the initial time period of a cooperative agreement awarded under subparagraph 7,a7 or 7,b71 but the total award amount of the original award plus any extension may not exceed #e1jjj1jjj4 7#b7 ,low interest revolving loans ,each loan awarded under this section shall be for a period determined by the ,secretary1 with an interest rate not greater than the ,federal ,reserve benchmark interest rate plus #c percent1 and in an amount not greater than #e1jjj1jjj4 7c7 ,applications 7#a7 ,in general ,to be eligible to receive a cooperative agreement or loan under this section1 an entity shall-- 7,a7 be an organization that-- 7i7 manufactures1 or facilitates the manufacture of1 finished drug products or devices in the ,united ,states2 7ii7 is an organization described in paragraph 7#c7 or 7#d7 of section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code2 and 7iii7 is based in the ,united ,states2 7,b7 demonstrate expertise in the process of drug or device manufacturing1 and the ability to fully comply with all applicable ,state and ,federal requirements2 7,c7 agree to ensure that-- 7i7 the highest total compensation offered to any employee of such entity is not more than #dj times greater than the total compensation offered to the lowest-compensated employee1 including any self-employed independent contracted workers on an hourly wage1 of such entity2 7ii7 among drugs that may be self-administered by patients and remaining after application of clause 7iii71 other than such drugs that are not required to be distributed through pharmacies-- 7,i7 the entity shall report to the ,secretary on an annual basis any barriers faced in making the drug widely available through retail pharmacies2 and 7,,ii7 the entity shall1 on an annual basis and in a manner prescribed by the ,secretary1 make publicly available complete information on the availability of the drug from retail pharmacies2 and 7iii7 if the ,secretary identifies a need to supplement the strategic national stockpile under section #cai;,f-#b1 the ,secretary has priority access to purchase1 at the average cost price offered to other purchasers1 a quantity of the drug or device equivalent to at least #be percent of the entity's production1 or such percentage of such supply as the ,secretary1 in consultation with the entity1 determines appropriate1 consistent with public health needs1 until the need has been met2 7,d7 include a timeline for any drugs or devices manufactured by the entity that are expected to come to market within the duration of the cooperative agreement or loan1 with at least one such drug or device expected to come to market within #e years of starting the cooperative agreement or loan2 and 7,e7 submit an application at such time1 in such manner1 and containing such additional information as the ,secretary may require4 7#b7 ,priority ,in awarding cooperative agreements and loans under this section1 the ,secretary shall give priority to applications from entities that are expected to manufacture and take to market eligible drugs or eligible devices at a price that is lower than existing treatments for the same disease or condition that such drug or device is intended to treat1 or to entities that are expected to manufacture any eligible drug or eligible device identified as a public health priority by the ,secretary4 7#c7 ,calculation of wages ,for purposes of paragraph 7#a77;,c77i7 to calculate employee compensation with respect to part-time employees1 the ,secretary shall calculate the compensation such employees would receive if they were to work full-time at their existing hourly wages4 7#d7 ,report ,the ,secretary shall report to ,congress annually regarding barriers reported by entities regarding availability of drugs described in paragraph 7#a77;,c77ii7 7other than such drugs that are not required to be distributed through pharmacies7 through retail pharmacies and regulatory or legislative recommendations to improve public access to such drugs4 7d7 ,definitions ,for purposes of this section-- 7#a7 the term eligible device means a device-- 7,a7 7i7 that is approved under section #eae of the ,federal ,food1 ,drug1 and ,cosmetic ,act1 cleared under section #eaj7k7 of such ,act1 or authorized under section #eac7;f77#b7 of such ,act2 7ii7 for which the device manufacturer applying for a cooperative agreement under subsection 7a7 or a low interest revolving loan under subsection 7b7 has submitted an application under section #eae of the ,federal ,food1 ,drug1 and ,cosmetic ,act1 or a notification under section #eaj7k7 or #eac7;f77#b7 of such ,act2 or 7iii7 that is urgently needed to meet a public health need1 as determined by the ,secretary1 and for which the device manufacturer applying for a cooperative agreement under subsection 7a7 or a low interest revolving loan under subsection 7b7 has provided a timeline for submission of an application under section #eae of the ,federal ,food1 ,drug1 and ,cosmetic ,act1 or a notification under section #eaj7k7 or #eac7;f77#b7 of such ,act2 and 7,b7 that the ,secretary has deemed essential on the basis of-- 7i7 there being #b or fewer active manufacturers of the device or a substantially similar device2 7ii7 the device having been on the device shortage list under section #ejf;,j7g7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act at any time in the past #e years2 7iii7 similar devices have increased in cost more than the rate of inflation over the most recent #e-year period2 7iv7 the device meeting an otherwise unmet critical public health need2 or 7v7 other factors1 as determined by the ,secretary2 and 7#b7 the term eligible drug means a drug-- 7,a7 7i7 that is approved by the ,food and ,drug ,administration under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under section #cea of this ,act2 7ii7 for which the drug manufacturer applying for a cooperative agreement under subsection 7a7 or a low interest revolving loan under subsection 7b7 has submitted an application under subsection 7b77#b7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or under section #cea7k7 of this ,act2 or 7iii7 that is urgently needed to meet a public health need1 as determined by the ,secretary1 and for which the drug manufacturer applying for a cooperative agreement under subsection 7a7 or a low interest revolving loan under subsection 7b7 has provided a timeline for submission of an application under subsection 7b7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or under subsection 7a7 or 7k7 of section #cea of this ,act2 and 7,b7 that the ,secretary has deemed essential on the basis of-- 7i7 there being #b or fewer active manufacturers of the drug2 7ii7 the drug having been on the drug shortage list under section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act at any time in the past #e years2 7iii7 alternative treatments for the disease or condition the drug is intended to treat costing more than #ej per #a-month supply according to the public list price2 7iv7 the drug meeting an otherwise unmet critical public health need2 or 7v7 other purposes1 as determined by the ,secretary4 7e7 ,use of funds ,a recipient of an award under this section may use funds for start-up1 research and development1 or expansion costs associated with the manufacture of eligible drugs or eligible devices1 in accordance with the terms of the applicable cooperative agreement or loan4 7f7 ,report ,not later than #c years after the date of enactment of the ,expanding ,access to ,affordable ,prescription ,drugs and ,medical ,devices ,act and annually thereafter1 the ,secretary shall submit a report to ,congress on1 with respect to the applicable reporting period-- 7#a7 the number of grants and loans awarded under the program2 7#b7 the drugs and devices that came to market with support from grants or loans under the program2 7#c7 a cost-savings analysis for all federally-funded health programs1 based on savings that were realized due to a drug or device whose manufacturer was supported by a grant under this section2 and 7#d7 a cost-savings analysis for consumer out-of-pocket and insurance premium spending1 based on savings that were realized due to a drug or device whose manufacturer was supported by a grant under this section1 and any impact on consumer access to the drug or device4 7g7 ,waiver of user fees with respect to entities not receiving an award 7#a7 ,in general ,with respect to an entity that is an organization described in paragraph 7#b71 the ,secretary shall waive the following fees that would otherwise be applicable during the period during which such entity is so exempt and is manufacturing such product3 7,a7 ,fees under paragraphs 7#a7 and 7#b7 of section #gcf7;a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 7,b7 ,fees under paragraphs 7#b7 and 7#c7 of section #gch7;a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 7,c7 ,fees under paragraphs 7#c71 7#d71 and 7#e7 of section #gdd;,b7a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 7,d7 ,fees under paragraphs 7#a77;,a71 7#a77;,b71 7#b71 and 7#c7 of section #gdd;,h of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 7#b7 ,entity described ,an entity described in this paragraph is an entity that-- 7,a7 is described in paragraph 7#c7 or 7#d7 of section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code2 7,b7 manufactures an eligible drug or eligible device2 and 7,c7 is not currently receiving a loan or cooperative agreement under this section4 7h7 ,funding 7#a7 ,authorization of appropriations ,to carry out this section1 there are authorized to be appropriated such sums as may be necessary for each of fiscal years #bjbb through #bjca4 7#b7 ,loan repayments ,in addition to any amounts appropriated under paragraph 7#a71 the ,secretary of the ,treasury shall transfer to the ,secretary of ,health and ,human ,services annually an amount equal to the amount received for the previous year in payments on loans awarded under this section for purposes of carrying out the program under this section with respect to loans4 4 7b7 ,,cbo report ,not later than #a year after the date of enactment of this ,act1 the ,director of the ,congressional ,budget ,office shall submit budget-neutral or cost-savings policy options to ,congress showing ways to capture the savings from nonprofit drug and device manufacturers supported by the program under section #cii,v-#g of the ,public ,health ,service ,act1 as added by subsection 7a74 ,such options shall direct at least half of such savings to create a mandatory funding stream to support grants and low-interest loans similar to grants and loans offered under section #cii,v-#g of the ,public ,health ,service ,act1 as added by subsection 7a71 and any remaining portion of such savings toward ensuring the solvency of the ,medicare program under title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq47 and reducing out-of-pocket and premium costs under such program4 7c7 ,priority review 7#a7 ,n,d,as ,the ,secretary of ,health and ,human ,services may grant priority review1 as described in the ,manual of ,policies and ,procedures of the ,food and ,drug ,administration and goals identified in the letters described in section #aja7;b7 of the ,prescription ,drug ,user ,fee ,amendments of #bjag1 for any application that includes a commitment to a specific price that represents a significant cost reduction compared to similar treatments on the market1 if the sponsor is a qualified drug or device manufacturing organization 7as defined in section #eja7s77#d7 of the ,internal ,revenue ,code of #aihf74 7#b7 ,a,n,d,as ,section #eje7;j77#aa77;,a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;j77#aa77;,a77 is amended-- 7,a7 in clause 7i71 by striking 2 or and inserting a semicolon2 7,b7 in clause 7ii71 by striking the period and inserting 2 or2 and 7,c7 by adding at the end the following3 7iii7 for which the sponsor is a qualified drug or device manufacturing organization 7as defined in section #eja7s77#d7 of the ,internal ,revenue ,code of #aihf71 and commits to a specific price that represents a significant cost reduction compared to similar treatments on the market4 4 7#c7 ,biosimilar biological products ,the ,secretary of ,health and ,human ,services may grant priority review for any application under section #cea7k7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7k77 that includes a commitment to a specific price that represents a significant cost reduction compared to similar treatments on the market1 if the sponsor is a qualified drug or device manufacturing organization 7as defined in section #eja7s77#d7 of the ,internal ,revenue ,code of #aihf74 7#d7 ,breakthrough devices ,section #eae;,b7b77#b7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cfj;e-#c7;b77#b77 is amended-- 7,a7 in subparagraph 7,c71 by striking 2 or and inserting a semicolon2 7,b7 by redesignating subparagraph 7,d7 as subparagraph 7,e72 and 7,c7 by inserting after subparagraph 7,c7 the following3 7,d7 for which the sponsor is a qualified drug or device manufacturing organization 7as defined in section #eja7s77#d7 of the ,internal ,revenue ,code of #aihf71 and commits to a specific price that represents a significant cost reduction compared to similar treatments on the market2 or 4 #c4 ,additional rules for tax-exempt status of certain drug and medical device manufacturers 7a7 ,in general ,section #eja of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7s7 ,additional requirements for certain drug or medical device manufacturers 7#a7 ,treatment as charitable organization ,a qualified drug or medical device manufacturing organization shall be treated as an organization organized and operated exclusively for charitable purposes under subsection 7c77#c7 if-- 7,a7 such organization meets the requirements under paragraph 7#d71 7,b7 no part of the net earnings of such organization inures to the benefit of any private shareholder or individual1 7,c7 no substantial part of the activities of such organization is carrying on propaganda1 or otherwise attempting1 to influence legislation 7except as otherwise provided in subsection 7h771 and 7,d7 such organization does not participate in1 or intervene in 7including the publishing or distributing of statements71 any political campaign on behalf of 7or in opposition to7 any candidate for public office4 7#b7 ,treatment as social welfare organization ,a qualified drug or medical device organization shall be treated as an organization organized and operated primarily to promote social welfare under subsection 7c77#d7 if-- 7,a7 such organization meets the requirements under paragraph 7#d71 and 7,b7 no part of the net earnings of such organization inures to the benefit of any private shareholder or individual4 7#c7 ,qualified drug or medical device manufacturing organization ,for purposes of this section-- 7,a7 ,in general ,the term qualified drug or medical device manufacturing organization means an organization that is organized and operated exclusively for the production of drugs or devices4 7,b7 ,special rule ,an organization shall not fail to be treated as a qualified drug or medical device manufacturing organization solely because such organization provides public health education1 conducts public health screenings1 or conducts other related charitable activities4 7#d7 ,requirements ,the requirements of this paragraph are as follows3 7,a7 ,organization and operation ,the organization is organized as a nonprofit corporation under ,state law and is compliant with the laws of the ,state pertaining to operation as a pharmaceutical or medical device manufacturer4 7,b7 ,drugs and devices ,each drug or device manufactured by the organization-- 7i7 furthers a public health objective 7as determined by the ,secretary1 in consultation with the ,secretary of ,health and ,human ,services71 such as addressing barriers related to availability1 shortage1 or price1 and 7ii7 meets such other requirements1 as determined by the ,secretary1 in consultation with the ,secretary of ,health and ,human ,services4 7,c7 ,list price 7i7 ,in general ,the organization establishes a public list price for each drug or device manufactured by the organization in accordance with clause 7ii7 and charges no more than such public list price4 7ii7 ,maximum list price ,the amount of the public list price established under this clause with respect to any drug or device shall not be more than #abj percent of the sum of-- 7,i7 the production costs for the drug or device1 7,,ii7 an amount calculated to recover up to the previous #e years of qualified research expenses 7as defined in section #da7 attributable to the drug or device over a #e-year period1 7,,iii7 the regulatory costs associated with developing and maintaining a marketed drug or device1 7,,iv7 the anticipated costs 7not greater than the usual and customary rates7 of storing1 warehousing1 and distributing the drug or device1 plus 7,v7 interest on loans directly financing the development or production of the drug or device4 7,d7 ,compensation 7i7 ,in general ,the organization meets the requirements of clauses 7ii71 7iii71 and 7iv74 7ii7 ,compensation amount 7,i7 ,in general ,the highest total remuneration offered to any employee of the organization or of an applicable independent contractor of the organization is not more than #dj times greater than the total remuneration offered to the lowest-compensated employee of the organization or of any applicable independent contractor of the organization4 ,for purposes of this clause1 the compensation provided to a part-time hourly employee shall be determined by applying such employee's hourly wage to the number of hours of a full-time employee4 7,,ii7 ,applicable independent contractor ,the term applicable independent contractor means1 with respect to any organization1 any independent contractor that has less than #b employees and the contract for which specifies an hourly rate4 7iii7 ,compensation of other independent contractors ,in the case of any independent contractor of the organization that is not an applicable independent contractor1 the organization-- 7,i7 compensates any work done at a fair market rate1 and 7,,ii7 keeps such financial information as required by the ,secretary with respect to amounts paid to such independent contractors4 7iv7 ,prohibition on outside compensation ,the organization does not permit employees to be compensated from any other person for work related to the organization4 7,e7 ,board of directors ,the organization-- 7i7 maintains an independent board of directors1 and 7ii7 maintains a clear financial separation from-- 7,i7 entities with which the organization conducts business1 and 7,,ii7 entities from which the organization purchases goods or services4 7#e7 ,other definitions ,for purposes of this subsection-- 7,a7 ,drug ,the term drug means any drug that is approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7 or licensed under section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb74 7,b7 ,device ,the term device means any device that is approved under section #eae of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cfj;e71 cleared under section #eaj7k7 of such ,act 7#ba ,u4,s4,c4 #cfj7k771 or authorized under section #eac7;f77#b7 of such ,act 7#ba ,u4,s4,c4 #cfj;c7f77#b774 7#f7 ,regulations ,the ,secretary shall issue such regulations and guidance as may be necessary to carry out the provisions of this subsection1 including guidance relating to determining acceptable methods for making the calculation under paragraph 7#d77;,c77ii74 4 7b7 ,treatment as a public charity ,section #eji7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking and at the end of paragraph 7#c71 by striking the period at the end of paragraph 7#d7 and inserting 1 and1 and by inserting after paragraph 7#d7 the following new paragraph3 7#e7 an organization which meets the requirements of subparagraphs 7,a71 7,b71 7,c71 and 7,d7 of section #eja7s77#a74 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 7d7 ,sense of the ,senate ,it is the sense of the ,senate that nothing in the amendments made by this section shall be construed to prevent an organization that manufactures drugs or medical devices and that is otherwise described in paragraph 7#c7 or 7#d7 of section #eja7;c7 of the ,internal ,revenue ,code of #aihf from being treated as an organization that is so described4