,,ii  #aai? ,,congress  #a/ ,session    
,s4 #ccbe  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,decemb] #c1 #bjbe,ms4 
,ros5 7= h]self & ,mr4 ,curtis7         
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to provide rules =
 det]m9+ ! tax-exempt /atus (           
organizations t manufacture & di/ribute 
drugs & m$ical devices to meet public   
heal? ne$s1 & = o!r purposes4  #a4 ,%ort
 title ,?is ,act may be cit$ z ! ,exp&+ 
,access to ,af=dable ,drugs & ,m$ical   
,devices ,act4  #b4 ,treatm5t ( public  
int]e/ drug or m$ical device heal? c>e  
organizations  7a7 ,9 g5]al ,section    
#eja ( ! ,int]nal ,rev5ue ,code ( #aihf 
is am5d$ by add+ at ! end ! foll[+ new  
subsection3  7s7 ,treatm5t ( public     
int]e/ drug or m$ical device heal? c>e  
organizations  7#a7 ,9 g5]al ,an        
organization t has be5 designat$ z a    
public int]e/ drug or m$ical device     
heal? c>e organization "u ?is subsection

 %all n fail to be treat$ z an          
organization describ$ 9 subsection      
7c77#c7 solely because su* organization1
 ei!r directly or by contract1          
manufactures or di/ributes drugs or     
m$ical devices 9 a mann] consi/5t ) its 
designation "u ?is subsection4  7#b7    
,eligibility = designation  7,a7 ,9     
g5]al ,! ,secret>y may designate an     
organization t1 ei!r directly or by     
contract1 manufactures or di/ributes    
drugs or m$ical devices z a public      
int]e/ drug or m$ical device heal? c>e  
organization "u ?is subsection if !     
,secret>y1 9 consultation ) ! ,secret>y 
( ,heal? & ,human ,s]vices1 det]m9es t--
 7i7 ! prim>y purpose ( su* organization
 is mak+ eligible drugs or m$ical       
devices af=dable1  7ii7 su* organization
 is creat$ or organiz$ 9 ! ,unit$ ,/ates
 & prim>ily op]at$ 9 ! ,unit$ ,/ates1   
7iii7 su* organization is n controll$ by
 a p]son :i* is n exempt f tax "u       
section #eja7;a71 &  7iv7 su*           
organization meets ! organizational     

requirem5ts ( subp>agraph 7,b74  7,b7   
,organizational requirem5ts  7i7 ,9     
g5]al ,an organization meets !          
requirem5ts ( ?is subp>agraph if-- 7,i7 
no m ?an ! applicable numb] ( memb]s ( !
 bo>d ! organization is also a bo>d     
memb] or executive /aff memb] ( a       
disqualifi$ entity1 &  7,,ii7 no        
executive /aff memb] ( ! organization is
 also a bo>d memb] or executive /aff    
memb] ( a disqualifi$ entity4  7ii7     
,applicable numb] ,= purposes (         
subp>agraph 7,b77i71 ! applicable numb] 
is-- 7,i7 9 ! case ( an organization )  
less ?an #c bo>d memb]s1 z]o1 &  7,,ii7 
9 ! case ( any o!r organization1 #a4    
7iii7 ,exception = :olly own$           
subsidi>ies ,an organization %all n be  
treat$ z fail+ to meet ! requirem5ts (  
clause 7i7 ) respect to any bo>d memb]  
or executive /aff memb] ( ! organization
 if-- 7,i7 ! disqualifi$ entity is a    
:olly own$ subsidi>y ( ! organization1 &
  7,,ii7 ! bo>d memb] or executive /aff 
memb] s]ves a simil> role ) respect to  

su* :olly own$ subsidi>y4  7iv7         
,exception if no bus9ess transaction    
,clause 7i77,,ii7 %all n apply if !     
organization & ! disqualifi$ entity are 
prohibit$ f engag+ 9 bus9ess            
transactions ) ea* o!r4  7,c7           
,disqualifi$ entity ,= purposes (       
subp>agraph 7,b71 ! t]m disqualifi$     
entity means1 ) respect to any          
organization describ$ 9 subp>agraph     
7,b77i71 any p]son :i*-- 7i7 is 9 !     
trade or bus9ess ( manufactur+ or       
di/ribut+ drugs or m$ical devices1 &    
7ii7 is n exempt f tax "u section       
#eja7;a74  7#c7 ,eligible drug or m$ical
 device  7,a7 ,9 g5]al ,= purposes ( ?is
 section1 ! t]m eligible drug or m$ical 
device means any drug or m$ical device  
if ! ,secret>y 79 consultation ) !      
,secret>y ( ,heal? & ,human ,s]vices7   
det]m9es t su* drug or m$ical device--  
7i7 meets ! requirem5ts ( ei!r clause   
7i7 or 7ii7 ( subp>agraph 7,b72 &  7ii7 
meets ! requirem5ts ( at lea/ "o o!r    
clause ( su* subp>agraph4  7,b7         

,requirem5ts ,! requirem5ts ( ?is       
subp>agraph ) respect to any drug or    
m$ical device are z foll[s3 7i7 ,! drug 
or m$ical device is 9 %ortage 7z def9$  
91 z applicable1 section #ejf;,c7h7 or  
section #ejf;,j7j7 ( ! ,f$]al ,food1    
,drug1 & ,cosmetic ,act 7#ba ,u4,s4,c4  
#cef;c7h72 #cef;j7j771 or1 ) respect to 
an ov]-!-c\nt] drug1 z det]m9$ by !     
,secret>y ( ,heal? & ,human ,s]vices71  
nationwide or 9 a "p ( ! ,unit$ ,/ates  
7det]m9$ ?r\gh geographic area or       
population gr\p71 or is at risk ( su*   
%ortage4  7ii7 ,! manufacture or        
di/ribution ( ! drug or m$ical device is
 expect$ to significantly r$uce-- 7,i7 !
 co/ ( su* drug or device = pati5ts     
directly or indirectly 7:i* may be      
det]m9$ ?r\gh sav+s to ! ,m$ic>e plan "u
 title ,,xviii ( ! ,social ,security    
,act 7#db ,u4,s4,c4 #acie et seq471 !   
,m$icaid program "u title ,,xix ( su*   
,act 7#db ,u4,s4,c4 #acif et seq471 or  
)9 ! heal? sy/em71 or  7,,ii7 9 ! case (
 a novel drug or device1 r$uce ! co/s   

comp>$ to curr5t /&>d ( c>e 7:i* may be 
det]m9$ by tak+ into acc\nt r$uc$       
hospitalizations & o!r m$ically relat$  
exp5ses or price 9 comp>ison to o!r     
available products ) simil> approv$     
uses74  7iii7 ,! manufacture or         
di/ribution ( ! drug or m$ical device is
 expect$ to address a curr5tly unmet    
heal? ne$4  7iv7 ,! manufacture or      
di/ribution ( ! drug is expect$ to      
address a public heal? ne$ id5tifi$ by !
 ,secret>y 79 consultation ) ! ,secret>y
 ( ,heal? & ,human ,s]vices71 or to     
address supply ne$s = drugs & devices   
us$ dur+ public heal? or o!r national   
em]g5cies4  7#d7 ,reque/ = designation  
,an organization may reque/ to be       
designat$ z a public int]e/ drug or     
m$ical device heal? c>e organization "u 
?is subsection by submitt+ to !         
,secret>y ! foll[+3 7,a7 ,evid5ce t !   
manufactur] or di/ributor curr5tly has1 
or has plans to develop1 ! ability to   
manufacture or di/ribute a drug or      
m$ical device :i* is an eligible drug or

 m$ical device4  7,b7 ,an agreem5t t1 9 
! ev5t t ! ,secret>y ( ,heal? & ,human  
,s]vices id5tifies a ne$ to supplem5t ! 
/rategic national /ockpile ) a drug or  
m$ical device designat$ "u ?is          
subsection1 ! manufactur] or di/ributor 
w give ! ,secret>y priority access to   
pur*ase su* drug or device1 at a co/ t  
is n m ?an ! av]age co/ price (f]$ to   
o!r pur*as]s1 9 a quantity t is         
equival5t to at lea/ #be p]c5t ( !      
manufactur]'s production or !           
di/ributor's /ock at ! "t ( ! reque/ =  
designation1 until ! ne$ id5tifi$ by !  
,secret>y has be5 met4  ,no?+ 9 an      
agreem5t "u subp>agraph 7,b7 %all be    
con/ru$ to prohibit an organization f   
supply+ ! id5tifi$ drug or m$ical device
 to any o!r p]son at ! "t or 9 ! mann] z
 requir$ "u a contract ent]$ into be=e !
 date su* drug or device is id5tifi$ by 
! ,secret>y "u subp>agraph 7,b74  7#e7  
,def9itions ,= purposes ( ?is section-- 
7,a7 ,drug ,! t]m drug means a drug     
approv$ "u section #eje ( ! ,f$]al      

,food1 ,drug1 & ,cosmetic ,act 7#ba     
,u4,s4,c4 #cee7 or lic5s$ "u section    
#cea ( ! ,public ,heal? ,s]vice ,act    
7#db ,u4,s4,c4 #beb74  7,b7 ,m$ical     
device ,! t]m m$ical device has ! mean+ 
giv5 ! t]m device 9 section #bja7;h7 ( !
 ,f$]al ,food1 ,drug1 & ,cosmetic ,act  
7#ba ,u4,s4,c4 #cba7;h774  7#f7         
,regulations & guidance ,! ,secret>y 79 
consultation ) ! ,secret>y ( ,heal? &   
,human ,s]vices7 %all issue su*         
regulations or o!r guidance z is        
necess>y to c>ry out ! purposes ( ?is   
subsection1 includ+ regulations or o!r  
guidance-- 7,a7 e/abli%+ af=dability    
guidel9es & co/ transp>5cy requirem5ts =
 purposes ( det]m9+ :e!r an organization
 meets ! requirem5ts ( p>agraph         
7#b77;,a7 ) respect to any eligible drug
 or m$ical device1 includ+ tak+ into    
acc\nt ! su/a9ability ( op]ations1      
capital exp5ditures1 rese>* &           
developm5t1 & ma9t5ance ( reasonable    
res]ves1  7,b7 det]m9+ :at con/itutes an
 unmet heal? ne$ = purposes ( p>agraph  

7#c77;,b77iii71 &  7,c7 = monitor+ !    
cont9u$ compliance ( ! requirem5ts ( ?is
 subsection = organizations designat$ z 
public int]e/ drug or m$ical device     
heal? c>e organizations4  4  7b7 ,excess
 b5efits  7#a7 ,9 g5]al ,section        
#dieh7;f77#a7 ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$ by /rik+ & at ! end ( 
subp>agraph 7,e71 by /rik+ ! p]iod at ! 
end ( subp>agraph 7,f7 & ins]t+ 1 &1 &  
by add+ at ! end ! foll[+ new           
subp>agraph3  7,g7 :i* involves public  
int]e/ drug or m$ical device heal? c>e  
organization 7)9 ! mean+ ( section      
#eja7s771 any p]son :o provides fund+ to
 su* organization :i* is n p]missible   
fund+4  4  7#b7 ,p]missible fund+       
,section #dieh7;f7 ( su* ,code is am5d$ 
by add+ at ! end ! foll[+ new p>agraph3 
7#i7 ,p]missible fund+ ,= purposes (    
p>agraph 7#a77;,g71 ! t]m p]missible    
fund+ means fund+ f-- 7,a7 am\nts :i* d 
n exce$ #a p]c5t ( ! gross receipts (   
su* organization = ! taxable ye> ( !    
organization 9 :i* su* am\nt is receiv$1

  7,b7 am\nts receiv$ pursuant to grants
 f or contracts ) any gov]nm5tal entity 
or organization :i* is exempt f tax "u  
section #eja7;a71 or  7,c7 am\nts       
provid$ 9 connection ) ! pur*ase ( drugs
 or m$ical devices 7o!r ?an pur*ases f  
any disqualifi$ entity 7z def9$ 9       
section #eja7s77#b77;,c7774  4  7c7     
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s      
beg9n+ aft] ! date t is "o ye> aft] !   
date ( ! enactm5t ( ?is ,act4