Protecting Our Pharmaceutical Supply Chain from China Act of 2020

II 116TH CONGRESS 2D SESSION S. 3635 To require the Secretary of Health and Human Services to maintain a list of the country of origin of all drugs marketed in the United States, to ban the use of Federal funds for the purchase of, or reimbursement for, drugs manufactured in China, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 6, 2020 Mr. COTTON (for himself, Mrs. BLACKBURN, Mr. CRUZ, Mr. DAINES, and Mr. SCOTT of Florida) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To require the Secretary of Health and Human Services to maintain a list of the country of origin of all drugs marketed in the United States, to ban the use of Federal funds for the purchase of, or reimbursement for, drugs manufactured in China, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Protecting Our Phar- 4 maceutical Supply Chain from China Act of 2020’’. 5 VerDate Sep 11 2014 18:24 May 08, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3635.IS S3635 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 3635 IS SEC. 2. COUNTRY OF ORIGIN OF DRUGS. 1 (a) IN GENERAL.—Subchapter A of chapter V of the 2 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 3 et seq.) is amended by adding at the end the following: 4 ‘‘SEC. 524B. REGISTRY OF DRUGS PRODUCED OUTSIDE THE 5 UNITED STATES. 6 ‘‘(a) IN GENERAL.—The Secretary shall compile and 7 maintain a list of all drugs approved under subsection (c) 8 or (j) of section 505 of this Act or licensed under sub- 9 section (a) or (k) of section 351 of the Public Health Serv- 10 ice Act, and any active ingredients in such drugs, that— 11 ‘‘(1) are manufactured outside of the United 12 States; and 13 ‘‘(2) are determined by the Secretary to be crit- 14 ical to the health and safety of consumers in the 15 United States. 16 ‘‘(b) ADDITIONAL LIST.—In conjunction with the list 17 described in subsection (a), the Secretary shall compile 18 and maintain a list of drugs included on such list that 19 are exclusively produced in, or use active or inactive ingre- 20 dients produced in, the People’s Republic of China. 21 ‘‘(c) REQUIREMENT.—The list described in sub- 22 section (a) shall, with respect to each drug included on 23 the list, provide information about the drug’s supply chain, 24 including each step in the supply chain that occurs prior 25 to the drug’s importation into the United States.’’. 26 VerDate Sep 11 2014 18:24 May 08, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3635.IS S3635 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 3635 IS (b) FEDERAL HEALTH PROGRAM PURCHASE OF, OR 1 REIMBURSEMENT FOR, DRUGS.— 2 (1) IN GENERAL.—Notwithstanding any other 3 provision of law, the Department of Health and 4 Human Services, the Department of Veterans Af- 5 fairs, the Department of Defense, and any other 6 Federal health care program (as defined in section 7 1128B(f) of the Social Security Act (42 U.S.C. 8 1320a–7b(b)), with respect to the purchase of, or re- 9 imbursement for, a drug by such agency or program, 10 the following shall apply: 11 (A) By 2022, a purchaser of, or 12 reimbursor for, drugs described in this sub- 13 section shall purchase drugs or reimburse for 14 drugs only if such drugs contain 60 percent or 15 more of their active pharmaceutical ingredients 16 manufactured in countries— 17 (i) other than the People’s Republic of 18 China; and 19 (ii) that meet the Food and Drug Ad- 20 ministration’s health and safety standards. 21 (B) By 2023, a purchaser of, or 22 reimbursor for, drugs described in this sub- 23 section shall purchase drugs or reimburse for 24 drugs only if such drugs contain 100 percent of 25 VerDate Sep 11 2014 18:24 May 08, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3635.IS S3635 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 3635 IS their active pharmaceutical ingredients manu- 1 factured in countries— 2 (i) other than the People’s Republic of 3 China; and 4 (ii) that meet the Food and Drug Ad- 5 ministration’s health and safety standards. 6 (2) WAIVERS.—The Secretary of Health and 7 Human Services may issue waivers of the require- 8 ments under paragraph (1) for any agency or pro- 9 gram that is unable to meet such requirements and 10 demonstrates a need for the waiver. No waiver may 11 be issued under this paragraph for drugs that are 12 purchased on or after January 1, 2025. 13 (c) LABELING REQUIREMENT.—Section 502 of the 14 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 352) 15 is amended by adding at the end the following: 16 ‘‘(ee) If it is a drug and its labeling does not specify 17 the country of origin of each active ingredient contained 18 in the drug.’’. 19 SEC. 3. TEMPORARY 100 PERCENT EXPENSING FOR PHAR- 20 MACEUTICAL AND MEDICAL DEVICE MANU- 21 FACTURING PROPERTY. 22 (a) IN GENERAL.—For purposes of section 168(k) of 23 the Internal Revenue Code of 1986, in the case of any 24 qualified pharmaceutical and medical device manufac- 25 VerDate Sep 11 2014 18:24 May 08, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3635.IS S3635 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 3635 IS turing property which is placed in service after December 1 31, 2019, and before January 1, 2026— 2 (1) such property shall be treated as qualified 3 property (within the meaning of such section), 4 (2) the applicable percentage otherwise deter- 5 mined under section 168(k)(6) of such Code with re- 6 spect to such property shall be 100 percent, and 7 (3) paragraph (8) of such section shall not 8 apply. 9 (b) QUALIFIED PHARMACEUTICAL AND MEDICAL 10 DEVICE MANUFACTURING PROPERTY.—For purposes of 11 this section, the term ‘‘qualified pharmaceutical and med- 12 ical device manufacturing property’’ means any tangible 13 property placed in service in the United States as part 14 of the construction or expansion of property for the manu- 15 facture of drugs (as defined in section 201(g) of the Fed- 16 eral Food, Drug, and Cosmetic Act (21 U.S.C. 321(g))) 17 or medical devices (as defined in section 201(h) of such 18 Act (21 U.S.C. 321(h))). 19 (c) TERMINATION.—This section shall not apply to 20 any property placed in service after December 31, 2025. 21 VerDate Sep 11 2014 18:24 May 08, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3635.IS S3635 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 3635 IS SEC. 4. RULE OF CONSTRUCTION. 1 Nothing in this Act shall be construed to divert the 2 resources of the Food and Drug Administration from re- 3 sponding to the COVID–19 public health emergency. 4 Æ VerDate Sep 11 2014 18:24 May 08, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S3635.IS S3635 pamtmann on DSKBC07HB2PROD with BILLS