COVID–19 Emergency Manufacturing Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 7113 To amend the Public Health Service Act to establish an Emergency Office of Manufacturing for Public Health, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 4, 2020 Ms. SCHAKOWSKY introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To amend the Public Health Service Act to establish an Emergency Office of Manufacturing for Public Health, 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 ‘‘COVID–19 Emergency 4 Manufacturing Act of 2020’’. 5 SEC. 2. PUBLIC MANUFACTURING OF PHARMACEUTICALS. 6 Part A of title III of the Public Health Service Act 7 (42 U.S.C. 241 et seq.) is amended by adding at the end 8 the following: 9 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 7113 IH ‘‘SEC. 310B. MANUFACTURING OF DRUGS, BIOLOGICAL 1 PRODUCTS, DEVICES, AND PERSONAL PRO- 2 TECTIVE EQUIPMENT. 3 ‘‘(a) EMERGENCY OFFICE OF MANUFACTURING FOR 4 PUBLIC HEALTH.— 5 ‘‘(1) ESTABLISHMENT.—There is established 6 within the Department of Health and Human Serv- 7 ices an office to be known as the Emergency Office 8 of Manufacturing for Public Health (referred to in 9 this section as the ‘Office’). 10 ‘‘(2) PURPOSE.—The purposes of the Office 11 are— 12 ‘‘(A) to ensure an adequate supply of, and 13 increase access to, prescription drugs, biological 14 products, devices, and other supplies, including 15 personal protective equipment, necessary to, as 16 appropriate, diagnose, mitigate, prevent, or 17 treat COVID–19 and to mitigate the harm the 18 COVID–19 pandemic might otherwise cause for 19 the strategic national stockpile under section 20 319F–2, Federal, State, local, and Native 21 health programs, and the commercial market; 22 ‘‘(B) to address shortages in the strategic 23 national stockpile and commercial market of 24 prescription drugs, biological products, devices, 25 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 7113 IH and personal protective equipment used to treat 1 conditions other than COVID–19; and 2 ‘‘(C) to provide prescription drugs, biologi- 3 cal products, devices, and personal protective 4 equipment necessary to diagnose, mitigate, pre- 5 vent, and treat COVID–19 and to mitigate the 6 harm the COVID–19 pandemic might otherwise 7 cause, to Federal, State, local, and Native 8 health programs, at no cost, and to consumers 9 in the commercial market and other inter- 10 national entities at cost. 11 ‘‘(3) PERSONNEL.— 12 ‘‘(A) DIRECTOR.— 13 ‘‘(i) IN GENERAL.—The Office shall 14 be headed by a Director, who shall be ap- 15 pointed by the President, not later than 15 16 days after the date of enactment of the 17 COVID–19 Emergency Manufacturing Act 18 of 2020, by and with the advice and con- 19 sent of the Senate. 20 ‘‘(ii) ACTING DIRECTOR.—The Assist- 21 ant Secretary for Preparedness and Re- 22 sponse, if in compliance with subparagraph 23 (C), may serve as Director of the Office in 24 an acting capacity until the later of Senate 25 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 7113 IH confirmation of a Director or 3 months 1 after date of enactment of the COVID–19 2 Emergency Manufacturing Act of 2020. 3 ‘‘(iii) COMPENSATION.—The Director 4 shall be compensated at the rate prescribed 5 for level III of the Executive Schedule 6 under section 5314 of title 5, United 7 States Code. 8 ‘‘(B) EMPLOYEES.—The Director of the 9 Office, in consultation with the Secretary, may 10 fix the number of, and appoint and direct, all 11 employees of the Office. 12 ‘‘(C) BANNED INDIVIDUALS.— 13 ‘‘(i) DRUG COMPANY LOBBYISTS.—No 14 former registered drug manufacturer lob- 15 byist— 16 ‘‘(I) may be appointed to the po- 17 sition of Director of the Office; or 18 ‘‘(II) may be employed by the Of- 19 fice during the 6-year period begin- 20 ning on the date on which the reg- 21 istered lobbyist terminates its reg- 22 istration in accordance with section 23 4(d) of the Lobbying Disclosure Act 24 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 7113 IH of 1995 or the agent terminates its 1 status, as applicable. 2 ‘‘(ii) SENIOR EXECUTIVES OF LAW- 3 BREAKING COMPANIES.—No former senior 4 executive of a covered entity— 5 ‘‘(I) may be appointed to the po- 6 sition of Director of the Office; or 7 ‘‘(II) may be employed by the Of- 8 fice during the 6-year period begin- 9 ning on the later of— 10 ‘‘(aa) the date of the settle- 11 ment; and 12 ‘‘(bb) the date on which the 13 enforcement action has con- 14 cluded. 15 ‘‘(iii) COVERED ENTITY.—For pur- 16 poses of clause (ii), the term ‘covered enti- 17 ty’ means any entity that is— 18 ‘‘(I) a drug manufacturer; and 19 ‘‘(II)(aa) operating under Fed- 20 eral settlement, including a Federal 21 consent decree; or 22 ‘‘(bb) the subject of an enforce- 23 ment action in a court of the United 24 States or by an agency. 25 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 7113 IH ‘‘(4) DUTIES.— 1 ‘‘(A) IN GENERAL.—The Office shall— 2 ‘‘(i) prepare and submit applications 3 for approval to the Food and Drug Admin- 4 istration, or enter into contracts for such 5 submission, for the manufacture of appli- 6 cable COVID–19 products and other appli- 7 cable drugs, biological products, and de- 8 vices when authorized under this section; 9 ‘‘(ii) obtain rights to manufacture ap- 10 plicable COVID–19 products and applica- 11 ble drugs, biological products, and devices 12 as authorized under this section; 13 ‘‘(iii) manufacture, or enter into con- 14 tracts with entities to manufacture, appli- 15 cable COVID–19 products and other appli- 16 cable drugs, biological products, and de- 17 vices as authorized under this section; 18 ‘‘(iv) determine a fair price for each 19 applicable drug, biological product, and de- 20 vice, in accordance with subparagraph 21 (B)(ii); 22 ‘‘(v) sell manufactured applicable 23 drugs, biological products, and devices at a 24 fair price, as authorized under this section; 25 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 7113 IH ‘‘(vi) provide, at no cost, applicable 1 COVID–19 products to Federal, State, 2 local, and Native health programs, and 3 other domestic health care providers and 4 suppliers, as determined by the Secretary; 5 ‘‘(vii) sell, at-cost, applicable COVID– 6 19 products to other commercial entities 7 and international entities, in accordance 8 with subparagraph (B)(i); and 9 ‘‘(viii) manufacture, or enter into con- 10 tracts with entities to manufacture, active 11 pharmaceutical ingredients for use by the 12 Office or for sale to other entities. 13 ‘‘(B) PRICING DETERMINATIONS.— 14 ‘‘(i) AT-COST PRICE.—In determining 15 an at-cost price for an applicable COVID– 16 19 product under subparagraph (A)(vii) 17 the Office shall consider— 18 ‘‘(I) the cost to the Federal Gov- 19 ernment of manufacturing the appli- 20 cable COVID–19 product; 21 ‘‘(II) the administrative costs of 22 operating the Office; and 23 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 7113 IH ‘‘(III) the cost to acquire or man- 1 ufacture applicable COVID–19 prod- 2 uct under this section. 3 ‘‘(ii) FAIR PRICE.—In determining a 4 fair price for an applicable drug, biological 5 product, or device under subparagraph 6 (A)(iv) the Office shall consider— 7 ‘‘(I) the impact of price on pa- 8 tient access to the applicable drug, bi- 9 ological product, or device; 10 ‘‘(II) the cost of the applicable 11 drug, biological product, or device to 12 Federal or State health care pro- 13 grams; 14 ‘‘(III) the cost to the Federal 15 Government of manufacturing the ap- 16 plicable drug, biological product, or 17 device; 18 ‘‘(IV) the administrative costs of 19 operating the Office; 20 ‘‘(V) the cost to acquire or manu- 21 facture the applicable drug, biological 22 product, or device under this section; 23 and 24 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 7113 IH ‘‘(VI) the impact of price on 1 market competition for the applicable 2 drug, biological product, or device. 3 ‘‘(iii) TRANSPARENCY.—All prices 4 charged for applicable COVID–19 products 5 and applicable drugs, biological products, 6 or devices shall be made publicly available 7 by the Office. 8 ‘‘(C) OBTAINING RIGHTS TO MANUFAC- 9 TURE AND MARKET.— 10 ‘‘(i) IN GENERAL.—When necessary to 11 fulfill the Office’s duties under this section, 12 the Office shall acquire the rights to manu- 13 facture and market applicable COVID–19 14 products and applicable drugs, biological 15 products, and devices as authorized under 16 this section. 17 ‘‘(ii) LICENSING AUTHORITY.— 18 ‘‘(I) IN GENERAL.—Notwith- 19 standing any other provision of law, 20 the Secretary shall issue licenses, as 21 useful for fulfilling the duties under 22 this Act, allowing the Office to prac- 23 tice or have practiced (which may in- 24 clude licensure of retroactive practice) 25 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 7113 IH any invention in the United States or 1 territories of the United States, in- 2 cluding making, using, offering to sell 3 or selling, importing, or exporting 4 such invention, to reference or rely 5 upon clinical trial data submitted to a 6 regulatory authority or the grant of 7 marketing approval, and to access and 8 use otherwise confidential informa- 9 tion, including know-how, related to 10 the manufacture of an applicable 11 COVID–19 product or applicable 12 drug, biological product, or device. 13 ‘‘(II) NON-VOLUNTARY LICENS- 14 ING.—For any license that involves a 15 non-voluntary authorization to use 16 patented inventions, regulatory test 17 data, data, know-how or other intel- 18 lectual property rights, the license 19 shall provide for reasonable remunera- 20 tion to rights holders such as a rea- 21 sonable royalty on the sales of prod- 22 uct, a 1-time payment, or some com- 23 bination, provided that the combined 24 royalty payments to all rights holders 25 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 7113 IH shall not exceed the percentage of 1 sales that is the average percent of all 2 royalty payments reported to the In- 3 ternal Revenue Service by companies 4 in the pharmaceutical and medicines 5 sector, North American Industry Clas- 6 sification System code 325410, pro- 7 vided that when products are distrib- 8 uted for free, the royalty shall be 9 based upon the cost of goods. When 10 there are multiple rights holders, the 11 allocation of the total royalty pay- 12 ments shall be determined by— 13 ‘‘(aa) agreement among the 14 rights holders; 15 ‘‘(bb) allocation by arbitra- 16 tion among the rights holders; or 17 ‘‘(cc) if neither item (aa) 18 nor (bb) applies, by the Office. 19 ‘‘(iii) TRANSPARENCY.—Subject to 20 clause (iv), the Secretary shall post any 21 contract agreement under subparagraph 22 (A) or license issued under clause (ii) on 23 the public internet website of the Depart- 24 ment of Health and Human Services, on 25 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 7113 IH the date on which such agreement or li- 1 cense takes effect. 2 ‘‘(iv) PROTECTED INFORMATION.—In 3 carrying out this section, the Secretary 4 shall enforce applicable law concerning the 5 protection of confidential commercial infor- 6 mation and trade secrets. 7 ‘‘(D) ACTIVE PHARMACEUTICAL INGREDI- 8 ENTS.— 9 ‘‘(i) IN GENERAL.—The Office shall 10 manufacture, or enter into contracts with 11 entities to manufacture, an active pharma- 12 ceutical ingredient applicable to a drug or 13 biological product that is either an applica- 14 ble COVID–19 product or an applicable 15 drug or biological product if— 16 ‘‘(I) the Office determines that 17 such ingredient is not readily available 18 from existing suppliers or the existing 19 supply of such ingredient to the do- 20 mestic market is vulnerable to disrup- 21 tion; 22 ‘‘(II) the manufacture of such in- 23 gredient would improve the ability of 24 other entities to enter the market for 25 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 13 •HR 7113 IH the manufacture of applicable 1 COVID–19 products or applicable 2 drugs, biological products, or devices, 3 or otherwise expand the manufacture 4 of applicable COVID–19 products or 5 applicable drugs, biological products, 6 or devices; or 7 ‘‘(III) the manufacture of such 8 ingredient is necessary for the Office 9 to carry out its duties under this sec- 10 tion. 11 ‘‘(ii) PRICE DETERMINATIONS.—In 12 determining the price at which to sell an 13 active pharmaceutical ingredient manufac- 14 tured in accordance with clause (i), the Of- 15 fice shall consider the cost to manufacture 16 the ingredient, the administrative costs of 17 the Office with respect to the ingredient, 18 and the impact of such price on market 19 competition for the ingredient. 20 ‘‘(E) PRIORITY.—In awarding contracts 21 under this paragraph, the Office shall prioritize 22 entities manufacturing applicable COVID–19 23 products and applicable drugs, biological prod- 24 VerDate Sep 11 2014 04:34 Jun 25, 2020 Jkt 099200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H7113.IH H7113 pbinns on DSKJLVW7X2PROD with BILLS 14 •HR 7113 IH ucts, and devices using components originating 1 and manufactured in the United States. 2 ‘‘(F) CONTRACT REQUIREMENTS.—All con- 3 tracts issued under this paragraph shall include 4 a requirement that the contract recipients rea- 5 sonably price products produced under the con- 6 tract. 7 ‘‘(b) MANUFACTURING OF PRODUCTS.— 8 ‘‘(1) IN GENERAL.— [Text truncated for display. 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