MMAPPP Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 7296 To require any COVID–19 drug developed in whole or in part with Federal support to be affordable and accessible by prohibiting monopolies and price gouging, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 22, 2020 Ms. SCHAKOWSKY (for herself, Mr. ROONEY of Florida, Mr. DOGGETT, Ms. DELAURO, Mr. DEFAZIO, Mr. POCAN, and Ms. JAYAPAL) introduced the following bill; which was referred to the Committee on Energy and Com- merce, and in addition to the Committees on the Judiciary, Science, Space, and Technology, and Armed Services, for a period to be subse- quently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To require any COVID–19 drug developed in whole or in part with Federal support to be affordable and accessible by prohibiting monopolies and price gouging, 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 ‘‘Make Medications Af- 4 fordable by Preventing Pandemic Price gouging Act of 5 2020’’ or the ‘‘MMAPPP Act of 2020’’. 6 VerDate Sep 11 2014 21:18 Jul 13, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 2 •HR 7296 IH SEC. 2. REQUIREMENTS FOR LICENSING OF NEW COVID–19 1 TREATMENT AND PREVENTION TECH- 2 NOLOGIES TO MEET DOMESTIC AND GLOBAL 3 DEMAND. 4 (a) NONEXCLUSIVE LICENSE REQUIRED.—Any cov- 5 ered license granted by the Federal Government shall be 6 an open, nonexclusive license. 7 (b) CONTRACTOR, ASSIGNEE, EXCLUSIVE LI- 8 CENSEE.—Notwithstanding any other provision of law, 9 any contractor, assignee, or exclusive licensee to an inven- 10 tion developed in whole or in part in work performed 11 under a covered transaction shall grant an open, non-ex- 12 clusive license. If any such contractor, assignee, or exclu- 13 sive licensee refuses to grant such license, the Federal gov- 14 ernment shall grant the license. 15 (c) REASONABLE ROYALTY.— 16 (1) IN GENERAL.—Except as provided in para- 17 graph (4), an entity that accepts an open, nonexclu- 18 sive license under this section shall pay a reasonable 19 royalty with respect to sales within the United 20 States to— 21 (A) the holder of a patent that claims the 22 COVID–19 related invention; or 23 (B) to the holder of an application ap- 24 proved under section 505 of the Federal Food, 25 Drug, and Cosmetic Act (21 U.S.C. 355) or 26 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 3 •HR 7296 IH section 351 of the Public Health Service Act 1 (42 U.S.C. 262) for which any FDA-granted 2 exclusivity with respect to a drug related to 3 such invention that was terminated under this 4 section. 5 (2) ROYALTY.—The reasonable royalty de- 6 scribed under paragraph (1) shall be a percentage of 7 sales of the entity paying the royalty, where the per- 8 centage rate is no higher than the average royalty 9 rate estimated from the data provided by the Inter- 10 nal Revenue Service for pharmaceutical manufac- 11 turer Federal income tax returns. 12 (3) REQUIREMENTS.— 13 (A) IN GENERAL.—The royalty described 14 under paragraph (2) shall be subject to the ap- 15 plicable royalty rate requirements of section 16 319B of the Public Health Service Act, as 17 added by section 5 of this Act. 18 (B) MULTIPLE AFFECTED PARTIES.—In 19 the case of more than one recipient of a royalty, 20 the royalty shall be divided among each such re- 21 cipient (including any manufacturer) in a man- 22 ner agreed upon by the manufacturer and other 23 recipients, or, in the absence of such an agree- 24 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 4 •HR 7296 IH ment, in a manner the Secretary determines to 1 be appropriate. 2 (4) EXCEPTION FOR GOVERNMENT-OWNED IN- 3 VENTIONS.—An entity that accepts an open, non- 4 exclusive license for a federally owned invention de- 5 scribed under section 207 of title 35, United States 6 Code, is not required to pay a royalty under this sec- 7 tion. 8 (d) DEFINITIONS.—In this section: 9 (1) COVERED LICENSE.—The term ‘‘covered li- 10 cense’’ means a license that allows a licensee to 11 make, use, offer to sell, or sell, export, or import 12 into the United States or any other country or terri- 13 tory a COVID–19 related invention pursuant to— 14 (A) section 207 of title 35, United States 15 Code; and 16 (B) section 12 of the Stevenson-Wydler 17 Technology Innovation Act of 1980 (15 U.S.C. 18 3710a). 19 (2) COVERED TRANSACTION.—The term ‘‘cov- 20 ered transaction’’ means any contract, funding 21 agreement, license, other transaction, or other ar- 22 rangement entered into between a party and the 23 Federal Government on or after the date of enact- 24 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 5 •HR 7296 IH ment of this Act with respect to research and devel- 1 opment regarding a drug that— 2 (A) is intended or anticipated to be used to 3 diagnose, mitigate, prevent, or treat COVID– 4 19; and 5 (B) consists of— 6 (i) a licensing agreement pursuant to 7 section 207 of title 35, United States 8 Code; 9 (ii) a cooperative research and devel- 10 opment agreement and licensing agreement 11 pursuant to section 12 of the Stevenson- 12 Wydler Technology Innovation Act of 1980 13 (15 U.S.C. 3710a); 14 (iii) a funding agreement, as defined 15 under section 201 of title 35, United 16 States Code; or 17 (iv) any other transaction entered into 18 pursuant to— 19 (I) section 319L, 421, or 480 of 20 the Public Health Service Act (42 21 U.S.C. 247d–7e, 285b–3, 287a); 22 (II) section 105 of the National 23 Institutes of Health Reform Act of 24 2006 (42 U.S.C. 284n); or 25 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 6 •HR 7296 IH (III) section 2371 of title 10, 1 United States Code. 2 (3) COVID–19 RELATED INVENTION.—The 3 term ‘‘COVID–19 related invention’’ means any in- 4 vention that claims a drug that is manufactured, 5 used, designed, developed, modified, licensed, or pro- 6 cured to diagnose, mitigate, prevent, treat, or cure 7 COVID–19; a use of such drug; a form of such 8 drug; a method of use of such drug; or a method of 9 manufacturing such drug. 10 (4) FDA-GRANTED EXCLUSIVITY.—The term 11 ‘‘FDA-granted exclusivity’’ means prohibitions on 12 the submission or approval of drug applications 13 granted under any of the following: 14 (A) Clauses (ii) through (v) of section 15 505(c)(3)(E) of the Federal Food, Drug, and 16 Cosmetic Act (21 U.S.C. 355(c)(3)(E)). 17 (B) Subsection (j)(5)(B)(iv) or clause (ii), 18 (iii), or (iv) of subsection (j)(5)(F) of such Act 19 (21 U.S.C. 355(c)(3)(E)). 20 (C) Section 505A of such Act (21 U.S.C. 21 355a). 22 (D) Section 505E of such Act (21 U.S.C. 23 355f). 24 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 7 •HR 7296 IH (E) Section 527 of such Act (21 U.S.C. 1 360cc). 2 (F) Section 351(k)(7) of this Act (42 3 U.S.C. 262(k)(7)). 4 (G) Any other provision of law that pro- 5 vides for marketing or data exclusivity (or ex- 6 tension of exclusivity) with respect to a drug. 7 (5) OPEN, NONEXCLUSIVE LICENSE.—The term 8 ‘‘open, nonexclusive license’’ means a license that al- 9 lows a qualified licensee, subject to the provisions of 10 the Federal Food, Drug, and Cosmetic Act (21 11 U.S.C. 301 et seq.) and the Public Health Service 12 Act (42 U.S.C. 201 et seq.)— 13 (A) to make, use, offer to sell, sell, export, 14 or import into the United States and any other 15 country and territory an invention; 16 (B) to reference or rely upon earlier-sub- 17 mitted regulatory test data or the earlier grant 18 of marketing approval of a treatment or vaccine 19 related to such invention; and 20 (C) to access and use otherwise confiden- 21 tial know-how relating to the manufacture of 22 such invention. 23 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 8 •HR 7296 IH SEC. 3. REQUIREMENTS FOR REASONABLE PRICING OF 1 FEDERALLY SUPPORTED COVID–19 DRUGS. 2 (a) REASONABLE PRICING REQUIREMENTS.—Any 3 covered transaction shall include terms and conditions re- 4 quiring that the pricing of the drug by the party referred 5 to in subsection (b)(1) be fair and reasonable, and facili- 6 tate global access, taking into consideration— 7 (1) the impact of the price on access to the 8 drug in the United States, taking into consideration 9 racial disparities in COVID–19 cases and fatalities 10 and other socioeconomic disparities; 11 (2) the impact of the price on health program 12 spending and budgets in the United States; 13 (3) the risk adjusted value of Federal subsidies 14 and investments related to the drug; 15 (4) the costs associated with development and 16 manufacturing of the drug; 17 (5) the size of the affected patient population in 18 the United States and globally; and 19 (6) the therapeutic efficacy of the drug. 20 (b) DEFINITIONS.—In this section: 21 (1) COVERED TRANSACTION.—The term ‘‘cov- 22 ered transaction’’ has the meaning given to such 23 term in section 2. 24 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 9 •HR 7296 IH (2) DRUG.—The term ‘‘drug’’ has the meaning 1 given to such term in section 201 of the Federal 2 Food, Drug, and Cosmetic Act (21 U.S.C. 321). 3 SEC. 4. REPORTING ON THE EXPENDITURES OF MANUFAC- 4 TURERS WITH RESPECT TO COVID–19 DRUGS. 5 (a) COVERED DRUG.—For purposes of this section, 6 the term ‘‘covered drug’’ means a drug that is intended 7 or anticipated to be used to diagnose, mitigate, prevent, 8 or treat COVID–19. 9 (b) REPORTING REQUIRED.—The manufacturer of a 10 covered drug shall submit a report described in subsection 11 (c) to the Secretary upon— 12 (1) the submission of an application for ap- 13 proval of the drug under subsection (b) or (j) of sec- 14 tion 505 of the Federal Food, Drug, and Cosmetic 15 Act (21 U.S.C. 355); 16 (2) investigational use of the drug under section 17 505(i) of the Federal Food, Drug, and Cosmetic Act 18 (21 U.S.C. 355(i)) or section 351 of the Public 19 Health Service Act (42 U.S.C. 262); 20 (3) the submission of an application for licens- 21 ing the drug under subsection (a) or (k) of section 22 351 of the Public Health Service Act (42 U.S.C. 23 262); 24 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 10 •HR 7296 IH (4) the issuance of an authorization for emer- 1 gency use of the drug under section 564 of the Fed- 2 eral Food, Drug, and Cosmetic Act (21 U.S.C. 3 360bbb–3); or 4 (5) the marketing of the drug. 5 (c) CONTENTS.—A report under subsection (a), con- 6 sistent with the standard for disclosures described in sec- 7 tion 213.3(d) of title 12, Code of Federal Regulations (as 8 in effect on the date of enactment of this Act), shall ad- 9 dress the expenditures of the manufacturer with respect 10 to the covered drug and include, at a minimum— 11 (1) the sponsor or sponsors of the covered drug; 12 and 13 (2) the current wholesale acquisition cost of the 14 covered drug when applicable; 15 (3) the total expenditures of the manufacturer, 16 specified by individual costs, on— 17 (A) materials and manufacturing for the 18 covered drug; and 19 (B) acquiring patents and licensing for the 20 covered drug; 21 (4) the total amount and percentage of research 22 and development expenditures for the covered drug 23 that was derived from Federal funds; 24 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 11 •HR 7296 IH (5) the total amount of any Federal benefits re- 1 ceived by the manufacturer with respect to the cov- 2 ered drug, including— 3 (A) the specific amounts and periods of 4 impact for each such benefit; 5 (B) the specific value of any tax credits, 6 including benefits from patient assistance pro- 7 grams and donated samples; 8 (C) clinical and preclinical investments; 9 (D) any Federal benefit toward manufac- 10 turing costs, including building or retrofitting 11 facilities; 12 (E) Federal grants, including from the Na- 13 tional Institutes of Health, the Centers for Dis- 14 ease Control and Prevention, the Department of 15 Defense, the Department of Energy, or other 16 Federal departments or agencies; 17 (F) patent applications that benefitted 18 from such grants; 19 (G) patent extensions; 20 (H) exclusivity periods; and 21 (I) waivers of fees; 22 (6) the total expenditures of the manufacturer 23 on research and development, itemized by basic and 24 preclinical research and by clinical research, re- 25 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond on DSKJM1Z7X2PROD with BILLS 12 •HR 7296 IH ported separately for each clinical trial, for the cov- 1 ered drug to demonstrate that the covered drug 2 meets applicable statutory standards for approval 3 under section 505 of the Federal Food, Drug, and 4 Cosmetic Act (21 U.S.C. 355), licensure under sec- 5 tion 351 of the Public Health Service Act (42 6 U.S.C. 262), an exemption for investigational use 7 under section 505(i) of the Federal Food, Drug, or 8 Cosmetic Act (21 U.S.C. 355(i)) or section 351 of 9 the Public Health Service Act, or approval under 10 section 564 of the Federal Food, Drug, and Cos- 11 metic Act (21 U.S.C. 360bbb–3), as applicable; 12 (7) the total expenditures of the manufacturer 13 on pursuing new or expanded indications or dosage 14 changes for the covered drug under section 505 of 15 the Federal Food, Drug, and Cosmetic Act (21 16 U.S.C. 355) or section 351 of the Public Health 17 Service Act (42 U.S.C. 262); 18 (8) the total expenditures of the manufacturer 19 on carrying out postmarket requirements related to 20 such drug, including under section 505(o)(3) of the 21 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 22 355–1); 23 VerDate Sep 11 2014 04:34 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H7296.IH H7296 khammond o [Text truncated for display. 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