Sec. 4. Subscription contracts

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After approval under section 505(c) of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 355(c) ) or licensure under section 351(a) of the Public Health Service Act ( 42 U.S.C. 262(a) ), the sponsor of an antimicrobial drug designated as a critical need antimicrobial under section 3 may submit an application for a subscription contract with the Secretary, under a procedure established by the Secretary. The Secretary shall, in consultation with the Committee— review all applications for subscription contracts under paragraph

(1)and assess all required application components; determine the extent to which the critical need antimicrobial meets the favored characteristics identified under section 2(c)(2), and deny any application for a drug that meets none of such characteristics; and assign a monetary value to the contract based on the regulations developed under section 2(d). To qualify for a subscription contract under this section, the sponsor of an antimicrobial drug designated as a critical need antimicrobial shall agree to— ensure commercial and Federal availability of the antimicrobial drug within 30 days of receiving first payment under the contract, and sufficient supply for susceptibility device manufacturers; identify, track, and publicly report drug resistance data and trends using available data related to the antimicrobial drug; develop and implement education and communications strategies, including communications for individuals with limited English proficiency and individuals with disabilities, for health care professionals and patients about appropriate use of the antimicrobial drug; submit an appropriate use assessment to the Secretary, Committee, Food and Drug Administration, and Centers for Disease Control and Prevention every 2 years regarding use of the antimicrobial drug, including how the drug is being marketed; submit a plan for registering the drug in additional countries where an unmet medical need exists; ensure a reliable drug supply chain, where any interruption to the supply chain will not last for more than 60 days in the United States; complete any postmarketing studies required by the Food and Drug Administration in a timely manner; produce the drug at a reasonable volume determined with the Secretary to ensure patient access to the drug; price the drug at a price that is not lower than a comparable generic drug; and abide by other terms as the Secretary may require. A subscription contract under this section shall be for the sale to the Secretary of any quantity of the antimicrobial drug needed over the term of the contract under paragraph (2), at an agreed upon price, for a total projected amount determined by the Secretary that is not less than $750,000,000 and not more than $3,000,000,000, adjusted for inflation, accounting for the favored characteristics of the drug, as determined by the Secretary, in consultation with the Committee, under subsection (a)(2), and shall be allocated from the amount made available under section 6(a). Not later than 6 months after the subscription contract is granted under subsection (a), the Secretary shall provide payments for purchased drugs in installments established by the Secretary in consultation with the sponsor of the antimicrobial drug and in accordance with subsection (d)(3). Funds received by the sponsor may be used to support criteria qualification under subsection (b), the completion of postmarketing clinical studies, manufacturing, and other preclinical and clinical activities agreed to by the Secretary and sponsor in the contract. The initial term of a contract under this subsection shall be no less than 5 years or greater than the greater of 10 years or the remaining period of time during which the sponsor has patent protections or a remaining exclusivity period with respect to the antimicrobial drug in the United States, as listed in the publication of the Food and Drug Administration entitled Approved Drug Products with Therapeutic Equivalence Evaluations . Payments may be in equal annual installments with the option to redeem 50 percent of the last year’s reimbursement in year 1 of the contract in order to offset costs of establishing manufacturing capacity, or another subscription arrangement to which the Secretary and sponsor agree. Subscription contracts shall remain in effect for such period even if the infection treated by such antimicrobial drug is later removed from the list of infections under section 2(c)(1). The Secretary may extend subscription contracts beyond the initial contract period with a generic or biosimilar brand manufacturer of the antimicrobial drug receiving a subscription contract or the original drug manufacturer. A single contract extension may be in effect not later than the date on which all periods of exclusivity granted by the Food and Drug Administration expire and shall be in an amount not to exceed $25,000,000 per year. All other terms of an extended contract shall be the same as the terms of the initial contract. The total amount of funding used on such contract extensions shall be no more than $1,000,000,000, and shall be allocated from the amount made available under section 6. The Secretary or sponsor, every 2 years after the start of the contract period under this subsection, may request a modification of the amount of the contract based on information that adjusts favored characteristics in section 2(c)(2). In the case of an antimicrobial drug that received a transitional subscription contract under section 2(f), the amount of a subscription contract for such drug under this section shall be reduced by the amount of the transitional subscription contract under such section 2(f) for such drug. Not later than a date determined appropriate by the Secretary following the end of each calendar year, the head (or a designee of such head) of each Federal agency carrying out a specified government program shall, in accordance with this paragraph, report to the Secretary of Health and Human Services the total prescription drug sales for each applicable antimicrobial drug under contract with respect to such program for such calendar year. For purposes of subparagraph (A), the Secretary shall report, for each applicable antimicrobial drug covered under part D of title XVIII of the Social Security Act ( 42 U.S.C. 1395w–101 et seq.), the product of— the per-unit ingredient cost, as reported to the Secretary by prescription drug plans and Medicare Advantage prescription drug plans, minus any per-unit rebate, discount, or other price concession provided, as reported to the Secretary by the prescription drug plans and the Medicare Advantage prescription drug plans; and the number of units of such applicable antimicrobial drug paid for under such part D. For purposes of subparagraph (A), the Secretary shall report, for each applicable antimicrobial drug covered under part B of title XVIII of the Social Security Act ( 42 U.S.C. 1395j et seq.), the product of— the per-unit average sales price (as defined in section 1847A(c) of such Act (42 U.S.C. 1395w–3a(c))) or the per-unit payment rate under such part B for a separately paid prescription drug without a reported average sales price; and the number of units of such applicable antimicrobial drug paid for under such part B. For purposes of subparagraph (A), the Secretary shall report, for each applicable antimicrobial drug covered under part A of title XVIII of the Social Security Act ( 42 U.S.C. 1395c et seq.), the product of— the per-unit price under such part A for the antimicrobial drug; and the number of units of such antimicrobial drug paid for under such part A. For purposes of clause (i), the Secretary shall establish a process for determining the units and the allocated price for those prescription drugs that are not separately payable or for which National Drug Codes are not reported in the diagnosis-related groups. Under the authority of section 1902(a)(6) of the Social Security Act ( 42 U.S.C. 1396a(a)(6) ), the Secretary shall require each State that makes medical assistance available under the State Medicaid program for an applicable antimicrobial drug (including, if applicable, any such drug which is a covered outpatient drug under a rebate agreement entered into under section 1927 of such Act ( 42 U.S.C. 1396r–8 )) to report to the Secretary, not later than the date established under subparagraph (A), for each dosage form and strength and package size of each such drug dispensed during the preceding calendar year under the State Medicaid program, the amount equal to— the product of— the per-unit ingredient cost paid by the State for each such drug; and the number of units of such drug paid for under the State Medicaid program; minus any discounts or other price concessions provided and rebates paid to the State with respect to such drug and such calendar year (including rebates paid under a rebate agreement under section 1927 of such Act ( 42 U.S.C. 1396r–8 ) and any State supplemental rebates paid under a supplemental rebate agreement). For purposes of subparagraph (A), the Secretary of Veterans Affairs shall report the total amount paid for each applicable antimicrobial drug procured by the Veterans Health Administration for individuals who receive health care from the Administration. For purposes of subparagraph (A), the Secretary of Defense shall report the sum of— the total amount paid for each applicable antimicrobial drug procured by the Department of Defense for individuals who receive health care from the Department; and for each applicable antimicrobial drug dispensed under the TRICARE retail pharmacy program, the product of— the per-unit ingredient cost, minus any per-unit rebate paid by the covered entity; and the number of units of such applicable antimicrobial drug dispensed under such program. For purposes of subparagraph (A), the Secretary of Homeland Security shall report the total amount paid for each applicable antimicrobial drug procured by the Department of Homeland Security for individuals who receive health care through a program carried out by the Department. For purposes of subparagraph (A), the Director of the Bureau of Prisons shall report the total amount paid for each applicable antimicrobial drug procured by the Bureau of Prisons for individuals who receive health care through the Bureau. For purposes of subparagraph (A), the Secretary, acting through the Indian Health Service, shall report the total amount paid for each applicable antimicrobial drug procured by the Service for individuals who receive health care through the Service. Not later than 1 year after the date of enactment of this Act, the Secretary shall publish guidance to assist the heads (or designees) of Federal agencies carrying out specified government programs in carrying out the requirements under this section. Pursuant to the contract entered into under this section with respect to an applicable antimicrobial drug, for each year of the term of such contract, the Secretary shall subtract from the payment installments determined for such contract under subsection (c)(1) for such year the revenue of the sponsor of such drug from the previous year from sales of the applicable antimicrobial drug reported under paragraph

(1)for specified government programs. In this subsection: The term applicable antimicrobial drug means an antimicrobial drug for which the sponsor of such drug receives a subscription contract under subsection (a). The term specified government program means— the Medicare part D program under part D of title XVIII of the Social Security Act ( 42 U.S.C. 1395w–101 et seq.); the Medicare Part B program under part B of such title XVIII ( 42 U.S.C. 1395j et seq.); the Medicare Part A program under part A of such title XVIII ( 42 U.S.C. 1395c et seq.); the Medicaid program established under title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq.) and includes, with respect to a State, any waiver in effect with respect to such program; any program under which prescription drugs are procured by the Department of Veterans Affairs; any program under which branded prescription drugs are procured by the Department of Defense; the TRICARE retail pharmacy program under section 1074g of title 10, United States Code; any program under which prescription drugs are procured by the Department of Homeland Security; any program under which prescription drugs are procured by the Bureau of Prisons; or any program under which prescription drugs are procured by the Indian Health Service. The Secretary shall cease any payment installments under a contract under this section if— the sponsor— permanently withdraws the antimicrobial drug from the market in the United States; fails to meet criteria under subsection (b); or does not complete a postmarket study required by the Food and Drug Administration during the length of the term of the contract; or the annual international and private insurance market revenues with respect to an antimicrobial drug (not counting any subscription revenues from any source pursuant to a contract under this section or other international or private entities) exceed 5 times the average annual amount of the subscription contract paid by the Secretary as certified by the sponsor annually. The Secretary shall make efforts to increase the participation of domestic private payors and international payors in subscription contracts or other types of pull incentives that are similar to the subscription contracts authorized under this section.

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