Sec. 6. Requirements for entering into a licensing agreement
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Upon retaining the title to any subject invention under section 202 of title 35, United States Code, or entering into a partial or exclusive licensing agreement relating to an applicable drug, the drug manufacturer shall agree to— beginning one year after an applicable drug first comes to market, limit the annual price increase on such drug to the percentage by which the medical care consumer price index detailed expenditure category for all urban consumers for that year exceed such index for the preceding calendar year; submit to the Drug Affordability and Access Committee, on a good faith timeline that is consistent with the recommendation under section 5(f)(2)(A)(ii)— the manufacturer list price for the drug; the retail price for the drug; information on expenditures, including— the total annual expenditures of the manufacturer on materials and manufacturing for the drug; the total expenditures of the manufacturer on acquiring patents and licensing for the drug, including expected royalty payments; the total expenditures of the manufacturer on research and development as shown on the manufacturer’s Federal tax returns under sections 41 and 174 of the Internal Revenue Code of 1986; the amount of the manufacturer's total expenditures derived from any Federal funding source, including tax deductions or credits claimed; and total expected expenditures for marketing and advertising for the drug in the first 3 years that the drug is on the market; the anticipated number of patients who will be treated with the drug; a copy of the application submitted under section 505(b) of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 355(b) ) or section 351(a) of the Public Health Service Act ( 42 U.S.C. 262(a) ) and any subsequent information or data requested by, or submitted to, the Food and Drug Administration during the approval process; any additional information requested by the Drug Affordability and Access Committee; and any additional information the manufacturer chooses to provide related to drug pricing decisions; submit the manufacturer list price and retail price of an applicable drug to the Drug Affordability and Access Committee for a reasonable price determination; and beginning one year after an applicable drug first comes to market, not exceed the reasonable price, as determined by such Committee, for the drug’s manufacturer list price.
In the case of a drug manufacturer subject to this section who increases the price of an applicable drug to an amount that exceeds the amount under subsection (a)(1) or exceeds the reasonable price as required under subsection (a)(4), any period of market exclusivity with respect to the applicable drug shall be deemed expired, effective on the date of such price increase or launch price. If a drug manufacturer fails to adhere to the limit on annual price increases under subsection (a)(1), such drug manufacturer, and its president, chief executive officer, chief operating officer, and general counsel employed at the time of the violation, shall be ineligible for future licensing agreements for qualifying patented technology.
If a drug manufacturer fails to adhere to the reasonable price as required under subsection (a)(4), the drug manufacturer, and its president, chief executive officer, chief operating officer, and general counsel, shall be ineligible for future licensing agreements for qualifying patented technology. Any manufacturer that fails to submit information required under subsection (a)(2) to be submitted to the Drug Affordability and Access Committee, or who submits false information to such Committee shall be subject to a civil monetary penalty of $500,000 and if a violation is not corrected within 30 days following notification of such violation, $1,000,000 for each day that the violation continues after such period until the violation is corrected.
If a drug manufacturer’s launch price in the first year for an applicable drug is at least 50 percent higher than the reasonable price as required under subsection (a)(4) to be in effect for the second year, the drug manufacturer shall be subject to a civil monetary penalty of the cost of the drug in excess of 50 percent multiplied by the number of doses of the drug sold in the United States in the first year on the market. Each fiscal year, there shall be transferred, out of funds in the Treasury not otherwise obligated, to the Director of the National Institutes of Health, an amount equal to the amount collected in civil penalties under this subsection during the previous fiscal year, unless the amount otherwise appropriated to the National Institutes of Health for the fiscal year in which such transfer would occur is less than the amount so appropriated for the previous fiscal year.
If, in accordance with clause (i), the Secretary of the Treasury does not transfer amounts under such clause during any portion of a fiscal year, and, at a later date in such fiscal year, the appropriations to the National Institutes of Health becomes equal to or greater than the amount of appropriations for the previous fiscal year, such Secretary shall transfer such amount at any time in such fiscal year.
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