Sec. 5. Pricing requirements for existing treatments and vaccines in a public health emergency

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Title III of the Public Health Service Act is amended by inserting after section 319A ( 42 U.S.C. 247d–1 ) the following new section: For purposes of this section: The term covered drug means a drug (including any vaccine) used to diagnose, mitigate, prevent, or treat a disease or disorder with respect to which there is or was in effect a declaration of a public health emergency under section 319. The term covered period means the period ending if and when the circumstances which led to an applicable public health emergency cease to exist and are unlikely to recur.

The term FDA-granted exclusivity means prohibitions on the submission or approval of drug applications granted under any of the following: Clauses

(ii)through

(v)of section 505(c)(3)(E) of the Federal Food, Drug, and Cosmetic Act. Subsection (j)(5)(B)(iv) or clause (ii), (iii), or

(iv)of subsection (j)(5)(F) of such Act. Section 505A of such Act. Section 505E of such Act. Section 527 of such Act. Section 351(k)(7) of this Act. Any other provision of law that provides for marketing or data exclusivity (or extension of exclusivity) with respect to a drug. The term wholesale acquisition cost has the meaning given that term in section 1847A(c)(6)(B) of the Social Security Act. During any covered period with respect to a covered drug, the Secretary shall determine that the price of a covered drug is excessive if the wholesale acquisition cost (or a more relevant measure of price) of the covered drug is not fair and reasonable, or does not facilitate global access, taking into consideration— the impact of the price on access to the covered drug in the United States, taking into consideration racial disparities and other socioeconomic disparities; the impact of the price on health program spending and budgets in the United States; the risk adjusted value of Federal subsidies and investments related to the covered drug; the costs associated with development and manufacturing of the covered drug; the size of the affected patient population in the United States and globally; and the therapeutic efficacy of the covered drug. If the Secretary determines pursuant to subsection

(b)that the price of a covered drug is excessive, the Secretary— shall waive or void any FDA-granted exclusivities with respect to the covered drug, effective on the date that the excessive price determination is made; and shall grant open, nonexclusive licenses allowing any person to make, use, offer to sell, or sell, or import into the United States such drug, and to rely upon the regulatory test data of such drug, and to access and use otherwise confidential information, including know-how, related to the manufacture of such drug in accordance with subsection (d). An entity accepting an open, nonexclusive license under subsection (c)(2) shall pay a reasonable royalty with respect to sales within the United States to the holder of a patent that claims the covered drug or that claims a use of the covered drug or to the holder of an application approved under section 505 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act for which any FDA-granted exclusivity with respect to the covered drug was terminated under subsection (c)(1). Such royalty rate shall be— a percentage of sales, where the percentage rate is no higher than the average royalty rate estimated from the data provided by the Internal Revenue Service for pharmaceutical manufacturer Federal income tax returns; or an amount as determined by the Secretary, taking into account— the therapeutic efficacy of the covered drug; the size of the affected patient population in the United States and globally; the risk adjusted value of Federal subsidies and investments related to the covered drug; the extent to which the manufacturer of the covered drug has recovered risk adjusted investments related to the covered drug, including the investments related to the invention, regulatory test data, and any other relevant research and development costs; and any other information the Secretary determines appropriate. An entity accepting an open, nonexclusive license under subsection (c)(2) shall pay a reasonable royalty with respect to sales within other countries based on the royalty rate paid in the United States times the ratio between that country’s gross domestic product per capita divided by the United States gross domestic product per capita in the last year such data was available for both countries, but such royalty shall be due only if there are granted patents or data exclusivity rights in that country at the time of sale. A royalty rate under subsection

(d)shall be consistent with making the covered drug available to purchasers, including governmental and nongovernmental purchasers and individuals, at prices that are affordable and reasonable. Under no condition shall a royalty be set at a rate that would cause a covered drug for which an open, nonexclusive license was issued under subsection

(c)to be sold at an excessive price, as determined under subsection (b). In the case that there is one or more holders or investors in the patented inventions related to the covered drug, the royalty rate shall be divided among the holders or investors (including such manufacturer) in a manner agreed upon by the manufacturer and other holders or investors, or, in the absence of such an agreement, in a manner the Secretary determines to be appropriate. An entity accepting an open, nonexclusive license under subsection (c)(2) shall sell the covered drug at a price not higher than the excessive price determined for the covered drug under subsection (b). An open, nonexclusive license under subsection (c)(2) shall be liable, subject to adequate protection of the legitimate interests of any party utilizing the license, to be terminated only if the circumstances which led to the granting of the open, nonexclusive license cease to exist and are unlikely to recur. The Secretary may review, upon request, the continued existence of these circumstances. .

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42 USC 247d–1

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Sec. 5

Pricing requirements for existing treatments and vaccines in a public health emergency

Cite42 USC 247d–1

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