To establish the National Institute for Biomedical Research and Development.

Summary: Free Market Drug Act - Establishes the National Institute for Biomedical Research and Development to provide for the development of drugs, biological products, and devices to: (1) increase the number and medical efficacy of drugs, biological products, and devices on the market; and (2) make the drugs, biological products, and devices available to the public at reasonable prices.

Requires the Director of the Institute to: (1) monitor the results of certain research to identify discoveries that, if subjected to appropriate research and development activities, may be suitable for approval by the Food and Drug Administration (FDA) as drugs, biological products, or devices for use in humans (candidate discoveries); (2) identify candidate discoveries and carry out appropriate research and development regarding such discoveries; (3) establish, review, and revise a plan for the development, testing, and manufacture of candidate discoveries through the Institute; (4) establish priorities among candidate discoveries; and (5)) maintain an Internet site to make available to the public information on activities under this Act.

Allows the Director to identify a discovery as a candidate discovery only if the Federal Government holds, or can reasonably be expected to obtain, a patent on the discovery. Prohibits the Director from transferring ownership of such patent to any non-Federal entity.

Allows civil suits to protect Federal ownership of patents.

Requires the Director to: (1) grant non-exclusive licenses for the commercial marketing of FDA-approved candidate discoveries; (2) establish Federal laboratories to carry out this Act; and (3) establish a fund to provide cash awards for making significant advances in knowledge regarding a disease, disorder, or other health condition.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Free Market Drug Act''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) Prescription drugs are increasingly expensive and 
        unaffordable for the patients that need them. The Congressional 
        Budget Office estimates that drug costs have risen at a 19.1 
        percent annual rate over the last eight years and projects that 
        they will rise at a 10.1 percent rate annual over the next 
        decade. Drug prices are far higher in the United States than in 
        any other developed country because it is the only country that 
        grants pharmaceutical companies a monopoly in the market, based 
        on patent protection, without any corresponding restriction on 
        prices.
            (2) New pharmaceuticals are decreasing in number and 
        quality. In 2002, 17 new drugs classified as new compounds were 
        approved by the Food and Drug Administration (``FDA''), down 
        from 24 in 2001 and 27 in 2000. The vast majority of new drugs 
        are not breakthrough cures, but rather copycat drugs. According 
        to the FDA, more than 70 percent of new drugs approved in the 
        last decade do not constitute qualitative improvements over 
        existing treatments.
            (3) Pharmaceutical manufacturers have distorted the quality 
        of drug research in many instances, such as with the drug 
        Celebrex. Often due to the influence of the funding source, 
        drug research has been shown to suffer from concealed and 
        distorted findings, bias, conflicts of interest, and secrecy.

SEC. 3. ESTABLISHMENT OF NATIONAL INSTITUTE FOR BIOMEDICAL RESEARCH AND 
              DEVELOPMENT.

    Part C of title IV of the Public Health Service Act (42 U.S.C. 285 
et seq.) is amended by adding at the end the following subpart:

     ``Subpart 19--National Institute for Biomedical Research and 
                              Development

                       ``purpose of the institute

    ``Sec. 464z-1. (a) In General.--The general purpose of the National 
Institute for Biomedical Research and Development (in this section 
referred to as the `Institute') is to provide in accordance with this 
section for the development of drugs, biological products, and devices, 
including through Federal laboratories under subsection (f), in a 
manner that will foster an increase in the number and medical efficacy 
of drugs, biological products, and devices on the market and will make 
the drugs, biological products, and devices available to the public at 
reasonable prices.
    ``(b) Identification of Candidate Discoveries.--The Director shall 
monitor the results of research conducted or supported by the National 
Institutes of Health, and by other appropriate public or private 
entities, in order to identify discoveries that, if subjected to 
appropriate research and development activities, may be suitable for 
the submission of applications for approval by the Food and Drug 
Administration as drugs, biological products, or devices for use in 
humans (referred to in this section as `candidate discoveries').
    ``(c) Research and Other Activities Regarding Candidate 
Discoveries.--
            ``(1) In general.--The Director of the Institute shall 
        conduct and support research, training, the dissemination of 
        information, and other programs toward identifying candidate 
        discoveries and carrying out appropriate research and 
        development activities regarding such discoveries.
            ``(2) Annual plan.--The Director of the Institute shall 
        establish, and annually review and as appropriate revise, a 
        plan for the development, testing, and manufacture of candidate 
        discoveries through the Institute.
            ``(3) Awards regarding research and development.--Each 
        award of financial assistance under paragraph (1) for research 
        and development activities shall be an award of a cooperative 
        agreement or a contract.
            ``(4) Priorities.--In allocating the resources of the 
        Institute, the Director of the Institute shall establish 
        priorities among candidate discoveries.
            ``(5) Internet site.--The Director of the Institute shall 
        maintain an Internet site to make available to the public 
        information on activities under this section, including 
        activities carried out by the Director and activities carried 
        out under cooperative agreements or contracts under paragraph 
        (1). Information posted on such site shall be updated 
        quarterly, or on such more frequent intervals as the Director 
        determines to be appropriate. Such information shall include 
        the following:
                    ``(A) An identification of candidate discoveries 
                that are receiving priority under paragraph (4).
                    ``(B) All raw data developed under paragraph (1) in 
                carrying out research and development activities.
                    ``(C) Findings made in carrying out such 
                activities.
    ``(d) Patents.--
            ``(1) In general.--The Director may identify a discovery as 
        a candidate discovery only if the Federal Government holds, or 
        can reasonably be expected to obtain, a patent on the 
        discovery. The Director may not transfer ownership of such 
        patent to any non-Federal entity, notwithstanding any 
        conflicting provision of chapter 18 of title 35, United States 
        Code.
            ``(2) Citizens' suits for protection of federal ownership 
        of patents.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), any person may on his or her behalf 
                commence a civil action in an appropriate district 
                court of the United States against--
                            ``(i) any person in order to protect 
                        Federal ownership of patents on candidate 
                        discoveries; or
                            ``(ii) the Secretary where there is alleged 
                        a failure of the Secretary to protect Federal 
                        ownership of such patents.
                    ``(B) Relief.--In a civil action under subparagraph 
                (A), the district court involved may, as the case may 
                be--
                            ``(i) enforce the compliance of a person 
                        with provisions relating to Federal ownership 
                        of patents; or
                            ``(ii) order the Secretary to perform an 
                        act or duty relating to such ownership.
                    ``(C) Limitations.--
                            ``(i) Notice to secretary.--A civil action 
                        may not be commenced under subparagraph (A)(i) 
                        prior to 60 days after the plaintiff has 
                        provided to the Secretary notice of the 
                        violation involved.
                            ``(ii) Relation to actions of secretary.--A 
                        civil action may not be commenced under 
                        subparagraph (A)(ii) if the Secretary has 
                        commenced and is diligently prosecuting a civil 
                        action in a district court of the United States 
                        to protect the Federal ownership of the patent 
                        involved.
                    ``(D) Right of secretary to intervene.--In any 
                civil action under subparagraph (A), the Secretary, if 
                not a party, may intervene as a matter of right.
                    ``(E) Award of costs; filing of bond.--In a civil 
                action under subparagraph (A), the district court 
                involved may award costs of litigation (including 
                reasonable attorney and expert witness fees) to any 
                party whenever the court determines such an award is 
                appropriate. The court may, if a temporary restraining 
                order or preliminary injunction is sought, require the 
                filing of a bond or equivalent security in accordance 
                with the Federal Rules of Civil Procedure.
                    ``(F) Savings provision.--This paragraph does not 
                restrict any right that a person (or class of persons) 
                may have under any statute or common law to seek 
                enforcement of provisions relating to Federal ownership 
                of patents on candidate discoveries, or to seek any 
                other relief (including relief against the Secretary).
    ``(e) Application for Approval by Food and Drug Administration.--
            ``(1) In general.--Each application submitted to the Food 
        and Drug Administration for the approval of a candidate 
        discovery, or for authorization to engage in investigational 
        uses of the discovery, shall be submitted by the Director of 
        the Institute or by a private entity. In the case of a private 
        entity, such application shall be submitted pursuant to--
                    ``(A) a cooperative agreement or contract between 
                the Director of the Institute and the private entity; 
                and
                    ``(B) a nonexclusive license granted by the 
                Director to the private entity for the commercial 
                marketing of the discovery, notwithstanding any 
                conflicting provision of chapter 18 of title 35, United 
                States Code.
            ``(2) Institute as holder of approved application.--In the 
        case of an application referred to in paragraph (1) that is 
        submitted by the Director of the Institute and approved by the 
        Food and Drug Administration, the Director, promptly after such 
        approval, shall seek to provide to one or more appropriate 
        private entities nonexclusive licenses for the commercial 
        marketing of the candidate discovery involved, notwithstanding 
        any conflicting provision of chapter 18 of title 35, United 
        States Code.
    ``(f) Federal Laboratory System.--
            ``(1) In general.--The Director of the Institute shall 
        carry out this section directly and through Federal 
        laboratories established by the Director in accordance with 
        paragraph (2).
            ``(2) Certain requirements.--Subject to the extent of 
        amounts made available in appropriations Acts, the Director 
        shall establish 10 laboratories under paragraph (1). Each such 
        laboratory shall be established within the National Institutes 
        of Health, and shall be headed by an Associate Director, who 
        shall be appointed by the Director of the Institute. With 
        respect to the location of the laboratories, the laboratories 
        shall be equitably distributed among the various regions of the 
        United States.
            ``(3) Ten-year performance review.--Promptly after the 
        expiration of the ten-year period beginning on the date on 
        which a Federal laboratory under paragraph (2) becomes 
        operational (as determined by the Director), and every ten 
        years thereafter, the Director of the Institute shall provide 
        for a comprehensive review of the performance of the 
        laboratory. The Director may, for good cause found pursuant to 
        such a review, terminate the laboratory. If the laboratory is 
        terminated, the Director of the Institute shall transfer the 
        duties of the laboratory, and the funds and other assets of the 
        laboratory, to the remaining laboratories under paragraph (2), 
        and shall transfer within the Institute the officers and 
        employees of the laboratory, or otherwise provide for the 
        disposition of such officers and employees in accordance with 
        applicable law.
    ``(g) Rewards for Significant Advances.--The Director of the 
Institute shall establish a fund, consisting of amounts reserved under 
subsection (i)(2), from which the Director may provide cash awards to 
individuals or organizations that, in carrying out research and 
development activities under subsection (c), make significant advances 
in knowledge regarding a disease, disorder, or other health condition, 
including new treatments or diagnostic techniques.
    ``(h) Definitions.--For purposes of this section:
            ``(1) The term `biological product' has the meaning that 
        applies under section 351.
            ``(2) The terms `drug' and `device' have the meanings given 
        such terms under section 201 of the Federal Food, Drug, and 
        Cosmetic Act.
    ``(i) Funding.--
            ``(1) Authorization of appropriations.--For the purpose of 
        carrying out this section, there are authorized to be 
        appropriated $19,930,000,000 for fiscal year 2004, 
        $20,400,000,000 for fiscal year 2005, $20,910,000,000 for 
        fiscal year 2006, $21,430,000,000 for fiscal year 2007, and 
        $21,970,000,000 for fiscal year 2008.
            ``(2) Rewards for significant advances.--Of the amounts 
        appropriated under paragraph (1) for a fiscal year, the 
        Director of the Institute shall reserve $50,000,000 for the 
        fund under subsection (g).''.