# Patient Protection and Affordable Care Act/Title VII
## Subtitle A--Biologics Price Competition and Innovation
### SEC. 7001. SHORT TITLE.

* (a) In General- This subtitle may be cited as the `Biologics Price Competition and Innovation Act of 2009'.
* (b) Sense of the Senate- It is the sense of the Senate that a biosimilars pathway balancing innovation and consumer interests should be established.

### SEC. 7002. APPROVAL PATHWAY FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

* (a) Licensure of Biological Products as Biosimilar or Interchangeable- Section 351 of the Public Health Service Act (42 U.S.C. 262) is amended--
** (1) in subsection (a)(1)(A), by inserting `under this subsection or subsection (k)' after `biologics license'; and
** (2) by adding at the end the following:
* (k) Licensure of Biological Products as Biosimilar or Interchangeable-
** (1) IN GENERAL- Any person may submit an application for licensure of a biological product under this subsection.
** (2) CONTENT-
*** (A) IN GENERAL-
**** (i) REQUIRED INFORMATION- An application submitted under this subsection shall include information demonstrating that--
***** (I) the biological product is biosimilar to a reference product based upon data derived from--
<TTITLE> `(aa) analytical studies that demonstrate that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components;</TTITLE> <TTITLE> `(bb) animal studies (including the assessment of toxicity); and</TTITLE> <TTITLE> `(cc) a clinical study or studies (including the assessment of immunogenicity and pharmacokinetics or pharmacodynamics) that are sufficient to demonstrate safety, purity, and potency in 1 or more appropriate conditions of use for which the reference product is licensed and intended to be used and for which licensure is sought for the biological product;</TTITLE>
*****(II) the biological product and reference product utilize the same mechanism or mechanisms of action for the condition or conditions of use prescribed, recommended, or suggested in the proposed labeling, but only to the extent the mechanism or mechanisms of action are known for the reference product;
***** (III) the condition or conditions of use prescribed, recommended, or suggested in the labeling proposed for the biological product have been previously approved for the reference product;
***** (IV) the route of administration, the dosage form, and the strength of the biological product are the same as those of the reference product; and
***** (V) the facility in which the biological product is manufactured, processed, packed, or held meets standards designed to assure that the biological product continues to be safe, pure, and potent.
**** (ii) DETERMINATION BY SECRETARY- The Secretary may determine, in the Secretary's discretion, that an element described in clause (i)(I) is unnecessary in an application submitted under this subsection.
**** (iii) ADDITIONAL INFORMATION- An application submitted under this subsection--
***** (I) shall include publicly-available information regarding the Secretary's previous determination that the reference product is safe, pure, and potent; and
***** (II) may include any additional information in support of the application, including publicly-available information with respect to the reference product or another biological product.
*** (B) INTERCHANGEABILITY- An application (or a supplement to an application) submitted under this subsection may include information demonstrating that the biological product meets the standards described in paragraph (4).
** (3) EVALUATION BY SECRETARY- Upon review of an application (or a supplement to an application) submitted under this subsection, the Secretary shall license the biological product under this subsection if--
*** (A) the Secretary determines that the information submitted in the application (or the supplement) is sufficient to show that the biological product--
**** (i) is biosimilar to the reference product; or
**** (ii) meets the standards described in paragraph (4), and therefore is interchangeable with the reference product; and
*** (B) the applicant (or other appropriate person) consents to the inspection of the facility that is the subject of the application, in accordance with subsection (c).
** (4) SAFETY STANDARDS FOR DETERMINING INTERCHANGEABILITY- Upon review of an application submitted under this subsection or any supplement to such application, the Secretary shall determine the biological product to be interchangeable with the reference product if the Secretary determines that the information submitted in the application (or a supplement to such application) is sufficient to show that--
*** (A) the biological product--
**** (i) is biosimilar to the reference product; and
**** (ii) can be expected to produce the same clinical result as the reference product in any given patient; and
*** (B) for a biological product that is administered more than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch.
** (5) GENERAL RULES-
*** (A) ONE REFERENCE PRODUCT PER APPLICATION- A biological product, in an application submitted under this subsection, may not be evaluated against more than 1 reference product.
*** (B) REVIEW- An application submitted under this subsection shall be reviewed by the division within the Food and Drug Administration that is responsible for the review and approval of the application under which the reference product is licensed.
*** (C) RISK EVALUATION AND MITIGATION STRATEGIES- The authority of the Secretary with respect to risk evaluation and mitigation strategies under the Federal Food, Drug, and Cosmetic Act shall apply to biological products licensed under this subsection in the same manner as such authority applies to biological products licensed under subsection (a).
** (6) EXCLUSIVITY FOR FIRST INTERCHANGEABLE BIOLOGICAL PRODUCT- Upon review of an application submitted under this subsection relying on the same reference product for which a prior biological product has received a determination of interchangeability for any condition of use, the Secretary shall not make a determination under paragraph (4) that the second or subsequent biological product is interchangeable for any condition of use until the earlier of--
*** (A) 1 year after the first commercial marketing of the first interchangeable biosimilar biological product to be approved as interchangeable for that reference product;
*** (B) 18 months after--
**** (i) a final court decision on all patents in suit in an action instituted under subsection (l)(6) against the applicant that submitted the application for the first approved interchangeable biosimilar biological product; or
**** (ii) the dismissal with or without prejudice of an action instituted under subsection (l)(6) against the applicant that submitted the application for the first approved interchangeable biosimilar biological product; or
*** (C)(i) 42 months after approval of the first interchangeable biosimilar biological product if the applicant that submitted such application has been sued under subsection (l)(6) and such litigation is still ongoing within such 42-month period; or
*** (ii) 18 months after approval of the first interchangeable biosimilar biological product if the applicant that submitted such application has not been sued under subsection (l)(6).
** For purposes of this paragraph, the term `final court decision' means a final decision of a court from which no appeal (other than a petition to the United States Supreme Court for a writ of certiorari) has been or can be taken.
** (7) EXCLUSIVITY FOR REFERENCE PRODUCT-
*** (A) EFFECTIVE DATE OF BIOSIMILAR APPLICATION APPROVAL- Approval of an application under this subsection may not be made effective by the Secretary until the date that is 12 years after the date on which the reference product was first licensed under subsection (a).
*** (B) FILING PERIOD- An application under this subsection may not be submitted to the Secretary until the date that is 4 years after the date on which the reference product was first licensed under subsection (a).
*** (C) FIRST LICENSURE- Subparagraphs (A) and (B) shall not apply to a license for or approval of--
**** (i) a supplement for the biological product that is the reference product; or
**** (ii) a subsequent application filed by the same sponsor or manufacturer of the biological product that is the reference product (or a licensor, predecessor in interest, or other related entity) for--
***** (I) a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength; or
***** (II) a modification to the structure of the biological product that does not result in a change in safety, purity, or potency.
** (8) GUIDANCE DOCUMENTS-
*** (A) IN GENERAL- The Secretary may, after opportunity for public comment, issue guidance in accordance, except as provided in subparagraph (B)(i), with section 701(h) of the Federal Food, Drug, and Cosmetic Act with respect to the licensure of a biological product under this subsection. Any such guidance may be general or specific.
*** (B) PUBLIC COMMENT-
**** (i) IN GENERAL- The Secretary shall provide the public an opportunity to comment on any proposed guidance issued under subparagraph (A) before issuing final guidance.
**** (ii) INPUT REGARDING MOST VALUABLE GUIDANCE- The Secretary shall establish a process through which the public may provide the Secretary with input regarding priorities for issuing guidance.
*** (C) NO REQUIREMENT FOR APPLICATION CONSIDERATION- The issuance (or non-issuance) of guidance under subparagraph (A) shall not preclude the review of, or action on, an application submitted under this subsection.
*** (D) REQUIREMENT FOR PRODUCT CLASS-SPECIFIC GUIDANCE- If the Secretary issues product class-specific guidance under subparagraph (A), such guidance shall include a description of--
**** (i) the criteria that the Secretary will use to determine whether a biological product is highly similar to a reference product in such product class; and
**** (ii) the criteria, if available, that the Secretary will use to determine whether a biological product meets the standards described in paragraph (4).
*** (E) CERTAIN PRODUCT CLASSES-
**** (i) GUIDANCE- The Secretary may indicate in a guidance document that the science and experience, as of the date of such guidance, with respect to a product or product class (not including any recombinant protein) does not allow approval of an application for a license as provided under this subsection for such product or product class.
**** (ii) MODIFICATION OR REVERSAL- The Secretary may issue a subsequent guidance document under subparagraph (A) to modify or reverse a guidance document under clause (i).
**** (iii) NO EFFECT ON ABILITY TO DENY LICENSE- Clause (i) shall not be construed to require the Secretary to approve a product with respect to which the Secretary has not indicated in a guidance document that the science and experience, as described in clause (i), does not allow approval of such an application.
* (l) Patents-
** (1) CONFIDENTIAL ACCESS TO SUBSECTION (k) APPLICATION-
*** (A) APPLICATION OF PARAGRAPH- Unless otherwise agreed to by a person that submits an application under subsection (k) (referred to in this subsection as the `subsection (k) applicant') and the sponsor of the application for the reference product (referred to in this subsection as the `reference product sponsor'), the provisions of this paragraph shall apply to the exchange of information described in this subsection.
*** (B) IN GENERAL-
**** (i) PROVISION OF CONFIDENTIAL INFORMATION- When a subsection (k) applicant submits an application under subsection (k), such applicant shall provide to the persons described in clause (ii), subject to the terms of this paragraph, confidential access to the information required to be produced pursuant to paragraph (2) and any other information that the subsection (k) applicant determines, in its sole discretion, to be appropriate (referred to in this subsection as the `confidential information').
**** (ii) RECIPIENTS OF INFORMATION- The persons described in this clause are the following:
***** (I) OUTSIDE COUNSEL- One or more attorneys designated by the reference product sponsor who are employees of an entity other than the reference product sponsor (referred to in this paragraph as the `outside counsel'), provided that such attorneys do not engage, formally or informally, in patent prosecution relevant or related to the reference product.
***** (II) IN-HOUSE COUNSEL- One attorney that represents the reference product sponsor who is an employee of the reference product sponsor, provided that such attorney does not engage, formally or informally, in patent prosecution relevant or related to the reference product.
**** (iii) PATENT OWNER ACCESS- A representative of the owner of a patent exclusively licensed to a reference product sponsor with respect to the reference product and who has retained a right to assert the patent or participate in litigation concerning the patent may be provided the confidential information, provided that the representative informs the reference product sponsor and the subsection (k) applicant of his or her agreement to be subject to the confidentiality provisions set forth in this paragraph, including those under clause (ii).
*** (C) LIMITATION ON DISCLOSURE- No person that receives confidential information pursuant to subparagraph (B) shall disclose any confidential information to any other person or entity, including the reference product sponsor employees, outside scientific consultants, or other outside counsel retained by the reference product sponsor, without the prior written consent of the subsection (k) applicant, which shall not be unreasonably withheld.
*** (D) USE OF CONFIDENTIAL INFORMATION- Confidential information shall be used for the sole and exclusive purpose of determining, with respect to each patent assigned to or exclusively licensed by the reference product sponsor, whether a claim of patent infringement could reasonably be asserted if the subsection (k) applicant engaged in the manufacture, use, offering for sale, sale, or importation into the United States of the biological product that is the subject of the application under subsection (k).
*** (E) OWNERSHIP OF CONFIDENTIAL INFORMATION- The confidential information disclosed under this paragraph is, and shall remain, the property of the subsection (k) applicant. By providing the confidential information pursuant to this paragraph, the subsection (k) applicant does not provide the reference product sponsor or the outside counsel any interest in or license to use the confidential information, for purposes other than those specified in subparagraph (D).
*** (F) EFFECT OF INFRINGEMENT ACTION- In the event that the reference product sponsor files a patent infringement suit, the use of confidential information shall continue to be governed by the terms of this paragraph until such time as a court enters a protective order regarding the information. Upon entry of such order, the subsection (k) applicant may redesignate confidential information in accordance with the terms of that order. No confidential information shall be included in any publicly-available complaint or other pleading. In the event that the reference product sponsor does not file an infringement action by the date specified in paragraph (6), the reference product sponsor shall return or destroy all confidential information received under this paragraph, provided that if the reference product sponsor opts to destroy such information, it will confirm destruction in writing to the subsection (k) applicant.
*** (G) RULE OF CONSTRUCTION- Nothing in this paragraph shall be construed--
**** (i) as an admission by the subsection (k) applicant regarding the validity, enforceability, or infringement of any patent; or
**** (ii) as an agreement or admission by the subsection (k) applicant with respect to the competency, relevance, or materiality of any confidential information.
*** (H) EFFECT OF VIOLATION- The disclosure of any confidential information in violation of this paragraph shall be deemed to cause the subsection (k) applicant to suffer irreparable harm for which there is no adequate legal remedy and the court shall consider immediate injunctive relief to be an appropriate and necessary remedy for any violation or threatened violation of this paragraph.
** (2) SUBSECTION (k) APPLICATION INFORMATION- Not later than 20 days after the Secretary notifies the subsection (k) applicant that the application has been accepted for review, the subsection (k) applicant--
*** (A) shall provide to the reference product sponsor a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application; and
*** (B) may provide to the reference product sponsor additional information requested by or on behalf of the reference product sponsor.
** (3) LIST AND DESCRIPTION OF PATENTS-
*** (A) LIST BY REFERENCE PRODUCT SPONSOR- Not later than 60 days after the receipt of the application and information under paragraph (2), the reference product sponsor shall provide to the subsection (k) applicant--
**** (i) a list of patents for which the reference product sponsor believes a claim of patent infringement could reasonably be asserted by the reference product sponsor, or by a patent owner that has granted an exclusive license to the reference product sponsor with respect to the reference product, if a person not licensed by the reference product sponsor engaged in the making, using, offering to sell, selling, or importing into the United States of the biological product that is the subject of the subsection (k) application; and
**** (ii) an identification of the patents on such list that the reference product sponsor would be prepared to license to the subsection (k) applicant.
*** (B) LIST AND DESCRIPTION BY SUBSECTION (k) APPLICANT- Not later than 60 days after receipt of the list under subparagraph (A), the subsection (k) applicant--
**** (i) may provide to the reference product sponsor a list of patents to which the subsection (k) applicant believes a claim of patent infringement could reasonably be asserted by the reference product sponsor if a person not licensed by the reference product sponsor engaged in the making, using, offering to sell, selling, or importing into the United States of the biological product that is the subject of the subsection (k) application;
**** (ii) shall provide to the reference product sponsor, with respect to each patent listed by the reference product sponsor under subparagraph (A) or listed by the subsection (k) applicant under clause (i)--
***** (I) a detailed statement that describes, on a claim by claim basis, the factual and legal basis of the opinion of the subsection (k) applicant that such patent is invalid, unenforceable, or will not be infringed by the commercial marketing of the biological product that is the subject of the subsection (k) application; or
***** (II) a statement that the subsection (k) applicant does not intend to begin commercial marketing of the biological product before the date that such patent expires; and
**** (iii) shall provide to the reference product sponsor a response regarding each patent identified by the reference product sponsor under subparagraph (A)(ii).
*** (C) DESCRIPTION BY REFERENCE PRODUCT SPONSOR- Not later than 60 days after receipt of the list and statement under subparagraph (B), the reference product sponsor shall provide to the subsection (k) applicant a detailed statement that describes, with respect to each patent described in subparagraph (B)(ii)(I), on a claim by claim basis, the factual and legal basis of the opinion of the reference product sponsor that such patent will be infringed by the commercial marketing of the biological product that is the subject of the subsection (k) application and a response to the statement concerning validity and enforceability provided under subparagraph (B)(ii)(I).
** (4) PATENT RESOLUTION NEGOTIATIONS-
*** (A) IN GENERAL- After receipt by the subsection (k) applicant of the statement under paragraph (3)(C), the reference product sponsor and the subsection (k) applicant shall engage in good faith negotiations to agree on which, if any, patents listed under paragraph (3) by the subsection (k) applicant or the reference product sponsor shall be the subject of an action for patent infringement under paragraph (6).
*** (B) FAILURE TO REACH AGREEMENT- If, within 15 days of beginning negotiations under subparagraph (A), the subsection (k) applicant and the reference product sponsor fail to agree on a final and complete list of which, if any, patents listed under paragraph (3) by the subsection (k) applicant or the reference product sponsor shall be the subject of an action for patent infringement under paragraph (6), the provisions of paragraph (5) shall apply to the parties.
** (5) PATENT RESOLUTION IF NO AGREEMENT-
*** (A) NUMBER OF PATENTS- The subsection (k) applicant shall notify the reference product sponsor of the number of patents that such applicant will provide to the reference product sponsor under subparagraph (B)(i)(I).
*** (B) EXCHANGE OF PATENT LISTS-
**** (i) IN GENERAL- On a date agreed to by the subsection (k) applicant and the reference product sponsor, but in no case later than 5 days after the subsection (k) applicant notifies the reference product sponsor under subparagraph (A), the subsection (k) applicant and the reference product sponsor shall simultaneously exchange--
***** (I) the list of patents that the subsection (k) applicant believes should be the subject of an action for patent infringement under paragraph (6); and
***** (II) the list of patents, in accordance with clause (ii), that the reference product sponsor believes should be the subject of an action for patent infringement under paragraph (6).
**** (ii) NUMBER OF PATENTS LISTED BY REFERENCE PRODUCT SPONSOR-
***** (I) IN GENERAL- Subject to subclause (II), the number of patents listed by the reference product sponsor under clause (i)(II) may not exceed the number of patents listed by the subsection (k) applicant under clause (i)(I).
***** (II) EXCEPTION- If a subsection (k) applicant does not list any patent under clause (i)(I), the reference product sponsor may list 1 patent under clause (i)(II).
** (6) IMMEDIATE PATENT INFRINGEMENT ACTION-
*** (A) ACTION IF AGREEMENT ON PATENT LIST- If the subsection (k) applicant and the reference product sponsor agree on patents as described in paragraph (4), not later than 30 days after such agreement, the reference product sponsor shall bring an action for patent infringement with respect to each such patent.
*** (B) ACTION IF NO AGREEMENT ON PATENT LIST- If the provisions of paragraph (5) apply to the parties as described in paragraph (4)(B), not later than 30 days after the exchange of lists under paragraph (5)(B), the reference product sponsor shall bring an action for patent infringement with respect to each patent that is included on such lists.
*** (C) NOTIFICATION AND PUBLICATION OF COMPLAINT-
**** (i) NOTIFICATION TO SECRETARY- Not later than 30 days after a complaint is served to a subsection (k) applicant in an action for patent infringement described under this paragraph, the subsection (k) applicant shall provide the Secretary with notice and a copy of such complaint.
**** (ii) PUBLICATION BY SECRETARY- The Secretary shall publish in the Federal Register notice of a complaint received under clause (i).
** (7) NEWLY ISSUED OR LICENSED PATENTS- In the case of a patent that--
*** (A) is issued to, or exclusively licensed by, the reference product sponsor after the date that the reference product sponsor provided the list to the subsection (k) applicant under paragraph (3)(A); and
*** (B) the reference product sponsor reasonably believes that, due to the issuance of such patent, a claim of patent infringement could reasonably be asserted by the reference product sponsor if a person not licensed by the reference product sponsor engaged in the making, using, offering to sell, selling, or importing into the United States of the biological product that is the subject of the subsection (k) application,
** not later than 30 days after such issuance or licensing, the reference product sponsor shall provide to the subsection (k) applicant a supplement to the list provided by the reference product sponsor under paragraph (3)(A) that includes such patent, not later than 30 days after such supplement is provided, the subsection (k) applicant shall provide a statement to the reference product sponsor in accordance with paragraph (3)(B), and such patent shall be subject to paragraph (8).
** (8) NOTICE OF COMMERCIAL MARKETING AND PRELIMINARY INJUNCTION-
*** (A) NOTICE OF COMMERCIAL MARKETING- The subsection (k) applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).
*** (B) PRELIMINARY INJUNCTION- After receiving the notice under subparagraph (A) and before such date of the first commercial marketing of such biological product, the reference product sponsor may seek a preliminary injunction prohibiting the subsection (k) applicant from engaging in the commercial manufacture or sale of such biological product until the court decides the issue of patent validity, enforcement, and infringement with respect to any patent that is--
**** (i) included in the list provided by the reference product sponsor under paragraph (3)(A) or in the list provided by the subsection (k) applicant under paragraph (3)(B); and
**** (ii) not included, as applicable, on--
***** (I) the list of patents described in paragraph (4); or
***** (II) the lists of patents described in paragraph (5)(B).
*** (C) REASONABLE COOPERATION- If the reference product sponsor has sought a preliminary injunction under subparagraph (B), the reference product sponsor and the subsection (k) applicant shall reasonably cooperate to expedite such further discovery as is needed in connection with the preliminary injunction motion.
** (9) LIMITATION ON DECLARATORY JUDGMENT ACTION-
*** (A) SUBSECTION (k) APPLICATION PROVIDED- If a subsection (k) applicant provides the application and information required under paragraph (2)(A), neither the reference product sponsor nor the subsection (k) applicant may, prior to the date notice is received under paragraph (8)(A), bring any action under section 2201 of title 28, United States Code, for a declaration of infringement, validity, or enforceability of any patent that is described in clauses (i) and (ii) of paragraph (8)(B).
*** (B) SUBSEQUENT FAILURE TO ACT BY SUBSECTION (k) APPLICANT- If a subsection (k) applicant fails to complete an action required of the subsection (k) applicant under paragraph (3)(B)(ii), paragraph (5), paragraph (6)(C)(i), paragraph (7), or paragraph (8)(A), the reference product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of title 28, United States Code, for a declaration of infringement, validity, or enforceability of any patent included in the list described in paragraph (3)(A), including as provided under paragraph (7).
*** (C) SUBSECTION (k) APPLICATION NOT PROVIDED- If a subsection (k) applicant fails to provide the application and information required under paragraph (2)(A), the reference product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of title 28, United States Code, for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.'.
* (b) Definitions- Section 351(i) of the Public Health Service Act (42 U.S.C. 262(i)) is amended--
** (1) by striking `In this section, the term `biological product' means' and inserting the following: `In this section:
** (1) The term `biological product' means';
** (2) in paragraph (1), as so designated, by inserting `protein (except any chemically synthesized polypeptide),' after `allergenic product,'; and
** (3) by adding at the end the following:
** (2) The term `biosimilar' or `biosimilarity', in reference to a biological product that is the subject of an application under subsection (k), means--
*** (A) that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components; and
*** (B) there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.
** (3) The term `interchangeable' or `interchangeability', in reference to a biological product that is shown to meet the standards described in subsection (k)(4), means that the biological product may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product.
** (4) The term `reference product' means the single biological product licensed under subsection (a) against which a biological product is evaluated in an application submitted under subsection (k).'.
* (c) Conforming Amendments Relating to Patents-
** (1) PATENTS- Section 271(e) of title 35, United States Code, is amended--
*** (A) in paragraph (2)--
**** (i) in subparagraph (A), by striking `or' at the end;
**** (ii) in subparagraph (B), by adding `or' at the end; and
**** (iii) by inserting after subparagraph (B) the following:
** (C)(i) with respect to a patent that is identified in the list of patents described in section 351(l)(3) of the Public Health Service Act (including as provided under section 351(l)(7) of such Act), an application seeking approval of a biological product, or
** (ii) if the applicant for the application fails to provide the application and information required under section 351(l)(2)(A) of such Act, an application seeking approval of a biological product for a patent that could be identified pursuant to section 351(l)(3)(A)(i) of such Act,'; and
**** (iv) in the matter following subparagraph (C) (as added by clause (iii)), by striking `or veterinary biological product' and inserting `, veterinary biological product, or biological product';
*** (B) in paragraph (4)--
**** (i) in subparagraph (B), by--
***** (I) striking `or veterinary biological product' and inserting `, veterinary biological product, or biological product'; and
***** (II) striking `and' at the end;
**** (ii) in subparagraph (C), by--
***** (I) striking `or veterinary biological product' and inserting `, veterinary biological product, or biological product'; and
***** (II) striking the period and inserting `, and';
**** (iii) by inserting after subparagraph (C) the following:
** (D) the court shall order a permanent injunction prohibiting any infringement of the patent by the biological product involved in the infringement until a date which is not earlier than the date of the expiration of the patent that has been infringed under paragraph (2)(C), provided the patent is the subject of a final court decision, as defined in section 351(k)(6) of the Public Health Service Act, in an action for infringement of the patent under section 351(l)(6) of such Act, and the biological product has not yet been approved because of section 351(k)(7) of such Act.'; and
**** (iv) in the matter following subparagraph (D) (as added by clause (iii)), by striking `and (C)' and inserting `(C), and (D)'; and
*** (C) by adding at the end the following:
* (6)(A) Subparagraph (B) applies, in lieu of paragraph (4), in the case of a patent--
** (i) that is identified, as applicable, in the list of patents described in section 351(l)(4) of the Public Health Service Act or the lists of patents described in section 351(l)(5)(B) of such Act with respect to a biological product; and
** (ii) for which an action for infringement of the patent with respect to the biological product--
*** (I) was brought after the expiration of the 30-day period described in subparagraph (A) or (B), as applicable, of section 351(l)(6) of such Act; or
*** (II) was brought before the expiration of the 30-day period described in subclause (I), but which was dismissed without prejudice or was not prosecuted to judgment in good faith.
* (B) In an action for infringement of a patent described in subparagraph (A), the sole and exclusive remedy that may be granted by a court, upon a finding that the making, using, offering to sell, selling, or importation into the United States of the biological product that is the subject of the action infringed the patent, shall be a reasonable royalty.
* (C) The owner of a patent that should have been included in the list described in section 351(l)(3)(A) of the Public Health Service Act, including as provided under section 351(l)(7) of such Act for a biological product, but was not timely included in such list, may not bring an action under this section for infringement of the patent with respect to the biological product.'.
** (2) CONFORMING AMENDMENT UNDER TITLE 28- Section 2201(b) of title 28, United States Code, is amended by inserting before the period the following: `, or section 351 of the Public Health Service Act'.
* (d) Conforming Amendments Under the Federal Food, Drug, and Cosmetic Act-
** (1) CONTENT AND REVIEW OF APPLICATIONS- Section 505(b)(5)(B) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)(5)(B)) is amended by inserting before the period at the end of the first sentence the following: `or, with respect to an applicant for approval of a biological product under section 351(k) of the Public Health Service Act, any necessary clinical study or studies'.
** (2) NEW ACTIVE INGREDIENT- Section 505B of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355c) is amended by adding at the end the following:
* (n) New Active Ingredient-
** (1) NON-INTERCHANGEABLE BIOSIMILAR BIOLOGICAL PRODUCT- A biological product that is biosimilar to a reference product under section 351 of the Public Health Service Act, and that the Secretary has not determined to meet the standards described in subsection (k)(4) of such section for interchangeability with the reference product, shall be considered to have a new active ingredient under this section.
** (2) INTERCHANGEABLE BIOSIMILAR BIOLOGICAL PRODUCT- A biological product that is interchangeable with a reference product under section 351 of the Public Health Service Act shall not be considered to have a new active ingredient under this section.'.
* (e) Products Previously Approved Under Section 505-
** (1) REQUIREMENT TO FOLLOW SECTION 351- Except as provided in paragraph (2), an application for a biological product shall be submitted under section 351 of the Public Health Service Act (42 U.S.C. 262) (as amended by this Act).
** (2) EXCEPTION- An application for a biological product may be submitted under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) if--
*** (A) such biological product is in a product class for which a biological product in such product class is the subject of an application approved under such section 505 not later than the date of enactment of this Act; and
*** (B) such application--
**** (i) has been submitted to the Secretary of Health and Human Services (referred to in this subtitle as the `Secretary') before the date of enactment of this Act; or
**** (ii) is submitted to the Secretary not later than the date that is 10 years after the date of enactment of this Act.
** (3) LIMITATION- Notwithstanding paragraph (2), an application for a biological product may not be submitted under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) if there is another biological product approved under subsection (a) of section 351 of the Public Health Service Act that could be a reference product with respect to such application (within the meaning of such section 351) if such application were submitted under subsection (k) of such section 351.
** (4) DEEMED APPROVED UNDER SECTION 351- An approved application for a biological product under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) shall be deemed to be a license for the biological product under such section 351 on the date that is 10 years after the date of enactment of this Act.
** (5) DEFINITIONS- For purposes of this subsection, the term `biological product' has the meaning given such term under section 351 of the Public Health Service Act (42 U.S.C. 262) (as amended by this Act).
* (f) Follow-on Biologics User Fees-
** (1) DEVELOPMENT OF USER FEES FOR BIOSIMILAR BIOLOGICAL PRODUCTS-
*** (A) IN GENERAL- Beginning not later than October 1, 2010, the Secretary shall develop recommendations to present to Congress with respect to the goals, and plans for meeting the goals, for the process for the review of biosimilar biological product applications submitted under section 351(k) of the Public Health Service Act (as added by this Act) for the first 5 fiscal years after fiscal year 2012. In developing such recommendations, the Secretary shall consult with--
**** (i) the Committee on Health, Education, Labor, and Pensions of the Senate;
**** (ii) the Committee on Energy and Commerce of the House of Representatives;
**** (iii) scientific and academic experts;
**** (iv) health care professionals;
**** (v) representatives of patient and consumer advocacy groups; and
**** (vi) the regulated industry.
*** (B) PUBLIC REVIEW OF RECOMMENDATIONS- After negotiations with the regulated industry, the Secretary shall--
**** (i) present the recommendations developed under subparagraph (A) to the Congressional committees specified in such subparagraph;
**** (ii) publish such recommendations in the Federal Register;
**** (iii) provide for a period of 30 days for the public to provide written comments on such recommendations;
**** (iv) hold a meeting at which the public may present its views on such recommendations; and
**** (v) after consideration of such public views and comments, revise such recommendations as necessary.
*** (C) TRANSMITTAL OF RECOMMENDATIONS- Not later than January 15, 2012, the Secretary shall transmit to Congress the revised recommendations under subparagraph (B), a summary of the views and comments received under such subparagraph, and any changes made to the recommendations in response to such views and comments.
** (2) ESTABLISHMENT OF USER FEE PROGRAM- It is the sense of the Senate that, based on the recommendations transmitted to Congress by the Secretary pursuant to paragraph (1)(C), Congress should authorize a program, effective on October 1, 2012, for the collection of user fees relating to the submission of biosimilar biological product applications under section 351(k) of the Public Health Service Act (as added by this Act).
** (3) TRANSITIONAL PROVISIONS FOR USER FEES FOR BIOSIMILAR BIOLOGICAL PRODUCTS-
*** (A) APPLICATION OF THE PRESCRIPTION DRUG USER FEE PROVISIONS- Section 735(1)(B) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379g(1)(B)) is amended by striking `section 351' and inserting `subsection (a) or (k) of section 351'.
*** (B) EVALUATION OF COSTS OF REVIEWING BIOSIMILAR BIOLOGICAL PRODUCT APPLICATIONS- During the period beginning on the date of enactment of this Act and ending on October 1, 2010, the Secretary shall collect and evaluate data regarding the costs of reviewing applications for biological products submitted under section 351(k) of the Public Health Service Act (as added by this Act) during such period.
*** (C) AUDIT-
**** (i) IN GENERAL- On the date that is 2 years after first receiving a user fee applicable to an application for a biological product under section 351(k) of the Public Health Service Act (as added by this Act), and on a biennial basis thereafter until October 1, 2013, the Secretary shall perform an audit of the costs of reviewing such applications under such section 351(k). Such an audit shall compare--
***** (I) the costs of reviewing such applications under such section 351(k) to the amount of the user fee applicable to such applications; and
***** (II)(aa) such ratio determined under subclause (I); to
***** (bb) the ratio of the costs of reviewing applications for biological products under section 351(a) of such Act (as amended by this Act) to the amount of the user fee applicable to such applications under such section 351(a).
**** (ii) ALTERATION OF USER FEE- If the audit performed under clause (i) indicates that the ratios compared under subclause (II) of such clause differ by more than 5 percent, then the Secretary shall alter the user fee applicable to applications submitted under such section 351(k) to more appropriately account for the costs of reviewing such applications.
**** (iii) ACCOUNTING STANDARDS- The Secretary shall perform an audit under clause (i) in conformance with the accounting principles, standards, and requirements prescribed by the Comptroller General of the United States under section 3511 of title 31, United State Code, to ensure the validity of any potential variability.
** (4) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this subsection such sums as may be necessary for each of fiscal years 2010 through 2012.
* (g) Pediatric Studies of Biological Products-
** (1) IN GENERAL- Section 351 of the Public Health Service Act (42 U.S.C. 262) is amended by adding at the end the following:
* (m) Pediatric Studies-
** (1) APPLICATION OF CERTAIN PROVISIONS- The provisions of subsections (a), (d), (e), (f), (i), (j), (k), (l), (p), and (q) of section 505A of the Federal Food, Drug, and Cosmetic Act shall apply with respect to the extension of a period under paragraphs (2) and (3) to the same extent and in the same manner as such provisions apply with respect to the extension of a period under subsection (b) or (c) of section 505A of the Federal Food, Drug, and Cosmetic Act.
** (2) MARKET EXCLUSIVITY FOR NEW BIOLOGICAL PRODUCTS- If, prior to approval of an application that is submitted under subsection (a), the Secretary determines that information relating to the use of a new biological product in the pediatric population may produce health benefits in that population, the Secretary makes a written request for pediatric studies (which shall include a timeframe for completing such studies), the applicant agrees to the request, such studies are completed using appropriate formulations for each age group for which the study is requested within any such timeframe, and the reports thereof are submitted and accepted in accordance with section 505A(d)(3) of the Federal Food, Drug, and Cosmetic Act--
*** (A) the periods for such biological product referred to in subsection (k)(7) are deemed to be 4 years and 6 months rather than 4 years and 12 years and 6 months rather than 12 years; and
*** (B) if the biological product is designated under section 526 for a rare disease or condition, the period for such biological product referred to in section 527(a) is deemed to be 7 years and 6 months rather than 7 years.
** (3) MARKET EXCLUSIVITY FOR ALREADY-MARKETED BIOLOGICAL PRODUCTS- If the Secretary determines that information relating to the use of a licensed biological product in the pediatric population may produce health benefits in that population and makes a written request to the holder of an approved application under subsection (a) for pediatric studies (which shall include a timeframe for completing such studies), the holder agrees to the request, such studies are completed using appropriate formulations for each age group for which the study is requested within any such timeframe, and the reports thereof are submitted and accepted in accordance with section 505A(d)(3) of the Federal Food, Drug, and Cosmetic Act--
*** (A) the periods for such biological product referred to in subsection (k)(7) are deemed to be 4 years and 6 months rather than 4 years and 12 years and 6 months rather than 12 years; and
*** (B) if the biological product is designated under section 526 for a rare disease or condition, the period for such biological product referred to in section 527(a) is deemed to be 7 years and 6 months rather than 7 years.
** (4) EXCEPTION- The Secretary shall not extend a period referred to in paragraph (2)(A), (2)(B), (3)(A), or (3)(B) if the determination under section 505A(d)(3) is made later than 9 months prior to the expiration of such period.'.
** (2) STUDIES REGARDING PEDIATRIC RESEARCH-
*** (A) PROGRAM FOR PEDIATRIC STUDY OF DRUGS- Subsection (a)(1) of section 409I of the Public Health Service Act (42 U.S.C. 284m) is amended by inserting `, biological products,' after `including drugs'.
*** (B) INSTITUTE OF MEDICINE STUDY- Section 505A(p) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355b(p)) is amended by striking paragraphs (4) and (5) and inserting the following:
** (4) review and assess the number and importance of biological products for children that are being tested as a result of the amendments made by the Biologics Price Competition and Innovation Act of 2009 and the importance for children, health care providers, parents, and others of labeling changes made as a result of such testing;
** (5) review and assess the number, importance, and prioritization of any biological products that are not being tested for pediatric use; and
** (6) offer recommendations for ensuring pediatric testing of biological products, including consideration of any incentives, such as those provided under this section or section 351(m) of the Public Health Service Act.'.
* (h) Orphan Products- If a reference product, as defined in section 351 of the Public Health Service Act (42 U.S.C. 262) (as amended by this Act) has been designated under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or condition, a biological product seeking approval for such disease or condition under subsection (k) of such section 351 as biosimilar to, or interchangeable with, such reference product may be licensed by the Secretary only after the expiration for such reference product of the later of--
** (1) the 7-year period described in section 527(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)); and
** (2) the 12-year period described in subsection (k)(7) of such section 351.

### SEC. 7003. SAVINGS.

* (a) Determination- The Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, shall for each fiscal year determine the amount of savings to the Federal Government as a result of the enactment of this subtitle.
* (b) Use- Notwithstanding any other provision of this subtitle (or an amendment made by this subtitle), the savings to the Federal Government generated as a result of the enactment of this subtitle shall be used for deficit reduction.

## Subtitle B--More Affordable Medicines for Children and Underserved Communities
### SEC. 7101. EXPANDED PARTICIPATION IN 340B PROGRAM.

* (a) Expansion of Covered Entities Receiving Discounted Prices- Section 340B(a)(4) of the Public Health Service Act (42 U.S.C. 256b(a)(4)) is amended by adding at the end the following:
*** (M) A children's hospital excluded from the Medicare prospective payment system pursuant to section 1886(d)(1)(B)(iii) of the Social Security Act, or a free-standing cancer hospital excluded from the Medicare prospective payment system pursuant to section 1886(d)(1)(B)(v) of the Social Security Act, that would meet the requirements of subparagraph (L), including the disproportionate share adjustment percentage requirement under clause (ii) of such subparagraph, if the hospital were a subsection (d) hospital as defined by section 1886(d)(1)(B) of the Social Security Act.
*** (N) An entity that is a critical access hospital (as determined under section 1820(c)(2) of the Social Security Act), and that meets the requirements of subparagraph (L)(i).
*** (O) An entity that is a rural referral center, as defined by section 1886(d)(5)(C)(i) of the Social Security Act, or a sole community hospital, as defined by section 1886(d)(5)(C)(iii) of such Act, and that both meets the requirements of subparagraph (L)(i) and has a disproportionate share adjustment percentage equal to or greater than 8 percent.'.
* (b) Extension of Discount to Inpatient Drugs- Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended--
** (1) in paragraphs (2), (5), (7), and (9) of subsection (a), by striking `outpatient' each place it appears; and
** (2) in subsection (b)--
*** (A) by striking `Other Definition' and all that follows through `In this section' and inserting the following: `Other Definitions-
** (1) IN GENERAL- In this section'; and
*** (B) by adding at the end the following new paragraph:
** (2) COVERED DRUG- In this section, the term `covered drug'--
*** (A) means a covered outpatient drug (as defined in section 1927(k)(2) of the Social Security Act); and
*** (B) includes, notwithstanding paragraph (3)(A) of section 1927(k) of such Act, a drug used in connection with an inpatient or outpatient service provided by a hospital described in subparagraph (L), (M), (N), or (O) of subsection (a)(4) that is enrolled to participate in the drug discount program under this section.'.
* (c) Prohibition on Group Purchasing Arrangements- Section 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)) is amended--
** (1) in paragraph (4)(L)--
*** (A) in clause (i), by adding `and' at the end;
*** (B) in clause (ii), by striking `; and' and inserting a period; and
*** (C) by striking clause (iii); and
** (2) in paragraph (5), as amended by subsection (b)--
*** (A) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E); respectively; and
*** (B) by inserting after subparagraph (B), the following:
*** (C) PROHIBITION ON GROUP PURCHASING ARRANGEMENTS-
**** (i) IN GENERAL- A hospital described in subparagraph (L), (M), (N), or (O) of paragraph (4) shall not obtain covered outpatient drugs through a group purchasing organization or other group purchasing arrangement, except as permitted or provided for pursuant to clauses (ii) or (iii).
**** (ii) INPATIENT DRUGS- Clause (i) shall not apply to drugs purchased for inpatient use.
**** (iii) EXCEPTIONS- The Secretary shall establish reasonable exceptions to clause (i)--
***** (I) with respect to a covered outpatient drug that is unavailable to be purchased through the program under this section due to a drug shortage problem, manufacturer noncompliance, or any other circumstance beyond the hospital's control;
***** (II) to facilitate generic substitution when a generic covered outpatient drug is available at a lower price; or
***** (III) to reduce in other ways the administrative burdens of managing both inventories of drugs subject to this section and inventories of drugs that are not subject to this section, so long as the exceptions do not create a duplicate discount problem in violation of subparagraph (A) or a diversion problem in violation of subparagraph (B).
**** (iv) PURCHASING ARRANGEMENTS FOR INPATIENT DRUGS- The Secretary shall ensure that a hospital described in subparagraph (L), (M), (N), or (O) of subsection (a)(4) that is enrolled to participate in the drug discount program under this section shall have multiple options for purchasing covered drugs for inpatients, including by utilizing a group purchasing organization or other group purchasing arrangement, establishing and utilizing its own group purchasing program, purchasing directly from a manufacturer, and any other purchasing arrangements that the Secretary determines is appropriate to ensure access to drug discount pricing under this section for inpatient drugs taking into account the particular needs of small and rural hospitals.'.
* (d) Medicaid Credits on Inpatient Drugs- Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended by striking subsection (c) and inserting the following:
* (c) Medicaid Credit- Not later than 90 days after the date of filing of the hospital's most recently filed Medicare cost report, the hospital shall issue a credit as determined by the Secretary to the State Medicaid program for inpatient covered drugs provided to Medicaid recipients.'.
* (e) Effective Dates-
** (1) IN GENERAL- The amendments made by this section and section 7102 shall take effect on January 1, 2010, and shall apply to drugs purchased on or after January 1, 2010.
** (2) EFFECTIVENESS- The amendments made by this section and section 7102 shall be effective and shall be taken into account in determining whether a manufacturer is deemed to meet the requirements of section 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)), notwithstanding any other provision of law.

### SEC. 7102. IMPROVEMENTS TO 340B PROGRAM INTEGRITY.

* (a) Integrity Improvements- Subsection (d) of section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended to read as follows:
* (d) Improvements in Program Integrity-
** (1) MANUFACTURER COMPLIANCE-
*** (A) IN GENERAL- From amounts appropriated under paragraph (4), the Secretary shall provide for improvements in compliance by manufacturers with the requirements of this section in order to prevent overcharges and other violations of the discounted pricing requirements specified in this section.
*** (B) IMPROVEMENTS- The improvements described in subparagraph (A) shall include the following:
**** (i) The development of a system to enable the Secretary to verify the accuracy of ceiling prices calculated by manufacturers under subsection (a)(1) and charged to covered entities, which shall include the following:
***** (I) Developing and publishing through an appropriate policy or regulatory issuance, precisely defined standards and methodology for the calculation of ceiling prices under such subsection.
***** (II) Comparing regularly the ceiling prices calculated by the Secretary with the quarterly pricing data that is reported by manufacturers to the Secretary.
***** (III) Performing spot checks of sales transactions by covered entities.
***** (IV) Inquiring into the cause of any pricing discrepancies that may be identified and either taking, or requiring manufacturers to take, such corrective action as is appropriate in response to such price discrepancies.
**** (ii) The establishment of procedures for manufacturers to issue refunds to covered entities in the event that there is an overcharge by the manufacturers, including the following:
***** (I) Providing the Secretary with an explanation of why and how the overcharge occurred, how the refunds will be calculated, and to whom the refunds will be issued.
***** (II) Oversight by the Secretary to ensure that the refunds are issued accurately and within a reasonable period of time, both in routine instances of retroactive adjustment to relevant pricing data and exceptional circumstances such as erroneous or intentional overcharging for covered drugs.
**** (iii) The provision of access through the Internet website of the Department of Health and Human Services to the applicable ceiling prices for covered drugs as calculated and verified by the Secretary in accordance with this section, in a manner (such as through the use of password protection) that limits such access to covered entities and adequately assures security and protection of privileged pricing data from unauthorized re-disclosure.
**** (iv) The development of a mechanism by which--
***** (I) rebates and other discounts provided by manufacturers to other purchasers subsequent to the sale of covered drugs to covered entities are reported to the Secretary; and
***** (II) appropriate credits and refunds are issued to covered entities if such discounts or rebates have the effect of lowering the applicable ceiling price for the relevant quarter for the drugs involved.
**** (v) Selective auditing of manufacturers and wholesalers to ensure the integrity of the drug discount program under this section.
**** (vi) The imposition of sanctions in the form of civil monetary penalties, which--
***** (I) shall be assessed according to standards established in regulations to be promulgated by the Secretary not later than 180 days after the date of enactment of the Patient Protection and Affordable Care Act;
***** (II) shall not exceed $5,000 for each instance of overcharging a covered entity that may have occurred; and
***** (III) shall apply to any manufacturer with an agreement under this section that knowingly and intentionally charges a covered entity a price for purchase of a drug that exceeds the maximum applicable price under subsection (a)(1).
** (2) COVERED ENTITY COMPLIANCE-
*** (A) IN GENERAL- From amounts appropriated under paragraph (4), the Secretary shall provide for improvements in compliance by covered entities with the requirements of this section in order to prevent diversion and violations of the duplicate discount provision and other requirements specified under subsection (a)(5).
*** (B) IMPROVEMENTS- The improvements described in subparagraph (A) shall include the following:
**** (i) The development of procedures to enable and require covered entities to regularly update (at least annually) the information on the Internet website of the Department of Health and Human Services relating to this section.
**** (ii) The development of a system for the Secretary to verify the accuracy of information regarding covered entities that is listed on the website described in clause (i).
**** (iii) The development of more detailed guidance describing methodologies and options available to covered entities for billing covered drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A).
**** (iv) The establishment of a single, universal, and standardized identification system by which each covered entity site can be identified by manufacturers, distributors, covered entities, and the Secretary for purposes of facilitating the ordering, purchasing, and delivery of covered drugs under this section, including the processing of chargebacks for such drugs.
**** (v) The imposition of sanctions, in appropriate cases as determined by the Secretary, additional to those to which covered entities are subject under subsection (a)(5)(E), through one or more of the following actions:
***** (I) Where a covered entity knowingly and intentionally violates subsection (a)(5)(B), the covered entity shall be required to pay a monetary penalty to a manufacturer or manufacturers in the form of interest on sums for which the covered entity is found liable under subsection (a)(5)(E), such interest to be compounded monthly and equal to the current short term interest rate as determined by the Federal Reserve for the time period for which the covered entity is liable.
***** (II) Where the Secretary determines a violation of subsection (a)(5)(B) was systematic and egregious as well as knowing and intentional, removing the covered entity from the drug discount program under this section and disqualifying the entity from re-entry into such program for a reasonable period of time to be determined by the Secretary.
***** (III) Referring matters to appropriate Federal authorities within the Food and Drug Administration, the Office of Inspector General of Department of Health and Human Services, or other Federal agencies for consideration of appropriate action under other Federal statutes, such as the Prescription Drug Marketing Act (21 U.S.C. 353).
** (3) ADMINISTRATIVE DISPUTE RESOLUTION PROCESS-
*** (A) IN GENERAL- Not later than 180 days after the date of enactment of the Patient Protection and Affordable Care Act, the Secretary shall promulgate regulations to establish and implement an administrative process for the resolution of claims by covered entities that they have been overcharged for drugs purchased under this section, and claims by manufacturers, after the conduct of audits as authorized by subsection (a)(5)(D), of violations of subsections (a)(5)(A) or (a)(5)(B), including appropriate procedures for the provision of remedies and enforcement of determinations made pursuant to such process through mechanisms and sanctions described in paragraphs (1)(B) and (2)(B).
*** (B) DEADLINES AND PROCEDURES- Regulations promulgated by the Secretary under subparagraph (A) shall--
**** (i) designate or establish a decision-making official or decision-making body within the Department of Health and Human Services to be responsible for reviewing and finally resolving claims by covered entities that they have been charged prices for covered drugs in excess of the ceiling price described in subsection (a)(1), and claims by manufacturers that violations of subsection (a)(5)(A) or (a)(5)(B) have occurred;
**** (ii) establish such deadlines and procedures as may be necessary to ensure that claims shall be resolved fairly, efficiently, and expeditiously;
**** (iii) establish procedures by which a covered entity may discover and obtain such information and documents from manufacturers and third parties as may be relevant to demonstrate the merits of a claim that charges for a manufacturer's product have exceeded the applicable ceiling price under this section, and may submit such documents and information to the administrative official or body responsible for adjudicating such claim;
**** (iv) require that a manufacturer conduct an audit of a covered entity pursuant to subsection (a)(5)(D) as a prerequisite to initiating administrative dispute resolution proceedings against a covered entity;
**** (v) permit the official or body designated under clause (i), at the request of a manufacturer or manufacturers, to consolidate claims brought by more than one manufacturer against the same covered entity where, in the judgment of such official or body, consolidation is appropriate and consistent with the goals of fairness and economy of resources; and
**** (vi) include provisions and procedures to permit multiple covered entities to jointly assert claims of overcharges by the same manufacturer for the same drug or drugs in one administrative proceeding, and permit such claims to be asserted on behalf of covered entities by associations or organizations representing the interests of such covered entities and of which the covered entities are members.
*** (C) FINALITY OF ADMINISTRATIVE RESOLUTION- The administrative resolution of a claim or claims under the regulations promulgated under subparagraph (A) shall be a final agency decision and shall be binding upon the parties involved, unless invalidated by an order of a court of competent jurisdiction.
** (4) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this subsection, such sums as may be necessary for fiscal year 2010 and each succeeding fiscal year.'.
* (b) Conforming Amendments- Section 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)) is amended--
** (1) in subsection (a)(1), by adding at the end the following: `Each such agreement shall require that the manufacturer furnish the Secretary with reports, on a quarterly basis, of the price for each covered drug subject to the agreement that, according to the manufacturer, represents the maximum price that covered entities may permissibly be required to pay for the drug (referred to in this section as the `ceiling price'), and shall require that the manufacturer offer each covered entity covered drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price.'; and
** (2) in the first sentence of subsection (a)(5)(E), as redesignated by section 7101(c), by inserting `after audit as described in subparagraph (D) and' after `finds,'.

### SEC. 7103. GAO STUDY TO MAKE RECOMMENDATIONS ON IMPROVING THE 340B PROGRAM.

* (a) Report- Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall submit to Congress a report that examines whether those individuals served by the covered entities under the program under section 340B of the Public Health Service Act (42 U.S.C. 256b) (referred to in this section as the `340B program') are receiving optimal health care services.
* (b) Recommendations- The report under subsection (a) shall include recommendations on the following:
** (1) Whether the 340B program should be expanded since it is anticipated that the 47,000,000 individuals who are uninsured as of the date of enactment of this Act will have health care coverage once this Act is implemented.
** (2) Whether mandatory sales of certain products by the 340B program could hinder patients access to those therapies through any provider.
** (3) Whether income from the 340B program is being used by the covered entities under the program to further the program objectives.