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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3497 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 3497

   To promote the development of meaningful treatments for patients.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           November 18, 2011

  Mr. Lance introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
   Ways and Means and the Judiciary, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
   To promote the development of meaningful treatments for patients.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Modernizing Our Drug & Diagnostics 
Evaluation and Regulatory Network Cures Act of 2011'' or the ``MODDERN 
Cures Act of 2011''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Findings.
Sec. 4. Definitions.
              TITLE I--ADVANCING DIAGNOSTICS FOR PATIENTS

Sec. 101. Developing a common lexicon to facilitate progress on 
                            diagnostics.
Sec. 102. Creating incentives for innovative diagnostics.
Sec. 103. Promoting the development of innovative diagnostics.
          TITLE II--CAPTURING LOST OPPORTUNITIES FOR PATIENTS

Sec. 201. Designation of dormant therapies.
Sec. 202. Promoting the development of dormant therapies.

SEC. 3. FINDINGS.

    The Congress makes the following findings:
            (1) More than 133 million Americans, or 45 percent of the 
        population, have at least one chronic condition. A quarter of 
        Americans have multiple chronic conditions.
            (2) Chronic diseases have become the leading cause of death 
        and disability in the United States. Seven out of every 10 
        deaths are attributable to chronic disease. Chronic diseases 
        also compromise the quality of life of millions of Americans.
            (3) Despite $80,000,000,000 spent annually on research and 
        development, many diseases and conditions lack effective 
        treatments.
            (4) Many commonly used drugs are effective in only 50 to 75 
        percent of the patient population, which can lead to 
        devastating long-term side effects, resulting in the potential 
        risks outweighing the benefits for some patients.
            (5) Advanced and innovative diagnostic tests have the 
        potential to dramatically increase the efficacy and safety of 
        drugs by better predicting how patients will respond to a given 
        therapy.
            (6) Despite their promise, many drugs and diagnostics may 
        go undeveloped due to uncertain regulatory and reimbursement 
        processes, among other reasons.
            (7) In addition, there is reason to believe that potential 
        treatments with tremendous value to patients are never 
        developed or are discontinued during research and development 
        due to insufficiencies in the intellectual property system.
            (8) It is in the public interest to address the hurdles 
        that may be precluding new treatments from reaching patients 
        and to remove the disincentives for the development of 
        therapies for these unmet needs.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) The term ``biological product'' has the meaning given 
        to that term in section 351 of the Public Health Service Act 
        (42 U.S.C. 262).
            (2) The term ``drug'' has the meaning given to that term in 
        section 201 of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 321).
            (3) The term ``Secretary'' means the Secretary of Health 
        and Human Services.

              TITLE I--ADVANCING DIAGNOSTICS FOR PATIENTS

SEC. 101. DEVELOPING A COMMON LEXICON TO FACILITATE PROGRESS ON 
              DIAGNOSTICS.

    (a) In General.--Not later than 180 days after the date of 
enactment of this Act, the Secretary shall establish within the 
Department of Health and Human Services the Advanced Diagnostics 
Education Council (in this section referred to as the ``Council'').
    (b) Duties.--
            (1) In general.--The Council shall promote an improved 
        understanding of key concepts related to innovative diagnostics 
        by recommending standard terms and definitions for use by 
        patients, physicians, health care providers, payers, and 
        policymakers.
            (2) Guide.--The Secretary shall publish and disseminate a 
        guide regarding such recommended terms and definitions for 
        patients, physicians, health care providers, payers, and 
        policymakers.
            (3) Report.--Not later than 12 months after the 
        establishment of the Council, the Secretary shall prepare and 
        submit a report to the Congress and to the public on the 
        Council's deliberations, activities, and determinations with 
        respect to meeting its duties described in paragraphs (1) and 
        (2).
    (c) Chairperson.--The Secretary, or the Secretary's designee, shall 
serve as chairperson of the Council.
    (d) Members.--In addition to the Secretary, the Council shall 
consist of the following:
            (1) The head of each the following agencies (or a designee 
        thereof):
                    (A) The National Institutes of Health.
                    (B) The Centers for Disease Control and Prevention.
                    (C) The Food and Drug Administration.
                    (D) The Agency for Healthcare Research and Quality.
                    (E) The Centers for Medicare & Medicaid Services.
                    (F) The Department of Defense.
                    (G) The Department of Veterans Affairs.
                    (H) The Health Resources and Services 
                Administration.
                    (I) The Substance Abuse and Mental Health Services 
                Administration.
                    (J) The Indian Health Service.
            (2) Seven members appointed by the Secretary from among 
        individuals who collectively--
                    (A) represent a broad range of perspectives; and
                    (B) have expertise in--
                            (i) basic and translational research, 
                        including with respect to molecular biology and 
                        genetics;
                            (ii) bioinformatics;
                            (iii) the discovery, development, and 
                        commercialization of in vitro diagnostics; and
                            (iv) law and ethics.
            (3) Four members appointed by the Secretary who are each a 
        chief medical or scientific officer of a patient advocacy 
        organization.
    (e) Public Input.--In carrying out its duties, the Council shall 
solicit input from relevant stakeholders and the public.
    (f) Termination.--The Council shall terminate after publishing the 
guide required by subsection (b)(2) and submitting the report required 
by subsection (b)(3), or later at the discretion of the Secretary.

SEC. 102. CREATING INCENTIVES FOR INNOVATIVE DIAGNOSTICS.

    (a) Improvements to Process for Determining Fee Schedule Amounts 
for New Tests.--
            (1) Clarifying factors for rate-setting.--
                    (A) In general.--In determining the payment amount 
                under gapfilling procedures (as described in section 
                414.508(b) of title 42, Code of Federal Regulations, or 
                any successor regulation to such section) for new 
                clinical diagnostic laboratory tests under section 
                1833(h)(8) of the Social Security Act (42 U.S.C. 
                1395l(h)(8)), the Secretary of Health and Human 
                Services (in this section referred to as the 
                ``Secretary'') shall take into account, as applicable 
                and available, the following factors with respect to 
                such a new test:
                            (i) Impact on patient care.--The impact of 
                        the new test on patient care, patient 
                        management, or patient treatment.
                            (ii) Technical characteristics.--The 
                        technical characteristics of the new test, and 
                        the resources required to develop, validate, 
                        and perform the new test.
                            (iii) Claims data.--Data from claims for 
                        which payment is made under part B of title 
                        XVIII of the Social Security Act.
                            (iv) Laboratory charges.--Amounts charged 
                        by laboratories to self-pay patients for the 
                        new test.
                            (v) Private insurance rates.--Amounts paid 
                        to laboratories for such new test under private 
                        health insurance coverage offered in the group 
                        market and the individual market.
                            (vi) Advisory panel recommendations.--The 
                        findings and recommendations of the independent 
                        advisory panel convened under paragraph (2) 
                        with respect to that new test and any comments 
                        received during the open meeting of the 
                        advisory panel.
                            (vii) Additional factors.--Such other 
                        factors as the Secretary may specify.
            (2) Input from patients, clinicians, and technical 
        experts.--
                    (A) Requirement for independent advisory panel.--
                The Secretary shall convene an independent advisory 
                panel from which the Secretary shall request 
                information and recommendations regarding any new test 
                (as referred to under subparagraph (A) of section 
                1833(h)(8) of the Social Security Act (42 U.S.C. 
                1395l(h)(8))) for which payment is made under such 
                section, including technical, clinical, and quality 
                information.
                    (B) Composition of independent advisory panel.--The 
                independent advisory panel shall be comprised of 19 
                members, including--
                            (i) 4 individuals with expertise and 
                        experience with advanced clinical diagnostic 
                        laboratory tests, including expertise in the 
                        technical characteristics of the new test;
                            (ii) 3 representatives of patients, 
                        including a patient representative for rare 
                        disorders;
                            (iii) 3 clinicians who use results of the 
                        new test in patient care;
                            (iv) 3 individuals with expertise in the 
                        requirements to develop, validate, and perform 
                        the new test;
                            (v) 2 laboratorians;
                            (vi) 2 experts in the area of 
                        pharmacoeconomics or health technology 
                        assessment; and
                            (vii) 2 individuals with expertise on the 
                        impact of new tests on quality of patient care, 
                        including genetic counselors.
                    (C) Terms.--A member of the panel shall be 
                appointed to serve a term of 6 years, except with 
                respect to the members first appointed, whose terms of 
                appointment shall be staggered evenly over 2-year 
                increments.
                    (D) Expert consultants.--The Secretary may include 
                to serve temporarily on the panel individuals who have 
                expertise pertaining to the new test involved.
                    (E) Open meetings.--The Secretary shall receive or 
                review the findings and recommendations of the 
                independent advisory panel with respect to the new 
                tests described in subparagraph (A) involved during a 
                meeting open to the public and provide opportunity for 
                public comment.
                    (F) Clarification of authority of secretary to 
                consult carriers.--Nothing in this section shall be 
                construed as affecting the authority of the Secretary 
                to consult with appropriate Medicare administrative 
                contractors.
    (b) Process for Assignment of Temporary Codes for Diagnostic 
Tests.--The Secretary shall establish a process for application for the 
assignment of a temporary national HCPCS code to uniquely identify a 
diagnostic test until a permanent national HCPCS code is available for 
assignment to that test. Assignments of a temporary national HCPCS code 
shall occur on a quarterly basis. The Secretary shall provide public 
notice through the Centers for Medicare & Medicaid Services website of 
applications made for such temporary national HCPCS codes. Upon 
assignment of a temporary code under this process, the Secretary shall 
treat such test as a new test for purposes of section 1833(h)(8) of the 
Social Security Act.
    (c) Development of Further Improvements in Rate-Setting 
Processes.--The Secretary shall analyze the process used for the 
gapfilling procedure used in determining payment amounts for new 
clinical diagnostic laboratory tests under section 1833(h)(8) of the 
Social Security Act. Taking into account the changes made by this 
section, the Secretary shall identify further changes to improve the 
accuracy and appropriateness of resulting rates and the openness, 
transparency, and predictability of the process. The Secretary shall 
examine what and how many entities should perform gapfilling, under 
contract or otherwise, and how to ensure that the process is informed 
by appropriate expertise and proceeds in a transparent and accountable 
manner. The Secretary shall implement improvements in the process, 
insofar as these are possible under the law through regulations, after 
public notice and opportunity for comment. For changes the Secretary 
determines would require a change in law, the Secretary shall transmit 
recommendations to the Speaker of the House and the President of the 
Senate not later than July 1, 2013.
    (d) Definitions.--For purposes of this section:
            (1) New clinical diagnostic laboratory tests.--The term 
        ``new clinical diagnostic laboratory test'' means a clinical 
        diagnostic laboratory test--
                    (A) that is assigned a new or substantially revised 
                code on or after January 1, 2013; or
                    (B) for which an application for a temporary 
                national HCPCS code is made under subsection (b) on or 
                after January 1, 2013.
            (2) Self-pay patient.--The term ``self-pay patient'' means, 
        with respect to a health care item or service, an individual 
        who pays out of pocket for such item or service and who does 
        not have health insurance coverage for such item or service.
    (e) Effective Date.--This section shall take effect on the date of 
enactment of this Act, and shall apply with respect to new clinical 
diagnostic laboratory tests.

SEC. 103. PROMOTING THE DEVELOPMENT OF INNOVATIVE DIAGNOSTICS.

    (a) Determination.--
            (1) Request.--The manufacturer or sponsor of a drug or 
        biological product may request the Secretary to determine 
        that--
                    (A) a diagnostic test has been developed by, or 
                with the participation of, the manufacturer or sponsor 
                of the drug or biological product; and
                    (B) use of the diagnostic test, as demonstrated 
                through valid scientific information such as peer-
                reviewed literature--
                            (i) provides for or improves the 
                        identification of a patient population for 
                        which the drug or biological product will or 
                        will not be used in accordance with its 
                        approved indications; or
                            (ii) provides for or improves the 
                        determination of the most appropriate treatment 
                        option for a patient population with the drug 
                        or biological product in accordance with its 
                        approved indications.
            (2) Response by secretary.--Not later than 30 days after 
        the submission of a request under paragraph (1), the Secretary, 
        shall--
                    (A) make the requested determination and publish a 
                notice of such determination and any extension under 
                this section resulting from such determination; or
                    (B) provide an explanation to the manufacturer or 
                sponsor submitting the request of why the determination 
                is not warranted.
    (b) Applicable Extension Period.--For purposes of subsections (c) 
and (d), the applicable extension period is--
            (1) with respect to a diagnostic test developed (as 
        described in subsection (a)(1)(A)) contemporaneously with the 
        development of the drug or biological product involved, 12 
        months; and
            (2) with respect to a diagnostic test developed otherwise, 
        6 months.
    (c) Extension for Drugs.--If, at the request of the manufacturer or 
sponsor of a drug, the Secretary makes the determination described in 
subsection (a)(1) with respect to such drug and a diagnostic test, 
then--
            (1) the four- and five-year periods described in 
        subsections (c)(3)(E)(ii) and (j)(5)(F)(ii) of section 505 of 
        the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355), the 
        three-year periods described in clauses (iii) and (iv) of 
        subsection (c)(3)(E) and clauses (iii) and (iv) of subsection 
        (j)(5)(F) of such section 505, or the seven-year period 
        described in section 527 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 360cc), as applicable, shall be 
        extended by the applicable extension period;
            (2) if the drug is the subject of--
                    (A) a listed patent for which a certification has 
                been submitted under subsection (b)(2)(A)(ii) or 
                (j)(2)(A)(vii)(II) of such section 505; or
                    (B) a listed patent for which a certification has 
                been submitted under subsection (b)(2)(A)(iii) or 
                (j)(2)(A)(vii)(III) of such section 505,
        then the period during which an application may not be approved 
        under subsection (c)(3) or (j)(5)(B) of such section 505 shall 
        be extended by the applicable extension period after the date 
        the patent expires (including any patent extensions); and
            (3) if the drug is the subject of a listed patent for which 
        a certification has been submitted under subsection 
        (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of such section 505, and in 
        the patent infringement litigation resulting from the 
        certification the court determines that the patent is valid and 
        would be infringed, the period during which an application may 
        not be approved under subsection (c)(3) or (j)(5)(B) of such 
        section 505 shall be extended by the applicable extension 
        period after the date the patent expires (including any patent 
        extension).
    (d) Extension for Biological Products.--If, at the request of the 
manufacturer or sponsor of a biological product, the Secretary makes 
the determination described in subsection (a)(1) with respect to such 
biological product and a diagnostic test, then the 12-year period 
described in subsection (k)(7)(A) of section 351 of the Public Health 
Service Act (42 U.S.C. 262), the 4-year period described in subsection 
(k)(7)(B) of such section 351, and the 7-year period described in 
section 527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
360cc), as applicable, shall be extended by the applicable extension 
period.
    (e) Relation to Pediatric Exclusivity.--Any extension under 
subsection (c) or (d) of a period shall be in addition to any extension 
of the period under section 505A of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355a) with respect to the drug or biological 
product.
    (f) Limitations.--Extensions under this section may apply--
            (1) not more than twice with respect to the same drug or 
        biological product; and
            (2) not more than once with respect to the same indication 
        to be treated by the same drug or biological product.

          TITLE II--CAPTURING LOST OPPORTUNITIES FOR PATIENTS

SEC. 201. DESIGNATION OF DORMANT THERAPIES.

    (a) Designation.--The Secretary shall designate a drug or 
biological product as a dormant therapy if--
            (1) the sponsor of the drug or biological product submits a 
        request in accordance with subsection (b); and
            (2) the Secretary determines that--
                    (A) the indication for which the drug or biological 
                product is being investigated or is intended to be 
                investigated is to address one or more unmet medical 
                needs; and
                    (B) the sponsor intends to file an application 
                pursuant to 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)) for 
                approval or licensing of the drug or biological product 
                for such indication.
    (b) Request for Designation.--
            (1) Submission.--The sponsor of a drug or biological 
        product may submit a request to the Secretary to designate the 
        drug or biological product as a dormant therapy.
            (2) Contents.--Any request under paragraph (1) with respect 
        to a drug or biological product shall contain each of the 
        following:
                    (A) A listing of all patents and applications for 
                patents--
                            (i) under which the sponsor has rights; and
                            (ii) which may be reasonably construed to 
                        provide protection for the drug or biological 
                        product.
                    (B) A waiver of enforcement rights in accordance 
                with paragraph (3).
                    (C) A certification by the sponsor that the new 
                drug or new biological product has prospectively 
                insufficient patent protection.
            (3) Waiver.--
                    (A) Requirement.--A request under paragraph (1) 
                shall contain a waiver of the right to enforce any 
                patent or patent application, which issues as a patent 
                described in paragraph (2)(A) with respect to any 
                product described in subparagraph (B).
                    (B) Products described.--A product is described in 
                this subparagraph if--
                            (i) it is approved or licensed pursuant to 
                        an application that is filed under section 
                        505(b)(2) or 505(j) of the Federal Food, Drug, 
                        and Cosmetic Act (21 U.S.C. 355(b)(2), (j)) or 
                        section 351(k) of the Public Health Service Act 
                        (42 U.S.C. 262(k)); and
                            (ii) the filing occurs after the expiration 
                        of the protection period (as defined in section 
                        202(a)(1) of this Act) applicable to the drug 
                        or biological product to which the request 
                        under paragraph (1) relates.
                    (C) Effective only upon designation.--A waiver 
                under this paragraph shall be effective only upon the 
                designation under this section of the drug or 
                biological product to which it relates as a dormant 
                therapy.
                    (D) Inability to waive right to enforce one or more 
                patents.--If a sponsor of a drug or biological product 
                is unable to grant an effective waiver of the right to 
                enforce one or more patents or applications for patent 
                as described in subparagraph (A)--
                            (i) the sponsor may not make a request 
                        under this subsection with respect to the drug 
                        or biological product; and
                            (ii) if the sponsor has made such a 
                        request, the sponsor shall promptly withdraw 
                        the request.
            (4) Timing.--
                    (A) Request.--Any request for designation of a drug 
                or biological product as a dormant therapy under 
                subsection (a) shall be made before the submission of 
                an application under section 505 of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 355) or section 351 
                of the Public Health Service Act (42 U.S.C. 262) for 
                the first approval or licensure of commercial marketing 
                or use of a drug or biological product that shares at 
                least one active moiety with an active moiety in the 
                drug or biological product for which designation is 
                being requested.
                    (B) Withdrawal of request.--The sponsor of a drug 
                or biological product may withdraw a request under 
                paragraph (1) with respect to the drug or biological 
                product, but only prior to approval or licensing of the 
                drug or biological product.
            (5) Effects of withdrawal of request.--If the sponsor of a 
        drug or biological product withdraws a request under paragraph 
        (1) with respect to the drug or biological product--
                    (A) any designation of the drug or biological 
                product as a dormant therapy under subsection (a) is 
                cancelled; and
                    (B) any waiver submitted under this subsection with 
                respect to the drug or biological product is cancelled.
    (c) Criteria for Designation.--
            (1) In general.--Not later than 18 months after the date of 
        the enactment of this Act, the Secretary shall establish a 
        comprehensive methodology and criteria for the designation of a 
        drug or biological product as a dormant therapy in accordance 
        with subsection (a). No designation shall be made under 
        subsection (a) during such 18-month period unless the Secretary 
        has established such methodology and criteria.
            (2) Public input.--The Secretary shall consult with 
        relevant stakeholders and provide an opportunity for public 
        notice and comment in--
                    (A) establishing the methodology and criteria under 
                paragraph (1); and
                    (B) establishing criteria for determining whether 
                the indication for which the drug or biological product 
                is being investigated or is intended to be investigated 
                is to address one or more unmet medical needs (as 
                described in subsection (a)(2)(A)).
    (d) Definitions.--In this section:
            (1) The term ``prospectively insufficient patent 
        protection'' means, with respect to a drug or biological 
        product for which a request for designation is submitted under 
        subsection (b) (in this paragraph referred to as the ``dormant 
        therapy''), that the protection afforded under patents and 
        patent applications, when issued as a patent, relating to the 
        dormant therapy, in the aggregate--
                    (A) are not reasonably anticipated by the sponsor 
                of the dormant therapy to provide an adequate scope of 
                protection to prevent the approval of products that 
                would rely upon or reference the dormant therapy, in an 
                application filed under section 505(b)(2) or 505(j) of 
                the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                355(b)(2), (j)) or section 351(k) of the Public Health 
                Service Act (42 U.S.C. 262(k)), or
                    (B) are not reasonably anticipated by the sponsor 
                of the dormant therapy to provide patent protection 
                under such patents and applications, when issued as a 
                patent,
        for a period of 14 years from the date of first approval or 
        licensing of the dormant therapy for marketing pursuant to an 
        application 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)).
            (2) The term ``address one or more unmet medical needs'' 
        refers to--
                    (A) addressing a need for drugs or biological 
                products for the treatment of one or more life-
                threatening or other serious diseases or conditions for 
                which no therapy exists; or
                    (B) if one or more therapies are available for the 
                treatment of such a disease or condition, demonstrating 
                through clinical investigations--
                            (i) one or more improved effects on serious 
                        outcomes of the disease or condition that are 
                        affected by alternative therapies, such as 
                        superiority of the drug or biological product 
                        used alone or in combination with other 
                        therapies in an active controlled trial 
                        assessing an endpoint reflecting serious 
                        morbidity;
                            (ii) one or more effects on serious 
                        outcomes of the disease or condition not known 
                        to be affected by alternative therapies, such 
                        as progressive disability in multiple sclerosis 
                        when alternative therapies have shown an effect 
                        on exacerbations but have not shown an effect 
                        on progressive disability;
                            (iii) an ability--
                                    (I) to provide one or more benefits 
                                in patients who are unable to tolerate 
                                or are unresponsive to alternative 
                                therapies, such as an antipsychotic 
                                agent that is effective in people 
                                failing standard therapy; or
                                    (II) to be used effectively in 
                                combination with other critical agents 
                                that cannot be combined with 
                                alternative therapies;
                            (iv) an ability to provide one or more 
                        benefits similar to those of alternative 
                        therapies while--
                                    (I) avoiding serious toxicity that 
                                is present in alternative therapies; or
                                    (II) avoiding less serious toxicity 
                                that is common in alternative therapies 
                                and causes discontinuation of treatment 
                                of a life-threatening or serious 
                                disease; or
                            (v) an ability to provide one or more 
                        benefits similar to those of alternative 
                        therapies but with improvement in some factor, 
                        such as compliance or convenience, that is 
                        shown to lead to improved effects on serious 
                        outcomes.
    (e) Public Notice of Designation.--The Secretary request for and 
notice of the designation of a dormant therapy under paragraph (4) 
shall be made available to the public.

SEC. 202. PROMOTING THE DEVELOPMENT OF DORMANT THERAPIES.

    (a) Protections for Dormant Therapy.--
            (1) Protection period.--The term ``protection period'' 
        means, with respect to a drug or biological product designated 
        as a dormant therapy under section 201(a) (in this section 
        referred to as the ``dormant therapy''), the 15-year period 
        beginning on the date on which the Secretary approves an 
        application 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)) for the drug or 
        biological product.
            (2) Applications filed during the protection period.--
        During the protection period for a dormant therapy, 
        notwithstanding any other provision of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 301 et seq.) or the Public Health 
        Service Act (42 U.S.C. 201 et seq.)--
                    (A) absent a right of reference from the holder of 
                such approved application for the dormant therapy, the 
                Secretary shall not approve an application filed 
                pursuant to section 505(b)(2) or section 505(j) of the 
                Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                355(b)(2), (j)) or section 351(k) of the Public Health 
                Service Act (42 U.S.C. 262(k)) referencing or otherwise 
                relying on the approval or licensure of the dormant 
                therapy;
                    (B) the Secretary shall not approve--
                            (i) an application filed pursuant to such 
                        section 505(b)(2) or 505(j) that references or 
                        otherwise relies on the approval or licensure 
                        of a drug or biological product that is not the 
                        dormant therapy but contains the same active 
                        moiety as the dormant therapy; or
                            (ii) an application filed pursuant to such 
                        section 351(k) that references or otherwise 
                        relies on the approval or licensure of a drug 
                        or biological product that is not the dormant 
                        therapy but contains an active moiety highly 
                        similar to that of the dormant therapy; and
                    (C) the Secretary shall not approve an application 
                filed pursuant to section 505(b)(1) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)(1)) for 
                a drug that contains the same active moiety as the 
                dormant therapy, or an application filed pursuant to 
                section 351(a) of the Public Health Service Act (42 
                U.S.C. 262(a)) for a biological product that contains 
                an active moiety highly similar to that of the dormant 
                therapy, unless the information provided to support 
                approval of such application is comparable in scope and 
                extent (including with respect to design and extent of 
                preclinical and clinical testing) to the information 
                provided to support approval of the application 
                (described in paragraph (1)) for the dormant therapy.
            (3) Regulations.--Not later than 18 months after the date 
        of the enactment of this Act, the Secretary, in consultation 
        with relevant Federal agencies, shall promulgate such 
        regulations as are required to implement the incentives 
        described in paragraph (2).
            (4) Patent term alignment with data package protection 
        period.--
                    (A) In general.--Notwithstanding any provision of 
                title 35, United States Code, a sponsor of a drug or 
                biologic product designated as a dormant therapy under 
                section 201(a), upon the approval or licensure thereof 
                under the Federal Food, Drug, and Cosmetic Act (21 
                U.S.C. 301 et seq.), and in lieu of filing a patent 
                term extension application under section 156(d) of such 
                title 35 (other than applications for interim 
                extensions filed under paragraph (5) of such section 
                156(d)), shall be entitled to patent term extension in 
                accordance with this paragraph.
                    (B) Submission of listing of patents and 
                applications for patents.--
                            (i) Submission.--The sponsor of the dormant 
                        therapy, within a period to be set by the 
                        Director of the United States Patent and 
                        Trademark Office (in this paragraph referred to 
                        as the ``Director''), shall submit to the 
                        Director--
                                    (I) the listing of patents and 
                                applications for patents required by 
                                section 201(b)(2)(A) with respect to 
                                the dormant therapy; and
                                    (II) a listing of any additional 
                                patents and applications for patents 
                                that, at the time of the submission, 
                                meet the description in section 
                                201(b)(2)(A).
                            (ii) Period.--The period set by the 
                        Director under clause (i) shall not be less 
                        than 6 months from the date on which the 
                        Secretary approves or licenses the dormant 
                        therapy.
                    (C) Extension of patents.--
                            (i) In general.--For each patent identified 
                        pursuant to subparagraph (B)(i), and for each 
                        patent issuing based upon an application for 
                        patent so identified, the Director shall extend 
                        the patent to expire at the end of the 
                        protection period under paragraph (1) for the 
                        dormant therapy, if the patent would otherwise 
                        expire prior to the end of the protection 
                        period.
                            (ii) Application of certain provisions.--
                        During the period of an extension under clause 
                        (i)--
                                    (I) the rights under the patent 
                                shall be limited in the manner provided 
                                under section 156(b) of title 35, 
                                United States Code; and
                                    (II) the terms ``product'' and 
                                ``approved product'' in such section 
                                156(b) shall be deemed to include forms 
                                of the active moiety of the dormant 
                                therapy and highly similar active 
                                moieties that might be approved by the 
                                Secretary based upon an application 
                                filed under section 505(b)(2) or 505(j) 
                                of the Federal Food, Drug, and Cosmetic 
                                Act (21 U.S.C. 355(b)(2), (j)) or under 
                                section 351(k) of the Public Health 
                                Service Act (42 U.S.C. 262(k)) that 
                                references or otherwise relies upon the 
                                dormant therapy.
                    (D) Notice of extension.--For each patent that is 
                extended under this paragraph, the Director shall 
                publish a notice of such extension.
                    (E) Notice of waiver.--For each patent identified 
                pursuant to subparagraph (B)(i), and each patent 
                issuing based upon an application for patent so 
                identified, that expires subsequent to the end of the 
                protection period for the dormant therapy under 
                paragraph (1), the Director shall publish a notice that 
                the patent is subject to the waiver of the right to 
                enforce as described section 201(b)(3).
    (b) Orphan Products.--If a drug or biological product has been 
designated as a dormant therapy under section 201(a) of this Act, the 
protections otherwise applicable with respect to such drug or 
biological product under section 527 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 360cc) shall not apply.
    (c) Study Regarding Dormant Therapies.--Not later than one year 
after the enactment of this Act, the Secretary shall enter into an 
agreement with the Director of the Institute of Medicine--
            (1) to conduct a study on intellectual property laws and 
        their impact on therapy and diagnostic development in order to 
        formulate recommendations on how to facilitate the clinical 
        evaluation and development of therapies currently available on 
        the market for new potential indications; and
            (2) not later than 18 months after the date of the 
        enactment of this Act, to submit a report to the Secretary and 
        the Congress containing the results of such study.
                                 <all>
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