II 

116TH CONGRESS 

2D SESSION S. 4175 

To secure the supply of drugs in the United States, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 2, 2020 

Ms. WARREN (for herself and Ms. SMITH) introduced the following bill; which 

was read twice and referred to the Committee on Health, Education, 

Labor, and Pensions 

A BILL 

To secure the supply of drugs in the United States, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Pharmaceutical Supply 

5 Chain Defense and Enhancement Act’’. 

6 SEC. 2. LISTING OF CRITICAL DRUGS. 

7 (a) IN GENERAL.—Not later than 1 year after the 

8 date of enactment of this Act, the Secretary, acting 

9 through the Commissioner of Food and Drugs and in con10 sultation with the Secretary of Defense, shall develop a 


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1 confidential list of drugs such Secretary determines to be 

2 critical to the public health or national security. Such list 

3 shall include the name of each such drug, as well as all 

4 active pharmaceutical ingredients and starting materials 

5 required for the manufacture of the drug. In developing 

6 the list, the Secretary may consider the role of shortages 

7 in impeding access to drugs. 

8 (b) UPDATES.—The Secretary shall update the list 

9 described in subsection (a) not less frequently than once 

10 every 2 years. 

11 (c) SUBMISSION OF LIST.—The Secretary shall sub12 mit the list described in subsection (a), including any up13 dates to such list under subsection (b), as a classified mat14 ter, to the Committee on Health, Education, Labor, and 

15 Pensions, the Committee on Armed Services, the Com16 mittee on Foreign Relations, and the Committee on Bank17 ing, Housing, and Urban Affairs of the Senate, and to 

18 the Committee on Energy and Commerce, the Committee 

19 on Armed Services, the Committee on Foreign Affairs, 

20 and the Committee on Financial Services of the House of 

21 Representatives. 

22 (d) INTERIM LIST.—During the period between the 

23 date of enactment of this Act and the date on which the 

24 Secretary issues the first list under subsection (a), the 

25 Secretary, in consultation with the Commissioner of Food 


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1 and Drugs, the Secretary of Defense, and the Assistant 

2 Secretary for Preparedness and Response, shall establish 

3 an interim list of drugs that will be deemed the list under 

4 subsection (a) until the Secretary develops the first list 

5 under subsection (a). Such interim list shall include not 

6 fewer than 30 drugs, as well as the active pharmaceutical 

7 ingredients and starting materials required for the manu8 facture of such drugs, that are— 

9 (1) included on the most recent list of essential 

10 medicines issued by the World Health Organization; 

11 or 

12 (2) countermeasures and products that could 

13 replenish the strategic national stockpile. 

14 (e) COMMENT PERIOD.—Not later than 60 days prior 

15 to the submission of the list described in subsection (a), 

16 the Secretary shall establish a comment period during 

17 which the public may comment on which drugs should be 

18 included on the list under subsection (a). 

19 SEC. 3. BOOSTING DOMESTIC DRUG AND ACTIVE INGRE20 DIENT MANUFACTURING CAPACITY. 

21 (a) IN GENERAL.—The Secretary, acting through the 

22 Director of the Biomedical Advanced Research and Devel23 opment Authority, shall increase the domestic capacity to 

24 manufacture active pharmaceutical ingredients and start25 ing materials for drugs critical to the public health and 


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1 national security by entering into the contracts described 

2 in subsection (b). 

3 (b) CONTRACTS.— 

4 (1) IN GENERAL.—To carry out subsection (a), 

5 the Secretary shall enter into contracts, not later 

6 than 6 months after the date of enactment of this 

7 Act, as follows: 

8 (A) The Secretary shall enter into con9 tracts with companies and nonprofit entities 

10 headquartered in the United States, under 

11 which such companies use manufacturing estab12 lishments located in the United States to manu13 facture the drugs included on the list under sec14 tion 2, and the requisite active pharmaceutical 

15 ingredients and starting materials of such 

16 drugs, using advanced manufacturing, including 

17 continuous manufacturing where applicable. 

18 (B) As a condition for entering into con19 tracts with the Secretary to manufacture drugs, 

20 companies and nonprofit entities shall— 

21 (i) develop and maintain a redun22 dancy risk management and continuity of 

23 business plan (reviewed and approved by 

24 the Secretary) that identifies and evaluates 

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1 ble, for each establishment in which such 

2 drug, and the requisite active pharma3 ceutical ingredients and starting materials 

4 of such drug, is manufactured; 

5 (ii) commit to implementing, as ap6 propriate, risk management and other 

7 strategies to ensure that, in the case of po8 tential supply chain disruptions, the entity 

9 can continue normal production of the 

10 drug, and the requisite active pharma11 ceutical ingredients and starting materials 

12 of such drug, for 18 months; 

13 (iii) commit to maintaining, to the ex14 tent practicable (as determined by the Sec15 retary) for each drug, and the requisite ac16 tive pharmaceutical ingredients and start17 ing materials of such drug, a 3-month sup18 ply in order to mitigate the impact of sup19 ply chain disruptions and shortages; 

20 (iv) commit to selling drugs, or the 

21 requisite active pharmaceutical ingredients 

22 and starting materials of such drugs, de23 veloped under contract with the Secretary 

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1 mined by the Secretary, taking into consid2 eration— 

3 (I) the impact of price on patient 

4 access to the drug; 

5 (II) the cost of the drug to Fed6 eral or State health programs; 

7 (III) the cost of manufacturing 

8 the drug; and 

9 (IV) the impact of price on mar10 ket competition for the drug; and 

11 (v) commit to making the prices de12 scribed in clause (iv) public. 

13 (C) The contracts described in this para14 graph shall contain continuity of business 

15 agreements demonstrating, in advance of receiv16 ing a contract, the company’s ability to rapidly 

17 begin production. 

18 (D) The Secretary shall enter into con19 tracts only with companies headquartered in the 

20 United States that use manufacturing establish21 ments located in the United States, under 

22 which such companies expand the capabilities of 

23 continuous manufacturing and other advanced 

24 manufacturing for the production of the active 

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1 rials for the drugs included on the list under 

2 section 2. 

3 (E) In issuing contracts under this section, 

4 the Secretary shall prioritize— 

5 (i) contracts designed to enhance the 

6 supply of generic drugs and biosimilar bio7 logical products and the requisite active 

8 pharmaceutical ingredients and starting 

9 materials of such generic drugs and bio10 similar products; and 

11 (ii) contracts designed to enhance the 

12 supply of drugs, and the requisite active 

13 pharmaceutical ingredients and starting 

14 materials of such drugs, that are not cur15 rently manufactured in the United States. 

16 (2) INSPECTOR GENERAL REVIEW.—The In17 spector General of the Department of Health and 

18 Human Services shall conduct a review of not fewer 

19 than 1 of every 3 contracts entered into under this 

20 section, and of the entities entering into such con21 tracts, to ensure that contracts are being issued 

22 under fair and reasonable terms and conditions, in23 cluding facilitating the procurement by the Federal 

24 Government of applicable products under section 2 

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1 ical devices at fair and reasonable prices. The In2 spector General shall make each such review public 

3 and, in cases where such a review identifies unrea4 sonable prices, submit recommendations to Congress 

5 on how the Office should improve its contracting 

6 systems to ensure reasonable pricing. 

7 (3) FUNDING.—To carry out this section, there 

8 are authorized to be appropriated $5,000,000,000 

9 for the period of fiscal years 2020 and 2024. Not 

10 later than April 1, 2024, the Secretary shall report 

11 to the congressional committees listed under section 

12 2(c) of this Act, and provide a recommendation for 

13 renewal of funding under this paragraph. 

14 (c) FEDERAL PROCUREMENT OF DOMESTICALLY

15 MANUFACTURED DRUGS.— 

16 (1) PROCUREMENT OF DRUGS.— 

17 (A) IN GENERAL.—Beginning in fiscal year 

18 2024, when purchasing any drug included on 

19 the list under section 2, the Secretary of De20 fense, the Secretary of Veterans Affairs, the Di21 rector of the Bureau of Prisons, and, for pur22 poses of maintaining the strategic national 

23 stockpile, the Secretary of Health and Human 

24 Services, shall give priority to supplies of the 

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1 cluding all active pharmaceutical ingredient and 

2 starting materials of the drug) that is of high 

3 quality. 

4 (B) USE OF REMAINING FUNDS.—In the 

5 case that a Federal agency described in this 

6 paragraph that, after purchasing all drugs on 

7 the list under section 2 needed by such agency 

8 for a fiscal year, has funds appropriated under 

9 paragraph (2) for that fiscal year remaining, 

10 such Federal agency may use the remaining 

11 funds to purchase drugs wholly manufactured 

12 in the United States that are not included on 

13 the list under section 2. 

14 (2) FUNDING.— 

15 (A) IN GENERAL.—There are authorized to 

16 be appropriated to each of the Secretary of De17 fense, the Secretary of Veterans Affairs, the 

18 Bureau of Prisons, and the Secretary of Health 

19 and Human Services, $1,000,000,000 for the 

20 period of fiscal years 2024 and 2028, to be 

21 used to purchase drugs manufactured in the 

22 United States, as described in paragraph (1). 

23 (B) REVERSION.—All funds that are ap24 propriated under this paragraph for a fiscal 

25 year, but not expended by the end of the fiscal 


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1 year, shall revert to the General Fund of the 

2 Treasury. 

3 (C) NO DIVERSION OR TRANSFER OF

4 FUNDS.—No funding appropriated under this 

5 section shall be diverted, transferred, or other6 wise made available for purposes beyond what 

7 is described in this Act. 

8 (3) NIH AUTHORIZATION.—There are author9 ized to be appropriated to the Director of the Na10 tional Institutes of Health, for each fiscal year for 

11 which amounts are appropriated under paragraph 

12 (2) but not expended in full, an amount equal to the 

13 amount that reverts to the Treasury for such year, 

14 as described in paragraph (2). Such amounts shall 

15 be used by the Director of the National Institutes of 

16 Health to carry out biomedical research. 

17 SEC. 4. SUPPLY CHAIN TRANSPARENCY. 

18 (a) DOMESTIC SUPPLIERS TO FEDERAL PRO19 GRAMS.—Each domestic manufacturer of a drug that sup20 plies such drug to the Department of Defense, the Depart21 ment of Veterans Affairs, the Department of Health and 

22 Human Services, or the Bureau of Prisons, or a domestic 

23 manufacturer of an active ingredient of a drug so supplied, 

24 shall— 


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1 (1) report annually to the Secretary and the 

2 agency receiving such drug on— 

3 (A) whether any ingredients of such drug 

4 is sourced, either wholly or in part, from a for5 eign country; 

6 (B) in the case of an active pharmaceutical 

7 ingredient or key starting material that the 

8 manufacturer procures from a single source in 

9 a single foreign country, as applicable— 

10 (i) not less than 2 alternative sources 

11 of any active pharmaceutical ingredient or 

12 key starting material; 

13 (ii) 1 such alternative source, if only 

14 1 such alternative source is available; or 

15 (iii) a statement that no such alter16 native sources are available; and 

17 (C) an assessment of the resilience and ca18 pacity of the alternate sources identified under 

19 subparagraph (B); and 

20 (2) develop continuity of business plans to pre21 vent the disruption of any drug listed under section 

22 2, including any active or inactive ingredients of 

23 such drug, which the Secretary may audit. 

24 (b) FOREIGN DRUG SUPPLIERS.— 


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1 (1) ESTABLISHMENTS IN A FOREIGN COUN2 TRY.—Section 510(i) of the Federal Food, Drug, 

3 and Cosmetic Act (21 U.S.C. 360(i)) is amended by 

4 inserting at the end the following: 

5 ‘‘(5) The requirements of paragraphs (1) and (2) 

6 shall apply to establishments within a foreign country en7 gaged in the manufacture, preparation, propagation, 

8 compounding, or processing of any drug that is required 

9 to be listed pursuant to subsection (j), or of any active 

10 pharmaceutical ingredient of such a drug. Such require11 ments shall apply regardless of whether the drug or active 

12 pharmaceutical ingredient undergoes further manufacture, 

13 preparation, propagation, compounding, or processing at 

14 a separate establishment or establishments outside the 

15 United States prior to being imported or offered for im16 port into the United States.’’. 

17 (2) LISTING OF DRUGS.—Section 510(j)(1) of 

18 the Federal Food, Drug, and Cosmetic Act (21 

19 U.S.C. 360(j)(1)) is amended— 

20 (A) in subparagraph (D), by striking 

21 ‘‘and’’ at the end; 

22 (B) in subparagraph (E), by striking the 

23 period at the end and inserting ‘‘; and’’; and 

24 (C) by adding at the end the following new 

25 subparagraph: 


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1 ‘‘(F) in the case of a drug contained in the ap2 plicable list, a certification that the registrant has— 

3 ‘‘(i) identified every other establishment 

4 where manufacturing is performed for the drug 

5 by the registrant; and 

6 ‘‘(ii) notified each known foreign establish7 ment engaged in the manufacture, preparation, 

8 propagation, compounding, or processing of the 

9 drug or the active pharmaceutical ingredient of 

10 the drug of the inclusion of the drug in the list 

11 and the obligation to register pursuant to sub12 section (i)(5).’’. 

13 (c) REPORTS TO CONGRESS AND THE PUBLIC.— 

14 (1) CLASSIFIED REPORT TO CONGRESS.—Not 

15 later than 1 year after the date of enactment of this 

16 Act and annually thereafter, the Secretary, in con17 sultation with the Secretary of Defense, shall submit 

18 a classified report to Congress on the Nation’s reli19 ance on importation of active and inactive ingredi20 ents of drugs included on the list under section 2. 

21 (2) PUBLIC REPORTS.—Not later than 1 year 

22 after the date of enactment of this Act and annually 

23 thereafter, the Secretary, in consultation with the 

24 Secretary of Defense, shall prepare an unclassified 

25 summary of the report described in paragraph (1), 


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1 and shall make such summary publicly available on 

2 the internet websites of the Department of Health 

3 and Human Services and the Department of De4 fense for purposes of understanding the Nation’s de5 pendency on foreign manufacturers of drugs. Such 

6 summaries shall not include the names of any drugs, 

7 active pharmaceutical ingredients, or starting mate8 rials. 

9 (3) CONTENT.—The reports under paragraph 

10 (1) shall include— 

11 (A) all brand name and generic drugs, and 

12 the active and inactive ingredients of such 

13 drugs that— 

14 (i) are not wholly produced in the 

15 United States; 

16 (ii) are exclusively produced, or utilize 

17 active or inactive ingredients produced 

18 abroad; 

19 (iii) are critical to the public health 

20 and national security of the people of the 

21 United States, as determined by the Sec22 retary, in consultation with the Secretary 

23 of Defense, and including any drugs in24 cluded in the list under section 2; or 


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1 (iv) are procured in any quantity by 

2 the Department of Defense for use by serv3 ice members or veterans or by the Depart4 ment of Health and Human Services for 

5 the strategic national stockpile; 

6 (B) a list of potential, alternative sources 

7 for any finished drug or active or inactive ingre8 dient of a drug, that is sourced from a single 

9 manufacturer with establishments in the United 

10 States; and 

11 (C) assess the resiliency and capacity of al12 ternative sources of any drug described in sub13 paragraph (A), and whether any such alter14 native source could be relied on to support do15 mestic demand for such drug. 

16 (d) MANUFACTURER COMPLIANCE.— 

17 (1) FAILURE TO NOTIFY OF A PERMANENT DIS18 CONTINUANCE OR AN INTERRUPTION.—Section 301 

19 of the Federal Food, Drug, and Cosmetic Act (21 

20 U.S.C. 331) is amended by adding at the end the 

21 following: 

22 ‘‘(fff) The failure of a manufacturer of a drug de23 scribed in section 506C(a), or an active pharmaceutical 

24 ingredient of such a drug, to notify the Secretary of a per25 manent discontinuance or an interruption, and the reasons 


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1 for such discontinuance or interruption, as required by 

2 section 506C.’’. 

3 (2) EXEMPTION FROM PENALTY.—Section 

4 303(c) of the Federal Food, Drug, and Cosmetic Act 

5 (21 U.S.C. 333(c)) is amended by inserting before 

6 the period at the end the following: or ‘‘(6) for hav7 ing violated section 301(fff) if such person made a 

8 good faith determination that the discontinuance or 

9 interruption was not likely to lead to a meaningful 

10 disruption in the supply of that drug in the United 

11 States’’. 

12 (e) REGISTRY OF ACTIVE INGREDIENTS.—There is 

13 authorized to be appropriated to the Secretary of Health 

14 and Human Services $20,000,000 for fiscal year 2021, for 

15 purposes of establishing, in consultation with the Commis16 sioner of Food and Drugs, an online registry of active 

17 pharmaceutical ingredients and key starting materials 

18 using information reported under subsection (a) and pur19 suant to a registration under section 510(i) of the Federal 

20 Food, Drug, and Cosmetic Act (21 U.S.C. 360(i)). 

21 (f) FOOD AND DRUG ADMINISTRATION INSPEC22 TIONS.—There are authorized to be appropriated such 

23 funds as may be necessary to ensure that the Commis24 sioner of Food and Drugs is able to conduct inspections 


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1 and evaluations of new establishments established using 

2 funds made available under this Act. 

3 SEC. 5. OVERSIGHT OF FOREIGN PHARMACEUTICAL IN4 VESTMENT. 

5 (a) IN GENERAL.—Not later than 1 year after the 

6 date of the enactment of this Act, and annually thereafter, 

7 the Federal Trade Commission, in consultation with the 

8 Secretary of the Treasury acting through the Committee 

9 on Foreign Investment in the United States (referred to 

10 in this section as the ‘‘Committee’’), shall submit to the 

11 appropriate congressional committees, the Secretary of 

12 Health and Human Services, and the Commissioner of 

13 Food and Drugs, a report on foreign investment in the 

14 pharmaceutical industry of the United States. 

15 (b) ELEMENTS.—The report required by subsection 

16 (a) shall include the following: 

17 (1) An assessment of— 

18 (A) the supply chain of the pharmaceutical 

19 industry of the United States and the effect of 

20 concentration and reliance on foreign manufac21 turing within that industry; 

22 (B) the effect of foreign investment in the 

23 pharmaceutical industry of the United States 

24 on domestic capacity to produce drugs and ac25 tive and inactive ingredients of drugs; and 


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1 (C) the effect of foreign investment in 

2 technologies or other products for sequencing or 

3 storage of DNA, including genome and exome 

4 analysis, in the United States, including the ef5 fect of such investment on the capacity to se6 quence or store DNA in the United States. 

7 (2) The number of reviews and investigations 

8 conducted by the Committee, in each of the 10 fiscal 

9 years preceding the year in which the study is con10 ducted, with respect to covered transactions (as de11 fined in section 721(a) of the Defense Production 

12 Act of 1950 (50 U.S.C. 4565(a)))— 

13 (A) in the pharmaceutical industry of the 

14 United States; or 

15 (B) relating to the sequencing or storage 

16 of DNA in the United States. 

17 (3) A short description of each such review or 

18 investigation, including whether the transaction was 

19 approved or prohibited. 

20 (c) AUTHORITY.—The Federal Trade Commission 

21 shall have authority under section 6 of the Federal Trade 

22 Commission Act (15 U.S.C. 46) to conduct the studies re23 quired to prepare the report required by subsection (a). 

24 (d) PUBLICATION.—The Federal Trade Commission 

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1 quired by subsection (a) on a publicly available internet 

2 website of the Commission. 

3 (e) APPROPRIATE CONGRESSIONAL COMMITTEES DE4 FINED.—In this section, the term ‘‘appropriate congres5 sional committees’’ means— 

6 (1) the Committee on Banking, Housing, and 

7 Urban Affairs, the Committee on Health, Education, 

8 Labor, and Pensions, the Committee on Armed 

9 Services, the Committee on Foreign Relations, the 

10 Committee on Commerce, Science, and Transpor11 tation, and the Committee on Appropriations of the 

12 Senate; and 

13 (2) the Committee on Financial Services, the 

14 Committee on Energy and Commerce, the Com15 mittee on Armed Services, the Committee on For16 eign Affairs, and the Committee on Appropriations 

17 of the House of Representatives. 

18 SEC. 6. DEFINITIONS. 

19 In this Act— 

20 (1) ‘‘advanced manufacturing’’ means an ap21 proach for the manufacturing of pharmaceuticals 

22 that incorporates novel technology, or uses an estab23 lished technique or technology in a new or innovative 

24 way (such as continuous manufacturing where the 

25 input materials are continuously transformed within 


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1 the process by 2 or more unit operations), that en2 hances drug quality or improves the manufacturing 

3 process; 

4 (2) the term ‘‘continuous manufacturing’’— 

5 (A) means a process where the input mate6 rials are continuously fed into and transformed 

7 within the process, and the processed output 

8 materials are continuously removed from the 

9 system; and 

10 (B) consists of an integrated process that 

11 consists of a series of 2 or more unit oper12 ations; 

13 (3) the term ‘‘drug’’ has the meaning given 

14 such term in section 201(g) of the Federal Food, 

15 Drug, and Cosmetic Act (21 U.S.C. 321(g)); 

16 (4) the term ‘‘Secretary’’, unless otherwise 

17 specified, means the Secretary of Health and 

18 Human Services; 

19 (5) the term ‘‘starting material’’ means a raw 

20 material, intermediate, or a drug substance that is 

21 used in the production of a drug substance and that 

22 is incorporated as a significant structural fragment 

23 into the structure of the drug substance; and 

24 (6) the term ‘‘strategic national stockpile’’ 

25 means the stockpile maintained by the Secretary 


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1 under section 319F–2 of the Public Health Service 

2 Act (42 U.S.C. 247d–6b). 

Æ 


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