II 

118TH CONGRESS 

2D SESSION S. 5029 

To amend title XI of the Social Security Act to establish a research and 

development-intensive small biotech manufacturer exception from the 

Medicare drug price negotiation program. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 12, 2024 

Mr. CASSIDY introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend title XI of the Social Security Act to establish 

a research and development-intensive small biotech manufacturer exception from the Medicare drug price negotiation program. 

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 ‘‘Small Biotech Innova5 tion Act’’. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
2 

•S 5029 IS

1 SEC. 2. RESEARCH AND DEVELOPMENT-INTENSIVE SMALL 

2 BIOTECH MANUFACTURER EXCEPTION FROM 

3 MEDICARE DRUG PRICE NEGOTIATION PRO4 GRAM. 

5 Section 1192(d)(2) of the Social Security Act (42 

6 U.S.C. 1320f–1(d)(2)) is amended by adding at the end 

7 the following new subparagraph: 

8 ‘‘(D) RESEARCH AND DEVELOPMENT-IN9 TENSIVE SMALL BIOTECH MANUFACTURER EX10 CEPTION FOR 2029 AND SUBSEQUENT YEARS.— 

11 ‘‘(i) IN GENERAL.—With respect to 

12 initial price applicability years (beginning 

13 with initial price applicability year 2029), 

14 subject to the succeeding provisions of this 

15 subparagraph, the term ‘negotiation eligi16 ble drug’ shall not include a qualifying sin17 gle source drug (as defined in subsection 

18 (e)) of a research and development-inten19 sive small biotech manufacturer (as de20 fined in clause (ii)). 

21 ‘‘(ii) DEFINITIONS.—In this subpara22 graph: 

23 ‘‘(I) APPLICABLE PERCENT.— 

24 The term ‘applicable percent’ 

25 means— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
3 

•S 5029 IS

1 ‘‘(aa) in the case of a small 

2 biotech manufacturer that has 1 

3 qualifying single source drug, 30 

4 percent; 

5 ‘‘(bb) in the case of a small 

6 biotech manufacturer that has 2 

7 qualifying single source drugs, 40 

8 percent; 

9 ‘‘(cc) in the case of a small 

10 biotech manufacturer that has 3 

11 qualifying single source drugs, 50 

12 percent; 

13 ‘‘(dd) in the case of a small 

14 biotech manufacturer that has 4 

15 qualifying single source drugs, 60 

16 percent; and 

17 ‘‘(ee) in the case of a small 

18 biotech manufacturer that has 5 

19 qualifying single source drugs, 70 

20 percent. 

21 ‘‘(II) SMALL BIOTECH MANUFAC22 TURER DEFINED.—The term ‘small 

23 biotech manufacturer’ means a manu24 facturer that has 5 or less qualifying 

25 single source drugs. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
4 

•S 5029 IS

1 ‘‘(III) RESEARCH AND DEVELOP2 MENT-INTENSIVE SMALL BIOTECH

3 MANUFACTURER DEFINED.—The term 

4 ‘research and development-intensive 

5 small biotech manufacturer’ means a 

6 small biotech manufacturer that in7 vests at least the applicable percent of 

8 their net revenue from the average of 

9 the previous three years in research 

10 and development (determined based 

11 on generally accepted accounting prin12 ciples). 

13 ‘‘(iii) TREATMENT IN CASE OF ACQUI14 SITION.—A drug shall not be considered to 

15 be a qualifying single source drug of a re16 search and development-intensive small 

17 biotech manufacturer if the manufacturer 

18 of such drug is acquired after 2029 by an19 other manufacturer that does not meet the 

20 definition of a research and development21 intensive small biotech manufacturer, ef22 fective at the beginning of the plan year 

23 immediately following such acquisition. 

24 ‘‘(iv) ANNUAL APPLICATION.—In 

25 order for a qualifying single source drug of 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
5 

•S 5029 IS

1 a research and development-intensive small 

2 biotech manufacturer to be eligible for the 

3 exception under this subparagraph with re4 spect to an initial price applicability year 

5 (beginning with initial price applicability 

6 year 2029), the manufacturer shall submit 

7 an application to the Secretary (at a time 

8 specified by the Secretary) containing— 

9 ‘‘(I) information on the net prod10 uct revenue and research and develop11 ment expenditures of the manufac12 turer during the relevant time period; 

13 ‘‘(II) a certification that the in14 formation submitted by the manufac15 turer under subclause (I) is accurate 

16 and complete to the best of the manu17 facturer’s knowledge; and 

18 ‘‘(III) such other information as 

19 the Secretary may specify. 

20 ‘‘(v) DISPUTE RESOLUTION.—The 

21 Secretary shall develop a process under 

22 which a manufacturer may appeal a deter23 mination by the Secretary that the manu24 facturer is not a research and develop25 ment-intensive small biotech manufacturer. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
6 

•S 5029 IS

1 Such process shall conclude, with respect 

2 to a manufacturer, not later than the se3 lected drug publication date with respect to 

4 the initial price applicability year for which 

5 the manufacturer submitted an application 

6 under clause (iv).’’. 

Æ 


kjohnson on DSK7ZCZBW3PROD with $$_JOB