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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1873 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                S. 1873

To prepare and strengthen the biodefenses of the United States against 
deliberate, accidental, and natural outbreaks of illness, and for other 
                               purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            October 17, 2005

Mr. Burr (for himself, Mr. Enzi, Mr. Gregg, Mr. Frist, and Mr. 
        Alexander) introduced the following bill; which was read twice 
        and referred to the Committee on Health, Education, Labor, and 
        PensionsYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY

_______________________________________________________________________

                                 A BILL

 
To prepare and strengthen the biodefenses of the United States against 
deliberate, accidental, and natural outbreaks of illness, and for other 
                               purposes.

    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 ``Biodefense and Pandemic Vaccine and 
Drug Development Act of 2005''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Biomedical Advanced Research and Development Agency.
Sec. 4. Clarification of countermeasures covered by Project BioShield.
Sec. 5. Orphan drug market exclusivity for countermeasure products.
Sec. 6. Liability protections for pandemics, epidemics, and 
                            countermeasures.
Sec. 7. Compensation.
Sec. 8. Rebates and grants for research development, and manufacturing 
                            of vaccines, qualified countermeasures and 
                            pandemic or epidemic products.
Sec. 9. Technical assistance.
Sec. 10. Animal models for certain diseases.
Sec. 11. Animal Model/Research Tool Scientific Advisory Committee.
Sec. 12. Collaboration and coordination.
Sec. 13. Procurement.
Sec. 14. National Pathology Center.

SEC. 3. BIOMEDICAL ADVANCED RESEARCH AND DEVELOPMENT AGENCY.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.) 
is amended by inserting after section 319K the following:

``SEC. 319L. BIOMEDICAL ADVANCED RESEARCH AND DEVELOPMENT AGENCY.

    ``(a) Definitions.--In this section:
            ``(1) BARDA.--The term `BARDA' means the Biomedical 
        Advanced Research and Development Agency.
            ``(2) Fund.--The term `Fund' means the Biodefense Medical 
        Countermeasure Development Fund established under subsection 
        (d).
            ``(3) Other transactions.--The term `other transactions' 
        means transactions, other than procurement contracts, grants, 
        and cooperative agreements, including transactions for 
        prototypes, as provided to the Secretary of Defense under 
        section 2371 of title 10, United States Code.
            ``(4) Qualified countermeasure.--The term `qualified 
        countermeasure' has the meaning given such term in section 
        319F-1.
            ``(5) Qualified countermeasure and qualified pandemic or 
        epidemic product advanced research and development.--
                    ``(A) In general.--The term `qualified 
                countermeasure and qualified pandemic or epidemic 
                product advanced research and development' means any 
                applied research, testing, or evaluation (including 
                those conducted on humans or animals), related to the 
                safety or effectiveness, that is required for approval, 
                clearance, or licensing by the Secretary under this Act 
                or the Federal Food, Drug, and Cosmetic Act, of such 
                countermeasure or pandemic or epidemic product to 
                diagnose, mitigate, prevent, or treat harm from a 
                deliberate, accidental, or natural exposure to a 
                chemical, biological, radiological, or nuclear agent, 
                particularly such exposure resulting from an act of 
                terrorism or potential pandemic infectious disease.
                    ``(B) Inclusion.--The term under subparagraph (A) 
                includes any investigation to improve the 
                manufacturing, formulation, finish, fill, delivery, or 
                shelf-life of such qualified countermeasures or 
                qualified pandemic or epidemic products.
            ``(6) Qualified pandemic or epidemic product.--The term 
        `qualified pandemic or epidemic product' has the meaning given 
        the term in section 319F-3(c)(5).
            ``(7) Security countermeasure.--The term `security 
        countermeasure' has the meaning given such term in section 
        319F-2.
            ``(8) Person.--The term `person' includes an individual, 
        partnership, corporation, association, entity, or public or 
        private corporation, including a Federal, State, or local 
        agency or department.
    ``(b) Biomedical Advanced Research and Development Agency.--
            ``(1) Establishment.--There is established within the 
        Department of Health and Human Services, the Biomedical 
        Advanced Research and Development Agency.
            ``(2) Purpose.--It shall be the purpose of the BARDA to 
        coordinate and oversee activities that support and accelerate 
        qualified countermeasure or qualified pandemic or epidemic 
        product (referred to in this section as `countermeasure or 
        product') advanced research and development by--
                    ``(A) directing and coordinating collaboration 
                among the Department of Health and Human Services, 
                other Federal agencies, relevant industries, academia, 
                and other persons, with respect to such advanced 
                research and development;
                    ``(B) supporting countermeasure and product 
                advanced research and development;
                    ``(C) recommending approaches to modernize and 
                streamline the countermeasure or product development 
                process and reduce regulatory burdens with respect to 
                procurement of security countermeasures and qualified 
                pandemic or epidemic products; and
                    ``(D) supporting innovation to reduce the time and 
                cost of countermeasure and product advanced research 
                and development.
            ``(3) Director.--The BARDA shall be headed by a Director 
        (referred to in this section as the `Director') who shall--
                    ``(A) be appointed by the President, with the 
                advice and consent of the Senate;
                    ``(B) report to the Secretary; and
                    ``(C) serve as the principal advisor to the 
                Secretary on countermeasure and product advanced 
                research and development.
            ``(4) Duties of Director.--
                    ``(A) Collaboration.--To carry out the purpose 
                described in paragraph (2)(A), the Secretary, acting 
                through the Director, shall--
                            ``(i) increase appropriate communication 
                        between the Federal Government and relevant 
                        industries, academia, and other interested 
                        persons with respect to countermeasure and 
                        product advanced research and development by 
                        establishing transparent, expeditious, and 
                        direct processes to--
                                    ``(I) facilitate regular, ongoing 
                                communication regarding the processes 
                                established under subparagraph (C)(ii) 
                                and new countermeasures or products of 
                                interest;
                                    ``(II) solicit research and 
                                associated data on potential 
                                countermeasures and products and 
                                related technologies; and
                                    ``(III) provide technical 
                                assistance with respect to such 
                                processes and the Food and Drug 
                                Administration approval process;
                            ``(ii) at least annually--
                                    ``(I) convene meetings with 
                                representatives from relevant 
                                industries, academia, other Federal 
                                agencies, international agencies, and 
                                other interested persons; and
                                    ``(II) sponsor relevant biodefense 
                                countermeasure technology 
                                demonstrations;
                            ``(iii) carry out the activities described 
                        in subsection (g) of section 2 of the Clayton 
                        Act; and
                            ``(iv) encourage and coordinate 
                        countermeasure or product advanced research and 
                        development, including by convening working 
                        groups as identified in paragraph (5).
                    ``(B) Support advanced research and development.--
                To carry out the purpose described in paragraph (2)(B), 
                the Secretary, acting through the Director, shall--
                            ``(i) conduct continuous searches and 
                        support calls for potential countermeasures or 
                        products for drugs, biological products, 
                        devices, or research tools to diagnose, 
                        mitigate, prevent, or treat harm from existing, 
                        emerging, or possible chemical, biological, 
                        radiological, and nuclear agents or potential 
                        pandemic infectious diseases that threaten 
                        public health and national security, as 
                        identified by the Assistant Secretary for 
                        Public Health Emergency Preparedness;
                            ``(ii) direct the countermeasure and 
                        product advanced research and development 
                        activities of the Department of Health and 
                        Human Services, in consultation with the 
                        Assistant Secretary for Public Health Emergency 
                        Preparedness, the Director of the National 
                        Institutes of Health, the Director of the 
                        Centers for the Disease Control and Prevention, 
                        and the Commissioner of Food and Drugs; and
                            ``(iii) award contracts, grants, 
                        cooperative agreements, and enter into other 
                        transactions, to include use of simplified 
                        acquisition authorities provided under sections 
                        319F-1 and 319F-2(c)(7)(C)(iii), to public and 
                        private persons, including for-profit and 
                        nonprofit persons, federally funded research 
                        and development centers, and universities, to--
                                    ``(I) support the cost of 
                                countermeasure and product advanced 
                                research and development; and
                                    ``(II) ensure accelerated 
                                development of countermeasures and 
                                products.
                    ``(C) Streamline processes.--To carry out the 
                purpose described in paragraph (2)(C), the Secretary, 
                acting through the Director, shall--
                            ``(i) receive from the Assistant Secretary 
                        for Public Health Emergency Preparedness, 
                        requirements for national civilian biodefense 
                        needs, particularly countermeasures or products 
                        and other technologies, to diagnose, mitigate, 
                        prevent, or treat harm from existing, emerging, 
                        or potential chemical, biological, 
                        radiological, or nuclear agents or potential 
                        pandemic infectious diseases;
                            ``(ii) establish transparent, expeditious, 
                        and direct processes for selecting promising 
                        countermeasures and products, supporting them 
                        through advanced research and development and 
                        recommending them for procurement;
                            ``(iii) establish an office within the 
                        BARDA, in consultation with the Commissioner of 
                        Food and Drugs, to--
                                    ``(I) facilitate regular and 
                                ongoing communication between the BARDA 
                                and the Food and Drug Administration 
                                regarding the status of BARDA advanced 
                                research and development activities;
                                    ``(II) ensure that such activities 
                                are coordinated with the approval 
                                requirements of the Food and Drug 
                                Administration, with the goal of 
                                expediting the development and approval 
                                of countermeasures and products; and
                                    ``(III) connect interested persons 
                                with additional technical assistance 
                                made available under section 565 of the 
                                Federal Food, Drug, and Cosmetic Act;
                            ``(iv) coordinate with the Food and Drug 
                        Administration to facilitate regulatory review 
                        and approval of promising classes of 
                        countermeasures or products through the 
                        development of research tools; and
                            ``(v) recommend to the Secretary, through 
                        the Assistant Secretary for Public Health 
                        Emergency Preparedness, procurement of the most 
                        promising eligible security countermeasures or 
                        qualified pandemic or epidemic products 
                        identified in clause (i).
                    ``(D) Supporting Innovation.--To carry out the 
                purpose described in paragraph (2)(D), the Secretary, 
                acting through the Director, shall award contracts, 
                grants, cooperative agreements, or enter into other 
                transactions, to include use of simplified acquisition 
                authorities provided under sections 319F-1 and 319F-
                2(c)(7)(C)(iii), to the entities described in 
                subparagraph (B)(iii), to promote innovation in 
                technologies supporting the advanced research and 
                development and production of qualified or security 
                countermeasures or qualified pandemic or epidemic 
                products, such as research tools, manufacturing, 
                countermeasure administration, storage, and 
                bioinformatics and other devices.
                    ``(E) Other duties.--
                            ``(i) In general.--The Director may--
                                    ``(I) prepare and submit to the 
                                President and Congress, an annual 
                                budget estimate for qualified 
                                countermeasure and pandemic or epidemic 
                                product advanced research and 
                                development and other BARDA activities, 
                                after opportunity for comment by the 
                                Secretary; and
                                    ``(II) receive from the President 
                                and the Office of Management and Budget 
                                directly all funds appropriated by 
                                Congress for obligation and expenditure 
                                by the BARDA.
                            ``(ii) Secretary duties.--The Secretary, 
                        acting through the Director, may--
                                    ``(I) enter into such contracts, 
                                leases, cooperative agreements, or 
                                other transactions, as may be necessary 
                                to carry out the functions of BARDA, 
                                without regard to section 3648 and 3709 
                                of the Revised Statutes of the United 
                                States (31 U.S.C. 3324(a) and (b)), (41 
                                U.S.C. 5), with any public agency, any 
                                firm, association, corporation, or 
                                educational institution, or any other 
                                person;
                                    ``(II) support advanced research 
                                and development and innovation of 
                                potential countermeasures or products 
                                by highly qualified foreign nationals 
                                outside the United States that may 
                                inure to the benefit of the American 
                                people and collaborative research 
                                involving American and foreign 
                                participants;
                                    ``(III) administer grants using 
                                milestone-based awards and payments; 
                                and
                                    ``(IV) establish 1 or more 
                                federally funded research and 
                                development centers or university 
                                affiliated research centers in 
                                accordance with section 253(c)(3) of 
                                title 41, United States Code.
            ``(5) Vulnerable populations.--In carrying out the 
        activities under this section, the Director, in consultation 
        with the Vulnerable Populations Working Group, may give 
        priority to supporting and facilitating advanced research and 
        development of countermeasures or products, and formulations of 
        countermeasures or products, that are likely to be safe and 
        effective for pediatric populations, pregnant women, and other 
        vulnerable populations.
            ``(6) Working groups.--
                    ``(A) Identification of technologies.--
                            ``(i) In general.--The Director may 
                        establish and convene, or enter into a contract 
                        with a public or private research institution 
                        to convene, one or more working groups that 
                        consists of experts on countermeasure 
                        technology to identify innovative technologies 
                        that have the potential to be developed as 
                        countermeasures or products.
                            ``(ii) Meetings.--A working group 
                        established under clause (i) shall participate 
                        in regular meetings with sponsors of 
                        countermeasures, products, or related 
                        technologies to--
                                    ``(I) review the scientific 
                                evidence or concept of such 
                                countermeasures, products, or related 
                                technologies;
                                    ``(II) provide guidance on research 
                                protocols or studies; and
                                    ``(III) provide guidance on the 
                                regulatory approval process for 
                                countermeasures, products, and related 
                                technologies.
                            ``(iii) Recommendations.--Not later than 30 
                        days after each meeting with a sponsor of a 
                        countermeasure, product, or related technology, 
                        the working group shall make recommendations to 
                        the Director concerning such countermeasure, 
                        product, or related technology.
                            ``(iv) Confidentiality.--Any commercial 
                        confidential or proprietary information that is 
                        disclosed to the working group in a meeting 
                        under this section shall remain confidential 
                        and shall not be disclosed other than to the 
                        Secretary or the Director, or their designees.
                            ``(v) Construction.--Nothing in this 
                        subparagraph shall be construed to prohibit a 
                        sponsor from meeting with the Director to 
                        discuss potential countermeasures, products, or 
                        related technologies.
                    ``(B) Public working group.--The Director may 
                establish and convene one or more working groups 
                composed of private citizens and officials of Federal, 
                State, and local governments to advise such Director 
                with respect to the functions of the BARDA and the 
                Director.
                    ``(C) Vulnerable populations working group.--The 
                Director shall establish and convene a Vulnerable 
                Populations Working Group composed of experts on 
                pediatric populations, pregnant women, and other 
                vulnerable populations to advise such Director with 
                respect to--
                            ``(i) supporting and facilitating advanced 
                        research and development of countermeasures, 
                        and formulations of countermeasures, that are 
                        safe and effective for such populations; and
                            ``(ii) other activities of the BARDA that 
                        effect such populations.
            ``(7) Personnel Authorities.--
                    ``(A) Specially qualified scientific and 
                professional personnel.--In hiring personnel for the 
                BARDA, the Director shall have the hiring and 
                management authorities described in section 1101 of the 
                Strom Thurmond National Defense Authorization Act for 
                Fiscal Year 1999 (5 U.S.C. 3104 note; Public Law 105-
                261). With respect to the personnel of the BARDA, the 
                term of appointments for employees referred to under 
                subsection (c)(1) of that section may not exceed 5 
                years before the granting of any extension under 
                subsection (c)(2) of that section.
                    ``(B) Special consultants.--The Director may accept 
                special consultants as personnel for the BARDA under 
                section 207(f).
                    ``(C) Intergovernmental personnel act.--The 
                Director may accept as personnel for the BARDA, 
                employees under subchapter VI of chapter 33 of subpart 
                B of part III of title 5, United States Code.
                    ``(D) Other services.--The Director may accept 
                voluntary and uncompensated services.
    ``(c) National Biodefense Advisory Board.--
            ``(1) In general.--
                    ``(A) Purpose.--The National Biodefense Advisory 
                Board shall provide expert advice and guidance to the 
                Secretary on the threats, challenges, and opportunities 
                presented by advances in biological and life sciences 
                and the threat from natural infectious diseases and 
                chemical, biological, radiological, and nuclear 
                threats.
                    ``(B) Membership.--There is established the 
                National Biodefense Advisory Board (hereinafter in this 
                section referred to as the `Board') to be composed of 
                23 members who represent the Nation's preeminent 
                scientific, public health, and medical experts on the 
                subject of biological, chemical, nuclear, and 
                radiological threats, whether naturally occurring, 
                accidental, or deliberate, as follows:
                            ``(i) Ex officio.--The following members 
                        shall serve on the Board ex officio:
                                    ``(I) The Assistant to the 
                                President for Homeland Security and 
                                Counterterrorism.
                                    ``(II) The Director of the Office 
                                of Science and Technology Policy.
                                    ``(III) The Assistant Secretary for 
                                Public Health Emergency Preparedness.
                                    ``(IV) The Director of the National 
                                Institutes of Health.
                                    ``(V) The Director of the Centers 
                                for Disease Control and Prevention.
                                    ``(VI) The Commissioner of Food and 
                                Drugs.
                                    ``(VII) The Director of BARDA.
                                    ``(VIII) The Assistant Secretary of 
                                Defense for Health Affairs.
                                    ``(IX) The Assistant Secretary of 
                                Homeland Security for Science and 
                                Technology.
                                    ``(X) The Secretary of Agriculture 
                                (or a designee).
                            ``(ii) Appointed members.--The following 
                        individuals, as appointed by the Secretary:
                                    ``(I) Four representatives of the 
                                pharmaceutical and biotechnology 
                                industries.
                                    ``(II) Four representatives of 
                                academia.
                                    ``(III) Five other members as 
                                determined appropriate by the 
                                Secretary.
                    ``(C) Term of appointment.--A member of the Board 
                described in subparagraph (B)(ii) shall serve for a 
                term of 3 years, except that the Secretary may adjust 
                the terms of the initial Board appointees in order to 
                provide for a staggered term of appointment for all 
                members.
                    ``(D) Consecutive appointments; maximum terms.--A 
                member may be appointed to serve not more than 3 terms 
                on the Board and may serve not more than 2 consecutive 
                terms.
            ``(2) Duties.--The Board shall--
                    ``(A) advise the Secretary on major biodefense 
                initiatives and review ongoing and proposed biodefense 
                programs, which may include potential activities of the 
                BARDA; and
                    ``(B) in consultation with the Director of BARDA, 
                and in coordination with the Director of National 
                Institute of Allergy and Infectious Diseases, provide 
                to the Secretary, recommendations and findings for an 
                expanded, intensified, and coordinated biodefense 
                research program encompassing the programs of the BARDA 
                and other Federal agencies and related programs of the 
                other research institutes.
            ``(3) Meetings.--The Board shall meet at the call of the 
        Secretary, but in no case less than twice annually to provide 
        to the Secretary updated assessments, findings, and 
        recommendations of the current trends, challenges, and 
        opportunities posed in biotechnology and genetic engineering.
            ``(4) Vacancies.--Any vacancy in the Board shall not affect 
        its powers, but shall be filled in the same manner as the 
        original appointment.
            ``(5) Chairperson.--The Secretary shall appoint a 
        chairperson from among the members of the Board.
            ``(6) Powers.--
                    ``(A) Hearings.--The Board may hold such hearings, 
                sit and act at such times and places, take such 
                testimony, and receive such evidence as the Board 
                considers advisable to carry out this subsection.
                    ``(B) Postal services.--The Board may use the 
                United States mails in the same manner and under the 
                same conditions as other departments and agencies of 
                the Federal Government.
            ``(7) Personnel.--
                    ``(A) Officers of the federal government.--A member 
                of the Board that is an employee of the Federal 
                Government may not receive additional pay, allowances, 
                or benefits by reason of the member's service on the 
                Board.
                    ``(B) Other members.--A member of the Board that is 
                not an employee of the Federal Government shall be 
                compensated at a rate equivalent to the daily 
                equivalent of the annual rate of basic pay prescribed 
                for level IV of the Executive Schedule under section 
                5315 of title 5, United States Code, for each day 
                (including travel time) during which the member is 
                engaged in the actual performance of duties as a member 
                of the Board.
                    ``(C) Travel expenses.--Each member of the Board 
                shall receive travel expenses, including per diem in 
                lieu of subsistence, in accordance with applicable 
                provisions under subchapter I of chapter 57 of title 5, 
                United States Code.
                    ``(D) Detail of government employees.--Any Federal 
                Government employee may be detailed to the Board 
                without reimbursement, and such detail shall be without 
                interruption or loss of civil service status or 
                privilege.
    ``(d) Fund.--
            ``(1) Establishment.--There is established the Biodefense 
        Medical Countermeasure Development Fund, which shall be 
        administered by the Director of the BARDA.
            ``(2) Funds.--
                    ``(A) First fiscal year.--Of the amounts 
                appropriated to carry out the Project BioShield Act of 
                2004 (Public Law 108-276) and not obligated, 
                $1,000,000,000 shall be available to the Fund to carry 
                out this section for fiscal year 2006. Such amounts 
                shall remain available until expended.
                    ``(B) Subsequent fiscal years.--There are 
                authorized to be appropriated such sums as may be 
                necessary to carry out this section for fiscal year 
                2007 and each subsequent fiscal year. Such sums shall 
                remain available until expended.
    ``(e) Effect of Section.--Nothing in this section shall be 
construed to limit any authority of the Department of Health and Human 
Services, including those authorities provided under the Project 
BioShield Act of 2004 (Public Law 108-276).
    ``(f) Inapplicability of Certain Acts.--
            ``(1) FACA.--The Federal Advisory Committee Act (5 U.S.C. 
        App.) shall not apply to the duties, activities, working 
        groups, and advisory boards of the BARDA.
            ``(2) FOIA.--Information that relates to the activities, 
        working groups, and advisory boards of the BARDA shall not be 
        subject to disclosure under section 552 of title 5, United 
        States Code, unless the Secretary or Director determines that 
        such disclosure would pose no threat to national security. Such 
        a determination shall not be subject to judicial review.
            ``(3) Certain cost principles and cost accounting 
        standards.--Notwithstanding any other provision of law, the 
        cost principles set forth under part 31 of title 48, Code of 
        Federal Regulations, the cost accounting standards set forth 
        under chapter 99 of title 48, Code of Federal Regulations, and 
        the requirement for the submission of certified cost and 
        pricing information under section 304A of the Federal Property 
        and Administrative Services Act of 1949 (41 U.S.C. 254b), shall 
        not apply to any contract, grant, cooperative agreement, or 
        other transaction entered into under the Project BioShield Act 
        of 2004 (Public Law 108-276).''.

SEC. 4. CLARIFICATION OF COUNTERMEASURES COVERED BY PROJECT BIOSHIELD.

    (a) Qualified Countermeasure.--Section 319F-1(a) of the Public 
Health Service Act (42 U.S.C. 247d-6a(a)) is amended by striking 
paragraph (2) and inserting the following:
            ``(2) Definitions.--In this section:
                    ``(A) Qualified countermeasure.--The term 
                `qualified countermeasure' means a drug (as that term 
                is defined by section 201(g)(1) of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 321(g)(1))), 
                biological product (as that term is defined by section 
                351(i) of this Act (42 U.S.C. 262(i))), device (as that 
                term is defined by section 201(h) of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 321(h))), or research 
                tool (as that term is defined in section 201(rr) of the 
                Federal Food, Drug, and Cosmetic Act) that the 
                Secretary determines to be a priority (consistent with 
                sections 302(2) and 304(a) of the Homeland Security Act 
                of 2002) to--
                            ``(i) diagnose, mitigate, prevent, or treat 
                        harm from any biological agent (including 
                        organisms that cause an infectious disease) or 
                        toxins, chemical, radiological, or nuclear 
                        agent that may cause a public health emergency 
                        affecting national security;
                            ``(ii) diagnose, mitigate, prevent, or 
                        treat harm from a condition that may result in 
                        adverse health consequences or death and may be 
                        caused by administering a drug, biological 
                        product, or device that is used as described in 
                        this subparagraph; or
                            ``(iii) in the case of a research tool, 
                        enable the rapid and effective identification, 
                        assessment, or development of a drug, 
                        biological product, or device to diagnose, 
                        mitigate, prevent, or treat harm, as described 
                        in clause (i) or (ii).
                    ``(B) Infectious disease.--The term `infectious 
                disease' means a disease potentially caused by a 
                pathogenic organism (including a bacteria, virus, 
                fungus, or parasite) that is acquired by a person and 
                that reproduces in that person.''.
    (b) Security Countermeasure.--Section 319F-2(c)(1)(B) is amended 
by--
                    (A) striking ``treat, identify, or prevent'' each 
                place it appears and inserting ``diagnose, mitigate, 
                prevent, or treat''; and
                    (B) inserting ``agent (including organisms that 
                cause an infectious disease) or toxin'' after ``any 
                biological''.
    (c) Research Tool.--Section 201 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 321) is amended by adding at the end the 
following:
    ``(rr) Research Tool.--The term `research tool' includes the full 
range of tools and systems that assist in the discovery, development, 
or manufacture of drugs, biological products (as defined in section 351 
of the Public Health Service Act), or devices.''.

SEC. 5. ORPHAN DRUG MARKET EXCLUSIVITY FOR COUNTERMEASURE PRODUCTS.

    (a) Market Exclusivity.--Subchapter A of chapter V of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended by 
inserting after section 505B the following:

``SEC. 505C. ORPHAN DRUG MARKET EXCLUSIVITY FOR COUNTERMEASURE 
              PRODUCTS.

    ``(a) In General.--With respect to countermeasure products (as such 
term is defined in this section), if a countermeasure product is 
designated under section 526 for a rare disease or condition, the 
period referred to in section 527(a) shall be 10 years instead of 7 
years.
    ``(b) Definition.--For the purpose of this section, the term 
`countermeasure' means a drug or biological product (as such term is 
defined by section 351(i) of the Public Health Service Act) that the 
Secretary determines to be a priority (consistent with sections 302(2) 
and 304(a) of the Homeland Security Act of 2002) to diagnose, mitigate, 
prevent, or treat harm from any biological, chemical, radiological, or 
nuclear agent (including organisms that cause an infectious disease) or 
toxin identified as a material threat under subsection (c)(2)(A)(ii) of 
section 319F-2 of the Public Health Service Act.''.
    (b) Orphan Drugs.--For purposes of section 526 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 360bb) a biological, chemical, 
radiological, or nuclear agent (including organisms that cause an 
infectious disease) or toxin identified as a material threat under 
subsection (c)(2)(A)(ii) of section 319F-2 of the Public Health Service 
Act shall be considered to be a ``rare disease or condition'' within 
the meaning of such term in such section 526. The Secretary may 
designate antibiotics and anti-infective products that treat infectious 
diseases as designated drugs or biological products under such section 
526.
    (c) Effect of Section.--This section, and the amendments made by 
this section, shall apply to new drug applications and biological 
product licenses approved under the Federal Food, Drug, and Cosmetic 
Act or the Public Health Service Act after the date of enactment of 
this Act.

SEC. 6. LIABILITY PROTECTIONS FOR PANDEMICS, EPIDEMICS, AND 
              COUNTERMEASURES.

    Part B of title III of the Public Health Service Act is amended by 
inserting after section 319F-2 (42 U.S.C. 247d-6b) the following:

``SEC. 319F-3. LIABILITY PROTECTIONS FOR PANDEMIC AND EPIDEMIC PRODUCTS 
              AND SECURITY COUNTERMEASURES.

    ``(a) Authority.--As provided in subsection (b), and subject to 
subsection (b)(1)(C), a manufacturer, distibutor, or administrator of a 
security countermeasure, or a qualified pandemic and epidemic product, 
described in subsection (b)(1)(A) or a health care provider shall be 
immune from suit or liability caused by or arising out of the design, 
development, clinical testing and investigation, manufacture, labeling, 
distribution, sale, purchase, donation, dispensing, prescribing, 
administration, or use of a security countermeasure, or a qualified 
pandemic and epidemic product, described in subsection (b)(1)(A).
    ``(b) Litigation Management.--
            ``(1) Limitation on cause of action.--
                    ``(A) In general.--
                            ``(i) In general.--No cause of action shall 
                        exist against a person described in subsection 
                        (a) for claims for loss of property, personal 
                        injury, or death arising out of, reasonably 
                        relating to, or resulting from the design, 
                        development, clinical testing and 
                        investigation, manufacture, labeling, 
                        distribution, sale, purchase, donation, 
                        dispensing, prescribing, administration, or use 
                        of a security countermeasure or qualified 
                        pandemic or epidemic product distributed, sold, 
                        purchased, donated, dispensed, prescribed, 
                        administered, or used in anticipation of and 
                        preparation for, in defense against, or in 
                        response to, or recovery from an actual or 
                        potential public health emergency that is a 
                        designated security countermeasure or a 
                        qualified pandemic or epidemic product by the 
                        Secretary in a declaration described in 
                        paragraph (2).
                            ``(ii) Rule of construction.--For purposes 
                        of this section, the phrase `arising out of, 
                        reasonably relating to, or resulting from' 
                        shall not be construed to apply to loss of 
                        property, personal injury, or death that has no 
                        alleged or potential causal relationship with 
                        the design, development, clinical testing and 
                        investigation, manufacture, labeling, 
                        distribution, sale, purchase, donation, 
                        dispensing, prescribing, administration, or use 
                        of a product described in clause (i).
                    ``(B) Rule.--
                            ``(i) Subsequent injury.--The protections 
                        set forth in subsection (a) and subparagraph 
                        (A) shall apply to all claims identified in 
                        subparagraph (A) that involve products 
                        distributed, sold, purchased, donated, 
                        dispensed, prescribed, administered, or used 
                        during the effective period set forth in the 
                        designation provided for in paragraph (2), 
                        regardless of the date of alleged injury.
                            ``(ii) Private donation or sale.--The 
                        protections set forth in subsection (a) and 
                        subparagraph (A) shall apply to all claims 
                        identified in subparagraph (A) that involve 
                        security countermeasures or qualified pandemic 
                        or epidemic products distributed, sold, 
                        purchased, donated, dispensed, prescribed, 
                        administered, or used during the effective 
                        period set forth in the designation provided 
                        for in paragraph (2) by a manufacturer through 
                        the commercial market, provided that the 
                        security countermeasures or the qualified 
                        pandemic or epidemic product are the security 
                        countermeasure or qualified pandemic or 
                        epidemic product described in a declaration 
                        described in paragraph (2) and the Secretary 
                        does not specifically prohibit such private 
                        donation or sale in such declaration.
                    ``(C) Potential liability upon determination.--
                            ``(i) In general.--A manufacturer, 
                        distributor, administrator, or health care 
                        provider shall not be immune under subsection 
                        (a) or exempted from a cause of action under 
                        subparagraph (A) if the Secretary makes a 
                        determination as provided for in subparagraph 
                        (D).
                            ``(ii) Investigation by secretary.--A party 
                        seeking a determination under subparagraph (D) 
                        may petition the Secretary to investigate 
                        allegations against a manufacturer, 
                        distributor, administrator, or health care 
                        provider arising out of, relating to, or 
                        resulting from the design, development, 
                        clinical testing and investigation, 
                        manufacture, labeling, distribution, sale, 
                        purchase, donation, dispensing, prescribing, 
                        administration, or use of products as provided 
                        for in subparagraph (A)(i). The decision to 
                        undertake such investigation shall be within 
                        the Secretary's discretion and shall not be 
                        subject to judicial review.
                            ``(iii) Rule of construction.--Nothing in 
                        this section shall be construed to abrogate or 
                        limit the application of subtitle II of chapter 
                        5 and chapter 7 of title 5, United States Code 
                        (commonly known as the Administrative Procedure 
                        Act).
                    ``(D) Determination by secretary.--
                            ``(i) In general.--In making a 
                        determination under this subparagraph, the 
                        Secretary, acting through an administrative law 
                        judge, must find clear and convincing evidence 
                        that--
                                    ``(I) the manufacturer, 
                                distributor, administrator, or health 
                                care provider violated a provision of 
                                the Federal Food, Drug, and Cosmetic 
                                Act (21 U.S.C. 301 et seq.) or this 
                                Act; and
                                    ``(II) in violating such Act, such 
                                manufacturer, distributor, 
                                administrator, or health care provider 
                                acted with willful misconduct.
                            ``(ii) Effect of determination.--If the 
                        Secretary finds such clear and convincing 
                        evidence under clause (i), the Secretary shall 
                        examine whether such willful misconduct to 
                        violate an Act under such clause--
                                    ``(I) caused the product to present 
                                a significant or unreasonable risk to 
                                human health; and
                                    ``(II) proximately caused the 
                                injury alleged by the party.
                            ``(iii) Notice and hearing.--Prior to the 
                        Secretary's making a determination under clause 
                        (i), the manufacturer, distributor, 
                        administrator, or health care provider shall 
                        have notice and a right to a formal hearing in 
                        accordance with section 556 of title 5, United 
                        States Code.
                            ``(iv) Effect of determination.--Subject to 
                        subsection (c), the sole exception to the 
                        immunity from suit and liability of 
                        manufacturers, distributors, administrators, or 
                        healthcare providers set forth in subsection 
                        (a) and subparagraph (A) shall be for actions 
                        against a manufacturer, distributor, 
                        administrator, or healthcare provider as 
                        provided in subparagraph (A).
                            ``(v) Judicial review.--At any time prior 
                        to the 90th day following a determination by 
                        the Secretary under clause (i), any 
                        manufacturer, distributor, administrator, or 
                        health care provider named in such 
                        determination may file a petition with the 
                        United States Court District Court for the 
                        District of Columbia, for a judicial review of 
                        such determination. A copy of the petition 
                        shall be forthwith transmitted by the clerk of 
                        the court to the Secretary or other officer 
                        designated by the Secretary for that purpose. 
                        The Secretary thereupon shall file in the court 
                        the record of the findings on which the 
                        Secretary based his or her determination. The 
                        filing of a petition under this clause shall 
                        automatically stay the Secretary's 
                        determination for the duration of the judicial 
                        proceeding. The sole parties to the judicial 
                        proceeding shall be the Secretary and the 
                        petitioner. Intervention by third parties in 
                        the judicial proceeding shall not be permitted. 
                        No subpoenas shall be issued nor shall other 
                        compulsory process apply. The court's review of 
                        a determination by the Secretary under this 
                        clause shall conform to the procedures for 
                        judicial review of administrative orders set 
                        forth in paragraphs (2) through (6) of section 
                        701(f) of the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S.C. 371(f)) to the extent consistent 
                        with this section.
                            ``(vi) Tolling of statute of limitations.--
                        The computation of the statute of limitations 
                        for any action against a manufacturer, 
                        distributor, administrator, or health care 
                        provider described under this subparagraph 
                        shall not include any time occurring before the 
                        determination by the Secretary under this 
                        subparagraph.
                            ``(vii) Regulatory authority.--The 
                        Secretary, in consultation with the Attorney 
                        General, shall promulgate regulations defining 
                        what actions by a manufacturer, distributor, 
                        administrator, or healthcare provider of a 
                        security countermeasure or a qualified pandemic 
                        and epidemic product shall be deemed to 
                        constitute `willful misconduct' for purposes of 
                        clause (i). In promulgating such regulations, 
                        the Secretary shall consider the nature of the 
                        actual or potential public health emergency, 
                        the timing and extent of any vaccination or 
                        countermeasure program, and any other 
                        circumstances they deem significant, so that 
                        any civil actions permitted under this 
                        subsection will not adversely affect the public 
                        health. The Secretary may specify the period of 
                        time for which such regulations apply.
                            ``(viii) Evidence required.--The Secretary, 
                        in consultation with the Attorney General, 
                        shall promulgate regulations that require, in 
                        order to be a party under this section, that an 
                        individual present evidence that reasonably 
                        demonstrates that--
                                    ``(I) such individual has suffered 
                                a loss as a direct result of the 
                                design, development, clinical testing 
                                and investigation, manufacture, 
                                labeling, distribution, sale, purchase, 
                                donation, dispensing, prescribing, or 
                                administration of a security 
                                countermeasure or qualified epidemic or 
                                pandemic product; and
                                    ``(II) the loss as described in 
                                subclause (I) was a direct result of 
                                the willful misconduct of the 
                                manufacturer, distributor, 
                                administrator, or health care provider 
                                in violating the Federal Food, Drug, 
                                and Cosmetic Act or this Act.
                    ``(E) Scope.--Subparagraph (C) shall apply 
                regardless of whether the suit or liability described 
                in subsection (a) or the claim described in 
                subparagraph (A) arises from the design, development, 
                clinical testing and investigation, manufacture, 
                labeling, distribution, sale, purchase, donation, 
                dispensing, prescribing, administration, or use by the 
                Federal Government or by any person.
            ``(2) Declaration by secretary.--
                    ``(A) In general.--The Secretary may issue a 
                declaration, pursuant to this paragraph, that an actual 
                or potential public health emergency makes advisable 
                the distribution, administration, or use of a security 
                countermeasure or qualified pandemic or epidemic 
                product.
                    ``(B) Security countermeasure or qualified pandemic 
                or epidemic product.--The Secretary shall specify in 
                such declaration the security countermeasures or 
                qualified pandemic or epidemic products to be sold by, 
                purchased from, or donated by a manufacturer or drawn 
                from the Strategic National Stockpile.
                    ``(C) Effective period.--The Secretary shall 
                specify in such declaration the beginning and the 
                ending dates of the effective period of the 
                declaration, which shall be not longer than 6 months. 
                The Secretary may subsequently amend such declaration 
                to shorten or extend such effective period, provided 
                that the new ending data is after the date on which the 
                declaration is amended.
                    ``(D) Publication.--The Secretary shall promptly 
                publish each such declaration and amendment in the 
                Federal Register.
    ``(c) Actions by the United States.--Nothing in this section shall 
be construed to abrogate or limit any right, remedy, or authority that 
the United States or any agency thereof may possess under any other 
provision of law.
    ``(d) Definitions.--In this section:
            ``(1) Administrator.--The term `administrator' means a 
        person employed by the State or local government, or their 
        designee, who supervised or administered a program with respect 
        to the administration, dispensing, distribution, or provision 
        of a security countermeasure or a qualified pandemic or 
        epidemic product, including a person who has established 
        requirements, provided policy guidance, supplied technical or 
        scientific advice or assistance.
            ``(2) Health care provider.--The term `health care 
        provider' means a person, including a volunteer, who 
        distributes, prescribes, administers, dispenses, provides a 
        facility to administer, or supervises or oversees the 
        administration of a security countermeasure or a qualified 
        pandemic or epidemic product, including persons who distribute, 
        prescribe, administer, dispense, or provide a facility to 
        administer in accordance with a designation under subsection 
        (b)(2).
            ``(3) Loss.--The term `loss' means death, physical injury, 
        or loss of or damage to property, including business 
        interruption loss.
            ``(4) Manufacturer.--The term `manufacturer' includes--
                    ``(A) a contractor or subcontractor of a 
                manufacturer;
                    ``(B) a supplier of any product or service, 
                research tool, or component to the manufacturer; and
                    ``(C) any or all of the parents, subsidiaries, 
                affiliates, successors, and assigns of a manufacturer.
            ``(5) Qualified pandemic or epidemic product.--The term 
        `qualified pandemic or epidemic product' means a drug (as such 
        term is defined in section 201(g)(1) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 321(g)(1))), biological product (as 
        such term is defined by section 351(i) of this Act) or device 
        (as such term is defined by section 201(h) of the Federal Food, 
        Drug and Cosmetic Act (21 U.S.C. 321(h))) designed, developed, 
        modified, or procured to diagnose, mitigate, prevent, treat, or 
        cure a pandemic or epidemic or limit the harm such pandemic or 
        epidemic might otherwise cause or a serious or life-threatening 
        disease or condition caused by such a product, that--
                    ``(A) is approved or cleared under chapter V of the 
                Federal Food, Drug, and Cosmetic Act or licensed under 
                section 351 of this Act;
                    ``(B) is a product for which the Secretary 
                determines that sufficient and satisfactory clinical 
                experience or research data (including data, if 
                available, from pre-clinical and clinical trials) 
                support a reasonable conclusion that the product will 
                qualify for approval or licensing within 8 years after 
                the date the Secretary makes a declaration under 
                paragraph (2); or
                    ``(C) is authorized for emergency use section 564 
                of the Federal Food, Drug, and Cosmetic Act, except 
                that subsection (b) of such section shall not apply.
            ``(6) Party.-- The term `party' means an individual who can 
        reasonably demonstrate to the Secretary that such individual 
        has suffered a loss (as defined in paragraph (3)) as a direct 
        result of the willful misconduct of a manufacturer, 
        distributor, administrator, or health care provider.
            ``(7) Person.--The term `person' includes an individual, 
        partnership, corporation, association, entity, or public or 
        private corporation, including a Federal, State, or local 
        agency or department.
            ``(8) Security countermeasure.--The term `security 
        countermeasure' has the meaning given such term in section 
        319F-2(c)(1)(B).''.

SEC. 7. COMPENSATION.

    Title II of the Public Health Service Act (42 U.S.C. 202 et seq.) 
is amended by adding at the end the following:

                 ``PART D--OTHER COMPENSATION PROGRAMS

``SEC. 271. COVERED COUNTERMEASURES PROGRAM.

    ``(a) In General.--If the Secretary issues a Proclamation stating 
that there is a critical public health need for a covered individual to 
receive a covered countermeasure during the effective period of the 
Proclamation, the Secretary shall establish a process to provide 
compensation to such covered individuals for a covered injury, 
consistent with the Smallpox Emergency Personnel Protection program 
under part C.
    ``(b) Definition.--For purposes of this section:
            ``(1) Covered countermeasure.--The term `covered 
        countermeasure' means a qualified pandemic or epidemic (as 
        defined in section 319F-3(c)(5)) or a security countermeasure 
        (as defined in section 319F-2(c)(1)(B)) specified in the 
        Proclamation.
            ``(2) Covered individual.--The term `covered individual' 
        means an individual--
                    ``(A) who is a health care worker, law enforcement 
                officer, firefighter, security personnel, emergency 
                medical personnel, other public health or safety 
                personnel, or support personnel for such occupational 
                specialties;
                    ``(B) who is or will be functioning in a role 
                identified in a State, local, or Department of Health 
                and Human Services emergency response plan approved by 
                the Secretary;
                    ``(C) who has volunteered and been selected to be a 
                member of an emergency response plan; and
                    ``(D) to whom a covered countermeasure is 
                administered pursuant to such approved plan during the 
                effective period of the Proclamation and prior to the 
                time at which the Secretary declares a public health 
                emergency pursuant to section 319 related to a covered 
                countermeasure specified in the Proclamation.
            ``(3) Covered injury.--The term `covered injury' means an 
        injury, disability, illness, condition, or death (other than a 
        minor injury such as minor scarring or minor local reaction) 
        determined by the Secretary to have been sustained by a covered 
        individual as the direct result of administration to the 
        individual of a covered countermeasure.
            ``(4) Effective period of the proclamation.--The term 
        `effective period of the Proclamation' means the effective 
        period specified in the Proclamation, unless extended by the 
        Secretary.
            ``(5) Emergency response plan.--The term `emergency 
        response plan' or `plan' means a response plan detailing 
        actions to be taken in preparation for a pandemic, epidemic, or 
        biological, chemical, nuclear agent or toxin that presents, or 
        may present, a public health emergency.
            ``(6) Proclamation.--The term `Proclamation' means a 
        Proclamation regarding the critical public health need for the 
        administration of a covered countermeasure issued by the 
        Secretary and published in the Federal Register. Such 
        Proclamation shall specify the specific covered countermeasure 
        recommended for administration.
    ``(c) Rule of Construction.--Nothing in this section shall be 
construed to require the creation of a compensation program if the 
covered injuries are only minor injuries consistent with section 
(b)(3).''.

SEC. 8. REBATES AND GRANTS FOR RESEARCH DEVELOPMENT, AND MANUFACTURING 
              OF VACCINES, QUALIFIED COUNTERMEASURES AND PANDEMIC OR 
              EPIDEMIC PRODUCTS.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') may award to a 
person with respect to an investment described in this section (or an 
amendment made by this section)--
            (1) a rebate pursuant to subsection (b); or
            (2) a grant pursuant to section 319M of the Public Health 
        Service Act (as added by subsection (c)).
    (b) Surge Capacity and Research Rebates.--
            (1) In general.--The Secretary may award rebates out of any 
        money in the Treasury not otherwise appropriated to persons for 
        the expansion of surge capacity for manufacturing vaccines, 
        qualified countermeasures (as defined in 319F-1 of the Public 
        Health Service Act, as amended by this Act) or qualified 
        pandemic or epidemic products (as defined in 319F-3(c)(5) of 
        such Act, as added by this Act) (referred to in this section as 
        ``vaccines, countermeasures or products'') and for vaccines, 
        countermeasures, or products research.
            (2) Vaccines, countermeasures or products manufacturing 
        facilities investment rebate.--
                    (A) In general.--For purposes of this section, 
                vaccines, countermeasures or products manufacturing 
                facilities investment rebate for any taxable year for a 
                person (as defined with respect to such person for 
                purposes of the Internal Revenue Code of 1986) shall be 
                an amount equal to 20 percent of the qualified 
                investment for such taxable year.
                    (B) Vaccines, countermeasures or products 
                manufacturing facilities investment.--For purposes of 
                subparagraph (A), the qualified investment for any 
                taxable year for a person is the basis of each 
                vaccines, countermeasures or products manufacturing 
                facilities property placed in service by the person 
                during the taxable year involved.
                    (C) Vaccines, countermeasures and products 
                manufacturing facilities property.--For purposes of 
                this subsection, the term ``vaccines, countermeasures 
                and products manufacturing facilities property'' means 
                real and tangible personal property--
                            (i)(I) the original use of which commences 
                        with the person applying for the rebate; or
                            (II) which is acquired through purchase (as 
                        defined by section 179(d)(2) of the Internal 
                        Revenue Code of 1986);
                            (ii) which is depreciable under section 167 
                        of the Internal Revenue Code of 1986;
                            (iii) which is physically located in a 
                        State;
                            (iv) which is used for the manufacture, 
                        distribution, or research and development of 
                        vaccines, countermeasures, or products; and
                            (v) which is in compliance with applicable 
                        good manufacturing practice and with any other 
                        applicable requirements which are promulgated 
                        by the Secretary, the Occupational Safety and 
                        Health Administration, or the Environmental 
                        Protection Agency, and which are applicable to 
                        such property.
                    (D) Denial of double benefit for manufacturing 
                facilities expenses.--If any portion of the vaccines, 
                countermeasures, and products manufacturing facilities 
                property investment expenses is otherwise allowable as 
                a deduction for the taxable year involved, the 
                Secretary shall only provide a rebate under this 
                section for the portion of such expenses not covered by 
                the rebate determined by such deduction.
                    (E) Eligibility.--To be eligible to receive a 
                rebate under this subsection, a manufacturer shall 
                submit to the Secretary an application at such time, in 
                such manner, and containing such information as the 
                Secretary may require, including--
                            (i) a detailed description and intended use 
                        of the facilities that is the basis of 
                        application;
                            (ii) a detailed description of the vaccine, 
                        countermeasure, or product being produced or 
                        that may be produced at the facility;
                            (iii) a detailed accounting of qualified 
                        manufacturing facilities investment of the 
                        person;
                            (iv) a certification as to the compliance 
                        of the person with clauses (i) through (iv) of 
                        subparagraph (C); and
                            (v) copies of tax returns for the taxable 
                        year involved.
                    (F) Effective date.--This paragraph shall apply to 
                property placed in service after December 31, 2005.
                    (G) Termination.--This paragraph shall not apply to 
                any property placed in service after December 31, 2010.
            (3) Medical research related to developing vaccines, 
        countermeasures or qualified pandemic or epidemic products 
        rebate.--
                    (A) In general.--For purposes of this subsection, 
                the research rebate determined under this section for 
                the taxable year involved (as determined as provided 
                for in paragraph (2)(A)) is an amount equal to 35 
                percent of the vaccines, qualified countermeasures, or 
                qualified pandemic or epidemic products (referred to in 
                this section as ``vaccine, countermeasure, or 
                product'') research expenses for the taxable year.
                    (B) Vaccines, countermeasures, or products research 
                expenses.--Except as otherwise provided in this 
                paragraph, the term ``vaccines, countermeasures, or 
                products research expenses'' means the amounts which 
                are paid or incurred by the researcher or manufacturer 
                during the taxable year with respect to any research 
                and development of vaccines, countermeasures, or 
                products. Qualified research and development expenses 
                include expenses related to reformulating existing 
                vaccines, countermeasures, or products.
                    (C) Determining research expenses.--Any vaccines, 
                countermeasures, or products research expenses for any 
                taxable year which are qualified research expenses 
                (within the meaning of this subsection) shall be taken 
                into account in determining base period research 
                expenses for purposes of applying this paragraph to 
                subsequent taxable years.
                    (D) Denial of double benefit for vaccines, 
                countermeasures, or products research expenses.--If any 
                portion of the vaccines, countermeasures, or products 
                research expenses is otherwise allowable as a deduction 
                for the taxable year involved, the Secretary shall only 
                provide a rebate under this section for the portion of 
                such expenses not covered by any rebate determined by 
                such deduction.
                    (E) Eligibility.--To be eligible to receive a 
                rebate under this paragraph, a manufacturer or 
                researcher shall submit to the Secretary an application 
                at such time, in such manner, and containing such 
                information as the Secretary may require, including--
                            (i) a detailed description of the vaccine, 
                        countermeasure, or product being researched or 
                        developed;
                            (ii) a detailed description of the research 
                        that is the subject of the rebate;
                            (iii) a detailed accounting of the 
                        qualified research expenses involved;
                            (iv) an assurance that the researcher or 
                        manufacturer is following good laboratory 
                        practice, as required by the Secretary pursuant 
                        to the Federal Food, Drug, and Cosmetic Act (21 
                        U.S.C. 301 et seq.) and the Public Health 
                        Service Act (42 U.S.C. 201 et seq.); and
                            (v) copies of tax returns for the taxable 
                        year involved.
                    (F) Effective date.--This paragraph shall apply to 
                expenses for taxable years beginning after December 31, 
                2005.
            (4) Exclusion for amounts funded by grants, etc.--The terms 
        ``vaccines, countermeasures, or products manufacturing 
        investment'' and ``qualified research expenses'' shall not 
        include any amount to the extent such amount is funded by any 
        grant, contract, or otherwise funded by another person (or any 
        governmental entity).
    (c) Grants to Expand and Improve Research and Development and 
Manufacturing of Vaccines, Countermeasures or Products.--Part B of 
title III of the Public Health Service Act is amended by inserting 
after section 319L, as added by this Act, the following:

``SEC. 319M. GRANTS TO EXPAND AND IMPROVE RESEARCH AND DEVELOPMENT AND 
              MANUFACTURING OF VACCINES, QUALIFIED COUNTERMEASURES OR 
              QUALIFIED PANDEMIC OR EPIDEMIC PRODUCTS.

    ``(a) In General.--The Secretary may award grants to a manufacturer 
to purchase or improve real property and tangible personal property 
used in the research and development, manufacture, or distribution of a 
vaccine, qualified countermeasure (as defined in section 319F-1) or 
qualified pandemic or epidemic product (as defined in section 319F-
3(c)(5)).
    ``(b) Eligibility.--To be eligible to receive a grant under 
subsection (a), a manufacturer shall submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require, including--
            ``(1) a detailed description of the planned expansion;
            ``(2) a detailed description of the equipment, facility, or 
        property involved;
            ``(3) a certification that such facility or property is 
        physically located in a State;
            ``(4) a detailed description of the vaccine, qualified 
        countermeasure or qualified pandemic or epidemic product 
        involved;
            ``(5) a detailed description of the research and 
        development, manufacturer, or distribution involved;
            ``(6) a description of how such equipment, facility, or 
        property is to be used;
            ``(7) a description of whether such equipment, facility, or 
        property can be used for the research and development, 
        manufacture, or distribution of a drug, biological product, 
        device or other countermeasure not described in paragraph (4); 
        and
            ``(8) a certification that the equipment, facility, or 
        property involved complies with all applicable Federal, State, 
        and local laws.
    ``(c) Recapture.--
            ``(1) In general.--If, at any time prior to the expiration 
        of the 20-year period beginning on the date on which a grant is 
        awarded under this section, the facility or property involved 
        ceases to be used for the purpose for which the grant was 
        awarded, the United States shall be entitled to recover from 
        the manufacturer an amount bearing the same ratio to the value 
        of the facility or property at such time as the amount of the 
        grant bore to the total cost of the purchase or improvement 
        involved. The value of the facility or property at such time 
        may be determined by agreement of the manufacturer and the 
        Secretary, or by order of the United States District Court for 
        the district in which such facility or property is situated.
            ``(2) Limitation.--The Secretary may not recapture the 
        facility or property under this subsection if the Secretary 
        determines, in accordance with regulations promulgated by the 
        Secretary, that there is good cause for the failure of proper 
        use.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this 
section.''.

SEC. 9. TECHNICAL ASSISTANCE.

    Subchapter E of chapter V of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 360bbb et seq.) is amended by adding at the end the 
following:

``SEC. 565. TECHNICAL ASSISTANCE.

    ``The Secretary, in consultation with the Commissioner of Food and 
Drugs, shall establish within the Food and Drug Administration a team 
of experts on manufacturing and regulatory activities (including 
compliance with current Good Manufacturing Practices) to provide both 
off-site and on-site technical assistance to the manufacturers of 
qualified countermeasures (as defined in section 319F-1 of the Public 
Health Service Act), security countermeasures (as defined in section 
319F-2 of such Act), or vaccines, at the request of such a manufacturer 
and at the discretion of the Secretary, if the Secretary determines 
that a shortage or potential shortage may occur in the United States in 
the supply of such vaccines or products and that the provision of such 
assistance would be beneficial in helping alleviate or avert such 
shortage.''.

SEC. 10. ANIMAL MODELS FOR CERTAIN DISEASES.

    Part B of title IV of the Public Health Service Act (42 U.S.C. 284 
et seq.) is amended by adding at the end the following:

``SEC. 409J. ANIMAL MODELS FOR CERTAIN DISEASES.

    ``(a) In General.--The Secretary, acting through the Director of 
NIH, in coordination with the Director of the Biomedical Advanced 
Research and Development Agency, the Director of the Centers for 
Disease Control and Prevention, and the Commissioner of Food and Drugs, 
shall establish and award grants under this section to eligible 
entities, including other Federal agencies, to study the physiological 
responses of certain animal species and, where appropriate, juvenile 
models, to chemical, biological, radiological, or nuclear agents or 
toxins or potential pandemic infectious disease, and to develop and 
validate such animal models.
    ``(b) Eligibility.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) provide assurances to the Secretary that the entity--
                    ``(A) has access to an appropriate biosafety 
                laboratory or facility, as determined by the Secretary; 
                and
                    ``(B) will follow good laboratory practices;
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require, including--
                    ``(A) a detailed description of the animal model 
                involved;
                    ``(B) a detailed description of the chemical, 
                biological, radiological, nuclear, or other infectious 
                agents involved;
                    ``(C) a detailed description of how the animal 
                model will be used for the development of a drug, 
                biological product, or device for use as a 
                countermeasure;
                    ``(D) a detailed description of validation methods; 
                and
                    ``(E) an assurance that the entity will follow good 
                laboratory practices; and
            ``(3) agree to submit the results of the research funded 
        under the grant to the Director of the Biomedical Advanced 
        Research and Development Agency and the Director of NIH.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this 
section.''.

SEC. 11. ANIMAL MODEL/RESEARCH TOOL SCIENTIFIC ADVISORY COMMITTEE.

    Subchapter E of chapter V of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 360bbb et seq.), as amended by this Act, is amended by 
adding at the end the following:

``SEC. 566. ANIMAL MODEL/RESEARCH TOOL SCIENTIFIC ADVISORY COMMITTEE.

    ``(a) Establishment.--Not later than 6 months after the date of 
enactment of this section, the Secretary shall establish an 11-member 
advisory committee to be known as the `Animal Model/Research Tool 
Scientific Advisory Committee' (referred to in this section as the 
`Advisory Committee').
    ``(b) Membership.--
            ``(1) In general.--The Secretary shall appoint as members 
        of the Advisory Committee individuals who are technically 
        qualified by training and experience, including in medicine, 
        veterinarian medicine, biology, technology involving the 
        manufacture, evaluation, or use of research tools, who are of 
        appropriately diversified professional backgrounds to evaluate 
        the priority animal models and research tools.
            ``(2) Ex officio members.--The Secretary may appoint 
        Federal officials, including at least 1 representative of the 
        Biomedical Advanced Research and Development Agency, to serve 
        as ex officio members of the Advisory Committee.
            ``(3) Chairperson.--The Secretary shall designate 1 of the 
        members of the Advisory Committee to serve as the chairperson.
    ``(c) Duties.--The Advisory Committee shall provide advice, 
information, and recommendations to the Secretary on--
            ``(1) accepted animal models for diseases and conditions 
        associated with any biological (including organisms that cause 
        infectious diseases), chemical, radiological, or nuclear agent 
        or toxin or potential pandemic infectious disease;
            ``(2) strategies to accelerate animal model and research 
        tool development and validation; and
            ``(3) scientific issues raised in applications as requested 
        by the Secretary.
    ``(d) Priorities.--Priorities for animal models and research tools 
shall be established by the Secretary.
    ``(e) Compensation; Support; FACA.--
            ``(1) Compensation and travel.--Members of the Advisory 
        Committee who are not officers or employees of the United 
        States, while attending conferences or meetings of the 
        committee or otherwise engaged in its business, shall be 
        entitled to receive compensation at rates to be fixed by the 
        Secretary, which may not exceed daily equivalent of the rate in 
        effect for level 4 of the Senior Executive Schedule under 
        section 5382 of title 5, United States Code, for each day 
        (including travel time) they are so engaged, and while so 
        serving away from their homes or regular places of business 
        each member may be allowed travel expenses, including per diem 
        in lieu of subsistence, as authorized by section 5703 of title 
        5, United States Code, for persons in the Federal Government 
        service employed intermittently.
            ``(2) Administrative support.--The Secretary shall furnish 
        the Advisory Committee clerical and other assistance.
            ``(3) Nonapplication of faca.--Section 14 of the Federal 
        Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
        Advisory Committee.
    ``(f) Proceedings.--The Advisory Committee shall make and maintain 
a transcript of any proceeding of the Committee. The Committee shall 
delete from any transcript made under this subsection information, 
which is exempt from disclosure under section 552(b) of title 5, United 
States Code.''.

SEC. 12. COLLABORATION AND COORDINATION.

    Section 2 of the Clayton Act (15 U.S.C. 13) is amended by adding at 
the end the following:
    ``(g) Limited Antitrust Exemption.--
            ``(1) Security countermeasures, qualified countermeasures 
        and qualified pandemic or epidemic product development 
        meetings.--
                    ``(A) Countermeasures and products development 
                meetings and consultations.--The Secretary of Health 
                and Human Services (referred to in this subsection as 
                the `Secretary') or the Director of the Biomedical 
                Advanced Research and Development Agency (referred to 
                in this subsection as the `Director'), in coordination 
                with the Attorney General and the Secretary of Homeland 
                Security, may conduct meetings and consultations with 
                parties involved in the development of security 
                countermeasures (as defined in section 319F-2 of the 
                Public Health Service Act) qualified countermeasures 
                (as defined in section 319F-1 of the Public Health 
                Service Act) or qualified pandemic or epidemic products 
                (as defined in section 319F-3(c)(5) of the Public 
                Health Service Act) (referred to in this section as 
                ``countermeasures or products'') for the purpose of the 
                development, manufacture, distribution, purchase, sale, 
                or storage of countermeasures or products consistent 
                with the purposes of this title. The Secretary or 
                Director may convene such meeting or consultation at 
                the request of any person, the Secretary of Homeland 
                Security, the Attorney General, the Chairperson of the 
                Federal Trade Commission, an industry representative or 
                member, or upon initiation by such Secretary. The 
                Secretary or Director shall give notice of such 
                meetings and consultations to the Chairperson of the 
                Federal Trade Commission (referred to in this 
                subsection as the `Chairperson') and the Attorney 
                General.
                    ``(B) Meeting and consultation conditions.--A 
                meeting or consultation conducted under subparagraph 
                (A) shall--
                            ``(i) be chaired or, in the case of a 
                        consultation, facilitated by the Secretary or 
                        Director;
                            ``(ii) be open to parties involved in the 
                        development, manufacture, distribution, 
                        purchase, or sale of countermeasures or 
                        products, as determined by the Secretary or 
                        Director;
                            ``(iii) be open to the Attorney General, 
                        the Secretary of Homeland Security, and the 
                        Chairperson;
                            ``(iv) be limited to discussions involving 
                        the development, manufacture, distribution, or 
                        sale of countermeasures or products, consistent 
                        with the purposes of this title; and
                            ``(v) be conducted in such manner as to 
                        ensure that national security, confidential, 
                        and proprietary information is not disclosed 
                        outside the meeting or consultation.
                    ``(C) Limitation.--The Secretary or Director may 
                not require the disclosure of confidential commercial 
                or proprietary information.
                    ``(D) Minutes.--The Secretary or Director shall 
                maintain minutes of meetings and consultations under 
                this subsection, which shall not be disclosed under 
                section 552 of title 5, United States Code, unless such 
                Secretary or Director, in consultation with the 
                Attorney General, determines that disclosure would pose 
                no threat to national security. Such determination 
                shall not be subject to judicial review.
                    ``(E) Exemption.--
                            ``(i) In general.--The antitrust laws shall 
                        not apply to meetings and consultations under 
                        this paragraph.
                            ``(ii) Limitation.--Clause (i) shall not 
                        apply to any agreement or conduct that results 
                        from a meeting or consultation and that does 
                        not receive an exemption pursuant to this 
                        subsection.
            ``(2) Written agreements.--The Secretary or the Director 
        shall file a written agreement regarding covered activities, 
        made pursuant to meetings or consultations conducted under 
        paragraph (1) and that is consistent with this paragraph, with 
        the Attorney General and the Chairperson for a determination of 
        the compliance of such agreement with antitrust laws. In 
        addition to the proposed agreement itself, any such filing 
        shall include--
                    ``(A) an explanation of the intended purpose of the 
                agreement;
                    ``(B) a specific statement of the substance of the 
                agreement;
                    ``(C) a description of the methods that will be 
                utilized to achieve the objectives of the agreement;
                    ``(D) an explanation of the necessity of a 
                cooperative effort among the particular participating 
                parties to achieve the objectives of the agreement; and
                    ``(E) any other relevant information determined 
                necessary by the Secretary or Director in consultation 
                with the Attorney General and the Chairperson.
            ``(3) Determination.--The Attorney General, in consultation 
        with the Chairperson, shall determine whether an agreement 
        regarding covered activities referred to in paragraph (2) would 
        likely--
                    ``(A) be in compliance with the antitrust laws, and 
                so inform the Secretary or Director and the 
                participating parties; or
                    ``(B) violate the antitrust laws, in which case, 
                the filing shall be deemed to be a request for an 
                exemption from the antitrust laws, limited to the 
                performance of the agreement consistent with the 
                purposes of this title.
            ``(4) Action on request for exemption.--
                    ``(A) In general.--The Attorney General, in 
                consultation with the Chairperson, shall grant, deny, 
                grant in part and deny in part, or propose 
                modifications to a request for exemption from the 
                antitrust laws under paragraph (3) within 15 business 
                days of the receipt of such request.
                    ``(B) Extension.--The Attorney General may extend 
                the 15-day period referred to in subparagraph (A) for 
                an additional period of not to exceed 10 days. Such 
                additional period may be further extended only by the 
                United States district court, upon an application by 
                the Attorney General after notice to the Secretary or 
                Director and the parties involved.
                    ``(C) Determination.--In granting an exemption 
                under this paragraph, the Attorney General, in 
                consultation with the Chairperson and the Secretary or 
                Director--
                            ``(i) shall find--
                                    ``(I) that the agreement involved 
                                is necessary to ensure the availability 
                                of countermeasures or products;
                                    ``(II) that the exemption from the 
                                antitrust laws would promote the public 
                                interest; and
                                    ``(III) that there is no 
                                substantial competitive impact to areas 
                                not directly related to the purposes of 
                                the agreement; and
                            ``(ii) may consider any other factors 
                        determined relevant by the Attorney General and 
                        the Chairperson.
            ``(5) Limitation on and renewal of exemptions.--An 
        exemption granted under paragraph (4) shall be limited to 
        covered activities, and shall be renewed (with modifications, 
        as appropriate) on the date that is 3 years after the date on 
        which the exemption becomes effective (and at 3-year intervals 
        thereafter, if renewed) unless the Attorney General in 
        consultation with the Chairperson determines that the exemption 
        should not be renewed (with modifications, as appropriate) 
        considering the factors described in paragraph (4).
            ``(6) Limitation on parties.--The use of any information 
        acquired under an exempted agreement by the parties to such an 
        agreement for any purposes other than those specified in the 
        antitrust exemption granted by the Attorney General shall be 
        subject to the antitrust laws and any other applicable laws.
            ``(7) Guidelines.--The Attorney General and the Chairperson 
        may develop and issue guidelines to implement this subsection.
            ``(8) Report.--Not later than 1 year after the date of 
        enactment of the Biodefense and Pandemic Vaccine and Drug 
        Development Act of 2005, and annually thereafter, the Attorney 
        General and the Chairperson shall report to Congress on the use 
        and continuing need for the exemption from the antitrust laws 
        provided by this subsection.
            ``(9) Status of memorandums.--Minutes maintained by the 
        Secretary or Director pursuant to paragraph (1)(D) shall not be 
        disclosed under section 552 of title 5, United States Code, if 
        the exemption is not renewed under paragraph (5), or if 
        meetings are no longer conducted, unless the Secretary or 
        Director, in consultation with the Attorney General, determines 
        that the disclosure would pose no threat to national security. 
        Such determination shall not be subject to judicial review.
    ``(h) Sunset.--The authority of the Attorney General to grant or 
renew a limited antitrust exemption under this section shall expire at 
the end of the 6-year period that begins on the date of enactment of 
the Biodefense and Pandemic Vaccine and Drug Development Act of 2005.
    ``(i) Definitions.--In this section:
            ``(1) Antitrust laws.--The term `antitrust laws'--
                    ``(A) has the meaning given such term in subsection 
                (a) of the first section of this Act, except that such 
                term includes the Act of June 19, 1936 (15 U.S.C. 13 et 
                seq.) (commonly known as the Robinson-Patman Act), and 
                section 5 of the Federal Trade Commission Act (15 
                U.S.C. 45) to the extent such section 5 applies to 
                unfair methods of competition; and
                    ``(B) includes any State law similar to the laws 
                referred to in subparagraph (A).
            ``(2) Covered activities.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `covered activities' means 
                any group of activities or conduct, including 
                attempting to make, making, or performing a contract or 
                agreement or engaging in other conduct, for the purpose 
                of--
                            ``(i) theoretical analysis, 
                        experimentation, or the systematic study of 
                        phenomena or observable facts necessary to the 
                        development of countermeasures or products;
                            ``(ii) the development or testing of basic 
                        engineering techniques necessary to the 
                        development of countermeasures or products;
                            ``(iii) the extension of investigative 
                        findings or theory of a scientific or technical 
                        nature into practical application for 
                        experimental and demonstration purposes, 
                        including the experimental production and 
                        testing of models, prototypes, equipment, 
                        materials, and processes necessary to the 
                        development of countermeasures or products;
                            ``(iv) the production, distribution, or 
                        marketing of a product, process, or service 
                        that is a countermeasures or products;
                            ``(v) the testing in connection with the 
                        production of a product, process, or services 
                        necessary to the development of countermeasures 
                        or products;
                            ``(vi) the collection, exchange, and 
                        analysis of research or production information 
                        necessary to the development of countermeasures 
                        or products; or
                            ``(vii) any combination of the purposes 
                        described in clauses (i) through (vi);
                and such term may include the establishment and 
                operation of facilities for the conduct of covered 
                activities described in clauses (i) through (vi), the 
                conduct of such covered activities on a protracted and 
                proprietary basis, and the processing of applications 
                for patents and the granting of licenses for the 
                results of such covered activities.
                    ``(B) Exception.--The term `covered activities' 
                shall not include the following activities involving 2 
                or more persons:
                            ``(i) Exchanging information among 
                        competitors relating to costs, profitability, 
                        marketing, or distribution of any product, 
                        process, or service if such information is not 
                        reasonably necessary to carry out the purposes 
                        of covered activities.
                            ``(ii) Entering into any agreement or 
                        engaging in any other conduct--
                                    ``(I) to restrict or require the 
                                sale, licensing, or sharing of 
                                inventions, developments, products, 
                                processes, or services not developed 
                                through, produced by, or distributed or 
                                sold through such covered activities; 
                                or
                                    ``(II) to restrict or require 
                                participation by any person who is a 
                                party to such covered activities in 
                                other research and development 
                                activities, that is not reasonably 
                                necessary to prevent the 
                                misappropriation of proprietary 
                                information contributed by any person 
                                who is a party to such covered 
                                activities or of the results of such 
                                covered activities.
                            ``(iii) Entering into any agreement or 
                        engaging in any other conduct allocating a 
                        market with a competitor that is not expressly 
                        exempted from the antitrust laws by a 
                        determination under subsection (g)(4).
                            ``(iv) Exchanging information among 
                        competitors relating to production (other than 
                        production by such covered activities) of a 
                        product, process, or service if such 
                        information is not reasonably necessary to 
                        carry out the purpose of such covered 
                        activities.
                            ``(v) Entering into any agreement or 
                        engaging in any other conduct restricting, 
                        requiring, or otherwise involving the 
                        production of a product, process, or service 
                        that is not so expressly exempted from the 
                        antitrust laws by a determination under 
                        subsection (g)(4).
                            ``(vi) Except as otherwise provided in this 
                        subsection, entering into any agreement or 
                        engaging in any other conduct to restrict or 
                        require participation by any person who is a 
                        party to such activities, in any unilateral or 
                        joint activity that is not reasonably necessary 
                        to carry out the purpose of such covered 
                        activities.
                            ``(vii) Entering into any agreement or 
                        engaging in any other conduct restricting or 
                        setting the price at which a product is offered 
                        for sale, whether by bid or otherwise.
            ``(3) Development.--The term `development' includes the 
        identification of suitable compounds or biological materials, 
        the conduct of preclinical and clinical studies, the 
        preparation of an application for marketing approval, and any 
        other actions related to preparation of a countermeasure or 
        product.''.

SEC. 13. PROCUREMENT.

    Section 319F-2 of the Public Health Service Act (42 U.S.C. 247d-6b) 
is amended--
            (1) in the section heading, by inserting ``and security 
        countermeasure procurements'' before the period; and
            (2) in subsection (c)--
                    (A) in the subsection heading, by striking 
                ``Biomedical'';
                    (B) in paragraph (5)(B)(i), by striking ``to meet 
                the needs of the stockpile'' and inserting ``to meet 
                the stockpile needs'';
                    (C) in paragraph (7)(C)(ii)--
                            (i) by amending clause (I) to read as 
                        follows:
                                    ``(I) Payment conditioned on 
                                delivery.--The contract shall provide 
                                that no payment may be made until 
                                delivery of a portion, acceptable to 
                                the Secretary, of the total number of 
                                units contracted for, except that, 
                                notwithstanding any other provision of 
                                law, the contract may provide that, if 
                                the Secretary determines (as the 
                                Secretary's discretion) that an advance 
                                payment, partial payment for 
                                significant milestones, or payment to 
                                increase manufacturing capacity is 
                                necessary to ensure success of a 
                                project, the Secretary shall pay an 
                                amount, not to exceed 10 percent of the 
                                contract amount, in advance of 
                                delivery. The contract shall provide 
                                that such advance payment is required 
                                to be repaid if there is a failure to 
                                perform by the vendor under the 
                                contract. The contract may also provide 
                                for up to 3 additional advance payments 
                                of 5 percent each for meeting the 
                                milestones specified in such contract. 
                                Provided that the specified milestones 
                                are reached, these advanced payments of 
                                5 percent shall not be required to be 
                                repaid. Nothing in this subclause shall 
                                be construed as affecting the rights of 
                                vendors under provisions of law or 
                                regulation (including the Federal 
                                Acquisition Regulation) relating to the 
                                termination of contracts for the 
                                convenience of the Government.''; and
                            (ii) by adding at the end the following:
                                    ``(VII) Sales exclusivity.--The 
                                contract may provide that the vendor is 
                                the sole and exclusive supplier of the 
                                product to the Federal Government for a 
                                specified period of time, not to exceed 
                                15 years, on the condition that the 
                                vendor is able to satisfy the needs of 
                                the Government. During the agreed 
                                period of sales exclusivity, the vendor 
                                shall not assign its rights of sales 
                                exclusivity to another entity or 
                                entities without approval by the 
                                Secretary.
                                    ``(VIII) Surge capacity.--The 
                                contract may provide that the vendor 
                                establish domestic manufacturing 
                                capacity of the product to ensure that 
                                additional production of the product is 
                                available in the event that the 
                                Secretary determines that there is a 
                                need to quickly purchase additional 
                                quantities of the product. Such 
                                contract may provide a fee to the 
                                vendor for establishing and maintaining 
                                such capacity in excess of the initial 
                                requirement for the purchase of the 
                                product. Additionally, the cost of 
                                maintaining the domestic manufacturing 
                                capacity shall be an allowable and 
                                allocable direct cost of the contract.
                                    ``(IX) Contract Terms.--The 
                                Secretary, in any contract for 
                                procurement under this section, may 
                                specify--
                                            ``(aa) the dosing and 
                                        administration requirements for 
                                        countermeasures to be developed 
                                        and procured;
                                            ``(bb) the amount of 
                                        funding that will be dedicated 
                                        by the Secretary for research 
                                        and development of the 
                                        countermeasure; and
                                            ``(cc) the specifications 
                                        the countermeasure must meet to 
                                        qualify for procurement under a 
                                        contract under this section.''; 
                                        and
                    (D) in paragraph (8)(A), by adding at the end the 
                following: ``Such agreements may allow other executive 
                agencies to order qualified and security 
                countermeasures under procurement contracts or other 
                agreements established by the Secretary. Such ordering 
                process (including transfers of appropriated funds 
                between an agency and the Department of Health and 
                Human Services as reimbursements for such orders for 
                countermeasures) may be conducted under the authority 
                of section 1535 of title 31, United States Code, except 
                that all such orders shall be processed under the terms 
                established under the Biodefense and Pandemic Vaccine 
                and Drug Development Act of 2005 and the Project 
                BioShield Act of 2004, for the procurement of 
                countermeasures under section 319F-1 or 319F-2.''

SEC. 14. NATIONAL PATHOLOGY CENTER.

    (a) In General.--Title IV of the Public Health Service Act (42 
U.S.C. 281 et seq.) is amended--
            (1) in section 401(b)(2), by adding at the end the 
        following:
            ``(H) The National Pathology Center.''; and
            (2) by adding at the end of part E (42 U.S.C. 287 et seq.) 
        the following:

                 ``Subpart 7--National Pathology Center

``SEC. 485A. ESTABLISHMENT OF NATIONAL PATHOLOGY CENTER.

    ``In order to provide pathology consultation for civilian and 
military health professionals (including Department of Veterans Affairs 
health professionals) there is established the National Pathology 
Center (in this subpart referred to as the `Center'). The Center shall 
be headed by a director, who shall be appointed by the Secretary. The 
Director of the Center shall report directly to the Director of NIH.

``SEC. 485B. PURPOSES AND FUNCTIONS OF THE CENTER.

    ``(a) Purposes of the Center.--The general purposes of the Center 
are to--
            ``(1) conduct and support research, education, training, 
        and other programs with respect to the science and clinical 
        practice of pathology;
            ``(2) maintain and improve a pathology tissue repository; 
        and
            ``(3) provide pathology consultation services.
    ``(b) Activities of the Director.--In order to carry out the 
purposes of the Center described in subsection (a), the Director of the 
Center--
            ``(1) shall--
                    ``(A) maintain and improve a comprehensive 
                repository of pathological specimens;
                    ``(B) provide consultations on request regarding 
                clinical cases;
                    ``(C) conduct educational programs and publish 
                educational materials on the science and clinical 
                practice of pathology;
                    ``(D) maintain and improve registries on such 
                clinical conditions as the Director of the Center 
                determines appropriate; and
                    ``(E) conduct and support research on pathology; 
                and
            ``(2) may--
                    ``(A) collect reasonable and appropriate fees for 
                the activities described in paragraph (1)(B); and
                    ``(B) conduct such other activities as the Director 
                of the Center determines appropriate to carry out the 
                purposes described in subsection (a).
    ``(c) Authority for Expert Opinions.--The Director of the Center 
may enter into memoranda of understanding with officials at the 
Department of Veterans Affairs and the Department of Defense to provide 
expert second opinion pathology consultations and pathology education 
or training if the Secretary of either such Department determines that 
such provision would be in the best interest of either of their 
respective departments.

``SEC. 485C. BOARD OF REGENTS.

    ``(a) Membership.--
            ``(1) In general.--There is established a Board of Regents 
        of the Center (in this subpart referred to as the `Board') 
        consisting of--
                    ``(A) the Surgeons General of--
                            ``(i) the Public Health Service;
                            ``(ii) the Army;
                            ``(iii) the Navy; and
                            ``(iv) the Air Force;
                    ``(B) the Chief Medical Director of the Department 
                of Medicine and Surgery of the Department of Veterans 
                Affairs;
                    ``(C) the Deputy Director of the National Library 
                of Medicine;
                    ``(D) the Assistant Secretary of Health of the 
                Department of Defense;
                    ``(E) the Dean of the Uniformed Services University 
                of the Health Sciences; and
                    ``(F) 11 members to be appointed by the Secretary 
                from among leaders in pathology research, education and 
                clinical practice.
            ``(2) Ex officio members.--The members of the Board 
        described in subparagraphs (A) through (E) of paragraph (1) 
        shall serve as ex officio members of the Board.
            ``(3) Chairperson.--The members of the Board appointed 
        under paragraph (1)(F) shall annually elect one of such members 
        to serve as the Chairperson of the Board until the next 
        election.
    ``(b) Duties of the Board.--It shall be the duty of the Board to 
advise, consult with, and make recommendations to the Director of NIH 
on important matters of policy in regard to the Center, including such 
matters as the scope, content and organization of the research, 
education and consultative services provided by the Center. The Board 
shall make recommendations to the Director of NIH regarding the rules 
under which specimens from the tissue repository will be used and under 
which it's publications, facilities and services will be made available 
to various kinds of users.
    ``(c) Terms of Office.--Each appointed member of the Board shall 
hold office for a term of 4 years, except that any member appointed to 
fill a vacancy occurring prior to the expiration of the term for which 
the predecessor of such member was appointed shall be appointed for the 
remainder of such term. None of the appointed members shall be eligible 
for reappointment within 1 year after the end of the preceding term of 
such member.
    ``(d) Compensation.--Appointed members of the Board who are not 
otherwise in the employ of the United States, while attending 
conferences of the Board or otherwise serving at the request of the 
Secretary in connection with the administration of the Board, shall be 
entitled to receive compensation, per diem in lieu of subsistence, and 
travel expenses in the same manner and under the same conditions as 
that prescribed under section 208(c).

``SEC. 485D. GIFTS TO THE CENTER.

    ``Section 231 shall be applicable to the acceptance and 
administration of gifts made for the benefit of the Center or for 
carrying out any of its functions.

``SEC. 485E. CENTER FACILITIES.

    ``There are authorized to be appropriated amounts sufficient for 
the erection and equipment of suitable and adequate buildings and 
facilities for use of the Center. The Administrator of General Services 
may acquire, by purchase, condemnation, donation, or otherwise, a 
suitable site or sites, selected by the Secretary in accordance with 
the direction of the Board, for such buildings and facilities and to 
erect thereon, furnish, and equip such buildings and facilities. The 
amounts authorized to be appropriated by this section include the cost 
of preparation of drawings and specifications, supervision of 
construction, and other administrative expenses incident to the work. 
The Administrator of General Services shall prepare the plans and 
specifications, make all necessary contracts, and supervise 
construction.''.
    (b) Report.--Not later than 12 months after the date of enactment 
of this Act, the Secretary of Health and Human Services shall submit a 
report to the appropriate committees of Congress that contains--
            (1) a review of all functions and duties of the National 
        Pathology Center under subpart 7 of part E of title IV of the 
        Public Health Service Act,as established by subsection (a);
            (2) areas where such functions and duties overlap with the 
        functions and duties of the National Institutes of Health; and
            (3) recommendations concerning necessary modifications to 
        the National Pathology Center.
    (c) Transfer of the Armed Forces Institute of Pathology.--
            (1) In general.--
                    (A) In general.--Except as provided in subparagraph 
                (B), there are transferred to the National Pathology 
                Center established under subpart 7 of part E of title 
                IV of the Public Health Service Act all functions, 
                duties, personnel, assets, liabilities, contracts, 
                property, records, and unexpended balances of 
                appropriations of the Armed Forces Institute of 
                Pathology. The preceding sentence shall not affect any 
                proceedings, pending applications, suits, or other 
                actions pending on the date of enactment of this Act.
                    (B) Exceptions.--The following components of the 
                Armed Forces Institute of Pathology shall not be 
                transferred from the Department of Defense pursuant to 
                subparagraph (A):
                            (i) The Armed Forces Medical Examiner.
                            (ii) The Department of Defense DNA 
                        registry.
                            (iii) Accident Investigation Program.
                            (iv) The histopathology training program.
                            (v) The patient safety center.
                            (vi) Department of Legal Medicine.
                            (vii) Center for Clinical Laboratory 
                        Medicine.
                            (viii) Drug Testing and Quality Assurance 
                        Program.
                            (ix) Subject to the discretion of the 
                        Secretary of Defense, medical research programs 
                        on the following:
                                    (I) Body armor.
                                    (II) Environmental sarcoidosis.
                                    (III) Depleted uranium.
                                    (IV) Military working dogs.
                                    (V) Such other areas of research 
                                related to pathology as the Secretary 
                                of Defense shall choose to conduct.
            (2) References.--Any reference in any Federal law, 
        Executive order, rule, regulation, or delegation of authority, 
        or any document of or relating to the Armed Forces Institute of 
        Pathology shall be deemed to be a reference to the National 
        Pathology Center established under subpart 7 of part E of title 
        IV of the Public Health Service Act.
                                 <all>
```