I 

116TH CONGRESS 

2D SESSION H. R. 7296 

To require any COVID–19 drug developed in whole or in part with Federal 

support to be affordable and accessible by prohibiting monopolies and 

price gouging, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 22, 2020 

Ms. SCHAKOWSKY (for herself, Mr. ROONEY of Florida, Mr. DOGGETT, Ms. 

DELAURO, Mr. DEFAZIO, Mr. POCAN, and Ms. JAYAPAL) introduced the 

following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on the Judiciary, Science, 

Space, and Technology, and Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To require any COVID–19 drug developed in whole or in 

part with Federal support to be affordable and accessible 

by prohibiting monopolies and price gouging, and for 

other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Make Medications Af5 fordable by Preventing Pandemic Price gouging Act of 

6 2020’’ or the ‘‘MMAPPP Act of 2020’’. 


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1 SEC. 2. REQUIREMENTS FOR LICENSING OF NEW COVID–19 

2 TREATMENT AND PREVENTION TECH3 NOLOGIES TO MEET DOMESTIC AND GLOBAL 

4 DEMAND. 

5 (a) NONEXCLUSIVE LICENSE REQUIRED.—Any cov6 ered license granted by the Federal Government shall be 

7 an open, nonexclusive license. 

8 (b) CONTRACTOR, ASSIGNEE, EXCLUSIVE LI9 CENSEE.—Notwithstanding any other provision of law, 

10 any contractor, assignee, or exclusive licensee to an inven11 tion developed in whole or in part in work performed 

12 under a covered transaction shall grant an open, non-ex13 clusive license. If any such contractor, assignee, or exclu14 sive licensee refuses to grant such license, the Federal gov15 ernment shall grant the license. 

16 (c) REASONABLE ROYALTY.— 

17 (1) IN GENERAL.—Except as provided in para18 graph (4), an entity that accepts an open, nonexclu19 sive license under this section shall pay a reasonable 

20 royalty with respect to sales within the United 

21 States to— 

22 (A) the holder of a patent that claims the 

23 COVID–19 related invention; or 

24 (B) to the holder of an application ap25 proved under section 505 of the Federal Food, 

26 Drug, and Cosmetic Act (21 U.S.C. 355) or 


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1 section 351 of the Public Health Service Act 

2 (42 U.S.C. 262) for which any FDA-granted 

3 exclusivity with respect to a drug related to 

4 such invention that was terminated under this 

5 section. 

6 (2) ROYALTY.—The reasonable royalty de7 scribed under paragraph (1) shall be a percentage of 

8 sales of the entity paying the royalty, where the per9 centage rate is no higher than the average royalty 

10 rate estimated from the data provided by the Inter11 nal Revenue Service for pharmaceutical manufac12 turer Federal income tax returns. 

13 (3) REQUIREMENTS.— 

14 (A) IN GENERAL.—The royalty described 

15 under paragraph (2) shall be subject to the ap16 plicable royalty rate requirements of section 

17 319B of the Public Health Service Act, as 

18 added by section 5 of this Act. 

19 (B) MULTIPLE AFFECTED PARTIES.—In 

20 the case of more than one recipient of a royalty, 

21 the royalty shall be divided among each such re22 cipient (including any manufacturer) in a man23 ner agreed upon by the manufacturer and other 

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1 ment, in a manner the Secretary determines to 

2 be appropriate. 

3 (4) EXCEPTION FOR GOVERNMENT-OWNED IN4 VENTIONS.—An entity that accepts an open, non5 exclusive license for a federally owned invention de6 scribed under section 207 of title 35, United States 

7 Code, is not required to pay a royalty under this sec8 tion. 

9 (d) DEFINITIONS.—In this section: 

10 (1) COVERED LICENSE.—The term ‘‘covered li11 cense’’ means a license that allows a licensee to 

12 make, use, offer to sell, or sell, export, or import 

13 into the United States or any other country or terri14 tory a COVID–19 related invention pursuant to— 

15 (A) section 207 of title 35, United States 

16 Code; and 

17 (B) section 12 of the Stevenson-Wydler 

18 Technology Innovation Act of 1980 (15 U.S.C. 

19 3710a). 

20 (2) COVERED TRANSACTION.—The term ‘‘cov21 ered transaction’’ means any contract, funding 

22 agreement, license, other transaction, or other ar23 rangement entered into between a party and the 

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1 ment of this Act with respect to research and devel2 opment regarding a drug that— 

3 (A) is intended or anticipated to be used to 

4 diagnose, mitigate, prevent, or treat COVID– 

5 19; and 

6 (B) consists of— 

7 (i) a licensing agreement pursuant to 

8 section 207 of title 35, United States 

9 Code; 

10 (ii) a cooperative research and devel11 opment agreement and licensing agreement 

12 pursuant to section 12 of the Stevenson13 Wydler Technology Innovation Act of 1980 

14 (15 U.S.C. 3710a); 

15 (iii) a funding agreement, as defined 

16 under section 201 of title 35, United 

17 States Code; or 

18 (iv) any other transaction entered into 

19 pursuant to— 

20 (I) section 319L, 421, or 480 of 

21 the Public Health Service Act (42 

22 U.S.C. 247d–7e, 285b–3, 287a); 

23 (II) section 105 of the National 

24 Institutes of Health Reform Act of 

25 2006 (42 U.S.C. 284n); or 


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1 (III) section 2371 of title 10, 

2 United States Code. 

3 (3) COVID–19 RELATED INVENTION.—The 

4 term ‘‘COVID–19 related invention’’ means any in5 vention that claims a drug that is manufactured, 

6 used, designed, developed, modified, licensed, or pro7 cured to diagnose, mitigate, prevent, treat, or cure 

8 COVID–19; a use of such drug; a form of such 

9 drug; a method of use of such drug; or a method of 

10 manufacturing such drug. 

11 (4) FDA-GRANTED EXCLUSIVITY.—The term 

12 ‘‘FDA-granted exclusivity’’ means prohibitions on 

13 the submission or approval of drug applications 

14 granted under any of the following: 

15 (A) Clauses (ii) through (v) of section 

16 505(c)(3)(E) of the Federal Food, Drug, and 

17 Cosmetic Act (21 U.S.C. 355(c)(3)(E)). 

18 (B) Subsection (j)(5)(B)(iv) or clause (ii), 

19 (iii), or (iv) of subsection (j)(5)(F) of such Act 

20 (21 U.S.C. 355(c)(3)(E)). 

21 (C) Section 505A of such Act (21 U.S.C. 

22 355a). 

23 (D) Section 505E of such Act (21 U.S.C. 

24 355f). 


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1 (E) Section 527 of such Act (21 U.S.C. 

2 360cc). 

3 (F) Section 351(k)(7) of this Act (42 

4 U.S.C. 262(k)(7)). 

5 (G) Any other provision of law that pro6 vides for marketing or data exclusivity (or ex7 tension of exclusivity) with respect to a drug. 

8 (5) OPEN, NONEXCLUSIVE LICENSE.—The term 

9 ‘‘open, nonexclusive license’’ means a license that al10 lows a qualified licensee, subject to the provisions of 

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

12 U.S.C. 301 et seq.) and the Public Health Service 

13 Act (42 U.S.C. 201 et seq.)— 

14 (A) to make, use, offer to sell, sell, export, 

15 or import into the United States and any other 

16 country and territory an invention; 

17 (B) to reference or rely upon earlier-sub18 mitted regulatory test data or the earlier grant 

19 of marketing approval of a treatment or vaccine 

20 related to such invention; and 

21 (C) to access and use otherwise confiden22 tial know-how relating to the manufacture of 

23 such invention. 


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1 SEC. 3. REQUIREMENTS FOR REASONABLE PRICING OF 

2 FEDERALLY SUPPORTED COVID–19 DRUGS. 

3 (a) REASONABLE PRICING REQUIREMENTS.—Any 

4 covered transaction shall include terms and conditions re5 quiring that the pricing of the drug by the party referred 

6 to in subsection (b)(1) be fair and reasonable, and facili7 tate global access, taking into consideration— 

8 (1) the impact of the price on access to the 

9 drug in the United States, taking into consideration 

10 racial disparities in COVID–19 cases and fatalities 

11 and other socioeconomic disparities; 

12 (2) the impact of the price on health program 

13 spending and budgets in the United States; 

14 (3) the risk adjusted value of Federal subsidies 

15 and investments related to the drug; 

16 (4) the costs associated with development and 

17 manufacturing of the drug; 

18 (5) the size of the affected patient population in 

19 the United States and globally; and 

20 (6) the therapeutic efficacy of the drug. 

21 (b) DEFINITIONS.—In this section: 

22 (1) COVERED TRANSACTION.—The term ‘‘cov23 ered transaction’’ has the meaning given to such 

24 term in section 2. 


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1 (2) DRUG.—The term ‘‘drug’’ has the meaning 

2 given to such term in section 201 of the Federal 

3 Food, Drug, and Cosmetic Act (21 U.S.C. 321). 

4 SEC. 4. REPORTING ON THE EXPENDITURES OF MANUFAC5 TURERS WITH RESPECT TO COVID–19 DRUGS. 

6 (a) COVERED DRUG.—For purposes of this section, 

7 the term ‘‘covered drug’’ means a drug that is intended 

8 or anticipated to be used to diagnose, mitigate, prevent, 

9 or treat COVID–19. 

10 (b) REPORTING REQUIRED.—The manufacturer of a 

11 covered drug shall submit a report described in subsection 

12 (c) to the Secretary upon— 

13 (1) the submission of an application for ap14 proval of the drug under subsection (b) or (j) of sec15 tion 505 of the Federal Food, Drug, and Cosmetic 

16 Act (21 U.S.C. 355); 

17 (2) investigational use of the drug under section 

18 505(i) of the Federal Food, Drug, and Cosmetic Act 

19 (21 U.S.C. 355(i)) or section 351 of the Public 

20 Health Service Act (42 U.S.C. 262); 

21 (3) the submission of an application for licens22 ing the drug under subsection (a) or (k) of section 

23 351 of the Public Health Service Act (42 U.S.C. 

24 262); 


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1 (4) the issuance of an authorization for emer2 gency use of the drug under section 564 of the Fed3 eral Food, Drug, and Cosmetic Act (21 U.S.C. 

4 360bbb–3); or 

5 (5) the marketing of the drug. 

6 (c) CONTENTS.—A report under subsection (a), con7 sistent with the standard for disclosures described in sec8 tion 213.3(d) of title 12, Code of Federal Regulations (as 

9 in effect on the date of enactment of this Act), shall ad10 dress the expenditures of the manufacturer with respect 

11 to the covered drug and include, at a minimum— 

12 (1) the sponsor or sponsors of the covered drug; 

13 and 

14 (2) the current wholesale acquisition cost of the 

15 covered drug when applicable; 

16 (3) the total expenditures of the manufacturer, 

17 specified by individual costs, on— 

18 (A) materials and manufacturing for the 

19 covered drug; and 

20 (B) acquiring patents and licensing for the 

21 covered drug; 

22 (4) the total amount and percentage of research 

23 and development expenditures for the covered drug 

24 that was derived from Federal funds; 


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1 (5) the total amount of any Federal benefits re2 ceived by the manufacturer with respect to the cov3 ered drug, including— 

4 (A) the specific amounts and periods of 

5 impact for each such benefit; 

6 (B) the specific value of any tax credits, 

7 including benefits from patient assistance pro8 grams and donated samples; 

9 (C) clinical and preclinical investments; 

10 (D) any Federal benefit toward manufac11 turing costs, including building or retrofitting 

12 facilities; 

13 (E) Federal grants, including from the Na14 tional Institutes of Health, the Centers for Dis15 ease Control and Prevention, the Department of 

16 Defense, the Department of Energy, or other 

17 Federal departments or agencies; 

18 (F) patent applications that benefitted 

19 from such grants; 

20 (G) patent extensions; 

21 (H) exclusivity periods; and 

22 (I) waivers of fees; 

23 (6) the total expenditures of the manufacturer 

24 on research and development, itemized by basic and 

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1 ported separately for each clinical trial, for the cov2 ered drug to demonstrate that the covered drug 

3 meets applicable statutory standards for approval 

4 under section 505 of the Federal Food, Drug, and 

5 Cosmetic Act (21 U.S.C. 355), licensure under sec6 tion 351 of the Public Health Service Act (42 

7 U.S.C. 262), an exemption for investigational use 

8 under section 505(i) of the Federal Food, Drug, or 

9 Cosmetic Act (21 U.S.C. 355(i)) or section 351 of 

10 the Public Health Service Act, or approval under 

11 section 564 of the Federal Food, Drug, and Cos12 metic Act (21 U.S.C. 360bbb–3), as applicable; 

13 (7) the total expenditures of the manufacturer 

14 on pursuing new or expanded indications or dosage 

15 changes for the covered drug under section 505 of 

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

17 U.S.C. 355) or section 351 of the Public Health 

18 Service Act (42 U.S.C. 262); 

19 (8) the total expenditures of the manufacturer 

20 on carrying out postmarket requirements related to 

21 such drug, including under section 505(o)(3) of the 

22 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

23 355–1); 


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1 (9) the specific expenditures associated with 

2 marketing and advertising costs for the covered 

3 drug; 

4 (10) any anticipated royalty fees from licensing 

5 to other manufacturers; and 

6 (11) with respect to the manufacturer— 

7 (A) all stock-based performance metrics 

8 used by the manufacturer to determine execu9 tive compensation over the preceding 12 

10 months; and 

11 (B) any additional information the manu12 facturer chooses to provide related to drug pric13 ing decisions. 

14 (d) CIVIL MONETARY PENALTIES.— 

15 (1) FAILURE TO SUBMIT.—Any manufacturer 

16 of a covered drug that fails to submit a report as 

17 required by this section, following notification by the 

18 Secretary to the manufacturer that the manufac19 turer is not in compliance with this section, shall be 

20 subject to a civil monetary penalty of $100,000 for 

21 each day on which the violation continues. 

22 (2) FALSE INFORMATION.—Any manufacturer 

23 of a covered drug that knowingly provides false in24 formation in a report under this section is subject to 


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1 a civil monetary penalty in an amount not to exceed 

2 $100,000 for each item of false information. 

3 (e) PUBLIC POSTING.— 

4 (1) IN GENERAL.—Subject to paragraph (3), 

5 the Secretary shall post each report submitted under 

6 subsection (b) on the public website of the Depart7 ment of Health and Human Services no later than 

8 30 days after the submission of the report. 

9 (2) FORMAT.—The Secretary shall ensure that 

10 such reports are— 

11 (A) user-friendly to the public; and 

12 (B) written in plain language that con13 sumers can readily understand. 

14 (3) PROTECTED INFORMATION.—Nothing in 

15 this section shall be construed to authorize the pub16 lic disclosure of information submitted by a manu17 facturer that is prohibited from disclosure by appli18 cable laws concerning the protection of trade secrets, 

19 commercial information, and other information cov20 ered under such laws. 

21 (f) DEFINITION.—In this section, the term ‘‘drug’’ 

22 has the meaning given to such term in section 201 of the 

23 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321). 


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1 SEC. 5. PRICING REQUIREMENTS FOR EXISTING TREAT2 MENTS AND VACCINES IN A PUBLIC HEALTH 

3 EMERGENCY. 

4 Title III of the Public Health Service Act is amended 

5 by inserting after section 319A (42 U.S.C. 247d–1a) the 

6 following new section: 

7 ‘‘SEC. 319B. PRICING REQUIREMENTS FOR TREATMENTS 

8 AND VACCINES IN A PUBLIC HEALTH EMER9 GENCY. 

10 ‘‘(a) DEFINITIONS.—For purposes of this section: 

11 ‘‘(1) The term ‘covered drug’ means a drug (in12 cluding any vaccine) used to diagnose, mitigate, pre13 vent, or treat a disease or disorder with respect to 

14 which there is or was in effect a declaration of a 

15 public health emergency under section 319. 

16 ‘‘(2) The term ‘covered period’ means the pe17 riod ending if and when the circumstances which led 

18 to the public health emergency cease to exist and are 

19 unlikely to recur. 

20 ‘‘(3) The term ‘FDA-granted exclusivity’ means 

21 prohibitions on the submission or approval of drug 

22 applications granted under any of the following: 

23 ‘‘(A) Clauses (ii) through (v) of section 

24 505(c)(3)(E) of the Federal Food, Drug, and 

25 Cosmetic Act. 


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1 ‘‘(B) Subsection (j)(5)(B)(iv) or clause (ii), 

2 (iii), or (iv) of subsection (j)(5)(F) of such Act. 

3 ‘‘(C) Section 505A of such Act. 

4 ‘‘(D) Section 505E of such Act. 

5 ‘‘(E) Section 527 of such Act. 

6 ‘‘(F) Section 351(k)(7) of this Act. 

7 ‘‘(G) Any other provision of law that pro8 vides for marketing or data exclusivity (or ex9 tension of exclusivity) with respect to a drug. 

10 ‘‘(4) The term ‘wholesale acquisition cost’ has 

11 the meaning given that term in section 

12 1847A(c)(6)(B) of the Social Security Act. 

13 ‘‘(b) DETERMINATION OF EXCESSIVE PRICE.—Dur14 ing any covered period with respect to a covered drug, the 

15 Secretary shall determine that the price of a covered drug 

16 is excessive if the wholesale acquisition cost (or a more 

17 relevant measure of price) of the covered drug is not fair 

18 and reasonable, or does not facilitate global access, taking 

19 into consideration— 

20 ‘‘(1) the impact of the price on access to the 

21 covered drug in the United States, taking into con22 sideration racial disparities and other socioeconomic 

23 disparities; 

24 ‘‘(2) the impact of the price on health program 

25 spending and budgets in the United States; 


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1 ‘‘(3) the risk adjusted value of Federal sub2 sidies and investments related to the covered drug; 

3 ‘‘(4) the costs associated with development and 

4 manufacturing of the covered drug; 

5 ‘‘(5) the size of the affected patient population 

6 in the United States and globally; and 

7 ‘‘(6) the therapeutic efficacy of the covered 

8 drug. 

9 ‘‘(c) EXCESSIVE PRICING REMEDY.—If the Secretary 

10 determines pursuant to subsection (b) that the price of 

11 a covered drug is excessive, the Secretary— 

12 ‘‘(1) shall waive or void any FDA-granted 

13 exclusivities with respect to the covered drug, effec14 tive on the date that the excessive price determina15 tion is made; and 

16 ‘‘(2) shall grant open, nonexclusive licenses al17 lowing any person to make, use, offer to sell, or sell, 

18 or import into the United States such drug, and to 

19 rely upon the regulatory test data of such drug, and 

20 to access and use otherwise confidential information, 

21 including know-how, related to the manufacture of 

22 such drug in accordance with subsection (d). 

23 ‘‘(d) REASONABLE ROYALTY.— 

24 ‘‘(1) IN GENERAL.—An entity accepting an 

25 open, nonexclusive license under subsection (c)(2) 


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1 shall pay a reasonable royalty with respect to sales 

2 within the United States to the holder of a patent 

3 that claims the covered drug or that claims a use of 

4 the covered drug or to the holder of an application 

5 approved under section 505 of the Federal Food, 

6 Drug, and Cosmetic Act or section 351 of the Public 

7 Health Service Act for which any FDA-granted ex8 clusivity with respect to the covered drug was termi9 nated under subsection (c)(1). 

10 ‘‘(2) ROYALTY RATE.—Such royalty rate shall 

11 be— 

12 ‘‘(A) a percentage of sales, where the per13 centage rate is no higher than the average roy14 alty rate estimated from the data provided by 

15 the Internal Revenue Service for pharma16 ceutical manufacturer Federal income tax re17 turns; or 

18 ‘‘(B) an amount as determined by the Sec19 retary, taking into account— 

20 ‘‘(i) the therapeutic efficacy of the 

21 covered drug; 

22 ‘‘(ii) the size of the affected patient 

23 population in the United States and glob24 ally; 


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1 ‘‘(iii) the risk adjusted value of Fed2 eral subsidies and investments related to 

3 the covered; 

4 ‘‘(iv) the extent to which the manufac5 turer of the covered drug has recovered 

6 risk adjusted investments related to the 

7 covered drug, including the investments re8 lated to the invention, regulatory test data, 

9 and any other relevant research and devel10 opment costs; and 

11 ‘‘(v) any other information the Sec12 retary determines appropriate. 

13 ‘‘(3) SALES WITHIN OTHER COUNTRIES.—An 

14 entity accepting an open, nonexclusive license under 

15 subsection (c)(2) shall pay a reasonable royalty with 

16 respect to sales within other countries based on the 

17 royalty rate paid in the United States times the 

18 ratio between that country’s gross domestic product 

19 per capita divided by the United States’ gross do20 mestic product per capita in the last year such data 

21 was available for both countries, but such royalty 

22 shall only be due if there are granted patents or 

23 data exclusivity rights in that country at the time of 

24 sale. 

25 ‘‘(e) REQUIREMENTS.— 


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1 ‘‘(1) IN GENERAL.—A royalty rate under sub2 section (d) shall be consistent with making the cov3 ered drug available to purchasers, including govern4 mental and nongovernmental purchasers and individ5 uals, at prices that are affordable and reasonable. 

6 Under no condition shall a royalty be set at a rate 

7 that would cause a covered drug for which an open, 

8 nonexclusive license was issued under subsection (c) 

9 to be sold at an excessive price, as determined under 

10 subsection (b). 

11 ‘‘(2) MULTIPLE AFFECTED PARTIES.—In the 

12 case that there is one or more holders or investors 

13 in the patented inventions related to the covered 

14 drug, the royalty rate shall be divided among the 

15 holders or investors (including such manufacturer) 

16 in a manner agreed upon by the manufacturer and 

17 other holders or investors, or, in the absence of such 

18 an agreement, in a manner the Secretary determines 

19 to be appropriate. 

20 ‘‘(3) PRICE.—An entity accepting an open, non21 exclusive license under subsection (c)(2) shall sell 

22 the covered drug at a price not higher than the ex23 cessive price determined for the covered drug under 

24 subsection (b). 


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1 ‘‘(f) CLARIFICATION.—An open, nonexclusive license 

2 under subsection (c)(2) shall be liable, subject to adequate 

3 protection of the legitimate interests of any party utilizing 

4 the license, to be terminated only if the circumstances 

5 which led to the granting of the open, nonexclusive license 

6 cease to exist and are unlikely to recur. The Secretary may 

7 review, upon request, the continued existence of these cir8 cumstances.’’. 

Æ 


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