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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3116 Introduced in House (IH)]

113th CONGRESS
  1st Session
                                H. R. 3116

   To promote the development of meaningful treatments for patients.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 17, 2013

   Mr. Lance (for himself, Mr. Roskam, Mr. Guthrie, Mr. Paulsen, Mr. 
Rangel, Mr. Runyan, Ms. Schwartz, Mr. King of New York, Mr. McCaul, Mr. 
Walden, Mr. Tiberi, Mr. Loebsack, Mr. Ben Ray Lujan of New Mexico, Mr. 
Ellison, Mr. Jones, and Mr. Long) introduced the following bill; which 
 was referred to the Committee on Energy and Commerce, and in addition 
to the Committees on Ways and Means and the Judiciary, for a period to 
      be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL

 
   To promote the development of meaningful treatments for patients.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Modernizing Our Drug & Diagnostics 
Evaluation and Regulatory Network Cures Act of 2013'' or the ``MODDERN 
Cures Act of 2013''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

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

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

Sec. 201. Dormant therapies.
Sec. 202. Study regarding new indications for existing therapies.

SEC. 3. FINDINGS.

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

SEC. 4. DEFINITIONS.

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

              TITLE I--ADVANCING DIAGNOSTICS FOR PATIENTS

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

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

SEC. 102. CREATING INCENTIVES FOR INNOVATIVE DIAGNOSTICS.

    (a) Improvements To Process for Determining Fee Schedule Amounts 
for New Tests.--
            (1) Clarifying factors for rate-setting.--In determining 
        the payment amount under gapfilling procedures (as described in 
        section 414.508(b) of title 42, Code of Federal Regulations, or 
        any successor regulation to such section) for new clinical 
        diagnostic laboratory tests under section 1833(h)(8) of the 
        Social Security Act (42 U.S.C. 1395l(h)(8)), the Secretary of 
        Health and Human Services (in this section referred to as the 
        ``Secretary'') shall take into account, as applicable and 
        available, the following factors with respect to such a new 
        test:
                    (A) Impact on patient care.--The impact of the new 
                test on patient care, patient management, or patient 
                treatment.
                    (B) Technical characteristics.--The technical 
                characteristics of the new test, and the resources 
                required to develop, validate, and perform the new 
                test.
                    (C) Claims data.--Data from claims for which 
                payment is made under part B of title XVIII of the 
                Social Security Act.
                    (D) Laboratory charges.--Amounts charged by 
                laboratories to self-pay patients for the new test.
                    (E) Private insurance rates.--Amounts paid to 
                laboratories for such new test under private health 
                insurance coverage offered in the group market and the 
                individual market.
                    (F) Advisory panel recommendations.--The findings 
                and recommendations of the independent advisory panel 
                convened under paragraph (2) with respect to that new 
                test and any comments received during the open meeting 
                of the advisory panel.
                    (G) Additional factors.--Such other factors as the 
                Secretary may specify.
            (2) Input from patients, clinicians, and technical 
        experts.--
                    (A) Requirement for independent advisory panel.--
                The Secretary shall convene an independent advisory 
                panel from which the Secretary shall request 
                information and recommendations regarding any new test 
                (as referred to under subparagraph (A) of section 
                1833(h)(8) of the Social Security Act (42 U.S.C. 
                1395l(h)(8))) for which payment is made under such 
                section, including technical, clinical, and quality 
                information.
                    (B) Composition of independent advisory panel.--
                Subject to subparagraph (D), the independent advisory 
                panel shall be comprised of 19 members, including--
                            (i) 7 individuals with expertise and 
                        experience with clinical diagnostic laboratory 
                        tests including expertise in the technical 
                        characteristics of the new test as well as 
                        expertise in the requirements to develop, 
                        validate, and perform the new test;
                            (ii) 3 representatives of patients, 
                        including a patient representative for rare 
                        disorders;
                            (iii) 3 clinicians who use results of the 
                        new test in patient care;
                            (iv) 2 laboratorians;
                            (v) 2 individuals with expertise in the 
                        area of pharmacoeconomics or health technology 
                        assessment; and
                            (vi) 2 individuals with expertise on the 
                        impact of new tests on quality of patient care, 
                        including genetic counselors.
                    (C) Terms.--Subject to subparagraph (D), a member 
                of the panel shall be appointed to serve a term of 6 
                years, except with respect to the members first 
                appointed, whose terms of appointment shall be 
                staggered evenly over 2-year increments.
                    (D) Temporary appointment of experts.--Insofar as 
                the Secretary determines with respect to a new test 
                that there are an insufficient number of members of the 
                panel with expertise with respect to that specific 
                test, the Secretary may appoint individuals who have 
                expertise pertaining to the new test involved to serve 
                on the panel.
                    (E) Open meetings.--The Secretary shall receive or 
                review the findings and recommendations of the 
                independent advisory panel with respect to the new 
                tests described in subparagraph (A) involved during a 
                meeting open to the public and provide opportunity for 
                public comment.
                    (F) Clarification of authority of secretary to 
                consult carriers.--Nothing in this section shall be 
                construed as affecting the authority of the Secretary 
                to consult with appropriate Medicare administrative 
                contractors.
            (3) Justification for payment determinations.--
                    (A) Initial justification.--With respect to 
                decisions regarding payments made under the clinical 
                laboratory fee schedule for new clinical diagnostic 
                laboratory tests, the Secretary shall publicly provide 
                a justification for the payment basis and payment rate 
                determination, including a detailed summary of the 
                information submitted to, or obtained by, the Secretary 
                regarding the factors specified in paragraph (1), such 
                that interested stakeholders can readily understand the 
                Secretary's rationale for the payment basis and rate 
                determinations.
                    (B) Reconsideration period.--After providing such 
                justification for a payment basis and payment rate 
                determination, the Secretary shall provide for a 
                reasonable period of reconsideration to receive any 
                appeal of the determination and to evaluate any 
                additional information received regarding the 
                justification and the factors specified in paragraph 
                (1).
                    (C) Final determination.--After the period of 
                reconsideration the Secretary shall make a final 
                payment basis and payment rate determination and 
                provide a justification for such final determination 
                explaining what additional information was evaluated 
                during the reconsideration and how such information was 
                taken into account with respect to the final 
                determination. Nothing in this paragraph shall be 
                construed as authorizing the Secretary to reveal 
                proprietary information which is otherwise prohibited 
                from disclosure under law.
    (b) Process for Assignment of Temporary Codes for Diagnostic 
Tests.--The Secretary shall establish a process for application for the 
assignment of a temporary national HCPCS code to uniquely identify a 
diagnostic test until a permanent national HCPCS code is available for 
assignment to that test. Assignments of a temporary national HCPCS code 
shall occur on a quarterly basis. The Secretary shall provide public 
notice through the Centers for Medicare & Medicaid Services Web site of 
applications made for such temporary national HCPCS codes. Upon 
assignment of a temporary code under this process, the Secretary shall 
treat such test as a new test for purposes of section 1833(h)(8) of the 
Social Security Act.
    (c) Development of Further Improvements in Rate-Setting 
Processes.--The Secretary shall analyze the process used for the 
gapfilling procedure used in determining payment amounts for new 
clinical diagnostic laboratory tests under section 1833(h)(8) of the 
Social Security Act. Taking into account the changes made by this 
section, the Secretary shall identify further changes to improve the 
accuracy and appropriateness of resulting rates and the openness, 
transparency, and predictability of the process. The Secretary shall 
examine what and how many entities should perform gapfilling, under 
contract or otherwise, and how to ensure that the process is informed 
by appropriate expertise and proceeds in a transparent and accountable 
manner. The Secretary shall implement improvements in the process, 
insofar as these are possible under the law through regulations, after 
public notice and opportunity for comment. For changes the Secretary 
determines would require a change in law, the Secretary shall transmit 
recommendations to the Speaker of the House and the President of the 
Senate not later than July 1, 2014.
    (d) Definitions.--For purposes of this section:
            (1) New clinical diagnostic laboratory tests.--The term 
        ``new clinical diagnostic laboratory test'' means a clinical 
        diagnostic laboratory test--
                    (A) that is assigned a new or substantially revised 
                code on or after January 1, 2013; or
                    (B) for which a temporary national HCPCS code is 
                granted under subsection (b) on or after January 1, 
                2014.
            (2) Self-pay patient.--The term ``self-pay patient'' means, 
        with respect to a health care item or service, an individual 
        who pays out of pocket for such item or service and who does 
        not have health insurance coverage for such item or service.
    (e) Effective Date.--
            (1) In general.--Subject to paragraph (2), this section 
        shall take effect on the date of enactment of this Act and 
        shall apply with respect to new clinical diagnostic laboratory 
        tests.
            (2) Application of justifications to current rate 
        determinations.--Subsection (a)(3) shall apply to payment basis 
        and payment rate determinations made on or after January 1, 
        2013.

SEC. 103. PROMOTING THE DEVELOPMENT OF INNOVATIVE DIAGNOSTICS.

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

          TITLE II--CAPTURING LOST OPPORTUNITIES FOR PATIENTS

SEC. 201. DORMANT THERAPIES.

    (a) Designation as Dormant Therapy.--The Secretary shall designate 
a medicine as a dormant therapy if--
            (1) the sponsor of the medicine submits a request for such 
        designation meeting the requirements under subsection (b), and 
        the request has not been withdrawn under subsection (d)(1); and
            (2) the Secretary determines that--
                    (A) the medicine is being investigated or is 
                intended to be investigated for an indication to 
                address one or more unmet medical needs;
                    (B) a suitable clinical plan for such 
                investigations of the medicine has been developed by 
                the sponsor;
                    (C) the sponsor intends to file an application 
                pursuant to section 505(b) of the Federal Food, Drug, 
                and Cosmetic Act (21 U.S.C. 355(b)) or section 351(a) 
                of the Public Health Service Act (42 U.S.C. 262(a)) for 
                approval or licensing of the medicine for an indication 
                described in subparagraph (A); and
                    (D) the request for designation was made on or 
                before the date of submission of any application under 
                section 505 of the Federal Food, Drug, and Cosmetic Act 
                (21 U.S.C. 355) or section 351 of the Public Health 
                Service Act (42 U.S.C. 262) for the approval or 
                licensure of commercial marketing or use of a medicine 
                that in the case of a drug shares an active moiety that 
                is the same as, and in the case of a biologic contains 
                an active moiety that is highly similar to, an active 
                moiety in the medicine for which designation is being 
                requested.
    (b) Requirements for Request for Designation as Dormant Therapy.--A 
request under subsection (a)(1) with respect to a medicine may only be 
made by the sponsor of the medicine and shall contain each of the 
following:
            (1) A listing of all patents and applications for patents 
        under which the sponsor has rights and that may be reasonably 
        construed to provide protection for the medicine.
            (2) A waiver of patent rights to the extent required under 
        subsection (c) to take effect, if at all, as provided under 
        subsection (c)(3).
            (3) Such additional information as the Secretary may 
        require by regulation in order to determine eligibility for 
        designation under subsection (a).
    (c) Waiver of Patent Rights Expiring After the Protection Period 
Ends.--
            (1) Patent waiver.--
                    (A) In general.--Subject to subparagraph (B), the 
                request under this subsection shall include a waiver of 
                the right to enforce or otherwise assert any patent 
                described in subsection (b)(1) (or any patent issued on 
                the basis of an application described in subsection 
                (b)(1)), which may expire after the end of the 
                protection period for the dormant therapy, against any 
                applicable product described in paragraph (2). The 
                waiver shall be made by the owner of the patent or 
                application for patent, as the case may be.
                    (B) Limitations on patent waiver.--Any patent 
                waiver provided pursuant to this section, should it 
                become effective--
                            (i) shall have no effect during the 
                        protection period for the medicine to which the 
                        waiver relates; and
                            (ii) shall have no effect with respect to 
                        the subject matter of a claimed invention in a 
                        patent that does not provide any protection for 
                        such medicine with respect to an applicable 
                        product described in paragraph (2).
            (2) Applicable products described.--An applicable product 
        is described in this paragraph only if--
                    (A) it is approved or licensed pursuant to an 
                application that--
                            (i) is filed under section 505(b)(2) or 
                        505(j) of the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S.C. 355(b)(2), (j)) or section 
                        351(k) of the Public Health Service Act (42 
                        U.S.C. 262(k)); and
                            (ii) references or otherwise relies upon 
                        the approval or licensure of the dormant 
                        therapy to which the waiver relates; and
                    (B) the approval of the product occurs after the 
                expiration of the protection period applicable to the 
                medicine to which the request under subsection (a)(1) 
                relates.
            (3) Effective date of waiver.--A waiver under subsection 
        (b)(2) with respect to a patent shall take effect, if at all, 
        on the date the Director publishes the notice required under 
        subsection (e)(2)(F) relating to the patent.
    (d) Withdrawal of Request for Designation, Revocation by the 
Secretary.--
            (1) In general.--The sponsor of a medicine may withdraw a 
        request for designation under subsection (a)(1) with respect to 
        a medicine unless the medicine has been approved or licensed 
        under section 505 of the Federal Food, Drug, and Cosmetic Act 
        (21 U.S.C. 355) or section 351 of the Public Health Service Act 
        (42 U.S.C. 262). The Secretary shall deny a designation request 
        or revoke any designation granted if at any time the Secretary 
        finds that the sponsor is not in compliance with subsections 
        (c)(1) and (g)(1).
            (2) Effects of withdrawal of request or revocation of 
        designation.--If the sponsor of a medicine withdraws a request 
        under subsection (b) or the Secretary denies a designation 
        request or revokes a designation with respect to the medicine--
                    (A) any patent waiver submitted under this section 
                with respect to the medicine, but not yet effective, is 
                canceled and deemed a nullity;
                    (B) any patent waiver that has taken effect under 
                this section with respect to the medicine shall remain 
                in effect;
                    (C) any patent term extension granted by the 
                Director under subsection (e)(2) with respect to the 
                medicine shall be canceled, except that the Director 
                shall maintain the patent term extension for one 
                patent, to be selected by the sponsor of the medicine, 
                for the period of extension that would have been 
                applicable under section 156 of title 35, United States 
                Code; and
                    (D) the designation, if made, otherwise shall be 
                treated as never having been requested or made or 
                having effect.
            (3) Basis for revocation.--The Secretary may revoke a 
        designation made under subsection (a), but only based upon a 
        finding by the Secretary under paragraph (1).
    (e) Guaranteed Protections for Dormant Therapies.--
            (1) Applications filed during the protection period.--
        During the protection period for a dormant therapy, 
        notwithstanding any other provision of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 301 et seq.) or the Public Health 
        Service Act (42 U.S.C. 201 et seq.)--
                    (A) absent a right of reference from the holder of 
                such approved application for the dormant therapy, the 
                Secretary shall not approve an application filed 
                pursuant to section 505(b)(2) or section 505(j) of the 
                Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                355(b)(2), (j)) or section 351(k) of the Public Health 
                Service Act (42 U.S.C. 262(k)) referencing or otherwise 
                relying on the approval or licensure of the dormant 
                therapy;
                    (B) the Secretary shall not approve--
                            (i) an application filed pursuant to such 
                        section 505(b)(2) or 505(j) that references or 
                        otherwise relies on the approval or licensure 
                        of a medicine that is not the dormant therapy, 
                        was approved subsequent to the approval of the 
                        dormant therapy, and contains the same active 
                        moiety as the active moiety in the dormant 
                        therapy (or if the dormant therapy contains 
                        more than one active moiety, all of the active 
                        moieties are the same); or
                            (ii) an application filed pursuant to such 
                        section 351(k) that references or otherwise 
                        relies on the approval or licensure of a 
                        medicine that is not the dormant therapy, was 
                        approved subsequent to the approval or 
                        licensure of the dormant therapy, and contains 
                        an active moiety that is highly similar to the 
                        active moiety in the dormant therapy (or if the 
                        dormant therapy contains more than one active 
                        moiety, all of the active moieties are highly 
                        similar); and
                    (C) the Secretary shall not approve an application 
                filed pursuant to section 505(b)(1) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)(1)) for 
                a drug that contains the same active moiety as the 
                active moiety in the dormant therapy (or if the dormant 
                therapy contains more than one active moiety, all of 
                the active moieties are the same), or an application 
                filed pursuant to section 351(a) of the Public Health 
                Service Act (42 U.S.C. 262(a)) for a biological product 
                that contains an active moiety that is highly similar 
                to the active moiety in the dormant therapy (or if the 
                dormant therapy contains more than one active moiety, 
                all of the active moieties are highly similar), 
                unless--
                            (i) the information provided to support 
                        approval of such application is comparable in 
                        scope and extent, including with respect to 
                        design and extent of preclinical and clinical 
                        testing, to the information provided to support 
                        approval of the application for the dormant 
                        therapy under section 505(b) of the Federal 
                        Food, Drug and Cosmetic Act (21 U.S.C. 355(b)) 
                        or section 351(a) of the Public Health Service 
                        Act (42 U.S.C. 262(a)); and
                            (ii) if such clinical testing had not 
                        commenced before the approval of the 
                        application for the dormant therapy, the 
                        clinical testing establishes clinical 
                        superiority in the form of a significant 
                        therapeutic advantage over and above that 
                        provided by the dormant therapy in one or more 
                        of the following ways:
                                    (I) Greater effectiveness on a 
                                clinically meaningful endpoint.
                                    (II) Greater safety in a 
                                substantial portion of the target 
                                populations.
                                    (III) Where neither greater safety 
                                nor greater effectiveness has been 
                                shown, a demonstration that the drug 
                                otherwise makes a major contribution to 
                                patient care.
            (2) Patent term alignment with data package protection 
        period.--
                    (A) In general.--Notwithstanding any provision of 
                title 35, United States Code, a sponsor of a medicine 
                designated as a dormant therapy under subsection 
                (a)(1), upon the approval or licensure thereof under 
                section 505 of the Federal Food, Drug, and Cosmetic Act 
                (21 U.S.C. 355) or section 351 of the Public Health 
                Service Act (42 U.S.C. 262), and in lieu of filing a 
                patent term extension application under section 156(d) 
                of such title 35, shall be entitled to patent term 
                extensions in accordance with this paragraph.
                    (B) Submission of final listing of patents and 
                applications for patents following approval.--
                            (i) Submission.--The sponsor of the dormant 
                        therapy, within a period to be set by the 
                        Director of not less than 2 months beginning on 
                        the date the Secretary approves or licenses the 
                        dormant therapy, shall submit to the Director--
                                    (I) the listing of patents and 
                                applications for patents provided to 
                                the Secretary under subsection (b)(1);
                                    (II) any revisions to such listing 
                                as may be required for compliance with 
                                subsection (b)(1); and
                                    (III) any documentation the 
                                Director may require from the patentee 
                                or patent applicant (as the case may 
                                be) of the waiver of patent rights 
                                required under subsection (b)(2).
                            (ii) Failure to provide sufficient 
                        documentation of waiver.--If the Director 
                        determines that the sponsor has not complied 
                        with the waiver requirements under subsection 
                        (c), after providing the sponsor the 
                        opportunity to remedy any insufficiency, the 
                        Director shall so notify the Secretary that the 
                        patent waiver requirements for designation have 
                        not been satisfied.
                    (C) Extension of patents.--
                            (i) In general.--Unless the Director has 
                        notified the Secretary of a determination under 
                        subparagraph (B)(ii), for each patent 
                        identified in a submission pursuant to 
                        subparagraph (B)(i), and for each patent 
                        issuing based upon an application for patent so 
                        identified, the Director shall, within the 3-
                        month period beginning on the date of the 
                        submission, extend the patent to expire at the 
                        end of the protection period for the dormant 
                        therapy, if the patent would otherwise expire 
                        before the end of the protection period. If the 
                        Director has so notified the Secretary under 
                        subparagraph (B)(ii), the Director shall extend 
                        one such patent, selected by the sponsor, for 
                        the period that would have been applicable had 
                        an application for extension been filed under 
                        section 156 of title 35, United States Code, 
                        with respect to such patent.
                            (ii) Application of certain provisions.--
                        During the period of an extension under clause 
                        (i)--
                                    (I) the rights under the patent 
                                shall be limited in the manner provided 
                                under section 156(b) of title 35, 
                                United States Code; and
                                    (II) the terms ``product'' and 
                                ``approved product'' in such section 
                                156(b) shall be deemed to include forms 
                                of the active moiety of the dormant 
                                therapy and highly similar active 
                                moieties that might be approved by the 
                                Secretary based upon an application 
                                filed under section 505(b)(2) or 505(j) 
                                of the Federal Food, Drug, and Cosmetic 
                                Act (21 U.S.C. 355(b)(2), (j)) or under 
                                section 351(k) of the Public Health 
                                Service Act (42 U.S.C. 262(k)) that 
                                references or otherwise relies upon the 
                                dormant therapy.
                    (D) Interim patent extensions.--Notwithstanding any 
                provision of title 35, United States Code, with respect 
                to any patent listed (or patent issuing on an 
                application listed) under subsection (b)(1) that would 
                otherwise expire before the sponsor could make a 
                submission under subparagraph (B), the Director, upon 
                application of the patentee, shall grant to the 
                patentee an interim extension of such patent, subject 
                to the limitations in section 156(d)(5)(F) of such 
                title 35, for such period as may be necessary to permit 
                the sponsor to submit the listing under subparagraph 
                (B) and, if the patent is therein listed, to extend the 
                patent as provided under subparagraph (C). The Director 
                may require, for any patent extended under this 
                subparagraph, that the sponsor of the dormant therapy 
                to which the patent relates provide periodic 
                certifications that development of the dormant therapy 
                is continuing. The Director may terminate any interim 
                extension for which a required certification has not 
                been made.
                    (E) Notice of extension.--For each patent that is 
                extended under this paragraph, the Director shall 
                publish a notice of such extension and issue a 
                certificate of extension described in section 156(e)(1) 
                of title 35, United States Code.
                    (F) Notice of waiver.--For each patent identified 
                in a submission under subparagraph (B)(i), and each 
                patent issuing based upon an application for patent so 
                identified, that expires after the end of the 
                protection period for the dormant therapy, the Director 
                shall publish a notice that the patent is subject to 
                the limited waiver of the right to enforce described in 
                subsection (c)(1).
    (f) Certain FDA Protections Inapplicable.--If a medicine has been 
designated as a dormant therapy under subsection (a), the protections 
otherwise applicable with respect to such medicine under sections 505A, 
505E, and 527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355a, 355f, 360cc) shall not apply. The preceding sentence shall not be 
construed to affect any protections applicable with respect to a drug, 
including a drug designated under section 526 of such Act (21 U.S.C. 
360bb) for a rare disease or condition, under provisions other than 
such sections 505A, 505E, and 527.
    (g) Development Certifications.--
            (1) In general.--The Secretary shall require that the 
        sponsor of a dormant therapy provide periodic certifications 
        that development of the dormant therapy to address one or more 
        unmet medical needs is continuing.
            (2) Determination of noncompliance.--If the Secretary 
        concludes that the sponsor has not complied with paragraph (1), 
        after providing the sponsor the opportunity to remedy any 
        insufficiency, the Secretary shall, for purposes of subsection 
        (d)(1), determine that the sponsor is not in compliance with 
        the certification requirement under paragraph (1).
    (h) Collaboration.--Nothing in this section shall be construed as 
preventing a sponsor from collaborating with other entities in 
developing a dormant therapy or applying for a dormant therapy 
designation.
    (i) Definitions.--For purposes of this section:
            (1) The term ``address one or more unmet medical needs'' 
        refers to--
                    (A) addressing a need for medicines for the 
                treatment of one or more life-threatening or other 
                serious diseases or conditions for which no therapy 
                exists; or
                    (B) if one or more therapies are available for the 
                treatment of such a disease or condition, demonstrating 
                through clinical investigations--
                            (i) one or more improved effects on serious 
                        outcomes of the disease or condition that are 
                        affected by alternative therapies, such as 
                        superiority of the medicine used alone or in 
                        combination with other therapies in an active 
                        controlled trial assessing an endpoint 
                        reflecting serious morbidity;
                            (ii) one or more effects on serious 
                        outcomes of the disease or condition not known 
                        to be affected by alternative therapies, such 
                        as progressive disability in multiple sclerosis 
                        when alternative therapies have shown an effect 
                        on exacerbations but have not shown an effect 
                        on progressive disability;
                            (iii) an ability--
                                    (I) to provide one or more benefits 
                                in patients who are unable to tolerate 
                                or are unresponsive to alternative 
                                therapies, such as an antipsychotic 
                                agent that is effective in people 
                                failing standard therapy; or
                                    (II) to be used effectively in 
                                combination with other critical agents 
                                that cannot be combined with 
                                alternative therapies;
                            (iv) an ability to provide one or more 
                        benefits similar to those of alternative 
                        therapies while--
                                    (I) avoiding serious toxicity that 
                                is present in alternative therapies; or
                                    (II) avoiding less serious toxicity 
                                that is common in alternative therapies 
                                and causes discontinuation of treatment 
                                of a life-threatening or serious 
                                disease; or
                            (v) an ability to provide one or more 
                        benefits similar to those of alternative 
                        therapies but with improvement in some factor, 
                        such as compliance or convenience, that is 
                        shown to lead to improved effects on serious 
                        outcomes.
            (2) The term ``Director'' means the Under Secretary of 
        Commerce for Intellectual Property and Director of the United 
        States Patent and Trademark Office.
            (3) The term ``dormant therapy'' means a medicine 
        designated as a dormant therapy under subsection (a).
            (4) The term ``protection period'' for a dormant therapy 
        means the period that--
                    (A) begins on the date on which the Secretary first 
                approves an application under section 505(b) of the 
                Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)) 
                or section 351(a) of the Public Health Service Act (42 
                U.S.C. 262(a)) for the dormant therapy for any 
                indication; and
                    (B) ends on the date that is 15 years after the 
                date of such approval.
            (5) The term ``sponsor'' for a dormant therapy is the 
        person who takes responsibility for the designation and 
        development of the dormant therapy. The sponsor may be a single 
        entity or an entity collaborating with one or more other 
        entities.

SEC. 202. STUDY REGARDING NEW INDICATIONS FOR EXISTING THERAPIES.

    Not later than one year after the date of the enactment of this 
Act, the Secretary shall enter into an arrangement with the Institute 
of Medicine (or, if the Institute declines, another appropriate 
entity)--
            (1) to conduct a study on intellectual property laws and 
        their impact on therapy and diagnostic development in order to 
        formulate recommendations on how to facilitate the clinical 
        evaluation and development of therapies currently available on 
        the market for new potential indications; and
            (2) not later than 18 months after such date of the 
        enactment, to submit a report to the Secretary and the Congress 
        containing the results of such study.
                                 <all>
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