II 

115TH CONGRESS 

1ST SESSION S. 2172 

To authorize the collection of supplemental payments to increase congressional 

investments in medical research, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 29, 2017 

Ms. WARREN (for herself, Mr. BROWN, Mrs. GILLIBRAND, Mr. FRANKEN, Ms. 

BALDWIN, Mr. SANDERS, and Ms. HARRIS) introduced the following bill; 

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

A BILL 

To authorize the collection of supplemental payments to increase congressional investments in medical research, 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 ‘‘Medical Innovation Act 

5 of 2017’’. 


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1 SEC. 2. AUTHORITY TO ASSESS AND USE SUPPLEMENTAL 

2 PAYMENTS TO INCREASE CONGRESSIONAL 

3 INVESTMENTS IN MEDICAL RESEARCH. 

4 (a) IN GENERAL.—Section 301 of the Public Health 

5 Service Act (42 U.S.C. 241) is amended by adding at the 

6 end the following: 

7 ‘‘(i) AUTHORITY TO ASSESS AND USE SUPPLE8 MENTAL PAYMENTS TO INCREASE CONGRESSIONAL IN9 VESTMENTS IN MEDICAL RESEARCH.— 

10 ‘‘(1) DEFINITIONS.—For purposes of this sub11 section: 

12 ‘‘(A) COVERED BLOCKBUSTER DRUG.— 

13 ‘‘(i) IN GENERAL.—The term ‘covered 

14 blockbuster drug’ means any product— 

15 ‘‘(I) for which the covered manu16 facturer reported to the Securities and 

17 Exchange Commission on a form, in18 cluding form 10–K or form 20–F, or 

19 is otherwise determined by the Sec20 retary to have received, at least 

21 $1,000,000,000 in net sales in the 

22 previous calendar year; and 

23 ‘‘(II) that was developed, in 

24 whole or in part, through Federal 

25 Government investments in medical 


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1 research, as the Secretary determines 

2 in accordance with clause (ii). 

3 ‘‘(ii) DETERMINATION OF FEDERAL

4 GOVERNMENT INVESTMENT.—In deter5 mining under clause (i)(II) whether a 

6 product was developed, in whole or in part, 

7 through Federal Government investments 

8 in medical research, the Secretary shall 

9 consider whether information included in 

10 any patent that claims the covered block11 buster drug or that claims a method of 

12 using such covered blockbuster drug and 

13 with respect to which a claim of patent in14 fringement could reasonably be asserted if 

15 a person not licensed by the owner engaged 

16 in the manufacture, use, or sale of the cov17 ered blockbuster drug, or any element of 

18 the covered blockbuster drug— 

19 ‘‘(I) relates to, or is based upon, 

20 prior science conducted, in whole or in 

21 part, by a person that is or was fund22 ed by the Federal Government; 

23 ‘‘(II) relates to, acts upon, or is 

24 based upon knowledge of a signaling 

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1 nel, protein, DNA or RNA sequence 

2 or mutation, virus, or any other sci3 entific information discovered, in 

4 whole or in part, through research 

5 funded by the Federal Government; or 

6 ‘‘(III) relates to, or is based 

7 upon, through the manufacturing 

8 process or testing process of the cov9 ered blockbuster drug, technology de10 rived, in whole or in part, through re11 search funded by the Federal Govern12 ment. 

13 ‘‘(B) COVERED MANUFACTURER.—The 

14 term ‘covered manufacturer’ means a person— 

15 ‘‘(i) that holds an application ap16 proved under section 505 of the Federal 

17 Food, Drug, and Cosmetic Act or a license 

18 under section 351 of this Act for a covered 

19 blockbuster drug; or 

20 ‘‘(ii) who is a co-licensed partner of 

21 the person described in clause (i) that ob22 tains the covered blockbuster drug directly 

23 from a person described in this clause or 

24 clause (i). 


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1 ‘‘(C) COVERED SETTLEMENT AGREE2 MENT.— 

3 ‘‘(i) IN GENERAL.—The term ‘covered 

4 settlement agreement’ means a settlement 

5 agreement (including a consent decree), 

6 and except as provided under clause (ii)— 

7 ‘‘(I) that is between an agency 

8 and a covered manufacturer; 

9 ‘‘(II) that relates to— 

10 ‘‘(aa) an alleged violation of, 

11 or a penalty under, section 

12 1128A of the Social Security Act 

13 or section 1128B of the Social 

14 Security Act; 

15 ‘‘(bb) an alleged violation 

16 under subchapter III of chapter 

17 37 of title 31, United States 

18 Code (commonly known as the 

19 ‘False Claims Act’); 

20 ‘‘(cc) an alleged violation 

21 under the Federal Food, Drug, 

22 and Cosmetic Act; or 

23 ‘‘(dd) an alleged violation of 

24 any other Federal civil or crimi25 nal law; and 


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1 ‘‘(III) under the terms of which a 

2 covered manufacturer is obligated in 

3 an amount not less than a total of 

4 $1,000,000, including civil or criminal 

5 penalties with respect to any parties, 

6 including governmental and private 

7 entities. 

8 ‘‘(ii) EXCEPTION FOR SETTLEMENTS

9 NOT AFFECTING TAXPAYERS OR PUBLIC

10 HEALTH.—The term ‘covered settlement 

11 agreement’ does not include any settlement 

12 agreement that the Secretary determines— 

13 ‘‘(I) does not involve an alleged 

14 criminal violation; and 

15 ‘‘(II) does not to relate to— 

16 ‘‘(aa) allegations of fraud re17 sulting, or potentially resulting, 

18 in a loss of taxpayer dollars; or 

19 ‘‘(bb) allegations of conduct 

20 having an adverse impact, or a 

21 potentially adverse impact, on the 

22 health of the public. 

23 ‘‘(D) PERSON.—The term ‘person’ has the 

24 meaning given such term in section 201(e) of 

25 the Federal Food, Drug, and Cosmetic Act. 


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1 ‘‘(E) PRODUCT.—The term ‘product’ 

2 means a drug approved under section 505 of 

3 the Federal Food, Drug, and Cosmetic Act or 

4 licensed under section 351, and subject to sec5 tion 503(b)(1) of the Federal Food, Drug, and 

6 Cosmetic Act. 

7 ‘‘(2) SUPPLEMENTAL PAYMENTS TO INCREASE

8 CONGRESSIONAL INVESTMENTS IN MEDICAL RE9 SEARCH.— 

10 ‘‘(A) SUPPLEMENTAL PAYMENT ASSESS11 MENT AND COLLECTION.—Beginning with the 

12 first fiscal year that begins at least 60 days 

13 after the date of enactment of the Medical In14 novation Act of 2017, and each subsequent fis15 cal year, the Secretary shall, in accordance with 

16 this paragraph, assess and collect supplemental 

17 payments to increase congressional investments 

18 in medical research from each covered manufac19 turer described in subparagraph (B). 

20 ‘‘(B) CRITERIA FOR ASSESSING PAY21 MENTS.—A covered manufacturer that meets 

22 both of the following criteria for a calendar year 

23 (referred to in this subparagraph and subpara24 graph (D) as the ‘applicable calendar year’) 

25 shall be assessed a supplemental payment under 


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1 subparagraph (A) for the fiscal year beginning 

2 in the proceeding calendar year: 

3 ‘‘(i) A covered manufacturer that, 

4 during the 5-year period immediately pre5 ceding the date on which the payment is 

6 assessed, but not before the date of enact7 ment of the Medical Innovation Act of 

8 2017, entered into a covered settlement 

9 agreement. 

10 ‘‘(ii) A covered manufacturer that re11 ported net income of at least 

12 $1,000,000,000 to the Securities and Ex13 change Commission on a form, including 

14 form 10–K or form 20–F, or that the Sec15 retary otherwise determines to have had 

16 net income of at least $1,000,000,000— 

17 ‘‘(I) during the applicable cal18 endar year; or 

19 ‘‘(II) during the calendar year in 

20 which the covered manufacturer en21 tered into a covered settlement agree22 ment, as described in clause (i). 

23 ‘‘(C) PAYMENT AMOUNT.— 

24 ‘‘(i) IN GENERAL.—A covered manu25 facturer described in subparagraph (B) 


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1 shall be assessed a supplemental payment 

2 to increase congressional investments in 

3 medical research for a fiscal year equal to 

4 the applicable percentage of the net income 

5 of the covered manufacturer, as reported 

6 or determined as described in subpara7 graph (B)(ii), for the previous calendar 

8 year, multiplied by the number of covered 

9 blockbuster drugs of the covered manufac10 turer for that year. 

11 ‘‘(ii) APPLICABLE PERCENTAGE.—For 

12 purposes of determining the amount of a 

13 supplemental payment under clause (i), the 

14 applicable percentage of the net income of 

15 a covered manufacturer is— 

16 ‘‘(I) 0.75 percent, in the case of 

17 a covered settlement agreement under 

18 the terms of which the total obligation 

19 of a covered manufacturer is in an 

20 amount that is less than 

21 $500,000,000; 

22 ‘‘(II) 1 percent, in the case of a 

23 covered settlement agreement under 

24 the terms of which the total obligation 

25 of a covered manufacturer is in an 


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1 amount that is at least $500,000,000 

2 but less than $1,000,000,000; or 

3 ‘‘(III) 1.5 percent, in the case of 

4 a covered settlement agreement under 

5 the terms of which the total obligation 

6 of a covered manufacturer is in an 

7 amount that is at least 

8 $1,000,000,000. 

9 ‘‘(D) ANNUAL LIMITATION.—In the case of 

10 a covered manufacturer that entered into more 

11 than 1 covered settlement agreement during an 

12 applicable calendar year, such covered manufac13 turer shall be assessed a supplemental payment 

14 under subparagraph (C) only with respect to 

15 the covered settlement agreement under which 

16 the total amount obligated of the covered manu17 facturer, as described in paragraph 

18 (1)(C)(i)(III), is the highest. 

19 ‘‘(E) PUBLICATION OF PAYMENTS.—Be20 ginning with the first fiscal year that begins at 

21 least 60 days after the date of enactment of the 

22 Medical Innovation Act of 2017, and not later 

23 than 60 days before the start of each fiscal 

24 year, the Secretary shall publish in the Federal 

25 Register, with respect to the next fiscal year— 


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1 ‘‘(i) a list of covered manufacturers 

2 subject to the payment under this para3 graph; 

4 ‘‘(ii) a list of the covered blockbuster 

5 drugs of each such covered manufacturer; 

6 ‘‘(iii) the total payment amount as7 sessed to each such covered manufacturer; 

8 and 

9 ‘‘(iv) the manner in which payments 

10 assessed under this paragraph will be col11 lected. 

12 ‘‘(F) CREDITING AND AVAILABILITY OF

13 SUPPLEMENTAL PAYMENTS.— 

14 ‘‘(i) IN GENERAL.—Subject to clause 

15 (ii), payments authorized under this para16 graph shall be collected and available for 

17 obligation only to the extent and in the 

18 amount provided in advance in appropria19 tions Acts. Such payments are authorized 

20 to remain available until expended. 

21 ‘‘(ii) COLLECTIONS AND APPROPRIA22 TIONS ACTS.— 

23 ‘‘(I) IN GENERAL.—The pay24 ments authorized by this paragraph— 


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1 ‘‘(aa) subject to subclause 

2 (II), shall be collected and avail3 able in each fiscal year in an 

4 amount not to exceed the amount 

5 specified in appropriation Acts, 

6 or otherwise made available for 

7 obligation, for such fiscal year; 

8 and 

9 ‘‘(bb) shall be available to 

10 the Secretary to distribute, as de11 scribed in paragraph (3). 

12 ‘‘(II) PROVISION FOR EARLY

13 PAYMENTS.—Payments authorized 

14 under clause (iii) for a fiscal year, 

15 prior to the due date for such pay16 ments, may be accepted by the Sec17 retary. 

18 ‘‘(iii) AUTHORIZATION OF APPROPRIA19 TIONS.—For the first fiscal year that be20 gins at least 60 days after the date of en21 actment of the Medical Innovation Act of 

22 2017 and for each subsequent fiscal year, 

23 there is authorized to be appropriated for 

24 the purpose of making distributions under 

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1 scribed in paragraph (4), an amount equal 

2 to the total amount of supplemental pay3 ments assessed for such fiscal year under 

4 this paragraph. 

5 ‘‘(G) REMITTING PAYMENTS.—A covered 

6 manufacturer assessed a supplemental payment 

7 under subparagraph (A) shall remit the pay8 ment no later than the first business day on or 

9 after October 1 of each fiscal year, or the first 

10 business day after the date of enactment of an 

11 appropriations Act providing for the collection 

12 and obligation of supplemental payments for 

13 such fiscal year. 

14 ‘‘(H) COLLECTION OF ASSESSED PAY15 MENTS THAT ARE NOT REMITTED.—In any case 

16 where the Secretary does not receive a supple17 mental payment assessed under subparagraph 

18 (A) within 30 days after it is due, such supple19 mental payment shall be treated as a claim of 

20 the United States Government subject to sub21 chapter II of chapter 37 of title 31, United 

22 States Code. 

23 ‘‘(I) SUPPLEMENT NOT SUPPLANT.—Pay24 ments collected under this paragraph shall be 

25 used to supplement and not supplant other 


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1 Federal funds made available to carry out the 

2 priorities described in paragraph (4). 

3 ‘‘(3) DISTRIBUTION OF PAYMENTS TO AGEN4 CIES TO INCREASE CONGRESSIONAL INVESTMENTS

5 IN MEDICAL RESEARCH.— 

6 ‘‘(A) DISTRIBUTION TO AGENCIES.—Sub7 ject to subparagraph (C), for the purposes de8 scribed in paragraph (4), the Secretary shall 

9 distribute the amounts appropriated under 

10 paragraph (2)(F)(iii) during a fiscal year to— 

11 ‘‘(i) the Food and Drug Administra12 tion, to be used in accordance with para13 graph (4)(A); and 

14 ‘‘(ii) the National Institutes of Health 

15 organized under title IV, to be used in ac16 cordance with paragraph (4)(B). 

17 ‘‘(B) DISTRIBUTION RATIO BETWEEN

18 AGENCIES.—The amount that the Secretary 

19 distributes to an agency under subparagraph 

20 (A) during a fiscal year shall bear the same re21 lation to the total amount appropriated under 

22 paragraph (2)(F)(iii) for such fiscal year as the 

23 amount of discretionary funds appropriated to 

24 such agency for such fiscal year bears to the 

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1 priated to both agencies listed in subparagraph 

2 (A) for such fiscal year. 

3 ‘‘(C) ENSURING STABLE CONGRESSIONAL

4 INVESTMENTS IN MEDICAL RESEARCH.— 

5 ‘‘(i) IN GENERAL.—Supplemental pay6 ments collected in accordance with para7 graph (2) shall not be distributed under 

8 subparagraph (A) for a fiscal year unless 

9 appropriations to both of the agencies list10 ed in such subparagraph for the fiscal year 

11 are equal to or greater than appropriations 

12 to such agencies for the prior fiscal year. 

13 ‘‘(ii) DELAYED DISTRIBUTION.—If, in 

14 accordance with clause (i), the Secretary 

15 does not distribute payments collected in 

16 accordance with paragraph (2) during any 

17 portion of a fiscal year, and, at a later 

18 date in such fiscal year, the appropriations 

19 to the agencies listed in subparagraph (A) 

20 become equal to or greater than the 

21 amount of appropriations for the prior fis22 cal year, the Secretary may distribute such 

23 payment at any time in such fiscal year. 


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1 ‘‘(D) CONSIDERATIONS.—In determining 

2 amounts appropriated for purposes of subpara3 graphs (B) and (C)— 

4 ‘‘(i) the Secretary shall not consider 

5 any amounts appropriated in accordance 

6 with paragraph (2)(F)(iii); and 

7 ‘‘(ii) with respect to the Food and 

8 Drug Administration, the Secretary shall 

9 not consider amounts appropriated in ac10 cordance with subchapter C of chapter VII 

11 of the Federal Food, Drug, and Cosmetic 

12 Act (relating to user fees collected by the 

13 Secretary). 

14 ‘‘(4) PRIORITIZING URGENT NEEDS IN MEDICAL

15 RESEARCH.—The Secretary shall ensure that the 

16 payments distributed under paragraph (3) are used 

17 to meet urgent needs in medical research, including 

18 priorities as follows: 

19 ‘‘(A) FDA.—With respect the Food and 

20 Drug Administration, the priority use of the 

21 distributions shall include carrying out the 

22 goals of the strategy and implementation plan 

23 for advancing regulatory science for medical 

24 products under section 1124 of the Food and 

25 Drug Administration Safety and Innovation Act 


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1 (21 U.S.C. 393 note), and other such research 

2 activities in order to promote the public health 

3 and advance innovation in regulatory decision4 making, as determined by the Secretary. 

5 ‘‘(B) NIH.—With respect to the National 

6 Institutes of Health, the priority use of the dis7 tributions shall include supporting— 

8 ‘‘(i) research that fosters radical inno9 vation, including— 

10 ‘‘(I) research on diseases or con11 ditions for which treatments exist but 

12 are inadequate; 

13 ‘‘(II) research on diseases or con14 ditions for which there are unmet 

15 medical needs; 

16 ‘‘(III) research on diseases for 

17 which treatments exist but the side ef18 fect profiles of such treatments limit 

19 the therapeutic potential of such 

20 treatments; 

21 ‘‘(IV) research on new ap22 proaches to treatment or diagnosis of 

23 a disease using a drug, device, or 

24 therapy that, at the time of distribu25 tion, is not used or is underused; or 


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1 ‘‘(V) research to identify new bio2 markers; 

3 ‘‘(ii) research that advances funda4 mental knowledge and technology even if it 

5 does not provide immediate or near-term 

6 clinical or therapeutic benefits, including 

7 research and technology that advances the 

8 understanding of biochemistry, biology, 

9 protein science, immunology, genetics, vi10 rology, microbiology, or neurology; 

11 ‘‘(iii) research related to diseases that 

12 disproportionally account for Federal 

13 health care spending, including spending 

14 under the Medicare program under title 

15 XVIII of the Social Security Act, the Med16 icaid program under title XIX of the Social 

17 Security Act, the State Children’s Health 

18 Insurance Program under title XXI of the 

19 Social Security Act, the TRICARE pro20 gram under chapter 55 of title 10, United 

21 States Code, and the hospital services and 

22 medical care provided through the Vet23 erans’ Administration under chapters 17 

24 and 18 of title 38, United States Code, 

25 and tax credits made available through the 


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1 amendments to the Internal Revenue Code 

2 of 1986 made by the Patient Protection 

3 and Affordable Care Act (Public Law 111– 

4 148), such as research relating to— 

5 ‘‘(I) diseases that disproportion6 ally impact older individuals; 

7 ‘‘(II) degenerative diseases, and 

8 ‘‘(III) chronic conditions; and 

9 ‘‘(iv) early career scientists by— 

10 ‘‘(I) awarding research project 

11 grants that support discrete, specified, 

12 circumscribed projects to be per13 formed by the investigator in an area 

14 representing the specific interests and 

15 competencies of such investigator, to 

16 investigators— 

17 ‘‘(aa) who are within 10 

18 years of completing a terminal 

19 research degree; or 

20 ‘‘(bb) who are within 10 

21 years of completing a medical 

22 residency; 

23 ‘‘(II) awarding grants that sup24 port career development experiences 


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1 that lead to earlier research independ2 ence; and 

3 ‘‘(III) awarding grants that sup4 port innovative training programs 

5 that, in addition to scientific training, 

6 provide additional training to enhance 

7 employment opportunities, including 

8 training in management and business, 

9 to— 

10 ‘‘(aa) graduate students; 

11 ‘‘(bb) post-doctoral fellows; 

12 ‘‘(cc) individuals within 10 

13 years of completing a terminal 

14 research degree; or 

15 ‘‘(dd) individuals within 10 

16 years of completing a medical 

17 residency. 

18 ‘‘(5) ANNUAL REPORTS.— 

19 ‘‘(A) SECRETARY OF HEALTH AND HUMAN

20 SERVICES.—Not later than 180 calendar days 

21 before the end of a fiscal year in which the Sec22 retary has assessed supplemental payments 

23 under paragraph (2), the Secretary shall submit 

24 a report to the Committee on Health, Edu25 cation, Labor, and Pensions of the Senate and 


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1 the Committee on Energy and Commerce of the 

2 House of Representatives, which shall include a 

3 description of supplemental payments assessed, 

4 collected, and distributed under this subsection 

5 for such fiscal year, and a list of the covered 

6 manufacturers that were assessed supplemental 

7 payments and the amount of such assessments. 

8 ‘‘(B) FDA AND NIH.—For each fiscal year 

9 in which amounts are distributed under para10 graph (3), the Food and Drug Administration 

11 and the National Institutes of Health shall re12 port on the use and impact of such amounts in 

13 the annual budget submission of such entity.’’. 

14 (b) EFFECT OF FAILURE TO REMIT PAYMENT.— 

15 Section 502 of the Federal Food, Drug, and Cosmetic Act 

16 (21 U.S.C. 352) is amended by adding at the end the fol17 lowing: 

18 ‘‘(ee) If it is a drug that is a covered blockbuster drug 

19 (as defined in section 301(i)(1) of the Public Health Serv20 ice Act) for which any payment assessed under section 

21 301(i)(2) of such Act has not been paid in accordance with 

22 such section, until such payment is made.’’. 

Æ 


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