I 

114TH CONGRESS 

2D SESSION H. R. 4784 

To increase competition in the pharmaceutical industry. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 17, 2016 

Mr. SCHRADER (for himself and Mr. BILIRAKIS) introduced the following bill; 

which was referred to the Committee on Energy and Commerce 

A BILL 

To increase competition in the pharmaceutical industry. 

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 ‘‘Lower Drug Costs 

5 through Competition Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) As part of the Food and Drug Administra9 tion’s mission to protect the public health, the Food 

10 and Drug Administration approves generic drugs 

11 that help establish competitive markets for treatVerDate Sep 11 2014 03:23 Mar 18, 2016 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4784.IH H4784

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1 ments that improve the lives of millions of patients 

2 in the United States. 

3 (2) Rising health care costs, including prescrip4 tion drug costs, continue to be a major concern for 

5 patients in the United States. 

6 (3) Eighty-eight percent of prescription drugs 

7 dispensed in the United States, or nearly 9 out of 

8 every 10 prescriptions dispensed, are generic drugs. 

9 (4) Studies suggest that generic drugs account 

10 for only 28 percent of total prescription drug spend11 ing and were responsible for $1,680,000,000,000 in 

12 estimated savings over the period of 2005 to 2014. 

13 (5) Increasing generic competition can be an ef14 fective way to help keep prescription drug costs low 

15 for patients, the health care system, and Federal 

16 and State government. 

17 (6) While the Food and Drug Administration 

18 has made progress toward a more consistent 

19 timeline for generic drug approvals since the enact20 ment of the Generic Drug User Fee Amendments of 

21 2012 (21 U.S.C. 379j–41 et seq.), a significant 

22 backlog of abbreviated new drug applications for ge23 neric drugs remains. 

24 (7) The sudden, aggressive price hikes for a va25 riety of recently acquired off-patent drugs that have 


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1 been used widely for decades, for which there is no 

2 generic drug competitor, also affects access to af3 fordable prescriptions for patients and the overall 

4 cost of health care in the United States. 

5 (8) Improving the review of abbreviated new 

6 drug applications and the approval of generic drugs 

7 would help to improve competition and lower prices 

8 for patients. 

9 (9) Establishing a clear timeframe for the Food 

10 and Drug Administration to expedite the review of 

11 certain applications for generic drugs would also 

12 help keep drug prices down and improve timely ac13 cess for patients. 

14 TITLE I—REMOVING REGU15 LATORY BARRIERS TO COM16 PETITION 

17 SEC. 101. IMPROVING GENERIC ACCESS. 

18 Section 505(j) of the Federal Food, Drug, and Cos19 metic Act (21 U.S.C. 355(j)) is amended by adding at the 

20 end the following: 

21 ‘‘(11)(A) The Secretary shall prioritize the review, 

22 and act not later than 180 calendar days after the date 

23 of the submission of an application, on an application that 

24 has been submitted and accepted for review under this 


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1 subsection, or on a supplement to such an application, 

2 that is for a drug that— 

3 ‘‘(i) has been introduced into interstate com4 merce by not more than one manufacturer or spon5 sor, as applicable, in the last 3 months and with re6 spect to which tentative approval under paragraph 

7 (5) has been granted for not more than 2 applica8 tions; or 

9 ‘‘(ii) has been included on the list under section 

10 506E. 

11 ‘‘(B) The Secretary may expedite an inspection or re12 inspection under section 704 of an establishment that pro13 poses to manufacture a drug described in subparagraph 

14 (A).’’. 

15 SEC. 102. REPORTING ON PENDING GENERIC DRUG APPLI16 CATIONS. 

17 Not later than 180 calendar days after the date of 

18 enactment of this Act, and every 180 calendar days there19 after until October 1, 2021, the Secretary of Health and 

20 Human Services shall submit to the Committee on Health, 

21 Education, Labor, and Pensions of the Senate, the Special 

22 Committee on Aging of the Senate, and the Committee 

23 on Energy and Commerce of the House of Representatives 

24 a report that provides— 


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1 (1) the number of applications that were filed 

2 under section 505(j) of the Federal Food, Drug, and 

3 Cosmetic Act (21 U.S.C. 355(j)) prior to October 1, 

4 2016, that are pending at the time the report is sub5 mitted; 

6 (2) the average and median total time such ap7 plications have been pending; 

8 (3) the number of such applications that con9 tain certifications under section 

10 505(j)(2)(A)(vii)(IV) of such Act; and 

11 (4) the number of such applications that are 

12 subject to priority review. 

13 TITLE II—INCENTIVIZING 

14 COMPETITION 

15 SEC. 201. GENERIC PRIORITY REVIEW VOUCHER. 

16 Chapter V of the Federal Food, Drug, and Cosmetic 

17 Act (21 U.S.C. 351 et seq.) is amended by inserting after 

18 section 506F the following: 

19 ‘‘SEC. 506G. GENERIC PRIORITY REVIEW VOUCHER. 

20 ‘‘(a) DEFINITIONS.—In this section: 

21 ‘‘(1) The term ‘priority review’ with respect to 

22 an application under section 505(j) means review 

23 and action by the Secretary on such application by 

24 the Secretary not later than 180 calendar days after 


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1 such application has been submitted and accepted 

2 for review. 

3 ‘‘(2) The term ‘priority review voucher’ means 

4 a voucher for priority review for an application 

5 under section 505(j). Such voucher shall be awarded 

6 upon the approval of the application described in 

7 505(j)(11)(A), unless such application contains a 

8 certification under section 505(j)(2)(A)(vii)(IV). 

9 ‘‘(b) GENERIC PRIORITY REVIEW VOUCHERS, IN

10 GENERAL.—Beginning on October 1, 2017, the Secretary 

11 shall award a priority review voucher to the sponsor of 

12 an application described in section 505(j)(11)(A) upon— 

13 ‘‘(1) approval by the Secretary of such applica14 tion; 

15 ‘‘(2) marketing of the drug subject to such ap16 plication; and 

17 ‘‘(3) determination by the Secretary that the 

18 drug has a sustained market presence. 

19 ‘‘(c) TRANSFERABILITY.— 

20 ‘‘(1) IN GENERAL.—The recipient of a priority 

21 review voucher under subsection (a) may transfer 

22 (including by sale) the entitlement to such voucher. 

23 There is no limit on the number of times a priority 

24 review voucher may be transferred before such 

25 voucher is used. 


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1 ‘‘(2) NOTIFICATION TO THE SECRETARY.— 

2 Each person to whom a voucher is transferred shall 

3 notify the Secretary of such change in ownership of 

4 such voucher not later than 30 calendar days after 

5 such transfer. 

6 ‘‘(d) NOTIFICATION.—The sponsor shall notify the 

7 Secretary not later than 30 calendar days prior to the sub8 mission of a human drug application that is intended to 

9 be the subject of a priority review voucher, except in the 

10 case of such an application that was pending as of October 

11 1, 2017, in which case the sponsor of such pending appli12 cation shall notify the Secretary not later than 30 days 

13 after the date on which such voucher is awarded. 

14 ‘‘(e) FEES.— 

15 ‘‘(1) IN GENERAL.—The sponsor of an applica16 tion that is the subject of a priority review voucher 

17 shall be subject to the fees required under sub18 chapter C of chapter VII. 

19 ‘‘(2) PRIORITY REVIEW USER FEE.— 

20 ‘‘(A) IN GENERAL.—The Secretary shall 

21 establish a user fee program under which a 

22 sponsor of a human drug application that is the 

23 subject of a priority review voucher shall pay to 

24 the Secretary a fee determined under subpara25 graph (B). Such fee shall be in addition to any 


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1 fee required to be submitted by the sponsor 

2 under subchapter C of chapter VII. 

3 ‘‘(B) FEE AMOUNT.—The amount of the 

4 priority review user fee shall be determined 

5 each fiscal year by the Secretary, based on 

6 twice the difference between— 

7 ‘‘(i) the average cost incurred by the 

8 Food and Drug Administration in the re9 view of a human drug application subject 

10 to priority review under this section in the 

11 previous fiscal year; and 

12 ‘‘(ii) the average cost incurred by the 

13 Food and Drug Administration in the re14 view of a human drug application under 

15 section 505(j) that is not subject to pri16 ority review under this section in the pre17 vious fiscal year. 

18 ‘‘(C) ANNUAL FEE SETTING.—The Sec19 retary shall establish, before the beginning of 

20 each fiscal year beginning after September 30, 

21 2017, and in accordance with subparagraph 

22 (B), the amount of the priority review user fee 

23 for that fiscal year. 

24 ‘‘(D) PAYMENT.— 


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1 ‘‘(i) IN GENERAL.—The priority re2 view user fee required by this paragraph 

3 shall be due upon the notification by a 

4 sponsor of the intent of such sponsor to 

5 use the voucher, as specified in subsection 

6 (d). All other user fees associated with the 

7 human drug application shall be due as re8 quired by the Secretary or under applicable 

9 law. 

10 ‘‘(ii) COMPLETE APPLICATION.—An 

11 application described in clause (i) for 

12 which the sponsor requests the use of a 

13 priority review voucher shall be considered 

14 incomplete if the fee required by this para15 graph and all other applicable user fees are 

16 not paid in accordance with the Secretary’s 

17 procedures for paying such fees. 

18 ‘‘(iii) NO WAIVERS, EXEMPTIONS, RE19 DUCTIONS, OR REFUNDS.—The Secretary 

20 may not grant a waiver, exemption, reduc21 tion, or refund of any fees due and payable 

22 under this paragraph. 

23 ‘‘(E) OFFSETTING COLLECTIONS.—Fees 

24 collected pursuant to this paragraph for any fis25 cal year— 


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1 ‘‘(i) shall be deposited and credited as 

2 offsetting collections to the account pro3 viding appropriations to the Food and 

4 Drug Administration; and 

5 ‘‘(ii) shall not be collected for any fis6 cal year except to the extent provided in 

7 advance in appropriations Acts. 

8 ‘‘(f) CLARIFICATION.—Nothing in this section affects 

9 any period of exclusivity under this Act or the protection 

10 of any patent. 

11 ‘‘(g) SUNSET.—The authority of the Secretary to 

12 carry out the generic priority review voucher program 

13 under this section shall terminate on October 1, 2021.’’. 

14 SEC. 202. TROPICAL DISEASE PRODUCT APPLICATION. 

15 Section 524(a)(4)(A) of the Federal Food, Drug, and 

16 Cosmetic Act (21 U.S.C. 360n(a)(4)(A)) is amended— 

17 (1) in clause (i), by striking ‘‘and’’; 

18 (2) in clause (ii), by adding ‘‘and’’ after the 

19 semicolon; and 

20 (3) by adding at the end the following: 

21 ‘‘(iii) that contains reports of new 

22 clinical investigations (other than bio23 availability studies) essential to the ap24 proval of the application and conducted or 

25 sponsored by the applicant;’’. 


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1 TITLE III—STUDY ON REMS 

2 SEC. 301. STUDY ON REMS. 

3 (a) IN GENERAL.—The Comptroller General shall 

4 conduct a review of the implementation and effectiveness 

5 of section 505–1 of the Federal Food, Drug, and Cosmetic 

6 Act (21 U.S.C. 355–1) (referred to in this section as the 

7 ‘‘REMS program’’), which section— 

8 (1) authorizes the Secretary of Health and 

9 Human Services to require a risk evaluation and 

10 mitigation strategy (referred to in this section as 

11 ‘‘REMS’’); and 

12 (2) codifies and expands regulations issued by 

13 the Food and Drug Administration under which the 

14 Food and Drug Administration may impose restric15 tions on distribution necessary to ensure a drug is 

16 safely used. 

17 (b) CONTENTS OF STUDY.—In conducting the review 

18 under subsection (a), the Comptroller General shall exam19 ine each relevant element described in subsection (c) with 

20 respect to each of the following categories: 

21 (1) New drug applications under subsection (b) 

22 of section 505 of the Federal Food, Drug, and Cos23 metic Act (21 U.S.C. 355(b)). 

24 (2) Abbreviated new drug applications under 

25 subsection (j) of such section. 


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1 (3) Applications for the license of a biological 

2 product under section 351 of the Public Health 

3 Service Act (42 U.S.C. 262). 

4 (4) Single, shared system REMS, as described 

5 in section 505–1(i) of the Food, Drug, and Cosmetic 

6 Act (21 U.S.C. 355–1(i)). 

7 (5) Controlled substances as defined in section 

8 102 of the Controlled Substances Act (21 U.S.C. 

9 802). 

10 (6) RISKMAPs or other risk management proc11 esses employed by the Food and Drug Administra12 tion. 

13 (c) ELEMENTS UNDER REVIEW.—In conducting the 

14 review under subsection (a), the Comptroller General shall 

15 examine each of the following elements with respect to 

16 each relevant category described in subsection (b). 

17 (1) For each type of application, and by year, 

18 the number of REMS required, submitted, volun19 tarily submitted, modified, added, approved, or re20 moved, and whether those REMS included elements 

21 to assure safe use, such as restricted distribution. 

22 (2) For each type of application, the number of 

23 REMS in effect at the time of the review and the 

24 number of years that each such REMS has been in 

25 effect at such time. 


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1 (3) If and how the REMS program has im2 proved drug safety, as compared to the time before 

3 the REMS program became effective, and how the 

4 Food and Drug Administration tracks such improve5 ments. 

6 (4) The burdens associated with REMS, includ7 ing burdens on patients, health care providers, ge8 neric drug manufacturers, brand drug manufactur9 ers, pharmacies, and wholesale distributors. 

10 (5) In the case of a REMS program for a drug 

11 containing a controlled substance, the coordination 

12 between the Food and Drug Administration and the 

13 Drug Enforcement Administration. 

14 (6) The effect of additional risk mitigation 

15 strategies, including non-REMS restricted distribu16 tion systems, imposed by companies outside of what 

17 is required under the REMS program. 

18 (7) The standards and policies applied by the 

19 Food and Drug Administration to require, modify, 

20 add, or remove a REMS, and how those standards 

21 and policies have changed since the REMS program 

22 became effective. 

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1 REMS restricted distribution systems, on generic 

2 entry into the marketplace. 

3 (9) The effect of REMS programs and addi4 tional risk mitigation strategies, including non5 REMS restricted distribution systems, on pharma6 ceutical prices. 

7 (d) REPORT.—Not later than May 1, 2017, the 

8 Comptroller General shall submit a report to the Com9 mittee on Health, Education, Labor, and Pensions of the 

10 Senate, the Special Committee on Aging of the Senate, 

11 and the Committee on Energy and Commerce of the 

12 House of Representatives, containing the results of the re13 view described in this section. 

Æ 


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