I 

117TH CONGRESS 

1ST SESSION H. R. 3437 

To require the Secretary of Health and Human Services to guarantee 

BioBonds in order to provide funding for loans to eligible biomedical 

companies and universities to carry out clinical trials approved by the 

Food and Drug Administration, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 20, 2021 

Mr. RUSH (for himself, Mr. FITZPATRICK, Mr. BISHOP of Georgia, Mr. CARSON, Mr. COHEN, Mr. COOPER, Mr. DANNY K. DAVIS of Illinois, Mr. 

GRIJALVA, Mr. LEVIN of California, Mr. SCHNEIDER, Ms. SEWELL, and 

Mr. THOMPSON of Mississippi) introduced the following bill; which was 

referred to the Committee on Energy and Commerce 

A BILL 

To require the Secretary of Health and Human Services 

to guarantee BioBonds in order to provide funding for 

loans to eligible biomedical companies and universities 

to carry out clinical trials approved by the Food and 

Drug Administration, 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 ‘‘Long-term Opportuni5 ties for Advancing New Studies for Biomedical Research 

6 Act’’ or the ‘‘LOANS for Biomedical Research Act’’. 


kjohnson on DSK79L0C42PROD with BILLS
2 

•HR 3437 IH

1 SEC. 2. BIOBONDS PROGRAM. 

2 (a) IN GENERAL.—Not later than 180 days after the 

3 date of enactment of this Act, the Secretary of Health and 

4 Human Services, in consultation with the Secretary of the 

5 Treasury, shall establish a program, to be known as the 

6 ‘‘Biobonds Program’’, to increase innovative biomedical 

7 research into therapies to address unmet medical needs, 

8 under which biomedical researchers seeking to conduct 

9 clinical trials with respect to a drug or device, but who 

10 cannot secure appropriate funding to conduct such trials 

11 (as determined by the Secretary of the Treasury), receive 

12 financial assistance through— 

13 (1) the purchasing of loans by fiscal agents 

14 under section 3; and 

15 (2) the sale and guarantee of Biobonds com16 prised of these loans under section 4. 

17 (b) BIOMEDICAL RESEARCHERS ELIGIBLE FOR FI18 NANCIAL ASSISTANCE.— 

19 (1) IN GENERAL.—A person shall be eligible to 

20 receive a loan under the Biobonds Program if such 

21 person is conducting or seeking to conduct research 

22 with respect to a drug or device that is— 

23 (A) intended for use to meet an unmet 

24 medical need (as determined by the Secretary of 

25 Health and Human Services); and 


kjohnson on DSK79L0C42PROD with BILLS
3 

•HR 3437 IH

1 (B) under investigation in a controlled 

2 clinical trial under— 

3 (i) an investigational drug application 

4 in effect under section 505(i) of the Fed5 eral Food, Drug, and Cosmetic Act (21 

6 U.S.C. 355(i)) or section 351(a)(3) of the 

7 Public Health Service Act (42 U.S.C. 

8 262(a)(3)) (as applicable); or 

9 (ii) an investigational device exemp10 tion in effect under section 520(g) of the 

11 Federal Food, Drug, and Cosmetic Act (21 

12 U.S.C. 360j(g)). 

13 (2) RULEMAKING.—The Secretary of Health 

14 and Human Services, in consultation with the Sec15 retary of the Treasury, shall issue rules to carry out 

16 this subsection. 

17 SEC. 3. PURCHASE OF LOANS BY FISCAL AGENTS. 

18 (a) IN GENERAL.—Fiscal agents shall purchase 

19 loans— 

20 (1) made to an eligible recipient for the purpose 

21 of conducting the applicable clinical trial; and 

22 (2) with respect to which the fiscal agent deter23 mines that the borrower has the ability to repay the 

24 loan, based on collateral and financial capabilities 


kjohnson on DSK79L0C42PROD with BILLS
4 

•HR 3437 IH

1 and not on the prospects for success of the clinical 

2 trial. 

3 (b) PRIORITY FOR LOANS.—The Secretary of Health 

4 and Human Services shall issue rules to require fiscal 

5 agents, in purchasing loans under this section, to— 

6 (1) purchase loans with respect to a diverse 

7 range of biomedical projects and not to favor one 

8 disease or disability, but with priority given to loans 

9 with potential to address unmet public health needs 

10 across the spectrum of diseases and disabilities; 

11 (2) consider as an important criterion for pur12 chasing loans with respect to clinical trials that they 

13 are being conducted by women researchers or re14 searchers who are members of a racial and ethnic 

15 minority group or disabled; and 

16 (3) prioritize purchasing loans with respect to 

17 clinical trials that include, where appropriate, rep18 resentative levels of women, members of a racial and 

19 ethnic minority groups, disabled individuals, and 

20 other diverse participants, as specified in guidance 

21 issued under section 505(b) of the Federal Food, 

22 Drug, and Cosmetic Act. 

23 (c) MAXIMUM LOAN AMOUNT.—A fiscal agent may 

24 not purchase loans in any one year with respect to a single 

25 recipient in an amount more than $25,000,000. 


kjohnson on DSK79L0C42PROD with BILLS
5 

•HR 3437 IH

1 (d) LOAN TERMS AND CONDITIONS.—The Secretary 

2 of Health and Human Services, in consultation with the 

3 Secretary of the Treasury, shall issue rules to— 

4 (1) establish criteria for the terms for loans 

5 that are eligible for purchase under this section; 

6 (2) establish criteria for the interest rate for 

7 loans that are eligible for purchase under this sec8 tion, which shall be based on applicable rates for ob9 ligations of the Department of the Treasury of com10 parable maturity plus a rate to be determined by the 

11 Secretary of the Treasury to reflect— 

12 (A) prevailing market conditions; 

13 (B) taxpayer protection; and 

14 (C) the need to ensure ample funding for 

15 clinical trials described under section 2; and 

16 (3) permit the use of warrants and similar in17 struments with respect to loans that are eligible for 

18 purchase under this section, where necessary to pro19 tect taxpayer interests. 

20 SEC. 4. BIOBONDS. 

21 (a) ISSUANCE.—The fiscal agents shall issue bonds, 

22 to be known as ‘‘BioBonds’’, collateralized by loans pur23 chased under this Act, and sell the BioBonds to investors. 

24 (b) BIOBOND GUARANTEE.—The Secretary of 

25 Health and Human Services shall provide a guarantee on 


kjohnson on DSK79L0C42PROD with BILLS
6 

•HR 3437 IH

1 the payment of principal (but not the payment of interest) 

2 for each BioBond, on a bond-by-bond basis, in an amount 

3 to be determined by the Secretary, but in no case may 

4 the amount of such guarantee be more than 90 percent 

5 of the principal of the BioBond. 

6 (c) SIZE OF ISSUANCES.—The Secretary of Health 

7 and Human Services, in consultation with the Secretary 

8 of the Treasury, shall establish the size of each BioBond 

9 issuance, to ensure market acceptance, portfolio diver10 sification, and the protection of taxpayer interests. 

11 (d) AUCTIONS.—The Secretary of Health and 

12 Human Services may— 

13 (1) authorize fiscal agents to use an auction to 

14 select the purchasers of BioBonds; and 

15 (2) require such auction to include a process 

16 that minimizes the risk to the Government of the 

17 Federal guarantee involved by allowing bidders for a 

18 BioBond to compete against each other by bidding 

19 on the percentage of the Federal guarantee under 

20 subsection (b) with respect to the BioBond, with the 

21 bid for the lowest percentage winning the auction, 

22 taking into account other terms and conditions set 

23 by the issuer to ensure the lowest total cost to the 

24 Government. 


kjohnson on DSK79L0C42PROD with BILLS
7 

•HR 3437 IH

1 (e) PORTFOLIO DIVERSITY.—With respect to an 

2 issuance of BioBonds and the loans collateralizing such 

3 issuance, no more than 15 percent of the principal amount 

4 of such issuance may relate to a group of related diseases 

5 or disabilities (as defined by the Secretary of Health and 

6 Human Services). 

7 (f) PRIORITIZATION OF TAXPAYER INTERESTS.—All 

8 BioBonds shall be structured to give first priority to pro9 tecting the interests of the United States by ensuring 

10 that— 

11 (1) all cash proceeds received from the repay12 ment of a BioBond are first used to reduce the 

13 amount of principal guaranteed by the Secretary of 

14 Health and Human Services; and 

15 (2) the Secretary of Health and Human Serv16 ices has a senior claim on all assets and collateral 

17 under a BioBond to the extent the guarantee pro18 vided by the Secretary is not extinguished. 

19 SEC. 5. FISCAL AGENTS. 

20 (a) IN GENERAL.—The Secretary of the Treasury 

21 shall contract with institutions to carry out the duties of 

22 fiscal agents under this Act, under such criteria as the 

23 Secretary of Health and Human Services, in consultation 

24 with the Secretary of the Treasury, determines appro25 priate. 


kjohnson on DSK79L0C42PROD with BILLS
8 

•HR 3437 IH

1 (b) SOUND UNDERWRITING PRACTICES.—The Sec2 retary of the Treasury shall issue rules to ensure that fis3 cal agents use sound underwriting practices that protect 

4 the interests of— 

5 (1) the United States; 

6 (2) BioBond investors; and 

7 (3) the long-term promotion of innovative bio8 medical research into therapies to address unmet 

9 medical needs. 

10 (c) COMPENSATION.—A fiscal agent shall be com11 pensated for performing duties under this Act from the 

12 proceeds from the sale of Biobonds issued by the fiscal 

13 agent, at such rate and on such terms as the Secretary 

14 of the Treasury may provide. 

15 (d) RULEMAKING.—Not later than 180 days after the 

16 date of enactment of this Act, the Secretary of the Treas17 ury shall issue final rules to carry out this section. 

18 SEC. 6. REPORTS. 

19 (a) GAO STUDY AND REPORTS ON OTHER RE20 SEARCH PROJECTS.— 

21 (1) ONGOING STUDY.—The Comptroller Gen22 eral of the United States shall carry out an ongoing 

23 study to consider whether a program similar to the 

24 BioBonds Program should be established for other 

25 biomedical research projects. 


kjohnson on DSK79L0C42PROD with BILLS
9 

•HR 3437 IH

1 (2) REPORT.—The Comptroller General shall 

2 issue a report to the Congress, not less frequently 

3 than annually, on all findings and determinations 

4 made in carrying out the study required under para5 graph (1). 

6 (b) REPORTS ON THE BIOBONDS PROGRAM.—Not 

7 later than 2 years after the date on which BioBonds are 

8 first issued, and annually thereafter during the period 

9 ending on the date that is 4 years after the date on which 

10 BioBonds are first issued, the Comptroller General and 

11 the Secretary of Health and Human Services shall each 

12 issue a separate report to the Congress on— 

13 (1) the progress of the issuance of BioBonds; 

14 (2) the reasons for any problems achieving de15 sired volumes of BioBonds or the ability of the Pro16 gram to proceed at a faster pace; 

17 (3) an analysis of the risk to the Government 

18 in providing the Federal guarantee described under 

19 section 4(b); 

20 (4) any recommended improvements to the Pro21 gram; and 

22 (5) any other matter that the Comptroller Gen23 eral or the Secretary, respectively, determines is ap24 propriate. 


kjohnson on DSK79L0C42PROD with BILLS
10 

•HR 3437 IH

1 SEC. 7. AUTHORIZATION OF APPROPRIATIONS. 

2 (a) IN GENERAL.—There is authorized to be appro3 priated to the Secretary of Health and Human Services 

4 to pay for the cost of guaranteeing BioBonds under this 

5 Act $10,000,000,000 for each of fiscal years 2022, 2023, 

6 and 2024. 

7 (b) PROGRAM FUNDING.— 

8 (1) ADMINISTRATIVE EXPENSES PAID FROM

9 BOND SALES.—Except as provided under paragraph 

10 (2), the cost of carrying out this Act, including the 

11 cost to the Secretary of Health and Human Services 

12 in administering the BioBond Program, shall be re13 covered from the proceeds from the sale of BioBonds 

14 or from fees as set forth in paragraph (3). 

15 (2) SPECIFIC APPROPRIATION OR CONTRIBU16 TION.—No guarantee shall be made under this Act 

17 unless— 

18 (A) an appropriation for the full cost of 

19 the guarantee has been made; 

20 (B) the Secretary has received from the 

21 BioBond issuer a payment in full for the cost 

22 of the guarantee; or 

23 (C) a combination of an appropriation and 

24 the deposit of a payment from the bond issuer 

25 into the Treasury has been made in a sufficient 

26 amount to cover the full cost of the guarantee. 


kjohnson on DSK79L0C42PROD with BILLS
11 

•HR 3437 IH

1 (3) COST OF GUARANTEES.— 

2 (A) IN GENERAL.—The Secretary of 

3 Health and Human Services shall charge and 

4 collect fees for guarantees under this Act in 

5 amounts the Secretary determines are sufficient 

6 to recover applicable administrative expenses. 

7 (B) AVAILABILITY.—Fees collected under 

8 this subsection— 

9 (i) shall be deposited by the Secretary 

10 into the Treasury; and 

11 (ii) are authorized to remain available 

12 until expended. 

13 SEC. 8. DEFINITIONS. 

14 In this Act: 

15 (1) COST.—The term ‘‘cost’’ has the meaning 

16 given to the term ‘‘cost of a loan guarantee’’ in sec17 tion 502(5)(C) of the Federal Credit Reform Act of 

18 1990 (2 U.S.C. 661a(5)(C)). 

19 (2) ELIGIBLE RECIPIENT.—The term ‘‘eligible 

20 recipient’’ means a person described under section 

21 2(b). 

22 (3) FISCAL AGENT.—The term ‘‘fiscal agent’’ 

23 means a person selected as a fiscal agent under sec24 tion 5(a). 

Æ 


kjohnson on DSK79L0C42PROD with BILLS