I
106TH CONGRESS
2D SESSION
H. R. 4525
To amend the Public Health Service Act to establish a program under
which the Secretary of Health and Human Services makes cash awards
to private entities that discover drugs that cure or prevent diseases
whose cure or prevention is designated by the Secretary as a national
priority.
IN THE HOUSE OF REPRESENTATIVES
MAY 23, 2000
Mr. STARK introduced the following bill; which was referred to the Committee
on Commerce
A BILL
To amend the Public Health Service Act to establish a pro-
gram under which the Secretary of Health and Human
Services makes cash awards to private entities that dis-
cover drugs that cure or prevent diseases whose cure
or prevention is designated by the Secretary as a national
priority.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Affordable Break-
through Drug Incentive Act of 2000’’.
SEC. 2. ESTABLISHMENT OF PROGRAM OF CASH AWARDS
FOR DISCOVERY OF DRUGS PROVIDING DIS-
EASE CURES OR PREVENTION.
Part G of title IV of the Public Health Service Act
(42 U.S.C. 288 et seq.) is amended by adding at the end
the following section:
‘‘AWARD FOR DISCOVERY OF DRUG PROVIDING DISEASE
CURE OR PREVENTION
‘‘SEC. 489A. (a) IN GENERAL.—From amounts ap-
propriated under subsection (f), the Secretary may make
a cash award to any private entity (whether nonprofit or
for profit) that, under section 505(b) of the Federal Food,
Drug, and Cosmetic Act, submits to the Secretary an ap-
plication for a drug that is approved by the Secretary as
a cure for a disease on the list under subsection (b) or
as a means of preventing the occurrence of a disease on
the list.
‘‘(b) NATIONAL PRIORITIES FOR CURE OR PREVEN-
TION; LIST OF DISEASES.—
‘‘(1) IN
GENERAL.—Not later than 90 days
after the date on which amounts are first made
available under subsection (f), the Secretary shall
publish in the Federal Register a list of the diseases
selected by the Secretary under paragraph (2), to-
gether with a statement explaining the availability of
cash awards under subsection (a) and identifying the
amount for the purpose of providing to the recipient
such reimbursement for the tax liability resulting
from the award and the reimbursement as will pro-
vide the recipient with an after-tax award that is
substantially equivalent to the selected amount.
‘‘(d) CERTAIN CONDITIONS.—
‘‘(1) IN GENERAL.—An award may be made
under subsection (a) only if the private entity in-
volved has entered into an agreement described in
paragraph (2) or an agreement described in para-
graph (3). The Secretary shall determine which of
such paragraphs will be applied to the entity.
‘‘(2) REASONABLE
PROFIT.—For purposes of
paragraph (1), an agreement described in this para-
graph is an agreement between the private entity in-
volved and the Secretary governing the price at
which the drug involved will be sold by the entity
(and any successors of the entity regarding the right
to market the drug commercially). In negotiating the
price, the Secretary shall take into account a reason-
able profit for the entity, (after allowing for a rea-
sonable cost of production and overhead and admin-
istrative costs), and shall consider the likely price at
which the drug will be sold at retail.
‘‘(3) TRANSFER OF PATENT RIGHTS.—
‘‘(A) TRANSFER
TO
FEDERAL
GOVERN-
MENT.—For purposes of paragraph (1), an
agreement described in this paragraph is an
agreement between the private entity involved
and the Secretary under which the entity trans-
fers to the Secretary all rights of the entity
with respect to patents for the drug involved.
The agreement may provide that the Secretary
will not with respect to the drug approve any
application under section 505(j) of the Federal
Food, Drug, and Cosmetic Act during the
*[180]-day period beginning on the date on
which the rights are transferred to the Sec-
retary, or during such shorter period as the
Secretary and the entity designate in the agree-
ment.
‘‘(B) FEDERAL EXERCISE OF RIGHTS; FA-
CILITATION
OF
GENERIC
DRUG
APPLICA-
TIONS.—The Secretary shall assert patent
rights transferred under subparagraph (A)
against any private entity that seeks to claim
the drug by patent. The Secretary may not as-
sert such rights against any entity that with re-
spect to the drug submits to the Secretary an
application under section 505(j) of the Federal
Food, Drug, and Cosmetic Act, except that the
Secretary may impose a reasonable fee for for-
bearance regarding such rights. Such fees are
available to the Secretary for awards under sub-
section (a).
‘‘(4) ADVANCE
NOTICE
TO
AWARD
CAN-
DIDATE.—Upon the request of a private entity that
expresses an interest in developing a drug that may
be a candidate for an award under subsection (a),
the Secretary may enter into an agreement with the
entity specifying which of paragraphs (2) and (3)
will be applied by the Secretary to the entity in the
event that the entity otherwise qualifies for an
award for the drug.
‘‘(e) DISCRETION OF SECRETARY.—Determinations
of the Secretary regarding the selection of recipients for
awards under subsection (a), the amount of such awards,
and the inclusion of diseases on the list under subsection
(b) are committed to the discretion of the Secretary, and
are not subject to judicial review.
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—For the
purpose of carrying out this section, there are authorized
to be appropriated such sums as may be necessary for
each of the fiscal years 2001 through 2010.’’.
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