I
106TH CONGRESS
2D SESSION
H. R. 4705
To provide for the recoupment of a portion of the Federal investment in
research and development supporting the production and sale of pharma-
ceutical, biologic, or genetic products.
IN THE HOUSE OF REPRESENTATIVES
JUNE 21, 2000
Mr. CAPUANO (for himself and Mr. STARK) introduced the following bill;
which was referred to the Committee on Commerce, and in addition to
the Committees on Science, and Ways and Means, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of
such provisions as fall within the jurisdiction of the committee concerned
A BILL
To provide for the recoupment of a portion of the Federal
investment in research and development supporting the
production and sale of pharmaceutical, biologic, or ge-
netic products.
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 ‘‘Public Investment Re-
covery Act of 2000’’.
SEC. 2. RECOUPMENT REQUIREMENT.
Each transaction entered into by an agency of the
Federal Government under which Federal support is pro-
vided for research and development which leads or may
lead to the production and sale of a pharmaceutical, bio-
logic, or genetic product shall include provisions requiring
that payments described in section 4 shall be paid annu-
ally to the Federal agency for deposit in the Public Invest-
ment Recovery Trust Fund established under section 6.
SEC. 3. PUBLIC INVESTMENT RECOVERY BOARD.
(a) ESTABLISHMENT.—There shall be established a
Public Investment Recovery Board, consisting of—
(1) a chairperson, who shall be an employee of
the National Science Foundation appointed by the
Director of the National Science Foundation;
(2) a representative of the Internal Revenue
Service;
(3) a representative of the Food and Drug Ad-
ministration;
(4) a representative of the Department of the
Treasury;
(5) a representative of the National Institutes
of Health;
(6) a representative of the Office of Science and
Technology Policy; and
(7) 3 nonvoting members appointed under sub-
section (b)(1).
(b) NONVOTING MEMBERS.—
(1) APPOINTMENT.—The President shall ap-
point 3 nonvoting members to the Board from
among appropriate nonprofit scientific and medical
societies, such as the American Association of Med-
ical Colleges, the American Pharmaceutical Associa-
tion, and the Biotechnology Industry Organization.
The President shall seek to ensure broad representa-
tion of appropriate points of view in making appoint-
ments under this paragraph.
(2) TERMS.—Members appointed under para-
graph (1) shall serve 3-year terms, except that of
the initial appointments 1 member shall be ap-
pointed to a 1-year term and 1 member shall be ap-
pointed to a 2-year term.
(3) 
COMPENSATION.—Members 
appointed
under this subsection shall receive no compensation
for service on the Board.
(c) FUNCTIONS.—The Board shall—
(1) determine, for purposes of section 4(a), the
total amount of profits that have been received with
respect to a pharmaceutical, biologic, or genetic
product, including profits received by a person not
a party to the transaction with the Federal agency;
and
(2) make calculations under section 5 of the
proportion of Federal support for research and de-
velopment which lead to the production and sale of
a pharmaceutical, biologic, or genetic product.
(d) 
ADMINISTRATIVE
SUPPORT.—The 
National
Science Foundation shall provide necessary administrative
support for the Board and its staff.
SEC. 4. AMOUNT OF PAYMENT REQUIRED.
(a) GENERAL RULE.—Except as provided in sub-
section (b), the amount that shall be required to be paid
under section 2 to a Federal agency shall be equal to the
total amount of profits determined by the Board under
section 3(c)(1) to have been received with respect to the
pharmaceutical, biologic, or genetic product up to the time
of payment, multiplied by the percentage calculated by the
Board under section 5.
(b) LIMITATION.—No annual payment shall be re-
quired under this Act that exceeds 20 percent of the prof-
its determined by the Board to have been received during
the year for which the payment is made.
(c) EXPIRATION OF REQUIREMENT.—The require-
ment to make payments under this Act shall expire on
the expiration of the initial patent issued for the pharma-
ceutical, biologic, or genetic product.
SEC. 5. CALCULATION OF PERCENTAGE.
The Board shall calculate, for each pharmaceutical,
biologic, or genetic product sold for which Federal support
was provided through a transaction described in section
2, the percentage that Federal support represents of the
total research and development that supported the produc-
tion and sale of the product.
SEC. 6. PUBLIC INVESTMENT RECOVERY TRUST FUND.
(a) ESTABLISHMENT.—The Secretary of the Treas-
ury shall establish an account in the Treasury to be known
as the ‘‘Public Investment Recovery Trust Fund’’, into
which shall be deposited all payments received by the Fed-
eral Government pursuant to this Act.
(b) PURPOSES.—Amounts in the Trust Fund may be
used, to the extent provided in advance in appropriations
Acts, for the following purposes:
(1) Not more than 2 percent may be used by
the Food and Drug Administration or the National
Institutes of Health to support research on the com-
parative efficiency and effectiveness of pharma-
ceutical, biologic, or genetic products and the report-
ing thereof.
(2) Not more than—
(A) 20 percent, in each of the first 5 fiscal
years after the date of the enactment of this
Act; and
(B) 3 percent, in subsequent fiscal years,
may be used to help pay the administrative expenses
of carrying out this Act.
(3) Not more than 20 percent may be used by
the National Institutes of Health to support phar-
maceutical, biologic, or genetic research and develop-
ment, unless no Medicare prescription drug benefit
has been enacted by the Congress, in which case the
remainder of the funds in the Trust Fund may be
used for the purpose under this paragraph.
(4) If a Medicare prescription drug benefit has
been enacted by the Congress, the remainder of the
funds in the Trust Fund shall be used for financing
such prescription drug benefit, except that any
amounts available in the Trust Fund in excess of
amounts required for financing such prescription
drug benefit may be used for the purpose stated in
paragraph (3).
SEC. 7. DEFINITIONS.
In this Act—
(1) the term ‘‘Board’’ means the Public Invest-
ment Recovery Board established under section 3;