I 
113TH CONGRESS 
1ST SESSION H. R. 3116 
To promote the development of meaningful treatments for patients. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 17, 2013 
Mr. LANCE (for himself, Mr. ROSKAM, Mr. GUTHRIE, Mr. PAULSEN, Mr. 
RANGEL, Mr. RUNYAN, Ms. SCHWARTZ, Mr. KING of New York, Mr. 
MCCAUL, Mr. WALDEN, Mr. TIBERI, Mr. LOEBSACK, Mr. BEN RAY 
LUJA´N of New Mexico, Mr. ELLISON, Mr. JONES, and Mr. LONG) intro-
duced the following bill; which was referred to the Committee on Energy 
and Commerce, and in addition to the Committees on Ways and Means 
and the Judiciary, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To promote the development of meaningful treatments for 
patients. 
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 ‘‘Modernizing Our Drug 
& Diagnostics Evaluation and Regulatory Network Cures 
Act of 2013’’ or the ‘‘MODDERN Cures Act of 2013’’. 
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SEC. 2. TABLE OF CONTENTS. 
The table of contents for this Act is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
Sec. 3. Findings. 
Sec. 4. Definitions. 
TITLE I—ADVANCING DIAGNOSTICS FOR PATIENTS 
Sec. 101. Developing a common lexicon to facilitate progress on diagnostics. 
Sec. 102. Creating incentives for innovative diagnostics. 
Sec. 103. Promoting the development of innovative diagnostics. 
TITLE II—CAPTURING LOST OPPORTUNITIES FOR PATIENTS 
Sec. 201. Dormant therapies. 
Sec. 202. Study regarding new indications for existing therapies. 
SEC. 3. FINDINGS. 
The Congress makes the following findings: 
(1) More than 133 million Americans, or 45 
percent of the population, have at least one chronic 
condition. A quarter of Americans have multiple 
chronic conditions. 
(2) Chronic diseases have become the leading 
cause of death and disability in the United States. 
Seven out of every 10 deaths are attributable to 
chronic disease. Chronic diseases also compromise 
the quality of life of millions of Americans. 
(3) Despite $80 billion spent annually on re-
search and development, many diseases and condi-
tions lack effective treatments. 
(4) Many commonly used drugs are effective in 
only 50 to 75 percent of the patient population, 
which can lead to devastating long-term side effects, 
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resulting in the potential risks outweighing the bene-
fits for some patients. 
(5) Advanced and innovative diagnostic tests 
have the potential to dramatically increase the effi-
cacy and safety of drugs by better predicting how 
patients will respond to a given therapy. 
(6) Despite their promise, many drugs and 
diagnostics may go undeveloped due to uncertain 
regulatory and reimbursement processes, among 
other reasons. 
(7) In addition, there is reason to believe that 
potential treatments with tremendous value to pa-
tients are never developed or are discontinued during 
research and development due to insufficiencies in 
the intellectual property system. 
(8) It is in the public interest to address the 
hurdles that may be precluding new treatments from 
reaching patients and to remove the disincentives for 
the development of therapies for these unmet needs. 
SEC. 4. DEFINITIONS. 
In this Act: 
(1) The term ‘‘biological product’’ has the 
meaning given to that term in section 351 of the 
Public Health Service Act (42 U.S.C. 262). 
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(2) The term ‘‘drug’’ has the meaning given to 
that term in section 201 of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 321). 
(3) The term ‘‘medicine’’ means a biological 
product or a drug. 
(4) The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. 
TITLE I—ADVANCING 
DIAGNOSTICS FOR PATIENTS 
SEC. 101. DEVELOPING A COMMON LEXICON TO FACILI-
TATE PROGRESS ON DIAGNOSTICS. 
(a) IN GENERAL.—Not later than 180 days after the 
date of enactment of this Act, the Secretary shall establish 
within the Department of Health and Human Services the 
Advanced Diagnostics Education Council (in this section 
referred to as the ‘‘Council’’). 
(b) DUTIES.— 
(1) IN GENERAL.—The Council shall promote 
an improved understanding of key concepts related 
to innovative diagnostics by recommending standard 
terms and definitions for use by patients, physicians, 
health care providers, payers, and policymakers. 
(2) GUIDE.—The Secretary shall publish and 
disseminate a guide regarding such recommended 
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terms and definitions for patients, physicians, health 
care providers, payers, and policymakers. 
(3) REPORT.—Not later than 12 months after 
the establishment of the Council, the Secretary shall 
prepare and submit a report to the Congress and to 
the public on the Council’s deliberations, activities, 
and determinations with respect to meeting its du-
ties described in paragraphs (1) and (2). 
(c) CHAIRPERSON.—The Secretary, or the Sec-
retary’s designee, shall serve as chairperson of the Coun-
cil. 
(d) MEMBERS.—In addition to the Secretary, the 
Council shall consist of the following: 
(1) The head of each of the following agencies 
(or a designee thereof): 
(A) The National Institutes of Health. 
(B) The Centers for Disease Control and 
Prevention. 
(C) The Food and Drug Administration. 
(D) The Agency for Healthcare Research 
and Quality. 
(E) The Centers for Medicare & Medicaid 
Services. 
(F) The Department of Defense. 
(G) The Department of Veterans Affairs. 
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(H) The Health Resources and Services 
Administration. 
(I) The Substance Abuse and Mental 
Health Services Administration. 
(J) The Indian Health Service. 
(2) Seven members appointed by the Secretary 
from among individuals who collectively— 
(A) represent a broad range of perspec-
tives; and 
(B) have expertise in— 
(i) basic and translational research, 
including with respect to molecular biology 
and genetics; 
(ii) bioinformatics; 
(iii) the discovery, development, and 
commercialization of in vitro diagnostics; 
and 
(iv) law and ethics. 
(3) Four members appointed by the Secretary 
who are each a chief medical or scientific officer of 
a patient advocacy organization. 
(e) PUBLIC INPUT.—In carrying out its duties, the 
Council shall solicit input from relevant stakeholders and 
the public. 
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(f) TERMINATION.—The Council shall terminate 
after publishing the guide required by subsection (b)(2) 
and submitting the report required by subsection (b)(3), 
or later at the discretion of the Secretary. 
SEC. 
102. 
CREATING 
INCENTIVES 
FOR 
INNOVATIVE 
DIAGNOSTICS. 
(a) IMPROVEMENTS TO PROCESS FOR DETERMINING 
FEE SCHEDULE AMOUNTS FOR NEW TESTS.— 
(1) CLARIFYING
FACTORS
FOR
RATE-SET-
TING.—In determining the payment amount under 
gapfilling procedures (as described in section 
414.508(b) of title 42, Code of Federal Regulations, 
or any successor regulation to such section) for new 
clinical diagnostic laboratory tests under section 
1833(h)(8) of the Social Security Act (42 U.S.C. 
1395l(h)(8)), the Secretary of Health and Human 
Services (in this section referred to as the ‘‘Sec-
retary’’) shall take into account, as applicable and 
available, the following factors with respect to such 
a new test: 
(A) IMPACT ON PATIENT CARE.—The im-
pact of the new test on patient care, patient 
management, or patient treatment. 
(B) TECHNICAL
CHARACTERISTICS.—The 
technical characteristics of the new test, and 
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the resources required to develop, validate, and 
perform the new test. 
(C) CLAIMS DATA.—Data from claims for 
which payment is made under part B of title 
XVIII of the Social Security Act. 
(D) 
LABORATORY
CHARGES.—Amounts 
charged by laboratories to self-pay patients for 
the new test. 
(E) 
PRIVATE
INSURANCE
RATES.— 
Amounts paid to laboratories for such new test 
under private health insurance coverage offered 
in the group market and the individual market. 
(F) 
ADVISORY
PANEL
RECOMMENDA-
TIONS.—The findings and recommendations of 
the independent advisory panel convened under 
paragraph (2) with respect to that new test and 
any comments received during the open meeting 
of the advisory panel. 
(G) ADDITIONAL
FACTORS.—Such other 
factors as the Secretary may specify. 
(2) INPUT FROM PATIENTS, CLINICIANS, AND 
TECHNICAL EXPERTS.— 
(A) REQUIREMENT FOR INDEPENDENT AD-
VISORY
PANEL.—The Secretary shall convene 
an independent advisory panel from which the 
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Secretary shall request information and rec-
ommendations regarding any new test (as re-
ferred to under subparagraph (A) of section 
1833(h)(8) of the Social Security Act (42 
U.S.C. 1395l(h)(8))) for which payment is 
made under such section, including technical, 
clinical, and quality information. 
(B) COMPOSITION OF INDEPENDENT ADVI-
SORY
PANEL.—Subject to subparagraph (D), 
the independent advisory panel shall be com-
prised of 19 members, including— 
(i) 7 individuals with expertise and ex-
perience with clinical diagnostic laboratory 
tests including expertise in the technical 
characteristics of the new test as well as 
expertise in the requirements to develop, 
validate, and perform the new test; 
(ii) 3 representatives of patients, in-
cluding a patient representative for rare 
disorders; 
(iii) 3 clinicians who use results of the 
new test in patient care; 
(iv) 2 laboratorians; 
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(v) 2 individuals with expertise in the 
area of pharmacoeconomics or health tech-
nology assessment; and 
(vi) 2 individuals with expertise on the 
impact of new tests on quality of patient 
care, including genetic counselors. 
(C) TERMS.—Subject to subparagraph 
(D), a member of the panel shall be appointed 
to serve a term of 6 years, except with respect 
to the members first appointed, whose terms of 
appointment shall be staggered evenly over 2- 
year increments. 
(D) TEMPORARY
APPOINTMENT
OF
EX-
PERTS.—Insofar as the Secretary determines 
with respect to a new test that there are an in-
sufficient number of members of the panel with 
expertise with respect to that specific test, the 
Secretary may appoint individuals who have ex-
pertise pertaining to the new test involved to 
serve on the panel. 
(E) OPEN MEETINGS.—The Secretary shall 
receive or review the findings and recommenda-
tions of the independent advisory panel with re-
spect to the new tests described in subpara-
graph (A) involved during a meeting open to 
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the public and provide opportunity for public 
comment. 
(F) CLARIFICATION
OF
AUTHORITY
OF 
SECRETARY TO CONSULT CARRIERS.—Nothing 
in this section shall be construed as affecting 
the authority of the Secretary to consult with 
appropriate Medicare administrative contrac-
tors. 
(3) JUSTIFICATION FOR PAYMENT DETERMINA-
TIONS.— 
(A) INITIAL JUSTIFICATION.—With respect 
to decisions regarding payments made under 
the clinical laboratory fee schedule for new clin-
ical diagnostic laboratory tests, the Secretary 
shall publicly provide a justification for the pay-
ment basis and payment rate determination, in-
cluding a detailed summary of the information 
submitted to, or obtained by, the Secretary re-
garding the factors specified in paragraph (1), 
such that interested stakeholders can readily 
understand the Secretary’s rationale for the 
payment basis and rate determinations. 
(B) 
RECONSIDERATION
PERIOD.—After 
providing such justification for a payment basis 
and payment rate determination, the Secretary 
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shall provide for a reasonable period of recon-
sideration to receive any appeal of the deter-
mination and to evaluate any additional infor-
mation received regarding the justification and 
the factors specified in paragraph (1). 
(C) FINAL
DETERMINATION.—After the 
period of reconsideration the Secretary shall 
make a final payment basis and payment rate 
determination and provide a justification for 
such final determination explaining what addi-
tional information was evaluated during the re-
consideration and how such information was 
taken into account with respect to the final de-
termination. Nothing in this paragraph shall be 
construed as authorizing the Secretary to reveal 
proprietary information which is otherwise pro-
hibited from disclosure under law. 
(b) PROCESS
FOR ASSIGNMENT
OF TEMPORARY 
CODES FOR DIAGNOSTIC TESTS.—The Secretary shall es-
tablish a process for application for the assignment of a 
temporary national HCPCS code to uniquely identify a di-
agnostic test until a permanent national HCPCS code is 
available for assignment to that test. Assignments of a 
temporary national HCPCS code shall occur on a quar-
terly basis. The Secretary shall provide public notice 
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through the Centers for Medicare & Medicaid Services 
Web site of applications made for such temporary national 
HCPCS codes. Upon assignment of a temporary code 
under this process, the Secretary shall treat such test as 
a new test for purposes of section 1833(h)(8) of the Social 
Security Act. 
(c) DEVELOPMENT OF FURTHER IMPROVEMENTS IN 
RATE-SETTING PROCESSES.—The Secretary shall analyze 
the process used for the gapfilling procedure used in deter-
mining payment amounts for new clinical diagnostic lab-
oratory tests under section 1833(h)(8) of the Social Secu-
rity Act. Taking into account the changes made by this 
section, the Secretary shall identify further changes to im-
prove the accuracy and appropriateness of resulting rates 
and the openness, transparency, and predictability of the 
process. The Secretary shall examine what and how many 
entities should perform gapfilling, under contract or other-
wise, and how to ensure that the process is informed by 
appropriate expertise and proceeds in a transparent and 
accountable manner. The Secretary shall implement im-
provements in the process, insofar as these are possible 
under the law through regulations, after public notice and 
opportunity for comment. For changes the Secretary de-
termines would require a change in law, the Secretary 
shall transmit recommendations to the Speaker of the 
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House and the President of the Senate not later than July 
1, 2014. 
(d) DEFINITIONS.—For purposes of this section: 
(1) NEW
CLINICAL
DIAGNOSTIC
LABORATORY 
TESTS.—The term ‘‘new clinical diagnostic labora-
tory test’’ means a clinical diagnostic laboratory 
test— 
(A) that is assigned a new or substantially 
revised code on or after January 1, 2013; or 
(B) for which a temporary national 
HCPCS code is granted under subsection (b) on 
or after January 1, 2014. 
(2) SELF-PAY
PATIENT.—The term ‘‘self-pay 
patient’’ means, with respect to a health care item 
or service, an individual who pays out of pocket for 
such item or service and who does not have health 
insurance coverage for such item or service. 
(e) EFFECTIVE DATE.— 
(1) IN GENERAL.—Subject to paragraph (2), 
this section shall take effect on the date of enact-
ment of this Act and shall apply with respect to new 
clinical diagnostic laboratory tests. 
(2) APPLICATION OF JUSTIFICATIONS TO CUR-
RENT
RATE
DETERMINATIONS.—Subsection (a)(3) 
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shall apply to payment basis and payment rate de-
terminations made on or after January 1, 2013. 
SEC. 103. PROMOTING THE DEVELOPMENT OF INNOVATIVE 
DIAGNOSTICS. 
(a) DETERMINATION.— 
(1) REQUEST.—The manufacturer or sponsor 
of a medicine may request the Secretary to deter-
mine that— 
(A) a diagnostic test has been developed 
by, or with the participation of, the manufac-
turer or sponsor of the medicine; and 
(B) use of the diagnostic test, as dem-
onstrated through valid scientific information 
such as peer-reviewed literature— 
(i) provides for or improves the identi-
fication of a patient population for which 
the medicine will or will not be used in ac-
cordance with its approved indications; 
(ii) provides for or improves the deter-
mination of the most appropriate treat-
ment option for a patient population with 
the medicine in accordance with its ap-
proved indications; or 
(iii) provides for the detection of a 
qualifying pathogen (as defined in section 
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505E(f) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355(f)). 
(2) RESPONSE BY SECRETARY.—Not later than 
30 days after the submission of a request under 
paragraph (1), the Secretary, shall— 
(A) make the requested determination and 
publish a notice of such determination and any 
extension under this section resulting from such 
determination; or 
(B) provide an explanation to the manufac-
turer or sponsor submitting the request of why 
the determination is not warranted. 
(b) APPLICABLE EXTENSION PERIOD.—For purposes 
of subsections (c) and (d), the applicable extension period 
is— 
(1) with respect to a diagnostic test developed 
(as described in subsection (a)(1)(A)) contempora-
neously with the development of the medicine in-
volved, 12 months; and 
(2) with respect to a diagnostic test developed 
otherwise, 6 months. 
(c) EXTENSION FOR DRUGS.—If, at the request of 
the manufacturer or sponsor of a drug, the Secretary 
makes the determination described in subsection (a)(1) 
with respect to such drug and a diagnostic test, then— 
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(1) the four- and five-year periods described in 
subsections (c)(3)(E)(ii) and (j)(5)(F)(ii) of section 
505 of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 355), the three-year periods described in 
clauses (iii) and (iv) of subsection (c)(3)(E) and 
clauses (iii) and (iv) of subsection (j)(5)(F) of such 
section 505, or the seven-year period described in 
section 527 of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 360cc), as applicable, shall be 
extended by the applicable extension period; 
(2) if the drug is the subject of— 
(A) a listed patent for which a certification 
has 
been 
submitted 
under 
subsection 
(b)(2)(A)(ii) or (j)(2)(A)(vii)(II) of such section 
505; or 
(B) a listed patent for which a certification 
has 
been 
submitted 
under 
subsection 
(b)(2)(A)(iii) or (j)(2)(A)(vii)(III) of such sec-
tion 505, 
then the period during which an application may not 
be approved under subsection (c)(3) or (j)(5)(B) of 
such section 505 shall be extended by the applicable 
extension period after the date the patent expires 
(including any patent extensions); and 
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(3) if the drug is the subject of a listed patent 
for which a certification has been submitted under 
subsection (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of such 
section 505, and in the patent infringement litiga-
tion resulting from the certification the court deter-
mines that the patent is valid and would be in-
fringed, the period during which an application may 
not be approved under subsection (c)(3) or (j)(5)(B) 
of such section 505 shall be extended by the applica-
ble extension period after the date the patent expires 
(including any patent extension). 
(d) EXTENSION FOR BIOLOGICAL PRODUCTS.—If, at 
the request of the manufacturer or sponsor of a biological 
product, the Secretary makes the determination described 
in subsection (a)(1) with respect to such biological product 
and a diagnostic test, then the 12-year period described 
in subsection (k)(7)(A) of section 351 of the Public Health 
Service Act (42 U.S.C. 262), the 4-year period described 
in subsection (k)(7)(B) of such section 351, and the 7- 
year period described in section 527 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 360cc), as applicable, 
shall be extended by the applicable extension period. 
(e) RELATION
TO PEDIATRIC EXCLUSIVITY.—Any 
extension under subsection (c) or (d) of a period shall be 
in addition to any extension of the period under section 
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505A of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355a) with respect to the medicine. 
(f) LIMITATIONS.—Extensions under this section 
may apply— 
(1) not more than twice with respect to the 
same medicine; and 
(2) not more than once with respect to the 
same indication to be treated by the same medicine. 
TITLE II—CAPTURING LOST 
OPPORTUNITIES FOR PATIENTS 
SEC. 201. DORMANT THERAPIES. 
(a) DESIGNATION
AS DORMANT THERAPY.—The 
Secretary shall designate a medicine as a dormant therapy 
if— 
(1) the sponsor of the medicine submits a re-
quest for such designation meeting the requirements 
under subsection (b), and the request has not been 
withdrawn under subsection (d)(1); and 
(2) the Secretary determines that— 
(A) the medicine is being investigated or is 
intended to be investigated for an indication to 
address one or more unmet medical needs; 
(B) a suitable clinical plan for such inves-
tigations of the medicine has been developed by 
the sponsor; 
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(C) the sponsor intends to file an applica-
tion pursuant to section 505(b) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 
355(b)) or section 351(a) of the Public Health 
Service Act (42 U.S.C. 262(a)) for approval or 
licensing of the medicine for an indication de-
scribed in subparagraph (A); and 
(D) the request for designation was made 
on or before the date of submission of any ap-
plication under section 505 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 355) 
or section 351 of the Public Health Service Act 
(42 U.S.C. 262) for the approval or licensure of 
commercial marketing or use of a medicine that 
in the case of a drug shares an active moiety 
that is the same as, and in the case of a bio-
logic contains an active moiety that is highly 
similar to, an active moiety in the medicine for 
which designation is being requested. 
(b) REQUIREMENTS FOR REQUEST FOR DESIGNA-
TION
AS DORMANT THERAPY.—A request under sub-
section (a)(1) with respect to a medicine may only be made 
by the sponsor of the medicine and shall contain each of 
the following: 
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