I 
116TH CONGRESS 
1ST SESSION H. R. 5031 
To authorize the collection of supplemental payments to increase congressional 
investments in medical research, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 8, 2019 
Mr. WELCH introduced the following bill; which was referred to the Committee 
on Energy and Commerce 
A BILL 
To authorize the collection of supplemental payments to in-
crease congressional investments in medical research, and 
for other purposes. 
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 ‘‘Medical Innovation Act 
of 2019’’. 
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SEC. 2. AUTHORITY TO ASSESS AND USE SUPPLEMENTAL 
PAYMENTS TO INCREASE CONGRESSIONAL 
INVESTMENTS IN MEDICAL RESEARCH. 
(a) IN GENERAL.—Section 301 of the Public Health 
Service Act (42 U.S.C. 241) is amended by adding at the 
end the following: 
‘‘(i) AUTHORITY TO ASSESS
AND USE SUPPLE-
MENTAL PAYMENTS TO INCREASE CONGRESSIONAL IN-
VESTMENTS IN MEDICAL RESEARCH.— 
‘‘(1) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) COVERED BLOCKBUSTER DRUG.— 
‘‘(i) IN GENERAL.—The term ‘covered 
blockbuster drug’ means any product— 
‘‘(I) for which the covered manu-
facturer reported to the Securities and 
Exchange Commission on a form, in-
cluding form 10–K or form 20–F, or 
is otherwise determined by the Sec-
retary to have received, at least 
$1,000,000,000 in net sales in the 
previous calendar year; and 
‘‘(II) that was developed, in 
whole or in part, through Federal 
Government investments in medical 
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research, as the Secretary determines 
in accordance with clause (ii). 
‘‘(ii) DETERMINATION
OF
FEDERAL 
GOVERNMENT
INVESTMENT.—In 
deter-
mining under clause (i)(II) whether a 
product was developed, in whole or in part, 
through Federal Government investments 
in medical research, the Secretary shall 
consider whether information included in 
any patent that claims the covered block-
buster drug or that claims a method of 
using such covered blockbuster drug and 
with respect to which a claim of patent in-
fringement could reasonably be asserted if 
a person not licensed by the owner engaged 
in the manufacture, use, or sale of the cov-
ered blockbuster drug, or any element of 
the covered blockbuster drug— 
‘‘(I) relates to, or is based upon, 
prior science conducted, in whole or in 
part, by a person that is or was fund-
ed by the Federal Government; 
‘‘(II) relates to, acts upon, or is 
based upon knowledge of a signaling 
pathway, cellular receptor, ion chan-
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nel, protein, DNA or RNA sequence 
or mutation, virus, or any other sci-
entific 
information 
discovered, 
in 
whole or in part, through research 
funded by the Federal Government; or 
‘‘(III) relates to, or is based 
upon, through the manufacturing 
process or testing process of the cov-
ered blockbuster drug, technology de-
rived, in whole or in part, through re-
search funded by the Federal Govern-
ment. 
‘‘(B) 
COVERED
MANUFACTURER.—The 
term ‘covered manufacturer’ means a person— 
‘‘(i) that holds an application ap-
proved under section 505 of the Federal 
Food, Drug, and Cosmetic Act or a license 
under section 351 of this Act for a covered 
blockbuster drug; or 
‘‘(ii) who is a co-licensed partner of 
the person described in clause (i) that ob-
tains the covered blockbuster drug directly 
from a person described in this clause or 
clause (i). 
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‘‘(C) 
COVERED
SETTLEMENT
AGREE-
MENT.— 
‘‘(i) IN GENERAL.—The term ‘covered 
settlement agreement’ means a settlement 
agreement (including a consent decree), 
and except as provided under clause (ii)— 
‘‘(I) that is between an agency 
and a covered manufacturer; 
‘‘(II) that relates to— 
‘‘(aa) an alleged violation of, 
or 
a 
penalty 
under, 
section 
1128A of the Social Security Act 
or section 1128B of the Social 
Security Act; 
‘‘(bb) an alleged violation 
under subchapter III of chapter 
37 of title 31, United States 
Code (commonly known as the 
‘False Claims Act’); 
‘‘(cc) an alleged violation 
under the Federal Food, Drug, 
and Cosmetic Act; or 
‘‘(dd) an alleged violation of 
any other Federal civil or crimi-
nal law; and 
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‘‘(III) under the terms of which a 
covered manufacturer is obligated in 
an amount not less than a total of 
$1,000,000, including civil or criminal 
penalties with respect to any parties, 
including governmental and private 
entities. 
‘‘(ii) EXCEPTION FOR SETTLEMENTS 
NOT
AFFECTING
TAXPAYERS
OR
PUBLIC 
HEALTH.—The term ‘covered settlement 
agreement’ does not include any settlement 
agreement that the Secretary determines— 
‘‘(I) does not involve an alleged 
criminal violation; and 
‘‘(II) does not to relate to— 
‘‘(aa) allegations of fraud re-
sulting, or potentially resulting, 
in a loss of taxpayer dollars; or 
‘‘(bb) allegations of conduct 
having an adverse impact, or a 
potentially adverse impact, on the 
health of the public. 
‘‘(D) PERSON.—The term ‘person’ has the 
meaning given such term in section 201(e) of 
the Federal Food, Drug, and Cosmetic Act. 
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‘‘(E) 
PRODUCT.—The 
term 
‘product’ 
means a drug approved under section 505 of 
the Federal Food, Drug, and Cosmetic Act or 
licensed under section 351, and subject to sec-
tion 503(b)(1) of the Federal Food, Drug, and 
Cosmetic Act. 
‘‘(2) SUPPLEMENTAL PAYMENTS TO INCREASE 
CONGRESSIONAL
INVESTMENTS
IN
MEDICAL
RE-
SEARCH.— 
‘‘(A) SUPPLEMENTAL
PAYMENT
ASSESS-
MENT AND COLLECTION.—Beginning with the 
first fiscal year that begins at least 60 days 
after the date of enactment of the Medical In-
novation Act of 2019, and each subsequent fis-
cal year, the Secretary shall, in accordance with 
this paragraph, assess and collect supplemental 
payments to increase congressional investments 
in medical research from each covered manufac-
turer described in subparagraph (B). 
‘‘(B) CRITERIA
FOR
ASSESSING
PAY-
MENTS.—A covered manufacturer that meets 
both of the following criteria for a calendar year 
(referred to in this subparagraph and subpara-
graph (D) as the ‘applicable calendar year’) 
shall be assessed a supplemental payment under 
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subparagraph (A) for the fiscal year beginning 
in the proceeding calendar year: 
‘‘(i) A covered manufacturer that, 
during the 5-year period immediately pre-
ceding the date on which the payment is 
assessed, but not before the date of enact-
ment of the Medical Innovation Act of 
2019, entered into a covered settlement 
agreement. 
‘‘(ii) A covered manufacturer that re-
ported 
net 
income 
of 
at 
least 
$1,000,000,000 to the Securities and Ex-
change Commission on a form, including 
form 10–K or form 20–F, or that the Sec-
retary otherwise determines to have had 
net income of at least $1,000,000,000— 
‘‘(I) during the applicable cal-
endar year; or 
‘‘(II) during the calendar year in 
which the covered manufacturer en-
tered into a covered settlement agree-
ment, as described in clause (i). 
‘‘(C) PAYMENT AMOUNT.— 
‘‘(i) IN GENERAL.—A covered manu-
facturer described in subparagraph (B) 
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shall be assessed a supplemental payment 
to increase congressional investments in 
medical research for a fiscal year equal to 
the applicable percentage of the net income 
of the covered manufacturer, as reported 
or determined as described in subpara-
graph (B)(ii), for the previous calendar 
year, multiplied by the number of covered 
blockbuster drugs of the covered manufac-
turer for that year. 
‘‘(ii) APPLICABLE PERCENTAGE.—For 
purposes of determining the amount of a 
supplemental payment under clause (i), the 
applicable percentage of the net income of 
a covered manufacturer is— 
‘‘(I) 0.75 percent, in the case of 
a covered settlement agreement under 
the terms of which the total obligation 
of a covered manufacturer is in an 
amount 
that 
is 
less 
than 
$500,000,000; 
‘‘(II) 1 percent, in the case of a 
covered settlement agreement under 
the terms of which the total obligation 
of a covered manufacturer is in an 
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amount that is at least $500,000,000 
but less than $1,000,000,000; or 
‘‘(III) 1.5 percent, in the case of 
a covered settlement agreement under 
the terms of which the total obligation 
of a covered manufacturer is in an 
amount 
that 
is 
at 
least 
$1,000,000,000. 
‘‘(D) ANNUAL LIMITATION.—In the case of 
a covered manufacturer that entered into more 
than 1 covered settlement agreement during an 
applicable calendar year, such covered manufac-
turer shall be assessed a supplemental payment 
under subparagraph (C) only with respect to 
the covered settlement agreement under which 
the total amount obligated of the covered manu-
facturer, 
as 
described 
in 
paragraph 
(1)(C)(i)(III), is the highest. 
‘‘(E) PUBLICATION
OF
PAYMENTS.—Be-
ginning with the first fiscal year that begins at 
least 60 days after the date of enactment of the 
Medical Innovation Act of 2019, and not later 
than 60 days before the start of each fiscal 
year, the Secretary shall publish in the Federal 
Register, with respect to the next fiscal year— 
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‘‘(i) a list of covered manufacturers 
subject to the payment under this para-
graph; 
‘‘(ii) a list of the covered blockbuster 
drugs of each such covered manufacturer; 
‘‘(iii) the total payment amount as-
sessed to each such covered manufacturer; 
and 
‘‘(iv) the manner in which payments 
assessed under this paragraph will be col-
lected. 
‘‘(F) CREDITING
AND
AVAILABILITY
OF 
SUPPLEMENTAL PAYMENTS.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), payments authorized under this para-
graph shall be collected and available for 
obligation only to the extent and in the 
amount provided in advance in appropria-
tions Acts. Such payments are authorized 
to remain available until expended. 
‘‘(ii) COLLECTIONS
AND
APPROPRIA-
TIONS ACTS.— 
‘‘(I) IN
GENERAL.—The pay-
ments authorized by this paragraph— 
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‘‘(aa) subject to subclause 
(II), shall be collected and avail-
able in each fiscal year in an 
amount not to exceed the amount 
specified in appropriation Acts, 
or otherwise made available for 
obligation, for such fiscal year; 
and 
‘‘(bb) shall be available to 
the Secretary to distribute, as de-
scribed in paragraph (3). 
‘‘(II) PROVISION
FOR
EARLY 
PAYMENTS.—Payments 
authorized 
under clause (iii) for a fiscal year, 
prior to the due date for such pay-
ments, may be accepted by the Sec-
retary. 
‘‘(iii) AUTHORIZATION OF APPROPRIA-
TIONS.—For the first fiscal year that be-
gins at least 60 days after the date of en-
actment of the Medical Innovation Act of 
2019 and for each subsequent fiscal year, 
there is authorized to be appropriated for 
the purpose of making distributions under 
paragraph (3) to meet the priorities de-
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scribed in paragraph (4), an amount equal 
to the total amount of supplemental pay-
ments assessed for such fiscal year under 
this paragraph. 
‘‘(G) REMITTING
PAYMENTS.—A covered 
manufacturer assessed a supplemental payment 
under subparagraph (A) shall remit the pay-
ment no later than the first business day on or 
after October 1 of each fiscal year, or the first 
business day after the date of enactment of an 
appropriations Act providing for the collection 
and obligation of supplemental payments for 
such fiscal year. 
‘‘(H) COLLECTION
OF
ASSESSED
PAY-
MENTS THAT ARE NOT REMITTED.—In any case 
where the Secretary does not receive a supple-
mental payment assessed under subparagraph 
(A) within 30 days after it is due, such supple-
mental payment shall be treated as a claim of 
the United States Government subject to sub-
chapter II of chapter 37 of title 31, United 
States Code. 
‘‘(I) SUPPLEMENT NOT SUPPLANT.—Pay-
ments collected under this paragraph shall be 
used to supplement and not supplant other 
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Federal funds made available to carry out the 
priorities described in paragraph (4). 
‘‘(3) DISTRIBUTION OF PAYMENTS TO AGEN-
CIES TO INCREASE CONGRESSIONAL INVESTMENTS 
IN MEDICAL RESEARCH.— 
‘‘(A) DISTRIBUTION TO AGENCIES.—Sub-
ject to subparagraph (C), for the purposes de-
scribed in paragraph (4), the Secretary shall 
distribute the amounts appropriated under 
paragraph (2)(F)(iii) during a fiscal year to— 
‘‘(i) the Food and Drug Administra-
tion, to be used in accordance with para-
graph (4)(A); and 
‘‘(ii) the National Institutes of Health 
organized under title IV, to be used in ac-
cordance with paragraph (4)(B). 
‘‘(B) 
DISTRIBUTION
RATIO
BETWEEN 
AGENCIES.—The amount that the Secretary 
distributes to an agency under subparagraph 
(A) during a fiscal year shall bear the same re-
lation to the total amount appropriated under 
paragraph (2)(F)(iii) for such fiscal year as the 
amount of discretionary funds appropriated to 
such agency for such fiscal year bears to the 
total amount of discretionary funding appro-
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‘‘(D) CONSIDERATIONS.—In determining 
amounts appropriated for purposes of subpara-
graphs (B) and (C)— 
‘‘(i) the Secretary shall not consider 
any amounts appropriated in accordance 
with paragraph (2)(F)(iii); and 
‘‘(ii) with respect to the Food and 
Drug Administration, the Secretary shall 
not consider amounts appropriated in ac-
cordance with subchapter C of chapter VII 
of the Federal Food, Drug, and Cosmetic 
Act (relating to user fees collected by the 
Secretary). 
‘‘(4) PRIORITIZING URGENT NEEDS IN MEDICAL 
RESEARCH.—The Secretary shall ensure that the 
payments distributed under paragraph (3) are used 
to meet urgent needs in medical research, including 
priorities as follows: 
‘‘(A) FDA.—With respect the Food and 
Drug Administration, the priority use of the 
distributions shall include carrying out the 
goals of the strategy and implementation plan 
for advancing regulatory science for medical 
products under section 1124 of the Food and 
Drug Administration Safety and Innovation Act 
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(21 U.S.C. 393 note), and other such research 
activities in order to promote the public health 
and advance innovation in regulatory decision-
making, as determined by the Secretary. 
‘‘(B) NIH.—With respect to the National 
Institutes of Health, the priority use of the dis-
tributions shall include supporting— 
‘‘(i) research that fosters radical inno-
vation, including— 
‘‘(I) research on diseases or con-
ditions for which treatments exist but 
are inadequate; 
‘‘(II) research on diseases or con-
ditions for which there are unmet 
medical needs; 
‘‘(III) research on diseases for 
which treatments exist but the side ef-
fect profiles of such treatments limit 
the therapeutic potential of such 
treatments; 
‘‘(IV) 
research 
on 
new 
ap-
proaches to treatment or diagnosis of 
a disease using a drug, device, or 
therapy that, at the time of distribu-
tion, is not used or is underused; or 
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‘‘(V) research to identify new bio-
markers; 
‘‘(ii) research that advances funda-
mental knowledge and technology even if it 
does not provide immediate or near-term 
clinical or therapeutic benefits, including 
research and technology that advances the 
understanding of biochemistry, biology, 
protein science, immunology, genetics, vi-
rology, microbiology, or neurology; 
‘‘(iii) research related to diseases that 
disproportionally 
account 
for 
Federal 
health care spending, including spending 
under the Medicare program under title 
XVIII of the Social Security Act, the Med-
icaid program under title XIX of the Social 
Security Act, the State Children’s Health 
Insurance Program under title XXI of the 
Social Security Act, the TRICARE pro-
gram under chapter 55 of title 10, United 
States Code, and the hospital services and 
medical care provided through the Vet-
erans’ Administration under chapters 17 
and 18 of title 38, United States Code, 
and tax credits made available through the 
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amendments to the Internal Revenue Code 
of 1986 made by the Patient Protection 
and Affordable Care Act (Public Law 111– 
148), such as research relating to— 
‘‘(I) diseases that disproportion-
ally impact older individuals; 
‘‘(II) degenerative diseases, and 
‘‘(III) chronic conditions; and 
‘‘(iv) early career scientists by— 
‘‘(I) awarding research project 
grants that support discrete, specified, 
circumscribed projects to be per-
formed by the investigator in an area 
representing the specific interests and 
competencies of such investigator, to 
investigators— 
‘‘(aa) who are within 10 
years of completing a terminal 
research degree; or 
‘‘(bb) who are within 10 
years of completing a medical 
residency; 
‘‘(II) awarding grants that sup-
port career development experiences 
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that lead to earlier research independ-
ence; and 
‘‘(III) awarding grants that sup-
port innovative training programs 
that, in addition to scientific training, 
provide additional training to enhance 
employment opportunities, including 
training in management and business, 
to— 
‘‘(aa) graduate students; 
‘‘(bb) post-doctoral fellows; 
‘‘(cc) individuals within 10 
years of completing a terminal 
research degree; or 
‘‘(dd) individuals within 10 
years of completing a medical 
residency. 
‘‘(5) ANNUAL REPORTS.— 
‘‘(A) SECRETARY OF HEALTH AND HUMAN 
SERVICES.—Not later than 180 calendar days 
before the end of a fiscal year in which the Sec-
retary has assessed supplemental payments 
under paragraph (2), the Secretary shall submit 
a report to the Committee on Health, Edu-
cation, Labor, and Pensions of the Senate and 
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the Committee on Energy and Commerce of the 
House of Representatives, which shall include a 
description of supplemental payments assessed, 
collected, and distributed under this subsection 
for such fiscal year, and a list of the covered 
manufacturers that were assessed supplemental 
payments and the amount of such assessments. 
‘‘(B) FDA AND NIH.—For each fiscal year 
in which amounts are distributed under para-
graph (3), the Food and Drug Administration 
and the National Institutes of Health shall re-
port on the use and impact of such amounts in 
the annual budget submission of such entity.’’. 
(b) EFFECT OF FAILURE TO REMIT PAYMENT.— 
Section 502 of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 352) is amended by adding at the end the fol-
lowing: 
‘‘(ee) If it is a drug that is a covered blockbuster drug 
(as defined in section 301(i)(1) of the Public Health Serv-
ice Act) for which any payment assessed under section 
301(i)(2) of such Act has not been paid in accordance with 
such section, until such payment is made.’’. 
(c) SEVERABILITY.—If any provision of this section, 
any amendment made by this section, or the application 
of such provision or amendment to any person or cir-
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cumstance is held to be unconstitutional, the remainder 
of the provisions of this section, the amendments made 
by this section, and the application of such provisions or 
amendments to any person or circumstance shall not be 
affected. 
Æ 
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