I 
115TH CONGRESS 
2D SESSION 
H. R. 7348 
To amend the Public Health Service Act to establish an Office of Drug 
Manufacturing. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 19, 2018 
Ms. SCHAKOWSKY introduced the following bill; which was referred to the 
Committee on Energy and Commerce 
A BILL 
To amend the Public Health Service Act to establish an 
Office of Drug Manufacturing. 
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 Drug Man-
ufacturing Act of 2018’’. 
SEC. 2. PUBLIC MANUFACTURING OF PHARMACEUTICALS. 
Part A of title III of the Public Health Service Act 
(42 U.S.C. 241 et seq.) is amended by adding at the end 
the following: 
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‘‘SEC. 310B. MANUFACTURING OF DRUGS. 
‘‘(a) ESTABLISHMENT OF OFFICE OF DRUG MANU-
FACTURING.— 
‘‘(1) IN GENERAL.—There is established within 
the Department of Health and Human Services an 
office to be known as the Office of Drug Manufac-
turing (referred to in this section as the ‘Office’). 
‘‘(2) PURPOSE.—The purpose of the Office is— 
‘‘(A) to increase competition, lower prices, 
and address shortages in the market for pre-
scription drugs, including insulin; 
‘‘(B) to reduce the cost of prescription 
drugs to Federal and State health programs, 
taxpayers, and consumers; and 
‘‘(C) to increase patient access to afford-
able drugs. 
‘‘(3) PERSONNEL.— 
‘‘(A) DIRECTOR.— 
‘‘(i) IN GENERAL.—The Office shall 
be headed by a Director, who shall be ap-
pointed by the President, by and with the 
advice and consent of the Senate. 
‘‘(ii) COMPENSATION.—The Director 
shall be compensated at the rate prescribed 
for level III of the Executive Schedule. 
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‘‘(B) EMPLOYEES.—The Director of the 
Office, in consultation with the Secretary, may 
fix the number of, and appoint and direct, all 
employees of the Office. 
‘‘(C) BANNED INDIVIDUALS.— 
‘‘(i) DRUG COMPANY LOBBYISTS.—No 
former registered drug manufacturer lob-
byist— 
‘‘(I) may be appointed to the po-
sition of Director of the Office; or 
‘‘(II) may be employed by the Of-
fice during the 6-year period begin-
ning on the date on which the reg-
istered lobbyist terminates its reg-
istration in accordance with section 
4(d) of the Lobbying Disclosure Act 
of 1995 (2 U.S.C. 1603(d)) or the 
agent terminates its status, as appli-
cable. 
‘‘(ii) SENIOR
EXECUTIVES
OF
LAW- 
BREAKING COMPANIES.—No former senior 
executive of a covered entity (as defined in 
clause (iii))— 
‘‘(I) may be appointed to the po-
sition of Director of the Office; or 
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‘‘(II) may be employed by the Of-
fice during the 6-year period begin-
ning on the later of— 
‘‘(aa) the date of the settle-
ment; and 
‘‘(bb) the date on which the 
enforcement 
action 
has 
con-
cluded. 
‘‘(iii) COVERED
ENTITY.—The term 
‘covered entity’ means any entity that is— 
‘‘(I) a drug manufacturer; and 
‘‘(II)(aa) operating under Fed-
eral settlement, including a Federal 
consent decree; or 
‘‘(bb) the subject of an enforce-
ment action in a court of the United 
States or by an agency. 
‘‘(4) DUTIES.— 
‘‘(A) IN GENERAL.—The Office shall— 
‘‘(i) prepare and submit applications 
for approval to the Food and Drug Admin-
istration, or enter into contracts for such 
submission, for the manufacture of appli-
cable drugs when authorized under this 
section; 
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‘‘(ii) acquire rights to manufacture 
applicable drugs as authorized under this 
section; 
‘‘(iii) manufacture, or enter into con-
tracts with entities to manufacture, appli-
cable drugs as authorized under this sec-
tion; 
‘‘(iv) determine a fair price for each 
applicable drug, in accordance with sub-
paragraph (B); 
‘‘(v) 
sell 
manufactured 
applicable 
drugs at a fair price as authorized under 
this section; and 
‘‘(vi) manufacture, or enter into con-
tracts with entities to manufacture, active 
pharmaceutical ingredients for use by the 
Office or for sale to other entities. 
‘‘(B) FAIR PRICE.—In determining a fair 
price for an applicable drug under subpara-
graph (A)(iv) the Office shall consider— 
‘‘(i) the impact of price on patient ac-
cess to the applicable drug; 
‘‘(ii) the cost of the applicable drug to 
Federal or State health care programs; 
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‘‘(iii) the cost to the Federal Govern-
ment of manufacturing the applicable 
drug; 
‘‘(iv) the administrative costs of oper-
ating the Office; 
‘‘(v) the cost to acquire or manufac-
ture applicable drugs under this section; 
and 
‘‘(vi) the impact of price on market 
competition for the applicable drug. 
‘‘(C) ACQUIRING RIGHT TO MANUFACTURE 
AND
MARKET.—The Office may acquire the 
rights to manufacture and market applicable 
drugs as authorized under this section. 
‘‘(D) ACTIVE PHARMACEUTICAL INGREDI-
ENTS.— 
‘‘(i) IN GENERAL.—The Office shall 
manufacture, or enter into contracts with 
entities to manufacture, an active pharma-
ceutical ingredient if— 
‘‘(I) the Office determines that 
such ingredient is not readily available 
from existing suppliers; 
‘‘(II) the manufacture of such in-
gredient would improve the ability of 
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other entities to enter the market for 
the manufacture of generic drugs or 
otherwise expand the manufacture of 
generic drugs; or 
‘‘(III) the manufacture of such 
ingredient is necessary for the Office 
to carry out its duties under this sec-
tion. 
‘‘(ii) 
PRICE
DETERMINATIONS.—In 
determining what price at which to sell an 
active pharmaceutical ingredient under 
clause (i), the Office shall consider the cost 
to manufacture the ingredient, the admin-
istrative costs of the Office with respect to 
the ingredient, and the impact of such 
price on market competition for the ingre-
dient. 
‘‘(5) REPORTS
TO
CONGRESS.—The Director 
shall prepare and submit to the President, the Com-
mittee on Health, Education, Labor, and Pensions 
of the Senate, and the Committee on Energy and 
Commerce of the House of Representatives, an an-
nual report that includes— 
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‘‘(A) an assessment of the major problems 
faced by patients in accessing affordable generic 
medications; 
‘‘(B) a description of the status of all 
medications for which manufacturing has been 
authorized under this section, including medica-
tions being manufactured, medications for 
which the Office has submitted an application 
to the Food and Drug Administration but has 
not yet received approval, and medications for 
which the Office has received approval from the 
Food and Drug Administration but are not 
being manufactured; and 
‘‘(C) an analysis of how the public manu-
facture of drugs meeting the conditions de-
scribed in paragraph (6) would impact, or has 
already impacted, competition, access to such 
drugs, the costs of such drugs, the costs of pre-
scription drugs to Federal and State health pro-
grams, and public health. 
‘‘(6) PRIORITY
MANUFACTURING.—The Office 
shall prioritize the manufacturing of those applicable 
drugs that would have the greatest impact on— 
‘‘(A) lowering drug costs to patients; 
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‘‘(B) increasing competition and address-
ing shortages in the prescription drug market; 
‘‘(C) improving public health; or 
‘‘(D) reducing the cost of prescription 
drugs to Federal and State health programs. 
‘‘(7) MANUFACTURING
LEVELS.—Not later 
than 1 year after the date of enactment of this sec-
tion, the Office shall manufacture, or enter into con-
tracts with entities for the manufacture, of not less 
than 15 applicable drugs. Not later than 3 years 
after such date of enactment, the Office shall manu-
facture, or enter into contracts with entities for the 
manufacture, of not less than 25 applicable drugs. 
‘‘(b) SUBMISSION OF APPLICATIONS.—For each ap-
plicable drug that the Office determines should be manu-
factured, as provided for under this section, the Secretary 
shall— 
‘‘(1) submit an application under section 505(j) 
or 515 of the Federal Food, Drug, and Cosmetic Act 
or section 351(k) of the Public Health Service Act 
or submit a notification under section 510(k) of the 
Federal Food, Drug, and Cosmetic Act (or enter 
into a contract with another entity to submit such 
an application or notification); or 
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‘‘(2) acquire from the holder of an application 
approved under subsection (c) or (j) of section 505 
or section 515 of the Federal Food, Drug, and Cos-
metic Act or section 351 of the Public Health Serv-
ice Act, or cleared under section 510(k) of the Fed-
eral Food, Drug, and Cosmetic Act, rights to manu-
facture such applicable drug. 
‘‘(c) USE.— 
‘‘(1) IN GENERAL.—The Secretary shall sell a 
drug produced under this section at a fair price to 
other entities. Amounts received from the sale of 
such drugs shall be used for the activities of the Of-
fice. 
‘‘(2) SALE OF APPROVED APPLICATION.— 
‘‘(A) IN
GENERAL.—For any applicable 
drug that the Office is manufacturing, the Sec-
retary shall, beginning 3 years after the date on 
which the Office first undertakes manufacturing 
of such drug and annually thereafter, make 
available for sale, to any person who commits to 
manufacturing and marketing the applicable 
drug, the approved application for the drug. 
‘‘(B) FAILURE TO USE.—If a person pur-
chasing an approved application under subpara-
graph (A)— 
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‘‘(i) fails to market the applicable 
drug within 6 months of the date of such 
purchase; or 
‘‘(ii) increases the average manufac-
turer price for the applicable drug above 
the fair price (increased by the consumer 
price index for all urban consumers (as 
published by the Bureau of Labor Statis-
tics) for that year), 
the Secretary shall revoke the purchaser’s ap-
proved application and resume production of 
the applicable drug. 
‘‘(d) INSULIN.—Not later than 1 year after the date 
of enactment of this section, the Secretary shall begin the 
public manufacturing of insulin meeting the definition of 
applicable drug and in accordance with this section. 
‘‘(e) APPLICABLE DRUG.—In this section, the term 
‘applicable drug’ means a drug (as defined in section 201 
of the Federal Food, Drug, and Cosmetic Act), biological 
product (as defined in section 351 of the Public Health 
Service Act), or combination product (as described in sec-
tion 503(g) of the Federal Food, Drug, and Cosmetic Act) 
for which an approved application under section 505 or 
515 of the Federal Food, Drug, and Cosmetic Act or sec-
tion 351 of the Public Health Service Act, or clearance 
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under section 510(k) of the Federal Food, Drug, and Cos-
metic Act, is in effect, and— 
‘‘(1)(A) for which, with respect to a drug in-
cluded in the list described in section 505(j)(7) of 
the Federal Food, Drug, and Cosmetic Act, each 
patent included with respect to such drug in such 
list has expired, or each patent that claims a biologi-
cal product has expired; 
‘‘(B) any period of regulatory exclusivity grant-
ed under— 
‘‘(i) clause (ii), (iii), or (iv) of section 
505(c)(3)(E) of the Federal Food, Drug, and 
Cosmetic Act, section 505(j)(5)(B)(iv) of such 
Act, clause (ii), (iii), or (iv) of section 
505(j)(5)(F) of such Act, section 527 of such 
Act, and any extension of such a period granted 
under section 505A or 505E of such Act, has 
expired; or 
‘‘(ii) paragraph (6) or (7) of section 351(k) 
of the Public Health Service Act, and any ex-
tension of such a period granted under para-
graph (2) or (3) of section 351(m) of such Act, 
has expired; and 
‘‘(C)(i) that is not being marketed in the 
United States; or 
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‘‘(ii) that is being marketed in the United 
States by fewer than 3 manufacturers, and that— 
‘‘(I) in the previous 1-year period, has ex-
perienced a price increase that is greater than 
the medical component of the consumer price 
index for the same period; 
‘‘(II) is included in the drug shortage list 
under section 506E of the Federal Food, Drug, 
and Cosmetic Act; or 
‘‘(III)(aa) has an average manufacturer 
price that the Secretary determines to be a bar-
rier to patient access; and 
‘‘(bb) is listed by the World Health Orga-
nization as an essential medicine; or 
‘‘(2) for which there is in effect a license, or 
patent use is authorized, under— 
‘‘(A) section 1498 of title 28, United 
States Code; 
‘‘(B) section 202 of title 35, United States 
Code; 
‘‘(C) section 203 of title 35, United States 
Code (march-in rights); 
‘‘(D) section 209 of title 35, United States 
Code; or 
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‘‘(E) any other licensing authority of the 
Federal Government. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as may be 
necessary to carry out this section.’’. 
Æ 
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