I
103D CONGRESS
1ST SESSION
H. R. 1334
To amend the Public Health Service Act to establish a process to provide
for reasonable prices for drugs, devices, and other tangible products
made available to the public as a consequence of funding by the National
Institutes of Health, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 11, 1993
Mr. WYDEN 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 a proc-
ess to provide for reasonable prices for drugs, devices,
and other tangible products made available to the public
as a consequence of funding by the National Institutes
of Health, 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 ‘‘Federal Research
Product Commercialization Act’’.
SEC. 2. ESTABLISHMENT OF PROCESS REGARDING REA-
SONABLE PRICES FOR PRODUCTS DEVEL-
OPED AS CONSEQUENCE OF FUNDING BY NA-
TIONAL INSTITUTES OF HEALTH.
Part G of title IV of the Public Health Service Act
(42 U.S.C. 289 et seq.) is amended by inserting after sec-
tion 498 the following section:
‘‘REASONABLE PRICES FOR PRODUCTS DEVELOPED WITH
ASSISTANCE OF INSTITUTES
‘‘SEC. 498B. (a) IN GENERAL.—Subject to the provi-
sions of this section, for fiscal year 1994 and subsequent
fiscal years, a project of biomedical research relating to
the development of a drug, device, or other tangible prod-
uct may not be conducted or supported by any agency of
the National Institutes of Health unless there are in effect
such regulations issued by the Secretary as may be nec-
essary to ensure that, in the event the product is (in ac-
cordance with applicable law) to be made available to the
public, there is compliance with the following:
‘‘(1) The research entity, in accordance with
this section, will ensure that the commercial parties
involved make the product available to the public at
a reasonable price, and that the commercial parties
pay to the National Institutes of Health royalties
reasonably related to the amounts expended by such
Institutes with respect to the product.
‘‘(2) For purposes of paragraph (1), the re-
search entity will conduct a competitive process of
bidding in order to select entities to serve as com-
mercial parties regarding the product. With respect
to such bidding, a solicitation of applications con-
taining bids will be published in the Federal
Register.
‘‘(3) Applicants under paragraph (2) will not be
approved by the research entity as commercial par-
ties regarding the project unless the following condi-
tions are met:
‘‘(A) The application specifies a formula
for determining the price at which the product
will be made available to the public, and the
formula results in a price that is in accordance
with paragraph (1).
‘‘(B) The application specifies the royalties
to be paid to the National Institutes of Health,
and the royalties are in accordance with para-
graph (1).
‘‘(C) The application demonstrates that
the applicant possesses the appropriate bio-
medical and commercial expertise.
‘‘(D) The application is in such form, is
made in such manner, and contains such other
information as the Secretary may require.
‘‘(4)(A) Subject to subparagraph (B), in select-
ing commercial parties under paragraph (3), the re-
search entity will, if there are a sufficient number of
qualified applicants, approve such applications as
may be necessary to ensure that commercial parties
compete in making the product available to the
public.
‘‘(B) The research entity will comply with sub-
paragraph (A) only to the extent not inconsistent
with paragraph (1).
‘‘(5)(A) If there is an insufficient number of
qualified applicants to provide for competing com-
mercial parties, the research entity will, in approving
applications to provide for an exclusive arrangement
for making the product available to the public, re-
quire that the applicants negotiate prices and royal-
ties under paragraph (1) with the Secretary.
‘‘(B) If an exclusive arrangement under sub-
paragraph (A) is to be made, the Secretary will
publish in the Federal Register a notice of such fact.
‘‘(C) An exclusive arrangement under subpara-
graph (A) will not become legally binding until the
‘‘(B) An entity is a research entity under sub-
paragraph (A) without regard to whether the prop-
erty interest in the results of the project involved—
‘‘(i) is directly in the drug, device, or other
product that is the subject of the project; or
‘‘(ii) is only in findings that relate to the
product.’’.
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