A bill to eliminate requirements to undertake duplicative clinical testing of new pharmaceutical drugs, vaccines, biological products, or medical devices, when such duplication is inconsistent with relevant ethical norms.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Ethical Pathway Act of 2012''.

SEC. 2. PURPOSE.

    The purpose of this Act is to eliminate requirements to undertake 
duplicative clinical testing of new pharmaceutical drugs, vaccines, 
biological products or medical devices, when such duplication is 
inconsistent with relevant ethical norms, by providing for the 
opportunity to rely upon existing trials, subject to sharing of the 
costs of those trials, during the period when regulatory test data is 
protected.

SEC. 3. ETHICAL PATHWAY FOR THE APPROVAL AND LICENSOR OF REGULATED 
              PRODUCTS.

    (a) Definitions.--For purposes of this Act:
            (1) Applicant.--The term ``applicant'' means a person who 
        submits to the Secretary an application to sell a regulated 
        product.
            (2) Commissioner.--The term ``Commissioner'' means the 
        Commissioner of Food and Drugs.
            (3) Regulated product.--The term ``regulated product'' 
        includes any new pharmaceutical drug, vaccine, biologic product 
        or medical device, that requires regulatory approval by the 
        Secretary.
            (4) Regulatory test data.--The term ``regulatory test 
        data'' means the evidence regarding the safety and efficacy of 
        new pharmaceutical drugs or biological products used in order 
        to obtain marketing approval for use in humans or vertebrate 
        animals.
            (5) Relevant application or license.--The term ``relevant 
        application or license'' means a new drug application or new 
        biological product license application approved by the 
        Secretary or relevant authority in a foreign country which 
        contains regulatory test data requested by an applicant under 
        this section.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
    (b) Ethical Pathway.--As soon as practicable after the date of 
enactment of this Act, the Secretary, acting through the Commissioner, 
shall establish a mechanism by which an applicant may request a cost-
sharing arrangement described in subsection (c). An applicant may 
request such an arrangement if, but for the arrangement--
            (1) the applicant would be required to conduct clinical 
        investigations involving human subjects that violate Article 20 
        of the Declaration of Helsinki on Ethical Principles for 
        Medical Research Involving Human Subjects in order to obtain 
        regulatory approval of a regulated product; or
            (2) the duplication of the clinical investigations required 
        for such application would violate other applicable ethical 
        standards concerning the testing of products on humans or other 
        vertebrate animals.
    (c) Cost-Sharing Arrangement.--
            (1) Responsibility of applicant.--An applicant that intends 
        to perform clinical investigations involving humans or 
        vertebrate animals in order to file an application for a 
        regulated product shall take all necessary measures to verify 
        that those investigations have not been performed or initiated 
        by another person.
            (2) Voluntary agreement procedures.--An applicant shall 
        make reasonable efforts to obtain voluntary agreements to use 
        existing regulatory test data, such as by offering to make 
        contributions toward the cost of undertaking such tests, which 
        the applicant does not have the right to rely upon in the 
        absence of a license or a cost-sharing agreement.
            (3) Failure to reach voluntary agreement.--The applicant 
        shall notify the Commissioner or the appropriate designee of 
        the Commissioner if there is a failure to reach a voluntary 
        agreement to use such test data. Upon receipt of a notification 
        of a failure to reach a voluntary agreement, the Commissioner 
        or such designee shall ask the parties to agree to binding 
        arbitration to determine the reasonable and fair fee for 
        relying upon relevant regulatory test data. If one or more of 
        the parties refuses to participate in such arbitration, the 
        Commissioner shall determine a reasonable and fair fee for the 
        reliance by the applicant on such regulatory test data.
            (4) Reasonable and fair fee.--The reasonable and fair fee 
        for the reliance by the applicant on the regulatory test data 
        shall be determined after considering the following factors:
                    (A) The actual out-of-pocket costs of the 
                applicable clinical investigations.
                    (B) The risks of the investigations, as reflected 
                in the probabilities that similar investigations result 
                in successful applications for marketing.
                    (C) Any Federal grants, tax credits, or other 
                subsidies that reduce the net cost of the 
                investigations.
                    (D) The expected share of the global market for the 
                product involved, by the party seeking to rely upon the 
                investigations for marketing approval.
                    (E) The amount of the time the holder or holders of 
                the relevant applications or licenses has benefitted 
                from exclusive rights, and the cumulative revenue 
                earned on the products that relied upon the regulatory 
                test data at issue.
    (d) Public Disclosure.--
            (1) In general.--In order to enhance the transparency of 
        the costs of innovation, and to provide greater predictability 
        as to the liability associated with nonvoluntary reliance upon 
        regulatory test data, the Secretary shall adopt procedures and 
        rules under which sufficient information about the costs and 
        fees will be made public by the arbitrator or the Commissioner 
        (or the appropriate designee of the Commissioner), as 
        applicable.
            (2) Content.--The information made public under paragraph 
        (1) shall include at least summary data of the actual costs of 
        the clinical investigations, the factors considered under 
        subsection (c)(4), and the amount of the fee provided to the 
        holder or holders of the relevant applications or licenses.
            (3) Limitations.--The requirements for public disclosure of 
        the costs of the clinical investigations shall not apply to 
        cases where the owner of the rights in the regulatory test data 
        does not assert an exclusive right to rely upon such test data. 
        If the owner of the rights in the regulatory test data asserts 
        an exclusive right, but reaches a voluntary agreement on the 
        fee for relying upon the data under subsection (c)(2), the 
        amount of the fee paid by the applicant shall be provided to 
        the Secretary or a designee, and be made public.

Summary: Ethical Pathway Act of 2012 - Directs the Commissioner of Food and Drugs (FDA) to establish a mechanism by which an applicant to sell any new pharmaceutical drug, vaccine, biologic product, or medical device that requires regulatory approval by the Secretary of Health and Human Services (HHS) (regulated product) may request a cost-sharing arrangement under which the applicant shall: (1) verify that intended clinical investigations involving humans or vertebrate animals have not been performed or initiated by another person; (2) make reasonable efforts to obtain voluntary agreements to use existing evidence regarding the safety and efficacy of new pharmaceutical drugs or biological products used to obtain marketing approval for use in humans or vertebrate animals (regulatory test data); and (3) notify the Commissioner if there is a failure to reach a voluntary agreement, at which point the Commissioner shall ask the parties to agree to binding arbitration to determine the reasonable and fair fee for relying upon relevant regulatory test data.

Permits such applicant to request such arrangement if, but for the arrangement: (1) the applicant would be required to conduct clinical investigations involving human subjects that violate Article 20 of the Declaration of Helsinki on Ethical Principles for Medical Research Involving Human Subjects in order to obtain regulatory approval of the regulated product, or (2) the duplication of the clinical investigations required for such application would violate other applicable ethical standards concerning the testing of products on humans or other vertebrate animals.

Requires the fee for reliance by the applicant on such regulatory test data to be determined after considering: (1) the actual out-of-pocket costs of the applicable clinical investigations; (2) the risks of the investigations; (3) any federal grants, tax credits, or other subsidies; (4) the expected share of the global market for the product involved; and (5) the amount of time the holders of the relevant applications or licenses have benefited from exclusive rights and the cumulative revenue earned on the products that relied upon the data at issue. Directs the Secretary to adopt procedures and rules under which sufficient information about costs and fees will be made public.