PREPARE Act
Bill: S.2740 | Sponsor: Sen. Brown, Sherrod (D-OH)
Policy area: Health

Summary:
Promoting Readiness and Ensuring Proper Active pharmaceutical ingredient Reserves of Essential medicines Act of 2021 or the PREPARE Act
This bill establishes the Strategic Active Pharmaceutical Ingredient Reserve.
The Department of Health and Human Services (HHS) must annually publish a public list of essential generic medicines that are medically necessary to have available at all times.
HHS must report and implement a plan to establish the reserve, which must be designed to minimize the impact of an interruption or reduction in imports of (1) key starting materials (including active pharmaceutical ingredients) for essential generic medicines, and (2) finished dosage forms of essential generic medicines for which key starting materials are not imported. The plan must also contain provisions to strengthen domestic capacity for active pharmaceutical ingredient production, storage, and conversion.
Within one year of this bill's enactment, the plan must include at least 25 of the essential generic medicines on the required list. The plan must add at least 25 medicines each year until the full list is covered.
HHS must prioritize domestically manufactured key starting materials for the reserve to the maximum extent possible.
A manufacturer of an essential generic medicine that switches to an active pharmaceutical ingredient sourced through the reserve shall not have to update the approved application for that medicine.
The Government Accountability Office must report to Congress on active pharmaceutical ingredient manufacturing, including the time and costs needed to develop domestic manufacturing capabilities.

To establish a strategic active pharmaceutical ingredient reserve to 
maintain a domestic supply of active pharmaceutical ingredients and key 
 starting materials needed for the manufacturing of essential generic 
 medicines, and to build a pipeline for domestic active pharmaceutical 
                         ingredient production.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promoting Readiness and Ensuring 
Proper Active pharmaceutical ingredient Reserves of Essential medicines 
Act of 2021'' or the ``PREPARE Act''.

SEC. 2. LISTING OF ESSENTIAL GENERIC MEDICINES.

    Part B of title III of the Public Health Service Act (42 U.S.C. 243 
et seq.) is amended by inserting after section 319M the following:

``SEC. 319N. LISTING OF ESSENTIAL GENERIC MEDICINES.

    ``(a) In General.--The Secretary, in consultation with the 
Commissioner of Food and Drugs, the Assistant Secretary for 
Preparedness and Response, the Secretary of Defense, Secretary of 
Homeland Security, and other heads of agencies, as appropriate, shall 
establish and make public a list of essential generic medicines 
determined, in accordance with subsection (b), to be medically 
necessary to have available at all times.
    ``(b) Requirements.--
            ``(1) Initial list.--The initial list of essential generic 
        medicines under subsection (a) shall be the generic medicines 
        included on the list of essential medicines, medical 
        countermeasures, and critical inputs identified by the 
        Commissioner of Food and Drugs as published on October 30, 
        2020, in accordance with section 3(c) of Executive Order 13944.
    ``(c) Updates.--
            ``(1) Annual review.--Not less than once each year, the 
        Secretary, after consultation with the Commissioner of Food and 
        Drugs, the Assistant Secretary for Preparedness and Response, 
        the Secretary of Defense, Secretary of Homeland Security, and 
        other heads of agencies, as appropriate, shall review and 
        update the list of essential generic medicines required under 
        subsection (a).
            ``(2) Rationale.--In carrying out the annual review and 
        update under paragraph (1), the Secretary shall provide a 
        rationale for each essential generic medicine added to, or 
        removed from, the list under subsection (a).
            ``(3) Specific populations.--The Secretary shall consider 
        including on the list under subsection (a), and, where 
        appropriate, include on such list, essential generic medicines 
        that are essential to specific subpopulations, including 
        pediatric populations, in developing the list under such 
        subsection.
            ``(4) Threat assessments.--
                    ``(A) In general.--The Secretary, after 
                consultation with the Public Health Emergency Medical 
                Countermeasures Enterprise established under section 
                2811-1, shall conduct regular threat assessments, and 
                take such assessments into consideration in updating 
                the list in accordance with paragraph (1).
                    ``(B) Threat assessments considerations.--Each 
                threat assessment under this paragraph shall include 
                consideration of--
                            ``(i) the lack of existing domestic 
                        capacity of essential generic medicines;
                            ``(ii) the concentration of current supply 
                        of the essential generic medicine or active 
                        pharmaceutical ingredients of the essential 
                        generic medicine in one geographical region;
                            ``(iii) whether there are less than 2 
                        manufacturers of the essential generic medicine 
                        or active pharmaceutical ingredients of the 
                        essential generic medicine; and
                            ``(iv) the potential for increased demand 
                        in a public health emergency.
            ``(5) Director of the strategic active pharmaceutical 
        ingredients reserve.--The Secretary shall appoint a Director of 
        the Strategic Active Pharmaceutical Ingredients Reserve who has 
        experience in one or more of the following areas: supply chain 
        management, disaster response, pharmaceutical or active 
        pharmaceutical ingredient development, or logistics. Such 
        Director shall ensure a sufficient supply of the active 
        pharmaceutical ingredients and critical components necessary to 
        manufacture the essential generic medicines included on the 
        list under subsection (a) in an amount adequate to serve the 
        needs of patients living in the United States and in the 
        appropriate dosage forms.
    ``(d) Appeal Process.--The Secretary shall establish a process by 
which stakeholders may appeal a determination by the Secretary not to 
include an essential generic medicine on the list under subsection (a).
    ``(e) Definitions.--In this section:
            ``(1) Drug.--The term `drug' has the meaning given such 
        term in section 201(g) of the Federal Food, Drug, and Cosmetic 
        Act, and includes a biological product (as defined in section 
        351(i) of this Act). Such term includes prescription and 
        nonprescription drugs, or active pharmaceutical ingredients of 
        drugs.
            ``(2) Essential generic medicine.--The term `essential 
        generic medicine' means a drug for which a generic is approved, 
        that is medically necessary to have available at all times 
        because the drug is--
                    ``(A) commonly used to prevent, mitigate, or treat 
                a common disease or condition, or used in a common 
                procedure;
                    ``(B) an antibiotic or antifungal used to treat an 
                infectious diseases;
                    ``(C) necessary to prevent or mitigate a public 
                health emergency; or
                    ``(D) life-supporting, life-sustaining, or intended 
                for use in the prevention or treatment of a 
                debilitating disease or condition.''.

SEC. 3. ESTABLISHMENT OF THE STRATEGIC ACTIVE PHARMACEUTICAL INGREDIENT 
              RESERVE.

    Part B of title III of the Public Health Service Act (42 U.S.C. 243 
et seq.), as amended by section 2, is further amended by inserting 
after section 319N the following:

``SEC. 319N-1. STRATEGIC ACTIVE PHARMACEUTICAL INGREDIENT RESERVE.

    ``(a) Strategic Active Pharmaceutical Ingredient Reserve Plan.--
            ``(1) In general.--Not later than 90 days after the date of 
        enactment of the Promoting Readiness and Ensuring Proper Active 
        pharmaceutical ingredient Reserves of Essential medicines Act 
        of 2021, the Secretary, in consultation with the Assistant 
        Secretary for Preparedness and Response, the Director of the 
        Centers for Disease Control and Prevention, the Commissioner of 
        Food and Drugs, and the Director of the Biomedical Advanced 
        Research and Development Authority, shall prepare and submit to 
        Congress a Strategic Active Pharmaceutical Ingredient Reserve 
        Plan (referred to in this section as the `Plan') in accordance 
        with subsection (b), which shall be used by the Secretary in 
        establishing and maintaining the Strategic Active 
        Pharmaceutical Ingredient Reserve described in subsection (c).
            ``(2) Annual updates.--The Secretary shall update the plan 
        annually and, by not later than June 1 of each year, submit the 
        updated plan to the applicable committees of Congress.
            ``(3) National security considerations.--
                    ``(A) Submissions.--The Secretary shall ensure that 
                any submission of the plan (including any update to the 
                plan) to the applicable committees of Congress is in a 
                manner that does not compromise national security.
                    ``(B) Exemption from disclosure.--Information in 
                the plan that, in the judgment of the Secretary, would 
                reveal public health vulnerabilities shall be exempt 
                from disclosure under section 552(b)(3) of title 5, 
                United States Code.
    ``(b) Plan Requirements.--
            ``(1) In general.--The Plan required under subsection (a) 
        shall--
                    ``(A) detail the design, construction, and filling 
                of the storage and related facilities comprising the 
                Strategic Active Pharmaceutical Ingredient Reserve 
                described in subsection (c) (referred to in this 
                section as the `Reserve');
                    ``(B) detail the requirements for maintaining the 
                Reserve described in subsection (c), including--
                            ``(i) storage and testing requirements, 
                        consistent with parts 210 and 211 of title 21, 
                        Code of Federal Regulations, or any successor 
                        regulation; and
                            ``(ii) any specific criteria agreed to by 
                        the Secretary and the manufacturer of the 
                        essential generic medicine using the active 
                        pharmaceutical ingredient or key starting 
                        material;
                    ``(C) be designed to minimize the impact of any 
                interruption or reduction in imports of--
                            ``(i) active pharmaceutical ingredients and 
                        other key starting materials that the Secretary 
                        determines are, or are likely to become, 
                        dependent upon such imports for a substantial 
                        portion of finished essential generic 
                        medicines; and
                            ``(ii) finished dosage forms of essential 
                        generic medicines for which active 
                        pharmaceutical ingredients and other key 
                        starting materials are not imported;
                    ``(D) include provisions to strengthen domestic 
                capacity for active pharmaceutical ingredient 
                production, storage, and conversion; and
                    ``(E) outline plans and processes for coordinating 
                and consulting, as appropriate, with the Assistant 
                Secretary for Preparedness and Response regarding 
                relevant issues of interest pertaining to the 
                maintenance and stocking of the strategic national 
                stockpile.
            ``(2) Required components.--
                    ``(A) In general.--The Plan shall include the 
                following:
                            ``(i) Identification and prioritization of 
                        the essential generic medicines included on the 
                        most recent list under section 319N(a)--
                                    ``(I) that the Secretary determines 
                                are essential for health care needs in 
                                the United States; and
                                    ``(II) for which the Secretary 
                                determines that there is the greatest 
                                need to maintain a reserve of the 
                                active pharmaceutical ingredients and 
                                key starting materials for the 
                                essential generic medicines--
                                            ``(aa) taking into account 
                                        factors including the extent to 
                                        which the United States is, or 
                                        is at risk of becoming, 
                                        dependent on foreign sources 
                                        for a substantial portion of 
                                        the domestic need; and
                                            ``(bb) giving special 
                                        consideration to the essential 
                                        generic medicines at risk of 
                                        supply interruption as a result 
                                        of the factors described in 
                                        section 319N(c)(4)(B).
                            ``(ii) An evaluation of the utilization 
                        levels of the essential generic medicines 
                        identified under clause (i) to inform how much 
                        of the active pharmaceutical ingredients of 
                        such medicines is required to cover the 
                        projected health care needs for one year of the 
                        United States population.
                            ``(iii) A comprehensive assessment of the 
                        essential generic medicines identified under 
                        clause (i), including the existing 
                        manufacturing bases for each such medicine 
                        (including identification and location of 
                        ownership of such facilities) and whether the 
                        active pharmaceutical ingredients of such 
                        ingredients are manufactured domestically or 
                        abroad, and whether finished dosage conversion 
                        steps for such essential generic medicines are 
                        performed domestically or abroad.
                            ``(iv) The types of facilities, equipment, 
                        and technology required to appropriately store, 
                        track, test, and convert all forms of active 
                        pharmaceutical ingredients that are critical 
                        inputs of drugs that are essential generic 
                        medicines, preliminary proposed locations for 
                        such public and privately owned facilities in 
                        multiple locations in the United States, the 
                        capacity required of the facilities used, and 
                        the estimated cost of acquisition and storage 
                        of the active pharmaceutical ingredients and 
                        management and operation of the facilities.
                            ``(v) An evaluation of the impact that the 
                        establishment and ongoing maintenance of the 
                        Reserve may have, including on availability and 
                        pricing of active pharmaceutical ingredients 
                        and finished drug dosages.
                            ``(vi) A distribution plan for the active 
                        pharmaceutical ingredients held in the Reserve, 
                        which shall include--
                                    ``(I) protocols for the method of 
                                conversion of active pharmaceutical 
                                ingredients into finished drugs, 
                                including conversion of key starting 
                                materials into active pharmaceutical 
                                ingredients and distribution from the 
                                Reserve into the strategic national 
                                stockpile and other government and 
                                commercial pharmaceutical distribution 
                                networks; and
                                    ``(II) benchmarks for the Secretary 
                                to initiate conversion of drug products 
                                that are essential generic medicines 
                                using the active pharmaceutical 
                                ingredients stored in the Reserve for 
                                transfer to the strategic national 
                                stockpile or other government or 
                                commercial pharmaceutical distribution 
                                networks, based on changes in the 
                                supply chain for the top essential 
                                generic medicines or a determination by 
                                the Secretary regarding a threat to 
                                public health.
                            ``(vii) A mechanism through which private 
                        sector manufacturers of active pharmaceutical 
                        ingredients or finished dosage forms may, 
                        through contracts with existing Reserve 
                        facilities, store and withdraw such ingredients 
                        in the Reserve to enhance resilience and reduce 
                        shortages and disruptions in the supply chain.
                            ``(viii) A mechanism through which the 
                        Federal Government may purchase, via 
                        manufacturing partners, reserve capacity for 
                        finished drug manufacturing to convert active 
                        pharmaceutical ingredients into finished drugs 
                        for essential generic medicines.
                    ``(B) Number of drugs.--
                            ``(i) In general.--Pursuant to subparagraph 
                        (A)(i), the Secretary shall ensure that for the 
                        first year after the date of enactment of the 
                        Promoting Readiness and Ensuring Proper Active 
                        pharmaceutical ingredient Reserves of Essential 
                        medicines Act of 2021, the Plan includes not 
                        less than 25 essential generic medicines, and 
                        that 25 additional essential generic medicines 
                        are included in such Plan for each year 
                        thereafter until the active pharmaceutical 
                        ingredients necessary to support the full list 
                        of essential generic medicines identified under 
                        section 319N(a) are covered.
                            ``(ii) Prioritization.--The Secretary shall 
                        prioritize essential generic medicines needed 
                        immediately in the event of an emergency.
            ``(3) Quantities of apis and key starting materials.--
                    ``(A) In general.--To the maximum extent 
                practicable, the Plan should include a plan to ensure 
                that, for each essential generic medicine included in 
                the Plan, the active pharmaceutical ingredients used in 
                the production of such medicine that are stored in the 
                Reserve are available in the minimum quantities as 
                follows:
                            ``(i) By the date that is 18 months after 
                        the date of enactment of the Promoting 
                        Readiness and Ensuring Proper Active 
                        pharmaceutical ingredient Reserves of Essential 
                        medicines Act of 2021, not less than 10 percent 
                        of the total amount of such ingredients needed 
                        to produce sufficient quantities of the 
                        essential generic medicines for the treatment 
                        of individuals living in the United States.
                            ``(ii) By the date that is 3 years after 
                        such date of enactment, not less than 25 
                        percent of the total amount of such ingredients 
                        needed to produce sufficient quantities of the 
                        essential generic medicines for the treatment 
                        of individuals living in the United States.
                            ``(iii) By the date that is 5 years after 
                        such date of enactment, not less than 50 
                        percent of the total amount of such ingredients 
                        needed to produce sufficient quantities of the 
                        essential generic medicines for the treatment 
                        of individuals living in the United States.
                            ``(iv) By the date that is 10 years after 
                        such date of enactment, not less than 90 
                        percent of the total amount of such ingredients 
                        needed to produce sufficient quantities of the 
                        essential generic medicines for the treatment 
                        of individuals living in the United States.
                    ``(B) Calculation of quantity of api.--In 
                calculating the quantities of active pharmaceutical 
                ingredients needed for purposes of subparagraph (A), 
                the Secretary shall determine the quantity of each 
                essential generic medicine required to cover the 
                projected health care needs, over a 1-year period, of 
                people living in the United States, based on average 
                annual demand during the 3-year period preceding the 
                date of enactment of the Promoting Readiness and 
                Ensuring Proper Active pharmaceutical ingredient 
                Reserves of Essential medicines Act of 2021.
    ``(c) Administering the Strategic Active Pharmaceutical Ingredient 
Reserve.--
            ``(1) In general.--With respect to each active 
        pharmaceutical ingredient and key starting material that is 
        included in the Plan, the Secretary shall place in storage, 
        transport, track, and exchange quantities of the substance that 
        are--
                    ``(A) produced in conformance with all quality 
                requirements under this Act and the Federal Food, Drug, 
                and Cosmetic Act, including the associated regulations 
                of such Acts;
                    ``(B) stored in compliance with--
                            ``(i) the requirements of parts 210 and 211 
                        of title 21, Code of Federal Regulations, or 
                        any successor regulation; and
                    ``(C) any specific criteria agreed to by the 
                Secretary and the manufacturer of the essential generic 
                medicine using the active pharmaceutical ingredient or 
                key starting material.
            ``(2) Requirements.--To the greatest extent practicable, in 
        carrying out paragraph (1), the Secretary shall acquire active 
        pharmaceutical ingredients and key starting materials in a 
        manner that minimizes cost, minimizes vulnerability of the 
        United States to severe shortages or disruptions for essential 
        generic medicines, minimizes the impact of acquisition of such 
        ingredients and materials to the marketplace, gives preference 
        to domestic manufacturers, and encourages competition in the 
        marketplace.
            ``(3) Drawdown of the reserve.--
                    ``(A) In general.--The Secretary may distribute 
                active pharmaceutical ingredients and key starting 
                materials in the Reserve in order to initiate 
                conversion of active pharmaceutical ingredients and 
                finished dosage form, in accordance with the Plan 
                developed under subsection (b).
                    ``(B) Deviations from plan.--In distributing active 
                pharmaceutical ingredients and key starting materials 
                under subparagraph (A), the Secretary, in consultation 
                with the Commissioner of Food and Drugs and the 
                Assistant Secretary for Preparedness and Response, may 
                deviate from the Plan developed under subsection (b) 
                only after certifying that the distribution from the 
                Reserve is required in response to a significant drug 
                supply interruption.
    ``(d) Consultation.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall consult with--
                    ``(A) the Commissioner of Food and Drugs, with 
                respect to identifying essential generic medicines;
                    ``(B) the Administrator of the Centers for Medicare 
                & Medicaid Services, with respect to determining the 
                volume of essential generic medicines needed 
                domestically; and
                    ``(C) the Assistant Secretary for Preparedness and 
                Response, and, as appropriate, the Director of the 
                Centers for Disease Control and Prevention, regarding 
                coordination with the strategic national stockpile.
            ``(2) Reporting by fda.--The Commissioner of Food and Drugs 
        shall provide to the Secretary the information collected under 
        section 510(j)(3) of the Federal Food, Drug, and Cosmetic Act, 
        for purposes of carrying out this section.
    ``(e) Contracting.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall--
                    ``(A) prioritize the purchase of active 
                pharmaceutical ingredients and other key starting 
                materials manufactured in the United States by domestic 
                manufacturers to the maximum extent possible;
                    ``(B) contract with domestic entities for the--
                            ``(i) distribution of active pharmaceutical 
                        ingredients and finished drug products;
                            ``(ii) storage, withdrawal, testing, and 
                        conversion of active pharmaceutical ingredients 
                        and other key starting materials;
                            ``(iii) tracking and coordinating the 
                        storage, testing, and sale of active 
                        pharmaceutical ingredients and other key 
                        starting materials;
                            ``(iv) sale of active pharmaceutical 
                        ingredients in advance of their expiration 
                        dates; and
                            ``(v) manufacturing, including continuous 
                        manufacturing as appropriate, of an active 
                        pharmaceutical ingredient or other key starting 
                        material of an essential generic medicine that 
                        is anticipated to be in shortage, as defined by 
                        the Secretary for purposes of this section;
                    ``(C) give preference to domestic nonprofit and 
                public-private partnerships, as appropriate;
                    ``(D) ensure geographic diversity of the physical 
                storage of active pharmaceutical ingredients and other 
                key starting materials;
                    ``(E) support domestic manufacturers of active 
                pharmaceuticals and other key starting materials and 
                facilitate long-term domestic capacity for essential 
                generic medicines in the United States; and
                    ``(F) prioritize contracts that facilitate the 
                conversation of active pharmaceutical ingredients and 
                other key starting materials into finished dosage form.
            ``(2) Rule of construction.--Nothing in this subsection 
        shall be construed to limit the Secretary's ability to enter 
        into other types of contracts to facilitate the implementation 
        of this section.
    ``(f) Reports to Congress.--The Secretary shall report to the 
applicable committees of Congress on supply chain resiliency with 
respect to active pharmaceutical ingredients for essential generic 
medicines, the status of the Reserve, and other relevant information in 
a manner that does not compromise national security.
    ``(g) Definitions.--In this section:
            ``(1) Applicable committees of congress.--The term 
        `applicable committees of Congress' means--
                    ``(A) the Committee on Health, Education, Labor, 
                and Pensions and the Committee on Intelligence of the 
                Senate; and
                    ``(B) the Committee on Energy and Commerce of the 
                House of Representatives.
            ``(2) Essential generic medicine.--The term `essential 
        generic medicine' means a drug included on the most current 
        list under section 319N(a).
            ``(3) Key starting material.--The term `key starting 
        material' means an active pharmaceutical ingredient or critical 
        input used in the manufacturing of an essential generic 
        medicine, as well as ingredients or components that possess 
        unique attributes essential in assessing the safety and 
        effectiveness of such essential generic medicines, including 
        excipients and inactive ingredients.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be 
necessary.''.

SEC. 4. WAIVER OF CERTAIN FDA ANDA REQUIREMENTS.

    Section 505(j) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355(j)) is amended by adding at the end the following:
            ``(14) Notwithstanding any other provision of this section, 
        the holder of an approved application under this subsection 
        that changes the source of an active pharmaceutical ingredient 
        of the drug that is the subject of such application to a source 
        available through the Strategic Active Pharmaceutical 
        Ingredient Reserve established under section 319N-1 of the 
        Public Health Service Act--
                    ``(A) shall not be required to update the approved 
                application with respect to such change before changing 
                the source; and
                    ``(B) shall inform the Secretary of the change, 
                through an update to the approved application or other 
                manner determined appropriate by the Secretary, prior 
                to commercial distribution of the drug.''.

SEC. 5. GAO REPORT.

    By not later than 18 months after the date of enactment of this 
Act, the Comptroller General of the United States shall prepare and 
submit a report to Congress that includes--
            (1) an assessment of what is known about active 
        pharmaceutical ingredient manufacturing, including--
                    (A) the time needed to develop and implement 
                domestic manufacturing capabilities;
                    (B) projected costs of developing new manufacturing 
                capabilities for active pharmaceutical ingredients not 
                currently available domestically, as of the date of the 
                report; and
                    (C) projected costs of expanding existing domestic 
                capabilities and policies, as of the date of the 
                report, that may help establish or strengthen domestic 
                manufacturing capacity for active pharmaceutical 
                ingredients, excipients, key starting materials, 
                components, functional ingredients, and finished dosage 
                manufacturing facilities; and
            (2) an assessment of incentives already offered or being 
        considered for the development or improvement of domestic 
        capacity to manufacture active pharmaceutical ingredients, 
        their intermediates, and their excipients, including--
                    (A) contractual arrangements for existing domestic 
                storage and manufacturing of active pharmaceutical 
                ingredients;
                    (B) guaranteed contracts for initial purchase and 
                replenishment of essential generic medicines; and
                    (C) other policies designed to help incentivize the 
                relocation of manufacturing facilities to the United 
                States or provide economic incentives for domestic 
                production.
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