Pandemic Emergency Manufacturing Act of 2021
Bill: S.187 | Sponsor: Sen. Warren, Elizabeth (D-MA)
Policy area: Health

Summary:
Pandemic Emergency Manufacturing Act of 2021
This bill establishes within the Department of Health and Human Services (HHS) an Emergency Office of Manufacturing for Public Health to manufacture and distribute medical products to address COVID-19 (i.e., coronavirus disease 2019) or medical products that are on shortage or vulnerable to shortage.
The office must (1) obtain the rights to manufacture the applicable medicines, ingredients, diagnostic tests, medical devices, personal protective equipment, and supplies; (2) manufacture or contract to manufacture such items; and (3) construct, or enter into construction contracts for, facilities to manufacture certain medicines, such as vaccines.
HHS may issue involuntary licenses allowing the office to make, use, sell, import, or export an invention related to an applicable drug, biological product, or device and to use clinical trial data and confidential information. Such a license must provide the rights holder with reasonable compensation.
The office must (1) provide such COVID-19 products at no cost to federal, state, local, and other health programs and certain domestic health care providers and suppliers; (2) offer COVID-19 products at cost to other commercial and international entities; and (3) offer other medical products to entities at a fair price, based on cost and other considerations.
The office shall prioritize the manufacture of certain COVID-19 products and meet manufacturing timelines specified in the bill.

To amend the Public Health Service Act to establish an Emergency Office 
      of Manufacturing for Public Health, and for other purposes.

    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 ``Pandemic Emergency Manufacturing Act 
of 2021''.

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:

``SEC. 310B. MANUFACTURING OF DRUGS, BIOLOGICAL PRODUCTS, DEVICES, AND 
              PERSONAL PROTECTIVE EQUIPMENT.

    ``(a) Emergency Office of Manufacturing for Public Health.--
            ``(1) Establishment.--There is established within the 
        Department of Health and Human Services an office to be known 
        as the Emergency Office of Manufacturing for Public Health 
        (referred to in this section as the `Office').
            ``(2) Purpose.--The purposes of the Office are--
                    ``(A) to ensure an adequate supply of, and increase 
                access to, prescription drugs, biological products, 
                devices, and other supplies, including personal 
                protective equipment, necessary to, as appropriate, 
                diagnose, mitigate, prevent, or treat COVID-19 and to 
                mitigate the harm the COVID-19 pandemic might otherwise 
                cause for the strategic national stockpile under 
                section 319F-2, Federal, State, local, and Native 
                health programs, and the commercial market;
                    ``(B) to address shortages in the strategic 
                national stockpile and commercial market of 
                prescription drugs, biological products, devices, and 
                personal protective equipment used to treat conditions 
                other than COVID-19; and
                    ``(C) to provide prescription drugs, biological 
                products, devices, and personal protective equipment 
                necessary to diagnose, mitigate, prevent, and treat 
                COVID-19 and to mitigate the harm the COVID-19 pandemic 
                might otherwise cause, to Federal, State, local, and 
                Native health programs, at no cost, and to consumers in 
                the commercial market and other international entities 
                at cost.
            ``(3) Personnel.--
                    ``(A) Director.--
                            ``(i) In general.--The Office shall be 
                        headed by a Director, who shall be appointed by 
                        the President, not later than 15 days after the 
                        date of enactment of the Pandemic Emergency 
                        Manufacturing Act of 2021, by and with the 
                        advice and consent of the Senate.
                            ``(ii) Acting director.--The Assistant 
                        Secretary for Preparedness and Response, if in 
                        compliance with subparagraph (C), may serve as 
                        Director of the Office in an acting capacity 
                        until the later of Senate confirmation of a 
                        Director or 3 months after date of enactment of 
                        the Pandemic Emergency Manufacturing Act of 
                        2021.
                            ``(iii) Compensation.--The Director shall 
                        be compensated at the rate prescribed for level 
                        III of the Executive Schedule under section 
                        5314 of title 5, United States Code.
                    ``(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 lobbyist--
                                    ``(I) may be appointed to the 
                                position of Director of the Office; or
                                    ``(II) may be employed by the 
                                Office during the 6-year period 
                                beginning on the date on which the 
                                registered lobbyist terminates its 
                                registration in accordance with section 
                                4(d) of the Lobbying Disclosure Act of 
                                1995 or the agent terminates its 
                                status, as applicable.
                            ``(ii) Senior executives of law-breaking 
                        companies.--No former senior executive of a 
                        covered entity--
                                    ``(I) may be appointed to the 
                                position of Director of the Office; or
                                    ``(II) may be employed by the 
                                Office during the 6-year period 
                                beginning on the later of--
                                            ``(aa) the date of the 
                                        settlement; and
                                            ``(bb) the date on which 
                                        the enforcement action has 
                                        concluded.
                            ``(iii) Covered entity.--For purposes of 
                        clause (ii), the term `covered entity' means 
                        any entity that is--
                                    ``(I) a drug manufacturer; and
                                    ``(II)(aa) operating under Federal 
                                settlement, including a Federal consent 
                                decree; or
                                    ``(bb) the subject of an 
                                enforcement 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 Administration, 
                        or enter into contracts for such submission, 
                        for the manufacture of applicable COVID-19 
                        products and other applicable drugs, biological 
                        products, and devices when authorized under 
                        this section;
                            ``(ii) obtain rights to manufacture 
                        applicable COVID-19 products and applicable 
                        drugs, biological products, and devices as 
                        authorized under this section;
                            ``(iii) manufacture, or enter into 
                        contracts with entities to manufacture, 
                        applicable COVID-19 products and other 
                        applicable drugs, biological products, and 
                        devices as authorized under this section;
                            ``(iv) determine a fair price for each 
                        applicable drug, biological product, and 
                        device, in accordance with subparagraph 
                        (B)(ii);
                            ``(v) sell manufactured applicable drugs, 
                        biological products, and devices at a fair 
                        price, as authorized under this section;
                            ``(vi) provide, at no cost, applicable 
                        COVID-19 products to Federal, State, local, and 
                        Native health programs, and other domestic 
                        health care providers and suppliers, as 
                        determined by the Secretary;
                            ``(vii) sell, at-cost, applicable COVID-19 
                        products to other commercial entities and 
                        international entities, in accordance with 
                        subparagraph (B)(i); and
                            ``(viii) manufacture, or enter into 
                        contracts with entities to manufacture, active 
                        pharmaceutical ingredients for use by the 
                        Office or for sale to other entities.
                    ``(B) Pricing determinations.--
                            ``(i) At-cost price.--In determining an at-
                        cost price for an applicable COVID-19 product 
                        under subparagraph (A)(vii) the Office shall 
                        consider--
                                    ``(I) the cost to the Federal 
                                Government of manufacturing the 
                                applicable COVID-19 product;
                                    ``(II) the administrative costs of 
                                operating the Office; and
                                    ``(III) the cost to acquire or 
                                manufacture applicable COVID-19 product 
                                under this section.
                            ``(ii) Fair price.--In determining a fair 
                        price for an applicable drug, biological 
                        product, or device under subparagraph (A)(iv) 
                        the Office shall consider--
                                    ``(I) the impact of price on 
                                patient access to the applicable drug, 
                                biological product, or device;
                                    ``(II) the cost of the applicable 
                                drug, biological product, or device to 
                                Federal or State health care programs;
                                    ``(III) the cost to the Federal 
                                Government of manufacturing the 
                                applicable drug, biological product, or 
                                device;
                                    ``(IV) the administrative costs of 
                                operating the Office;
                                    ``(V) the cost to acquire or 
                                manufacture the applicable drug, 
                                biological product, or device under 
                                this section; and
                                    ``(VI) the impact of price on 
                                market competition for the applicable 
                                drug, biological product, or device.
                            ``(iii) Transparency.--All prices charged 
                        for applicable COVID-19 products and applicable 
                        drugs, biological products, or devices shall be 
                        made publicly available by the Office.
                    ``(C) Obtaining rights to manufacture and market.--
                            ``(i) In general.--When necessary to 
                        fulfill the Office's duties under this section, 
                        the Office shall acquire the rights to 
                        manufacture and market applicable COVID-19 
                        products and applicable drugs, biological 
                        products, and devices as authorized under this 
                        section.
                            ``(ii) Licensing authority.--
                                    ``(I) In general.--Notwithstanding 
                                any other provision of law, the 
                                Secretary may issue licenses, as useful 
                                for fulfilling the duties under this 
                                Act, allowing the Office to practice or 
                                have practiced (which may include 
                                licensure of retroactive practice) any 
                                invention in the United States or 
                                territories of the United States, 
                                including making, using, offering to 
                                sell or selling, importing, or 
                                exporting such invention, to reference 
                                or rely upon clinical trial data 
                                submitted to a regulatory authority or 
                                the grant of marketing approval, and to 
                                access and use otherwise confidential 
                                information, including know-how, 
                                related to the manufacture of an 
                                applicable COVID-19 product or 
                                applicable drug, biological product, or 
                                device.
                                    ``(II) Non-voluntary licensing.--
                                For any license that involves a non-
                                voluntary authorization to use patented 
                                inventions, regulatory test data, data, 
                                know-how or other intellectual property 
                                rights, the license shall provide for 
                                reasonable remuneration to rights 
                                holders such as a reasonable royalty on 
                                the sales of product, a 1-time payment, 
                                or some combination, provided that the 
                                combined royalty payments to all rights 
                                holders shall not exceed the percentage 
                                of sales that is the average percent of 
                                all royalty payments reported to the 
                                Internal Revenue Service by companies 
                                in the pharmaceutical and medicines 
                                sector, North American Industry 
                                Classification System code 325410, 
                                provided that when products are 
                                distributed for free, the royalty shall 
                                be based upon the cost of goods. When 
                                there are multiple rights holders, the 
                                allocation of the total royalty 
                                payments shall be determined by--
                                            ``(aa) agreement among the 
                                        rights holders;
                                            ``(bb) allocation by 
                                        arbitration among the rights 
                                        holders; or
                                            ``(cc) if neither item (aa) 
                                        nor (bb) applies, by the 
                                        Office.
                            ``(iii) Transparency.--Subject to clause 
                        (iv), the Secretary shall post any contract 
                        agreement under subparagraph (A) or license 
                        issued under clause (ii) on the public internet 
                        website of the Department of Health and Human 
                        Services, on the date on which such agreement 
                        or license takes effect.
                            ``(iv) Protected information.--In carrying 
                        out this section, the Secretary shall enforce 
                        applicable law concerning the protection of 
                        confidential commercial information and trade 
                        secrets.
                    ``(D) Active pharmaceutical ingredients.--
                            ``(i) In general.--The Office shall 
                        manufacture, or enter into contracts with 
                        entities to manufacture, an active 
                        pharmaceutical ingredient applicable to a drug 
                        or biological product that is either an 
                        applicable COVID-19 product or an applicable 
                        drug or biological product if--
                                    ``(I) the Office determines that 
                                such ingredient is not readily 
                                available from existing suppliers or 
                                the existing supply of such ingredient 
                                to the domestic market is vulnerable to 
                                disruption;
                                    ``(II) the manufacture of such 
                                ingredient would improve the ability of 
                                other entities to enter the market for 
                                the manufacture of applicable COVID-19 
                                products or applicable drugs, 
                                biological products, or devices, or 
                                otherwise expand the manufacture of 
                                applicable COVID-19 products or 
                                applicable drugs, biological products, 
                                or devices; or
                                    ``(III) the manufacture of such 
                                ingredient is necessary for the Office 
                                to carry out its duties under this 
                                section.
                            ``(ii) Price determinations.--In 
                        determining the price at which to sell an 
                        active pharmaceutical ingredient manufactured 
                        in accordance with clause (i), the Office shall 
                        consider the cost to manufacture the 
                        ingredient, the administrative costs of the 
                        Office with respect to the ingredient, and the 
                        impact of such price on market competition for 
                        the ingredient.
                    ``(E) Priority.--In awarding contracts under this 
                paragraph, the Office shall prioritize entities 
                manufacturing applicable COVID-19 products and 
                applicable drugs, biological products, and devices 
                using components originating and manufactured in the 
                United States.
                    ``(F) Contract requirements.--All contracts issued 
                under this paragraph shall include a requirement that 
                the contract recipients reasonably price products 
                produced under the contract.
    ``(b) Manufacturing of Products.--
            ``(1) In general.--As soon as practicable after the date of 
        enactment of this section, but no later than 1 month after such 
        date of enactment, the Office shall begin--
                    ``(A) manufacturing, or entering into contracts 
                with entities for the manufacture of applicable COVID-
                19 products and applicable drugs, biological products, 
                and devices, prioritizing drugs, biological products, 
                devices or personal protective equipment the 
                manufacture of which would provide the greatest public 
                health impact; and
                    ``(B) constructing, or entering into contracts to 
                construct, manufacturing facilities, including the 
                construction of advanced manufacturing technology, RNA 
                vaccines, DNA vaccines, recombinant protein vaccines, 
                and other therapeutics, viral vector-based vaccines, 
                live attenuated vaccines, inactivated vaccines, or 
                other therapeutics, after clinical data relating to 
                such products have demonstrated strong positive 
                indications of safety and efficacy, to ensure immediate 
                production at-scale upon Federal approval.
            ``(2) Submission of applications.--For each applicable 
        COVID-19 product, and for each applicable drug, biological 
        product, or device that the Office determines should be 
        manufactured, as provided for under this section, the Secretary 
        shall--
                    ``(A) submit an application under section 505(b), 
                505(j), or 515 of the Federal Food, Drug, and Cosmetic 
                Act or section 351(a) or 351(k) of this 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);
                    ``(B) request an emergency use authorization of the 
                product under section 564 of the Federal Food, Drug, 
                and Cosmetic Act (21 U.S.C. 360bbb-3) (or enter into a 
                contract with another entity to submit an application 
                for such use); or
                    ``(C) obtain from the holder of an application 
                approved under subsection (c) or (j) of section 505 or 
                section 515 of the Federal Food, Drug, and Cosmetic Act 
                or subsection (a) or (k) of section 351 of the Public 
                Health Service Act, or cleared under section 510(k) of 
                the Federal Food, Drug, and Cosmetic Act, rights to 
                manufacture such applicable drug.
            ``(3) Manufacturing timelines.--
                    ``(A) Personal protective equipment.--Not later 
                than 1 month after the date of enactment of this 
                section, the Secretary shall begin the public 
                manufacturing of personal protective equipment, 
                including surgical masks, surgical gowns, face shields, 
                and N95 masks, meeting the definition of applicable 
                COVID-19 product and in accordance with this section.
                    ``(B) COVID-19 diagnostic test materials.--Not 
                later than 1 month after the date of enactment of this 
                section, the Secretary shall begin the public 
                manufacturing of materials necessary for the 
                development of COVID-19 diagnostic tests, including 
                chemical reagents, test swabs, and materials necessary 
                to develop serological COVID-19 tests, meeting the 
                definition of applicable COVID-19 product and in 
                accordance with this section.
                    ``(C) COVID-19 treatment drugs.--As soon as 
                practicable after the date of enactment of this 
                section, the Secretary shall begin the public 
                manufacturing of drugs and biological products in 
                shortage, and any devices used to administer such drugs 
                and biological products, that are used for treatment of 
                severe COVID-19 cases, including albuterol, drugs used 
                to intubate patients, antibiotics, and antivirals, 
                meeting the definition of applicable COVID-19 product 
                and in accordance with this section.
            ``(4) Priority manufacturing.--The Office shall prioritize 
        the manufacturing of applicable COVID-19 products and 
        applicable drugs, biological products, and devices that would 
        have the greatest impact on--
                    ``(A) diagnosing, mitigating, preventing, treating, 
                or curing COVID-19;
                    ``(B) limiting the harm the COVID-19 pandemic might 
                otherwise cause to public health and the economy;
                    ``(C) addressing shortages of drugs, biological, 
                products, and devices;
                    ``(D) reducing the cost of combating COVID-19 to 
                Federal, State, local, and Native health programs; and
                    ``(E) alleviating demographic disparities in COVID-
                19 outcomes or access to diagnosis, mitigation, 
                prevention, and treatment.
    ``(c) Provision of Products.--
            ``(1) Provision of applicable covid-19 products.--The 
        Secretary shall provide applicable COVID-19 products at no cost 
        to Federal, State, local, and Native health programs, and other 
        domestic health care providers and suppliers, including 
        domestic commercial health care providers, as determined by the 
        Secretary, and sell at cost applicable COVID-19 products to 
        other commercial entities and international entities. Amounts 
        received from the sale of such drugs shall be used for the 
        activities of the Office.
            ``(2) Provision of applicable drugs, biological products 
        and devices.--The Secretary shall sell applicable drugs, 
        biological products, and devices produced under this section at 
        a fair price to other entities. Amounts received from the sale 
        of such drugs shall be used to replenish the national strategic 
        stockpile under section 319F-2.
    ``(d) Oversight of Contracts.--In the case of applicable COVID-19 
products and applicable drugs, biological products, and devices 
manufactured via contracts, the Inspector General of the Department of 
Health and Human Services shall conduct a review of not fewer than 1 of 
every 3 contracts entered into under this section, and of the entities 
entering into such contracts, to ensure that the Office is issuing 
contracts under fair and reasonable terms and conditions, including 
facilitating the procurement by the Federal Government of applicable 
COVID-19 products and applicable drugs, biological products, and 
medical devices at fair and reasonable prices. The Inspector General 
shall make each such review public and, in cases where such a review 
identifies unreasonable prices, submit recommendations to Congress on 
how the Office should improve its contracting systems to ensure 
reasonable pricing.
    ``(e) Reports to Congress.--The Director shall prepare and submit 
to the President, the Committee on Health, Education, Labor, and 
Pensions of the Senate, and the Committee on Energy and Commerce of the 
House of Representatives, not later than 1 month after the date of 
enactment of the Pandemic Emergency Manufacturing Act of 2021 and 
monthly thereafter until 3 months after the public health emergency 
declared by the Secretary under section 319 on January 31, 2020, with 
respect to COVID-19 has concluded, that includes--
            ``(1) an assessment of the major supply chain challenges 
        facing hospitals, medical providers, the Federal Government, 
        State, local, and tribal governments, and the private sector in 
        procuring drugs, biological products, devices, and personal 
        protective equipment to combat and prevent the spread of COVID-
        19; and
            ``(2) a description of the status of all drugs, biological 
        products, devices, active pharmaceutical ingredients, and 
        personal protective equipment for which manufacturing has been 
        authorized under this section, including drugs, biological 
        products, devices, active pharmaceutical ingredients, and 
        personal protective equipment being manufactured, drugs, 
        biological products, devices, active pharmaceutical 
        ingredients, and personal protective equipment for which the 
        Office has submitted an application for approval or a 
        notification for clearance or classification to the Food and 
        Drug Administration but has not yet received approval, 
        clearance, or classification, and drugs, biological products, 
        devices, active pharmaceutical ingredients, and personal 
        protective equipment for which the Office has received 
        approval, clearance, or classification from the Food and Drug 
        Administration but are not being manufactured.
    ``(f) Definitions.--In this section:
            ``(1) Applicable drug, biological product, or device 
        definition.--The term `applicable drug, biological product, or 
        device' means a drug (as defined in section 201(g) of the 
        Federal Food, Drug, and Cosmetic Act), biological product (as 
        defined in section 351(i) of the Public Health Service Act), 
        combination product (as described in section 503(g) of the 
        Federal Food, Drug, and Cosmetic Act), or device (as defined in 
        section 201(h) 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 section 351 of the 
        Public Health Service Act, or clearance under section 510(k) of 
        the Federal Food, Drug, and Cosmetic Act, is in effect, and--
                    ``(A) is included in the drug shortage list under 
                section 506E of the Federal Food, Drug, and Cosmetic 
                Act; or
                    ``(B) is vulnerable to shortage.
            ``(2) Applicable covid-19 product definition.--
                    ``(A) In general.--The term `applicable COVID-19 
                product' means a product that is included on a list 
                that the Secretary of Health and Human Services, in 
                consultation with the Commissioner of Food and Drugs, 
                the Assistant Secretary for Preparedness and Response, 
                and the Director of the Centers for Disease Control and 
                Prevention, shall compile not later than 2 weeks after 
                the date of enactment of this section and shall review 
                and update, as necessary, every 2 weeks of--
                            ``(i) qualified pandemic or epidemic 
                        products, as defined under section 319F-3, that 
                        are--
                                    ``(I)(aa) drugs, biological 
                                products, and devices that are 
                                manufactured, used, designed, 
                                developed, modified, licensed or 
                                procured--
                                            ``(AA) to diagnose, 
                                        mitigate, prevent, treat, or 
                                        cure COVID-19; or
                                            ``(BB) to limit the harm 
                                        the COVID-19 pandemic might 
                                        otherwise cause;
                                    ``(bb) drugs, biological products, 
                                and devices that are manufactured, 
                                used, designed, developed, modified, 
                                licensed, or procured to diagnose, 
                                mitigate, prevent, treat, or cure a 
                                serious or life-threatening disease or 
                                condition caused by a product described 
                                in item (aa); or
                                    ``(cc) drugs, biological products, 
                                devices or technologies intended to 
                                enhance the use or effect of a drug, 
                                biological product, or device described 
                                in item (aa) or (bb); and
                            ``(ii) personal protective equipment, 
                        including protective equipment for eyes, face, 
                        head, and extremities, protective clothing, 
                        respiratory devices, and protective shields and 
                        barriers, used to protect people from COVID-19 
                        infection.
                    ``(B) Consultation.--In developing the list 
                described in subparagraph (A), the Secretary shall 
                consult with the Administrator of the Federal Emergency 
                Management Administration and the Secretary of Defense 
                to ensure that, in instances where the President has 
                enacted the Defense Production Act to produce 
                applicable COVID-19 products, the Office does not 
                replicate or overproduce products being developed under 
                the Act.
            ``(3) Native health program.--The term `Native health 
        program' shall include--
                    ``(A) a program provided through the Indian Health 
                Service;
                    ``(B) any health program operated by--
                            ``(i) an Indian tribe, or Tribal 
                        organization, as such terms are defined in 
                        section 4 of the Indian Self-Determination and 
                        Education Assistance Act;
                            ``(ii) an inter-tribal consortium, as 
                        defined in section 501(a) of the Indian Self-
                        Determination and Education Assistance Act; or
                            ``(iii) an urban Indian organization, as 
                        defined in section 4 of the Indian Health Care 
                        Improvement Act; and
                    ``(C) any health program provided through a Native 
                Hawaiian health care system, as defined in section 12 
                of the Native Hawaiian Health Care Improvement Act.
            ``(4) Domestic health care provider.--The term `domestic 
        health care provider' shall include the direct support 
        professional, home health, and personal care attendant 
        workforce.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this 
section.''.
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