Title: Strengthening America’s Supply Chain and National Security Act
Policy area: Health

Summary:
Strengthening America's Supply Chain and National Security Act
This bill requires the Department of Defense (DOD) and the Department of Health and Human Services (HHS) to take specified actions concerning the importation of pharmaceutical products from China and any other countries selected by DOD.
DOD must submit to Congress a classified report that addresses, among other issues, the percentage of pharmaceutical products used by DOD that are made by such countries and recommendations related to the domestic manufacturing capacity and the resiliency of the supply chain for such products. An unclassified summary of this report must be published on a DOD website.
A manufacturer of a pharmaceutical product that has received market approval must annually submit to HHS specified information about the product's active and inactive pharmaceutical ingredients, including the sources of such ingredients and the percentage of the aggregate amount of such ingredients from China and other countries selected by DOD. HHS shall provide such information to DOD.
In addition, the bill revises certain statutory tests used to determine the country of origin of a pharmaceutical product. Specifically, a pharmaceutical product shall be deemed to have the same country of origin as the product's active pharmaceutical ingredient (API). (A recent court case held that a drug manufactured in the United States using an API from India is considered a U.S.-made product for procurement purposes.)

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3538 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 3538

 To require the Secretary of Defense to submit to Congress a report on 
    the reliance by the Department of Defense on imports of certain 
pharmaceutical products made in part or in whole in certain countries, 
to establish postmarket reporting requirements for pharmaceuticals, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 19, 2020

  Mr. Rubio (for himself, Ms. Warren, Mr. Cramer, Mr. Murphy, and Mr. 
Kaine) introduced the following bill; which was read twice and referred 
                      to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To require the Secretary of Defense to submit to Congress a report on 
    the reliance by the Department of Defense on imports of certain 
pharmaceutical products made in part or in whole in certain countries, 
to establish postmarket reporting requirements for pharmaceuticals, 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 ``Strengthening America's Supply Chain 
and National Security Act''.

SEC. 2. REPORT ON RELIANCE BY DEPARTMENT OF DEFENSE ON PHARMACEUTICAL 
              PRODUCTS FROM CERTAIN COUNTRIES.

    (a) In General.--Not later than one year after the date of the 
enactment of this Act, the Secretary of Defense, in coordination with 
the Secretary of Health and Human Services, shall submit to the 
appropriate congressional committees a classified report on the 
reliance by the Department of Defense on imports of certain 
pharmaceutical products made in part or in whole in a covered country.
    (b) Elements.--The report required by subsection (a) shall--
            (1) analyze the percent of pharmaceutical products used by 
        the Department of Defense that are made in part or in whole in 
        a covered country, including--
                    (A) drugs;
                    (B) active ingredients;
                    (C) raw pharmaceutical components;
                    (D) nonprescription drugs intended for human use; 
                and
                    (E) any other pharmaceutical product, or its 
                components, as the Secretary considers appropriate;
            (2) assess the products identified under paragraph (1) to 
        determine--
                    (A) whether the Department of Defense can procure 
                the product from other sources;
                    (B) whether reliance by the Department of Defense 
                on the product is likely, or has significant potential, 
                to be used for a military, geopolitical, or economic 
                advantage against the United States;
                    (C) whether reliance on the product creates a risk 
                for the United States; and
                    (D) what impact there would be if access to the 
                product was terminated;
            (3) set forth recommendations to ensure that by 2025 no 
        pharmaceutical products purchased for beneficiaries of health 
        care from the Department of Defense or any associated program 
        are made in part or in whole in a covered country;
            (4) assess the resilience and capacity of the current 
        supply chain and industrial base to support national defense if 
        no pharmaceutical products purchased for beneficiaries of 
        health care from the Department of Defense or any associated 
        program are made in part or in whole in a covered country, 
        including with respect to--
                    (A) the manufacturing capacity of the United 
                States;
                    (B) gaps in domestic manufacturing capabilities, 
                including non-existent, extinct, threatened, and 
                single-point-of-failure capabilities; and
                    (C) supply chains with single points of failure and 
                limited resiliency;
            (5) set forth recommendations--
                    (A) to diversify supply of pharmaceutical products 
                away from complete dependency on sources of supply in 
                countries that are competitors of the United States or 
                politically unstable that may cut off supply in the 
                United States;
                    (B) to address critical bottlenecks in the supply 
                of pharmaceutical products in the United States; and
                    (C) to mitigate single points of failure and 
                limited resilience of supply chains for pharmaceutical 
                products in the United States; and
            (6) set forth recommendations for legislative and 
        administrative action necessary to avoid, or prepare for, 
        contingencies identified in the report.
    (c) Publication of Unclassified Summary.--Concurrent with the 
submittal of the report required by subsection (a), the Secretary of 
Defense shall publish on a publicly available internet website of the 
Department of Defense an unclassified summary of the report.
    (d) Definitions.--In this section:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Armed Services, the Select 
                Committee on Intelligence, the Committee on Finance, 
                the Committee on Banking, Housing, and Urban Affairs, 
                and the Committee on Health, Education, Labor, and 
                Pensions of the Senate; and
                    (B) the Committee on Armed Services, the Permanent 
                Select Committee on Intelligence, the Committee on Ways 
                and Means, the Committee on Financial Services, and the 
                Committee on Energy and Commerce of the House of 
                Representatives.
            (2) Covered country.--The term ``covered country'' means--
                    (A) China; and
                    (B) any other country as determined by the 
                Secretary of Defense for national security purposes.
            (3) Drug.--The term ``drug'' means a product subject to 
        regulation under section 505 or section 802 of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 355 or 382) or under 
        section 351 of the Public Health Service Act (42 U.S.C. 262).
            (4) Nonprescription drug.--The term ``nonprescription 
        drug'' has the meaning given that term in section 760(a)(2) of 
        the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        379aa(a)(2)).

SEC. 3. MODIFICATION OF RULES OF ORIGIN FOR PHARMACEUTICAL PRODUCTS.

    (a) Trade Agreements.--Section 308(4)(B) of the Trade Agreements 
Act of 1979 (19 U.S.C. 2518(4)(B)) is amended--
            (1) in clause (i), by striking ``instrumentality, or'' and 
        inserting ``instrumentality,'';
            (2) in clause (ii)--
                    (A) by inserting ``, other than an active 
                pharmaceutical ingredient,'' after ``part of 
                materials''; and
                    (B) by striking the period at the end and inserting 
                ``, or''; and
            (3) by inserting before the period at the end the 
        following: ``(iii) in the case of an article which consists of 
        an active pharmaceutical ingredient, the pharmaceutical 
        ingredient is wholly the growth, product, or manufacture of 
        that country or instrumentality''.
    (b) Federal Acquisition Regulation.--Not later than 180 days after 
the date of the enactment of this Act, the President shall prescribe 
regulations to update sections 52.225-5 and 25.003 of title 48, Code of 
Federal Regulations (or successor regulations) to be consistent with 
rules of origin determinations for active pharmaceutical ingredients 
made under section 308(4)(B) of the Trade Agreements Act of 1979 (19 
U.S.C. 2518(4)(B)), as amended by subsection (a).

SEC. 4. POSTMARKET REPORTING REQUIREMENTS FOR PHARMACEUTICALS.

    (a) In General.--The Secretary of Health and Human Services, acting 
through the Commissioner of Food and Drugs, shall ensure that each 
holder of an approved application under section 505 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 355) or under section 351 of 
the Public Health Service Act (42 U.S.C. 262) annually submit, as part 
of the postmarket annual report required by the Secretary under section 
314.81(b)(2) of title 21, Code of Federal Regulations (or any successor 
regulation), the following information:
            (1) The names and addresses of the sources of active and 
        inactive ingredients of the drug.
            (2) For each active and inactive ingredient of the drug, 
        the percentage of the aggregate amount of such ingredient used 
        in the manufacture of the drug during the reporting period that 
        is from each of the sources identified under paragraph (1).
    (b) Disclosure of Information.--The Secretary of Health and Human 
Services shall--
            (1) annually provide the information reported in paragraphs 
        (1) and (2) of subsection (a) to the Secretary of Defense for 
        purposes of understanding the dependency on foreign 
        manufacturers of drugs used by members of the Armed Forces; and
            (2) publish the information reported under such paragraphs 
        on a publicly available internet website of the Federal 
        Government in a single, aggregate form, without disclosing 
        proprietary information.
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