Title: Enhancing the Security of the U.S. Pharmaceutical Supply Chain Act of 2020
Policy area: Health

Summary:
Enhancing the Security of the U.S. Pharmaceutical Supply Chain Act of 2020
This bill provides tax credits for manufacturing certain priority medicines and establishes an expedited review procedure for drug manufacturers seeking to transition from foreign manufacturing to domestic manufacturing.
The Department of Health and Human Services (HHS) must publish annually a list of priority drugs and active pharmaceutical ingredients that (1) are necessary for use in a public health emergency, (2) are at high risk of becoming in short supply, and (3) have a vulnerable global supply chain. The bill provides a tax credit for 50% of a manufacturer's direct and indirect costs incurred in a taxable year for the production of a drug or active ingredient that was on this list in any of the five preceding years.
Furthermore, the Food and Drug Administration (FDA) must expedite the review and approval of a supplemental application that seeks to transfer manufacturing of an already-approved drug or active pharmaceutical ingredient to a domestic establishment. (A supplemental application generally involves a change, such as a manufacturing change, to an existing application for FDA market approval.) The bill imposes various requirements for this expedited review, including a deadline for the FDA to take action on such a supplemental application within six months of submission.
HHS shall also establish the Facility Transfer Working Group to assist with evaluating such applications and provide advice and feedback to applicants upon request.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8987 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 8987

 To amend the Public Health Service Act to incentivize the manufacture 
 of certain medicines in the United States and to enhance the security 
    of the United States pharmaceutical supply chain, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 16, 2020

  Mr. Joyce of Pennsylvania introduced the following bill; which was 
 referred to the Committee on Energy and Commerce, and in addition to 
   the Committee on Ways and Means, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Public Health Service Act to incentivize the manufacture 
 of certain medicines in the United States and to enhance the security 
    of the United States pharmaceutical supply chain, 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 ``Enhancing the Security of the U.S. 
Pharmaceutical Supply Chain Act of 2020''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Identification, development, and procurement of priority 
                            medicines.
Sec. 4. Priority medicine production credit.
Sec. 5. Improving regulatory efficiencies for transfer of drugs.

SEC. 3. IDENTIFICATION, DEVELOPMENT, AND PROCUREMENT OF PRIORITY 
              MEDICINES.

    (a) Priority Medicines.--Title XXVIII of the Public Health Service 
Act (42 U.S.C. 300hh et seq.) is amended by adding at the end the 
following:

``SEC. 2804. IDENTIFICATION OF PRIORITY MEDICINES.

    ``(a) Priority Medicines.--The Secretary shall designate as a 
priority medicine each covered product that--
            ``(1)(A) is necessary for use in a public health emergency 
        declared under section 319; or
            ``(B) is at high risk of becoming in short supply; and
            ``(2) has a vulnerable global supply chain.
    ``(b) Global Supply Chain Vulnerability.--In determining whether a 
covered product has a vulnerable global supply chain under subsection 
(a)(2), the Secretary shall consider--
            ``(1) the findings of the National Academies of Sciences, 
        Engineering, and Medicine in the report published pursuant to 
        section 4111 of the CARES Act (Public Law 116-136);
            ``(2) the number of manufacturers of each covered product;
            ``(3) the manufacturing locations, and amount produced, of 
        each covered product;
            ``(4) the history of the importation of each priority 
        medicine; and
            ``(5) the probability of the imposition of duties on the 
        importation of each covered product.
    ``(c) Consultation.--In carrying out subsection (a), the Secretary 
shall consult with the Public Health Emergency Medical Countermeasures 
Enterprise established under section 2811-1.
    ``(d) Publication of List.--The Secretary shall--
            ``(1) not later than 180 days after the date of enactment 
        of this section, publish a preliminary list of priority 
        medicines;
            ``(2) provide an opportunity for public comment on such 
        preliminary list;
            ``(3) not later than 1 year after such date of enactment, 
        publish a final list of priority medicines; and
            ``(4) on an annual basis, review and, as appropriate, 
        update such list.
    ``(e) Definitions.--In this section:
            ``(1) Active pharmaceutical ingredient.--The term `active 
        pharmaceutical ingredient'--
                    ``(A) means any component that is intended to 
                furnish pharmacological activity or other direct effect 
                in the diagnosis, cure, mitigation, treatment, or 
                prevention of a disease, or to affect the structure or 
                any function of the body of a human or animal; and
                    ``(B) does not include--
                            ``(i) intermediates used in the synthesis 
                        of a drug product; or
                            ``(ii) components that may undergo chemical 
                        change in the manufacture of a drug product and 
                        be present in a drug product in a modified form 
                        that is intended to furnish such activity or 
                        effect.
            ``(2) Covered product.--The term `covered product' means a 
        drug (including a biological product) or an active 
        pharmaceutical ingredient.
            ``(3) Priority medicine.--The term `priority medicine' 
        means a priority medicine for which a designation is in effect 
        under subsection (a).''.
    (b) National Strategic Health Strategy.--Section 2802(b) of the 
Public Health Service Act (42 U.S.C. 300hh-1(b)) is amended by adding 
at the end the following:
            ``(11) Priority medicines.--Supporting the identification, 
        production, and procurement of priority medicines designated 
        under section 2804.''.
    (c) Public Health Emergency Medical Countermeasures Enterprise 
Recommendations.--Section 2811-1(c)(1) of the Public Health Service Act 
(42 U.S.C. 300hh-10a(c)) is amended by adding at the end the following:
                    ``(E) Provide recommendations to the Secretary with 
                respect to the priority medicines designated under 
                section 2804.''.
    (d) Strategic Plan for Countermeasure Research, Development, and 
Procurement.--Section 319L(b) of the Public Health Service Act (42 
U.S.C. 247d-7e(b)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(D) the development and procurement of priority 
                medicines designated under section 2804.''; and
            (2) by adding at the end the following:
            ``(3) Priority medicines.--With respect to the development 
        and procurement of priority medicines, the Secretary shall 
        promote a diverse and sustainable supply chain, including 
        through grants and purchases.''.
    (e) Critical Drug Consideration.--Section 3101 of the CARES Act 
(Public Law 116-136) is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) after executing the redesignation in paragraph (1), by 
        inserting after subsection (c) the following:
    ``(d) Consideration.--With respect to any analysis of a critical 
drug under subsection (b)(1), the Secretary shall consider the 
vulnerability of such drug with respect to the global supply chain, 
including an analysis of--
            ``(1) the number of manufacturers of such drug;
            ``(2) the manufacturing locations, and amounts produced, of 
        such drug;
            ``(3) the history of the importation of such drug; and
            ``(4) the probability of the imposition of duties on the 
        importation of such drug.''.

SEC. 4. PRIORITY MEDICINE PRODUCTION CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45U. PRIORITY MEDICINE PRODUCTION CREDIT.

    ``(a) General Rule.--For purposes of section 38, the priority 
medicine production credit determined under this section for the 
taxable year is an amount equal to 50 percent of the qualified priority 
medicine expenses for the taxable year.
    ``(b) Qualified Priority Medicine Expenses.--
            ``(1) Qualified priority medicine expenses.--The term 
        `qualified priority medicine expenses' means direct and 
        indirect costs paid or incurred by the taxpayer during the 
        taxable year for the production of priority medicines.
            ``(2) Priority medicines.--For purposes of this section, a 
        `priority medicine' is a medicine that was included, within the 
        5 calendar years immediately preceding the taxable year, on the 
        list developed and published by the Secretary of Health and 
        Human Services pursuant to section 2804(d) of the Public Health 
        Service Act.
            ``(3) Coordination with section 263a.--
                    ``(A) Coordination with section 263a.--In applying 
                section 263A, indirect costs shall be allocated between 
                the production of priority medicines and the production 
                of other medicines based on the ratio in which the 
                number of doses of the priority medicines produced in 
                the taxable year bears to the total number of doses of 
                all medicines produced by the taxpayer in that taxable 
                year to which the expense is attributable.
                    ``(B) Regulations and guidance.--The Secretary 
                shall by regulation or other guidance prescribe rules 
                for the proper allocation of indirect costs described 
                in subparagraph (A).''.
    (b) Credit Allowed as Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 (relating to current year business 
credit) is amended by striking ``plus'' at the end of paragraph (32), 
by striking the period at the end of paragraph (33) and inserting ``, 
plus'', and adding at the end the following new paragraph:
            ``(34) the priority medicine production credit determined 
        under section 45U.''.
    (c) Conforming Amendments.--
            (1) Coordination with section 59.--
                    (A) Section 59A(b)(1)(B)(ii) is amended--
                            (i) in subclause (I), by striking ``plus,'' 
                        at the end;
                            (ii) in subclause (II), by striking the 
                        period at the end, and inserting ``, plus''; 
                        and
                            (iii) by adding at the end the following:
                                    ``(III) the credit allowed under 
                                section 38 for the taxable year which 
                                is properly allocable to the priority 
                                medicine production credit determined 
                                under section 45U.''.
                    (B) Section 59A(b)(2)(B) is amended to read as 
                follows:
                    ``(B) by reducing (but not below zero) the regular 
                tax liability (as defined in section 26(b)) for 
                purposes of subparagraph (B) thereof by the excess (if 
                any) of the aggregate amount of the credits allowed 
                under this chapter against such regular tax liability 
                over the credit allowed under section 38 for the 
                taxable year which is properly allocable to the 
                priority medicine production credit determined under 
                section 45U, rather than the excess described in such 
                paragraph.''.
            (2) Coordination with research credit.--Section 41(c)(4)(A) 
        is amended by striking ``14'' and inserting ``20''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after the item 
relating to section 45T the following new item:

``Sec. 45U. Priority medicine production credit.''
    (e) Effective Date.--The amendments made by this section shall 
apply to qualified priority medicine expenses paid or incurred after 
December 31, 2020.

SEC. 5. IMPROVING REGULATORY EFFICIENCIES FOR TRANSFER OF DRUGS.

    The Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) is 
amended by inserting after section 505-1 of such Act (21 U.S.C. 355-1) 
the following:

``SEC. 505-2. TRANSFER OF DRUGS TO DOMESTIC ESTABLISHMENTS.

    ``(a) In General.--Beginning not later than 90 days after the date 
of the enactment of this section, the Secretary shall expedite the 
review and approval of a supplemental application to an abbreviated new 
drug application approved under section 505(j) or a new drug 
application approved under section 505(c) that seeks to transfer 
manufacturing of one or more finished dosage forms of a drug or one or 
more active pharmaceutical ingredients therein from one or more foreign 
establishments to one or more new or existing domestic establishments.
    ``(b) Before Supplemental Application Submission.--
            ``(1) Development and pre-submission.--After an applicant 
        submits a meeting request with respect to expedited review and 
        approval of a supplemental application pursuant to subsection 
        (a), the Secretary shall--
                    ``(A) not later than 30 days after receiving such 
                request, conduct a meeting with the applicant to--
                            ``(i) discuss the information necessary to 
                        approve the supplemental application; and
                            ``(ii) if applicable, schedule a pre-
                        approval inspection; and
                    ``(B) not later than 60 days after receiving such 
                request, conduct a meeting with the applicant to--
                            ``(i) provide advice to the applicant with 
                        respect to the supplemental application; and
                            ``(ii) if applicable, select a first drug 
                        to be identified in accordance with subsection 
                        (c).
            ``(2) Review and approval.--In carrying out subsection (a), 
        the Secretary shall--
                    ``(A) review and take action with respect to a 
                supplemental application not later than 6 months after 
                the date of submission or resubmission of such 
                application; and
                    ``(B) where the Secretary recommends a change to a 
                domestic establishment following an inspection of such 
                establishment, reinspect the establishment not later 
                than 90 days after receiving a request from the 
                applicant for reinspection.
            ``(3) Relation to fee performance goals.--The deadlines 
        specified in paragraph (1) supersede any conflicting 
        performance goals identified in any statute reauthorizing the 
        fee programs in parts 2 and 7 of subchapter C of title VII of 
        the Federal Food, Drug, and Cosmetic Act.
    ``(c) Contents.--With respect to a supplemental application under 
subsection (a) for a transfer of the site of manufacture of multiple 
drugs that share a similar manufacturing process, the Secretary shall--
            ``(1) request a list of the drugs;
            ``(2) from the list under paragraph (1), identify a first 
        drug to be transferred;
            ``(3) determine the criteria necessary to receive approval 
        of the supplemental application; and
            ``(4) require the applicant to demonstrate, as part of such 
        criteria, that each foreign establishment from which the drugs 
        are to be transferred has a satisfactory inspection history 
        with respect to the drugs.
    ``(d) Subsequent Transfer of Drugs That Share a Similar 
Manufacturing Process.--After the approval of a supplemental 
application under subsection (a) for the transfer of the manufacturing 
of a first drug identified by the Secretary pursuant to subsection 
(c)(2) from one or more foreign establishments to one or more new or 
existing domestic establishments, the Secretary may allow the applicant 
to so transfer drugs that share a similar manufacturing process with 
such first drug pursuant to submission of a report under section 
506A(d)(2) rather than by requiring submission of a supplemental 
application.
    ``(e) Working Group.--
            ``(1) Establishment.--Not later than 90 days after the date 
        of enactment of this section, the Secretary shall establish an 
        intra-agency working group to be known as the Facility Transfer 
        Working Group.
            ``(2) Membership.--The Secretary shall appoint members of 
        the Facility Transfer Working Group from among officials and 
        employees of the Department of Health and Human Services who--
                    ``(A) represent a cross-section of the Department 
                of Health and Human Services; and
                    ``(B) have expertise on establishments used to 
                manufacture drugs.
            ``(3) Duties.--The Facility Transfer Working Group shall--
                    ``(A) assist the Secretary in carrying out this 
                section;
                    ``(B) upon request by an applicant, conduct an 
                informational site visit during the developmental phase 
                to discuss requirements with the applicant with respect 
                to facility design, site status, and validation;
                    ``(C) not later than 30 days after conducting an 
                informational site visit under subparagraph (B), 
                provide advice and feedback to the applicant with 
                respect to facility issues that may prevent approval of 
                the supplemental application under subsection (a), 
                including any issues with the facility transfer plans; 
                and
                    ``(D) participate in any pre-approval inspection 
                required by the Secretary for an establishment or 
                provide feedback to the Secretary with respect to a 
                supplemental application described in subsection (a).
    ``(f) Additional Informational Visits.--Upon request by the 
applicant, the Secretary may conduct informational site visits in 
addition to an informational site visit conducted by the Facility 
Transfer Working Group under subsection (e).
    ``(g) Guidance.--
            ``(1) Issuance.--Not later than 1 year after the date of 
        enactment of this section, the Secretary shall issue guidance 
        with respect to this section.
            ``(2) Content.--The guidance issued under this paragraph 
        shall include--
                    ``(A) the process by which an applicant may seek 
                expedited review and approval of a supplemental 
                application under subsection (a); and
                    ``(B) a description of the actions the Secretary 
                may take to expedite the submission and review of such 
                supplemental application.
    ``(h) Definitions.--In this section:
            ``(1) Satisfactory inspection history.--The term 
        `satisfactory inspection history' means, with respect to a 
        drug, a history consisting of one or more inspections in which 
        the most recent manufacturing inspection was a satisfactory 
        manufacturing inspection during which--
                    ``(A) no objectionable conditions or practices were 
                found; or
                    ``(B) objectionable conditions were found and 
                voluntary corrective action was left to the 
                manufacturer.
            ``(2) Similar manufacturing process.--The term `similar 
        manufacturing process' means processes used to manufacture 
        drugs that share at least one unit operation having the same 
        design principle.''.
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