[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7113 Introduced in House (IH)]
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116th CONGRESS
2d Session
H. R. 7113
To amend the Public Health Service Act to establish an Emergency Office
of Manufacturing for Public Health, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 4, 2020
Ms. Schakowsky introduced the following bill; which was referred to the
Committee on Energy and Commerce
_______________________________________________________________________
A 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 ``COVID-19 Emergency Manufacturing Act
of 2020''.
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 COVID-19 Emergency
Manufacturing Act of 2020, 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 COVID-19 Emergency Manufacturing Act of
2020.
``(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 shall 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,
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 subsection (b) or
(j) of section 505, or under section 515, of the
Federal Food, Drug, and Cosmetic Act or subsection (a)
or (k) of section 351 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 564A of the Federal Food, Drug,
and Cosmetic Act (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, a monthly report during the public health
emergency declared by the Secretary under section 319 on January 31,
2020, with respect to COVID-19, and a final report 3 months after the
public health emergency 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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