[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5638 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
2d Session
S. 5638
To secure the supply of drugs in the United States, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 19 (legislative day, December 16), 2024
Ms. Warren (for herself and Ms. Smith) introduced the following bill;
which was read twice and referred to the Committee on Health,
Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To secure the supply of drugs in the United States, 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 ``Pharmaceutical Supply Chain Defense
and Enhancement Act''.
SEC. 2. LISTING OF CRITICAL DRUGS.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Secretary, acting through the Commissioner of Food and
Drugs and in consultation with the Secretary of Defense, shall develop
a confidential list of drugs such Secretary determines to be critical
to the public health or national security. Such list shall include the
name of each such drug, as well as all active pharmaceutical
ingredients and starting materials required for the manufacture of the
drug. In developing the list, the Secretary may consider the role of
shortages in impeding access to drugs.
(b) Updates.--The Secretary shall update the list described in
subsection (a) not less frequently than once every 2 years.
(c) Submission of List.--The Secretary shall submit the list
described in subsection (a), including any updates to such list under
subsection (b), as a classified matter, to the Committee on Health,
Education, Labor, and Pensions, the Committee on Armed Services, the
Committee on Foreign Relations, and the Committee on Banking, Housing,
and Urban Affairs of the Senate, and to the Committee on Energy and
Commerce, the Committee on Armed Services, the Committee on Foreign
Affairs, and the Committee on Financial Services of the House of
Representatives.
(d) Interim List.--During the period between the date of enactment
of this Act and the date on which the Secretary issues the first list
under subsection (a), the Secretary, in consultation with the
Commissioner of Food and Drugs, the Secretary of Defense, and the
Assistant Secretary for Preparedness and Response, shall establish an
interim list of drugs that will be deemed the list under subsection (a)
until the Secretary develops the first list under subsection (a). Such
interim list shall include not fewer than 30 drugs, as well as the
active pharmaceutical ingredients and starting materials required for
the manufacture of such drugs, that are--
(1) included on the most recent list of essential medicines
issued by the World Health Organization; or
(2) countermeasures and products that could replenish the
strategic national stockpile.
(e) Comment Period.--Not later than 60 days prior to the submission
of the list described in subsection (a), the Secretary shall establish
a comment period during which the public may comment on which drugs
should be included on the list under subsection (a).
SEC. 3. BOOSTING DOMESTIC DRUG AND ACTIVE INGREDIENT MANUFACTURING
CAPACITY.
(a) In General.--The Secretary, acting through the Director of the
Biomedical Advanced Research and Development Authority, shall increase
the domestic capacity to manufacture active pharmaceutical ingredients
and starting materials for drugs critical to the public health and
national security by entering into the contracts described in
subsection (b).
(b) Contracts.--
(1) In general.--To carry out subsection (a), the Secretary
shall enter into contracts, not later than 6 months after the
date of enactment of this Act, as follows:
(A) The Secretary shall enter into contracts with
companies and nonprofit entities headquartered in the
United States, under which such companies use
manufacturing establishments located in the United
States to manufacture the drugs included on the list
under section 2, and the requisite active
pharmaceutical ingredients and starting materials of
such drugs, using advanced manufacturing, including
continuous manufacturing where applicable.
(B) As a condition for entering into contracts with
the Secretary to manufacture drugs, companies and
nonprofit entities shall--
(i) develop and maintain a redundancy risk
management and continuity of business plan
(reviewed and approved by the Secretary) that
identifies and evaluates risks to the supply of
the drug, as applicable, for each establishment
in which such drug, and the requisite active
pharmaceutical ingredients and starting
materials of such drug, is manufactured;
(ii) commit to implementing, as
appropriate, risk management and other
strategies to ensure that, in the case of
potential supply chain disruptions, the entity
can continue normal production of the drug, and
the requisite active pharmaceutical ingredients
and starting materials of such drug, for 18
months;
(iii) commit to maintaining, to the extent
practicable (as determined by the Secretary)
for each drug, and the requisite active
pharmaceutical ingredients and starting
materials of such drug, a 3-month supply in
order to mitigate the impact of supply chain
disruptions and shortages;
(iv) commit to selling drugs, or the
requisite active pharmaceutical ingredients and
starting materials of such drugs, developed
under contract with the Secretary at fair and
reasonable prices, as determined by the
Secretary, taking into consideration--
(I) the impact of price on patient
access to the drug;
(II) the cost of the drug to
Federal or State health programs;
(III) the cost of manufacturing the
drug; and
(IV) the impact of price on market
competition for the drug; and
(v) commit to making the prices described
in clause (iv) public.
(C) The contracts described in this paragraph shall
contain continuity of business agreements
demonstrating, in advance of receiving a contract, the
company's ability to rapidly begin production.
(D) The Secretary shall enter into contracts only
with companies headquartered in the United States that
use manufacturing establishments located in the United
States, under which such companies expand the
capabilities of continuous manufacturing and other
advanced manufacturing for the production of the active
pharmaceutical ingredients and starting materials for
the drugs included on the list under section 2.
(E) In issuing contracts under this section, the
Secretary shall prioritize--
(i) contracts designed to enhance the
supply of generic drugs and biosimilar
biological products and the requisite active
pharmaceutical ingredients and starting
materials of such generic drugs and biosimilar
products; and
(ii) contracts designed to enhance the
supply of drugs, and the requisite active
pharmaceutical ingredients and starting
materials of such drugs, that are not currently
manufactured in the United States.
(2) Inspector general review.--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 contracts are being issued under fair and
reasonable terms and conditions, including facilitating the
procurement by the Federal Government of applicable products
under section 2 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.
(3) Funding.--To carry out this section, there are
authorized to be appropriated $5,000,000,000 for the period of
fiscal years 2025 and 2029. Not later than April 1, 2029, the
Secretary shall report to the congressional committees listed
under section 2(c), and provide a recommendation for renewal of
funding under this paragraph.
(c) Federal Procurement of Domestically Manufactured Drugs.--
(1) Procurement of drugs.--
(A) In general.--Beginning in fiscal year 2029 when
purchasing any drug included on the list under section
2, the Secretary of Defense, the Secretary of Veterans
Affairs, the Director of the Bureau of Prisons, and,
for purposes of maintaining the strategic national
stockpile, the Secretary of Health and Human Services,
shall give priority to supplies of the drug
manufactured in the United States (including all active
pharmaceutical ingredient and starting materials of the
drug) that is of high quality.
(B) Use of remaining funds.--In the case that a
Federal agency described in this paragraph that, after
purchasing all drugs on the list under section 2 needed
by such agency for a fiscal year, has funds
appropriated under paragraph (2) for that fiscal year
remaining, such Federal agency may use the remaining
funds to purchase drugs wholly manufactured in the
United States that are not included on the list under
section 2.
(2) Funding.--
(A) In general.--There are authorized to be
appropriated to each of the Secretary of Defense, the
Secretary of Veterans Affairs, the Bureau of Prisons,
and the Secretary of Health and Human Services,
$1,000,000,000 for the period of fiscal years 2029
through 2033 to be used to purchase drugs manufactured
in the United States, as described in paragraph (1).
(B) Reversion.--All funds that are appropriated
under this paragraph for a fiscal year, but not
expended by the end of the fiscal year, shall revert to
the General Fund of the Treasury.
(C) No diversion or transfer of funds.--No funding
appropriated under this section shall be diverted,
transferred, or otherwise made available for purposes
beyond what is described in this Act.
(3) NIH authorization.--There are authorized to be
appropriated to the Director of the National Institutes of
Health, for each fiscal year for which amounts are appropriated
under paragraph (2) but not expended in full, an amount equal
to the amount that reverts to the Treasury for such year, as
described in paragraph (2). Such amounts shall be used by the
Director of the National Institutes of Health to carry out
biomedical research.
SEC. 4. SUPPLY CHAIN TRANSPARENCY.
(a) Domestic Suppliers to Federal Programs.--Each domestic
manufacturer of a drug that supplies such drug to the Department of
Defense, the Department of Veterans Affairs, the Department of Health
and Human Services, or the Bureau of Prisons, or a domestic
manufacturer of an active ingredient of a drug so supplied, shall--
(1) report annually to the Secretary and the agency
receiving such drug on--
(A) whether any ingredients of such drug is
sourced, either wholly or in part, from a foreign
country;
(B) in the case of an active pharmaceutical
ingredient or key starting material that the
manufacturer procures from a single source in a single
foreign country, as applicable--
(i) not less than 2 alternative sources of
any active pharmaceutical ingredient or key
starting material;
(ii) 1 such alternative source, if only 1
such alternative source is available; or
(iii) a statement that no such alternative
sources are available; and
(C) an assessment of the resilience and capacity of
the alternate sources identified under subparagraph
(B); and
(2) develop continuity of business plans to prevent the
disruption of any drug listed under section 2, including any
active or inactive ingredients of such drug, which the
Secretary may audit.
(b) Foreign Drug Suppliers.--
(1) Establishments in a foreign country.--Section 510(i)(5)
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
360(i)(5)) is amended by inserting before ``The Secretary'' the
following: ``The requirements of paragraphs (1) and (2) shall
apply to establishments within a foreign country engaged in the
manufacture, preparation, propagation, compounding, or
processing of any drug that is required to be listed pursuant
to subsection (j), or of any active pharmaceutical ingredient
of such a drug.''.
(2) Listing of drugs.--Section 510(j)(1) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 360(j)(1)) is amended--
(A) in subparagraph (D), by striking ``and'' at the
end;
(B) in subparagraph (E), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(F) in the case of a drug contained in the applicable
list, a certification that the registrant has--
``(i) identified every other establishment where
manufacturing is performed for the drug by the
registrant; and
``(ii) notified each known foreign establishment
engaged in the manufacture, preparation, propagation,
compounding, or processing of the drug or the active
pharmaceutical ingredient of the drug of the inclusion
of the drug in the list and the obligation to register
pursuant to subsection (i)(5).''.
(c) Reports to Congress and the Public.--
(1) Classified report to congress.--Not later than 1 year
after the date of enactment of this Act and annually
thereafter, the Secretary, in consultation with the Secretary
of Defense, shall submit a classified report to Congress on the
Nation's reliance on importation of active and inactive
ingredients of drugs included on the list under section 2.
(2) Public reports.--Not later than 1 year after the date
of enactment of this Act and annually thereafter, the
Secretary, in consultation with the Secretary of Defense, shall
prepare an unclassified summary of the report described in
paragraph (1), and shall make such summary publicly available
on the websites of the Department of Health and Human Services
and the Department of Defense for purposes of understanding the
Nation's dependency on foreign manufacturers of drugs. Such
summaries shall not include the names of any drugs, active
pharmaceutical ingredients, or starting materials.
(3) Content.--The reports under paragraph (1) shall
include--
(A) all brand name and generic drugs, and the
active and inactive ingredients of such drugs that--
(i) are not wholly produced in the United
States;
(ii) are exclusively produced, or utilize
active or inactive ingredients produced abroad;
(iii) are critical to the public health and
national security of the people of the United
States, as determined by the Secretary, in
consultation with the Secretary of Defense, and
including any drugs included in the list under
section 2; or
(iv) are procured in any quantity by the
Department of Defense for use by service
members or veterans or by the Department of
Health and Human Services for the strategic
national stockpile;
(B) a list of potential, alternative sources for
any finished drug or active or inactive ingredient of a
drug, that is sourced from a single manufacturer with
establishments in the United States; and
(C) assess the resiliency and capacity of
alternative sources of any drug described in
subparagraph (A), and whether any such alternative
source could be relied on to support domestic demand
for such drug.
(d) Manufacturer Compliance.--
(1) Failure to notify of a permanent discontinuance or an
interruption.--Section 301 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 331) is amended by adding at the end
the following:
``(jjj) The failure of a manufacturer of a drug described in
section 506C(a), or an active pharmaceutical ingredient of such a drug,
to notify the Secretary of a permanent discontinuance or an
interruption, and the reasons for such discontinuance or interruption,
as required by section 506C.''.
(2) Exemption from penalty.--Section 303(c) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 333(c)) is amended by
inserting before the period at the end the following: ``or (7)
for having violated section 301(jjj) if such person made a good
faith determination that the discontinuance or interruption was
not likely to lead to a meaningful disruption in the supply of
that drug in the United States''.
(e) Registry of Active Ingredients.--There is authorized to be
appropriated to the Secretary of Health and Human Services $20,000,000
for fiscal year 2026, for purposes of establishing, in consultation
with the Commissioner of Food and Drugs, an online registry of active
pharmaceutical ingredients and key starting materials using information
reported under subsection (a) and pursuant to a registration under
section 510(i) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
360(i)).
(f) Food and Drug Administration Inspections.--There are authorized
to be appropriated such funds as may be necessary to ensure that the
Commissioner of Food and Drugs is able to conduct inspections and
evaluations of new establishments established using funds made
available under this Act.
SEC. 5. OVERSIGHT OF FOREIGN PHARMACEUTICAL INVESTMENT.
(a) In General.--Not later than 1 year after the date of the
enactment of this Act, and annually thereafter, the Federal Trade
Commission, in consultation with the Secretary of the Treasury acting
through the Committee on Foreign Investment in the United States
(referred to in this section as the ``Committee''), shall submit to the
appropriate congressional committees, the Secretary of Health and Human
Services, and the Commissioner of Food and Drugs, a report on foreign
investment in the pharmaceutical industry of the United States.
(b) Elements.--The report required by subsection (a) shall include
the following:
(1) An assessment of--
(A) the supply chain of the pharmaceutical industry
of the United States and the effect of concentration
and reliance on foreign manufacturing within that
industry;
(B) the effect of foreign investment in the
pharmaceutical industry of the United States on
domestic capacity to produce drugs and active and
inactive ingredients of drugs; and
(C) the effect of foreign investment in
technologies or other products for sequencing or
storage of DNA, including genome and exome analysis, in
the United States, including the effect of such
investment on the capacity to sequence or store DNA in
the United States.
(2) The number of reviews and investigations conducted by
the Committee, in each of the 10 fiscal years preceding the
year in which the study is conducted, with respect to covered
transactions (as defined in section 721(a) of the Defense
Production Act of 1950 (50 U.S.C. 4565(a)))--
(A) in the pharmaceutical industry of the United
States; or
(B) relating to the sequencing or storage of DNA in
the United States.
(3) A short description of each such review or
investigation, including whether the transaction was approved
or prohibited.
(c) Authority.--The Federal Trade Commission shall have authority
under section 6 of the Federal Trade Commission Act (15 U.S.C. 46) to
conduct the studies required to prepare the report required by
subsection (a).
(d) Publication.--The Federal Trade Commission shall publish an
unclassified summary of the report required by subsection (a) on a
publicly available internet website of the Commission.
(e) Appropriate Congressional Committees Defined.--In this section,
the term ``appropriate congressional committees'' means--
(1) the Committee on Banking, Housing, and Urban Affairs,
the Committee on Health, Education, Labor, and Pensions, the
Committee on Armed Services, the Committee on Foreign
Relations, the Committee on Commerce, Science, and
Transportation, and the Committee on Appropriations of the
Senate; and
(2) the Committee on Financial Services, the Committee on
Energy and Commerce, the Committee on Armed Services, the
Committee on Foreign Affairs, and the Committee on
Appropriations of the House of Representatives.
SEC. 6. DEFINITIONS.
In this Act--
(1) ``advanced manufacturing'' means an approach for the
manufacturing of pharmaceuticals that incorporates novel
technology, or uses an established technique or technology in a
new or innovative way (such as continuous manufacturing where
the input materials are continuously transformed within the
process by 2 or more unit operations), that enhances drug
quality or improves the manufacturing process;
(2) the term ``continuous manufacturing''--
(A) means a process where the input materials are
continuously fed into and transformed within the
process, and the processed output materials are
continuously removed from the system; and
(B) consists of an integrated process that consists
of a series of 2 or more unit operations;
(3) the term ``drug'' has the meaning given such term in
section 201(g) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 321(g));
(4) the term ``Secretary'', unless otherwise specified,
means the Secretary of Health and Human Services;
(5) the term ``starting material'' means a raw material,
intermediate, or a drug substance that is used in the
production of a drug substance and that is incorporated as a
significant structural fragment into the structure of the drug
substance; and
(6) the term ``strategic national stockpile'' means the
stockpile maintained by the Secretary under section 319F-2 of
the Public Health Service Act (42 U.S.C. 247d-6b).
<all>