Senator Al Franken, D-Minn., and Representative Jan Schakowsky, D-Ill., along with various high-ranking Democrats in the House and Senate, introduced the Improving Access To Affordable Prescription Drugs Act (S. 771 and H.R. 1776) on March 29, 2017.
The bill contains a provision that would create a prize fund for antibiotics. The prize fund would initially contain $2 billion, and would allow the Director of the NIH to award up to three prizes for qualifying products in the 10-year period following enactment of the bill, based upon a framework of goals in antibiotic research, certain criteria to be established in accordance with considerations in the bill, and the condition that any award recipients waive patent and other monopoly rights and set a reasonable price. The bill would also require the establishment of an open source dividend prize to reward “persons that openly shared on a royalty-free, not-for-profit and non-discriminatory basis, materials, technology, data, and knowledge that contribute in a significant way to the successful development of a qualifying product or significantly advanced the field of antibiotic research.”
The final subsection of the prize fund provision contains language that would require the Director of the NIH to enter into an agreement with the National Academies to conduct a study on various aspects of delinkage, including the use of innovation inducement prizes and push financing mechanisms and modelling of delinkage in various areas of the pharmaceutical sector, such as HIV/AIDS, rare diseases, and cancer.
The text of the bill, which would amend the Public Health Service Act (42 U.S.C. 284 et seq.) by adding a new section at the end, is reproduced below.
“SEC. 409K. PRIZE FUND FOR NEW AND MORE EFFECTIVE TREATMENTS OF BACTERIAL INFECTIONS.
“(a) Establishment Of Fund.—There is hereby established in the Treasury of the United States a revolving fund to be known as the ‘Antibiotics Prize Fund’, which shall consist of funds transferred under subsection (b).
“(b) Amounts Credited To The Fund.—There are hereby authorized to be appropriated, and appropriated, to the Antibiotics Prize Fund, for fiscal year 2018, out of any monies in the Treasury not otherwise appropriated, $2,000,000,000. Such funds shall remain available until expended.
“(c) Awards.—
“(1) IN GENERAL.—During the 10-year period following the date of enactment of the Improving Access To Affordable Prescription Drugs Act, the Director of the NIH, in accordance with the criteria under subsection (d) and the goals under subsection (e), shall award—
“(A) up to 3 prizes for qualifying products that provide added benefit for patients over existing therapies in the treatment of serious and life-threatening bacterial infections demonstrating in superiority trials; and
“(B) award open source dividend prizes for contributions that significantly advance the field of antibiotic research with openly sourced materials, technology, data, and knowledge.
“(2) AWARD AMOUNT REQUIREMENTS.—No more than 5 percent of the amount available in the Antibiotics Prize Fund shall be dedicated to open source dividend prizes.
“(d) Criteria And Structure Of Prizes.—
“(1) ESTABLISHMENT OF CRITERIA.—Not later than 120 days after the date of enactment of the Improving Access To Affordable Prescription Drugs Act, the Director of NIH shall establish criteria for the selection of recipients and eligibility of persons for prizes under this section and criteria for determining the amounts of such prizes, through notice and comment rulemaking.
“(2) CONSIDERATIONS IN ESTABLISHING CRITERIA FOR QUALIFYING PRODUCTS.—In establishing the criteria for selection of recipients and amounts of prizes under paragraph (1), the Director of NIH, in consultation with other agencies as appropriate, shall consider the following:
“(A) The number of patients in the United States and in other countries who would benefit from the qualifying product that treats a serious or life-threatening bacterial infection, and the number of patients in the United States and in other countries projected to benefit during the upcoming 10-year period.
“(B) Whether the qualifying product treats, or has the potential to treat, a serious or life-threatening bacterial infection for which no other treatment is currently available or for which there is a high threat of resistance to existing treatments.
“(C) The incremental and additional therapeutic benefit to human in the United States and other countries of the qualifying product as compared to other treatments available to treat the bacterial infection, evaluating the incremental therapeutic benefit in comparison to treatments that were not recently developed.
“(D) The transmissibility of the bacterial infection the qualifying product would treat, and barriers to prevention of that infection.
“(E) The extent to which knowledge, data, materials, and technology that are openly sourced have contributed to the successful development of new treatments that provide an added benefit to patients, such as decreasing mortality or irreversible morbidity on patient-centered outcomes, significantly advancing the field of antibiotic research, or improving processes for manufacturing products used for the treatment.
“(F) Other criteria that the Director of NIH determines to be relevant and useful in ensuring that the prizes provide appropriate incentives.
“(3) CRITERIA FOR OPEN SOURCE DIVIDEND PRIZES.—An open source dividend prize under this section shall reward persons that openly shared on a royalty-free, not-for-profit and non-discriminatory basis, materials, technology, data, and knowledge that contribute in a significant way to the successful development of a qualifying product or significantly advanced the field of antibiotic research.
“(e) Goals.—With respect to each year for which the Director of NIH awards prizes under subsection (c), the Director of NIH shall establish a framework of goals that a qualifying product or contribution that significantly advances the field of antibiotic research is required to show promise to help meet in order for a person to be eligible to receive a prize with respect to such product or such contribution. Such goals may include—
“(1) reduced hospital admissions or readmissions;
“(2) use of diagnostics prior to prescribing of drugs; and
“(3) use of innovative programs for antibiotic stewardship.
“(f) Condition On Receipt Of Prize.—
“(1) IN GENERAL.—Each prize for a qualifying product offered under this section shall be conditioned on the following:
“(A) The recipient shall agree to offer the qualifying product at a reasonable price as described in paragraph (3).
“(B) Subject to applicable patient privacy protections, the recipient shall agree to publicly disclose all pre-clinical and clinical trial data with respect to the qualifying product.
“(C) The recipient shall agree to submit to the Director of NIH, for review and approval by such director, in collaboration with the Commissioner of Food and Drugs and the Director of the Centers for Disease Control and Prevention, all marketing, sales, and other promotional and educational activities associated with the qualifying product, to ensure that such activities align with, and advance the goals of, resource conserving stewardship, protecting the utility of antibiotics, and encouraging and ensuring the correct use of antibiotics.
“(D) The recipient shall irrevocably waive—
“(i) all periods of exclusivity available to the product under chapter V of the Federal Food, Drug, and Cosmetic Act or section 351 of this Act; and
“(ii) all applicable patent rights under title 35, United States Code.
“(E) Any other conditions the Director of NIH determines appropriate.
“(2) APPLICABILITY.—All conditions described in paragraph (1) shall apply to subsequent owners, licensees, producers, and manufacturers, and assignees of the product or any chemical component of the qualifying product for which the prize was awarded.
“(3) REASONABLE PRICE.—
“(A) IN GENERAL.—A recipient may satisfy the requirement to offer a qualifying product or contribution at a ‘reasonable price’ for purposes of paragraph (1)(A) by—
“(i) (I) providing open licensing of all necessary rights to patents, manufacturing processes, rights in data, and other intellectual property rights needed to make and sell the product to manufacturers of the generic version of such product; or
“(II) selling such product at a price that is no more than twice the price of antibiotic drugs approved under section 505(j) of the Federal Food, Drug, and Cosmetic Act with similar manufacturing costs; and
“(ii) selling such product at a price that is not higher than the median price charged, at the time of such sale, in the applicable 7 countries, as determined under in subparagraph (B).
“(B) CRITERIA.—For purposes of subparagraph (A)(ii), the Director of NIH shall identify, on an annual basis, the countries that have a per capita income that is not less than half the per capita income of the United States, select the 7 of such countries that have the largest gross domestic product, and determine the median price charged for each qualifying product for which an award has been granted under subsection (c).
“(g) Enforcement.—If the prize recipient, or subsequent owner, licensee, or assignee of the qualifying product, does not fulfill the conditions described subsection (f)(1), the Secretary, in collaboration with the Attorney General, shall take all necessary action to clawback the prize.
“(h) Transparency.—With respect to each prize awarded under this section, the Director of NIH shall make public—
“(1) the methodology used and criteria analyzed in determining the prize recipient; and
“(2) a complete analysis of the recipient’s fulfillment of award conditions under subsection (e)(1).
“(i) Qualifying Product.—For purposes of this section, the term ‘qualifying product’ means a drug (as defined in section 201(g) of the Federal Food, Drug, and Cosmetic Act) subject to section 503(b)(1) of the Federal Food, Drug, and Cosmetic Act.
“(j) Study.—
“(1) IN GENERAL.—The Director of NIH shall seek to enter into an agreement with the National Academies of Sciences, Engineering, and Medicine to conduct a study to examine—
“(A) the use of innovation inducement prize funds and push financing mechanisms as ways to stimulate investments in biomedical research and development that de-links costs from product prices;
“(B) models of different possible means of de-linking research and development costs from drug prices, including the replacement of the monopoly on new products as an incentive, with innovation inducement prize funds and push financing mechanisms as new incentives to stimulate the development of drugs, including drugs to treat bacterial infections, rare diseases, HIV/AIDS, and cancer; and
“(C) the size of prizes awarded under this section and the effectiveness of such prizes in stimulating innovation.
“(2) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of carrying out this subsection, there are authorized to be appropriated, and there are appropriated, $3,000,000 for fiscal year 2018. Such funds shall remain available until expended.”.