On June 12, 2019, 15 members of the U.S. Senate introduced S.1801 (116th Congress), a bill to make medicines more affordable. Among the provisions of the bill, which also include a study of delinkage of R&D financing from pricing, is a Innovation Incentive Fund for New and More Effective Treatments for Bacterial Infections. Section 301 of the bill would create a $2 billion fund, for “up to 3 market entry awards for qualifying products”, as well as “open source dividend prizes for contributions that significantly advance the field of antibiotic research with openly sourced materials, technology, data, and knowledge.”
The Innovation Fund would attach conditions to the receipt of the market entry rewards, as follows:
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“(f) Condition On Receipt Of Market Entry Reward.—
“(1) IN GENERAL.—Each market entry reward 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.
Reasonable price is defined as follows;
“(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).
The full text of Section 301 that relate to the antibiotics incentive fund follow:
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S. 1801. To ensure medications are affordable.
IN THE SENATE OF THE UNITED STATES
June 12, 2019
Ms. Smith (for herself, Ms. Klobuchar, Mr. Blumenthal, Mr. Udall, Mr. Brown, Ms. Warren, Mr. Sanders, Ms. Hassan, Mr. Whitehouse, Mr. Merkley, Mr. Reed, Ms. Baldwin, Mr. Booker, Mr. Durbin, and Mrs. Gillibrand) introduced the following bill; which was read twice and referred to the Committee on Finance
https://www.congress.gov/bill/116th-congress/senate-bill/1801/
TITLE III—INNOVATION
SEC. 301. INNOVATION INCENTIVE FUND FOR NEW AND MORE EFFECTIVE TREATMENTS OF BACTERIAL INFECTIONS.
Part B of title IV of the Public Health Service Act (42 U.S.C. 284 et seq.) is amended by adding at the end the following:
“SEC. 409K. INNOVATION INCENTIVE 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 Innovation Incentive 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 Innovation Incentive Fund, for fiscal year 2020, 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 Affordable Medications 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 market entry awards 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 Innovation Incentive 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 Affordable Medications Act, the Director of NIH shall establish criteria for the selection of recipients and eligibility of persons for market entry rewards and open source dividend 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 market entry rewards and open source dividend 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 market entry rewards and open source dividend 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 market entry reward or open source dividend 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 Market Entry Reward.—
“(1) IN GENERAL.—Each market entry reward 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 market entry reward 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 market entry reward 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 market entry reward.
“(h) Transparency.—With respect to each market entry reward or open source dividend prize awarded under this section, the Director of NIH shall make public—
“(1) the methodology used and criteria analyzed in determining the market entry reward or open source dividend 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.