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Title II — Domestic Manufacturing and Supply Chain

H.R. 14 · 116th Congress · Oct 30, 2020 · Lineage

II Domestic Manufacturing and Supply Chain

A Sustained On-Shore Manufacturing Capacity for Public Health Emergencies

Sec. 2001 Sustained on-shore manufacturing capacity for public health emergencies

(a)
In general— Section 319L of the Public Health Service Act (42 U.S.C. 247d–7e) is amended—
(1)
in subsection (a)(6)(B)—
(A)
by redesignating clauses (iv) and (v) as clauses (v) and (vi), respectively;
(B)
by inserting after clause (iii), the following:

“(iv) activities to support domestic manufacturing surge capacity of products or platform technologies, including manufacturing capacity and capabilities to utilize platform technologies to provide for flexible manufacturing initiatives;”

(C)
in clause (vi) (as so redesignated), by inserting “manufacture,” after “improvement,”;
(2)
in subsection (b)—
(A)
in the first sentence of paragraph (1), by inserting “support for domestic manufacturing surge capacity,” after “initiatives for innovation,”; and
(B)
in paragraph (2)—
(i)
in subparagraph (B), by striking “and” at the end;
(ii)
by redesignating subparagraph (C) as subparagraph (D); and
(iii)
by inserting after subparagraph (B), the following:

“(C) activities to support manufacturing surge capacities and capabilities to increase the availability of existing medical countermeasures and utilize existing novel platforms to manufacture new medical countermeasures to meet manufacturing demands to address threats that pose a significant level of risk to national security; and”

(3)
in subsection (c)—
(A)
in paragraph (2)—
(i)
in subparagraph (C), by striking “and” at the end;
(ii)
in subparagraph (D), by striking the period and inserting “; and”; and
(iii)
by adding at the end the following:

“(E) promoting domestic manufacturing surge capacity and capabilities for countermeasure advanced research and development, including facilitating contracts to support flexible or surge manufacturing.”

(B)
in paragraph (4)—
(i)
in subparagraph (B)—
(I)
in clause (iii), by striking “and” at the end;
(II)
in clause (iv), by striking the period and inserting “; and”; and
(III)
by adding at the end the following:

“(v) support and maintain domestic manufacturing surge capacity and capabilities, including through contracts to support flexible or surge manufacturing, to ensure that additional production of countermeasures is available in the event that the Secretary determines there is such a need for additional production.”

(ii)
in subparagraph (D)—
(I)
in clause (ii), by striking “and” at the end;
(II)
by redesignating clause (iii) as clause (iv); and
(III)
by inserting after clause (ii) the following:

“(iii) research to advance manufacturing capacities and capabilities for medical countermeasures and platform technologies that may be utilized for medical countermeasures; and”

(iii)
in subparagraph (E), by striking clause (ix); and
(C)
in paragraph (7)(C)(i), by striking “up to 100 highly qualified individuals, or up to 50 percent of the total number of employees, whichever is less,” and inserting “75 percent of the total number of employees”;
(4)
in subsection (e)(1)—
(A)
by redesignating subparagraphs (B) through (D) as subparagraphs (C) through (E), respectively; and
(B)
by inserting after subparagraph (A), the following:

“(B) Temporary flexibility—During a public health emergency under section 319, the Secretary shall be provided with an additional 60 business days to comply with information requests for the disclosure of information under section 552 of title 5, United States Code, related to the activities under this section (unless such activities are otherwise exempt under subparagraph (A)).”

(5)
in subsection (f)—
(A)
in paragraph (1), by striking “Not later than 180 days after the date of enactment of this subsection” and inserting “Not later than 180 days after the date of enactment of the Commitment to Defeat the Virus and Keep America Healthy Act”; and
(B)
in paragraph (2), by striking “Not later than 1 year after the date of enactment of this subsection” and inserting “Not later than 1 year after the date of enactment of the Commitment to Defeat the Virus and Keep America Healthy Act”.
(b)
Medical Countermeasure Innovation Partner— The restrictions under section 202 of division A of the Further Consolidated Appropriations Act, 2020 (Public Law 116–94), or any other provision of law imposing a restriction on salaries of individuals related to a previous appropriation to the Department of Health and Human Services, shall not apply with respect to salaries paid pursuant to an agreement under the medical countermeasure innovation partner program under section 319L(c)(4)(E) of the Public Health Service Act (42 U.S.C. 247d–7e(c)(4)(E)).

B Manufacturing API, Drugs, and Excipients in America

Sec. 2011 Report to Congress on barriers to domestic manufacturing of medical products and supplies

(a)
Report— Not later than January 1, 2021, the Secretary of Health and Human Services (referred to in this section as the “Secretary”) shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a report on barriers to domestic manufacturing of active pharmaceutical ingredients, drugs, and devices that are manufactured outside of the United States.
(b)
Contents— Such report shall—
(1)
identify factors that limit or otherwise discourage the domestic manufacturing of active pharmaceutical ingredients, drugs, and devices that are currently manufactured outside of the United States, including any Federal, State, local, or Tribal laws and regulations that hinder domestic manufacturing opportunities; and
(2)
recommend specific strategies to overcome the challenges identified under paragraph (1), including strategies—
(A)
to develop effective incentives for domestic manufacturing; and
(B)
to make changes to laws or regulations that hinder domestic manufacturing opportunities.
(c)
Consultation— In carrying out the report under subsection (a), the Secretary shall consult with—
(1)
the Food and Drug Administration, the Centers for Medicare & Medicaid Services, the Department of Defense, the Department of Commerce, the Department of State, the Department of Veterans Affairs, the Department of Justice, and any other Federal agencies as appropriate; and
(2)
relevant stakeholders, including drug, device, and active pharmaceutical ingredient manufacturers, and other entities, as appropriate.
(d)
Definition— In this section, the term active pharmaceutical ingredient has the meaning given to such term in section 207.1 of title 21, Code of Federal Regulations (and any successor regulations).
(e)
Publication— The Secretary shall make the report under subsection (a) available on the public website of the Department of Health and Human Services.

Sec. 2012 Enhancing intra-agency coordination and public health assessment with regard to compliance activities

(a)
Benefit/Risk framework—
(1)
In general— Paragraph (2) of section 704(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 374(b)) is amended by adding at the end the following: “The Secretary shall ensure timely and effective coordination among such offices regarding the reviews of such report and the alignment of any feedback regarding such report, and any corrective or preventive actions in response to such report, after consideration of the benefits and risks to the public health, patient safety, the drug supply and drug supply chain, and timely patient access to drugs.”.
(2)
Annual reporting— Subsection (b) of section 704 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 374) is amended by adding at the end the following new paragraph:

“(3) On an annual basis, the Secretary shall prepare a report on the utilization of the framework described in paragraph (2) and post such report on the public website of the Food and Drug Administration.”

(3)
Applicability— The amendments made by paragraphs (1) and (2) shall take effect on the effective date described in section 3112 of the CARES Act (Public Law 116–136), after executing the amendments made by such section 3112, and shall apply beginning on the date that is 1 year after the date of enactment of this Act.
(b)
Public meeting— The Secretary of Health and Human Services shall publish in the Federal Register a notice of a public meeting to be held no later than six months after the date of enactment of this Act to discuss and obtain input and recommendations from public stakeholders, including patient advocates, consumers, regulated industry, and health care providers, regarding the contents of a benefit/risk framework described in section 704(b)(2) of the Federal Food, Drug, and Cosmetic Act, as amended by subsection (a), that supports a safe, stable, redundant drug supply chain.
(c)
Guidance— The Secretary of Health and Human Services shall—
(1)
not later than one year after the date on which the public meeting described in subsection (b) is held, issue draft guidance regarding the goals and implementation of a benefit/risk framework described in subsection (b); and
(2)
not later than two years after such date of enactment, issue final guidance with respect to the implementation of such a framework.

Sec. 2013 Encouraging international harmonization

(a)
GAO study— Not later than one year after the date of enactment of this Act, the Comptroller General of the United States shall issue a report evaluating—
(1)
the consistency with which the International Conference on Harmonisation (in this section referred to as “ICH”) guidelines on good manufacturing practices, including ICH Guidelines Q8–11, are being implemented by drug regulatory authorities across countries and international regions;
(2)
whether domestic active pharmaceutical ingredient manufacturers (including any such contract manufacturers) are provided sufficient opportunity to participate with regulatory authorities in the development of guidelines prior to implementation;
(3)
whether divergence from ICH guidelines or differing regulatory standards or requirements by drug regulatory authorities across countries and international regions creates—
(A)
inefficiencies in drug manufacturing;
(B)
incompatible requirements that can contribute to or exacerbate drug shortages; and
(C)
the most common areas of divergence between ICH guidelines and regulatory standards and requirements by drug regulatory authorities across countries and international regions that, if rectified, may reduce the inefficiencies and incompatibilities identified pursuant to subparagraphs (A) and (B).
(b)
International training program— Not later than two years after the date of enactment of this Act, informed by the needs identified in the report issued pursuant to subsection (a), the Secretary of Health and Human Services, in conjunction with drug regulatory authorities across countries and international regions and the ICH, shall develop and implement a training program for drug regulatory authorities across countries and international regions to promote consistent application of and reduce divergence from ICH guidelines on good manufacturing practices.

Sec. 2014 Mutual recognition agreements for inspections and review activities

(a)
Mutual Recognition of Inspections— Pursuant to section 809 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 384e), the Secretary of Health and Human Services (in this section referred to as the “Secretary”) shall establish or expand initiatives for mutual sharing of review and inspection findings between drug regulatory authorities across countries and international regions, such as through the Pharmaceutical Cooperation Inspection Scheme, the Mutual Recognition Agreement with the European Union, and the Australia-Canada-Singapore-Switzerland Consortium, to—
(1)
reduce the potential for duplicative regulatory evaluation of medical products regulated by the Food and Drug Administration; and
(2)
more constructively allocate appropriations to the Food and Drug Administration, including those attributable to user fees, to harmonized regulatory processes.
(b)
Additional countries, regions, and evaluation— In carrying out subsection (a), the Secretary may expand the initiatives to include—
(1)
additional countries and geographic regions with established and competent regulatory frameworks; and
(2)
additional types of regulatory evaluation, including with respect to—
(A)
good manufacturing practice inspections; and
(B)
approval of changes to the manufacturing of drugs for which an approval or licensure is in effect under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or section 351 of the Public Health Service Act (42 U.S.C. 262).
(c)
Implementation framework—
(1)
Publication— Not later than one year after the date of enactment of this Act, the Secretary shall publish an implementation framework for the agreements to share review and inspection findings under subsection (a) on the public website of the Food and Drug Administration.
(2)
Contents— The implementation framework under this subsection shall—
(A)
include the timeline for establishing or expanding initiatives described in subsection (a);
(B)
describe additional types of regulatory processes that will become subject to such initiatives;
(C)
specify the countries and geographic regions where such initiatives will be established or expanded; and
(D)
identify additional opportunities and challenges for expanding mutual recognition agreements in drug and biologic regulation.
(d)
Annual reporting—
(1)
In general— Not later than the end of calendar year 2020 and annually thereafter, the Secretary shall publish a report on the public website of the Food and Drug Administration on the utilization of agreements described in subsection (c)(1) in the previous fiscal year.
(2)
Contents— The report under paragraph (1) shall include each of the following:
(A)
The total number of establishments that are registered under section 510(i) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360) and located outside of the United States, and of these establishments, the number in each region of interest.
(B)
The total number of inspections conducted at establishments described in subparagraph (A).
(C)
Of the inspections described in subparagraph (B), the total number of inspections in each of region of interest.
(D)
Of the inspections in each region of interest reported pursuant to subparagraph (C), the number of inspections in each FDA inspection category.
(E)
Of the number of inspections reported under each of subparagraphs (B), (C), and (D)—
(i)
the number of inspections which have been conducted pursuant to an agreement described in subsection (c)(1); and
(ii)
the number of inspections which have been conducted by employees or other agents of the Food and Drug Administration.
(3)
Definitions— In this subsection:
(A)
The term region of interest refers to China, India, the European Union, and any other geographic region as determined appropriate by the Secretary.
(B)
The term FDA inspection category means refers to the following inspection categories:
(i)
Inspections to support an approval of a drug under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or section 351 of the Public Health Service Act (42 U.S.C. 262).
(ii)
Good manufacturing practice inspections.
(iii)
For-cause inspections.

Sec. 2015 Enhancing transparency of drug facility inspection timelines

Section 902 of the FDA Reauthorization Act of 2017 (21 U.S.C. 355 note) is amended to read as follows:

“902. Annual report on inspections

“Not later than March 1 of each year, the Secretary of Health and Human Services shall post on the public website of the Food and Drug Administration information related to inspections of facilities necessary for approval of a drug under subsection (c) or (j) of section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355), approval of a device under section 515 of such Act (21 U.S.C. 360e), or clearance of a device under section 510(k) of such Act (21 U.S.C. 360(k)) that were conducted during the previous calendar year. Such information shall include the following:

“(1) The median time following a request from staff of the Food and Drug Administration reviewing an application or report to the beginning of the inspection, and the median time from the beginning of an inspection to the issuance of a report pursuant to section 704(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 374(b)), including—

“(A) the median time for drugs described in 505(j)(11)(A)(i) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(11)(A)(i));

“(B) the median time for drugs described in section 506C(a) of such Act (21 U.S.C. 356c(a)) only; and

“(C) the median time for drugs on the drug shortage list in effect under section 506E of such Act (21 U.S.C. 356f).

“(2) The median time from the issuance of a report pursuant to such section 704(b) to the sending of a warning letter, issuance of an import alert, or holding of a regulatory meeting for inspections for which the Secretary concluded that regulatory or enforcement action was indicated, including the median time for each category of drugs listed in subparagraphs (A) through (C) of paragraph (1).

“(3) The median time from the sending of a warning letter, issuance of an import alert, or holding of a regulatory meeting to resolution of the regulatory or enforcement action indicated for inspections for which the Secretary concluded that such action was indicated.

“(4) The number of times that a facility was issued a report pursuant to such section 704(b) and approval of an application was delayed due to the issuance of a withhold recommendation, including the number of such times for each category of drugs listed in subparagraphs (A) through (C) of paragraph (1).”

Sec. 2016 Advanced manufacturing technologies program

Subchapter A of chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended by adding at the end the following:

“524B. Advanced manufacturing technologies program

“(a) In general—Not later than 1 year after the date of enactment of the Commitment to Defeat the Virus and Keep America Healthy Act, the Secretary shall continue in effect the program to evaluate new drug manufacturing technologies that are included in an application, or supplement to an application, for a drug under subsection (b) or (j) of section 505 of this Act or for a biological product submitted under subsection (a) or (k) of section 351 of the Public Health Service Act.

“(b) Designation—The Secretary shall designate a method of manufacturing a drug as an advanced manufacturing technology under this section if the drug manufacturer demonstrates that such technology is likely to—

“(1) prevent or resolve a drug shortage;

“(2) maintain an adequate supply of critical medications for national emergencies; or

“(3) promote the adoption of innovative approaches to drug product design and manufacturing.

“(c) Consultation—If the Secretary designates a method of manufacturing as an advanced manufacturing technology under this section, the Secretary shall take actions to expedite the development and implementation of such method of manufacture for purposes of approval of the application under subsection (c) or (j) of section 505 of this Act or subsection (a) or (k) of section 351 of the Public Health Service Act, which may include, as appropriate—

“(1) holding meetings between the sponsor of the application and appropriate Food and Drug Administration staff throughout the development of the technology;

“(2) providing timely advice to, and interactive communication with, the sponsor regarding the development of the technology; and

“(3) involving senior managers and experienced staff of the Food and Drug Administration, as appropriate, in a collaborative, cross-disciplinary review of the method of manufacturing.

“(d) Evaluation of an Advanced Manufacturing Technology

“(1) Package—A sponsor who receives designation of an advanced manufacturing technology under this section shall provide the Secretary with a package of scientific evidence supporting the implementation of the advanced manufacturing technology in a particular context-of-use.

“(2) Evaluation—Within 90 days of receiving the package, the Secretary shall determine whether a designated advanced manufacturing technology is validated for the proposed context of use based on the scientific merit the supporting evidence provided by the sponsor.

“(3) Effect of Approval—Upon approval, the same sponsor may rely upon the advanced manufacturing technology for use across multiple manufacturing product lines within the same context-of-use without having to re-submit data to the Secretary validating the underlying technology.

“(e) Implementation and Reporting

“(1) Public meeting—The Secretary shall publish in the Federal Register a notice of a public meeting to be held no later than 1 year after the date of enactment of the Commitment to Defeat the Virus and Keep America Healthy Act to discuss and obtain input and recommendations from stakeholders regarding the goals and scope of, and a suitable framework and procedures and requirements for, the program under this section.

“(2) Program guidance—The Secretary shall—

“(A) not later than 1 year after the date of enactment of the Commitment to Defeat the Virus and Keep America Healthy Act, issue draft guidance regarding the goals and implementation of the program under this section; and

“(B) not later than 2 years after the date of enactment of the Commitment to Defeat the Virus and Keep America Healthy Act, issue final guidance with respect to the implementation of such program.

“(3) Report—The Secretary shall make available on the public website of the Food and Drug Administration an annual report on the progress of the program under this section.”

C Improving the American Drug Supply Chain

Sec. 2021 Study and reporting on domestic and foreign production

(a)
In general— The Secretary of Health and Human Services shall enter into an agreement with the National Academies of Sciences, Engineering, and Medicine (referred to in this section as the “National Academies”) under which, not later than 24 months after the date of enactment of this Act, the National Academies will—
(1)
study the current and historical production of drugs and key ingredients thereof (including active pharmaceutical ingredients) in the United States and in foreign countries;
(2)
formulate recommendations for promoting increased production of drugs and key ingredients thereof (including active pharmaceutical ingredients) in the United States; and
(3)
in a manner that does not compromise national security or disclose trade secrets or other confidential commercial information that is subject to section 552(b)(4) of title 5, United States Code, or section 1905 of title 18, United States Code, submit a report to the Congress on—
(A)
the findings and conclusions of the study under paragraph (1); and
(B)
the recommendations under paragraph (2).
(b)
Study topics— The study pursuant to subsection (a)(1) shall include—
(1)
evaluation of—
(A)
the extent to which production of drugs for use in the United States and key ingredients thereof (including active pharmaceutical ingredients) takes place in the United States; and
(B)
the extent to which such production takes place in foreign countries;
(2)
identification of the foreign countries in which such production takes place;
(3)
evaluation of historical changes in the countries in which such production takes place;
(4)
determination of the reasons why such production takes place in foreign countries, including why such production takes place in particular foreign countries, including consideration of—
(A)
the reasons for historical migration of such production to foreign countries, or from foreign countries to other foreign countries or the United States;
(B)
economic factors, including economic impediments to domestic production and incentives for foreign production; and
(C)
regulatory, intellectual property, international trade, and other legal and policy factors; and
(5)
evaluation of the benefits of redundancies in the supply chain of drugs in the United States in the event of a public health emergency.
(c)
Recommendations— The agreement under subsection (a) shall—
(1)
provide for inclusion in the recommendations under subsection (a)(2) of measures (which may include statutory, regulatory, and other policy changes) that should be taken—
(A)
to encourage the domestic production of drugs for use in the United States and key ingredients thereof (including active pharmaceutical ingredients); or
(B)
to otherwise reduce the risks to the availability of drugs in the United States in the event of a public health emergency; and
(2)
require consideration, in developing such recommendations, of—
(A)
factors affecting the production of drugs, including—
(i)
access to skilled labor;
(ii)
the cost of raw materials, the cost of energy, and related costs;
(iii)
taxes and other incentives; and
(iv)
the effects of regulations; and
(B)
the costs and consequences of implementing, or failing to implement, each such recommendation.
(d)
Input— The agreement under subsection (a) shall require—
(1)
consideration of input from the Department of Health and Human Services, the Department of Commerce, and, as appropriate, other Federal agencies; and
(2)
consultation with relevant stakeholders, which—
(A)
may include conducting public meetings and other forms of engagement, as appropriate;
(B)
shall include consultation with experts in—
(i)
the manufacturing of drugs;
(ii)
pharmaceutical industry business and economics;
(iii)
drug purchasing, pricing, and reimbursement;
(iv)
regulatory and intellectual property issues affecting drug manufacturing;
(v)
economics;
(vi)
international trade policy; and
(vii)
emergency planning; and
(C)
may include consultation with other entities with experience in drug manufacturing and pricing, as appropriate.
(e)
Definitions— In this section, the term drug has the meaning given such term in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).

D Essential Medicines Strategic Stockpile

Sec. 2031 Pilot program on ensuring medication supply stability

Part D of title III of the Public Health Service Act (42 U.S.C. 254b et seq.) is amended by adding at the end the following new subpart:

“XIII Ensuring Medication Supply Stability

“340J. Ensuring medication supply stability

“(a) Award of contracts—Beginning not later than January 1, 2021, the Secretary shall award contracts to eligible entities to each implement and test the effectiveness of acquiring, maintaining, managing, and distributing a stockpile that—

“(1) consists of generic drugs at risk of shortage; and

“(2) is of sufficient quantity to ensure that customers in the United States of the respective eligible entity have access to such drugs for at least 6 months (as specified by the Secretary based on the historic demand for those drugs).

“(b) Selection of drugs

“(1) In general—The Secretary shall—

“(A) select not more than 50 types of drugs that may be included by eligible entities in a stockpile pursuant to a contract under this section;

“(B) maintain an up-to-date list of such drugs; and

“(C) make such list publicly available.

“(2) Choice of eligible entities—A contract awarded to an eligible entity under this section need not require the stockpile of the eligible entity to include all 50 types of drugs listed pursuant to paragraph (1).

“(c) Sufficient quantity—For each generic drug in a stockpile maintained pursuant to subsection (a), the Secretary shall specify the quantity of such drug that is sufficient for purposes of such subsection to ensure that consumers in the United States of the respective eligible entity have access to such drug for at least 6 months.

“(d) Duration; liquidation of inventory

“(1) Duration—A contract awarded under this section shall be for a term of no more than 3 years.

“(2) Liquidation of inventory—A drug held in a stockpile pursuant to a contract under this section may be liquidated by the eligible entity at the end of the period of the contract.

“(e) Stockpile requirements

“(1) Ensuring availability of unexpired products—Each eligible entity with a contract under this section for a stockpile of generic drugs at risk of shortage shall—

“(A) ensure that each drug maintained in the stockpile has an expiration date at least 1 year beyond the current date; and

“(B) to comply with subparagraph (A)—

“(i) sell drugs in the stockpile through normal commercial channels and replace those drugs; or

“(ii) if there is no commercial market for a drug in the stockpile, dispose of the drug, report such disposal to the Secretary, and replace the drug.

“(2) Management of stockpile

“(A) In general—Each eligible entity with a contract under this section for a stockpile of generic drugs at risk of shortage shall—

“(i) acquire not later than 6 months following the date the contract is awarded, and maintain thereafter, a 6-month supply of each type of drug the eligible entity has contracted to stockpile, which 6-month supply shall be in addition to the average levels of inventory held by such eligible entity over the previous year for such drug; and

“(ii) if it is not possible to comply with clause (i), notify the Secretary, citing the reason why it is not possible and the expected time of acquisition of the drug.

“(B) Inventory management—Each eligible entity with a contract under this section for a stockpile of generic drugs at risk of shortage shall manage inventory to ensure that drugs in the stockpile are efficiently cycled to the commercial market and—

“(i) may stockpile inventory at the eligible entity’s distribution center with specified inventory amounts virtually reserved for the Federal Government with constant cycling to reduce product expiration; or

“(ii) may store stockpiled inventory separately in a different location and replace drugs in the stockpile inventory with the same drug with newer dating.

“(C) Insufficient funds—If amounts available to an eligible entity through contracts under this section are not sufficient to acquire or maintain a 6-month supply of any drug in the stockpile of the eligible entity funded under this section, the eligible entity—

“(i) may acquire and maintain less than a 6-month supply, but in no case less than a 3-month supply; and

“(ii) shall submit a report to the Secretary identifying—

“(I) each such drug; and

“(II) the reasons why such amounts are not sufficient to acquire or maintain a 6-month supply.

“(D) Annual audits—Not more than annually, the Secretary may request a physical audit count of the inventories of all eligible entities with a contract under this section to validate that each such entity is maintaining the appropriate amount of stockpiled inventory.

“(3) Periodic product review

“(A) Use of proceeds—An eligible entity with a contract under this section for a stockpile of generic drugs at risk of shortage shall use the proceeds of the sale of any drugs in the stockpile to purchase drugs for the stockpile in accordance with this section.

“(B) Market inflation or deflation—In the case of market inflation or deflation affecting the price of a drug in the stockpile of an eligible entity maintained pursuant to a contract under this section, the contract shall ensure that the Federal Government does not profit or suffer loss on items of such drug as a result of such inflation or deflation.

“(4) Reporting—Each eligible entity with a contract under this section shall submit reports at such time and in such manner as the Secretary may require regarding—

“(A) current inventory levels of stockpiled drugs at a drug level;

“(B) indicators of current inventory levels of stockpiled drugs relative to acceptable minimums; and

“(C) such other matters as the Secretary determines appropriate.

“(f) Contract terms

“(1) Payment of monthly fees for management—Subject to paragraph (2), the Secretary shall pay to each eligible entity with a contract under this section for a stockpile of generic drugs at risk of shortage appropriate monthly fees for the management of the stockpile.

“(2) Payment conditioned on stockpile adequacy

“(A) In general—Except as provided in subparagraph (B), each contract with an eligible entity under this section shall provide that no payment under the contract may be made until the entity demonstrates to the Secretary that the entity has stockpiled such portion of the total quantity of drugs to be stockpiled under the contract as the Secretary determines to be acceptable for payment.

“(B) Exceptions for advance payments

“(i) In general—A contract under this section may provide that, if the Secretary determines (in the Secretary’s discretion) that an advance payment, partial payment for significant milestones, or payment to increase capacity is necessary to ensure success of the terms of the contract, the Secretary shall pay, in advance of delivery, an amount not to exceed 10 percent of the total contract amount to be paid to the eligible entity by the Secretary pursuant to the contract over the full period of the contract.

“(ii) Cost of capital—A contract under this section may provide for payments to compensate the contracting eligible entity for additional capital requirements related to the additional inventory to be maintained.

“(iii) Timing—The Secretary shall, to the extent practicable, make any determination under clause (i) to make an advance payment at the same time as the issuance of a solicitation.

“(iv) Repayment—If the Secretary makes an advance payment pursuant to clause (i), the Secretary shall require the eligible entity receiving such advance payment to repay it if there is a failure to perform by the eligible entity.

“(3) Termination

“(A) In general—Subject to subparagraph (B), nothing in this section shall be construed as affecting the rights of eligible entities under provisions of statute or regulation (including the Federal Acquisition Regulation) relating to the termination of contracts for the convenience of the Government.

“(B) Liquidation of stockpile—If a contract under this section is terminated, the eligible entity with the contract shall liquidate the drugs comprising the stockpile funded through the contract and return to the Government any amounts owed in relation to such drugs, but shall collect the management fees associated with such liquidation.

“(g) Congressional oversight

“(1) Independent evaluation and report—Not later than 1 year after the date of enactment of this section and annually thereafter, the Comptroller General of the United States shall conduct an independent evaluation, and submit to the appropriate congressional committees a report, concerning the program under this section.

“(2) Contents of report—The report under paragraph (1) shall review, assess, and provide recommendations, as appropriate, on the following:

“(A) Details on likely costs and resultant savings as compared to a stockpiling method that does not incorporate perpetual inventory cycling.

“(B) Identification of drawdowns from the stockpile, as evidence of market shortage avoidance.

“(C) The allocation of drugs included in the stockpiles funded pursuant to this section to the customers of the eligible entities with contracts under this section.

“(D) The degree to which eligible entities with contracts under this section fulfilled their obligations under such contracts.

“(h) Definitions—In this section:

“(1) The term eligible entity means an entity that meets each of the following criteria:

“(A) The entity is licensed or registered in accordance with applicable Federal and State law and in good standing with respect to such licensure or registration.

“(B) The entity agrees—

“(i) to purchase all drugs to be maintained in its stockpile funded under this section directly from the manufacturers of the drugs or the exclusive distributors of such manufacturers; or

“(ii) in the case of an entity that is a co-op or chain pharmacy warehouse—

“(I) to purchase drugs to be maintained in its stockpile funded under this section from an authorized distributor; and

“(II) distribute those drugs only to its member pharmacies.

“(C) The entity holds a verified authorized wholesale distributor certification issued by the National Association of Boards of Pharmacy.

“(D) The entity sells more than 90 percent of its drugs to dispensers.

“(E) The entity agrees to distribute inventory from its stockpile funded under this section only to dispensers that are customers of the entity.

“(2) The term generic drug at risk of shortage means a drug (as defined in section 201 of the Federal Food, Drug, and Cosmetic Act) that—

“(A) is approved pursuant to section 505(j) of such Act;

“(B) is included in the World Health Organization’s most recent Model List of Essential Medicines;

“(C) is included, at any point during the preceding 36 months, on the drug shortage list in effect under section 506E of the Federal Food, Drug, and Cosmetic Act; and

“(D) is manufactured by 3 or fewer persons that are registered under section 510 of the Federal Food, Drug, and Cosmetic Act for purposes of such manufacture.

“(i) Authorization of appropriations—To carry out this section, there is authorized to be appropriated $120,000,000 for fiscal years 2021 through 2023, to remain available until expended.”

E National Centers of Excellence in Continuous Pharmaceutical Manufacturing

Sec. 2041 National Centers of Excellence in Continuous Pharmaceutical Manufacturing

(a)
In general— Section 3016 of the 21st Century Cures Act (21 U.S.C. 399h) is amended to read as follows:

“3016. National Centers of Excellence in Continuous Pharmaceutical Manufacturing

“(a) In general—The Secretary of Health and Human Services, acting through the Commissioner of Food and Drugs—

“(1) shall solicit and, beginning not later than one year after the date of enactment of the Commitment to Defeat the Virus and Keep America Healthy Act, receive requests from institutions of higher education to be designated as a National Center of Excellence in Continuous Pharmaceutical Manufacturing (in this section referred to as a “National Center of Excellence”) to support the advancement and development of continuous manufacturing; and

“(2) shall so designate any institution of higher education that—

“(A) requests such designation; and

“(B) meets the criteria specified in subsection (c).

“(b) Request for designation—A request for designation under subsection (a) shall be made to the Secretary at such time, in such manner, and containing such information as the Secretary may require. Any such request shall include a description of how the institution of higher education meets or plans to meet each of the criteria specified in subsection (c).

“(c) Criteria for designation described—The criteria specified in this subsection with respect to an institution of higher education are that the institution has, as of the date of the submission of a request under subsection (a) by such institution—

“(1) physical and technical capacity for research and development of continuous manufacturing;

“(2) manufacturing knowledge-sharing networks with other institutions of higher education, large and small pharmaceutical manufacturers, generic and nonprescription manufacturers, contract manufacturers, and other entities;

“(3) proven capacity to design and demonstrate new, highly effective technology for use in continuous manufacturing;

“(4) a track record for creating and transferring knowledge with respect to continuous manufacturing;

“(5) the potential to train a future workforce for research on and implementation of advanced manufacturing and continuous manufacturing; and

“(6) experience in participating in and leading a continuous manufacturing technology partnership with other institutions of higher education, large and small pharmaceutical manufacturers, generic and nonprescription manufacturers, contract manufacturers, and other entities—

“(A) to support companies with continuous manufacturing in the United States;

“(B) to support Federal agencies with technical assistance, which may include regulatory and quality metric guidance as applicable, for advanced manufacturing and continuous manufacturing;

“(C) with respect to continuous manufacturing, to organize and conduct research and development activities needed to create new and more effective technology, capture and disseminate expertise, create intellectual property, and maintain technological leadership;

“(D) to develop best practices for designing continuous manufacturing; and

“(E) to assess and respond to the workforce needs for continuous manufacturing, including the development of training programs if needed.

“(d) Termination of designation—The Secretary may terminate the designation of any National Center of Excellence designated under this section if the Secretary determines such National Center of Excellence no longer meets the criteria specified in subsection (c). Not later than 60 days before the effective date of such a termination, the Secretary shall provide written notice to the National Center of Excellence, including the rationale for such termination.

“(e) Conditions for designation—As a condition of designation as a National Center of Excellence under this section, the Secretary shall require that an institution of higher education enter into an agreement with the Secretary under which the institution agrees—

“(1) to collaborate directly with the Food and Drug Administration to publish the reports required by subsection (g);

“(2) to share data with the Food and Drug Administration regarding best practices and research generated through the funding under subsection (f);

“(3) to develop, along with industry partners (which may include large and small biopharmaceutical manufacturers, generic and nonprescription manufacturers, and contract manufacturers) and another institution or institutions designated under this section, if any, a roadmap for developing a continuous manufacturing workforce;

“(4) to develop, along with industry partners and other institutions designated under this section, a roadmap for strengthening existing, and developing new, relationships with other institutions; and

“(5) to provide an annual report to the Food and Drug Administration regarding the institution’s activities under this section, including a description of how the institution continues to meet and make progress on the criteria listed in subsection (c).

“(f) Funding

“(1) In general—The Secretary shall award funding, through grants, contracts, or cooperative agreements, to the National Centers of Excellence designated under this section for the purpose of studying and recommending improvements to continuous manufacturing, including such improvements as may enable the Centers—

“(A) to continue to meet the conditions specified in subsection (e); and

“(B) to expand capacity for research on, and development of, continuing manufacturing.

“(2) Consistency with FDA mission—As a condition on receipt of funding under this subsection, a National Center of Excellence shall agree to consider any input from the Secretary regarding the use of funding that would—

“(A) help to further the advancement of continuous manufacturing through the National Center of Excellence; and

“(B) be relevant to the mission of the Food and Drug Administration.

“(3) Authorization of appropriations—There is authorized to be appropriated to carry out this subsection $80,000,000 for the period of fiscal years 2021 through 2025.

“(4) Rule of construction—Nothing in this section shall be construed as precluding a National Center for Excellence designated under this section from receiving funds under any other provision of this Act or any other Federal law.

“(g) Annual review and reports

“(1) Annual report—Beginning not later than one year after the date on which the first designation is made under subsection (a), and annually thereafter, the Secretary shall—

“(A) submit to Congress a report describing the activities, partnerships and collaborations, Federal policy recommendations, previous and continuing funding, and findings of, and any other applicable information from, the National Centers of Excellence designated under this section; and

“(B) make such report available to the public in an easily accessible electronic format on the website of the Food and Drug Administration.

“(2) Review of national centers of excellence and potential designees—The Secretary shall periodically review the National Centers of Excellence designated under this section to ensure that such National Centers of Excellence continue to meet the criteria for designation under this section.

“(3) Report on long-term vision of FDA role—Not later than 2 years after the date on which the first designation is made under subsection (a), the Secretary, in consultation with the National Centers of Excellence designated under this section, shall submit a report to the Congress on the long-term vision of the Department of Health and Human Services on the role of the Food and Drug Administration in supporting continuous manufacturing, including—

“(A) a national framework of principles related to the implementation and regulation of continuous manufacturing;

“(B) a plan for the development of Federal regulations and guidance for how advanced manufacturing and continuous manufacturing can be incorporated into the development of pharmaceuticals and regulatory responsibilities of the Food and Drug Administration; and

“(C) appropriate feedback solicited from the public, which may include other institutions, large and small biopharmaceutical manufacturers, generic and nonprescription manufacturers, and contract manufacturers.

“(h) Definitions—In this section:

“(1) Advanced manufacturing—The term 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 two or more unit operations) that enhances drug quality or improves the manufacturing process.

“(2) Continuous manufacturing—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 two or more unit operations.

“(3) Institution of higher education—The term institution of higher education has the meaning given such term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)).

“(4) Secretary—The term Secretary means the Secretary of Health and Human Services, acting through the Commissioner of Food and Drugs.”

(b)
Transition rule— Section 3016 of the 21st Century Cures Act (21 U.S.C. 399h), as in effect on the day before the date of the enactment of this section, shall apply with respect to grants awarded under such section before such date of enactment.