S. 627 (113^th): Medical Innovation Prize Fund Act

in lieu of any remuneration the person would have otherwise received for the exclusive marketing, distribution, sale, or use of a drug, biological product, or manufacturing process for a drug or biological product but for the application of subsection (a); and

in addition to any other remuneration that such person receives by reason of the nonexclusive marketing, distribution, sale, or use of the drug, biological product, or manufacturing process for a drug or biological product.

the Administrator of the Centers for Medicare Medicaid Services;

the Commissioner of Food and Drugs;

the Director of the National Institutes of Health;

the Director of the Centers for Disease Control and Prevention; and

9 individuals to be appointed by the President, with the advice and consent of the Senate, of which—

In general

Except as provided in paragraph (2), each member appointed to the Board under subsection (b)(5) shall be appointed for a term of 4 years.

Terms of initial appointees

As designated by the President at the time of appointment, of the members first appointed to the Board under subsection (b)(5)—

Compensation

Members of the Board shall each be paid not less than the daily equivalent of level IV of the Executive Schedule for each day (including travel time) during which they are engaged in the actual performance of the duties of the Board.

Travel expenses

Each member of the Board shall receive travel expenses, including per diem in lieu of subsistence, in accordance with applicable provisions under subchapter I of chapter 57 of title 5, United States Code.

award prize payments for medical innovation in accordance with this Act; and

submit a report to the Congress under section 16.

Hearings and sessions

Policies and procedures

Expert advisory committees

To assist the Board in carrying out this Act, the Board shall establish independent expert advisory committees, including committees on the following:

Powers of members and agents

Any member or agent of the Board may, if authorized by the Board, take any action which the Board is authorized to take under this Act.

Mails

The Board may use the United States mails in the same manner and under the same conditions as other departments and agencies of the United States.

in the case of a drug or biological product, the first person to receive market clearance with respect to the drug or biological product;

in the case of a manufacturing process, the holder of the patent with respect to such process; or

in the case of open source contributions, the persons or communities that openly shared knowledge, data, materials, and technology on a royalty-free and nondiscriminatory basis.

The number of patients who would benefit from the drug, biological product, or manufacturing process involved, including (in cases of global neglected diseases, global infectious diseases, and other global public health priorities) the number of non-United States patients.

The incremental therapeutic benefit of the drug, biological product, or manufacturing process involved as compared to existing drugs, biological products, and manufacturing processes available to treat the same disease or condition, except that the Board shall provide for cases where drugs, biological products, or manufacturing processes are developed at roughly the same time, so that the comparison is to products that were not recently developed.

The degree to which the drug, biological product, or manufacturing process involved addresses priority health care needs, including—

Improved efficiency of manufacturing processes for drugs or biological processes.

The extent to which knowledge, data, materials and technology that are openly shared have contributed to the successful development of new products or improved processes for manufacturing products.

In the case of antibiotics or other products for which drug resistance is a significant public health problem, the expected life cycle benefits of the antibiotic or other product, with appropriate adjustments that reward the conservation of the resources, taking into account drug resistance that is related to use of the product.

In the case of products used in stockpiles for potential threats to the public health, the risk adjusted benefits of stockpiling the products.

In cases where a new drug, biological product, or manufacturing process offers an improvement over an existing drug, biological product, or manufacturing process and the new drug, biological product, or manufacturing process competes with or replaces the existing drug, biological product, or manufacturing process, the Board shall continue to make prize payments for the existing drug, biological product, or manufacturing process to the degree that the new drug, biological product, or manufacturing process was based on or benefitted from the development of the existing drug, biological product, or manufacturing process.

The Board may not make prize payments based on the identity of the person who manufactures, distributes, sells, or uses the drug, biological product, or manufacturing process involved.

The Board may award prize payments for a drug, a biological product, or a manufacturing process for not more than 10 fiscal years, regardless of the term of any related patents.

For any fiscal year, the Board may not award a prize payment for any single drug, biological product, or manufacturing process in an amount that exceeds 5 percent of the total amount appropriated to the Fund for that year.

For every drug or biological product that receives market clearance, the Board shall determine whether and in what amount to award a prize payment for the drug or biological product not later than the end of the fourth full calendar-year quarter following the calendar-year quarter in which the drug or biological product receives market clearance.

4 percent of such amount for global neglected diseases;

10 percent of such amount for orphan diseases; and

4 percent of such amount for global infectious diseases and other global public health priorities, including research on AIDS, AIDS vaccines, and medicines for responding to bioterrorism.

solicit public input on research and development priorities; and

periodically recommend to the Board modifications in the minimum levels of funding for prizes for priority research and development under this section.

In general

The Board of Trustees shall adopt procedures for the allocation of Open Source Dividend prizes. Such procedures shall—

Public availability of nominations

The nominations described in paragraph (1)(C), and the evidence supporting such nominations, shall be public. The public shall be allowed to provide commentary and additional evidence on such nominations before awards are made.

of the amount appropriated to the Fund for fiscal year 2015, not more than 90 percent of such amount; and

of the amount appropriated to the Fund for each of the succeeding 9 fiscal years, not more than a percentage of such amount that is equal to 9 percent less the percentage applicable to the preceding fiscal year under this subsection.

in bringing to market drugs, vaccines and other biological products, and new manufacturing processes for medicines in a cost-effective manner; and

in addressing society's medical needs, including global neglected diseases that afflict primarily the poor in developing countries, indications for which orphan designation has been granted under section 526 of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 360bb ), and global infectious diseases and other global public health priorities.

Start-up costs

For fiscal year 2015, there are authorized to be appropriated to the Fund, such sums as may be necessary to carry out this Act .

Program implementation

For fiscal year 2015 and each subsequent fiscal year, there is appropriated to the Fund, out of any funds in the Treasury not otherwise appropriated, an amount equal to the amount that is .55 percent of the gross domestic product of the United States for the preceding fiscal year (as such amount is determined by the Secretary of Commerce).

In general

Each covered entity engaged in the business of providing health insurance shall pay to the Secretary not later than the annual payment date of each calendar year beginning after 2014 a fee in an amount determined under subsection (b).

Annual payment date

For purposes of this section, the term annual payment date means, with respect to any calendar year, a date determined by the Secretary, which in no event, may be later than September 30 of such calendar year.

the sum of net premiums for all covered entities; and

all Federal outlays on health insurance or reimbursement of health care costs, excluding the costs of long term care.

With respect to a covered entity’s net premiums written during the calendar year that are not more than $25,000,000, the percentage of net premiums written that are taken into account is 0 percent.

With respect to a covered entity’s net premiums written during the calendar year that are more than $25,000,000 but less than $50,000,000, the percentage of net premiums written that are taken into account is 50 percent.

With respect to a covered entity’s net premiums written during the calendar year that are $50,000,000 or more, the percentage of net premiums written that are taken into account is 100 percent.

In general

For purposes of this section, the term covered entity means any entity which provides health insurance for any United States health risk.

Exclusion

Such term does not include any governmental entity.