BARDA: House vs. Senate

Earlier this month, Representative Mike Rogers (R-MI) submitted the House version (H.R.5533) of the `Biodefense and Pandemic Vaccine and Drug Development Act of 2006′ (BARDA). The bill was introduced in the Senate by Senator Richard Burr (R-NC) (S.2564). The two bills are essentially the same with the exception of two controversial sections included in the Senate, but not the House version. Section 5: Orphan Drug Market Exclusivity for Countermeasures Products and Section 7: Collaboration and Coordination.

The Market Exclusivity section Amends the Federal Food, Drug, and Cosmetic Act to extend the period of market exclusivity from seven years to ten years for certain new drugs, antibiotics, or anti-infective drugs to treat a rare disease or condition caused by a biological agent, toxin, chemical, radiological, or nuclear agent that is deemed by the Secretary to be a material threat to the United States.

The Collaboration and Coordination section provides an antitrust exemption for: (1) meetings and consultations held by the Secretary among persons engaged in the development of countermeasures or pandemic or epidemic products; and (2) agreements resulting from such meetings.

See the extended entry for the full text of Sections 5 and 7.

SEC. 5. ORPHAN DRUG MARKET EXCLUSIVITY FOR COUNTERMEASURE PRODUCTS.
(a) In General- Section 527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is amended by adding at the end the following:

`(c) Market Exclusivities for Countermeasures, Antibiotics, and Antiinfectives-

`(1) IN GENERAL- Except as provided in paragraph (2), with respect to a drug that is designated under section 526 for a rare disease or condition, the period referred to in this section is deemed to be 10 years in lieu of 7 years if–

`(A) such rare disease or condition is directly caused by a–

`(i)(I) biological agent (including an organism that causes infectious disease);

`(II) toxin; or

`(III) chemical, radiological, or nuclear agent; and

`(ii) such biological agent (including an organism that causes an infectious disease), toxin, or chemical, radiological or nuclear agent, is identified as a material threat under subsection (c)(2)(A)(ii) of section 319F-2 of the Public Health Service Act;

`(B) such drug is determined by the Secretary to be a security countermeasure under subsection (c)(1)(B) of such section 319F-2 with respect to such agent or toxin;

`(C) no active ingredient (including a salt or ester of the active ingredient) of the drug has been approved under an application under section 505(b) prior to the submission of the request for designation of the new drug under section 526; and

`(D) notice respecting the designation of a drug under section 526 has been made available to the public.

`(2) APPLICATION OF PROVISION- Paragraph (1) shall apply with respect to an antibiotic drug or antiinfective drug designated under section 526 only if–

`(A) no active ingredient (including a salt or ester of the active ingredient) of such drug has been approved as a feed or water additive for an animal in the absence of any clinical sign of disease in the animal for growth promotion, feed efficiency, weight gain, routine disease prevention, or other routine purpose;

`(B) no active ingredient (including a salt or ester of the active ingredient) of such drug has been approved for use in humans under section 505 or approved for human use under section 507 (as in effect prior to November 21, 1997) prior to the submission of the request for designation of the new drug under section 526;

`(C) the Secretary has made a determination that–

`(i) such drug is not a member of a class of antibiotics that is particularly prone to creating antibiotic resistance;

`(ii) sufficient antibiotics do not already exist in the same class;

`(iii) such drug represents a significant clinical improvement over other antibiotic drugs;

`(iv) such drug is for a serious or life-threatening disease or conditions; and

`(v) such drug is for a countermeasure use; and

`(D) notice respecting the designation of a drug under section 526 has been made available to the public.

`(3) RULE OF CONSTRUCTION- With respect to a drug to which this subsection applies, and which is also approved for additional uses to which this subsection does not apply, nothing in section 505(b)(2) or 505(j) shall prohibit the Secretary from approving a drug under section 505(b)(2) or 505(j) with different or additional labeling for the drug as the Secretary deems necessary to ensure that the drug is safe and effective for the uses to which this subsection does not apply.

`(4) STUDY AND REPORT- Not later than January 1, 2011, the Comptroller General of the United States shall conduct a study and submit to Congress a report concerning the effect of and activities under this subsection. Such study and report shall examine all relevant issues including–

`(A) the effectiveness of this subsection in improving the availability of novel countermeasures for procurement under section 319F-2 of the Public Health Service Act;

`(B) the effectiveness of this subsection in improving the availability of drugs that treat serious or life threatening diseases or conditions and offer significant clinical improvements;

`(C) the continued need for additional incentives to create more antibiotics and antiinfectives;

`(D) the economic impact of the section on taxpayers and consumers, including–

`(i) the economic value of additional drugs provided for under this subsection, including the impact of improved health care and hospitalization times associated with treatment of nosocomial infections; and

`(ii) the economic cost of any delay in the availability of lower cost generic drugs on patients, the insured, and Federal and private health plans;

`(E) the adequacy of limits under subparagraphs (A) and (B) of paragraph (2) to maximize the useful period during which antibiotic drugs or antiinfective drugs remain therapeutically useful treatments; and

`(F) any recommendations for modifications to this subsection that the Comptroller determines to be appropriate.

`(5) EFFECTIVE DATE- This subsection shall apply only to products for which an applicant has applied for designation under section 526 after the date of enactment of the Biodefense and Pandemic Vaccine and Drug Development Act of 2006.

`(6) SUNSET- This subsection shall not apply with respect to any designation of a drug under section 526 made by the Secretary on or after October 1, 2011.’.

SEC. 7. COLLABORATION AND COORDINATION.
(a) Limited Antitrust Exemption-

(1) MEETINGS AND CONSULTATIONS TO DISCUSS SECURITY COUNTERMEASURES, QUALIFIED COUNTERMEASURES, OR QUALIFIED PANDEMIC OR EPIDEMIC PRODUCT DEVELOPMENT-

(A) AUTHORITY TO CONDUCT MEETINGS AND CONSULTATIONS- The Secretary of Health and Human Services (referred to in this subsection as the `Secretary’), in coordination with the Attorney General and the Secretary of Homeland Security, may conduct meetings and consultations with persons engaged in the development of a security countermeasure (as defined in section 319F-2 of the Public Health Service Act (42 U.S.C. 247d-6b)) (as amended by this Act), a qualified countermeasure (as defined in section 319F-1 of the Public Health Service Act (42 U.S.C. 247d-6a)) (as amended by this Act), or a qualified pandemic or epidemic product (as defined in section 319F-3 of the Public Health Service Act (42 U.S.C. 247d-6d)) for the purpose of the development, manufacture, distribution, purchase, or storage of a countermeasure or product. The Secretary may convene such meeting or consultation at the request of the Secretary of Homeland Security, the Attorney General, the Chairman of the Federal Trade Commission (referred to in this section as the `Chairman’), or any interested person, or upon initiation by the Secretary. The Secretary shall give prior notice of any such meeting or consultation, and the topics to be discussed, to the Attorney General, the Chairman, and the Secretary of Homeland Security.

(B) MEETING AND CONSULTATION CONDITIONS- A meeting or consultation conducted under subparagraph (A) shall–

(i) be chaired or, in the case of a consultation, facilitated by the Secretary;

(ii) be open to persons involved in the development, manufacture, distribution, purchase, or storage of a countermeasure or product, as determined by the Secretary;

(iii) be open to the Attorney General, the Secretary of Homeland Security, and the Chairman;

(iv) be limited to discussions involving covered activities; and

(v) be conducted in such manner as to ensure that no national security, confidential commercial, or proprietary information is disclosed outside the meeting or consultation.

(C) LIMITATION- The Secretary may not require participants to disclose confidential commercial or proprietary information.

(D) TRANSCRIPT- The Secretary shall maintain a complete verbatim transcript of each meeting or consultation conducted under this subsection, which shall not be disclosed under section 552 of title 5, United States Code, unless such Secretary, in consultation with the Attorney General and the Secretary of Homeland Security, determines that disclosure would pose no threat to national security. The determination regarding possible threats to national security shall not be subject to judicial review.

(E) EXEMPTION-

(i) IN GENERAL- Subject to clause (ii), it shall not be a violation of the antitrust laws for any person to participate in a meeting or consultation conducted in accordance with this paragraph.

(ii) LIMITATION- Clause (i) shall not apply to any agreement or conduct that results from a meeting or consultation and that is not covered by an exemption granted under paragraph (4).

(2) SUBMISSION OF WRITTEN AGREEMENTS- The Secretary shall submit each written agreement regarding covered activities that is made pursuant to meetings or consultations conducted under paragraph (1) to the Attorney General and the Chairman for consideration. In addition to the proposed agreement itself, any submission shall include–

(A) an explanation of the intended purpose of the agreement;

(B) a specific statement of the substance of the agreement;

(C) a description of the methods that will be utilized to achieve the objectives of the agreement;

(D) an explanation of the necessity for a cooperative effort among the particular participating persons to achieve the objectives of the agreement; and

(E) any other relevant information determined necessary by the Attorney General, in consultation with the Chairman and the Secretary.

(3) EXEMPTION FOR CONDUCT UNDER APPROVED AGREEMENT- It shall not be a violation of the antitrust laws for a person to engage in conduct in accordance with a written agreement to the extent that such agreement has been granted an exemption under paragraph (4), during the period for which the exemption is in effect.

(4) ACTION ON WRITTEN AGREEMENTS-

(A) IN GENERAL- The Attorney General, in consultation with the Chairman, shall grant, deny, grant in part and deny in part, or propose modifications to an exemption request regarding a written agreement submitted under paragraph (2), in a written statement to the Secretary, within 15 business days of the receipt of such request. An exemption granted under this paragraph shall take effect immediately.

(B) EXTENSION- The Attorney General may extend the 15-day period referred to in subparagraph (A) for an additional period of not to exceed 10 business days.

(C) DETERMINATION- An exemption shall be granted regarding a written agreement submitted in accordance with paragraph (2) only to the extent that the Attorney General, in consultation with the Chairman and the Secretary, finds that the conduct that will be exempted will not have any substantial anticompetitive effect that is not reasonably necessary for ensuring the availability of the countermeasure or product involved.

(5) LIMITATION ON AND RENEWAL OF EXEMPTIONS- An exemption granted under paragraph (4) shall be limited to covered activities, and such exemption shall be renewed (with modifications, as appropriate, consistent with the finding described in paragraph (4)(C)), on the date that is 3 years after the date on which the exemption is granted unless the Attorney General in consultation with the Chairman determines that the exemption should not be renewed (with modifications, as appropriate) considering the factors described in paragraph (4).

(6) AUTHORITY TO OBTAIN INFORMATION- Consideration by the Attorney General for granting or renewing an exemption submitted under this section shall be considered an antitrust investigation for purposes of the Antitrust Civil Process Act (15 U.S.C. 1311 et seq.).

(7) LIMITATION ON PARTIES- The use of any information acquired under an agreement for which an exemption has been granted under paragraph (4), for any purpose other than specified in the exemption, shall be subject to the antitrust laws and any other applicable laws.

(8) REPORT- Not later than one year after the date of enactment of this Act and biannually thereafter, the Attorney General and the Chairman shall report to Congress on the use of the exemption from the antitrust laws provided by this subsection.

(b) Sunset- The applicability of this section shall expire at the end of the 6-year period that begins on the date of enactment of this Act.

(c) Definitions- In this section:

(1) ANTITRUST LAWS- The term `antitrust laws’–

(A) has the meaning given such term in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)), except that such term includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent such section 5 applies to unfair methods of competition; and

(B) includes any State law similar to the laws referred to in subparagraph (A).

(2) COUNTERMEASURE OR PRODUCT- The term `countermeasure or product’ refers to a security countermeasure, qualified countermeasure, or qualified pandemic or epidemic product (as those terms are defined in subsection (a)(1)).

(3) COVERED ACTIVITIES-

(A) IN GENERAL- Except as provided in subparagraph (B), the term `covered activities’ includes any activity relating to the development, manufacture, distribution, purchase, or storage of a countermeasure or product.

(B) EXCEPTION- The term `covered activities’ shall not include, with respect to a meeting or consultation conducted under subsection (a)(1) or an agreement for which an exemption has been granted under subsection (a)(4), the following activities involving 2 or more persons:

(i) Exchanging information among competitors relating to costs, profitability, or distribution of any product, process, or service if such information is not reasonably necessary to carry out covered activities–

(I) with respect to a countermeasure or product regarding which such meeting or consultation is being conducted; or

(II) that are described in the agreement as exempted.

(ii) Entering into any agreement or engaging in any other conduct–

(I) to restrict or require the sale, licensing, or sharing of inventions, developments, products, processes, or services not developed through, produced by, or distributed or sold through such covered activities; or

(II) to restrict or require participation, by any person participating in such covered activities, in other research and development activities, except as reasonably necessary to prevent the misappropriation of proprietary information contributed by any person participating in such covered activities or of the results of such covered activities.

(iii) Entering into any agreement or engaging in any other conduct allocating a market with a competitor that is not expressly exempted from the antitrust laws under subsection (a)(4).

(iv) Exchanging information among competitors relating to production (other than production by such covered activities) of a product, process, or service if such information is not reasonably necessary to carry out such covered activities.

(v) Entering into any agreement or engaging in any other conduct restricting, requiring, or otherwise involving the production of a product, process, or service that is not expressly exempted from the antitrust laws under subsection (a)(4).

(vi) Except as otherwise provided in this subsection, entering into any agreement or engaging in any other conduct to restrict or require participation by any person participating in such covered activities, in any unilateral or joint activity that is not reasonably necessary to carry out such covered activities.

(vii) Entering into any agreement or engaging in any other conduct restricting or setting the price at which a countermeasure or product is offered for sale, whether by bid or otherwise.

The post BARDA: House vs. Senate appears on the FAS Strategic Security Blog.

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