E-DRUG: USA compulsory licensing proposal for medicines
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[The USA has always made extensive use of Compulsory Licensing
for military and space technology. Here a surprising example
how some Congress members also want to use it for medicines!
Maybe a good model for developing countries to follow suit?
copied from Pharm-Policy with thanks. NN]
Affordable Prescription Drugs and Medical Inventions Act
(Introduced in the House)
HR 1708 IH
107th CONGRESS
1st Session
H. R. 1708
To amend title 35, United States Code, to provide for compulsory
licensing of certain patented inventions relating to health.
IN THE HOUSE OF REPRESENTATIVES
May 3, 2001
Mr. BROWN of Ohio (for himself, Mr. Berry, Mr. Stark, Mr. Allen, Mr.
SANDERS, Mr. Bonior, Ms. Lee, Mr. LATOURETTE, Mr. Wynn, Mr. Langevin,
Mr. Davis of Illinois, Mr. Barrett, Mr. Baldacci, Ms. Schakowsky, Mr.
Green of Texas, Mrs. Jones of Ohio, Mr. Nadler, Mr. Lewis of Georgia,
Mr. George Miller of California, and Mr. DeFazio) introduced the
following bill; which was referred to the Committee on the Judiciary,
and in addition to the Committee on Energy and Commerce, for a period to
be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To amend title 35, United States Code, to provide for compulsory
licensing of certain patented inventions relating to health.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Affordable Prescription Drugs and
Medical Inventions Act'.
SEC. 2. COMPULSORY LICENSING OF PATENTED INVENTIONS.
(a) IN GENERAL- Chapter 14 of title 35, United States Code, is
amended by adding at the end the following:
`Sec. 158. Compulsory licensing
`(a) COMPULSORY LICENSING OF PATENTED INVENTIONS- In the case of
any invention relating to health care, in which a patent holder,
contractor, exclusive licensee, or assignee has acquired title under
this title, the Secretary of Health and Human Services and the Federal
Trade Commission shall each have the right to establish other use of the
subject matter of the patent without authorization of the right holder
if the Secretary or the Commission (as the case may be) makes the
determination described in subsection (b).
`(b) DETERMINATION- The determination referred to in subsection (a)
with respect to an invention claimed in a patent is a determination that
one or more of the following applies:
`(1) The patent holder, contractor, licensee, or assignee
referred to in subsection (a) has not taken, or is not expected to take
within a reasonable time, effective steps to achieve practical
application of the subject invention in a field of use.
`(2) Establishing other use of the subject matter of the
patent is necessary to alleviate health or safety needs which are not
adequately satisfied by the patent holder, contractor, licensee, or
assignee.
`(3) The patent holder has engaged in anti-competitive
behavior. Such determination may include, but is not limited to, a
determination that--
`(A) the patented invention is priced excessively
relative to the median price for developed countries or by other
reasonable standards, and that such pricing contravenes the public
interest; or
`(B) the patented invention is an essential component of
a health care product that involves patents, and the licensing terms for
the patent on the invention are not reasonable and deter innovation or
product development, contrary to the public interest.
`(4) An invention covered by a patent (the `second patent')
cannot be exploited without infringing upon the patent described in
subsection (a) (the `first patent'), insofar as the invention claimed in
the second patent involves an important technical advance.
`(5) The invention claimed in the patent is needed for
research purposes that would benefit the public health, and is not
licensed on reasonable terms and conditions.
`(c) FACTORS IN AUTHORIZING OTHER USE- In exercising the right
under subsection (a) to authorize other use of the subject matter of a
patent, the following shall apply:
`(1) In cases involving commercial use, such use may be
permitted only if, prior to such use, the proposed user has made efforts
to obtain authorization from the right holder on reasonable commercial
terms and conditions and such efforts have not been successful within a
reasonable period of time.
`(2) The right holder shall be paid adequate remuneration for
the use of the patent.
`(3) Where such use is authorized under subsection (b)(4), the
owner of the first patent shall be entitled to a license on reasonable
terms to use the invention claimed in the second patent.
`(d) CONSIDERATIONS FOR DETERMINING REMUNERATION FOR USE OF A
PATENT- In determining the reasonableness of licensing terms and the
remuneration for the use of a patent under subsection (c), the Secretary
of Health and Human Services or the Federal Trade Commission (as the
case may be) shall consider--
`(1) the risks and costs associated with the invention claimed
in the patent and the commercial development of products that use the
invention;
`(2) the efficacy and innovative nature and importance to the
public health of the invention or products using the invention;
`(3) the degree to which the invention benefited from publicly
funded research;
`(4) the need for adequate incentives for the creation and
commercialization of new inventions;
`(5) the interests of the public as patients and payers for
health care services; and
`(6) the public health benefits of expanded access to the
invention.
`(e) CONSISTENCY WITH TRIPS- The Secretary of Health and Human
Services and the Federal Trade Commission may adopt regulations jointly
to implement the purposes of this section, consistent with the Agreement
on Trade-Related Aspects of Intellectual Property Rights referred to in
section 101(d)(15) of the Uruguay Round Agreements Act.
`(f) DEFINITION- In this section, the term `health care product'
means any drug or device (as those terms are defined in section 201 of
the Federal Food, Drug, and Cosmetic Act), any biological product (as
defined in section 351 of the Public Health Service Act), or any
technology or process to the extent the technology or process is applied
to health or health care.'.
(b) CONFORMING AMENDMENT- The table of contents for chapter 14 of
title 35, United States Code, is amended by adding at the end the
following new item:
`158. Compulsory licensing.'.
SEC. 3. REPORT ON PHARMACEUTICAL COSTS AND SALES.
(a) REPORT REQUIREMENT- Any person engaged in the manufacture and
sale of any drug approved under section 505 or 512 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355, 360b) for which a patent is still
in effect shall report to the Secretary of Health and Human Services
annually an audit of all financial information relevant to the pricing
of that drug nationally and internationally, including, in formats
specified by the Secretary, an accounting of the costs allocated to
research and development of that drug, as well as costs allocated to
other research and development activities. The Secretary shall transmit
the reports filed under this subsection to the Congress.
(b) CIVIL PENALTY-
(1) PENALTY- Any person who fails to submit a report under
subsection (a) by the date specified pursuant to subsection
(c) shall be liable to the United States for a civil penalty
in an amount not to exceed $25,000 for each such violation. Each day
such a violation continues shall, for purposes of this subsection,
constitute a separate violation of subsection (a).
(2) PROCEDURES- A civil penalty for a violation of subsection
(a) shall be assessed by order of the Secretary of Health and Human
Services after opportunity (provided in accordance with this paragraph)
for a hearing in accordance with section 554 of title 5, United States
Code. Before issuing such an order, the Secretary shall give written
notice to the person to be assessed a civil penalty under such order of
the Secretary's proposal to issue such order and provide such person an
opportunity to request, within 15 days of the date the notice is
received by such person, such a hearing on the order.
(3) JUDICIAL REVIEW- Any person who requested a hearing in
accordance with paragraph (2) a hearing and who is aggrieved by an order
assessing a civil penalty pursuant to the hearing may seek judicial
review of the order by filing a petition for judicial review in the
appropriate United States district court not later than 30 days after
the date on which the order was issued.
(4) FAILURE TO PAY PENALTY- If any person fails to pay an
assessment of a civil penalty--
(A) after the order making the assessment has become a
final order and if such person does not file a petition for judicial
review of the order, or
(B) after a court in an action for judicial review of the
order has entered a final judgment in favor of the Secretary of Health
and Human Services, the Attorney General shall recover the amount
assessed (plus interest at currently prevailing rates from the date of
the expiration of the 30-day period referred to in paragraph (3) or the
date of such final judgment, as the case may be) in an action brought in
any appropriate district court of the United States. In such an action,
the validity, amount, and appropriateness of such penalty shall not be
subject to review.
(c) REGULATIONS- The Secretary of Health and Human Services shall
issue such regulations as are necessary to carry out this section,
including specifying the dates by which the reports under subsection (a)
must be submitted.