119-hr3731

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3731 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 3731

 To amend title XI of the Social Security Act to establish a research 
and development-intensive small biotech manufacturer exception from the 
 Medicare drug price negotiation program.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 June 4, 2025

 Mr. Pfluger (for himself and Mr. Kustoff) introduced the following 
 bill; which was referred to the Committee on Energy and Commerce, and 
 in addition to the Committee on Ways and Means, 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 XI of the Social Security Act to establish a research 
and development-intensive small biotech manufacturer exception from the 
 Medicare drug price negotiation program.

 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 ``Small Biotech Innovation Act''.

SEC. 2. RESEARCH AND DEVELOPMENT-INTENSIVE SMALL BIOTECH MANUFACTURER 
 EXCEPTION FROM MEDICARE DRUG PRICE NEGOTIATION PROGRAM.

 

Section 1192
            (d) (2) of the Social Security Act (42 U.S.C. 1320f-
1
            (d) (2) ) is amended by adding at the end the following new 
subparagraph:
 ``
            (D) Research and development-intensive small 
 biotech manufacturer exception for 2029 and subsequent 
 years.--
 ``
            (i) In general.--With respect to initial 
 price applicability years (beginning with 
 initial price applicability year 2029), subject 
 to the succeeding provisions of this 
 subparagraph, the term `negotiation eligible 
 drug' shall not include a qualifying single 
 source drug (as defined in subsection

    (e) ) of a 
 research and development-intensive small 
 biotech manufacturer (as defined in clause
            (ii) ).
 ``
            (ii) === Definitions. ===
-In this subparagraph:
 ``
            (I) Applicable percent.--The term 
 `applicable percent' means--
 ``

    (aa) in the case of a 
 small biotech manufacturer that 
 has 1 qualifying single source 
 drug, 30 percent;
 ``

    (bb) in the case of a 
 small biotech manufacturer that 
 has 2 qualifying single source 
 drugs, 40 percent;
 ``
            (cc) in the case of a 
 small biotech manufacturer that 
 has 3 qualifying single source 
 drugs, 50 percent;
 ``
            (dd) in the case of a 
 small biotech manufacturer that 
 has 4 qualifying single source 
 drugs, 60 percent; and
 ``

    (ee) in the case of a 
 small biotech manufacturer that 
 has 5 qualifying single source 
 drugs, 70 percent.
 ``
            (II) Small biotech manufacturer 
 defined.--The term `small biotech 
 manufacturer' means a manufacturer 
 that--
 ``

    (aa) has 5 or less 
 qualifying single source drugs; 
 and
 ``

    (bb) is not owned by, 
 controlled by, or subject to 
 the jurisdiction or direction 
 of a government of a foreign 
 country, or organized under the 
 laws of a foreign country that 
 is a covered nation (as defined 
 in 

section 4872

    (f) of title 10, 
 United States Code).
 ``
            (III) Research and development-
 intensive small biotech manufacturer 
 defined.--The term `research and 
 development-intensive small biotech 
 manufacturer' means a small biotech 
 manufacturer that invests at least the 
 applicable percent of their net revenue 
 from the average of the previous three 
 years in research and development 
 (determined based on generally accepted 
 accounting principles).
 ``
            (iii) Treatment in case of acquisition.--
 A drug shall not be considered to be a 
 qualifying single source drug of a research and 
 development-intensive small biotech 
 manufacturer if the manufacturer of such drug 
 is acquired after 2029 by another manufacturer 
 that does not meet the definition of a research 
 and development-intensive small biotech 
 manufacturer, effective at the beginning of the 
 plan year immediately following such 
 acquisition.
 ``
            (iv) Annual application.--In order for a 
 qualifying single source drug of a research and 
 development-intensive small biotech 
 manufacturer to be eligible for the exception 
 under this subparagraph with respect to an 
 initial price applicability year (beginning 
 with initial price applicability year 2029), 
 the manufacturer shall submit an application to 
 the Secretary (at a time specified by the 
 Secretary) containing--
 ``
            (I) information on the net 
 product revenue and research and 
 development expenditures of the 
 manufacturer during the relevant time 
 period;
 ``
            (II) a certification that the 
 information submitted by the 
 manufacturer under subclause
            (I) is 
 accurate and complete to the best of 
 the manufacturer's knowledge; and
 ``
            (III) such other information as 
 the Secretary may specify.
 ``
            (v) Dispute resolution.--The Secretary 
 shall develop a process under which a 
 manufacturer may appeal a determination by the 
 Secretary that the manufacturer is not a 
 research and development-intensive small 
 biotech manufacturer. Such process shall 
 conclude, with respect to a manufacturer, not 
 later than the selected drug publication date 
 with respect to the initial price applicability 
 year for which the manufacturer submitted an 
 application under clause
            (iv) .''.
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