I
118THCONGRESS
1
STSESSION H. R. 447
To rescue domestic medical manufacturing activity by providing incentives
in economically distressed areas of the United States and its possessions.
IN THE HOUSE OF REPRESENTATIVES
JANUARY24, 2023
Mrs. G
ONZA´LEZ-COLO´N(for herself and Ms. SALAZAR) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means,
and in addition to the Committee on Energy and Commerce, for a period
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee
concerned
A BILL
To rescue domestic medical manufacturing activity by pro-
viding incentives in economically distressed areas of the
United States and its possessions.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Medical Manufac-4
turing, Economic Development, and Sustainability Act of 5
2023’’ or the ‘‘MMEDS Act of 2023’’. 6
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SEC. 2. ECONOMICALLY DISTRESSED ZONES. 1
(a) I
NGENERAL.—Chapter 1 of the Internal Rev-2
enue Code of 1986 is amended by adding at the end the 3
following new subchapter: 4
‘‘Subchapter AA—Medical Manufacturing in 5
Economically Distressed Zones 6
‘‘SUBCHAPTER AA—MEDICAL MANUFACTURING IN ECONOMICALLY DISTRESSED
ZONES
‘‘Sec. 1400AA–1. Medical manufacturing in economically distressed zone credit.
‘‘Sec. 1400AA–2. Credit for economically distressed zone products and services
acquired by domestic medical manufacturers.
‘‘Sec. 1400AA–3. Special rules to secure the national supply chain and for the
production of population health products.
‘‘Sec. 1400AA–4. Designation of economically distressed zones.
‘‘SEC. 1400AA–1. MEDICAL MANUFACTURING IN ECONOMI-
7
CALLY DISTRESSED ZONE CREDIT. 8
‘‘(a) A
LLOWANCE OF CREDIT.—There shall be al-9
lowed as a credit against the tax imposed by subtitle A 10
for the taxable year an amount equal 40 percent of the 11
sum of— 12
‘‘(1) the aggregate amount of the taxpayer’s 13
medical manufacturing economically distressed zone 14
wages for such taxable year, 15
‘‘(2) the allocable employee fringe benefit ex-16
penses of the taxpayer for such taxable year, and 17
‘‘(3) the depreciation and amortization allow-18
ances of the taxpayer for the taxable year with re-19
spect to qualified medical manufacturing facility 20
property. 21
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‘‘(b) DENIAL OFDOUBLEBENEFIT.—Any wages or 1
other expenses taken into account in determining the cred-2
it under this section may not be taken into account in de-3
termining the credit under sections 41, and any other pro-4
vision determined by the Secretary to be substantially 5
similar. 6
‘‘(c) D
EFINITIONS ANDSPECIALRULES.—For pur-7
poses of this section— 8
‘‘(1) E
CONOMICALLY DISTRESSED ZONE 9
WAGES.— 10
‘‘(A) I
N GENERAL.—The term ‘economi-11
cally distressed zone wages’ means amounts 12
paid or incurred for wages of an employee by 13
the taxpayer for the taxable year which are— 14
‘‘(i) in connection with the active con-15
duct of a trade or business of the taxpayer, 16
and 17
‘‘(ii) paid or incurred for an employee 18
the principal place of employment of whom 19
is in a qualified medical manufacturing fa-20
cility of such taxpayer. 21
‘‘(B) L
IMITATION ON AMOUNT OF WAGES 22
TAKEN INTO ACCOUNT .— 23
‘‘(i) I
N GENERAL.—The amount of 24
wages which may be taken into account 25
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under subparagraph (A) with respect to 1
any employee for any taxable year shall 2
not exceed the contribution and benefit 3
base determined under section 230 of the 4
Social Security Act for the calendar year 5
in which such taxable year begins. 6
‘‘(ii) T
REATMENT OF PART -TIME EM-7
PLOYEES, ETC.—If— 8
‘‘(I) any employee is not em-9
ployed by the taxpayer on a substan-10
tially full-time basis at all times dur-11
ing the taxable year, or 12
‘‘(II) the principal place of em-13
ployment of any employee is not with-14
in an economically distressed zone at 15
all times during the taxable year, 16
the limitation applicable under clause (i) 17
with respect to such employee shall be the 18
appropriate portion (as determined by the 19
Secretary) of the limitation which would 20
otherwise be in effect under clause (i). 21
‘‘(C) T
REATMENT OF CERTAIN EMPLOY -22
EES.—The term ‘economically distressed zone 23
wages’ shall not include any wages paid to em-24
ployees who are assigned by the employer to 25
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perform services for another person, unless the 1
principal trade or business of the employer is to 2
make employees available for temporary periods 3
to other persons in return for compensation. 4
‘‘(D) W
AGES.—For purposes of this para-5
graph, the term ‘wages’ shall not include any 6
amounts which are allocable employee fringe 7
benefit expenses. 8
‘‘(2) A
LLOCABLE EMPLOYEE FRINGE BENEFIT 9
EXPENSES.— 10
‘‘(A) I
N GENERAL.—The term ‘allocable 11
employee fringe benefit expenses’ means the ag-12
gregate amount allowable as a deduction under 13
this chapter to the taxpayer for the taxable year 14
for the following amounts which are allocable to 15
employment in a qualified medical manufac-16
turing facility and which are not included as 17
economically distressed zone wages pursuant to 18
this subsection: 19
‘‘(i) Employer contributions under a 20
stock bonus, pension, profit-sharing, or an-21
nuity plan. 22
‘‘(ii) Employer-provided coverage 23
under any accident or health plan for em-24
ployees. 25
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‘‘(iii) The cost of life or disability in-1
surance provided to employees. 2
‘‘(B) A
LLOCATION.—For purposes of sub-3
paragraph (A), an amount shall be treated as 4
allocable to a qualified medical manufacturing 5
facility only if such amount is with respect to 6
employment of an individual for services pro-7
vided, and the principal place of employment of 8
whom is, in such facility. 9
‘‘(3) Q
UALIFIED MEDICAL MANUFACTURING FA -10
CILITY.—The term ‘qualified medical manufacturing 11
facility’ means any facility that— 12
‘‘(A) researches and develops or produces 13
medical products or essential components of 14
medical products, and 15
‘‘(B) is located within an economically dis-16
tressed zone. 17
‘‘(4) Q
UALIFIED MEDICAL MANUFACTURING FA -18
CILITY PROPERTY.—The term ‘qualified medical 19
manufacturing facility property’ means any property 20
used in (or consisting of) a qualified medical manu-21
facturing facility if such property is directly con-22
nected to the research, development, or production 23
of a medical product. 24
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‘‘(5) MEDICAL PRODUCT; ESSENTIAL COMPO-1
NENT.— 2
‘‘(A) M
EDICAL PRODUCT.—The term ‘med-3
ical product’ means— 4
‘‘(i) a drug that— 5
‘‘(I) is a prescription drug sub-6
ject to regulation under section 505 of 7
the Federal Food, Drug, and Cos-8
metic Act (21 U.S.C. 355) or section 9
351 of the Public Health Service Act 10
(42 U.S.C. 262), 11
‘‘(II) is subject to regulation 12
under section 802 of the Federal 13
Food, Drug, and Cosmetic Act (21 14
U.S.C. 382), or 15
‘‘(III) is described in section 16
201(jj) of such Act (21 U.S.C. 17
321(jj)), or 18
‘‘(ii) a device, as defined in section 19
201(h) of such Act (21 U.S.C. 321(h)). 20
‘‘(B) E
SSENTIAL COMPONENT .—The term 21
‘essential component’ means, with respect to a 22
medical product— 23
‘‘(i) an active pharmaceutical ingre-24
dient, or 25
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‘‘(ii) a protein, antibody, enzyme, hor-1
mone, or other organic material that is an 2
active ingredient in a biological product. 3
‘‘(6) A
GGREGATION RULES.— 4
‘‘(A) I
N GENERAL.—For purposes of this 5
section, members of an affiliated group shall be 6
treated as a single taxpayer. 7
‘‘(B) A
FFILIATED GROUP.—The term ‘af-8
filiated group’ means an affiliated group (as de-9
fined in section 1504(a), determined without re-10
gard to section 1504(b)(3)) one or more mem-11
bers of which are engaged in the active conduct 12
of a trade or business within an economically 13
distressed zone. 14
‘‘SEC. 1400AA–2. CREDIT FOR ECONOMICALLY DISTRESSED 15
ZONE PRODUCTS AND SERVICES ACQUIRED 16
BY DOMESTIC MEDICAL MANUFACTURERS. 17
‘‘(a) A
LLOWANCE OFCREDIT.—In the case of an eli-18
gible medical manufacturer, there shall be allowed as a 19
credit against the tax imposed by subtitle A for the taxable 20
year an amount equal to the applicable percentage of the 21
aggregate amounts paid or incurred by the taxpayer dur-22
ing such taxable year for qualified economically distressed 23
zone products or services. 24
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‘‘(b) APPLICABLEPERCENTAGE.—For purposes of 1
this section, the term applicable percentage means— 2
‘‘(1) 30 percent in the case of amounts paid or 3
incurred to persons not described in paragraph (2) 4
or (3), 5
‘‘(2) 40 percent in the case of amounts paid or 6
incurred to an unrelated minority business, and 7
‘‘(3) 5 percent in the case of amounts paid or 8
incurred to a related person. 9
‘‘(c) E
LIGIBLEMEDICALMANUFACTURER.—For 10
purposes of this section, the term ‘eligible medical manu-11
facturer’ means any person in the trade or business of pro-12
ducing medical products in the United States. 13
‘‘(d) Q
UALIFIEDPRODUCT ORSERVICE.—For pur-14
poses of this section, the term ‘qualified product or service’ 15
means— 16
‘‘(1) any product which is produced in an eco-17
nomically distressed zone and which is integrated 18
into a medical product produced by the taxpayer, 19
and 20
‘‘(2) any service which is provided in an eco-21
nomically distressed zone and which is necessary to 22
the production of a medical product by the taxpayer 23
(including packaging). 24
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‘‘(e) MINORITYBUSINESS.—For purposes of this sec-1
tion— 2
‘‘(1) I
N GENERAL.—The term ‘minority busi-3
ness’ means— 4
‘‘(A) a sole proprietorship carried on by a 5
qualified individual, or 6
‘‘(B) a corporation or partnership— 7
‘‘(i) at least 50 percent of the owner-8
ship interests in which are held by one or 9
more qualified individuals, and 10
‘‘(ii) of which a qualified individual is 11
the president or chief executive officer (or 12
a substantially equivalent position). 13
‘‘(2) Q
UALIFIED INDIVIDUAL.—The term ‘quali-14
fied individual’ means any individual who— 15
‘‘(A) is of Asian-Indian, Asian-Pacific, 16
Black, Hispanic, or Native American origin or 17
descent, and 18
‘‘(B) is a United States citizen or legal 19
resident of the United States or any of its terri-20
tories or possessions. 21
‘‘(f) R
ELATEDPERSONS.—For purposes of this sec-22
tion, persons shall be treated as related to each other if 23
such persons would be treated as a single employer under 24
the regulations prescribed under section 52(b). 25
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‘‘(g) OTHERTERMS.—Terms used in this section 1
which are also used in section 1400AA–1 shall have the 2
same meaning as when used in such section. 3
‘‘SEC. 1400AA–3. SPECIAL RULES TO SECURE THE NATIONAL 4
SUPPLY CHAIN AND FOR THE PRODUCTION 5
OF POPULATION HEALTH PRODUCTS. 6
‘‘(a) I
NGENERAL.—In the case of a qualified repatri-7
ated medical manufacturing facility or a qualified popu-8
lation health product manufacturing facility— 9
‘‘(1) section 1400AA–1(a) shall be applied by 10
substituting ‘60 percent’ for ‘40 percent’, and 11
‘‘(2) section 1400AA–2(a) shall be applied— 12
‘‘(A) by substituting ‘50 percent’ for ‘30 13
percent’, and 14
‘‘(B) by substituting ‘60 percent’ for ‘40 15
percent’. 16
‘‘(b) E
LECTIONTOEXPENSE INLIEU OFTAXCRED-17
IT FORDEPRECIATION.—In the case of a taxpayer which 18
elects (at such time and in such manner as the Secretary 19
may provide) the application of this subsection with re-20
spect to any qualified repatriated medical manufacturing 21
facility or qualified population health product manufac-22
turing facility— 23
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‘‘(1) section 1400AA–1(a)(3) shall not apply 1
with respect to any qualified medical manufacturing 2
facility property with respect to such facility, and 3
‘‘(2) for purposes of section 168(k)— 4
‘‘(A) such property shall be treated as 5
qualified property, and 6
‘‘(B) the applicable percentage with respect 7
to such property shall be 100 percent. 8
‘‘(c) Q
UALIFIEDREPATRIATEDMEDICALMANUFAC-9
TURINGFACILITY.—For purposes of this section, the term 10
‘qualified repatriated medical manufacturing facility’ 11
means any qualified medical manufacturing facility (as de-12
fined in section 1400AA–1) the production of which was 13
moved to an economically distressed zone from a foreign 14
country that the United States Trade Representative has 15
determined could pose a risk to the national supply chain 16
because of political or social factors. 17
‘‘(d) Q
UALIFIEDPOPULATIONHEALTHPRODUCT 18
M
ANUFACTURING FACILITY.—For purposes of this sec-19
tion, the term ‘qualified population health product manu-20
facturing facility’ means any qualified medical manufac-21
turing facility (as defined in section 1400AA–1) that pro-22
duces a population health product (as defined in section 23
319L(a)(11) of the Public Health Service Act) which the 24
Secretary of Health and Human Services has identified 25
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for support through a strategic initiative under section 1
319L(c)(4)(F)(ii) of the Public Health Service Act. 2
‘‘SEC. 1400AA–4. DESIGNATION OF ECONOMICALLY DIS-3
TRESSED ZONES. 4
‘‘(a) I
NGENERAL.—For purposes of this subchapter, 5
the term ‘economically distressed zone’ means any popu-6
lation census tract within the United States which— 7
‘‘(1) has a poverty rate of not less than 35 per-8
cent for each of the 5 most recent calendar years for 9
which information is available, or 10
‘‘(2) satisfies each of the following require-11
ments: 12
‘‘(A) has pervasive poverty, unemployment, 13
low labor force participation, and general dis-14
tress measured as a prolonged period of eco-15
nomic decline measured by real gross national 16
product, 17
‘‘(B) has a poverty rate of not less than 30 18
percent for each of the 5 most recent calendar 19
years for which information is available, and 20
‘‘(C) has been designated as such by the 21
Secretary and the Secretary of Commerce pur-22
suant to an application under subsection (b). 23
‘‘(b) A
PPLICATION FORDESIGNATION.— 24
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‘‘(1) IN GENERAL.—An application for designa-1
tion as an economically distressed zone may be filed 2
by a State or local government in which the popu-3
lation census tract to which the application applies 4
is located. 5
‘‘(2) R
EQUIREMENTS.—Such application shall 6
include a strategic plan for accomplishing the pur-7
poses of this subchapter, which— 8
‘‘(A) describes the coordinated economic, 9
human, community, and physical development 10
plan and related activities proposed for the 11
nominated area, 12
‘‘(B) describes the process by which the af-13
fected community is a full partner in the proc-14
ess of developing and implementing the plan 15
and the extent to which local institutions and 16
organizations have contributed to the planning 17
process, 18
‘‘(C) identifies the amount of State, local, 19
and private resources that will be available in 20
the nominated area and the private/public part-21
nerships to be used, which may include partici-22
pation by, and cooperation with, universities, 23
medical centers, and other private and public 24
entities, 25
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‘‘(D) identifies the funding requested 1
under any Federal program in support of the 2
proposed economic, human, community, and 3
physical development and related activities, 4
‘‘(E) identifies baselines, methods, and 5
benchmarks for measuring the success of car-6
rying out the strategic plan, including the ex-7
tent to which poor persons and families will be 8
empowered to become economically self-suffi-9
cient, and 10
‘‘(F) does not include any action to assist 11
any establishment in relocating from one area 12
outside the nominated area to the nominated 13
area, except that assistance for the expansion of 14
an existing business entity through the estab-15
lishment of a new branch, affiliate, or sub-16
sidiary is permitted if— 17
‘‘(i) the establishment of the new 18
branch, affiliate, or subsidiary will not re-19
sult in a decrease in employment in the 20
area of original location or in any other 21
area where the existing business entity 22
conducts business operations, 23
‘‘(ii) there is no reason to believe that 24
the new branch, affiliate, or subsidiary is 25
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being established with the intention of clos-1
ing down the operations of the existing 2
business entity in the area of its original 3
location or in any other area where the ex-4
isting business entity conducts business op-5
eration, and 6
‘‘(iii) includes such other information 7
as may be required by the Secretary and 8
the Secretary of Commerce. 9
‘‘(c) P
ERIOD FORWHICHDESIGNATIONSARE INEF-10
FECT.—Designation as an economically distressed zone 11
may be made at any time during the 10-year period begin-12
ning on the date of the enactment of this section, and shall 13
remain in effect with respect to such zone during the 15- 14
year period beginning on the date of such designation. 15
Economically distressed zones described in subsection 16
(a)(1) shall take effect on the date of the enactment of 17
this Act and shall remain in effect during the 15-year pe-18
riod beginning on such date. 19
‘‘(d) T
ERRITORIES AND POSSESSIONS.—The term 20
‘United States’ includes the 50 States, the District of Co-21
lumbia, and the territories and possessions of the United 22
States. 23
‘‘(e) R
EGULATIONS.—The Secretary shall issue such 24
regulations or other guidance as may be necessary or ap-25
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propriate to carry out the purposes of this section, includ-1
ing— 2
‘‘(1) not later than 30 days after the date of 3
the enactment of this section, a list of the population 4
census tracts described in subsection (a)(1), and 5
‘‘(2) not later than 60 days after the date of 6
the enactment of this section, regulations or other 7
guidance regarding the designation of population 8
census tracts described in subsection (a)(2).’’. 9
(b) E
FFECTIVEDATE.—The amendments made by 10
this section shall apply to taxable years beginning after 11
December 31, 2022. 12
SEC. 3. AUTHORITY TO SUPPORT DEVELOPMENT OF POPU-13
LATION HEALTH PRODUCTS. 14
(a) D
EFINITIONS.— 15
(1) Q
UALIFIED COUNTERMEASURE .—Subpara-16
graph (A) of section 319F–1(a)(2) of the Public 17
Health Service Act (42 U.S.C. 247d–6a(a)(2)) is 18
amended to read as follows: 19
‘‘(A) Q
UALIFIED COUNTERMEASURE .—The 20
term ‘qualified countermeasure’ means a drug 21
(as that term is defined by section 201(g)(1) of 22
the Federal Food, Drug, and Cosmetic Act (21 23
U.S.C. 321(g)(1))), biological product (as that 24
term is defined by section 351(i) of this Act (42 25
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U.S.C. 262(i))), or device (as that term is de-1
fined by section 201(h) of the Federal Food, 2
Drug, and Cosmetic Act (21 U.S.C. 321(h))), 3
that the Secretary determines to be a priority 4
consistent with sections 302(2) and 304(a) of 5
the Homeland Security Act of 2002— 6
‘‘(i) to diagnose, mitigate, prevent, or 7
treat harm from any biological agent (in-8
cluding organisms that cause an infectious 9
disease), toxin, chemical, radiological, or 10
nuclear agent that may cause a public 11
health emergency affecting national secu-12
rity; or 13
‘‘(ii) to diagnose, mitigate, prevent, or 14
treat harm from an underlying non-com-15
municable disease which, combined with 16
pandemic influenza or an emerging infec-17
tious disease, may result in adverse health 18
consequences or serious threat to one or 19
more vulnerable American populations (as 20
defined in section 319L(a)) in an epidemic 21
or pandemic.’’. 22
(2) O
THER DEFINITIONS.—Subsection (a) of 23
section 319L of the Public Health Service Act (42 24
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U.S.C. 247d–7e) is amended by adding at the end 1
the following new paragraphs: 2
‘‘(11) P
OPULATION HEALTH PRODUCT .—The 3
term ‘population health product’ means a widely 4
available drug to diagnose, mitigate, prevent, or 5
treat harm from an underlying non-communicable 6
disease which, combined with pandemic influenza or 7
an emerging infectious disease, may result in ad-8
verse health consequences or a serious threat to one 9
or more vulnerable American populations in an epi-10
demic or pandemic. 11
‘‘(12) V
ULNERABLE AMERICAN POPU -12
LATIONS.—The term ‘vulnerable American popu-13
lations’ means children, pregnant women, older 14
adults, minority populations, and other at-risk indi-15
viduals with relevant characteristics that warrant 16
consideration during the process of researching and 17
developing such countermeasures and products.’’. 18
(b) S
TRATEGICINITIATIVES.—Clause (ii) of section 19
319L(c)(4)(F) of the Public Health Service Act (42 20
U.S.C. 247d–7e(c)(4)(F)) is amended to read as follows: 21
‘‘(ii) threats that consistently exist or 22
continually circulate and have a significant 23
potential to become a pandemic, such as 24
pandemic influenza and emerging infec-25
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tious diseases in combination with under-1
lying non-communicable diseases, which 2
may include the advanced research and de-3
velopment, manufacturing, and appropriate 4
stockpiling of qualified pandemic or epi-5
demic products, and products, technologies, 6
or processes to support the advanced re-7
search and development of such counter-8
measures (including multiuse platform 9
technologies for diagnostics, vaccines, and 10
therapeutics; virus seeds; clinical trial lots; 11
novel virus strains; and antigen and adju-12
vant material); and’’. 13
(c) A
T-RISKINDIVIDUALS.—Paragraph (6) of section 14
319L(c) of the Public Health Service Act (42 U.S.C. 15
247d–7e(c)) is amended to read as follows: 16
‘‘(6) A
T-RISK INDIVIDUALS.—In carrying out 17
the functions under this section, the Secretary may 18
give a priority to advanced research and develop-19
ment of— 20
‘‘(A) qualified countermeasures and quali-21
fied pandemic or epidemic products likely to be 22
safe and effective with respect to vulnerable 23
American populations; and 24
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‘‘(B) population health products likely to 1
protect vulnerable American populations with 2
underlying non-communicable diseases from dis-3
proportionate harm in epidemics and 4
pandemics.’’. 5
(d) O
THERAUTHORITIES.—Section 319L(c) of the 6
Public Health Service Act (42 U.S.C. 247d–7e(c)) is 7
amended by adding at the end the following: 8
‘‘(8) T
IMELY DELIVERY OF POPULATION 9
HEALTH PRODUCTS TO AT -RISK INDIVIDUALS.—The 10
Secretary shall collaborate with the Administrator of 11
the Centers for Medicare & Medicaid Services, the 12
Secretary of Defense, the Secretary of Veterans Af-13
fairs, the Commissioner of Food and Drugs, and the 14
heads of other Federal agencies involved with ap-15
proval and distribution of health products to assure 16
that such Federal agencies distribute approved pop-17
ulation health products as promptly and effectively 18
as possible, and as continuously as possible, to pro-19
tect vulnerable American populations from harm in 20
epidemics and pandemics. 21
‘‘(9) R
EPORT ON NEED FOR INCENTIVIZING DE -22
VELOPMENT OF POPULATION HEALTH PRODUCTS .— 23
Not later than 90 days after the date of enactment 24
of the Medical Manufacturing, Economic Develop-25
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•HR 447 IH
ment, and Sustainability Act of 2023, the Secretary 1
shall examine and report to the Congress on— 2
‘‘(A) the extent to which the health of 3
aging Americans, African Americans, His-4
panics, Native Americans, veterans, or other 5
vulnerable American populations has been dis-6
proportionately harmed by the COVID–19 pan-7
demic and prior epidemics and pandemics; 8
‘‘(B) the population health products cur-9
rently available and whether there is a need for 10
additional innovation and development to 11
produce population health products to reduce 12
the exposure of vulnerable American popu-13
lations to risk of disproportionate harm in 14
epidemics and pandemics; and 15
‘‘(C) whether the Secretary recommends 16
providing the same incentives for the develop-17
ment and marketing of population health prod-18
ucts as is given with respect to covered infec-19
tious disease products under the Federal Food, 20
Drug, and Cosmetic Act, including under sec-21
tion 505E of such Act.’’. 22
Æ
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