# H.R. 6: The 21st Century Cures Act

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URL: https://www.frixlaw.com/law-library/documents/crs%3AR44071

## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** August 10, 2015
- **Citation:** R44071

## Text

H.R. 6: The 21st Century Cures Act
(name redacted), Coordinator
Specialist in Biomedical Policy
(name redacted), Coordinator
Specialist in Drug Safety and Effectiveness
(nameredacted), Coordinator
Analyst in Health Policy
August 10, 2015

Congressional Research Service
7-....
www.crs.gov
R44071

H.R. 6: The 21st Century Cures Act

Summary
On July 10, 2015, the House passed H.R. 6, the 21st Century Cures Act, on a vote of 344 to 77.
Eight amendments were offered; five were approved by voice vote, two failed by recorded vote,
and one was withdrawn. The House Energy and Commerce Committee, on May 21, 2015,
unanimously ordered to be reported H.R. 6 and the House Committee on Rules published a
committee print of the bill on July 2, 2015. On July 7, 2015, H.R. 6 was reported by the
Committee on Energy and Commerce (H.Rept. 114-190), and the House Committee on Ways and
Means was discharged from further consideration of the bill.
The bill would reauthorize the National Institutes of Health (NIH) through FY2018 and provide
other funding to the agency through FY2020. In addition, the bill would promote and encourage
more strategic planning for research conducted by NIH; change loan support for young, emerging
scientists; promote pediatric research; and encourage more collaborative research activities. The
bill also focuses on changes to the Food and Drug Administration’s (FDA’s) regulatory
procedures for drugs and devices by requiring the issuance of more guidance and increasing
regulatory flexibility in areas such as precision (or personalized) medicine, types of data that
could serve as evidence of safety and effectiveness, antibiotic drug development, orphan drugs,
and medical devices. The bill proposes additional funding for the FDA to support some of its
efforts in certain specified areas.
H.R. 6 consists of four separate titles. Title I focuses on discovery-related issues and is
concentrated on matters related to the NIH, including developing strategic plans, cultivating
young scientists, and promoting more collaboration among NIH researchers, grant recipients, and
institutions. Title II targets the development of new and more innovative drugs and medical
devices and the regulatory processes in place to consider these products. Title III includes
provisions related to the delivery of health care, including interoperability of electronic health
information technology and the treatment of disposable medical technologies. Title IV includes
Medicare and Medicaid changes being proposed to offset the costs of the NIH- and FDA-related
changes in Titles I, II, and III. These proposed offsets include changes in prior authorization
procedures for power mobility devices under Medicare, as well as a proposed drawdown in the
nation’s strategic petroleum reserve.
This report provides a brief summary of each provision of H.R. 6 as passed by the House on July
10, 2015. Each summary includes a brief description of current law and an explanation of how the
bill would change current law. A list of the abbreviations used throughout this report appears in
Appendix B.

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H.R. 6: The 21st Century Cures Act

Contents
Overview ......................................................................................................................................... 1
Summary of Provisions ................................................................................................................... 3
Section 2. NIH and Cures Innovation Fund ........................................................................ 3
Title I—Discovery..................................................................................................................... 7
Subtitle A—National Institutes of Health Funding ................................................................... 7
Section 1001. National Institutes of Health Reauthorization .............................................. 7
Section 1002. Prize Competitions ....................................................................................... 7
Subtitle B—National Institutes of Health Planning and Administration................................... 9
Section 1021. NIH Research Strategic Plan........................................................................ 9
Section 1022. Increasing Accountability at the National Institutes of Health .................. 10
Section 1023. Reducing Administrative Burdens of Researchers ...................................... 11
Section 1024. Exemption for the National Institutes of Health from the
Paperwork Reduction Act Requirements ........................................................................ 11
Section 1025. NIH Travel ................................................................................................. 12
Section 1026. Other Transactions Authority ..................................................................... 13
Section 1027. NCATS Phase IIB Restriction .................................................................... 13
Section 1028. High-Risk, High-Reward Research............................................................ 14
Section 1029. Sense of Congress on Increased Inclusion of Underrepresented
Communities in Clinical Trials ...................................................................................... 15
Subtitle C—Supporting Young Emerging Scientists ............................................................... 16
Section 1041. Improvement of Loan Repayment Programs of National Institutes
of Health ........................................................................................................................ 16
Section 1042. Report......................................................................................................... 17
Subtitle D—Capstone Grant Program ..................................................................................... 17
Section 1061. Capstone Award ......................................................................................... 17
Subtitle E—Promoting Pediatric Research Through the National Institutes of Health .......... 18
Section 1081. National Pediatric Research Network ........................................................ 18
Section 1082. Global Pediatric Clinical Study Network Sense of Congress .................... 18
Section 1083. Appropriate Age Groupings in Clinical Research ...................................... 19
Subtitle F—Advancement of National Institutes of Health Research and Data Access ......... 19
Section 1101. Standardization of Data in Clinical Trial Registry Data Bank on
Eligibility for Clinical Trials .......................................................................................... 19
Subtitle G—Facilitating Collaborative Research .................................................................... 20
Section 1121. Clinical Trial Data System ......................................................................... 20
Section 1122. National Neurological Diseases Surveillance System................................ 21
Section 1123. Data on Natural History of Diseases .......................................................... 21
Section 1124. Accessing, Sharing, and Using Health Data for Research Purposes .......... 22
Subtitle H—Council for 21st Century Cures ........................................................................... 23
Section 1141. Council for 21st Century Cures................................................................... 23
Title II—Development ............................................................................................................ 24
Subtitle A—Patient-Focused Drug Development ................................................................... 24
Section 2001. Development and Use of Patient Experience Data to Enhance
Structured Risk-Benefit Assessment Framework .......................................................... 24
Subtitle B—Qualification and Use of Drug Development Tools ............................................ 25
Section 2021. Qualification of Drug Development Tools ................................................. 25
Section 2022. Accelerated Approval Development Plan .................................................. 28
Subtitle C—FDA Advancement of Precision Medicine .......................................................... 29

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Section 2041. Precision Medicine Guidance and Other Programs of Food and
Drug Administration ...................................................................................................... 29
Subtitle D—Modern Trial Design and Evidence Development .............................................. 30
Section 2061. Broader Application of Bayesian Statistics and Adaptive Trial
Designs .......................................................................................................................... 30
Section 2062. Utilizing Evidence from Clinical Experience ............................................ 31
Section 2063. Streamlined Data Review Program ............................................................ 32
Subtitle E—Expediting Patient Access ................................................................................... 33
Section 2081. Sense of Congress ...................................................................................... 33
Section 2082. Expanded Access Policy ............................................................................ 34
Section 2083. Finalizing Draft Guidance on Expanded Access ........................................ 35
Subtitle F—Facilitating Responsible Manufacturer Communications.................................... 35
Section 2101. Facilitating Dissemination of Health Care Economic Information ............ 35
Section 2102. Facilitating Responsible Communication of Scientific and Medical
Developments ................................................................................................................ 36
Subtitle G—Antibiotic Drug Development............................................................................. 37
Section 2121. Approval of Certain Drugs for Use in a Limited Population of
Patients........................................................................................................................... 37
Section 2122. Susceptibility Test Interpretive Criteria for Microorganisms ..................... 38
Section 2123. Encouraging the Development and Use of DISARM Drugs ..................... 40
Subtitle H—Vaccine Access, Certainty, and Innovation ......................................................... 41
Section 2141. Timely Review of Vaccines by the Advisory Committee on
Immunization Practices.................................................................................................. 42
Section 2142. Review of Processes and Consistency of ACIP Recommendations........... 43
Section 2143. Meetings Between CDC and Vaccine Developers ..................................... 43
Subtitle I—Orphan Product Extensions Now; Incentives for Certain Products for
Limited Populations ............................................................................................................. 43
Section 2151. Extension of Exclusivity Periods for a Drug Approved for a New
Indication for a Rare Disease or Condition.................................................................... 43
Section 2152. Reauthorization of Rare Pediatric Disease Priority Review Voucher
Incentive Program .......................................................................................................... 44
Subtitle J—Domestic Manufacturing and Export Efficiencies ............................................... 44
Section 2161. Grants for Studying the Process of Continuous Drug
Manufacturing................................................................................................................ 44
Section 2162. Re-Exportation Among Members of the European Economic Area .......... 45
Subtitle K—Enhancing Combination Products Review ......................................................... 45
Section 2181. Enhancing Combination Products Review................................................. 45
Subtitle L—Priority Review for Breakthrough Devices ......................................................... 46
Section 2201. Priority Review for Breakthrough Devices ................................................ 47
Subtitle M—Medical Device Regulatory Process Improvements .......................................... 49
Section 2221. Third-Party Quality System Assessment .................................................... 49
Section 2222. Valid Scientific Evidence ........................................................................... 52
Section 2223. Training and Oversight in Least Burdensome Appropriate
Means Concept .............................................................................................................. 52
Section 2224. Recognition of Standards ........................................................................... 54
Section 2225. Easing Regulatory Burden with Respect to Certain Class I and
Class II Devices ............................................................................................................. 55
Section 2226. Advisory Committee Process ..................................................................... 56
Section 2227. Humanitarian Device Exemption Application ........................................... 58
Section 2228. CLIA Waiver Study Design Guidance for In Vitro Diagnostics ................ 58

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Subtitle N—Sensible Oversight for Technology Which Advances Regulatory
Efficiency ............................................................................................................................. 59
Section 2241. Health Software ......................................................................................... 60
Section 2242. Applicability and Inapplicability of Regulation ......................................... 60
Section 2243. Exclusion from Definition of Device ......................................................... 60
Subtitle O—Streamlining Clinical Trials ................................................................................ 61
Section 2261. Protection of Human Subjects in Research; Applicability of Rules........... 62
Section 2262. Use of Non-Local Institutional Review Boards for Review of
Investigational Device Exemptions and Human Device Exemptions ........................... 62
Section 2263. Alteration or Waiver of Informed Consent for Clinical
Investigations ................................................................................................................. 63
Subtitle P—Improving Scientific Expertise and Outreach at FDA ......................................... 63
Section 2281. Silvio O. Conte Senior Biomedical Research Service ............................... 63
Section 2282. Enabling FDA Scientific Engagement ....................................................... 64
Section 2283. Reagan-Udall Foundation for the Food and Drug Administration............. 64
Section 2284. Collection of Certain Voluntary Information Exempted from
Paperwork Reduction Act .............................................................................................. 65
Section 2285. Hiring Authority for Scientific, Technical, and Professional
Personnel........................................................................................................................ 66
Subtitle Q—Exempting From Sequestration Certain User Fees ............................................. 67
Section 2301. Exempting From Sequestration Certain User Fees of Food and
Drug Administration ...................................................................................................... 67
Subtitle R—Other Provisions .................................................................................................. 68
Section 2321. Sense of Congress ...................................................................................... 68
Title III—Delivery .................................................................................................................. 68
Subtitle A—Interoperability .................................................................................................... 68
Section 3001. Ensuring Interoperability of Health Information Technology .................... 68
Subtitle B—Telehealth ............................................................................................................ 72
Section 3021. Telehealth Services under the Medicare Program ...................................... 72
Subtitle C—Encouraging Continuing Medical Education for Physicians .............................. 73
Section 3041. Exempting From Manufacturer Transparency Reporting Certain
Transfers Used for Educational Purposes ...................................................................... 73
Subtitle D—Disposable Medical Technologies ...................................................................... 75
Section 3061. Treatment of Certain Items and Devices .................................................... 75
Subtitle E—Local Coverage Decision Reforms...................................................................... 76
Section 3081. Improvements in the Medicare Local Coverage Determination
(LCD) Process ............................................................................................................... 76
Subtitle F—Medicare Pharmaceutical and Technology Ombudsman ..................................... 77
Section 3101. Medicare Pharmaceutical and Technology Ombudsman ........................... 77
Subtitle G—Medicare Site-of-Service Price Transparency..................................................... 78
Section 3121. Medicare Site-of-Service Price Transparency ............................................ 78
Subtitle H—Medicare Part D Patient Safety and Drug Abuse Prevention .............................. 79
Section 3141. Programs to Prevent Prescription Drug Abuse Under Medicare
Parts C and D ................................................................................................................. 79
Title IV—Medicaid, Medicare, and Other Reforms ............................................................... 81
Subtitle A—Medicaid and Medicare Reforms ........................................................................ 81
Section 4001. Limiting Federal Medicaid Reimbursement to States for Durable
Medical Equipment (DME) to Medicare Payment Rates .............................................. 81
Section 4002. Excluding Authorized Generics from Calculation of Average
Manufacturer Price ........................................................................................................ 82

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Section 4003. Medicare Payment Incentive for the Transition from Traditional XRay Imaging to Digital Radiography and Other Medicare Imaging Payment
Provision ........................................................................................................................ 83
Section 4004. Treatment of Infusion Drugs Furnished Through Durable Medical
Equipment ...................................................................................................................... 84
Section 4005. Extension and Expansion of Prior Authorization for Power
Mobility Devices (PMDs) and Accessories and Prior Authorization Audit
Limitations ..................................................................................................................... 85
Section 4006. Civil Monetary Penalties for Violations Related to Grants,
Contracts, and Other Agreements .................................................................................. 87
Subtitle B—Other Reforms ..................................................................................................... 90
Section 4041. SPR Drawdown .......................................................................................... 90
Subtitle C—Miscellaneous...................................................................................................... 91
Section 4061. Lyme Disease and Other Tick-Borne Diseases .......................................... 91
Section 4062. Outreach to Historically Black Colleges and Universities ......................... 92

Tables
Table A-1. Guidance, Reports, and Regulations/Rulemaking That H.R. 6 Would Require .......... 93

Appendixes
Appendix A. Guidance, Reports, and Regulations/Rulemaking That H.R. 6
Would Require............................................................................................................................ 93
Appendix B. List of Abbreviations ................................................................................................ 95

Contacts
Author Contact Information .......................................................................................................... 97
Acknowledgments ......................................................................................................................... 97

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H.R. 6: The 21st Century Cures Act

Overview
On July 10, 2015, the House passed H.R. 6, the 21st Century Cures Act, on a vote of 344 to 77.
Eight amendments were offered; five were approved by voice vote, two failed by recorded vote,
and one was withdrawn. On May 21, 2015, the House Energy and Commerce Committee
unanimously ordered to be reported H.R. 6. 1 The House Committee on Rules published a
committee print of the bill on July 2, 2015. 2 On July 7, 2015, H.R. 6 was reported by the
Committee on Energy and Commerce (H.Rept. 114-190), and the House Committee on Ways and
Means was discharged from further consideration of the bill.
Amendments to H.R. 6
Amendment 1 (Brat) to reform the NIH and Cures Innovation Fund to make it a discretionary program, failed by
recorded vote Y-141 N-281.
Amendment 2 (Young) to create authority within NIH prize program to incentivize health innovation and create
breakthrough research and technology, approved by voice vote.
Amendment 3 (Lee) to strike the provision that applies policy riders in appropriations bills to NIH & FDA funding in
H.R. 6, failed by recorded vote Y-176 N-245.
Amendment 4 (Castro) to ensure that underrepresented individuals in the sciences (women and minorities) are
included as a focus topic in the report on Supporting Young Emerging Scientists, approved by voice vote.
Amendment 5 (Slaughter) to direct CDC to conduct a study to determine how the additional payments for certain
drugs are affecting usage practices and the development of drug resistance, approved by voice vote.
Amendment 6 (Fitzpatrick) to express a sense of Congress that recording Unique Device Identifiers at the point-ofcare in electronic health record systems could significantly enhance the availability of medical device data for postmarket surveillance purposes, approved by voice vote.
Amendment 7 (Polis) to direct FDA to issue a report on the risks and benefits associated with a two-tiered approval
process that would permit certain medical devices to provisionally come to market if they have demonstrated safety
but not efficacy, withdrawn.
Amendment 8 (Jackson Lee) to direct the HHS Secretary to conduct outreach to certain colleges, universities and
other institutions to ensure that health professionals from underrepresented populations are aware of the research
opportunities under this Act, approved by voice vote.

While consisting of many different provisions, the bill is primarily focused on efforts to increase
strategic investments in medical research at the National Institutes of Health (NIH) and change
some aspects of how the Food and Drug Administration (FDA) executes its regulatory oversight
mission with regard to the review and approval of new drugs, biologics, and medical devices.
H.R. 6 is the result of a series of hearings and roundtable meetings hosted by the House Energy
and Commerce Committee dating back to spring 2014.3 The hearings and roundtables focused on
a broad range of topics, including modernizing clinical trials, incorporating patient perspectives
1

U.S. House of Representatives, Committee on Energy and Commerce, Full Committee Vote on the 21st Century Cures
Act, May 19, 2015, http://energycommerce.house.gov/markup/full-committee-vote-21st-century-cures-act. The
committee website links to more than one version of the bill and several amendments; the committee marked up a
composite of a Committee Print dated May 19, 2015, named UPTON_005 (http://docs.house.gov/meetings/IF/IF00/
20150519/103516/BILLS-1146ih.pdf) and a manager’s amendment dated May 20, 2015, named UPTON_006
(http://docs.house.gov/meetings/IF/IF00/20150519/103516/BILLS-114-6-U000031-Amdt-3.pdf).
2
Rules Committee Print 114-22, Text of H.R. 6, 21st Century Cures Act, based on H.R. 6 as ordered reported by the
Committee on Energy and Commerce, July 2, 2015, http://docs.house.gov/billsthisweek/20150706/CPRT-114-HPRTRU00-HR6.pdf.
3
House Energy and Commerce Committee, 21st Century Cures Roundtable, http://energycommerce.house.gov/event/
21st-century-cures-roundtable.

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into medical research and regulatory processes, precision/personalized medicine, digital health
care, and more. At present, no companion legislation to H.R. 6 has been introduced in the Senate.
However, the Senate Health, Education, Labor, and Pensions (HELP) Committee has started work
on issues related to medical innovation4 and committee leadership has indicated they plan to
continue this work in the 114th Congress.
The July 2, 2015, Rules Committee Print differs from the version that the Committee on Energy
and Commerce ordered to be reported on May 21, 2015. Among the most notable changes is the
reduction in proposed funding for the NIH Innovation Fund, from a level of $10 billion over five
years in the version voted on by Energy and Commerce to a level of $8.75 billion. The other most
significant changes to the bill are found in the proposals to offset the costs for the legislation. A
provision in the May 21 version that would have delayed certain Medicare prepayments for
prescription drug plans has been deleted from the current version of the bill. The latest version
(July 2) includes a new provision to expand the use of prior authorization under Medicare for
power mobility devices (wheelchairs and scooters) along with an expansion of the provision in
the May 21 version for drawdowns from the Strategic Petroleum Reserve, among others.
Some of the key themes in the bill are innovation, flexibility, and transparency. H.R. 6 represents
an effort to maintain or increase medical innovation as reflected in research conducted or funded
by the NIH. The bill has numerous provisions related to increasing regulatory flexibility by FDA
in its processes for reviewing and approving drugs, biologics, and medical devices. In particular,
the bill increases the ability of industries subject to FDA regulation (e.g., pharmaceutical
companies, device makers) and the individuals who are or may become patients who could
benefit from future products, to have a greater voice in the regulatory process and to streamline
the various ways in which FDA ensures safe and effective medications and medical devices enter
the market. The bill attempts to improve the transparency of data—for researchers, consumers,
and regulated entities—by helping to provide enhanced and timelier information for
decisionmakers.
H.R. 6 would reauthorize the NIH through FY2018 and provide $8.75 billion in additional
funding for an innovation fund through FY2020. The bill would promote and encourage more
strategic planning for research conducted by NIH; change loan support for young, emerging
scientists; promote pediatric research; and encourage more collaborative research activities. The
bill focuses on changes to the FDA’s regulatory procedures for drugs and devices by requiring the
issuance of more guidance and increasing regulatory flexibility in areas such as precision (or
personalized) medicine, antibiotic drug development, orphan drugs, and medical devices. The bill
also proposes $550 million in additional funding over five years to support efforts in certain
specified areas, mostly in FDA. FDA estimates it could cost more than $900 million to implement
the legislation; “any unfunded mandates in the bill may require resources to be shifted from other
activities.”5

4

U.S. Senate Committee on Health, Education, Labor, and Pensions, Full Committee Hearing, “Continuing America’s
Leadership in Medical Innovation for Patient,” March 10, 2015, http://www.help.senate.gov/hearings/continuingamericas-leadership-in-medical-innovation-for-patients. Statement by Senator Lamar Alexander, “Senate Health
Committee Holds First Hearing on Innovation Initiative: How to Get Medical Devices, Drugs, Treatments from
Discovery to the Medicine Cabinet,” March 10, 2015, http://www.help.senate.gov/chair/newsroom/press/-senatehealth-committee-holds-first-hearing-on-innovation-initiative-how-to-get-medical-devices-drugs-treatments-fromdiscovery-to-the-medicine-cabinet.
5
Derrick Gingery, “FDA Program Cuts Loom if “Cures” Bill Isn't Fully Funded, Ostroff Warns,” The Pink Sheet
Daily, June 3, 2015. See Appendix A for a list of new requirements (e.g., regulations, guidance, reports, etc.) that
would be created by H.R. 6.

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Many interested groups (manufacturers, medical schools, disease and patient advocates,
researchers, and past and present regulators) have opined publicly on specific provisions in
various drafts of the bill, not all of which have been supportive.6 This report provides summary
descriptions of the bill’s provisions, along with background to give context, not a full analysis of
their impact. The Congressional Budget Office has published a cost estimate.7

Summary of Provisions
Section 2. NIH and Cures Innovation Fund
Background
The National Institutes of Health is the lead federal agency charged with performing and
supporting biomedical and behavioral research. It also has major roles in training biomedical
researchers and disseminating health information. Congress doubled the NIH budget from $13.65
billion to $27.1 billion in the five-year period from FY1998 to FY2003; during that period,
annual increases in the 14%-15% range were the norm. Since then, increases from regular
appropriations have been between 1.0% and 3.2% each year.8 The growth rate of the NIH budget
has been at or below the rate of inflation, which for biomedical research in FY2015 is estimated
to be 2.2%.9 NIH funding in FY2015 is 22% lower than the FY2003 level, the peak of the
doubling period in constant 2012 dollars.10

6

See, for example, The Editorial Board, “How Not to Fix the FDA,” The New York Times, July 20, 2015,
http://www.nytimes.com/2015/07/20/opinion/how-not-to-fix-the-fda.html?_r=0; Rita F. Redberg and Sanket S. Dhruva,
“The FDA’s Medical Device Problem,” The New York Times, July 17, 2015,
http://www.nytimes.com/2015/07/17/opinion/the-fdas-medical-device-problem.html; Jerry Avorn and Aaron S.
Kesselheim, “The 21st Century Cures Act—Will It Take Us Back in Time?” New England Journal of Medicine, June 3,
2015, http://www.nejm.org/doi/pdf/10.1056/NEJMp1506964; Michael Causey, “Congress Crawls Out of 20th Century
to Push Bipartisan ‘Cures’ Legislation,” Quality Digest, June 9, 2015, http://www.qualitydigest.com/inside/fdacompliance-article/060915-congress-crawls-out-20th-century-push-bipartisan-cures#; Editorial Board, “A breakthrough
for biomedicine,” May 29, 2015, Denver Post, May 29, 2015, http://www.denverpost.com/editorials/ci_28216439/
breakthrough-biomedicine; Quardricos Bernard Driskell, “What will it take to cure psoriatic disease?” National
Psoriasis Foundation blog, June 2, 2015, http://blog.psoriasis.org/blog/what-will-it-take-cure-psoriatic-disease; Newt
Gingrich, “21st Century Cures is a Major Breakthrough,” Gingrich Productions, June 3, 2015,
http://www.gingrichproductions.com/2015/06/21st-century-cures-is-a-major-breakthrough/; Gregg Gonsalves, Mark
Harrington, and David A. Kessler, “Don’t Weaken the F.D.A.’s Drug Approval Process,” New York Times, June 11,
2015, http://www.nytimes.com/2015/06/11/opinion/dont-weaken-the-fdas-drug-approval-process.html?ref=opinion;
Bronwyn Mixter, “Watchdog, Consumer Groups Say ‘Cures’ Bill Could Lower Certain Drug Approval Standards,”
BNA, June 3, 2015, http://healthlawrc.bna.com/hlrc/4225/split_display.adp?fedfid=69846101&vname=
hcenotallissues&fn=69846101&jd=69846101; Bernard Muller, “Beyond the Ice Bucket,” The Hill, June 10, 2015,
http://thehill.com/blogs/congress-blog/healthcare/244456-beyond-the-ice-bucket; and Ed Silverman, “Will the 21st
Century Cures Bill Lower Standards for Some Drug Approvals?” Pharmalot blog in Wall Street Journal, May 29, 2015,
http://blogs.wsj.com/pharmalot/search/will%20the%2021st%20century%20cure/?s=will+the+21st+century+cure.
7
Congressional Budget Office, H.R. 6, 21st Century Cures Act, Cost Estimate for Rules Committee Print 114-22, July
7, 2015, http://www.cbo.gov/publication/50361.
8
For further information, see CRS Report R43341, NIH Funding: FY1994-FY2016.
9
The Biomedical Research and Development Price Index (BRDPI) is developed each year for NIH by the Bureau of
Economic Analysis of the Department of Commerce. It reflects the increase in prices of the resources needed to
conduct biomedical research—including personnel services, supplies, equipment—and indicates how much the NIH
budget must change to maintain purchasing power. See http://officeofbudget.od.nih.gov/gbiPriceIndexes.html.
10
For further information, see CRS Report R43341, NIH Funding: FY1994-FY2016.

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A recent analysis of U.S. expenditures on biomedical research found that “U.S. government
research funding declined from 57% (2004) to 50% (2012) of the global total, as did that of U.S.
companies (50% to 41%), with the total U.S. (public plus private) share of global research
funding declining from 57% to 44%. Asia, particularly China, tripled investment from $2.6
billion (2004) to $9.7 billion (2012) preferentially for education and personnel.”11 The United
States continues to be the top supporter of both public and industry medical research.12 However,
some Members of Congress and many in the biomedical research community have expressed
concern over the rapidly increasing investments being made by other countries in this area of
research.
Many of those who are concerned over the U.S. global position in biomedical research investment
have made frequent calls for increased support for research at the NIH. However, another recent
analysis of U.S. biomedical research funding cautioned that the past pattern of rapid doubling of
the NIH budget followed by slowdowns in federal funding “created an unsustainable
hypercompetitive system that is discouraging even the most outstanding prospective students
from entering our profession—and making it difficult for seasoned investigators to produce their
best work.”13 Rather than short-term infusions of cash that disappear, the authors recommend that
greater emphasis be placed on the predictable and stable growth of federal funds for the research
enterprise.14 In responding to questions raised by Senator Elizabeth Warren during a May 5, 2015,
Senate hearing, NIH Director Francis Collins agreed that continued NIH budget increases—
ranging from 3.7% annually to inflation plus 4% or 5%—would be preferred to a temporary
larger investment that disappears.15
The Food and Drug Administration plays a central role in protecting the public health in the
United States by regulating most of the food supply and vitally important medical products,
including drugs, devices, and biologics that affect American lives on a daily basis. In performing
this role, FDA regulates some of the most successful and innovative companies in the U.S.
economy, such as those in the pharmaceutical and medical device industries. In recent years,
some have argued that FDA is underfunded and at risk of being unable to fulfill all its statutory
responsibilities assigned by Congress. Implementing new statutory provisions involves the
development of new regulations and extensive communication with industry and the public;
carrying out the new responsibilities requires additional FDA staff time as well as agency
resources.16

11

Hamilton Moses, David H. M. Matheson, Sarah Cairns-Smith, et al., “The Anatomy of Medical Research: U.S. and
International Comparisons,” Journal of the American Medical Association, vol. 313, no. 2 (January 13, 2015), pp. 174189.
12
Overall medical research funding in the United States was $117.2 billion in 2011. See Figure 8 on page 181 in
Hamilton Moses, David H. M. Matheson, Sarah Cairns-Smith, et al., “The Anatomy of Medical Research: U.S. and
International Comparisons,” Journal of the American Medical Association, vol. 313, no. 2 (January 13, 2015).
13
Bruce Alberts, Marc W. Kirschner, Shirley Tilghman, and Harold Varmus, “Rescuing U.S. biomedical research from
its systemic flaws,” Proceedings of the National Academy of Sciences, vol. 111, no. 16 (April 22, 2014), pp. 57735777.
14
Ibid., p. 5775.
15
U.S. Congress, Senate Committee on Health, Education, Labor, and Pensions, Continuing America’s Leadership:
Realizing the Promise of Precision Medicine for Patients, 114th Cong., 1st sess., May 5, 2015.
16
A recent example is implementation of the Food Safety Modernization Act (FSMA). The Congressional Budget
Office indicated that FDA would require $580 million between 2011 through 2015 to carry out FSMA; so far Congress
has appropriated less than half of this amount.

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FDA’s program level, the amount that FDA can spend, is composed of direct appropriations (also
referred to as budget authority) and user fees collected from the regulated industry.17 For FY2015,
FDA’s program level is $4.5 billion, of which 42.3% ($1.902 billion) comes from user fees. By
statute and by five-year agreements between FDA and the regulated industries that pay the fees,
FDA may use user fee revenue only for specified activities. This requirement, along with tasks
that the Committee on Appropriations reports direct FDA to conduct, influences the priorities of
the agency, potentially leaving other tasks inadequately addressed.

Provision
The provision would establish in the U.S. Treasury an NIH and Cures Innovation Fund and would
provide the Fund with $1.86 billion in mandatory funds per year for FY2016 through FY2020.18
The amounts appropriated to the Fund would be in addition to amounts otherwise made available
to the Department of Health and Human Services (HHS).
Of the amounts made available to the NIH and Cures Innovation Fund for each fiscal year, $1.75
billion would be for “NIH Biomedical Research” and $110 million would be for “Cures
Development.” Of the amounts for NIH biomedical research for a fiscal year, not less than $500
million is for the Accelerating Advancement Program. Of the remaining funds in that fiscal year,
not less than 20% is for high-risk, high-reward research, and not less than 35% is for early stage
investigators (defined as the principal investigator of the proposed research, who has been
awarded no more than one substantial, competing grant, and who is within 10 years of having
completed a medical residency or terminal degree). Of the total amount made available for the
NIH Innovation Fund in a fiscal year, not more than 10% is for intramural research.
The NIH and Cures Innovation Fund would not be subject to any transfer authority of the NIH
Director or the Secretary of HHS, such as the PHS Evaluation Set-Aside, the Common Fund, the
1% transfer authority of the NIH Director, or the Nonrecurring Expenses Fund.19
The provision states that amounts in the NIH and Cures Innovation Fund that are allocated for
“NIH biomedical research” would be used only to conduct or support certain biomedical research
activities. The provision specifies some of these activities, such as research carried out by an
early stage investigator, research carried out by a small business, the Accelerating Advancement
Program, and development and implementation of the NIH research strategic plan.
The provision states that amounts in the NIH and Cures Innovation Fund that are allocated for
“cures development” would only be used for activities of the following nine provisions:



PHSA Section 229A, as added by Section 1123 (the natural history of diseases);
Section 2001 and the amendments made by such section (development and use of
patient experience data to enhance structured risk-benefit assessment
framework);

17

Beginning with the Prescription Drug User Fee Act (PDUFA, P.L. 102-571) in 1992, Congress has authorized FDA
to collect fees from industry sponsors of certain FDA-regulated products and to use the revenue to support statutorily
defined activities, such as the review of product marketing applications.
18
During floor debate on H.R. 6, Amendment 1 (Brat) was defeated on a vote of Yea-141 Nay-281. Amendment 1
would have made the NIH and Cures Innovation Fund a discretionary spending program.
19
Nonrecurring Expenses Fund (NEF) is an account within the Department of the Treasury. The HHS Secretary is
authorized to transfer to the NEF unobligated balances of expired discretionary funds. NEF funds are available until
expended for use by the HHS Secretary for capital acquisitions, including facility and information technology
infrastructure. Congressional appropriators must be notified in advance of any planned use of NEF funds. NEF was
created by Section 223 of Division G of the Consolidated Appropriations Act, 2008 (42 U.S.C. 3514a).

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







Section 2021 and the amendments made by such section (qualification of drug
development tools);
Section 2062 and the amendments made by such section (utilizing evidence from
clinical experience);
Section 2161 (grants to study the process of continuous drug manufacturing);
Section 2201 and the amendments made by such section (priority review for
breakthrough devices);
Section 2221 and the amendments made by such section (third-party quality
system assessments);
Sections 2241, 2242, and 2243 and the amendments made by such sections
(health software); and
FFDCA Section 513(j), as added by Section 2223 (training and oversight in least
burdensome appropriate means concept).

Of the biomedical research funded under the provision, the NIH Director would ensure
coordination among the various research institutes, centers, agencies, departments, offices of the
federal government and minimize unnecessary duplication. This section requires the NIH
Director to establish the Accelerating Advancement Program under which for every $1 of NIH
Innovation Fund made available by the NIH Director to an NIH research Institute or Center, the
Institute or Center contributes $1 of other funding to accomplish important biomedical research
objectives. The scientifically based strategic plan would identify focus areas in which the
resources of the NIH Innovation Fund can be used on biomedical research to expand knowledge,
find more effective treatments, and address unmet needs in the United States. Focus areas include
biomarkers, precision medicine, infectious diseases, and antibiotics. The strategic plan would
include objectives for each strategic focus area and ensure that basic research remains a priority.
The strategic plan would be updated not less than every 18 months.
The House and Senate Committees on Appropriation could provide for the transfer of funds in the
NIH and Cures Innovation Fund for the authorized uses specified in the provision (NIH
biomedical research and cures development).
Funds appropriated to the NIH and Cures Innovation Fund would be used to supplement, not
supplant, the funds otherwise made available to HHS, are subject to the requirements and
limitations of the most recently enacted regular or full-year continuing appropriation Act or
resolution for NIH or FDA programs, and may be used only for the activities specified in the
provision.20

20

Amendment 1 (Brat) to H.R. 6 would have struck subsection (f) and all the terms and conditions listed here.
Amendment 1 was defeated on a vote of Yea-141 Nay-281. Amendment 3 (Lee), defeated on a vote of Yea-176 Nay245, would have struck paragraph (f)(2). Paragraph (f)(2) would require that the funds appropriated to the NIH and
Cures Innovation Fund be subject to the requirements and limitations—also called policy riders—of the most recently
enacted regular or full-year continuing appropriation Act or resolution for NIH or FDA programs.

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Title I—Discovery
Subtitle A—National Institutes of Health Funding
Section 1001. National Institutes of Health Reauthorization
Background
NIH derives its statutory authority from the Public Health Service Act of 1944 (PHSA), as
amended.21 Section 301 of the PHSA grants the Secretary of HHS broad permanent authority to
conduct and sponsor research.22 In addition, Title IV of the PHSA, “National Research Institutes,”
authorizes in greater detail various activities, functions, and responsibilities of the NIH Director
and the institutes and centers.23 The last major NIH reauthorization was the NIH Reform Act of
2006.24 The NIH Reform Act authorized total funding levels for NIH appropriations for FY2007
($30,331,309,000), FY2008 ($32,831,309,000), and such sums as necessary for FY2009. Overall
NIH authorization expired at the end of FY2009 and has not been extended by Congress. Annual
appropriations, together with Section 301 of the PHSA, provide authority for NIH programs to
continue from FY2009 to the present.

Provision
The provision would authorize appropriations for NIH in FY2016 ($31,811,000,000), FY2017
($33,331,000,000), and FY2018 ($34,851,000,000).

Section 1002. Prize Competitions
Background
Section 105 of the America COMPETES Reauthorization Act of 2010 (P.L. 111-358) provided
federal agencies with broad authority to carry out programs designed to stimulate innovation
through prize competitions.25 Before passage of P.L. 111-358, only certain federal agencies had
the authority to initiate prize competitions. The White House Office of Science and Technology
Policy (OSTP) has published annual reports on the implementation of Section 105 as required by
P.L. 111-358. Currently a number of federal government agencies, including NIH, sponsor
challenges or prize competitions in science and medical research. A current list of such challenges
can be found at a federal government website.26 A search of the website on July 15, 2015, resulted
in seven competitions conducted by the “National Institutes of Health.” Examples of research
topics covered in the various challenges: breast cancer genetics, antimicrobial resistance, and
drug abuse and addiction research.

21

42 U.S.C. §§201-300mm-61.
42 U.S.C. §241.
23
42 U.S.C. §§281-290b.
24
P.L. 109-482
25
For more information, see CRS Report R43880, The America COMPETES Acts: An Overview.
26
https://www.challenge.gov/list/.
22

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Provision
The provision would amend the PHSA by adding a new Section 409K that would require the
Director of NIH to establish an Innovation Prizes Program.27 The goal(s) of the NIH prize
program would be “identifying and funding areas of biomedical science that could realize
significant advancement through the creation of a prize competition,” and/or “improving health
outcomes, particularly with respect to human diseases and conditions for which the public and
private investment in research is disproportionately small relative to federal government
expenditures on prevention and treatment activities.”
Within six months of enactment, the Director of NIH would be required to: (1) design the prize
competitions; (2) ensure the design is realistic (given the funds to be awarded), does not reflect
any bias (concerning which innovations would be the best solution), allows any person to
participate; and (3) submit a report to Congress on the design of the competitions.
The Director of NIH would be required to establish the “I-Prize Board” composed of 9 board
members who would be appointed by the NIH Director and certain specified Members of
Congress. The I-Prize Board would provide advice on identifying areas of biomedical science per
the goals of the prize program and make recommendations on establishing the criteria for the
prize competitions as well as how to conduct the prize competition. Board members would be
appointed within 120 days of enactment, each for a 5-year term.
The provision specifies restrictions on financial conflict of interest that would be imposed on the
members of the I-Prize board and any other NIH officer or employee involved in carrying out the
prize competition. The provision also would require that the NIH Director, “with respect to an
innovation,” not award a prize “to any individual or entity that has a vested financial interest in
any product or procedure that is likely to be developed or marketed because of such innovation.”
The provision would allow for one or more contracts to be awarded by the NIH Director to
perform a simulation of the prize competitions and use the simulation to assess the effectiveness
of the competition design; a report to Congress on the simulation results would be submitted
within 4 months of awarding such a contract. The provision would allow the NIH Director to
enter into an agreement with one or more “tax exempt” entities to implement the prize
competition. However, no more than 15% of funds or other assistance “shall be for administration
of the prize competition and not less than 85% of such assistance shall be for activities in direct
support of competitors.”
The Director of NIH would be required to collect information on the medical efficacy of
innovations funded via the prize program as well as the actual and potential effect on federal
expenditures and submit reports to Congress as specified in the provision.
The provision would prohibit the federal government from acquiring the intellectual property
rights from a participant in a prize competition without his or her written consent. The provision
would allow the federal government to negotiate a license for the use of such intellectual
property.

27

Amendment 2 (Young), agreed to by voice vote during floor debate on H.R. 6, added this provision.

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Subtitle B—National Institutes of Health Planning and
Administration
Section 1021. NIH Research Strategic Plan
Background
Section 402(b)(5) of the PHSA specifies that the NIH Director “shall ensure that scientifically
based strategic planning is implemented in support of research priorities as determined by the
agencies of the National Institutes of Health.” NIH provides access to many of its strategic plans
on the agency’s website.28
The focus of NIH research, and to some extent its organizational structure, have been criticized
by some in the academic literature.29 A point often made is that the United States spends more on
health care than any of the other 30 countries that make up the Organization for Economic
Cooperation and Development (OECD)—in fact, U.S. health care spending is more than 2.5
times the OECD average—and yet, the health of the U.S. populace, as measured by life
expectancy, is ranked 24th of the 30 countries.30 “Despite its name, NIH’s mission has not
generally been current health, per se, but rather research for tomorrow’s health.... An agency
devoted to current health would do well to focus on tobacco control, exercise, nutrition,
sanitation, and more cost-effective delivery of health care—prevention and efficiency, rather than
research on diseases currently not treatable.”31 Questioning or making changes to the focus of
NIH research (whether basic, clinical, prevention, health care delivery, or patient-centered
outcomes research) is perhaps “especially pertinent in light of the nation’s continually mediocre
public health outcomes, and their stark contrast to the sophistication and productivity of the
biomedical research enterprise.”32

Provision
The provision would add a new subsection (m) to Section 402 of the PHSA, which describes in
further detail a Research Strategic Plan for NIH. Every five years, beginning in 2016, the NIH
Director, along with the directors of the national research Institutes and Centers, as well as
researchers, patient advocacy groups, and industry leaders, would be required to develop and
maintain a biomedical research strategic plan. The strategic plan would be used to identify
research opportunities and develop individual strategic plans for the research activities of each of
the NIH Institutes and Centers. The Institute and Center (IC) plans would have a common
template and identify strategic focus areas. The IC plans would consider and identify the return
on investment to the U.S. public of such biomedical research and identify contributions to
improving U.S. public health through biomedical research. Overarching and trans-NIH focus
areas—or Mission Priority Focus Areas—would be identified that best serve the goals of
preventing or eliminating the burden of a disease or condition and scientifically merit enhanced
and focused research over the next five years. Rare and pediatric diseases would remain a
28

See for example http://report.nih.gov/strategicplans/#tab2.
See for example Michael M. Crow, “Time to rethink NIH,” Nature, vol. 471 (March 31, 2011), pp. 569-571; and,
Robert Cook-Deegan, “Has NIH lost its halo?,” Issues in Science and Technology, Winter 2015, pp. 37-47.
30
Michael M. Crow, “Time to rethink NIH,” Nature, vol. 471 (March 31, 2011), p. 570.
31
Robert Cook-Deegan, “Has NIH lost its halo?,” Issues in Science and Technology, Winter 2015, p. 43.
32
Ibid.
29

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priority. In developing the strategic plan, the NIH Director would be required to ensure that
maintaining the biomedical workforce, including the participation of scientists from traditionally
underrepresented groups, would remain a priority. The initial strategic plan would be completed
not later than 270 days after enactment. The NIH Director, in consultation with the directors of
the national research Institutes and Centers, would be required to conduct annual progress
reviews for each strategic focus area in the IC plans. The plans would be reviewed and updated
every five years.

Section 1022. Increasing Accountability at the National Institutes of Health
Background
Section 405 of the PHSA specifies that the Director of the National Cancer Institute is appointed
by the President and the Directors of the other NIH Institutes are appointed by the Secretary. Each
NIH Institute Director reports directly to the NIH Director.
Section 202 of the Labor/HHS/ED Appropriations Act, 1993, states at the end of the section that
the payment of compensation to consultants or individual scientists appointed for limited periods
of time is “not to exceed the per diem rate equivalent to the maximum rate payable for seniorlevel positions,” which is “not less than 120% of the minimum rate of basic pay payable for GS–
15 of the General Schedule; and ... not greater than the rate of basic pay payable for level III of
the Executive Schedule.”33

Provision
The provision would amend Section 405 of the PHSA with regard to the appointment and terms
of the Director of the National Cancer Institute and the directors of other NIH Institutes and
Centers (ICs). It would require that directors of ICs be appointed by the NIH Director, with the
exception of the Director of the National Cancer Institute (who would continue to be appointed
by the President). It would add a new requirement that the term of office for the director of an IC
be five years and authorize the NIH Director to remove an IC Director prior to the end of a fiveyear term. It would permit the director of an IC to be reappointed at the end of a five-year term,
with no limit to the number of terms served. It would require that, if the office of a director of an
IC becomes vacant before the end of a five-year term, the director appointed to fill the vacancy
begin a new five-year term (as opposed to finishing the five-year term of the previous director).
Each current IC Director would be deemed to be appointed for a five-year term as of the date of
enactment.
The provision would remove compensation limitations for consultants and individual scientists as
stipulated by Section 202 of the Labor/HHS/ED Appropriations Act, 1993.34
The provision would add a new requirement that before a new research grant is made, the IC
Director will review and approve the award, taking into consideration the mission of the IC, the
scientific priorities identified in the strategic plan, and “whether other agencies are funding
programs or projects to accomplish the same goal.”
The provision would require the Secretary to enter into an arrangement with the Institute of
Medicine35 (or other appropriate entity) to complete a study, not later than two years following
33
34

P.L. 102-394 and 5 U.S.C. 5376.
Ibid.

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enactment, “on the extent to which biomedical research supported by the federal government is
duplicative” and would require a report be submitted to Congress including recommendations on
how to prevent such duplication.

Section 1023. Reducing Administrative Burdens of Researchers
Background
The Federal Demonstration Partnership (FDP) is “a cooperative initiative among 10 federal
agencies and 119 institutional recipients of federal funds, sponsored by the National Academies,
with a purpose of reducing the administrative burdens associated with federal research grants and
contracts.”36 In 2005 and 2012, FDP conducted surveys of principal investigators of federally
funded projects to determine the impact of federal regulations and requirements on the research
process. In both surveys, researchers reported spending 57% of their time engaged in research and
42% of their time in completing pre- and post-award requirements. “The most commonly
experienced administrative responsibilities included those related to federal project finances,
personnel, and effort reporting. These were also among the most time-consuming responsibilities.
For researchers engaged in projects that required human or animal subjects, the related
Institutional Review Board (IRB) and Institutional Animal Care and Use Committee (IACUC)
requirements were by far the most time-consuming. Other areas viewed as particularly timeconsuming were those involving clinical trials, subcontracts, and cross-agency differences.”37

Provision
The provision would require the NIH Director to implement measures to reduce the
administrative burden of NIH-funded researchers, taking into account the recommendations of the
NIH Scientific Management Review Board, the National Academy of Sciences, the Faculty
Burden Survey conducted by the Federal Demonstration Partnership, and the Research Business
Models Working Group. Not later than two years following enactment, the NIH Director would
be required to submit a report to Congress on the measures that have been implemented to reduce
the administrative burden of NIH-funded researchers.

Section 1024. Exemption for the National Institutes of Health from the
Paperwork Reduction Act Requirements
Background
The Paperwork Reduction Act (PRA, 44 U.S.C. Chapter 35), enacted in 1980 and amended in
1995, established the Office of Information and Regulatory Affairs (OIRA) in the Office of
Management and Budget (OMB). Congress required that agencies seek OIRA permission before
(...continued)
35
In April 2015, the Institute of Medicine of the National Academies announced that, effective July 1, 2015, it would
change its name to the National Academy of Medicine. Institute of Medicine of the National Academies, “Institute of
Medicine to Become National Academy of Medicine,” press release, April 28, 2015, http://www.iom.edu/Global/
News%20Announcements/IOM-to-become-NAM-Press-Release.aspx.
36
Sandra L. Schneider et al., Federal Demonstration Partnership (FDP) 2012 Faculty Workload Survey: Executive
Summary, April 2014.
37
http://sites.nationalacademies.org/cs/groups/pgasite/documents/webpage/pga_087823.pdf;
http://sites.nationalacademies.org/PGA/fdp/PGA_055749.

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collecting information from the public. The first of 11 stated purposes was to “minimize the
paperwork burden for individuals ... and other persons resulting from the collection of
information by and for the Federal Government.”38 The PRA requires that federal agencies
receive clearance from OIRA before requesting most types of information from the public.39 PRA
clearance is required when standardized information is collected from 10 or more respondents
within a 12-month period.40 PRA does not apply to certain types of scientific research, including
collections that are neither sponsored nor conducted by the agency and those that are subject to a
clinical exception.41

Provision
The provision would amend 44 U.S.C. Chapter 35 to exempt NIH research from the requirements
of the PRA.

Section 1025. NIH Travel
Background
Following allegations of misspent funds during a 2010 General Services Administration meeting
held in Las Vegas, the Office of Management and Budget imposed restrictions on conference
travel for federal employees in a May 11, 2012, memorandum.42 The memorandum directed
agencies, beginning in FY2013, to spend at least 30% less than what was spent in FY2010 on
travel expenses, and stated that agencies “must maintain this reduced level of spending each year
through FY 2016.” Senior level agency approval is required for all conferences sponsored by an
agency where the conference expenses to the agency are over $100,000. Agencies are prohibited
from spending more than $500,000 on a single conference. However, this restriction may be
waived if the agency head “determines that exceptional circumstances exist whereby spending in
excess of $500,000 on a single conference is the most cost-effective option to achieve a
compelling purpose.”43

Provision
The provision would express the sense of Congress that “participation in or sponsorship of
scientific conferences and meetings is essential to the mission of the National Institutes of
Health.”

38

44 U.S.C. §3501.
For further information about the PRA, see CRS Report RL30590, Paperwork Reduction Act Reauthorization and
Government Information Management Issues, and CRS Report RL32397, Federal Rulemaking: The Role of the Office
of Information and Regulatory Affairs.
40
See NIH, Office of Science Policy, Genetics, Health and Society, What is the Paperwork Reduction Act?, at
http://osp.od.nih.gov/faq/what-paperwork-reduction-act; and HHS, Frequently Asked Questions About PRA /
Information Collection, at http://www.hhs.gov/ocio/policy/collection/infocollectfaq.html.
41
Cass R. Sunstein, Facilitating Scientific Research by Streamlining the Paperwork Reduction Act Process, Executive
Office of the President, Office of Management and Budget, December 9, 2010, https://www.whitehouse.gov/sites/
default/files/omb/memoranda/2011/m11-07.pdf.
42
Promoting Efficient Spending to Support Agency Operations, http://www.whitehouse.gov/sites/default/files/omb/
memoranda/2012/m-12-12.pdf.
43
Ibid.
39

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Section 1026. Other Transactions Authority
Background
Section 480 of the PHSA establishes the Cures Acceleration Network (CAN). The purpose of the
CAN is to support revolutionary advances in basic research and facilitate FDA review of CANfunded high-need cures. A high-need cure is a drug, biological product, or device that, as
determined by the Director of the NIH National Center for Advancing Translational Sciences
(NCATS), “is a priority to diagnose, mitigate, prevent, or treat harm from any disease or
condition [and] for which the incentives of the commercial market are unlikely to result in its
adequate or timely development.”44
Under current law, if the Director of NCATS determines that the goals and objectives of this
section cannot be adequately carried out through a contract, grant, or cooperative agreement, then
the Director has “flexible research authority to use other transactions to fund projects in
accordance with the terms and conditions of this section. Awards made under such flexible
research authority for a fiscal year shall not exceed 20 percent of the total funds appropriated” for
a fiscal year.45 Other transaction (OT) authority is a special vehicle used by certain federal
agencies for obtaining or advancing research and development (R&D).46 Generally, OT authority
is created because the government needs to obtain leading-edge R&D from commercial sources,
but some companies (and other entities) are unwilling or unable to comply with the government’s
procurement regulations.
Current law stipulates that any “grant, cooperative agreement, or contract awarded under this
section shall be awarded on a competitive basis.”47

Provision
The provision would replace the current subparagraph on other transactions authority with a new
subparagraph that would provide other transactions authority with fewer restrictions. The OT
authority would not be conditional on a determination that the goals and objectives of this section
cannot be adequately carried out through a contract, grant, or cooperative agreement. The
provision would not limit OTs to 20% of the total funds appropriated.
The provision would also delete the requirement that grants, contracts, and cooperative
agreements be awarded on a competitive basis.

Section 1027. NCATS Phase IIB Restriction
Background
Prior to FDA approval, medical products are tested in a clinical trial using human volunteers to
see how the products compare to standard treatments or to no treatment. FDA uses the data from
clinical trials to determine whether to approve a manufacturer’s application for marketing a
44

PHS Act §480(a)(3).
PHS Act §480(e)(3)(C).
46
An OT is not a contract, grant, or cooperative agreement, and there is no statutory or regulatory definition of “other
transaction.” Only those agencies that have been provided OT authority may engage in other transactions. For further
information, see CRS Report RL34760, Other Transaction (OT) Authority.
47
PHS Act §480(f).
45

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medical product. Clinical trials are conducted in phases, which are described by FDA in the
paragraphs below. Sometimes Phase II clinical trials are divided into Phase IIA (to assess dosing
requirements) and Phase IIB (to study efficacy).
Phase I trials try to determine dosing, document how a drug is metabolized and excreted,
and identify acute side effects. Usually, a small number of healthy volunteers (between
20 and 80) are used in Phase I trials.
Phase II trials include more participants (about 100-300) who have the disease or
condition that the product potentially could treat. In Phase II trials, researchers seek to
gather further safety data and preliminary evidence of the drug’s beneficial effects
(efficacy), and they develop and refine research methods for future trials with this drug. If
the Phase II trials indicate that the drug may be effective—and the risks are considered
acceptable, given the observed efficacy and the severity of the disease—the drug moves
to Phase III.
In Phase III trials, the drug is studied in a larger number of participants with the disease
(approximately 1,000-3,000). This phase further tests the product’s effectiveness,
monitors side effects and, in some cases, compares the product’s effects to a standard
treatment, if one is already available. As more and more participants are tested over
longer periods of time, the less common side effects are more likely to be revealed. 48

Under current law, although NCATS may develop and provide infrastructure and resources for all
phases of clinical trials research, it may support clinical trial activities only through the end of
Phase IIA, with one exception. NCATS may support clinical trial activities through the end of
Phase IIB for a treatment for a rare disease or condition if (1) it gives public notice for a period of
at least 120 days of NCATS intention to support the clinical trial activities in Phase IIB; (2) no
public or private organization provides credible written intent to NCATS that the organization has
timely plans to further the clinical trial activities or conduct clinical trials of a similar nature
beyond Phase IIA; and (3) NCATS ensures that support of the clinical trial activities in Phase IIB
will not increase the federal government’s liability beyond the award value of the center’s
support.

Provision
The provision would extend NCATS’s authority to support clinical trial activities through the end
of Phase IIB (instead of Phase IIA), and extend the exception for treatment of a rare disease or
condition through the end of Phase III (instead of Phase IIB).

Section 1028. High-Risk, High-Reward Research
Background
The NIH Common Fund, within the Office of the NIH Director, supports research in emerging
areas of scientific opportunity, public health challenges, and knowledge gaps. These are often
large, complex research efforts that involve the collaboration of two or more research institutes or
centers. The Common Fund also supports the High-Risk, High-Reward Research Program, which
has “four unique funding opportunities for exceptionally creative scientists who propose highly
innovative approaches to major challenges in biomedical research.”49 These awards are intended
48

FDA, Inside Clinical Trials: Testing Medical Products in People, What Happens in a Clinical Trial?, at
http://www.fda.gov/Drugs/ResourcesForYou/Consumers/ucm143531.htm.
49
NIH, Office of Strategic Coordination, The Common Fund, High-Risk Research, at https://commonfund.nih.gov/
(continued...)

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“to encourage creative, outside-the-box thinkers to pursue exciting and innovative ideas about
biomedical research.” The four funding opportunities are (1) the NIH Director’s Pioneer Award,
(2) the New Innovator Award, (3) the Transformative Research Award, and (4) the NIH Director’s
Early Independence Award. This last award was created in FY2011 “to support exceptional early
career scientists who possess the intellect, scientific creativity, drive, and maturity to flourish
independently immediately following their graduate training, eliminating the need for traditional
post-doctoral training.”50 NIH announced 78 High-Risk, High-Reward awards in FY2013.51 A
total of 85 such awards were made in FY2014.52

Provision
The provision would add a new Section 409K to the PHSA that would require the Director of
each NIH institute to “establish programs to conduct or support research projects that pursue
innovative approaches to major contemporary challenges in biomedical research that involve
inherent high risk, but have the potential to lead to breakthroughs.” The NIH Director would
determine a specific percentage of funding for each institute for such projects.

Section 1029. Sense of Congress on Increased Inclusion of Underrepresented
Communities in Clinical Trials
Background
Minorities have been underrepresented in clinical trials. For example, according to a 2011 report
from an FDA-sponsored conference, “African Americans represent 12% of the U.S. population
but only 5% of clinical trial participants and Hispanics make up 16% of the population but only
1% of clinical trial participants.”53 There can be biological differences in how people process or
respond to medical products. For example, genetic differences can make a treatment less effective
or perhaps even more toxic in one particular ethnic group. Therefore, it is important to study in
clinical trials the safety and effectiveness of medical products in all people who will use the
products following FDA approval.

Provision
The provision would express the sense of Congress that the NIH National Institute on Minority
Health and Health Disparities “should include within its strategic plan ways to increase
representation of underrepresented communities in clinical trials.”

(...continued)
highrisk/index.
50
NIH, Office of Strategic Coordination, The Common Fund, High-Risk Research, at http://commonfund.nih.gov/
highrisk/overview.
51
NIH, News Releases, at http://www.nih.gov/news/health/sep2013/od-30.htm.
52
NIH, News Releases, at http://www.nih.gov/news/health/oct2014/od-06.htm.
53
FDA, For Consumers, Clinical Trials Shed Light on Minority Health, at http://www.fda.gov/ForConsumers/
ConsumerUpdates/ucm349063.htm.

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Subtitle C—Supporting Young Emerging Scientists
Section 1041. Improvement of Loan Repayment Programs of National
Institutes of Health
Background
NIH funds seven loan repayment programs for researchers.54 Three of these are intramural
programs that provide loan repayment to researchers in exchange for undertaking research while
employed by NIH. Intramural loan repayment programs support researchers from disadvantaged
backgrounds, those who are investigating AIDS, and those undertaking general research
(including general research by physicians during their fellowship training). NIH also funds four
programs to repay the loans of extramural researchers. These funds are awarded competitively to
researchers who are employed by a qualifying educational institution. Specific programs are
available to extramural researchers investigating health disparities, undertaking contraception and
infertility research, engaging in clinical research, and examining pediatric-related topics.
Researchers may receive up to $35,000 per year in loan repayment under each of these programs,
and the NIH loan repayment follows (where not inconsistent with the specific program) the
regulations that govern the National Health Service Corps Loan Repayment Program55 with
regard to participant eligibility, application procedures, selection criteria, loan repayment contract
terms, tax liability for payments received, service obligation, and penalties for breach of contract.

Provision
The provision would authorize a new NIH loan repayment program by adding a new PHSA
Section 487H “Loan Repayment Program.” The new section would require the Secretary to
establish a new extramural loan repayment program for the NIH, based on the agency’s scientific
and workforce needs, under which the federal government would pay not more than $50,000 per
year on the principal and educational loans of health professionals who engage in research.
Beginning in FY2017, the provision would allow amounts repaid under this new program to be
adjusted annually for inflation. Individuals eligible for loan repayment must have a substantial
amount of educational loans relative to income and must complete at least two years of research
service. The provision would also require that the new program, except where inconsistent with
the program’s purpose, be subject to the regulations that govern the National Health Service
Corps Loan Repayment Program56 with regard to participant eligibility, application procedures,
selection criteria, loan repayment contract terms, tax liability for payments received, service
obligation, and penalties for breach of contract. The provision would also allow amounts
appropriated for new loan repayment contracts to remain available until the end of the second
fiscal year after they are appropriated.

54

For description of these programs, see Appendix A of CRS Report R43571, Federal Student Loan Forgiveness and
Loan Repayment Programs.
55
For program description, see CRS Report R43920, National Health Service Corps: Changes in Funding and Impact
on Recruitment. For program regulations, see U.S. Department of Health and Human Services, Health Resources and
Services Administration, “National Health Service Corps: Loan repayment Program,” http://nhsc.hrsa.gov/downloads/
lrpapplicationguidance.pdf.
56
Ibid.

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Finally, the provision would amend the existing NIH loan repayment programs by increasing
annual loan repayment limits from $35,000 to $50,000 and by permitting an annual adjustment of
loan repayment amounts for inflation, beginning in FY2017.

Section 1042. Report
Provision
The provision would require the NIH Director to submit to Congress a report, not later than 18
months following enactment, on NIH efforts “to attract, retain and develop emerging scientists,
including underrepresented individuals in the sciences, such as women and other minorities.”57

Subtitle D—Capstone Grant Program
Section 1061. Capstone Award
Background
In February 2015, the NIH Deputy Director for Extramural Research, Sally Rockey, posted a
description of a new NIH emeritus award that would “help senior investigators who wish to
transition out of a position that relies on funding from NIH research grants, and facilitate the
transfer of their work, knowledge and resources to junior colleagues.”58 According to Science,
“most of the more than 120 comments” responding to Sally Rockey’s blog were critical of the
emeritus award.59 At the same time, NIH also published a formal request for public comment—
also known as a Request for Information (RFI)—on the emeritus award.60 Jeremy Berg, former
director of the NIH National Institute of General Medical Sciences stated that he is “skeptical that
it would have the desired impact,” that it may become “an entitlement for senior investigators,”
and that “[t]here is absolutely no need to create a new mechanism.”61

57

Amendment 4 (Castro), agreed to by voice vote during floor debate on H.R. 6, added the language ensuring that
underrepresented individuals in the sciences (women and minorities) would be included as a focus topic in the NIH
report to Congress.
58
Sally Rockey, Rock Talk, “Seeking Your Input on Sustaining the Workforce Through an Emeritus Award,” February
3, 2015, at http://nexus.od.nih.gov/all/2015/02/03/emeritus-rfi/. The Federation of American Societies for Experimental
Biology (FASEB) states that the award “reflects an idea initially suggested during a meeting of the NIH Advisory
Committee to the Director.” Yvette Seger, “NIH requests feedback on potential emeritus award,” The Washington
Update, February 11, 2015, http://washingtonupdate.faseb.org/?p=1225. The transition award idea is also a
recommendation in a January 2015 FASEB report, Sustaining Discovery in Biological and Medical Sciences: A
Framework for Discussion. See recommendation 2.10 on page 64 of the FASEB report, Sustaining Discovery in
Biological and Medical Sciences: A Framework for Discussion, at
http://www.faseb.org/pdfviewer.aspx?loadthis=http%3A%2F%2Fwww.faseb.org%2FPortals%2F2%2FPDFs%2Fopa%
2F2015%2FSustaining%2520Discovery%2520Report%2520Final.pdf.
59
Jocelyn Kaiser, NIH proposal to create grant for aging scientists hits a nerve, ScienceInsider, February 6, 2015, at
http://news.sciencemag.org/funding/2015/02/nih-proposal-create-grant-aging-scientists-hits-nerve.
60
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-15-064.html; NIH uses RFIs as a mechanism to gather
community feedback on proposed ideas; the draft concepts described in RFIs are subject to change as a result of public
input and internal NIH discussions.
61
Kaiser, “NIH proposal to create grant for aging scientists hits a nerve,” ScienceInsider.

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Provision
The provision would add a new Section 490 to the PHSA creating a capstone award to support
outstanding scientists who have received NIH funding. The purpose of the award would be to
“facilitate the successful transition or conclusion of research programs.” The duration and amount
of each award would be determined by the NIH Director in consultation with the IC Directors.
Individuals who have received a capstone award would not be eligible to be the principal
investigator on subsequent NIH awards.

Subtitle E—Promoting Pediatric Research Through the National
Institutes of Health
Background
Section 409D(d) of the PHSA authorized in 2013 the establishment within NIH of a Pediatric
Research Network “in order to more effectively support pediatric research and optimize the use of
Federal resources.”62

Section 1081. National Pediatric Research Network
Provision
The provision would require the establishment of the National Pediatric Research Network
(NPRN). In establishing the NPRN, the provision would (1) eliminate language telling the NIH
Director to consult with the Director of the Eunice Kennedy Shriver National Institute of Child
Health and Human Development but (2) retain language telling the NIH Director to collaborate
with the ICs that carry out pediatric research. The provision would allow that the NPRN “may be
comprised of, as appropriate, the pediatric research consortia” that are receiving grants under this
section of the PHSA, and deletes that the NPRN may be comprised of other consortia, centers or
networks focused on pediatric research. The provision would now require the NIH Director to
award funding to support the pediatric research consortia; the duration of such support “shall be
for a period not to exceed 5 years.” Each consortium receiving an award under this section of the
PHSA would be required to “provide assistance to [CDC] for activities related to patient registries
and other surveillance systems.”

Section 1082. Global Pediatric Clinical Study Network Sense of Congress
Provision
The provision would express the sense of Congress that NIH “should encourage a global pediatric
clinical study network through the allocation of grants, contracts, or cooperative agreements to
supplement the salaries of new and early investigators who participate in the global pediatric
clinical study network.”

62

Section 409D(d) was added to the PHS Act by P.L. 113-55, the Prematurity Research Expansion and Education for
Mothers who deliver Infants Early Reauthorization Act, or the PREEMIE Reauthorization Act, which was signed into
law on November 27, 2013.

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The provision would express the sense of Congress that NIH “grants, contracts, or cooperative
agreements should be awarded, solely for the purpose of supplementing the salaries of new and
early investigators, to entities that participate in the global pediatric clinical study network.”
The provision would express the sense of Congress that FDA “should engage the European
Medicines Agency and other foreign regulatory entities during the formation of the global
pediatric clinical study network to encourage their participation.”
The provision would express the sense of Congress that “once a global pediatric clinical study
network is established and becomes operational, [FDA] should continue to engage the European
Medicines Agency and other foreign regulatory entities to encourage and facilitate their
participation in the network with the goal of enhancing the global reach of the network.”

Section 1083. Appropriate Age Groupings in Clinical Research
Provision
The provision would require the NIH Director, within 180 days of enactment, to convene a
workshop of experts on pediatrics and geriatrics and then publish guidelines regarding
“appropriate age groupings to be included in research studies.” The Director would also be
required to make available to the public, within 180 days after the end of the workshop, the
findings and conclusions of the workshop. At least every other year, the Director would be
required to disclose to the public the number of children included in NIH-supported research,
“disaggregated by developmentally appropriate age group, race, and gender.”

Subtitle F—Advancement of National Institutes of Health Research
and Data Access
Section 1101. Standardization of Data in Clinical Trial Registry Data Bank on
Eligibility for Clinical Trials
Background
Sponsors of clinical trials for drugs, biologics, and devices regulated by the FDA are required to
submit registration and summary results information to ClinicalTrials.gov, the clinical trial
registry and results data bank operated by NIH’s National Library of Medicine (NLM) pursuant to
Sections 402(i)-(j) of the PHS Act. Subparagraph 402(j)(2)(B) requires the NIH Director to
ensure that the public may, in addition to key-word searching, search the entries in the data bank
by various specified criteria, including the disease or condition being studied, the name of the
drug or device under investigation, and the location of the clinical trial. The NIH Director is
instructed to add search categories as deemed necessary and to ensure that the data bank is easy to
use, and that its entries are easily compared.

Provision
The provision would add new language to Section 402(j) of the PHS Act (“Expanded Clinical
Trial Registry Data Bank”) requiring the NIH Director to ensure that (1) the registry and results
data bank is easily used by the public; (2) the registry and results data bank entries are easily
compared; (3) information is submitted to the registry and results data bank in a standardized
format, including certain specified data; and (4) standard terminologies and code sets are used, to

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the extent possible, to facilitate electronic data matching. The provision would strike
subparagraph 402(j)(2)(B).
Within 90 days of enactment, the Secretary would be required to seek the advice of relevant
stakeholders and experts on enhancements to the clinical trial registry data bank that are
necessary to implement the provision. The Secretary would have to begin implementation of the
provision within 18 months of enactment.

Subtitle G—Facilitating Collaborative Research
Section 1121. Clinical Trial Data System
Background
Sponsors of clinical trials for drugs, biologics, and devices regulated by the FDA are required to
submit registration and summary results information to ClinicalTrials.gov, the clinical trial
registry and results data bank operated by NIH’s National Library of Medicine (NLM). Under
Section 402(j) of the PHS Act, those responsible for specified clinical trials of FDA-regulated
products have been required to submit registration information to ClinicalTrials.gov since
December 2007, submit summary results information for clinical trials of approved products
since September 2008, and submit adverse events information since September 2009. The
Secretary is required, by rulemaking, to expand the requirements for submission of summary
results information, and authorized to use rulemaking to make other changes in the requirements
for submission of registration and results information. In November 2014, HHS published a
proposed rule to clarify and expand requirements for the submission of clinical trial registration
and results information to ClinicalTrials.gov.63

Provision
The provision would instruct the Secretary to enter into a seven-year cooperative agreement,
contract, or grant—the Clinical Trial Data System Agreement—with one or more eligible entities
(i.e., tax-exempt academic institutions) to implement a pilot program to enable registered users to
conduct further research on reported clinical trial data. Eligible entities seeking funding would
have to submit an application that contains certain specified information including, among other
things, (1) information demonstrating that the eligible entity can compile clinical trial data in
standardized formats; (2) a description of the system the eligible entity will use to store and
maintain such data; (3) a certification that the eligible entity will allow only registered users to
access and use de-identified clinical trial data; (4) evidence demonstrating the ability of the
eligible entity to ensure that registered users disseminate the results of their research; and (5)
evidence demonstrating that the eligible entity has a proven track record of protecting
confidential data.
Within six years of establishing the pilot program, the Comptroller General would have to study
and report to the Secretary and Congress on the impact and effectiveness of the program,
including recommendations for improving it. Among other things, the report would have to
include information on new discoveries, research inquiries, or clinical trials that resulted from
having access to clinical trial data under the pilot program, as well as an analysis of whether the
63

Department of Health and Human Services, National Institutes of Health, “Clinical Trials Registration and Results
Submission,” 79 Federal Register 69566, November 21, 2014.

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program had helped reduce adverse events in clinical trials. The Secretary would be able to
extend (including permanently), expand, or terminate the pilot program, in whole or in part, after
the seven-year period expires.

Section 1122. National Neurological Diseases Surveillance System
Background
The PHSA does not explicitly authorize or require surveillance of neurological diseases in
general, although the Secretary may conduct such activities under general authorities in PHSA
Title III. Surveillance is explicitly authorized for certain specified neurological disorders (e.g.,
amyotrophic lateral sclerosis64 and autism spectrum disorder).65

Provision
The provision would add a new PHSA Section 399V-6, “Surveillance of Neurological Diseases.”
It would require the Secretary, acting through the Director of the Centers for Disease Control and
Prevention (CDC)—in consultation with specified stakeholders, and coordinated with other
agencies—to establish a National Neurological Diseases Surveillance System, to include
surveillance of multiple sclerosis and Parkinson’s disease. Required system elements would
include demographic information and risk factors associated or possibly associated with
neurological diseases, and information about diagnosis and progression markers.66 Optional
system elements would include information about the epidemiology, natural history, prevention,
detection, management, and treatment approaches for the diseases; the development of outcomes
measures; and any additional matters identified by stakeholders.
The provision also would authorize the Secretary to furnish grants, contracts, or cooperative
agreements with public or private nonprofit entities to implement this provision. The Secretary
would be required to make information and analysis obtained from the system available to other
federal health agencies (as listed) and state and local agencies, and, subject to HIPAA privacy and
security protections, to the public, including researchers. The Secretary would be required to
report to Congress regarding the system within four years of enactment. The provision would
authorize the appropriation of $5 million for each of fiscal years FY2016 through FY2020.

Section 1123. Data on Natural History of Diseases
Background
The natural history of a disease is its course over time from inception to its eventual end in full
recovery or death. Natural history encompasses exposure or another inciting event, onset and
types of symptoms, and any resulting disability, among other things.

64

PHSA Section 399S; 42 U.S.C. §280g-7.
PHSA Section 399AA; 42 U.S.C. §280i.
66
A disease marker is a substance or other measurable parameter that can be used to identify the presence or severity
of a health condition. A progression marker is one that could indicate worsening or improvement in the condition over
time.
65

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Provision
The provision would express the sense of Congress, in subsection (a), that “studies on the natural
history of diseases can help facilitate and expedite the development of medical products for such
diseases.” Subsection (b) would establish a new PHSA Section 229A. It would authorize the
Secretary to engage in public-private partnerships and award grants in order to gather, analyze,
and interpret data on the natural history of diseases, with a focus on rare diseases. It also would
authorize the Secretary, through these public-private partnerships, to support disease registries
and a secure, flexible information management system, and to provide advice to researchers,
advocacy groups, and others on matters regarding disease studies.
The new PHSA Section 229A also would require the Secretary to make data obtained or
maintained pursuant to this section available to the public (including patient advocacy groups,
researchers, and drug developers), consistent with federal and state privacy laws, in order to
facilitate medical product development. The Secretary would be required to follow applicable
laws protecting privileged or confidential trade secret, commercial, or financial information.
Finally, the provision would authorize the appropriation of $5 million for each of fiscal years
FY2016 through FY2020 to implement this section.

Section 1124. Accessing, Sharing, and Using Health Data for Research
Purposes
Background
The Health Information Portability and Accountability Act (HIPAA) privacy rule describes the
circumstances under which HIPAA-covered entities such as health plans and health care
providers are permitted to use or disclose individually identifiable health information (i.e.,
protected health information, or PHI) without an individual’s written authorization.67 In general,
covered entities may use or disclose PHI for the purposes of treatment, payment, and other
routine health care operations with few restrictions.68 Covered entities also may disclose PHI for
certain public health purposes, including disclosing information about an FDA-regulated product
or activity to an individual subject to FDA’s jurisdiction.69 However, the privacy rule’s definition
of health care operations excludes using or disclosing PHI for the primary purpose of conducting
research (i.e., systematic investigation designed to develop or contribute to generalizable
knowledge).70
The disclosure of PHI to researchers generally requires an individual’s authorization unless an
Institutional Review Board (or equivalent Privacy Board) waives the authorization.71 A covered
entity may, however, allow researchers access to PHI to prepare a research protocol, provided the
PHI is not removed from the covered entity. The privacy rule traditionally has required
authorizations to be study-specific; authorizations for future research were prohibited. In a
January 2013 final rule, HHS permitted authorizations for future research if a sufficiently clear
description of the future research is provided.72 While covered entities may not sell PHI to
67

The HIPAA privacy rule is codified at 45 C.F.R. Part 164, Subpart E.
45 C.F.R. §164.506.
69
45 C.F.R. §164.512(b)(1)(iii).
70
45 C.F.R. §164.501.
71
45 C.F.R. §164.512(i)(1)(i).
72
Department of Health and Human Services, Office of the Secretary, “Modifications to the HIPAA Privacy, Security,
(continued...)
68

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researchers, they are permitted to charge researchers a cost-based fee to cover the preparation and
transmission of the information.73

Provision
This provision would add a new Part 4 to Subtitle D of the HITECH Act instructing the Secretary
to make several revisions or clarifications to the HIPAA privacy rule within 12 months of
enactment. These changes are intended to ease some of the rule’s restrictions on accessing,
sharing, and using health information for research purposes.
First, the Secretary would be required to revise or clarify the privacy rule to allow the use or
disclosure of PHI by a covered entity for research purposes to be treated as health care operations.
However, such disclosures would be treated as health care operations only if they were made to
another covered entity (or to a business associate under contract with the disclosing covered
entity) to perform health care operations, or to a business associate under contract to perform data
aggregation.
Second, the Secretary would be required to revise or clarify the privacy rule to permit the sale of
PHI for research purposes by removing the provision that limits the remuneration to an amount
that covers the cost of preparing and transmitting the information. The Secretary would be
required to further amend the rule so that research on the quality, safety, or effectiveness of FDAregulated products is treated as a public health activity for the purpose of disclosing PHI to an
individual subject to FDA’s jurisdiction.
Third, the Secretary would be required to revise or clarify the privacy rule’s provision that
prohibits researchers from removing PHI during preparation of a research protocol to permit
remote access to PHI by researchers, provided appropriate security and privacy safeguards are in
place and the PHI is not copied or retained by the researchers.
Finally, the Secretary would be required to revise or clarify the privacy rule to allow an
authorization for the use or disclosure of PHI for future research purposes, provided the
authorization (1) sufficiently describes the purposes such that it would be reasonable for an
individual to expect that the PHI could be used or disclosed for future research; (2) states that the
authorization will expire on a particular date or on the occurrence of a particular event; and (3)
states that the authorization will remain valid unless revoked, and provides revocation
instructions.

Subtitle H—Council for 21st Century Cures
Section 1141. Council for 21st Century Cures
Provision
The provision would add to Title II of the PHSA a new Part E, “Council for 21st Century Cures.”
The council would be a non-profit public-private partnership. The purpose of the council would
(...continued)
Enforcement, and Breach Notification Rules Under the Health Information Technology for Economic and Clinical
Health Act and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules; Final Rule,”
78 Federal Register 5566, 5611, January 25, 2013.
73
45 C.F.R. §164.502(a)(5)(ii)(B)(2).

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be to “accelerate the discovery, development, and delivery in the United States of innovative
cures, treatments, and preventive measures for patients.” To accomplish its purpose, the council
would foster collaboration and coordination of those “engaged in the cycle of discovery,
development and delivery of life-saving and health-enhancing innovative interventions.” Other
duties of the council would include communication and dissemination activities; establishing a
strategic agenda to accelerate the discovery, development, and delivery of cures, treatments, and
preventive interventions; developing recommendations based on the identification of gaps and
opportunities within the discovery, development, and delivery cycle; and identifying opportunities
to work with other entities within the United States as well as internationally, such as the
Innovative Medicines Initiative of the European Union.
The council would have a Board of Directors composed of eight ex officio members and 17
appointed members. The ex officio members would consist of the NIH Director, the FDA
Commissioner, the CMS Administrator, and “the heads of five other federal agencies deemed by
the Secretary to be engaged in biomedical research and development.” Within six months of
enactment, the Comptroller General would select the appointed board members. From a list of
nominations made by the leading trade associations, the Comptroller General would select four
representatives of the biopharmaceutical industry, two from the medical device industry, and two
from the information and digital technology industry. In addition, the Comptroller General would
select two academic researchers, three patient representatives, two representatives of health care
providers, and two representatives of health care plans and insurers. The term of appointed
members would be five years. Within 90 days of incorporation of the council and board
appointment, the members of the board would select a Chair, establish the by-laws and policies
for the council, and issue an agenda outlining how it will achieve its purpose. This agenda would
be reviewed and updated annually. The board would be required to meet quarterly, and its minutes
would be publically available and submitted to Congress. The day-to-day management of the
council would be the responsibility of the Executive Director, whose specific duties would be
established by the Board of Directors.
The council would be required to terminate on September 30, 2023. For each fiscal year, FY2016
through FY2023, the provision would authorize appropriations of $10 million to the council. The
council would also be able to “accept financial or in-kind support from participating entities or
private foundations or organizations when such support is deemed appropriate.”

Title II—Development
Subtitle A—Patient-Focused Drug Development
Section 2001. Development and Use of Patient Experience Data to Enhance
Structured Risk-Benefit Assessment Framework
Background
FFDCA Section 505(d), in its instructions on new drug applications, requires the Secretary to
implement a structured risk-benefit assessment framework in the new drug approval
process to facilitate the balanced consideration of benefits and risks, a consistent and
systematic approach to the discussion and regulatory decision making, and the
communication of the benefits and risks of new drugs. Nothing in the preceding sentence
shall alter the criteria for evaluating an application for premarket approval of a drug.

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Provision
The provision would amend FFDCA Section 505 by deleting a clause from Section 505(d) and
adding new subsections (x) and (y). The new 505(x) would restate the deleted 505(d) requirement
for the Secretary to “implement a structured risk-benefit assessment framework in the new drug
approval process.” The new 505(y) would require the Secretary to “establish and implement
processes under which” entities “seeking to develop patient experience data” could submit ideas
and data to the Secretary and the Secretary could request materials from those entities, which
could include the manufacturer and nonmanufacturer groups. This provision would define
“patient experience data” as
data collected by patients, parents, caregivers, patient advocacy organizations, disease
research foundations, medical researchers, research sponsors, or other parties determined
appropriate by the Secretary that is intended to facilitate or enhance the Secretary’s riskbenefit assessments, including information about the impact of a disease or a therapy on
patients’ lives.

The new subsection would also require the Secretary to issue implementation guidance after
holding several methodological workshops and a public meeting.

Subtitle B—Qualification and Use of Drug Development Tools
Section 2021. Qualification of Drug Development Tools
Background
The pharmaceutical industry claims the cost of drug discovery and development is high,
estimated at $1.3 billion to $1.6 billion to bring a drug to market for use in humans.74 Others have
criticized these estimates, claiming they are “false and built on seriously flawed methods” and
that the “true cost is likely to be below $100 million.”75 Lengthy clinical trials have been blamed
as one factor contributing to the high cost of drug development.
Surrogate endpoints—based on the measurement of biomarkers—may be used to determine the
clinical benefit of a product instead of using clinical endpoints. This is because surrogates “enable
smaller, faster, and thus cheaper clinical trials. In addition, pharmaceutical companies argue that
using surrogates means that fewer patients are exposed during testing, and beneficial new
medications reach the market faster. Their main disadvantage is that favorable effects on
surrogates do not automatically translate into benefits to health.”76 For example, Avastin “delayed
74

Stephen Whitehead, “Making medicines evergreen,” (rapid response), BMJ, December 17, 2012.
Peter C. Gotzsche, “Making medicines evergreen,” (rapid response), BMJ, December 17, 2012. See also: Arnold S.
Relman and Marcia Angell, “America’s other drug problem: how the drug industry distorts medicine and politics,” The
New Republic, December 16, 2002, pp. 27-41; Marcia Angell, “How much does the pharmaceutical industry really
spend on R&D?,” in The truth about the drug companies: How they deceive us and what to do about it (New York:
Random House, 2004), pp. 37-41; Merrill Goozner, The $800 million pill: The truth behind the cost of new drugs
(Berkeley: University of California Press, 2005); and, Donald W. Light, “Misleading Congress about Drug
Development,” Journal of Health Politics, Policy and Law, vol. 32, no. 5 (October 2007), pp. 895-913. One recent
estimate states that the “median costs were a third less than the average, or $60 million. Deconstructing other inflators
would lower the estimate of costs even further.” Donald W. Light and Joel R. Lexchin, “Pharmaceutical research and
development: what do we get for all that money?,” BMJ, August 7, 2012.
76
Staffan Svensson, David B. Menkes, and Joel Lexchin, “Surrogate Outcomes in Clinical Trials—A Cautionary Tale,”
JAMA Internal Medicine, vol. 173, no. 8 (April 22, 2013), pp. 611-612.
75

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tumor progression in advanced breast cancer but was not shown to benefit patients.”77 Likewise
Avandia lowered a biomarker level in patients with diabetes but also increased their risk of heart
attack. A number of drugs have been approved on the basis of surrogate endpoint data and, after
adoption into medical practice, have been shown to be harmful through clinical trials or other
subsequent analysis.78 The FDA uses surrogate endpoints in about half of new drug approvals.79
The Institute of Medicine defines a clinical endpoint as “a characteristic or variable that reflects
how a patient [or consumer] feels, functions, or survives. Death is one example of a clinical
endpoint.”80 IOM defines “surrogate endpoint” in the following way:
a biomarker that is intended to substitute for a clinical endpoint. A surrogate endpoint is
expected to predict clinical benefit (or harm or lack of benefit or harm) based on
epidemiologic, therapeutic, pathophysiologic, or other scientific evidence. For example,
blood pressure has served as a surrogate endpoint for morbidity and mortality due to
cardiovascular disease in trials of several classes of antihypertensive drugs. A surrogate
endpoint represents a special use of a biomarker, in which the biomarker substitutes for a
clinical endpoint.81

The Food and Drug Administration Safety and Innovation Act (FDASIA, P.L. 112-144) amended
FFDCA Section 506 by adding the following: “The Secretary shall ... establish a program to
encourage the development of surrogate and clinical endpoints, including biomarkers, and other
scientific methods and tools that can assist the Secretary in determining whether the evidence
submitted in an application is reasonably likely to predict clinical benefit for serious or lifethreatening conditions for which significant unmet medical needs exist.”82

Provision
The provision would add a new FFDCA Section 507, “Qualification of Drug Development
Tools,” which would require the Secretary to establish a process for the qualification of drug
development tools. A drug development tool would be defined to include (1) a biomarker; (2) a
clinical outcome assessment; and (3) any other method, material, or measure that the Secretary
determines aids drug development and regulatory review.
Under new FFDCA Section 507, the Secretary would be allowed to accept a qualification
submission based on factors that include its scientific merit or the available resources of the FDA
to review the submission, and the Secretary would be allowed to prioritize review of a
qualification submission based on factors including, for example, the severity, rarity, or
prevalence of the disease being targeted or the availability or lack of an alternative treatment. The
Secretary would be allowed, through grants or other specified mechanisms, to consult with
biomedical research consortia and may consider the consortia’s recommendations in review of the
qualification submission. “Biomedical research consortia” would be defined as collaborative
77

Jerry Avorn and Aaron S. Kesselheim, “The 21st Century Cures Act—Will It Take Us Back in Time?,” The New
England Journal of Medicine, June 3, 2015, http://www.nejm.org/doi/full/10.1056/NEJMp1506964.
78
Staffan Svensson, David B. Menkes, and Joel Lexchin, “Surrogate Outcomes in Clinical Trials—A Cautionary Tale,”
JAMA Internal Medicine, vol. 173, no. 8 (April 22, 2013), Supplementary Online eTable.
79
Jerry Avorn and Aaron S. Kesselheim, “The 21st Century Cures Act—Will It Take Us Back in Time?,” The New
England Journal of Medicine, June 3, 2015, http://www.nejm.org/doi/full/10.1056/NEJMp1506964.
80
IOM, Perspectives on Biomarker and Surrogate Endpoint Evaluation: Discussion Forum Summary, January 18,
2011, p.6.
81
Ibid.
82
FFDCA §506(d)(2).

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groups that may take the form of public-private partnerships and may include, among others,
government agencies, institutions of higher education, patient advocacy groups, industry
representatives, clinical and scientific experts, and other relevant individuals.83 The Secretary
would be required to carry out a full review of the qualification package and to determine if the
drug development tool at issue is qualified for its proposed context of use.
A qualified drug development tool would be allowed to be used to obtain approval or licensure of
a drug or biologic or to support the product’s investigational use. The Secretary would be allowed
to rescind or modify the granted qualification if she determines the drug development tool is not
appropriate for the proposed context, and, if the Secretary does this, the requestor would be
granted a meeting with the Secretary to discuss the basis of the decision.
New FFDCA Section 507 would require the Secretary to make public, and update at least
biannually, certain information, including, for example, information about the qualification
submissions, the Secretary’s determinations in response to the submissions, and any subsequent
modifications to the Secretary’s determinations. It also specifies that nothing in this section would
be construed to allow the Secretary to release any information contained in an application for
approval or licensure of a drug or biologic that is confidential commercial or trade secret
information; in addition, nothing in the section would be allowed to be construed as altering the
standards of evidence for approval or licensure of a drug or biologic or to limit the Secretary’s
authority to approve or license such products.
New FFDCA Section 507 would authorize to be appropriated $10 million for each of fiscal years
FY2016 through FY2020.
The provision would also require the Secretary, not later than 24 months after enactment, to
publish draft guidance to implement new FFDCA Section 507, in consultation with the
biomedical research consortia and other interested parties through a collaborative public process.
The guidance would be required to, for example, make recommendations for demonstrating that a
surrogate endpoint is reasonably likely to predict clinical benefit for the purpose of supporting
accelerated approval of a drug. The Secretary would be required to issue final guidance not later
than six months after the comment period for the draft guidance closes. In order to inform the
guidance, the Secretary would be required, in consultation with the biomedical research consortia,
to develop a taxonomy for the classification of biomarkers for use in drug development. The
Secretary would be required to make this publicly available not later than 12 months after
enactment and finalize the taxonomy not later than 12 months after the public comment period
closes.
The provision would require the Secretary, not later than 12 months after enactment, to convene a
public meeting regarding the qualification process under new FFDCA Section 507. The Secretary
would also be required to publish a report on FDA’s website, not later than five years after
enactment, to include information, as specified.
Funds from the Cures Innovation Fund, as would be established by Section 4041 of this Act,
would be allowed to be made available to be used to carry out the activities in this provision and
amendments made by this provision.

83

The provision includes a finding that these consortia can play a valuable role in helping develop and qualify drug
development tools, and a sense of Congress stating that an entity seeking to qualify a drug development tool should be
encouraged to consult with these consortia.

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Section 2022. Accelerated Approval Development Plan
Background
For drugs that address unmet needs or serious or life-threatening conditions, have the potential to
offer better outcomes or fewer side effects, or meet other criteria associated with improved public
health, FDA uses several formal mechanisms to expedite development or review processes.84
These include “priority review,” “breakthrough therapy,” and “fast track” designations, and the
accelerated approval pathway.85 FFDCA Section 506(c) authorizes accelerated approval for a
product to treat a serious or life-threatening disease or condition; this pathway allows the
Secretary to approve an application based on the product’s effect on a “surrogate endpoint that is
reasonably likely to predict clinical benefit” or on a clinical endpoint meeting specified criteria.
The Institute of Medicine defined “surrogate endpoint” as
a biomarker that is intended to substitute for a clinical endpoint. A surrogate endpoint is
expected to predict clinical benefit (or harm or lack of benefit or harm) based on
epidemiologic, therapeutic, pathophysiologic, or other scientific evidence. For example,
blood pressure has served as a surrogate endpoint for morbidity and mortality due to
cardiovascular disease in trials of several classes of antihypertensive drugs. A surrogate
endpoint represents a special use of a biomarker, in which the biomarker substitutes for a
clinical endpoint.86

Provision
The provision would add to FFDCA Section 506 a new subsection (g), which would allow the
sponsor of a drug or biological product to request that the Secretary agree to an accelerated
approval development plan if an application for investigation of the product has been submitted
under FFDCA Section 505(i) or PHSA Section 351(a)(3) and the Secretary determines that the
product may be eligible for accelerated approval under FFDCA 506(c). An accelerated approval
development plan would be defined as a plan agreed on by the Secretary and the sponsor that
contains study parameters for the use of a surrogate endpoint that is reasonably likely to predict
clinical benefit and is intended to be the basis of the accelerated approval of a product under
FFDCA 506(c).
An accelerated approval development plan would include, among other things, agreement on the
surrogate endpoint to be assessed and the design of the study that would utilize the surrogate
endpoint. The provision would authorize the Secretary to require the product sponsor to modify
or terminate the plan if data indicate that the plan is no longer sufficient to demonstrate the safety
of the drug involved or the drug is no longer eligible for accelerated approval; in this case, the
sponsor would be granted a request for a meeting to discuss the basis of the Secretary’s decision.
84

FDA, “DRAFT Guidance for Industry: Expedited Programs for Serious Conditions––Drugs and Biologics,” Center
for Drug Evaluation and Research and Center for Biologics Evaluation and Research, June 2013, http://www.fda.gov/
downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM358301.pdf; and FDA, “Review
Designation Policy: Priority (P) and Standard (S),” MAPP 6020.3 Rev. 2, Manual of Policies and Procedures, Center
for Drug Evaluation and Research, Office of New Drugs, June 25, 2013, http://www.fda.gov/downloads/AboutFDA/
CentersOffices/OfficeofMedicalProductsandTobacco/CDER/ManualofPoliciesProcedures/UCM082000.pdf.
85
See FDA, “DRAFT Guidance for Industry: Expedited Programs for Serious Conditions––Drugs and Biologics” table,
pp. 7-8.
86
Institute of Medicine, 2011, “Perspectives on Biomarker and Surrogate Endpoint Evaluation: Discussion Forum
Summary,” p. 6, http://www.iom.edu/Reports/2011/Perspectives-on-Biomarker-and-Surrogate-EndpointEvaluation.aspx.

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Subtitle C—FDA Advancement of Precision Medicine
Section 2041. Precision Medicine Guidance and Other Programs of Food and
Drug Administration
Background
Precision medicine is a relatively new term for what has traditionally been called personalized
medicine, the idea of providing health care to individuals based on specific patient characteristics.
This approach relies on companion diagnostics to target drugs and biological products to specific
subsets of patients.
Precision drugs and biologicals, because they may be treating small subsets of patients,
sometimes qualify as “orphan drugs.” Such drugs are called orphan drugs because firms may lack
the financial incentives to sponsor products to treat small patient populations. Orphan drugs
receive their designation pursuant to FFDCA Section 526(a),87 a designation that was created by
the Orphan Drug Act88 to encourage firms to develop pharmaceuticals to treat rare diseases and
conditions by providing an extended period of market exclusivity.
For drugs that address unmet needs or serious or life-threatening conditions, have the potential to
offer better outcomes or fewer side effects, or meet other criteria associated with improved public
health, FDA uses several formal mechanisms to expedite development or review processes.89
These include “priority review,” “breakthrough therapy,” and “fast track” designations, and the
accelerated approval pathway.90

Provision
The provision would add a new Subchapter J, Precision Medicine, to Chapter V of the FFDCA;
this subchapter would include two new sections: (1) Section 591, “General agency guidance on
precision medicine,” and (2) Section 592, “Precision medicine regarding orphan-drug

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR44071. Public record. Not legal advice.