To amend the Public Health Service Act to improve and secure an adequate supply of influenza vaccine.

October 6, 2005

Mrs. CLINTON (for herself and Mr. ROBERTS) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

To amend the Public Health Service Act to improve and secure an adequate supply of influenza vaccine.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Influenza Vaccine Security Act of 2005'.

TITLE I--MARKET GUARANTEES

SEC. 101. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

Title XXI of the Public Health Service Act (42 U.S.C. 300aa-1 et seq.) is amended by adding at the end the following:

`Subtitle 3--Influenza Vaccine Security

`SEC. 2141. ESTABLISHMENT OF AN INFLUENZA VACCINE TARGET AND STOCKPILE.

`(a) Annual Target- The Secretary, in consultation with the Advisory Committee on Immunization Practices to the Centers for Disease Control and Prevention (referred to in this subtitle as the `Advisory Committee'), shall determine an annual production target for influenza vaccine, based on the recommendations of the Advisory Committee. Based on such target, the Secretary, acting through the Centers for Disease Control and Prevention, shall coordinate with the private market to encourage the production of such vaccine in amounts that will meet the annual target.

`(b) Stockpile- Prior to the start of each annual influenza season (as determined by the Secretary), the Secretary is authorized to purchase and store from multiple manufacturers an amount equal to not to exceed 10 percent of the total amount of influenza vaccine, including one or more active vaccine antigen ingredients in bulk or filled form, that is designated for production by the Advisory Committee for placement in the strategic national stockpile under section 121 of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. Such vaccine shall be held in reserve to be used in the event of a vaccine shortage in a given influenza season. The Secretary shall coordinate with the manufacturers involved to ensure that reserving amounts of vaccine for the stockpile does not interfere with the early season delivery or early season administration of vaccine to high priority populations (as defined by the Advisory Committee on Immunization Practices and the Centers for Disease Control and Prevention) (referred to in this subtitle as `high priority populations').

`SEC. 2142. VACCINE BUYBACK PROGRAM.

`(a) In General- The Secretary shall establish an influenza vaccine buyback protocol under which the Secretary may enter into buyback contracts with manufacturers of influenza vaccine to purchase such manufacturers' excess stocks of influenza vaccine so long as such vaccine has been manufactured in accordance with the recommendations of the Advisory Committee for the production of seasonal influenza vaccine.

`(b) Manufacturers- The Secretary shall have the discretion to award buyback contracts under subsection (a) to several influenza vaccine manufacturers in a manner consistent with the goal of providing stability in the influenza vaccine market, as long as the Federal Government purchases not more than 50 percent of the excess influenza vaccine stock of any single manufacturer at market price.

`(c) Cooperation With Manufacturers, Distributors, and Wholesalers- As a condition of participation in the buyback program under this section, the Director of the Centers for Disease Control and Prevention shall work in cooperation with influenza vaccine manufacturers and wholesalers and distributors within the chain of custody from factory to health care institution or health care providers to share pertinent information that will allow for the tracking of influenza vaccine, maximize the delivery and availability of influenza vaccines to high priority populations, and ensure that influenza vaccine is delivered on an equitable basis, particularly in times of vaccine shortages.

`(d) Confidentiality- The information submitted to the Centers for Disease Control and Prevention or its contractors, if any, under subsections (c) and (d) shall remain confidential in accordance with the exception from the public disclosure of trade secrets, commercial or financial information, and information obtained from an individual that is privileged and confidential, as provided for in section 552(b)(4) of title 5, United States Code, and subject to the penalties and exceptions under sections 1832 and 1833 of title 18, United States Code, relating to the protection and theft of trade secrets, and subject to privacy protections that are consistent with the regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996. None of such information provided by a manufacturer, wholesaler, or distributor shall be disclosed without its consent to another manufacturer, wholesaler, or distributor, or shall be used in any manner to give a manufacturer, wholesaler, or distributor a proprietary advantage over its competitors.

`(e) Ability to Negotiate- The Secretary shall have the ability to negotiate, on a case-by-case basis, the submission of information under subsection (c), as long as the information provided will achieve the goals of tracking of the influenza vaccine, maximizing the delivery and availability of influenza vaccines to high priority populations, and ensuring that influenza vaccine is delivered on an equitable geographical basis, particularly in times of vaccine shortages.

`(f) Notice-

`(1) IN GENERAL- For purposes of maintaining and administering the supply of vaccines described under subsection (a), the Secretary shall by contract require that a manufacturer of a vaccine included in such supply provide not less than 12 months notice to the Secretary of a purposeful discontinuance of the manufacture of such vaccine by the manufacture of the vaccine.

`(2) REDUCTION OF PERIOD OF NOTICE- The notification period required under paragraph (1) shall not apply in a case in which vaccine production is interrupted because of unforeseen manufacturing concerns.

`SEC. 2143. ANTIVIRAL PURCHASE PROGRAM.

`(a) In General- The Secretary shall increase the amount of antiviral medications contained in the strategic national stockpile under section 121 of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, in such amounts as necessary, as determined appropriate in consultation with the Director of the Centers for Disease Control and Prevention, to provide adequate protection to not less than those responding to an influenza epidemic.

`(b) Pediatric Antiviral- The Secretary is encouraged to work with all relevant Federal agencies and the private sector to develop and approve an antiviral for use in the pediatric population.

`SEC. 2144. AUTHORIZATION OF APPROPRIATIONS.

`There are authorized to be appropriated such sums as may be necessary to carry out this subtitle in each of fiscal years 2007 through 2011.'.

TITLE II--FOOD AND DRUG ADMINISTRATION ASSISTANCE TO MANUFACTURERS

SEC. 201. AMENDMENT TO THE FOOD, DRUG, AND COSMETIC ACT.

Chapter IX of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 391 et seq.) is amended by adding at the end the following:

`SEC. 909. PROVISIONS RELATING TO INFLUENZA VACCINE MANUFACTURERS.

`(a) Assistance and Technical Training Branch- The Secretary shall expand and strengthen the activities of the Manufacturer Assistance and Technical Training Branch at the Center for Biologics Evaluation and Research of the Food and Drug Administration to provide for the dissemination of information, and to provide technical guidance, to entities seeking to comply with regulations of the Secretary relating to the production of biologic materials, particularly influenza vaccine.

`(b) Technical Assistance Grants-

`(1) IN GENERAL- The Secretary, in consultation with the Commissioner, shall award technical assistance grants to entities seeking to--

`(A) enter the United States influenza vaccine market;

`(B) expand their vaccine production capacity for the United States influenza vaccine market; or

`(C) improve their ability to remain within the United States influenza vaccine market.

`(2) ACTIVITIES- Amounts awarded under grants under paragraph (1) shall be used for one or more of the following activities:

`(A) Establishing or making capital improvements in technology, machinery, or production capacity to vaccine manufacturing facilities located within the United States to enable such facilities to comply with the regulations of the Food and Drug Administration.

`(B) The training of employees of United States-based vaccine manufacturing facilities in vaccine production methods.

`(C) Any other activities approved by the Commissioner as assisting with the goal of increasing manufacturer participation in the vaccine market and improving domestically-based vaccine manufacturing capacity.

`(c) Provisions Related to the Emergency Acquisition of Vaccines-

`(1) INCREASED COMMUNICATION- The Food and Drug Administration shall carry out activities to increase communication between the agency and the scientific community regarding vaccine development and regulation, including participation in conferences on the science related to infectious diseases, influenza, biologic manufacturing, and other issues as determined appropriate by the Director of the Center for Biologics Evaluation and Research.

`(2) REGULATORY ROADMAP- The Commissioner, in consultation with the Director of the Centers for Disease Control and Prevention, the Secretary, and other agencies or participants as determined appropriate by the Secretary, shall develop a regulatory roadmap to address the following issues surrounding emergency use authorization of influenza vaccine, as determined by the Secretary during a public health emergency involving an actual or imminent outbreak of naturally occurring or engineered seasonal influenza:

`(A) Policies for the emergency use authorization of influenza vaccine that is produced and sold in other countries so that such vaccine may be imported into the United States by the United States government during a vaccine shortage.

`(B) Policies for the facilitation of the distribution of any such vaccine imported into the United States during a vaccine shortage, including the interstate transportation, allocation and equitable distribution of vaccine among high priority populations (as defined by the Advisory Committee on Immunization Practices and the Centers for Disease Control and Prevention) during an emergency use situation.

`(C) Policies for the communication and coordination of a response to an emergency use authorization with State and local health departments, including guidelines for notification of such entities in such situations.

`(D) Policies for the emergency use authorization of vaccines that are in clinical development in both the United States and other countries, including clarification of IND protocols for such vaccines, particularly those using new vaccine development technologies.

`(3) CONSULTATION- In developing the roadmap under paragraph (2), the Commissioner shall solicit input from private and nonprofit stakeholders, including State and local health officials, and such input shall include recommendations for developing emergency use authorization guidelines that maintain the scientific and regulatory standards of the Food and Drug Administration.

`(4) STANDING ORDERS-

`(A) DEVELOPMENT- The Secretary shall direct the Centers for Disease Control and Prevention, in conjunction with State and local health departments and representatives of State medical boards and nursing examiners, to develop and publish a model standing order that will, at a minimum, address the need for standing orders to administer influenza vaccine in hospitals, nursing homes, and by home health care providers. The Centers for Disease Control and Prevention is encouraged to expand such a model standing order to take into account--

`(i) the administration of other Medicare covered vaccines; and

`(ii) the delivery of influenza vaccine to patients in children's hospitals or other institutions serving the long-term care needs of a pediatric population.

`(B) IMPLEMENTATION- Not less than 1 year after the publication of the standing order under paragraph (A), States shall be required to implement such standing order in order to be eligible to receive grants under this Act.

`(C) RULE OF CONSTRUCTION- Nothing in this paragraph shall be construed as precluding the application of State laws, so long as such laws don not restrict the implementation of this requirements of the Influenza Vaccine Security Act of 2005 (and the amendments made by such Act).

`(d) Authorization of Appropriations-

`(1) IN GENERAL- There are authorized to be appropriated to carry out this section, $75,000,000 for each of fiscal years 2007 through 2011.

`(2) USE OF FUNDS- The Secretary shall ensure that $5,000,000 of the amount appropriated under paragraph (1) for fiscal year 2007, and such sums as may be necessary for each of fiscal years 2008 through 2011, shall be made available for the purpose of increasing the ability of the Food and Drug Administration to provide the technical assistance and take advantage of the training opportunities as designated in this section.'.

TITLE III--VACCINE DEVELOPMENT RESEARCH AND COORDINATION

SEC. 301. INCREASED FUNDING FOR NEW AND EXISTING VACCINE DEVELOPMENT RESEARCH.

Subpart 6 of part C of title IV of the Public Health Service Act (42 U.S.C. 285f et seq.) is amended by adding at the end the following:

`SEC. 447C. INCREASED FUNDING FOR NEW AND EXISTING VACCINE DEVELOPMENT RESEARCH.

`(a) New Research-

`(1) SOLICITATION OF PROPOSALS- The Institute shall solicit proposals for research into improved technologies for influenza vaccine development, including a permanent influenza vaccine. The Secretary, acting through the Director of the Institute may award grants to fund such proposals.

`(2) PRIORITY- In funding proposals submitted under paragraph (1), the Institute shall give priority to proposals for research that contributes to the goal of providing marketable influenza vaccine alternatives within the 10-year period after the date of enactment of this section.

`(b) Existing Research-

`(1) IN GENERAL- The Director of the Institute, acting jointly with the Director of Intramural Research at the Institute and the Scientific Director of the Vaccine Research Program at the Institute, and in consultation with any other officials determined appropriate by the Director, shall review vaccine development research that is being conducted under grants awarded by the Institute to identify research that could provide the United States with improved technologies for vaccine production that could be marketed within the United States within the 10-year period beginning on the date of enactment of this section.

`(2) SUPPLEMENTARY FUNDING- The Director of the Institute shall provide supplementary grant funding to the research identified under paragraph (1) that the Director determines could result in the production described in such paragraph.

`(3) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section, $100,000,000 for each of fiscal years 2007 through 2011.'.

SEC. 302. AUTHORITY OF THE NATIONAL IMMUNIZATION PROGRAM FOR COORDINATION OF, EDUCATION, OUTREACH, AND COMMUNICATION ACROSS HHS.

Section 2102 of the Public Health Service Act (42 U.S.C. 300aa-2) is amended--

(1) in subsection (a), by adding at the end the following:

`(10) COORDINATION OF SUPPORT- The Director of the Program shall--

`(A) coordinate education, outreach, and communication efforts in regard to all influenza vaccine research activities within the Department in support of the goal of--

`(i) increasing overall influenza vaccination rates in the United States, particularly those of high priority populations (as defined by the Advisory Committee on Immunization Practices and the Centers for Disease Control and Prevention) and health care providers,

`(ii) ensuring that safe and effective marketable vaccines produced with improved technologies that supplement the current egg-based system of production shall be available within the 10-year period after the enactment of this paragraph; and

`(iii) any other vaccine promotion activities as directed by the Secretary;

`(B) coordinate educational efforts under this paragraph with the National Vaccine Program Office, State and local health departments, the National Institutes of Health, and all other relevant Federal and other entities as designated by the Director; and

`(C) provide an annual report to Congress on the progress being made toward the goals described in subparagraph (A).'; and

(2) by adding at the end the following:

`(c) Appropriations for Coordination of Influenza Vaccine Outreach Activities- There is authorized to be appropriated to carry out activities under subsection (a)(10), $2,000,000 for each of fiscal years 2007 through 2011.'.

TITLE IV--INCREASED INFLUENZA VACCINE AND OUTBREAK SURVEILLANCE ACTIVITIES

SEC. 401. TRACKING NETWORK AND DEMONSTRATION GRANTS.

Title III of the Public Health Service Act is amended by inserting after section 319B (42 U.S.C. 247d-2) the following:

`SEC. 319B-1. TRACKING NETWORK AND DEMONSTRATION GRANTS.

`(a) Tracking System-

`(1) ESTABLISHMENT- Not later than 2 years after the date of enactment of this section, the Director of the Centers for Disease Control and Prevention, in conjunction with State and local public health officials, shall establish an electronic tracking system through which the Director and such officials can determine the amount of influenza vaccine that is available for distribution to patients, as well as the need for such vaccine on a county-by-county basis, and the progress of vaccine delivery and distribution efforts at the State and local level.

`(2) ESTIMATES- The tracking system established under paragraph (1) shall collect estimates of the size of high priority populations (as defined by the Advisory Committee on Immunization Practices and the Centers for Disease Control and Prevention) (referred to in this section as `high priority populations') in each county in the United States, so as to better determine where influenza vaccine resources may need to be directed in the case of an emergency.

`(3) PROVISION OF INFORMATION- To be eligible to participate in buyback programs the vaccine manufacturer shall provide information to the tracking system as the Director of the Centers for Disease Control and Prevention determines appropriate in accordance with subtitle 3 of title XXI.

`(4) DATABASE- In consultation with manufacturers, distributors, wholesalers, and State and local health departments, the Secretary shall develop guidelines for the development and use of a database in order to maintain confidentiality and ensure that none of the information provided under paragraph (3) and contained in the database can be used to provide a proprietary advantage within the vaccine market while allowing State and local health officials such information to maximize the delivery and availability of vaccines to high priority populations.

`(b) Expansion of Current Systems and Activities-

`(1) SURVEILLANCE SYSTEM- Not later than 4 years after the date of enactment of this section, the Director of the Centers for Disease Control and Prevention shall upgrade the influenza surveillance system of the Centers for Disease Control and Prevention to report influenza data from State and local health departments into the tracking system established under subsection (a)(1).

`(2) EDUCATIONAL MATERIALS- The tracking system shall contain information to assist users in accessing influenza education, outreach, and communications tools, such as those developed and financed under the Influenza Vaccine Security Act of 2005 (and the amendments made by such Act).

`(3) EMERGENCY PROVIDER DATABASE- The Director of the Centers for Disease Control and Prevention shall coordinate access to, in conjunction with State and local health departments and State licensing boards for health professionals, a database registry of medical personnel who can provide services in the event of a health emergency, including pandemic influenza or an influenza vaccine shortage. Such information shall be made available through the tracking network.

`(c) Demonstration Grants-

`(1) IN GENERAL- The Director of the Centers for Disease Control and Prevention shall award demonstration grants to State and local health departments to enable such departments to enter into contract with hospitals, community health centers, long-term care facilities, physicians' offices, and health care facilities operated or funded by such departments to assist such entities in upgrading their information technology, infrastructure, and workforce in a manner that will allow such entities to improve their ability to report and track influenza vaccine dissemination.

`(2) PRIORITY- In awarding grants under paragraph (1), priority shall be given to entities that serve high priority populations in medically underserved areas.

`(d) Authorization of Appropriations- There are authorized to be appropriated--

`(1) to carry out subsection (a), $100,000,000 for each of fiscal years 2007 through 2011, of which $500,000 for each fiscal year shall be made available to implement subsection (b)(3); and

`(2) to carry out subsection (c), $100,000,000 for each of fiscal years 2007 through 2011.'.

TITLE V--FLU VACCINE OUTREACH AND EDUCATION

SEC. 501. EDUCATIONAL EFFORTS AND GRANTS.

Title III of the Public Health Service Act is amended by inserting after section 319B-1 (as added by section 401) the following:

`SEC. 319B-2. IMMUNIZATION EDUCATIONAL EFFORTS AND GRANTS.

`(a) In General- The Director of the Centers for Disease Control and Prevention, in conjunction with State and local health departments, shall revise and expand the influenza-related educational materials to the Centers for Disease Control and Prevention, and facilitate the use of such materials by health care providers and patients. The Director is authorized to coordinate such educational efforts with nonprofit provider and patient advocacy groups.

`(b) Influenza Vaccine Education and Outreach-

`(1) IN GENERAL- In order to achieve an optimal balance in the influenza vaccine market, and to ensure that the recommendations of the Advisory Committee on Immunization Practices to the Centers for Disease Control and Prevention for vaccine administration are carried out to the maximum extent possible, the Director of the Centers for Disease Control and Prevention, in conjunction with State and local health departments, shall carry out influenza immunization education and outreach activities that target physicians and other health care providers, health insurance providers, health care institutions and patients, particularly those in high priority populations (as defined by the Advisory Committee on Immunization Practices and the Centers for Disease Control and Prevention) (referred to in this section as `high priority populations').

`(2) TYPES OF ACTIVITIES- The education and outreach activities under paragraph (1) shall include--

`(A) activities to encourage voluntary participation in influenza vaccination programs, with the goal of increasing overall influenza vaccination rates in the United States, achieving full influenza vaccination of all high priority populations, and full use of each season's influenza vaccine supply;

`(B) the provision of information on influenza prevention;

`(C) activities to increase the number of healthcare providers who receive influenza vaccines each year; and

`(D) other influenza educational efforts determined appropriate by the Director.

`(c) Grants- The Director of the Centers for Disease Control and Prevention may award grants to State and local health departments to carry out activities to encourage individuals, particularly those from high priority populations, to seek out influenza vaccinations.

`(d) Collaboration- State and local health departments that receive grants under subsection (b) are encouraged to collaborate on projects with physicians and other health care providers, health insurance providers, health care institutions, and groups representing high priority populations.

`(e) Authorization of Appropriations- In addition to any amounts otherwise available through the Secretary for influenza outreach and education, there is authorized to be appropriated to carry out this section, $10,000,000 for each of fiscal years 2007 through 2011.'.

TITLE VI--COMPENSATION

SEC. 601. COMPENSATION.

Section 224 of the Public Health Service Act (42 U.S.C. 233) is amended by adding at the end the following:

`(q) Manufacture, Administration, and Use of Pandemic Influenza Technologies-

`(1) DEFINITIONS- In this subsection:

`(A) COVERED PERSON- The term `covered person' means--

`(i) a manufacturer of a qualified pandemic influenza technology;

`(ii) a distributor of a qualified pandemic influenza technology;

`(iii) a hospital, clinic, and other healthcare entity under whose auspices a qualified pandemic influenza technology is administered;

`(iv) a licensed health care professional or other individual authorized to administer a qualified pandemic influenza technology under State law; and

`(v) any official, agent, or employee of any of the entities described in clauses (i) through (iv), or of a State or locally administered health plan, or a volunteer acting under a publicly funded health program, who is acting within the scope of his or her agency or employment.

`(B) PANDEMIC INFLUENZA TECHNOLOGY- The term `pandemic influenza technology' means any vaccine product developed or procured for the specific purpose of preventing or treating pandemic influenza or any vaccine product limiting the harm such pandemic might otherwise cause.

`(C) QUALIFIED PANDEMIC INFLUENZA TECHNOLOGY- The term `qualified pandemic influenza technology' means a pandemic influenza technology that has been designated by the Secretary in accordance with paragraph (2).

`(2) DESIGNATION BY SECRETARY-

`(A) IN GENERAL- The Secretary may designate a pandemic influenza technology as a qualified pandemic influenza technology if the Secretary determines that there is a public health emergency involving an actual or imminent outbreak of naturally occurring or engineered pandemic influenza and requiring the manufacture, distribution, and administration of pandemic influenza technology.

`(B) RECOMMENDED DESIGNATION- A person may recommend to the Secretary at any time the designation of a technology under subparagraph (A) and may provide data and information to support such recommendation.

`(C) EFFECTIVE PERIOD- The Secretary shall specify in a designation under this paragraph the beginning and ending dates of the effective period of such designation, and may subsequently amend such designation to shorten or extend such effective period.

`(D) PUBLICATION- The Secretary shall provide for the publication of each designation under this paragraph, and each amendment thereto, in the Federal Register. Such designation or amendment shall take effect immediately upon such publication and shall not be subject to the provisions of section 553 of title 5, United States Code, concerning prior notice and opportunity for comment.

`(E) VACCINE INJURY COMPENSATION PROGRAM- Nothing in this Act shall be construed to supersede the authority of the Vaccine Injury Compensation Program in regards to vaccine products on the table, such as trivalent influenza vaccine.

`(3) LIABILITY OF UNITED STATES-

`(A) IN GENERAL- For purposes of this section, a covered person shall be deemed to be an employee of the Public Health Service with respect to liability for personal injury or death arising out of the manufacture, administration, or use of a qualified pandemic influenza technology. The liability of the United States under this subsection shall be as set forth in section 1346(b) and chapter 171 of title 28, United States Code, except--

`(i) as otherwise provided in this section; and

`(ii) that the liability of the United States may be based on any cause of action seeking compensation for harm allegedly arising out of the manufacture, administration, or use of a qualified pandemic influenza technology, regardless of whether such cause of action is alleged as negligence, strict liability in tort, breach of warranty, failure to warn, or other action.

`(B) SCOPE- For purposes of this section, any activity reasonably related to the manufacture, distribution, or administration of a qualified pandemic influenza technology shall be considered to be a medical, surgical, dental, or related function within the scope of the covered person's employment by the Public Health Service.

`(C) GOVERNING LAW- Notwithstanding the provisions of section 1346(b)(1) and chapter 171 of title 28, United States Code, as they relate to governing law, the liability of the United States as provided in this subsection shall be in accordance with the law of the place of injury.

`(D) MILITARY PERSONNEL AND UNITED STATES CITIZENS OVERSEES-

`(i) MILITARY PERSONNEL- The liability of the United States as provided in this subsection shall extend to claims brought by United States military personnel.

`(ii) CLAIMS ARISING IN A FOREIGN COUNTRY- Notwithstanding the provisions of section 2680(k) of title 28, United States Code, the liability of the United States as provided in this subsection shall extend to claims based on injuries arising in a foreign country where the injured party is a member of the United States military, is the spouse or child of a member of the United States military, or is a United States citizen.

`(iii) GOVERNING LAW- With regard to all claims brought under clause (ii), and notwithstanding the provisions of section 1346(b)(1) and chapter 171 of title 28, United States Code, and of subparagraph (C), as they relate to governing law, the liability of the United States as provided in this subsection shall be in accordance with the law of the claimant's domicile in the United States or most recent domicile within the United States.

`(4) EXCLUSIVITY OF REMEDY- The remedy provided for by this section shall be exclusive of any other civil action or proceeding against a covered person, for personal injury or death arising out of the manufacture, administration, or use of a qualified pandemic influenza technology during the effective period of the designation under paragraph (2).

`(5) COVERED PERSON TO COOPERATE WITH UNITED STATES-

`(A) IN GENERAL- A covered person shall cooperate with the United States in the processing and defense of a claim or action under this subsection based upon the acts or omissions of such person.

`(B) CONSEQUENCES OF FAILURE TO COOPERATE- Upon the motion of the United States or any other party and upon a finding that a covered person has failed to cooperate with the United States as provided for in subparagraph (A)--

`(i) the court shall substitute such person as the party defendant in place of the United States and, upon motion, shall remand any such suit to the court in which it was instituted if it appears that the court lacks subject matter jurisdiction;

`(ii) the United States shall not be liable based on the acts or omissions of such person; and

`(iii) the Attorney General shall not be obligated to defend such action.

`(6) RECOURSE AGAINST COVERED PERSONS IN CASE OF GROSS MISCONDUCT OR MATERIAL BREACH OF CONTRACT-

`(A) IN GENERAL- If payment is made by the United States to any claimant bringing a claim against a covered person under this subsection, either by way of administrative determination, settlement, or court judgment, the United States shall have, notwithstanding any provision of State law, the right to recover for that portion of the damages so awarded or paid, as well as interest and any costs of litigation, resulting from--

`(i) such covered person's intentional breach of a procurement contract, so long as such breach was materially related to the injury that is the subject of the claim, or

`(ii) any grossly negligent or reckless conduct, or willful misconduct, on the part of such covered person, so long as such conduct or misconduct was materially related to the injury that is the subject to the claim.

`(B) ACTION BY THE UNITED STATES- The United States may maintain an action under this paragraph against a covered person described in subparagraph (A) in the district court of the United States in which such person resides or has its principal place of business.'.

END