II 

116TH CONGRESS 

1ST SESSION S. 637 

To prohibit price gouging in the sale of drugs. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 28, 2019 

Mr. BLUMENTHAL (for himself, Mr. MERKLEY, Ms. HARRIS, Ms. KLOBUCHAR, Mr. SCHATZ, and Mr. SANDERS) introduced the following bill; 

which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To prohibit price gouging in the sale of drugs. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Combatting Unreason5 able Rises and Excessively High Drug Prices Act’’ or the 

6 ‘‘CURE High Drug Prices Act’’. 

7 SEC. 2. DEFINITIONS. 

8 In this Act: 

9 (1) AVERAGE MANUFACTURER PRICE.—The 

10 term ‘‘average manufacturer price’’— 


pamtmann on DSKBFK8HB2PROD with BILLS
2 

•S 637 IS

1 (A) has the meaning given the term in sec2 tion 1927(k) of the Social Security Act (42 

3 U.S.C. 1396r–8(k)); or 

4 (B) with respect to a drug for which there 

5 is no average manufacturer price as so defined, 

6 means the wholesale acquisition cost of the 

7 drug. 

8 (2) DRUG.—The term ‘‘drug’’— 

9 (A) has the meaning given the term in sec10 tion 201 of the Federal Food, Drug, and Cos11 metic Act (21 U.S.C. 321); and 

12 (B) includes biological products, as defined 

13 in section 351 of the Public Health Service Act 

14 (42 U.S.C. 262). 

15 (3) FEDERAL HEALTH CARE PROGRAM.—The 

16 term ‘‘Federal health care program’’ has the mean17 ing given the term in section 1128B(f) of the Social 

18 Security Act (42 U.S.C. 1320a–7b(f)). 

19 (4) MANUFACTURER.—The term ‘‘manufac20 turer’’ means a person— 

21 (A) that holds the application for a drug 

22 approved under section 505 of the Federal 

23 Food, Drug, and Cosmetic Act (21 U.S.C. 355) 

24 or the license issued under section 351 of the 

25 Public Health Service Act (42 U.S.C. 262); or 


pamtmann on DSKBFK8HB2PROD with BILLS
3 

•S 637 IS

1 (B) who is responsible for setting the price 

2 for the drug. 

3 (5) PRICE GOUGING.—The term ‘‘price 

4 gouging’’ means an increase in the average manufac5 turer price of a qualifying drug that— 

6 (A) is in substantial excess of an amount 

7 that could be reasonably justified by an increase 

8 in cost of producing the drug or by an increase 

9 in cost due to appropriate expansion of access 

10 to the drug to promote public health; and 

11 (B) that because of insufficient competi12 tion in the marketplace, consumers cannot rea13 sonably avoid. 

14 (6) QUALIFYING DRUG.—The term ‘‘qualifying 

15 drug’’ means any drug, including a combination 

16 product whose primary mode of action is determined 

17 under section 503(g) of the Federal Food, Drug, 

18 and Cosmetic Act (21 U.S.C. 353(g)) to be that of 

19 a drug, that— 

20 (A) is subject to section 503(b)(1) of the 

21 Federal Food, Drug, and Cosmetic Act (21 

22 U.S.C. 353(b)(1)); and 

23 (B) is covered by a Federal health care 

24 program. 


pamtmann on DSKBFK8HB2PROD with BILLS
4 

•S 637 IS

1 (7) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Health and Human Services. 

3 SEC. 3. PRICE GOUGING PROHIBITED. 

4 (a) IN GENERAL.—A manufacturer shall not engage 

5 in price gouging in the sale of a qualifying drug. 

6 (b) PRESUMPTION.—Price gouging shall be presumed 

7 if the average manufacturer price has increased— 

8 (1) 10 percent or more within the previous 12- 

9 month period; 

10 (2) 20 percent or more in the previous 36- 

11 month period; or 

12 (3) 30 percent or more within the previous 60- 

13 month period. 

14 (c) NOTICE BY SECRETARY.—The Secretary shall no15 tify the manufacturer of an increase, within the previous 

16 2 years, in the average manufacturer price of a qualifying 

17 drug the Secretary has reason to believe constitutes price 

18 gouging, by sending notice to the manufacturer, request19 ing a statement of justification for the increase, which 

20 may include— 

21 (1) itemizing the components of the cost of pro22 ducing the qualifying drug; 

23 (2) identifying the circumstances and timing of 

24 an increase in materials or manufacturing costs that 

25 caused an increase in the average manufacturer 


pamtmann on DSKBFK8HB2PROD with BILLS
5 

•S 637 IS

1 price of the qualifying drug within the 5-year period 

2 preceding the date of the average manufacturer 

3 price increase; 

4 (3) identifying the circumstances and timing of 

5 any expenditures made by the manufacturer to ex6 pand access to the qualifying drug and explaining 

7 any improvement in public health associated with 

8 those expenditures; 

9 (4) providing sales and price information for 

10 other qualifying drugs with similar therapeutic ef11 fects, as relevant to assessing the extent of competi12 tion in the marketplace, and the choice available to 

13 consumers; and 

14 (5) providing any other information that the 

15 manufacturer believes to be relevant to a determina16 tion of whether a violation of this Act has occurred. 

17 (d) STATEMENT.—Not later than 45 days after the 

18 date on which a manufacturer receives a statement under 

19 subsection (c), the manufacturer shall submit to the Sec20 retary a statement described in subsection (c). 

21 (e) DETERMINATION BY SECRETARY.—If the Sec22 retary determines, after review of the statement of jus23 tification, or based on reasonable belief if the manufac24 turer fails to submit a statement of justification as re25 quired, that the manufacturer has engaged in price 


pamtmann on DSKBFK8HB2PROD with BILLS
6 

•S 637 IS

1 gouging with respect to a qualifying drug, the Secretary 

2 shall notify the manufacturer of the determination. 

3 (f) REMEDY.— 

4 (1) IN GENERAL.—The Secretary may order 

5 that a manufacturer determined under subsection 

6 (e) to have engaged in price gouging with respect to 

7 a qualifying drug— 

8 (A) restore to any consumer, including a 

9 third-party payor, any excessive amount paid as 

10 a result of a price increase that violates this 

11 Act; 

12 (B) make the drug available to partici13 pants of any qualified health plan or Federal 

14 health plan for a period of up to 1 year at the 

15 price at which the drug was made available to 

16 consumers immediately before the violation of 

17 this Act; or 

18 (C) if the price gouging is done knowingly, 

19 or occurs after a previous determination by the 

20 Secretary or price gouging by the manufac21 turer, pay a civil penalty of up to 3 times the 

22 excessive amount the manufacturer received as 

23 a result of a violation of this Act. 

24 (2) APPEALS.—Any person adversely affected 

25 by a determination of the Secretary under this subVerDate Sep 11 2014 00:36 Mar 09, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S637.IS S637

pamtmann on DSKBFK8HB2PROD with BILLS
7 

•S 637 IS

1 section may obtain review of the determination in 

2 accordance with section 1128A(e) of the Social Secu3 rity Act (42 U.S.C. 1320a–7a(e)). 

4 (g) ENFORCEMENT BY ATTORNEY GENERAL.— 

5 (1) IN GENERAL.—If a manufacturer deter6 mined under subsection (e) to have engaged in price 

7 gouging fails to comply with an order of the Sec8 retary under subsection (f), the Secretary may refer 

9 the matter to the Attorney General for enforcement. 

10 (2) SUBPOENAS.—The Attorney General may 

11 subpoena documents or testimony as may assist in 

12 establishing whether the manufacturer engaged in 

13 price gouging in violation of this Act. 

14 (3) ACTION.—The Attorney General may bring 

15 an action in an appropriate district court for relief, 

16 including any relief described in subsection (f) and 

17 such further relief as the court determines is appro18 priate. 

19 SEC. 4. EFFECTIVE DATE; APPLICABILITY. 

20 This Act shall— 

21 (1) take effect on January 1, 2020; and 

22 (2) apply with respect to all increases in the av23 erage manufacturer price of a qualifying drug occur24 ring on or after that date. 

Æ 


pamtmann on DSKBFK8HB2PROD with BILLS