I 

116TH CONGRESS 

1ST SESSION H. R. 5039 

To lower the prices of excessively costly life-sustaining prescription drugs 

under part D of the Medicare program by requiring the Secretary of 

Health and Human Services to negotiate their prices, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 12, 2019 

Mr. LIPINSKI introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on 

Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To lower the prices of excessively costly life-sustaining prescription drugs under part D of the Medicare program 

by requiring the Secretary of Health and Human Services to negotiate their prices, and for other purposes. 

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 ‘‘Life-Sustaining Pre5 scription Drug Price Relief Act of 2019’’. 


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1 SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED LIFE2 SUSTAINING PRESCRIPTION DRUGS. 

3 (a) IN GENERAL.—The Secretary, not later than 1 

4 year after the date of enactment of this Act, shall establish 

5 a process to conduct a review of all life-sustaining pre6 scription drugs, not less frequently than once per calendar 

7 year, under which the Secretary determines under sub8 section (b) whether the price of each such drug is exces9 sive. 

10 (b) EXCESSIVE PRICE DETERMINATIONS.— 

11 (1) INTERNATIONAL REFERENCE PRICE.— 

12 (A) IN GENERAL.—The Secretary shall de13 termine that any life-sustaining prescription 

14 drug for which the domestic average manufac15 turing price exceeds 110 percent of the average 

16 price charged for such drug in the 5 reference 

17 countries to have an excessive price. In assess18 ing the extent to which the price is excessive, 

19 the Secretary shall consider the factors de20 scribed in paragraph (2). 

21 (B) REFERENCE COUNTRIES.—In this Act, 

22 the term ‘‘reference countries’’ means Canada, 

23 the United Kingdom, Germany, France, and 

24 Japan. 

25 (C) REQUIREMENT WITH RESPECT TO

26 DRUGS FOR WHICH CERTAIN REFERENCE COUNVerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039

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1 TRY INFORMATION IS NOT AVAILABLE.—The 

2 Secretary shall make a determination under 

3 paragraph (1) for every life-sustaining prescrip4 tion drug for which pricing information is avail5 able for at least 3 of the 5 reference countries. 

6 (2) DETERMINATIONS BASED ON OTHER FAC7 TORS.—With respect to any life-sustaining prescrip8 tion drug that is not determined to have an excessive 

9 price by operation of paragraph (1) (including any 

10 drug for which there is insufficient data to make 

11 such a determination under such paragraph), the 

12 Secretary shall determine that such drug has an ex13 cessive price if the price of the drug is higher than 

14 reasonable taking into account the following factors: 

15 (A) The size of the affected patient popu16 lation. 

17 (B) The risk adjusted value of Federal 

18 Government subsidies and investments related 

19 to the drug. 

20 (C) The costs associated with development 

21 of the drug. 

22 (D) Whether the drug provided a signifi23 cant improvement in health outcomes, com24 pared to other therapies available at the time of 

25 its approval. 


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1 (E) The cumulative global revenues gen2 erated by the drug. 

3 (F) Whether the domestic average manu4 facturer price of the drug increased during any 

5 annual quarter by a percentage that is more 

6 than the percentage increase in the consumer 

7 price index for all urban consumers for the re8 spective annual quarter. 

9 (G) Other factors the Secretary determines 

10 appropriate. 

11 (c) PETITION FOR DETERMINATION.— 

12 (1) IN GENERAL.—Any person may petition the 

13 Secretary, in accordance with section 553(e) of title 

14 5, United States Code, to make an excessive drug 

15 price determination for an applicable drug under 

16 subsection (b)(2). Not later than 90 days after the 

17 date of receipt of such a petition, subject to para18 graph (2), the Secretary shall— 

19 (A) make a determination under subsection 

20 (b)(2) regarding such drug; or 

21 (B)(i) decline to make such a determina22 tion; and 

23 (ii) make public the reasons why the Sec24 retary has declined to make such a determina25 tion. 


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1 (2) EXCEPTION.—The Secretary shall not make 

2 a determination under subsection (b)(2) for a drug 

3 in response to a petition under this section more fre4 quently than once per calendar year. 

5 (3) PUBLIC AVAILABILITY.—The Secretary 

6 shall make any petitions submitted under this sub7 section, together with any documentation related to 

8 the petitions and the Secretary’s determinations on 

9 such petitions and rationale for such determinations, 

10 publicly available, including by posting such informa11 tion on the database under section 5. 

12 SEC. 3. ABOLISHING THE PROHIBITION ON MEDICARE NE13 GOTIATION OF DRUG PRICES AND REQUIR14 ING THE SECRETARY OF HEALTH AND 

15 HUMAN SERVICES TO NEGOTIATE PRICES OF 

16 LIFE-SUSTAINING PRESCRIPTION DRUGS 

17 FURNISHED UNDER PART D OF THE MEDI18 CARE PROGRAM. 

19 Section 1860D–11 of the Social Security Act (42 

20 U.S.C. 1395w–111) is amended by striking subsection (i) 

21 and inserting the following new subsection: 

22 ‘‘(i) REQUIREMENT TO NEGOTIATE PRICES WITH

23 RESPECT TO CERTAIN LIFE-SUSTAINING PRESCRIPTION

24 DRUGS.— 


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1 ‘‘(1) IN GENERAL.—With respect to any life2 sustaining prescription drug (as defined in section 

3 6(4) of the Life-Sustaining Prescription Drug Price 

4 Relief Act of 2019), if the Secretary determines 

5 under section 2 of such Act that the price of the 

6 drug is excessive, the Secretary shall, notwith7 standing any other provision of law, negotiate with 

8 manufacturers, prescription drug plan sponsors, and 

9 MA organizations the total payment (including any 

10 discounts, rebates, and other price concessions) that 

11 may be made by such sponsors and organizations 

12 during a negotiated price period (as specified by the 

13 Secretary) for such drugs with respect to such drugs 

14 furnished to individuals who are enrolled under a 

15 prescription drug plan or under an MA–PD plan of16 fered by such sponsor or organization, respectively. 

17 ‘‘(2) PRICE LIMITATION.—In the case of a life18 sustaining prescription drug that is negotiated by 

19 the Secretary pursuant to paragraph (1), the total 

20 payment described in such paragraph may not ex21 ceed 110 percent of the average price charged for 

22 such drug in the 5 reference countries described in 

23 section 2(b)(1)(B) of such Act (in this section re24 ferred to as the ‘international reference price’). 

25 ‘‘(3) ENFORCEMENT.— 


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1 ‘‘(A) IN GENERAL.—In the case of a man2 ufacturer of a life-sustaining prescription drug 

3 for which the Secretary has made a determina4 tion described in paragraph (1) that fails to 

5 enter into a negotiation and agree on a total 

6 payment with respect to such drugs as de7 scribed in such paragraph within 9 months of 

8 such determination— 

9 ‘‘(i) if such drug has an international 

10 reference price, the Secretary shall assess 

11 a civil monetary penalty equal to 2 times 

12 the difference between the total revenue for 

13 such drug from all sales in the United 

14 States made beginning after the date that 

15 is 9 months after such determination and 

16 the total revenue for such drug from all 

17 such sales made after such date that would 

18 have been received if the manufacturer 

19 charged the international reference price 

20 for such drug; and 

21 ‘‘(ii) if such drug has an international 

22 reference price, the Secretary shall assess 

23 a civil monetary penalty equal to 50 per24 cent of the revenue from all United States 

25 sales of the drug in the first 90 days after 


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1 the date that is 9 months after such deter2 mination, 75 percent of the value of all 

3 revenue from such sales during the fol4 lowing 90 days, and 95 percent of all rev5 enue from such sales in subsequent days 

6 until such time as an agreement is reached 

7 or an international reference price is avail8 able. 

9 ‘‘(B) DEPOSIT INTO TRUST FUND.—Civil 

10 monetary penalties collected pursuant to sub11 paragraph (A) shall be deposited into the Fed12 eral Hospital Insurance Trust Fund.’’. 

13 SEC. 4. PUBLIC EXCESSIVE DRUG PRICE DATABASE. 

14 (a) EXCESSIVE DRUG PRICE DATABASE.— 

15 (1) IN GENERAL.—The Secretary shall establish 

16 and maintain a comprehensive, up-to-date database 

17 of life-sustaining prescription drugs and the exces18 sive price determinations for such drugs under sec19 tion 2. 

20 (2) CONTENTS.—The database shall include, at 

21 a minimum, for each life-sustaining prescription 

22 drug, for the applicable calendar year— 

23 (A) the name of the drug; 

24 (B) the manufacturer; 


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1 (C) whether the drug was determined 

2 under section 2(b) to have an excessive price; 

3 and 

4 (D) the number of petitions the Secretary 

5 received under section 2(c) to make an exces6 sive price determination for the drug, together 

7 with the information described in section 

8 2(c)(3). 

9 (3) CERTAIN DETERMINATIONS.—With respect 

10 to a determination made under section 2(b)(1), the 

11 Secretary shall publish on the database such deter12 mination in accordance with paragraph (1) within 

13 30 days of receiving domestic and international pric14 ing information from manufacturers under section 6. 

15 (b) ANNUAL REPORTS TO CONGRESS.—Not later 

16 than 60 days after the first excessive price review under 

17 section 2 is complete, and annually thereafter, the Sec18 retary shall submit to Congress a report describing the 

19 excessive drug price review for the preceding year. The 

20 report shall contain summary data regarding— 

21 (1) the total number of drugs that were re22 viewed; 

23 (2) the total number of drugs determined to be 

24 excessively priced under each of paragraphs (1) and 


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1 (2) of section 2(b), and the name and manufacturer 

2 of each such drug; 

3 (3) the total number of drugs determined to be 

4 excessively priced, listed by manufacturer; 

5 (4) the extent to which the prices of the drugs 

6 identified under section 2 were higher than reason7 able, on average; 

8 (5) the total number of petitions the Secretary 

9 received under section 2(c) to make excessive price 

10 determinations for drugs; 

11 (6) a list of any manufacturers who failed to re12 port information as required under section 6; and 

13 (7) other appropriate information, as the Sec14 retary determines or as Congress requests. 

15 (c) PUBLIC AVAILABILITY.—The Secretary shall 

16 make the information in the database described in sub17 section (a) and the report in subsection (b) publicly avail18 able, including on the internet website of the Food and 

19 Drug Administration, in a manner that is easy to find and 

20 understand. 

21 SEC. 5. DRUG MANUFACTURER REPORTING. 

22 (a) IN GENERAL.—Each manufacturer shall submit 

23 to the Secretary, in such format as the Secretary may re24 quire, an annual report that includes the following inforVerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039

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1 mation for each life-sustaining prescription drug of the 

2 manufacturer, with respect to the previous calendar year: 

3 (1) The average manufacturer price of the drug 

4 in the United States and in the reference countries, 

5 for the entire year, and broken down for each quar6 ter of the year. 

7 (2) The wholesale acquisition cost of the drug 

8 in the United States and in the reference countries, 

9 for the entire year, and broken down for each quar10 ter of the year. 

11 (3) Cumulative global revenues generated by 

12 the drug. 

13 (4) Annual net sales revenue generated by the 

14 drug in the United States and in the reference coun15 tries, for the entire year, and broken down for each 

16 quarter of the year. 

17 (5) Total expenditures on domestic and foreign 

18 drug research and development related to the drug, 

19 itemized by— 

20 (A) basic and preclinical research; 

21 (B) clinical research, reported separately 

22 for each clinical trial; 

23 (C) development of alternative dosage 

24 forms and strengths for the drug molecule or 

25 combinations, including the molecule; 


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1 (D) other drug development activities, such 

2 as nonclinical laboratory studies and record and 

3 report maintenance; 

4 (E) pursuing new or expanded indications 

5 for such drug through supplemental applica6 tions under section 505 of the Federal Food, 

7 Drug, and Cosmetic Act; and 

8 (F) carrying out postmarket requirements 

9 related to such drug, including under section 

10 505(o)(3) of the Federal Food, Drug, and Cos11 metic Act. 

12 (6) Total expenditures on domestic and foreign 

13 marketing and advertising related to the drug. 

14 (7) Investments in human clinical trials related 

15 to the drug, by each trial and each year, including 

16 grants, research contracts, tax credits or deductions, 

17 and reimbursements from public or private health 

18 plans or insurance, and any other public sector sub19 sidies or incentives, such as the fair market value or 

20 priority review vouchers or other considerations. 

21 (8) The estimated size of the affected patient 

22 population. 

23 (9) Additional information the manufacturer 

24 chooses to provide related to drug pricing decisions, 


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1 such as information related to the methodology used 

2 to set the price of the drug. 

3 (10) Additional information as the Secretary 

4 determines necessary to carry out this Act, including 

5 information for previous years. 

6 (b) REPORT DUE DATE.—Applicable manufacturers 

7 shall submit the reports described in subsection (a) not 

8 later than January 15 of the year following the date of 

9 enactment of this Act, and of each year thereafter. 

10 (c) PENALTY FOR NONCOMPLIANCE.— 

11 (1) IN GENERAL.—Any manufacturer that fails 

12 to submit information for a drug as required by this 

13 section on a timely basis or that knowingly provides 

14 false information shall be liable for a civil monetary 

15 penalty, as determined by the Secretary under para16 graph (2), in addition to any other penalty under 

17 other applicable provisions of law. 

18 (2) AMOUNT OF PENALTY.—The amount of a 

19 civil penalty under paragraph (1) shall be equal to 

20 the product of— 

21 (A) an amount, as determined appropriate 

22 by the Secretary, which is— 

23 (i) not less than 0.5 percent of the 

24 gross revenues from sales for the previous 


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1 calendar year of the drug for which the in2 formation was not submitted; and 

3 (ii) not greater than 1 percent of the 

4 gross revenues from sales for the previous 

5 calendar year of such drug; and 

6 (B) the number of days in the period be7 tween— 

8 (i) the report due date under sub9 section (b); and 

10 (ii) the date on which the Secretary 

11 receives the information required to be re12 ported by the manufacturer under this sec13 tion. 

14 (3) USE OF CIVIL PENALTY.—The Secretary 

15 shall collect the civil penalties under this subsection 

16 and shall use such funds to support competitive re17 search grant programs of the National Institutes of 

18 Health. 

19 SEC. 6. DEFINITIONS. 

20 For the purposes of this Act: 

21 (1) AVERAGE MANUFACTURER PRICE.— 

22 (A) IN GENERAL.—The term ‘‘average 

23 manufacturer price’’, with respect to a drug, 

24 subject to subparagraph (B), has the meaning 

25 given such term in section 1927(k)(1) of the 


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1 Social Security Act (42 U.S.C. 1396r–8(k)(1)); 

2 or with respect to a drug for which there is no 

3 average manufacturer price as so defined, such 

4 term shall mean the wholesale acquisition cost 

5 (as defined in section 1847A(c)(6)(B) of the 

6 Social Security Act (42 U.S.C. 1395w– 

7 3a(c)(6)(B)) of the drug. 

8 (B) APPLICATION TO REFERENCE COUN9 TRIES.—With respect to reference countries, 

10 the term ‘‘average manufacturer price’’, as de11 fined in subparagraph (A), shall be determined 

12 based on the price of the drug in the applicable 

13 reference country. 

14 (2) BIOSIMILAR BIOLOGICAL PRODUCT.—The 

15 term ‘‘biosimilar biological product’’ means a biologi16 cal product licensed pursuant to an application 

17 under section 351(k) of the Public Health Service 

18 Act (42 U.S.C. 262(k)). 

19 (3) GENERIC DRUG.—The term ‘‘generic drug’’ 

20 means a drug approved pursuant to an application 

21 under section (b)(2) or (j) of the Federal Food, 

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

23 (4) LIFE-SUSTAINING PRESCRIPTION DRUG.— 

24 The term ‘‘life-sustaining prescription drug’’ means 

25 a drug that is— 


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1 (A) approved under subsection (c) or (j) of 

2 section 505 of the Federal Food, Drug, and 

3 Cosmetic Act (21 U.S.C. 355) or a biological 

4 product licensed under subsection (a) or (k) of 

5 section 351 of the Public Health Service Act 

6 (42 U.S.C. 262); 

7 (B) subject to section 503(b)(1) of the 

8 Federal Food, Drug, and Cosmetic Act (21 

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

10 (C) life-sustaining (as such term is defined 

11 in regulation pursuant to section 506C of the 

12 Federal Food, Drug, and Cosmetic Act (21 

13 U.S.C. 356c)). 

14 (5) MANUFACTURER.—The term ‘‘manufac15 turer’’ means the holder of an application approved 

16 under section 505 of the Federal Food, Drug, and 

17 Cosmetic Act (21 U.S.C. 355) or of a license issued 

18 under section 351 of the Public Health Service Act 

19 (42 U.S.C. 262). 

20 (6) SECRETARY.—The term ‘‘Secretary’’ means 

21 the Secretary of Health and Human Services. 

Æ 


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