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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5039 Introduced in House (IH)]

<DOC>

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.

    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 ``Life-Sustaining Prescription Drug 
Price Relief Act of 2019''.

SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED LIFE-SUSTAINING 
              PRESCRIPTION DRUGS.

    (a) In General.--The Secretary, not later than 1 year after the 
date of enactment of this Act, shall establish a process to conduct a 
review of all life-sustaining prescription drugs, not less frequently 
than once per calendar year, under which the Secretary determines under 
subsection (b) whether the price of each such drug is excessive.
    (b) Excessive Price Determinations.--
            (1) International reference price.--
                    (A) In general.--The Secretary shall determine that 
                any life-sustaining prescription drug for which the 
                domestic average manufacturing price exceeds 110 
                percent of the average price charged for such drug in 
                the 5 reference countries to have an excessive price. 
                In assessing the extent to which the price is 
                excessive, the Secretary shall consider the factors 
                described in paragraph (2).
                    (B) Reference countries.--In this Act, the term 
                ``reference countries'' means Canada, the United 
                Kingdom, Germany, France, and Japan.
                    (C) Requirement with respect to drugs for which 
                certain reference country information is not 
                available.--The Secretary shall make a determination 
                under paragraph (1) for every life-sustaining 
                prescription drug for which pricing information is 
                available for at least 3 of the 5 reference countries.
            (2) Determinations based on other factors.--With respect to 
        any life-sustaining prescription drug that is not determined to 
        have an excessive price by operation of paragraph (1) 
        (including any drug for which there is insufficient data to 
        make such a determination under such paragraph), the Secretary 
        shall determine that such drug has an excessive price if the 
        price of the drug is higher than reasonable taking into account 
        the following factors:
                    (A) The size of the affected patient population.
                    (B) The risk adjusted value of Federal Government 
                subsidies and investments related to the drug.
                    (C) The costs associated with development of the 
                drug.
                    (D) Whether the drug provided a significant 
                improvement in health outcomes, compared to other 
                therapies available at the time of its approval.
                    (E) The cumulative global revenues generated by the 
                drug.
                    (F) Whether the domestic average manufacturer price 
                of the drug increased during any annual quarter by a 
                percentage that is more than the percentage increase in 
                the consumer price index for all urban consumers for 
                the respective annual quarter.
                    (G) Other factors the Secretary determines 
                appropriate.
    (c) Petition for Determination.--
            (1) In general.--Any person may petition the Secretary, in 
        accordance with section 553(e) of title 5, United States Code, 
        to make an excessive drug price determination for an applicable 
        drug under subsection (b)(2). Not later than 90 days after the 
        date of receipt of such a petition, subject to paragraph (2), 
        the Secretary shall--
                    (A) make a determination under subsection (b)(2) 
                regarding such drug; or
                    (B)(i) decline to make such a determination; and
                    (ii) make public the reasons why the Secretary has 
                declined to make such a determination.
            (2) Exception.--The Secretary shall not make a 
        determination under subsection (b)(2) for a drug in response to 
        a petition under this section more frequently than once per 
        calendar year.
            (3) Public availability.--The Secretary shall make any 
        petitions submitted under this subsection, together with any 
        documentation related to the petitions and the Secretary's 
        determinations on such petitions and rationale for such 
        determinations, publicly available, including by posting such 
        information on the database under section 5.

SEC. 3. ABOLISHING THE PROHIBITION ON MEDICARE NEGOTIATION OF DRUG 
              PRICES AND REQUIRING THE SECRETARY OF HEALTH AND HUMAN 
              SERVICES TO NEGOTIATE PRICES OF LIFE-SUSTAINING 
              PRESCRIPTION DRUGS FURNISHED UNDER PART D OF THE MEDICARE 
              PROGRAM.

    Section 1860D-11 of the Social Security Act (42 U.S.C. 1395w-111) 
is amended by striking subsection (i) and inserting the following new 
subsection:
    ``(i) Requirement To Negotiate Prices With Respect to Certain Life-
Sustaining Prescription Drugs.--
            ``(1) In general.--With respect to any life-sustaining 
        prescription drug (as defined in section 6(4) of the Life-
        Sustaining Prescription Drug Price Relief Act of 2019), if the 
        Secretary determines under section 2 of such Act that the price 
        of the drug is excessive, the Secretary shall, notwithstanding 
        any other provision of law, negotiate with manufacturers, 
        prescription drug plan sponsors, and MA organizations the total 
        payment (including any discounts, rebates, and other price 
        concessions) that may be made by such sponsors and 
        organizations during a negotiated price period (as specified by 
        the Secretary) for such drugs with respect to such drugs 
        furnished to individuals who are enrolled under a prescription 
        drug plan or under an MA-PD plan offered by such sponsor or 
        organization, respectively.
            ``(2) Price limitation.--In the case of a life-sustaining 
        prescription drug that is negotiated by the Secretary pursuant 
        to paragraph (1), the total payment described in such paragraph 
        may not exceed 110 percent of the average price charged for 
        such drug in the 5 reference countries described in section 
        2(b)(1)(B) of such Act (in this section referred to as the 
        `international reference price').
            ``(3) Enforcement.--
                    ``(A) In general.--In the case of a manufacturer of 
                a life-sustaining prescription drug for which the 
                Secretary has made a determination described in 
                paragraph (1) that fails to enter into a negotiation 
                and agree on a total payment with respect to such drugs 
                as described in such paragraph within 9 months of such 
                determination--
                            ``(i) if such drug has an international 
                        reference price, the Secretary shall assess a 
                        civil monetary penalty equal to 2 times the 
                        difference between the total revenue for such 
                        drug from all sales in the United States made 
                        beginning after the date that is 9 months after 
                        such determination and the total revenue for 
                        such drug from all such sales made after such 
                        date that would have been received if the 
                        manufacturer charged the international 
                        reference price for such drug; and
                            ``(ii) if such drug has an international 
                        reference price, the Secretary shall assess a 
                        civil monetary penalty equal to 50 percent of 
                        the revenue from all United States sales of the 
                        drug in the first 90 days after the date that 
                        is 9 months after such determination, 75 
                        percent of the value of all revenue from such 
                        sales during the following 90 days, and 95 
                        percent of all revenue from such sales in 
                        subsequent days until such time as an agreement 
                        is reached or an international reference price 
                        is available.
                    ``(B) Deposit into trust fund.--Civil monetary 
                penalties collected pursuant to subparagraph (A) shall 
                be deposited into the Federal Hospital Insurance Trust 
                Fund.''.

SEC. 4. PUBLIC EXCESSIVE DRUG PRICE DATABASE.

    (a) Excessive Drug Price Database.--
            (1) In general.--The Secretary shall establish and maintain 
        a comprehensive, up-to-date database of life-sustaining 
        prescription drugs and the excessive price determinations for 
        such drugs under section 2.
            (2) Contents.--The database shall include, at a minimum, 
        for each life-sustaining prescription drug, for the applicable 
        calendar year--
                    (A) the name of the drug;
                    (B) the manufacturer;
                    (C) whether the drug was determined under section 
                2(b) to have an excessive price; and
                    (D) the number of petitions the Secretary received 
                under section 2(c) to make an excessive price 
                determination for the drug, together with the 
                information described in section 2(c)(3).
            (3) Certain determinations.--With respect to a 
        determination made under section 2(b)(1), the Secretary shall 
        publish on the database such determination in accordance with 
        paragraph (1) within 30 days of receiving domestic and 
        international pricing information from manufacturers under 
        section 6.
    (b) Annual Reports to Congress.--Not later than 60 days after the 
first excessive price review under section 2 is complete, and annually 
thereafter, the Secretary shall submit to Congress a report describing 
the excessive drug price review for the preceding year. The report 
shall contain summary data regarding--
            (1) the total number of drugs that were reviewed;
            (2) the total number of drugs determined to be excessively 
        priced under each of paragraphs (1) and (2) of section 2(b), 
        and the name and manufacturer of each such drug;
            (3) the total number of drugs determined to be excessively 
        priced, listed by manufacturer;
            (4) the extent to which the prices of the drugs identified 
        under section 2 were higher than reasonable, on average;
            (5) the total number of petitions the Secretary received 
        under section 2(c) to make excessive price determinations for 
        drugs;
            (6) a list of any manufacturers who failed to report 
        information as required under section 6; and
            (7) other appropriate information, as the Secretary 
        determines or as Congress requests.
    (c) Public Availability.--The Secretary shall make the information 
in the database described in subsection (a) and the report in 
subsection (b) publicly available, including on the internet website of 
the Food and Drug Administration, in a manner that is easy to find and 
understand.

SEC. 5. DRUG MANUFACTURER REPORTING.

    (a) In General.--Each manufacturer shall submit to the Secretary, 
in such format as the Secretary may require, an annual report that 
includes the following information for each life-sustaining 
prescription drug of the manufacturer, with respect to the previous 
calendar year:
            (1) The average manufacturer price of the drug in the 
        United States and in the reference countries, for the entire 
        year, and broken down for each quarter of the year.
            (2) The wholesale acquisition cost of the drug in the 
        United States and in the reference countries, for the entire 
        year, and broken down for each quarter of the year.
            (3) Cumulative global revenues generated by the drug.
            (4) Annual net sales revenue generated by the drug in the 
        United States and in the reference countries, for the entire 
        year, and broken down for each quarter of the year.
            (5) Total expenditures on domestic and foreign drug 
        research and development related to the drug, itemized by--
                    (A) basic and preclinical research;
                    (B) clinical research, reported separately for each 
                clinical trial;
                    (C) development of alternative dosage forms and 
                strengths for the drug molecule or combinations, 
                including the molecule;
                    (D) other drug development activities, such as 
                nonclinical laboratory studies and record and report 
                maintenance;
                    (E) pursuing new or expanded indications for such 
                drug through supplemental applications under section 
                505 of the Federal Food, Drug, and Cosmetic Act; and
                    (F) carrying out postmarket requirements related to 
                such drug, including under section 505(o)(3) of the 
                Federal Food, Drug, and Cosmetic Act.
            (6) Total expenditures on domestic and foreign marketing 
        and advertising related to the drug.
            (7) Investments in human clinical trials related to the 
        drug, by each trial and each year, including grants, research 
        contracts, tax credits or deductions, and reimbursements from 
        public or private health plans or insurance, and any other 
        public sector subsidies or incentives, such as the fair market 
        value or priority review vouchers or other considerations.
            (8) The estimated size of the affected patient population.
            (9) Additional information the manufacturer chooses to 
        provide related to drug pricing decisions, such as information 
        related to the methodology used to set the price of the drug.
            (10) Additional information as the Secretary determines 
        necessary to carry out this Act, including information for 
        previous years.
    (b) Report Due Date.--Applicable manufacturers shall submit the 
reports described in subsection (a) not later than January 15 of the 
year following the date of enactment of this Act, and of each year 
thereafter.
    (c) Penalty for Noncompliance.--
            (1) In general.--Any manufacturer that fails to submit 
        information for a drug as required by this section on a timely 
        basis or that knowingly provides false information shall be 
        liable for a civil monetary penalty, as determined by the 
        Secretary under paragraph (2), in addition to any other penalty 
        under other applicable provisions of law.
            (2) Amount of penalty.--The amount of a civil penalty under 
        paragraph (1) shall be equal to the product of--
                    (A) an amount, as determined appropriate by the 
                Secretary, which is--
                            (i) not less than 0.5 percent of the gross 
                        revenues from sales for the previous calendar 
                        year of the drug for which the information was 
                        not submitted; and
                            (ii) not greater than 1 percent of the 
                        gross revenues from sales for the previous 
                        calendar year of such drug; and
                    (B) the number of days in the period between--
                            (i) the report due date under subsection 
                        (b); and
                            (ii) the date on which the Secretary 
                        receives the information required to be 
                        reported by the manufacturer under this 
                        section.
            (3) Use of civil penalty.--The Secretary shall collect the 
        civil penalties under this subsection and shall use such funds 
        to support competitive research grant programs of the National 
        Institutes of Health.

SEC. 6. DEFINITIONS.

    For the purposes of this Act:
            (1) Average manufacturer price.--
                    (A) In general.--The term ``average manufacturer 
                price'', with respect to a drug, subject to 
                subparagraph (B), has the meaning given such term in 
                section 1927(k)(1) of the Social Security Act (42 
                U.S.C. 1396r-8(k)(1)); or with respect to a drug for 
                which there is no average manufacturer price as so 
                defined, such term shall mean the wholesale acquisition 
                cost (as defined in section 1847A(c)(6)(B) of the 
                Social Security Act (42 U.S.C. 1395w-3a(c)(6)(B)) of 
                the drug.
                    (B) Application to reference countries.--With 
                respect to reference countries, the term ``average 
                manufacturer price'', as defined in subparagraph (A), 
                shall be determined based on the price of the drug in 
                the applicable reference country.
            (2) Biosimilar biological product.--The term ``biosimilar 
        biological product'' means a biological product licensed 
        pursuant to an application under section 351(k) of the Public 
        Health Service Act (42 U.S.C. 262(k)).
            (3) Generic drug.--The term ``generic drug'' means a drug 
        approved pursuant to an application under section (b)(2) or (j) 
        of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355).
            (4) Life-sustaining prescription drug.--The term ``life-
        sustaining prescription drug'' means a drug that is--
                    (A) approved under subsection (c) or (j) of section 
                505 of the Federal Food, Drug, and Cosmetic Act (21 
                U.S.C. 355) or a biological product licensed under 
                subsection (a) or (k) of section 351 of the Public 
                Health Service Act (42 U.S.C. 262);
                    (B) subject to section 503(b)(1) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)); and
                    (C) life-sustaining (as such term is defined in 
                regulation pursuant to section 506C of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 356c)).
            (5) Manufacturer.--The term ``manufacturer'' means the 
        holder of an application approved under section 505 of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or of a 
        license issued under section 351 of the Public Health Service 
        Act (42 U.S.C. 262).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
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