I 

114TH CONGRESS 

1ST SESSION H. R. 4207 

To amend part D of title XVIII of the Social Security Act to require 

the Secretary of Health and Human Services to determine, on behalf 

of Medicare beneficiaries, covered part D drug prices for certain covered 

part D drugs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 9, 2015 

Ms. SCHAKOWSKY (for herself, Mr. DOGGETT, Ms. LEE, Mr. POCAN, Ms. 

DELAURO, Mr. MCDERMOTT, Mr. WELCH, and Mr. CUMMINGS) 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 amend part D of title XVIII of the Social Security 

Act to require the Secretary of Health and Human Services to determine, on behalf of Medicare beneficiaries, 

covered part D drug prices for certain covered part D 

drugs, 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 ‘‘Medicare Fair Drug 

5 Pricing Act of 2015’’. 


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1 SEC. 2. REQUIREMENT TO DETERMINE LOWER COVERED 

2 PART D DRUG PRICES FOR CERTAIN COV3 ERED PART D DRUGS. 

4 (a) IN GENERAL.—Section 1860D–11(i) of the Social 

5 Security Act (42 U.S.C. 1395w–111(i)) is amended— 

6 (1) by striking ‘‘(i) NONINTERFERENCE.—In’’ 

7 and inserting the following: 

8 ‘‘(i) NONINTERFERENCE.— 

9 ‘‘(1) IN GENERAL.—In’’; 

10 (2) by inserting ‘‘subject to paragraph (2),’’ 

11 after ‘‘part,’’; and 

12 (3) by adding at the end the following new 

13 paragraph: 

14 ‘‘(2) EXCEPTION FOR SPECIFIED DRUGS.— 

15 ‘‘(A) REQUIREMENT.— 

16 ‘‘(i) IN GENERAL.—Notwithstanding 

17 paragraph (1), the part D price for speci18 fied drugs shall be determined in accord19 ance with the process described in sub20 paragraph (B). 

21 ‘‘(ii) SPECIFIED DRUGS.—For pur22 poses of this paragraph, the term ‘specified 

23 drug’ means a covered part D drug— 

24 ‘‘(I) that is— 

25 ‘‘(aa) a single source drug 

26 or biological; 


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1 ‘‘(bb) not a biological prod2 uct licensed pursuant to an appli3 cation under section 351(k) of 

4 the Public Health Service Act; 

5 and 

6 ‘‘(cc) not both manufactured 

7 by more than two drug manufac8 turers and manufactured by at 

9 least one such manufacturer as a 

10 generic drug; or 

11 ‘‘(II) that— 

12 ‘‘(aa) is selected by the Sec13 retary for purposes of this para14 graph; and 

15 ‘‘(bb) the Secretary deter16 mines is a covered part D drug 

17 with respect to which there is 

18 limited ability for PDP sponsors 

19 and MA organizations to nego20 tiate manufacturer rebates, such 

21 that the Secretary determines 

22 that the failure to apply this 

23 paragraph will have a significant 

24 fiscal impact on the program 

25 under this title. 


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1 ‘‘(iii) PART D PRICE DEFINED.—For 

2 purposes of this paragraph, the term ‘part 

3 D price’ means, with respect to a covered 

4 part D drug, the price (including dis5 counts, rebates, and other price conces6 sions) that may be charged to PDP spon7 sors and MA organizations for such drug 

8 for part D eligible individuals who are en9 rolled under a prescription drug plan or 

10 under an MA–PD plan. 

11 ‘‘(iv) REGULATIONS FOR IDENTIFICA12 TION OF SPECIFIED DRUGS.—The Sec13 retary, not later than one year after the 

14 date of the enactment of this paragraph, 

15 shall promulgate regulations regarding the 

16 identification of single source drugs and 

17 biologicals as specified drugs. 

18 ‘‘(v) PROCESS TO PETITION THAT

19 DRUG IS NO LONGER A SPECIFIED DRUG.— 

20 The Secretary shall establish a process 

21 under which a manufacturer for a specified 

22 drug may petition the Secretary for the re23 scinding of a previous identification of a 

24 drug as a specified drug under clause (ii) 


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1 based upon the drug involved no longer 

2 being a specified drug. 

3 ‘‘(B) PRICE DETERMINATION PROCESS.— 

4 For purposes of subparagraph (A), the process 

5 described in this subparagraph, with respect to 

6 the part D price for a specified drug for a plan 

7 year, is the following: 

8 ‘‘(i) LIMITED PERIOD FOR NEGOTIA9 TION FOR FIRST PLAN YEAR.— 

10 ‘‘(I) IN GENERAL.—The Sec11 retary shall negotiate such price with 

12 the drug manufacturer involved for a 

13 period of not more than 90 days be14 ginning on the date of identification 

15 of the drug as a specified drug for 

16 such plan year by the Secretary. 

17 ‘‘(II) SUCCESSFUL NEGOTIA18 TIONS.—In the case that such nego19 tiation with respect to such 90-day pe20 riod results in a price that is agreed 

21 to by both the Secretary and manu22 facturer, such price shall be the max23 imum part D price for such specified 

24 drug through the end of the plan year 

25 beginning after such period. 


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1 ‘‘(ii) SECRETARY SETS PRICE FOR

2 FIRST PLAN YEAR IN CASE OF FAILURE TO

3 NEGOTIATE PRICE.—In the case that nego4 tiations under clause (i), with respect to a 

5 specified drug, do not result in a price for 

6 such specified drug that is so agreed to by 

7 the Secretary and drug manufacturer, the 

8 Secretary shall determine a price for such 

9 drug based on— 

10 ‘‘(I) the information provided to 

11 the Secretary by the drug manufac12 turer during the 90-day period de13 scribed in clause (i)(I) regarding costs 

14 associated with such drug that are ap15 plicable with respect to such drug 

16 manufacturer; 

17 ‘‘(II) in the case that payment is 

18 made for such drug by the Depart19 ment of Veterans Affairs or under 

20 title XIX, the net priced paid for such 

21 drug by such Department or under 

22 such title, as applicable; 

23 ‘‘(III) ensuring affordability of 

24 such drug, and accessibility to such 

25 drug, for individuals entitled to beneVerDate Sep 11 2014 21:15 Dec 10, 2015 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4207.IH H4207

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1 fits under part A or enrolled under 

2 part B; and 

3 ‘‘(IV) such other factors as the 

4 Secretary determines appropriate. 

5 The price determined under this clause 

6 shall be the maximum part D price for 

7 such specified drug through the end of the 

8 plan year beginning after such determina9 tion of such price. 

10 ‘‘(iii) PRICE IN SUBSEQUENT PLAN

11 YEARS.—For each plan year that is subse12 quent to the plan year for which a price is 

13 determined for a specified drug under 

14 clause (i) or (ii) and in which, on the first 

15 day of such subsequent plan year, the iden16 tification of such drug as a specified drug 

17 still applies, the maximum price for such 

18 drug shall be the maximum part D price 

19 for the previous year determined under 

20 clause (i) or (ii), as applicable, increased 

21 by the percentage increase in the consumer 

22 price index for all urban consumers (all 

23 items; U.S. city average) for the 12-month 

24 period ending with June of the year before 

25 such subsequent plan year. 


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1 ‘‘(iv) CONSULTATION.—In deter2 mining a price for a specified drug under 

3 clause (ii), the Secretary may consult with 

4 the Comptroller General, the Medicare 

5 Payment Advisory Commission, the Med6 icaid and CHIP Payment and Access Com7 mission, or other outside, independent ex8 perts. 

9 ‘‘(C) NO CHANGE IN RULES FOR

10 FORMULARIES.— 

11 ‘‘(i) IN GENERAL.—Nothing in sub12 paragraph (A) or (B) shall be construed to 

13 authorize the Secretary to establish or re14 quire a particular formulary. 

15 ‘‘(ii) CONSTRUCTION.—Clause (i) 

16 shall not be construed as affecting the Sec17 retary’s authority to ensure appropriate 

18 and adequate access to covered part D 

19 drugs under prescription drug plans and 

20 under MA–PD plans, including compliance 

21 of such plans with formulary requirements 

22 under section 1860D–4(b)(3). 

23 ‘‘(D) CONSTRUCTION.—Nothing in this 

24 paragraph shall be construed as— 


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1 ‘‘(i) preventing the sponsor of a pre2 scription drug plan, or an organization of3 fering an MA–PD plan, from obtaining a 

4 discount or reduction of the price for a 

5 covered part D drug described in subpara6 graph (A) below the price negotiated under 

7 such subparagraph or determined under 

8 subparagraph (B); or 

9 ‘‘(ii) permitting the Secretary to make 

10 proprietary data available to the public. 

11 ‘‘(E) DEFINITIONS.—In this paragraph: 

12 ‘‘(i) DRUG MANUFACTURER.—The 

13 term ‘drug manufacturer’ has the meaning 

14 given the term ‘manufacturer’ in section 

15 1860D–14A(g)(5). 

16 ‘‘(ii) SINGLE SOURCE DRUG OR BIO17 LOGICAL.—The term ‘single source drug or 

18 biological’ has the meaning given such 

19 term in section 1847A(c)(6)(D).’’. 

20 (b) REQUIRING PARTICIPATION IN NEGOTIATION

21 PROCESS AS CONDITION OF PART D DRUG COVERAGE.— 

22 Section 1860D–14A(b) of the Social Security Act (42 

23 U.S.C. 1395w–114a(b)) is amended by adding at the end 

24 the following new paragraph: 


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1 ‘‘(5) PARTICIPATION IN NEGOTIATION PROC2 ESS.—Each agreement under this subsection shall 

3 include, with respect to plans years beginning with 

4 plan year 2017, an agreement by the manufacturer, 

5 with respect to each specified drug of such manufac6 turer under section 1860d–11(i)(2), to participate in 

7 the negotiation process under such section for such 

8 drug, including accepting the price resulting from 

9 the negotiation (or, in the case that such negotiation 

10 does not result in a price for such drug that is 

11 agreed to by the Secretary and the manufacturer, 

12 the price resulting from the application of subpara13 graph (B)(ii) of such section) as the maximum price 

14 for such drug for the period provided under such 

15 section.’’. 

16 SEC. 3. STUDY AND REPORT. 

17 (a) STUDY.—The Secretary of Health and Human 

18 Services shall conduct a study examining— 

19 (1) the impact of the amendments made by sec20 tion 2 on— 

21 (A) the cost of single source drugs and 

22 biologicals (as defined in section 

23 1847A(c)(6)(D) of the Social Security Act (42 

24 U.S.C. 1395w–3a(c)(6)(D))) for which payment 


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1 is made under part B of title XVIII of such 

2 Act; and 

3 (B) the accessibility of such drugs and 

4 biologicals for individuals entitled to benefits 

5 under part A of such title or enrolled under 

6 part B of such title; and 

7 (2) options that would permit or require the 

8 Secretary to create and implement, not later than 

9 one year after the date of the report described in 

10 subsection (b)— 

11 (A) a method to apply to such single 

12 source drugs and biologicals for which the Sec13 retary determines appropriate— 

14 (i) an authority similar to the author15 ity granted to the Secretary under sub16 paragraph (A) of section 1860D–11(i)(2) 

17 of such Act (relating to negotiating with 

18 drug manufacturers the part D prices for 

19 certain specified drugs); and 

20 (ii) a negotiation process similar to 

21 the process under subparagraph (B) of 

22 such section; and 

23 (B) a method, such as a rebate program, 

24 to incorporate the rate negotiated for such 

25 drugs and biologicals pursuant to the authority 


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1 described in subparagraph (A) into payments 

2 for such drugs and biologicals under part B of 

3 such Act. 

4 (b) REPORT.—Not later than one year after the date 

5 of the enactment of this Act, the Secretary of Health and 

6 Human Services shall submit a report to Congress on the 

7 results of the study conducted under subsection (a). Such 

8 report shall include recommendations regarding the op9 tions examined pursuant to paragraph (2) of such sub10 section. 

Æ 


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