II 

116TH CONGRESS 

1ST SESSION S. 474 

To amend title XI of the Social Security Act to require drug manufacturers 

to publicly justify unnecessary price increases. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 13, 2019 

Mr. WYDEN (for himself, Mr. CARDIN, Mr. CARPER, Mr. COONS, Ms. 

DUCKWORTH, Ms. KLOBUCHAR, Mr. MENENDEZ, Ms. STABENOW, and 

Mr. TESTER) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XI of the Social Security Act to require 

drug manufacturers to publicly justify unnecessary price 

increases. 

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 ‘‘Stopping the Pharma5 ceutical Industry from Keeping drugs Expensive (SPIKE) 

6 Act of 2019’’. 


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1 SEC. 2. DRUG MANUFACTURER PRICE TRANSPARENCY. 

2 Title XI of the Social Security Act (42 U.S.C. 1301 

3 et seq.) is amended by inserting after section 1128K the 

4 following new section: 

5 ‘‘SEC. 1128L. DRUG MANUFACTURER PRICE TRANSPAR6 ENCY. 

7 ‘‘(a) IN GENERAL.—Effective beginning on July 1, 

8 2019, subject to subsection (e), the Secretary shall require 

9 a manufacturer of an applicable drug to submit to the Sec10 retary the justification described in subsection (c) in ac11 cordance with the timing described in subsection (d). 

12 ‘‘(b) DEFINITIONS.—In this section: 

13 ‘‘(1) APPLICABLE DRUG.—Subject to paragraph 

14 (2), the term ‘applicable drug’ means a drug, as de15 fined in section 201(g) of the Federal Food, Drug, 

16 and Cosmetic Act (21 U.S.C. 321(g)), that is sub17 ject to section 503(b)(1) of such Act (21 U.S.C. 

18 353(b)(1)), and that the Secretary determines is de19 scribed in either of the following subparagraphs: 

20 ‘‘(A) The drug (per dose)— 

21 ‘‘(i) has a wholesale acquisition cost of 

22 at least $10 dollars; and 

23 ‘‘(ii) had an increase in the wholesale 

24 acquisition cost of the drug, with respect 

25 to determinations made— 


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1 ‘‘(I) during 2020, of at least 100 

2 percent since the date of the enact3 ment of this section; 

4 ‘‘(II) during 2021, of at least 

5 100 percent in the preceding 12 

6 months or of at least 150 percent in 

7 the preceding 2 years; 

8 ‘‘(III) during 2022, of at least 

9 100 percent in the preceding 12 

10 months or of at least 200 percent in 

11 the preceding 3 years; 

12 ‘‘(IV) during 2023, of at least 

13 100 percent in the preceding 12 

14 months or of at least 250 percent in 

15 the preceding 4 years; or 

16 ‘‘(V) on or after January 1, 

17 2024, of at least 100 percent in the 

18 preceding 12 months or of at least 

19 300 percent in the preceding 5 years. 

20 ‘‘(B) The drug (per dose)— 

21 ‘‘(i) is in the top 50th percentile of 

22 net spending under title XVIII or XIX in 

23 at least one of the preceding 5 years; and 


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1 ‘‘(ii) had an increase in the wholesale 

2 acquisition cost of the drug, with respect 

3 to determinations made— 

4 ‘‘(I) during 2020, of at least 15 

5 percent since the date of the enact6 ment of this section; 

7 ‘‘(II) during 2021, of at least 15 

8 percent in the preceding 12 months or 

9 of at least 20 percent in the preceding 

10 2 years; 

11 ‘‘(III) during 2022, of at least 15 

12 percent in the preceding 12 months or 

13 of at least 30 percent in the preceding 

14 3 years; 

15 ‘‘(IV) during 2023, of at least 15 

16 percent in the preceding 12 months or 

17 of at least 40 percent in the preceding 

18 4 years; or 

19 ‘‘(V) on or after January 1, 

20 2024, of at least 15 percent in the 

21 preceding 12 months or of at least 50 

22 percent in the preceding 5 years. 

23 ‘‘(2) SPECIAL RULE.—For purposes of applying 

24 paragraph (1), the Secretary may substitute for each 

25 percentage described in subparagraph (A) or (B) of 


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1 such paragraph (other than the percentile described 

2 subparagraph (B)(i) of such paragraph) a percent3 age within a de minimis range specified by the Sec4 retary below the percentage so described. 

5 ‘‘(3) MANUFACTURER.—The term ‘manufac6 turer’ has the meaning given that term in section 

7 581(10) of the Federal Food, Drug, and Cosmetic 

8 Act (21 U.S.C. 360eee(10)). 

9 ‘‘(4) WHOLESALE ACQUISITION COST.—The 

10 term ‘wholesale acquisition cost’ has the meaning 

11 given that term in section 1847A(c)(6)(B). 

12 ‘‘(c) JUSTIFICATION DESCRIBED.—The justification 

13 described in this subsection is all relevant information and 

14 supporting documentation necessary to justify the increase 

15 in the wholesale acquisition cost of the applicable drug of 

16 the manufacturer, which may include the following: 

17 ‘‘(1) The individual factors that have contrib18 uted to the increase in the wholesale acquisition 

19 cost. 

20 ‘‘(2) An explanation of the role of each factor 

21 in contributing to such increase. 

22 ‘‘(3) Total expenditures of the manufacturer 

23 on— 

24 ‘‘(A) materials and manufacturing for such 

25 drug; 


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1 ‘‘(B) acquiring patents and licensing for 

2 each drug of the manufacturer; and 

3 ‘‘(C) costs to purchase or acquire the drug 

4 from another company, if applicable. 

5 ‘‘(4) The percentage of total expenditures of the 

6 manufacturer on research and development for such 

7 drug that was derived from Federal funds. 

8 ‘‘(5) The total expenditures of the manufac9 turer on research and development for such drug. 

10 ‘‘(6) The total revenue and net profit generated 

11 from the applicable drug for each calendar year 

12 since drug approval. 

13 ‘‘(7) The total costs associated with marketing 

14 and advertising for the applicable drug. 

15 ‘‘(8) Additional information specific to the man16 ufacturer of the applicable drug, such as— 

17 ‘‘(A) the total revenue and net profit of the 

18 manufacturer for the period of such increase, as 

19 determined by the Secretary; 

20 ‘‘(B) metrics used to determine executive 

21 compensation; 

22 ‘‘(C) any additional information related to 

23 drug pricing decisions of the manufacturer, 

24 such as total expenditures on— 


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1 ‘‘(i) drug research and development; 

2 or 

3 ‘‘(ii) clinical trials on drugs that failed 

4 to receive approval by the Food and Drug 

5 Administration. 

6 ‘‘(d) TIMING.— 

7 ‘‘(1) NOTIFICATION.—Not later than 60 days 

8 after the date on which the Secretary makes the de9 termination that a drug is an applicable drug under 

10 subsection (b), the Secretary shall notify the manu11 facturer of the applicable drug of such determina12 tion. 

13 ‘‘(2) SUBMISSION OF JUSTIFICATION.—Not 

14 later than 180 days after the date on which a manu15 facturer receives a notification under paragraph (1), 

16 the manufacturer shall submit to the Secretary the 

17 justification required under subsection (a). 

18 ‘‘(3) POSTING ON INTERNET WEBSITE.— 

19 ‘‘(A) IN GENERAL.—Subject to subpara20 graph (B), not later than 30 days after receiv21 ing the justification under paragraph (2), the 

22 Secretary shall post on the internet website of 

23 the Centers for Medicare & Medicaid Services 

24 the justification, together with a summary of 

25 such justification that is written and formatted 


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1 using language that is easily understandable by 

2 beneficiaries under titles XVIII and XIX. 

3 ‘‘(B) EXCEPTION.—The Secretary shall es4 tablish a process under which a manufacturer 

5 of an applicable drug may submit a request to 

6 the Secretary that certain proprietary informa7 tion disclosed as part of justification in sub8 section (c) be excluded from the posting de9 scribed in subparagraph (A) if, as determined 

10 by the Secretary (in consultation with the In11 spector General of the Department of Health 

12 and Human Services), the public disclosure of 

13 such information would directly lead to in14 creased prices of prescription drugs. If propri15 etary information is excluded from the posting 

16 pursuant to the preceding sentence, to the ex17 tent feasible, the summary of the information 

18 described in subparagraph (A) shall include a 

19 summary of such proprietary information. 

20 ‘‘(e) EXCEPTION TO REQUIREMENT FOR SUBMIS21 SION.—The requirement to submit a justification under 

22 subsection (a) shall not apply in the case where the manu23 facturer, after receiving the notification under subsection 

24 (d)(1) with respect to an applicable drug of the manufac25 turer, reduces the wholesale acquisition cost of a drug so 


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1 that it no longer meets the definition of an applicable drug 

2 under subsection (b) for at least a 6-month period, as de3 termined by the Secretary. 

4 ‘‘(f) PENALTIES.—The provisions of subsection 

5 (b)(3)(C) of section 1927 shall apply to a manufacturer 

6 that fails to submit the justification required under sub7 section (a) on a timely basis or that knowingly provides 

8 false information in the same manner as such provisions 

9 apply to a manufacturer with an agreement under that 

10 section.’’. 

Æ 


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