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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4845 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 4845

             To lower the cost of drugs for all Americans.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 30, 2024

Mr. Booker (for himself 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 lower the cost of drugs for all Americans.

    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 ``Prescription Drug Affordability and 
Access Act''.

SEC. 2. ESTABLISHMENT OF THE BUREAU OF PRESCRIPTION DRUG AFFORDABILITY 
              AND ACCESS.

    (a) Establishment.--
            (1) In general.--There is established within the Department 
        of Health and Human Services a bureau, to be known as the 
        Bureau of Prescription Drug Affordability and Access (in this 
        Act referred to as the ``Bureau'') to carry out the duties 
        described in this section. The purposes of the Bureau are to--
                    (A) attain lower prescription drug costs for 
                patients;
                    (B) decrease unnecessary government expenditures on 
                prescription drugs; and
                    (C) ensure access to clinically beneficial 
                prescription drugs.
            (2) Executive agency.--The Bureau shall be considered an 
        Executive agency, as defined in section 105 of title 5, United 
        States Code.
            (3) Director.--
                    (A) Appointment.--The Bureau shall be headed by a 
                Director (in this Act referred to as the ``Director'') 
                who shall be appointed by the President, by and with 
                the advice and consent of the Senate.
                    (B) Qualification.--The President shall nominate 
                the Director from among individuals who are citizens of 
                the United States.
                    (C) Term.--The Director shall serve for a term of 5 
                years. The term of the first Director to be appointed 
                shall begin on the date that is 180 days after the date 
                of enactment of this Act.
            (4) Consultation.--
                    (A) Consultations and public meetings.--
                            (i) In general.--In carrying out the duties 
                        under this section, the Bureau shall--
                                    (I) regularly consult with relevant 
                                stakeholders, including patients, 
                                representatives of relevant Federal 
                                agencies, and medical and health care 
                                finance experts; and
                                    (II) hold regular public meetings, 
                                not less frequently than quarterly, to 
                                solicit input from relevant 
                                stakeholders.
                            (ii) Public disclosures.--The Bureau shall 
                        make publicly available a list of individuals 
                        it consults or meets with pursuant to clause 
                        (i), and the organizations with which such 
                        individuals are affiliated.
                    (B) Patient engagement.--
                            (i) In general.--The Director shall ensure 
                        that patients or organizations representing 
                        patients have opportunities to meaningfully 
                        engage with the Bureau as it conducts its work, 
                        including while the Bureau makes appropriate 
                        price determinations under section 3(d). Such 
                        opportunities may include holding regular 
                        panels, forums, and other meetings for patient 
                        engagement.
                            (ii) Petition.--The Director shall 
                        establish a process by which patients can 
                        petition the entity and raise concerns about 
                        the price of their prescription drugs.
                    (C) Consumer advisory council.--
                            (i) Establishment.--The Director shall 
                        establish a Consumer Advisory Council to advise 
                        and consult with the Bureau as it conducts its 
                        work.
                            (ii) Membership.--The Council established 
                        under this subparagraph shall be composed of 
                        not fewer than 6 members appointed by the 
                        Director. In appointing members to the Council, 
                        the Director shall ensure that at least half of 
                        the members of the Council are patients or 
                        organizations representing patients, 
                        particularly those who have been significantly 
                        impacted by high priced medications. The 
                        Director shall also seek to appoint members to 
                        the Council who are experts in relevant areas, 
                        including medicine and health care finance.
                            (iii) Meetings.--The Consumer Advisory 
                        Council shall meet from time to time at the 
                        call of the Director but shall meet at least 
                        twice a year.
            (5) Employment condition.--
                    (A) In general.--An individual who has a conflict 
                of interest shall not be appointed to be a member of, 
                or employed by, the Bureau, including the Consumer 
                Advisory Council established under paragraph (4)(C).
                    (B) Disclosure.--Individuals under consideration 
                for employment by, or appointment to, the Bureau, 
                including the Consumer Advisory Council, shall--
                            (i) disclose any potential conflict of 
                        interest, including the type, nature, and 
                        magnitude of the interests involved; and
                            (ii) consent to an investigation into 
                        potential conflicts of interest, which may be 
                        initiated at the discretion of the Secretary.
    (b) Duties.--The Bureau shall carry out the following duties:
            (1) Carry out the provisions of section 3.
            (2) Submit the annual reports under subsection (c).
            (3) Any other duty that the Director determines 
        appropriate.
    (c) Annual Reporting.--
            (1) In general.--Not later than January 1 of the first year 
        that is not less than 2 years after the date of enactment of 
        this Act, and annually thereafter, the Director shall submit to 
        Congress a report on the activities of the Bureau.
            (2) Contents.--Each report under paragraph (1) shall 
        contain the following:
                    (A) A description of the activities of the Bureau, 
                including--
                            (i) the total estimated savings achieved by 
                        the Bureau since the most recent report;
                            (ii) the disaggregated estimated savings 
                        achieved since the most recent report, 
                        including by each therapeutic class of 
                        prescription drugs;
                            (iii) a summary of the information 
                        submitted by prescription drug manufacturers as 
                        required under section 3; and
                            (iv) the impact of the Bureau's work on 
                        patient affordability and access to essential 
                        prescription drugs.
                    (B) Recommendations for such legislation and 
                administrative action as the Bureau determines 
                appropriate.
                    (C) A copy of each report submitted by drug 
                manufacturers as required under section 3.
                    (D) Other items, as the Bureau determines 
                appropriate.
    (d) Funding.--There are appropriated, from amounts in the Treasury 
not otherwise appropriated, $50,000,000 for fiscal year 2025 and each 
subsequent fiscal year to carry out the activities of the Bureau. 
Amounts appropriated under the preceding sentence shall remain 
available until expended.

SEC. 3. PRESCRIPTION DRUG CONSUMER PRICE PROTECTIONS.

    (a) Review of Prices.--
            (1) In general.--
                    (A) Authority.--The Bureau shall conduct annual 
                reviews of the prices of prescription drugs to ensure 
                that the wholesale acquisition cost of, and the net 
                cost after application of any rebates for, each such 
                drug is appropriate.
                    (B) Mandatory reviews.--Pursuant to subparagraph 
                (A), the Bureau shall conduct reviews of the prices of 
                any prescription drug--
                            (i)(I) for which a price increase described 
                        in subsection (b)(2) has been imposed in the 
                        previous year; and
                            (II) which surpass the revenue benchmark 
                        under subsection (c); or
                            (ii) for which there is an increase in 
                        demand for the drug that is significant, as 
                        determined by the Secretary.
                    (C) Discretionary reviews.--The Bureau may conduct 
                reviews of the prices of prescription drugs other than 
                the drugs described in subparagraph (B). In conducting 
                reviews under this subparagraph, the Bureau shall 
                prioritize any such prescription drug--
                            (i) that is in the top fiftieth percentile 
                        of net spending on prescription drugs under any 
                        Federal program, including the Medicare program 
                        under title XVIII of the Social Security Act 
                        (42 U.S.C. 1395 et seq.) or the Medicaid 
                        program under title XIX of such Act (42 U.S.C. 
                        1396 et seq.);
                            (ii) that is in the top fiftieth percentile 
                        of utilization under any Federal program, 
                        including such Medicare program or such 
                        Medicaid program;
                            (iii) that has experienced an increase in 
                        the wholesale acquisition cost or net price of 
                        25 percent or more over the preceding 3 years;
                            (iv) for which such review is expected to 
                        support a great patient need, such as on the 
                        basis of the therapeutic impacts and high costs 
                        of the drug; or
                            (v) that has been identified in a patient 
                        petition pursuant to section 2(a)(4)(B)(ii).
            (2) Information on prescription drugs approved as of 
        enactment.--With respect to any prescription drug that, as of 
        the date of enactment of this Act, has in effect an application 
        approved under section 505 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355) or section 351 of the Public 
        Health Service Act (42 U.S.C. 262), each manufacturer, not 
        later than 180 days after such date of enactment, shall provide 
        to the Bureau the following information:
                    (A) The name of the prescription drug.
                    (B) A description of the prescription drug and its 
                approved indications.
                    (C) The number of individuals in the United States 
                and globally for which such prescription drug is 
                clinically indicated, disaggregated by indication, if 
                applicable.
                    (D) A list of patents and patent applications that 
                claim the prescription drug; a use of the prescription 
                drug; any formulation, metabolite, or component of the 
                prescription drug; a method of use of the prescription 
                drug; or a method of manufacture of the prescription 
                drug.
                    (E) Data on any patents and government-granted 
                exclusivities that affect the date on which drug 
                applications sponsored by other manufacturers may be 
                submitted and approved by the Food and Drug 
                Administration.
                    (F) The date on which the prescription drug was 
                approved under section 505 of the Federal Food, Drug, 
                and Cosmetic Act or section 351 of the Public Health 
                Service Act.
                    (G) International price data with respect to the 
                drug.
                    (H) The total expenditures of the manufacturer and 
                other persons on--
                            (i) domestic and foreign research and 
                        development of the drug, including an itemized 
                        description of--
                                    (I) clinical research, including 
                                the cost of each clinical trial 
                                associated with the prescription drug, 
                                reported separately for each clinical 
                                trial;
                                    (II) the development of alternative 
                                dosage forms and strengths for the 
                                prescription drug molecule or 
                                combinations, including the molecule;
                                    (III) other prescription drug 
                                development activities, such as 
                                nonclinical laboratory studies and 
                                record and report maintenance;
                                    (IV) pursuing new or expanded 
                                indications for such prescription drug 
                                through supplemental applications under 
                                section 505 of the Federal Food, Drug, 
                                and Cosmetic Act or section 351 of the 
                                Public Health Service Act;
                                    (V) carrying out postmarket 
                                requirements related to such 
                                prescription drug, including under 
                                subsection (o) of such section 505 or 
                                such section 351;
                                    (VI) carrying out risk evaluation 
                                and mitigation strategies in accordance 
                                with section 505-1 of the Federal Food, 
                                Drug, and Cosmetic Act (21 U.S.C. 355-
                                1) or such section 351; and
                                    (VII) marketing research;
                            (ii) the acquisition of prescription drug 
                        components and packaging, in total and per unit 
                        sold, broken out by source and cost and 
                        identifying specific costs that reflect 
                        internal transfers within the manufacturer's 
                        company;
                            (iii) other acquisitions relating to the 
                        prescription drug, including for the purchase 
                        of patents and licensing or acquisition of any 
                        corporate entity owning any rights to the drug 
                        during or after development of the prescription 
                        drug;
                            (iv) current unit costs of production and 
                        distribution of the prescription drug;
                            (v) marketing, advertising, and educating 
                        for the promotion of a prescription drug, 
                        including a breakdown of amounts aimed at 
                        consumers, prescribers, managed care 
                        organizations, and others, irrespective of 
                        whether a prescription drug is mentioned in 
                        marketing, advertising, or educating;
                            (vi) any patient assistance and co-pay 
                        programs to which the manufacturer sponsors or 
                        contributes;
                            (vii) the gross revenue, net revenue, gross 
                        profit, and net profit of the manufacturer with 
                        respect to such prescription drug;
                            (viii) the total number of units of such 
                        prescription drug that were sold in the United 
                        States; and
                            (ix) pricing information with respect to 
                        the sale of such prescription drug, including--
                                    (I) the current wholesale 
                                acquisition cost;
                                    (II) the introductory wholesale 
                                acquisition cost;
                                    (III) the net average price 
                                realized by pharmacy benefit managers 
                                for such prescription drug provided to 
                                individuals in the United States, after 
                                accounting for any rebates or other 
                                payments from the manufacturer to the 
                                pharmacy benefit manager and from the 
                                pharmacy benefit manager to the 
                                manufacturer;
                                    (IV) the list price of such 
                                prescription drug charged to purchasers 
                                in each applicable prescription drug 
                                reference country;
                                    (V) the net price of such 
                                prescription drug, after accounting for 
                                discounts, rebates, or other financial 
                                considerations, charged to purchasers 
                                in each applicable prescription drug 
                                reference country;
                                    (VI) a description of the timing 
                                and magnitude of all price changes of 
                                the prescription drug since the 
                                introductory wholesale acquisition 
                                cost; and
                                    (VII) the average net price of such 
                                prescription drug for each year since 
                                first being sold in the United States.
                    (I) Any Federal benefits and amounts and periods of 
                impact for each such benefit received by the 
                manufacturer with respect to the prescription drug, 
                including tax credits, Federal grants, patent 
                applications that benefitted from such grants, patent 
                extensions, government-granted exclusivities, and 
                waivers of fees.
                    (J) Prior outside financial support for clinical 
                trials or basic and translational scientific inputs to 
                the disclovery and development with respect to the 
                drug, including the percentage of research and 
                development expenditures described in this section that 
                were derived from Federal funds.
                    (K) Executive compensation for the chief executive 
                officer, chief financial officer, and the three other 
                most highly compensated executive officers, including 
                bonuses, paid by such manufacturer, and stock options 
                affiliated with the manufacturer that were offered to 
                or accrued by such officers.
                    (L) Other information as the Director may require.
            (3) Information on prescription drugs approved after 
        enactment.--With respect to any prescription drug approved 
        under section 505 of the Federal Food, Drug, and Cosmetic Act 
        (21 U.S.C. 355) or section 351 of the Public Health Service Act 
        (42 U.S.C. 262) after the date of enactment of this Act, each 
        manufacturer, not later than 45 days prior to introducing such 
        prescription drug into interstate commerce in the United 
        States, shall provide to the Bureau the following information:
                    (A) The information described in the following 
                provisions of paragraph (2), except for the information 
                required under subparagraphs (G)(v) and (H) of such 
                paragraph.
                    (B) Pricing information with respect to the sale of 
                such prescription drug, including--
                            (i) the planned introductory wholesale 
                        acquisition cost;
                            (ii) the list price of such prescription 
                        drug charged or planned to be charged to 
                        purchasers in each applicable prescription drug 
                        reference country; and
                            (iii) the net price of such prescription 
                        drug, after accounting for discounts, rebates, 
                        or other financial considerations, charged or 
                        planned to be charged to purchasers in each 
                        applicable prescription drug reference country.
                    (C) The estimated annual profit and revenue that is 
                expected to be generated by the prescription drug, both 
                domestically and globally.
                    (D) Other information as the Director may require.
    (b) Review of Certain Price Increases.--
            (1) In general.--The Bureau shall conduct a review of the 
        price of a prescription drug for which a submission is required 
        under paragraph (2).
            (2) Notification of intention to increase price.--If a 
        manufacturer intends to increase the wholesale acquisition cost 
        of a prescription drug by more than the percentage by which the 
        Consumer Price Index for all urban consumers for that year 
        exceeds such index for the preceding calendar year, such 
        manufacturer, not later than 60 days before the price increase 
        takes effect, shall submit to the Bureau the following 
        information:
                    (A) The information described in subsection 
                (a)(2)(A).
                    (B) The planned increase in the wholesale 
                acquisition cost and the planned date the increase will 
                go into effect.
                    (C) A justification of the planned increase in 
                wholesale acquisition cost.
                    (D) Any other information as the Secretary may 
                require.
    (c) Revenue Benchmark Review.--
            (1) In general.--The Bureau shall conduct a review of a 
        prescription drug when revenue for such prescription drug 
        surpasses the revenue benchmark to ensure that the wholesale 
        acquisition cost of the prescription drug remains appropriate.
            (2) Required submission.--Not later than 60 days before the 
        manufacturer of a prescription drug anticipates the global 
        revenue for such drug will surpass the revenue benchmark, the 
        manufacturer shall submit to the Bureau the information 
        outlined in subsection (a)(2)(A).
            (3) Revenue benchmark.--
                    (A) In general.--Subject to subparagraph (B), for 
                purposes of this subsection, the revenue benchmark is 
                $5,000,000,000 in global revenue.
                    (B) Update.--The Bureau may update the amount of 
                the global benchmark over time.
    (d) General Authority To Review.--
            (1) In general.--The Bureau may at any time review the 
        wholesale acquisition cost of a prescription drug to determine 
        if such price is appropriate, including in response to a 
        patient petition under section 2(a)(3)(B)(ii).
            (2) Procedure.--The Bureau shall notify the manufacturer of 
        a prescription drug it wishes to review pursuant to this 
        subsection, and, within 45 days of receiving such a 
        notification, the manufacturer shall submit to the Bureau 
        information the Bureau determines necessary for such review.
    (e) Appropriate Price Determinations.--
            (1) Considerations.--In determining whether the wholesale 
        acquisition cost or proposed wholesale acquisition cost of a 
        prescription drug is appropriate, the Bureau shall consider the 
        following:
                    (A) The size of the affected patient population.
                    (B) The therapeutic benefits of the prescription 
                drug to patients, including the extent to which such 
                drug represents a therapeutic advance as compared to 
                existing therapeutic alternatives, and the costs of 
                such existing alternatives, and the extent to which 
                such drug and therapeutic alternatives to such drug 
                address unmet medical needs for a serious or life-
                threatening medical condition for which treatment or 
                diagnosis is not addressed adequately by available 
                therapies.
                    (C) The impact of the price on access to the 
                prescription drug, including for patients who are 
                uninsured, and the associated financial burden on 
                patients who use such prescription drug.
                    (D) The total annual expenditures by the Federal 
                Government on the prescription drug and the budgetary 
                impact of Federal health care programs providing 
                coverage of the prescription drug.
                    (E) The risk-adjusted value of Federal Government 
                subsidies and investments related to the prescription 
                drug.
                    (F) The costs associated with the development or 
                manufacturing of the prescription drug.
                    (G) The number of similarly effective prescription 
                drugs or alternative treatment regimens for each 
                approved use of such prescription drug.
                    (H) Whether the prescription drug provided a 
                clinically meaningful improvement in health outcomes, 
                compared to other therapies available at the time of 
                approval, as determined through comparative clinical 
                effectiveness, including the effects of such drug and 
                therapeutic alternatives to such drug on specific 
                populations, such as individuals with disabilities, the 
                elderly, the terminally ill, children, and other 
                patient populations.
                    (I) The current wholesale acquisition cost of 
                comparable prescription drugs in the United States, to 
                the extent that those prices have been deemed 
                appropriate.
                    (J) The cumulative and expected global revenue 
                generated by the prescription drug.
                    (K) The price of the drug in other countries, 
                including in the prescription drug reference countries.
                    (L) The public health benefit of the drug.
                    (M) The information that the manufacturer submits 
                to the Bureau as required under this section.
                    (N) Any other information, as the Bureau requires.
            (2) Special rules.--
                    (A) Interim appropriate price of prescription 
                drugs.--
                            (i) In general.--For each prescription drug 
                        described in clause (ii), the Bureau shall--
                                    (I) establish an interim 
                                appropriate price, which shall be the 
                                lesser of--
                                            (aa) the median list price 
                                        of the prescription drug in the 
                                        prescription drug reference 
                                        countries; or
                                            (bb) if applicable, the 
                                        appropriate price determination 
                                        made by the Bureau; and
                                    (II) direct the manufacturer to set 
                                the wholesale acquisition cost at a 
                                level that does not exceed the interim 
                                appropriate price.
                            (ii) Applicable drugs.--A prescription drug 
                        described in this clause is a prescription 
                        drug--
                                    (I) that--
                                            (aa) as of the date of the 
                                        enactment of this Act, has in 
                                        effect an application approved 
                                        under section 505(c) of the 
                                        Federal Food, Drug, and 
                                        Cosmetic Act (21 U.S.C. 355(c)) 
                                        or section 351(a) of the Public 
                                        Health Service Act (42 U.S.C. 
                                        262(a)); and
                                            (bb) is not a listed drug 
                                        or a reference product for more 
                                        than 2 prescription drugs or 
                                        biological products approved 
                                        and currently marketed under 
                                        section 505(j) of the Federal 
                                        Food, Drug, and Cosmetic Act 
                                        (21 U.S.C. 355(j)) or under 
                                        section 351(k) of the Public 
                                        Health Service Act (42 U.S.C. 
                                        262(k)); or
                                    (II) with respect to which the 
                                Secretary has authorized under 
                                subsection (g) the use of any patent, 
                                clinical trial data, or other 
                                government-granted exclusivity related 
                                to such drug by another sponsor, until 
                                the date that is 1 year after the date 
                                on which another application for such 
                                drug, for which the sponsor relies upon 
                                a such authorization under subsection 
                                (g), is approved under such section 505 
                                or such section 351.
                    (B) Spike in price.--If a manufacturer increases 
                the wholesale acquisition cost of a prescription drug 
                by more than the percentage by which the Consumer Price 
                Index for all urban consumers for that year exceeds 
                such index for the preceding calendar year, such 
                prescription drug shall be deemed to have a wholesale 
                acquisition cost that is not appropriate unless the 
                Bureau determines, based on the information submitted 
                under paragraphs (2) and (3) of subsection (a) and 
                under subsection (b)(2) and the considerations 
                described in paragraph (1), that the wholesale 
                acquisition cost is appropriate.
            (3) Opportunity to comment.--Prior to making a 
        determination on whether the wholesale acquisition cost of a 
        prescription drug is appropriate, the Bureau shall ensure 
        relevant stakeholders, including patients, have an opportunity 
        to comment.
    (f) Required Actions if Price Is Not Appropriate.--
            (1) Notice and requirement to remit excess.--If the Bureau 
        determines that the wholesale acquisition cost or proposed 
        wholesale acquisition cost of a prescription drug is not 
        appropriate, the Bureau shall notify and direct the 
        manufacturer to lower the wholesale acquisition cost to a level 
        that would be deemed appropriate. The Bureau shall also require 
        the manufacturer to remit the excess revenue earned as a result 
        of the prescription drug having a price that is not 
        appropriate.
            (2) Patient rebate.--The Director of the Bureau shall 
        establish a process to distribute funds remitted under 
        paragraph (1) to patients who were impacted by the prescription 
        drug having a price that is not appropriate.
    (g) Enforcement.--
            (1) In general.--If, within 30 days of receiving a notice 
        that the wholesale acquisition cost of a prescription drug is 
        not appropriate, the manufacturer of such prescription drug 
        fails to lower the wholesale acquisition cost of a prescription 
        drug or fails to remit excessive revenue earned in accordance 
        with subsection (f), or if the manufacturer of a drug described 
        in subsection (a)(3) sets an introductory wholesale acquisition 
        cost of a drug that is not appropriate, the Director shall 
        notify the Secretary and the Secretary shall authorize the use 
        of any patent, clinical trial data, or government-granted 
        exclusivity by an entity for purposes of manufacturing such 
        prescription drug for sale. An entity that wishes to 
        manufacture such prescription drug for sale shall agree to--
                    (A) set the wholesale acquisition cost of such 
                prescription drug at or below the level that the Bureau 
                determines is appropriate; and
                    (B) provide the prescription drug manufacturer with 
                reasonable compensation, which shall be determined by 
                the Bureau, based on the information submitted by the 
                manufacturer under this section including--
                            (i) the risk-adjusted value of any Federal 
                        Government subsidies and investments in 
                        research and development used to support the 
                        development of such drug;
                            (ii) the risk-adjusted value of any 
                        investment made by such manufacturer in the 
                        research and development of such drug;
                            (iii) the impact of the price, including 
                        license compensation payments, on meeting the 
                        medical need of all patients;
                            (iv) the relationship between the price of 
                        such drug, including compensation payments and 
                        the health benefits of such drug; and
                            (v) other relevant information determined 
                        appropriate by the Secretary, in coordination 
                        with the Director.
            (2) Public manufacturing.--Nothing in this section shall 
        prevent the Secretary from entering into arrangements for the 
        public manufacturing of prescription drugs, including through 
        government-owned and contractor-operated manufacturing, 
        production, or distribution facilities.
            (3) Post licensing.--
                    (A) In general.--Any manufacturer of a prescription 
                drug that fails to comply with the interim appropriate 
                price under subsection (e)(2)(A)(i)(I) shall be subject 
                to a civil monetary penalty of not less than an amount 
                equal to 150 percent of all revenues obtained by the 
                manufacturer that are in excess of the expected 
                revenues at the interim appropriate price.
                    (B) Procedure.--The provisions of section 1128A, 
                other than subsections (a) and (b) and the first 
                sentence of subsection (c)(1) of such section, shall 
                apply to civil monetary penalties under this paragraph 
                in the same manner as such provisions apply to a 
                penalty or proceeding under section 1128A.
                    (C) Transfer to national institutes of health.--The 
                civil monetary penalties collected under this paragraph 
                shall be transferred to the National Institutes of 
                Health to supplement activities related to 
                pharmaceutical research and development.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Conflict of interest.--The term ``conflict of 
        interest'' means an association, including a financial or 
        personal association, or past employment, that has the 
        potential to bias or have the appearance of biasing an 
        individual's decisions.
            (2) Excess revenue.--The term ``excess revenue'' means the 
        difference between a prescription drug's wholesale acquisition 
        cost at the time of the Bureau review under this section and 
        the maximum wholesale acquisition price for the prescription 
        drugs that the Bureau determines to be appropriate.
            (3) Government-granted exclusivity.--The term ``government-
        granted exclusivity'' means prohibitions on the submission or 
        effective approval of prescription drug applications granted 
        under any of the following:
                    (A) Clauses (ii) through (v) of section 
                505(c)(3)(E) of the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 355(c)(3)(E)).
                    (B) Section 505(j)(5)(B)(iv) of such Act (21 U.S.C. 
                355(j)(5)(B)(iv)) or clause (ii), (iii), or (iv) of 
                section 505(j)(5)(F) of such Act.
                    (C) Section 505A of such Act (21 U.S.C. 355a).
                    (D) Section 505E of such Act (21 U.S.C. 355f).
                    (E) Section 527 of such Act (21 U.S.C. 360cc).
                    (F) Section 351(k)(7) of such Act (42 U.S.C. 
                262(k)(7)).
                    (G) Any other provision of law that provides for 
                exclusivity (or extension of exclusivity) with respect 
                to a drug.
            (4) Listed drug.--The term ``listed drug'' means a drug 
        listed under section 505(j)(7) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355(j)(7)).
            (5) Manufacturer.--The term ``manufacturer'', with respect 
        to a prescription drug, means an entity that--
                    (A) is the holder of the approved application under 
                section 505 of the Federal Food, Drug, and Cosmetic Act 
                (21 U.S.C. 355) or under section 351 of the Public 
                Health Service Act (42 U.S.C. 262); and
                    (B) is responsible for setting the price of the 
                prescription drug.
            (6) Prescription drug.--The term ``prescription drug'' 
        means any drug subject to section 505 of the Federal Food, 
        Drug, and Cosmetic Act or section 351 of the Public Health 
        Service Act and to section 503(b)(2) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 353(b)(2)).
            (7) Prescription drug reference country.--The term 
        ``prescription drug reference country'' means Japan, Germany, 
        the United Kingdom, France, Italy, Canada, Australia, Spain, 
        the Netherlands, Switzerland, and Sweden.
            (8) Reference product.--The term ``reference product'' has 
        the meaning given the term in section 351(i) of the Public 
        Health Service Act (42 U.S.C. 262(i)).
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (10) Wholesale acquisition cost.--The term ``wholesale 
        acquisition cost'' has the meaning given that term in section 
        1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
        3a(c)(6)(B)).

SEC. 5. REPEAL OF MEDICARE'S NONINTERFERENCE CLAUSE.

    Section 1860D-11 of the Social Security Act (42 U.S.C. 1395w-111) 
is amended by striking subsection (i).
                                 <all>
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