I 

116TH CONGRESS 

1ST SESSION H. R. 1046 

To amend title XVIII of the Social Security Act to require the Secretary 

of Health and Human Services to negotiate prices of prescription drugs 

furnished under part D of the Medicare program. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 7, 2019 

Mr. DOGGETT (for himself, Mr. WELCH, Mr. CUMMINGS, Ms. ADAMS, Ms. 

BASS, Mrs. BEATTY, Mr. BLUMENAUER, Ms. BONAMICI, Mr. CARTWRIGHT, Mr. CASE, Mr. CASTEN of Illinois, Ms. CASTOR of Florida, Mr. 

CASTRO of Texas, Ms. JUDY CHU of California, Mr. CICILLINE, Mr. 

CISNEROS, Mr. CLAY, Mr. CLEAVER, Mr. COHEN, Mr. COURTNEY, Mr. 

CRIST, Mr. CROW, Mr. DANNY K. DAVIS of Illinois, Mr. DEFAZIO, Ms. 

DELAURO, Mr. DESAULNIER, Mrs. DINGELL, Mr. MICHAEL F. DOYLE

of Pennsylvania, Ms. ESCOBAR, Mr. ESPAILLAT, Mr. EVANS, Ms. 

FRANKEL, Mr. GALLEGO, Mr. GARAMENDI, Mr. GOLDEN, Mr. GONZALEZ

of Texas, Mr. GREEN of Texas, Mr. GRIJALVA, Ms. HAALAND, Mr. 

HARDER of California, Mr. HASTINGS, Mr. HIGGINS of New York, Ms. 

HILL of California, Ms. JACKSON LEE, Ms. JAYAPAL, Ms. JOHNSON of 

Texas, Ms. KAPTUR, Mr. KHANNA, Mr. KIM, Mrs. KIRKPATRICK, Mr. 

KRISHNAMOORTHI, Mr. LANGEVIN, Mr. LARSON of Connecticut, Mr. 

LAWSON of Florida, Ms. LEE of California, Mrs. LEE of Nevada, Mr. 

LEVIN of Michigan, Mr. LEWIS, Mr. LIPINSKI, Mr. LOEBSACK, Ms. LOFGREN, Mr. LOWENTHAL, Mr. LYNCH, Mrs. CAROLYN B. MALONEY of 

New York, Mr. SEAN PATRICK MALONEY of New York, Ms. MCCOLLUM, 

Mr. MCNERNEY, Ms. MOORE, Mr. NADLER, Mrs. NAPOLITANO, Mr. 

NEGUSE, Ms. NORTON, Ms. OCASIO-CORTEZ, Ms. OMAR, Mr. PERLMUTTER, Mr. PETERSON, Mr. PHILLIPS, Ms. PINGREE, Mr. POCAN, Ms. 

PORTER, Ms. PRESSLEY, Mr. RASKIN, Mr. RICHMOND, Mr. ROSE of New 

York, Ms. ROYBAL-ALLARD, Mr. RUPPERSBERGER, Mr. RUSH, Mr. 

RYAN, Mr. SARBANES, Ms. SCHAKOWSKY, Mr. SCHIFF, Mr. SCOTT of 

Virginia, Mr. SERRANO, Mr. SHERMAN, Ms. SLOTKIN, Ms. SPANBERGER, 

Mr. SUOZZI, Mr. TAKANO, Mr. THOMPSON of Mississippi, Ms. TITUS, Ms. 

TLAIB, Mrs. TORRES of California, Ms. VELA ́ZQUEZ, Mr. VISCLOSKY, Ms. 

WASSERMAN SCHULTZ, Ms. WATERS, Ms. WILD, Mr. YARMUTH, and Mr. 

MALINOWSKI) 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 


pamtmann on DSKBFK8HB2PROD with BILLS
2 

•HR 1046 IH

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

the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to require 

the Secretary of Health and Human Services to negotiate 

prices of prescription drugs furnished under part D of 

the Medicare program. 

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 Negotiation 

5 and Competitive Licensing Act of 2019’’. 

6 SEC. 2. REQUIRING THE SECRETARY OF HEALTH AND 

7 HUMAN SERVICES TO NEGOTIATE PRICES OF 

8 PRESCRIPTION DRUGS FURNISHED UNDER 

9 PART D OF THE MEDICARE PROGRAM. 

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

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

12 and inserting the following new subsection: 

13 ‘‘(i) NEGOTIATION OF LOWER DRUG PRICES.— 

14 ‘‘(1) IN GENERAL.—Notwithstanding any other 

15 provision of law, the Secretary shall, for plan years 

16 beginning on or after the date of the enactment of 

17 this subsection, negotiate with pharmaceutical man18 ufacturers the prices (including discounts, rebates, 


pamtmann on DSKBFK8HB2PROD with BILLS
3 

•HR 1046 IH

1 and other price concessions) that may be charged to 

2 PDP sponsors and MA organizations during a nego3 tiated price period (as specified by the Secretary) for 

4 covered part D drugs for part D eligible individuals 

5 who are enrolled under a prescription drug plan or 

6 under an MA–PD plan. In negotiating such prices 

7 under this section, the Secretary shall take into ac8 count the following factors: 

9 ‘‘(A) The comparative clinical effectiveness 

10 and cost effectiveness, when available from an 

11 impartial source, of such drug. 

12 ‘‘(B) The budgetary impact of providing 

13 coverage of such drug. 

14 ‘‘(C) The number of similarly effective 

15 drugs or alternative treatment regimens for 

16 each approved use of such drug. 

17 ‘‘(D) The associated financial burden on 

18 patients that utilize such drug. 

19 ‘‘(E) The associated unmet patient need 

20 for such drug. 

21 ‘‘(F) The total revenues from global sales 

22 obtained by the manufacturer for such drug 

23 and the associated investment in research and 

24 development of such drug by the manufacturer. 


pamtmann on DSKBFK8HB2PROD with BILLS
4 

•HR 1046 IH

1 ‘‘(2) FINALIZATION OF NEGOTIATED PRICE.— 

2 The negotiated price of each covered part D drug for 

3 a negotiated price period shall be finalized not later 

4 than 30 days before a PDP sponsor is required to 

5 submit information described in subsection (b)(2) 

6 for the first plan year in such negotiated price pe7 riod. 

8 ‘‘(3) COMPETITIVE LICENSING AUTHORITY.— 

9 ‘‘(A) IN GENERAL.—Notwithstanding any 

10 exclusivity under clause (iii) or (iv) of section 

11 505(j)(5)(F) of the Federal Food, Drug, and 

12 Cosmetic Act, clause (iii) or (iv) of section 

13 505(c)(3)(E) of such Act, section 351(k)(7)(A) 

14 of the Public Health Service Act, or section 

15 527(a) of the Federal Food, Drug, and Cos16 metic Act, or by an extension of such exclusivity 

17 under section 505A of such Act or section 505E 

18 of such Act, and any other provision of law that 

19 provides for market exclusivity (or extension of 

20 market exclusivity) with respect to a drug, in 

21 the case that the Secretary is unable to success22 fully negotiate an appropriate price for a cov23 ered part D drug for a negotiated price period, 

24 the Secretary shall authorize the use of any 

25 patent, clinical trial data, or other exclusivity 


pamtmann on DSKBFK8HB2PROD with BILLS
5 

•HR 1046 IH

1 granted by the Federal government with respect 

2 to such drug as the Secretary determines ap3 propriate for purposes of manufacturing such 

4 drug for sale under a prescription drug plan or 

5 MA–PD plan. Any entity making use of a com6 petitive license to use patent, clinical trial data, 

7 or other exclusivity under this section shall pro8 vide to the manufacturer holding such exclu9 sivity reasonable compensation, as determined 

10 by the Secretary based on the following factors: 

11 ‘‘(i) The risk-adjusted value of any 

12 Federal government subsidies and invest13 ments in research and development used to 

14 support the development of such drug. 

15 ‘‘(ii) The risk-adjusted value of any 

16 investment made by such manufacturer in 

17 the research and development of such 

18 drug. 

19 ‘‘(iii) The impact of the price, includ20 ing license compensation payments, on 

21 meeting the medical need of all patients. 

22 ‘‘(iv) The relationship between the 

23 price of such drug, including compensation 

24 payments, and the health benefits of such 

25 drug. 


pamtmann on DSKBFK8HB2PROD with BILLS
6 

•HR 1046 IH

1 ‘‘(v) Other relevant factors determined 

2 appropriate by the Secretary to provide 

3 reasonable compensation. 

4 ‘‘(B) REASONABLE COMPENSATION.—The 

5 manufacturer described in subparagraph (A) 

6 may seek recovery against the United States in 

7 the United States Court of Federal Claims. 

8 ‘‘(C) INTERIM PERIOD.— 

9 ‘‘(i) IN GENERAL.—Until 1 year after 

10 a drug described in subparagraph (A) is 

11 approved under section 505(j) of the Fed12 eral Food, Drug, and Cosmetic Act or sec13 tion 351(k) of the Public Health Service 

14 Act and is provided under license issued by 

15 the Secretary under such subparagraph, 

16 PDP plans and MA–PD plans shall not 

17 pay more for such drug than the average 

18 of the prices available, during the most re19 cent 12-month period for which data is 

20 available prior to the beginning of such ne21 gotiated price period, from the manufac22 turer to any wholesaler, retailer, provider, 

23 health maintenance organization, nonprofit 

24 entity, or governmental entity in the ten 

25 OECD (Organization for Economic CoVerDate Sep 11 2014 00:51 Feb 20, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1046.IH H1046

pamtmann on DSKBFK8HB2PROD with BILLS
7 

•HR 1046 IH

1 operation and Development) countries that 

2 have the largest gross domestic product 

3 with a per capita income that is not less 

4 than half the per capita income of the 

5 United States. 

6 ‘‘(ii) FEDERAL PROGRAM LICENS7 ING.—If such drug is not made available 

8 at the price determined, the Secretary shall 

9 authorize such entities to use any patent, 

10 clinical trial data, or other exclusivity 

11 granted by the Federal government with 

12 respect to such drug as the Secretary de13 termines appropriate for purposes of man14 ufacturing such drug for sale under any 

15 Federal program, including those provided 

16 by Medicare, Medicaid, Veterans Affairs, 

17 the Department of Defense, and the Coast 

18 Guard. 

19 ‘‘(D) AUTHORIZATION FOR SECRETARY TO

20 PROCURE DRUGS DIRECTLY.— 

21 ‘‘(i) IN GENERAL.—The Secretary 

22 may procure a drug manufactured pursu23 ant to a competitive license under subpara24 graph (A) for purposes of this part or pur25 suant to a Federal program license under 


pamtmann on DSKBFK8HB2PROD with BILLS
8 

•HR 1046 IH

1 subparagraph (C)(ii) for purposes of a 

2 Federal program directly from the entity 

3 manufacturing the drug pursuant to such 

4 a license. 

5 ‘‘(ii) CLARIFICATION REGARDING AP6 PLICATION OF BUY AMERICAN ACT.—In 

7 the case where the Secretary procures a 

8 drug under this subparagraph, the provi9 sions of chapter 83 of title 41, United 

10 States Code (commonly referred to as the 

11 ‘Buy American Act’) shall apply. 

12 ‘‘(E) PRIORITY FOR U.S. MANUFACTURERS

13 IN AUTHORIZING COMPETITIVE LICENSES.—In 

14 authorizing a competitive license under this 

15 paragraph, the Secretary— 

16 ‘‘(i) shall give preference to entities 

17 that the Secretary determines have the 

18 highest safety and security standards; and 

19 ‘‘(ii) may give priority to entities that 

20 will manufacture such drug in the United 

21 States. 

22 ‘‘(4) FDA REVIEW OF LICENSED DRUG APPLI23 CATIONS.—The Secretary shall prioritize review of 

24 applications under section 505(j) of the Federal 


pamtmann on DSKBFK8HB2PROD with BILLS
9 

•HR 1046 IH

1 Food, Drug, and Cosmetic Act for drugs licensed 

2 under paragraph (3)(A). 

3 ‘‘(5) PROHIBITION OF ANTICOMPETITIVE BE4 HAVIOR.—No drug manufacturer may engage in 

5 anticompetitive behavior with another manufacturer 

6 that may interfere with the issuance and implemen7 tation of a competitive license or run contrary to 

8 public policy. 

9 ‘‘(6) REQUIRED REPORTING.—The Secretary 

10 may require pharmaceutical manufacturers to dis11 close to the Secretary such information that the Sec12 retary determines necessary for purposes of carrying 

13 out this subsection. 

14 ‘‘(7) CLARIFICATION.—Nothing in this sub15 section shall be construed as preventing the sponsor 

16 of a prescription drug plan or an organization offer17 ing an MA–PD plan from obtaining a discount or 

18 reduction of the price for a covered part D drug 

19 below the price negotiated by the Secretary.’’. 

Æ 


pamtmann on DSKBFK8HB2PROD with BILLS