I 

114TH CONGRESS 

1ST SESSION H. R. 3513 

To ensure greater affordability of prescription drugs. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 16, 2015 

Mr. CUMMINGS (for himself, Mr. ELLISON, Ms. NORTON, and Mr. SARBANES) 

introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and 

Means and the Judiciary, 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 ensure greater affordability of prescription drugs. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Prescription Drug Affordability Act of 2015’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—DRUGS UNDER THE MEDICARE PROGRAM 

Sec. 101. Negotiation of lower covered part D drug prices on behalf of Medicare beneficiaries. 


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Sec. 102. Acceleration of the closing of the Medicare Part D donut hole. 

TITLE II—PRESCRIPTION DRUG IMPORTATION 

Sec. 201. Prescription drug importation. 

Sec. 202. Sense of the House of Representatives regarding trade agreements. 

TITLE III—MEDICARE AND MEDICAID REBATES 

Sec. 301. Requiring drug manufacturers to provide drug rebates for drugs dispensed to low-income individuals. 

Sec. 302. Applying the Medicaid additional rebate requirement to generic 

drugs. 

TITLE IV—PAY-FOR-DELAY BLOCKING 

Sec. 401. Preserving access to affordable generics. 

TITLE V—FRAUD 

Sec. 501. Conditions on award of drug exclusivity. 

TITLE VI—TRANSPARENCY 

Sec. 601. Drug manufacturer reporting. 

1 TITLE I—DRUGS UNDER THE 

2 MEDICARE PROGRAM 

3 SEC. 101. NEGOTIATION OF LOWER COVERED PART D DRUG 

4 PRICES ON BEHALF OF MEDICARE BENE5 FICIARIES. 

6 (a) NEGOTIATION BY SECRETARY.—Section 1860D– 

7 11 of the Social Security Act (42 U.S.C. 1395w–111) is 

8 amended by striking subsection (i) (relating to noninter9 ference) and inserting the following: 

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

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

12 provision of law, the Secretary shall negotiate with 

13 pharmaceutical manufacturers the prices (including 

14 discounts, rebates, and other price concessions) that 

15 may be charged to PDP sponsors and MA organizaVerDate Sep 11 2014 04:15 Sep 17, 2015 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3513.IH H3513

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1 tions for covered part D drugs for part D eligible in2 dividuals who are enrolled under a prescription drug 

3 plan or under an MA–PD plan. 

4 ‘‘(2) NO CHANGE IN RULES FOR

5 FORMULARIES.— 

6 ‘‘(A) IN GENERAL.—Nothing in paragraph 

7 (1) shall be construed to authorize the Sec8 retary to establish or require a particular for9 mulary. 

10 ‘‘(B) CONSTRUCTION.—Subparagraph (A) 

11 shall not be construed as affecting the Sec12 retary’s authority to ensure appropriate and 

13 adequate access to covered part D drugs under 

14 prescription drug plans and under MA–PD 

15 plans, including compliance of such plans with 

16 formulary requirements under section 1860D– 

17 4(b)(3). 

18 ‘‘(3) CONSTRUCTION.—Nothing in this sub19 section shall be construed as preventing the sponsor 

20 of a prescription drug plan, or an organization offer21 ing an MA–PD plan, from obtaining a discount or 

22 reduction of the price for a covered part D drug 

23 below the price negotiated under paragraph (1).’’. 

24 (b) EFFECTIVE DATE.—The amendment made by 

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1 ment of this Act and shall first apply to negotiations and 

2 prices for plan years beginning on January 1, 2016. 

3 SEC. 102. ACCELERATION OF THE CLOSING OF THE MEDI4 CARE PART D DONUT HOLE. 

5 (a) REDUCTION IN COINSURANCE.—Section 1860D– 

6 2(b)(2) of the Social Security Act (42 U.S.C. 1395w– 

7 102(b)(2)) is amended— 

8 (1) in each of subclauses (II) and (III) of sub9 paragraph (C)(ii), by striking ‘‘2020’’ and inserting 

10 ‘‘2017’’; and 

11 (2) in subparagraph (D)(ii)— 

12 (A) in subclause (II), by inserting ‘‘and’’ 

13 at the end; and 

14 (B) by striking clauses (III) through (VI) 

15 and inserting the following: 

16 ‘‘(III) 2017 is 100 percent.’’. 

17 (b) INCREASE IN MANUFACTURER REBATE.—Section 

18 1860D–14A(g)(4)(A) of the Social Security Act (42 

19 U.S.C. 1395w–114a(g)(4)(A)) is amended by inserting 

20 ‘‘(or, for 2017 and subsequent years, 75 percent)’’ after 

21 ‘‘50 percent’’. 


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1 TITLE II—PRESCRIPTION DRUG 

2 IMPORTATION 

3 SEC. 201. PRESCRIPTION DRUG IMPORTATION. 

4 (a) IMPORTATION BY PHARMACISTS AND WHOLE5 SALERS.—Section 804(b) of the Federal Food, Drug, and 

6 Cosmetic Act (21 U.S.C. 384(b)) is amended by striking 

7 ‘‘The Secretary,’’ and inserting ‘‘The Secretary, not later 

8 than January 1, 2016,’’. 

9 (b) IMPORTATION BY INDIVIDUALS.— 

10 (1) IN GENERAL.—Section 804 of the Federal 

11 Food, Drug, and Cosmetic Act (21 U.S.C. 384) is 

12 amended— 

13 (A) in subsection (f), by striking ‘‘within 

14 Canada’’; 

15 (B) in subsection (j)— 

16 (i) in paragraph (1), in the matter 

17 preceding subparagraph (A), by inserting 

18 ‘‘from countries other than Canada’’ after 

19 ‘‘devices’’; and 

20 (ii) in paragraph (3)— 

21 (I) in the heading, by striking 

22 ‘‘FROM CANADA’’ and inserting ‘‘FROM

23 COUNTRIES OTHER THAN CANADA’’; 

24 and 


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1 (II) in subparagraph (C), by 

2 striking ‘‘from Canada,’’; and 

3 (C) by striking subsection (l) and inserting 

4 the following: 

5 ‘‘(l) IMPORTATION OF PRESCRIPTION DRUGS FROM

6 CANADA.—Individuals may import from Canada any pre7 scription drug that meets the requirements of subpara8 graphs (A) through (F) of subsection (j)(3).’’. 

9 (2) REGULATIONS.—Not later than January 1, 

10 2016, the Secretary of Health and Human Services 

11 shall promulgate regulations with respect to sub12 section (l) of section 804 of the Federal Food, Drug, 

13 and Cosmetic Act (21 U.S.C. 384) (as amended by 

14 paragraph (1)(B)). 

15 (3) EFFECTIVE DATE.—The amendments made 

16 by paragraph (1) shall take effect on the effective 

17 date of the final regulations promulgated in accord18 ance with paragraph (2). 

19 (c) FDASIA AMENDMENT.—Subsection (c) of sec20 tion 708 of the Food and Drug Administration Safety and 

21 Innovation Act (Public Law 112–144; 126 Stat. 1068) is 

22 amended by striking ‘‘The amendment made by’’ and all 

23 that follows through the period at the end and inserting 

24 ‘‘The amendment made by subsection (a) and the regula25 tions promulgated under subsection (b) shall apply beginVerDate Sep 11 2014 04:15 Sep 17, 2015 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3513.IH H3513

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1 ning on the effective date of the regulations promulgated 

2 under section 804(b) of the Federal Food, Drug, and Cos3 metic Act (21 U.S.C. 384(b)) and the amendments made 

4 by section 201(b) of the Prescription Drug Affordability 

5 Act of 2015.’’. 

6 SEC. 202. SENSE OF THE HOUSE OF REPRESENTATIVES RE7 GARDING TRADE AGREEMENTS. 

8 It is the sense of the House of Representatives that 

9 the United States Trade Representative should not nego10 tiate trade agreements that would raise the prices of pre11 scription drugs in the United States, extend the periods 

12 of market exclusivity otherwise available for prescription 

13 drugs, or remove flexibility in Federal or State law regard14 ing pricing of prescription drugs. 

15 TITLE III—MEDICARE AND 

16 MEDICAID REBATES 

17 SEC. 301. REQUIRING DRUG MANUFACTURERS TO PROVIDE 

18 DRUG REBATES FOR DRUGS DISPENSED TO 

19 LOW-INCOME INDIVIDUALS. 

20 (a) IN GENERAL.—Section 1860D–2 of the Social 

21 Security Act (42 U.S.C. 1395w–102) is amended— 

22 (1) in subsection (e)(1), in the matter preceding 

23 subparagraph (A), by inserting ‘‘and subsection (f)’’ 

24 after ‘‘this subsection’’; and 


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1 (2) by adding at the end the following new sub2 section: 

3 ‘‘(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR

4 REBATE ELIGIBLE INDIVIDUALS.— 

5 ‘‘(1) REQUIREMENT.— 

6 ‘‘(A) IN GENERAL.—For plan years begin7 ning on or after January 1, 2017, in this part, 

8 the term ‘covered part D drug’ does not include 

9 any drug or biological product that is manufac10 tured by a manufacturer that has not entered 

11 into and have in effect a rebate agreement de12 scribed in paragraph (2). 

13 ‘‘(B) 2016 PLAN YEAR REQUIREMENT.— 

14 Any drug or biological product manufactured by 

15 a manufacturer that declines to enter into a re16 bate agreement described in paragraph (2) for 

17 the period beginning on January 1, 2016, and 

18 ending on December 31, 2016, shall not be in19 cluded as a ‘covered part D drug’ for the subse20 quent plan year. 

21 ‘‘(2) REBATE AGREEMENT.—A rebate agree22 ment under this subsection shall require the manu23 facturer to provide to the Secretary a rebate for 

24 each rebate period (as defined in paragraph (6)(B)) 

25 ending after December 31, 2015, in the amount 


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1 specified in paragraph (3) for any covered part D 

2 drug of the manufacturer dispensed after December 

3 31, 2015, to any rebate eligible individual (as de4 fined in paragraph (6)(A)) for which payment was 

5 made by a PDP sponsor or MA organization under 

6 this part for such period, including payments passed 

7 through the low-income and reinsurance subsidies 

8 under sections 1860D–14 and 1860D–15(b), respec9 tively. Such rebate shall be paid by the manufac10 turer to the Secretary not later than 30 days after 

11 the date of receipt of the information described in 

12 section 1860D–12(b)(7), including as such section is 

13 applied under section 1857(f)(3), or 30 days after 

14 the receipt of information under subparagraph (D) 

15 of paragraph (3), as determined by the Secretary. 

16 Insofar as not inconsistent with this subsection, the 

17 Secretary shall establish terms and conditions of 

18 such agreement relating to compliance, penalties, 

19 and program evaluations, investigations, and audits 

20 that are similar to the terms and conditions for re21 bate agreements under paragraphs (3) and (4) of 

22 section 1927(b). 

23 ‘‘(3) REBATE FOR REBATE ELIGIBLE MEDICARE

24 DRUG PLAN ENROLLEES.— 


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1 ‘‘(A) IN GENERAL.—The amount of the re2 bate specified under this paragraph for a manu3 facturer for a rebate period, with respect to 

4 each dosage form and strength of any covered 

5 part D drug provided by such manufacturer 

6 and dispensed to a rebate eligible individual, 

7 shall be equal to the product of— 

8 ‘‘(i) the total number of units of such 

9 dosage form and strength of the drug so 

10 provided and dispensed for which payment 

11 was made by a PDP sponsor or an MA or12 ganization under this part for the rebate 

13 period, including payments passed through 

14 the low-income and reinsurance subsidies 

15 under sections 1860D–14 and 1860D– 

16 15(b), respectively; and 

17 ‘‘(ii) the amount (if any) by which— 

18 ‘‘(I) the Medicaid rebate amount 

19 (as defined in subparagraph (B)) for 

20 such form, strength, and period, ex21 ceeds 

22 ‘‘(II) the average Medicare drug 

23 program rebate eligible rebate amount 

24 (as defined in subparagraph (C)) for 

25 such form, strength, and period. 


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1 ‘‘(B) MEDICAID REBATE AMOUNT.—For 

2 purposes of this paragraph, the term ‘Medicaid 

3 rebate amount’ means, with respect to each 

4 dosage form and strength of a covered part D 

5 drug provided by the manufacturer for a rebate 

6 period— 

7 ‘‘(i) in the case of a single source 

8 drug or an innovator multiple source drug, 

9 the amount specified in paragraph 

10 (1)(A)(ii)(II) or (2)(C) of section 1927(c) 

11 plus the amount, if any, specified in sub12 paragraph (A)(ii) of paragraph (2) of such 

13 section, for such form, strength, and pe14 riod; or 

15 ‘‘(ii) in the case of any other covered 

16 outpatient drug, the amount specified in 

17 paragraph (3)(A)(i) of such section for 

18 such form, strength, and period. 

19 ‘‘(C) AVERAGE MEDICARE DRUG PROGRAM

20 REBATE ELIGIBLE REBATE AMOUNT.—For pur21 poses of this subsection, the term ‘average 

22 Medicare drug program rebate eligible rebate 

23 amount’ means, with respect to each dosage 

24 form and strength of a covered part D drug 

25 provided by a manufacturer for a rebate period, 


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1 the sum, for all PDP sponsors under part D 

2 and MA organizations administering an MA– 

3 PD plan under part C, of— 

4 ‘‘(i) the product, for each such spon5 sor or organization, of— 

6 ‘‘(I) the sum of all rebates, dis7 counts, or other price concessions (not 

8 taking into account any rebate pro9 vided under paragraph (2) or any dis10 counts under the program under sec11 tion 1860D–14A) for such dosage 

12 form and strength of the drug dis13 pensed, calculated on a per-unit basis, 

14 but only to the extent that any such 

15 rebate, discount, or other price con16 cession applies equally to drugs dis17 pensed to rebate eligible Medicare 

18 drug plan enrollees and drugs dis19 pensed to PDP and MA–PD enrollees 

20 who are not rebate eligible individuals; 

21 and 

22 ‘‘(II) the number of the units of 

23 such dosage and strength of the drug 

24 dispensed during the rebate period to 

25 rebate eligible individuals enrolled in 


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1 the prescription drug plans adminis2 tered by the PDP sponsor or the MA– 

3 PD plans administered by the MA or4 ganization; divided by 

5 ‘‘(ii) the total number of units of such 

6 dosage and strength of the drug dispensed 

7 during the rebate period to rebate eligible 

8 individuals enrolled in all prescription drug 

9 plans administered by PDP sponsors and 

10 all MA–PD plans administered by MA or11 ganizations. 

12 ‘‘(D) USE OF ESTIMATES.—The Secretary 

13 may establish a methodology for estimating the 

14 average Medicare drug program rebate eligible 

15 rebate amounts for each rebate period based on 

16 bid and utilization information under this part 

17 and may use these estimates as the basis for 

18 determining the rebates under this section. If 

19 the Secretary elects to estimate the average 

20 Medicare drug program rebate eligible rebate 

21 amounts, the Secretary shall establish a rec22 onciliation process for adjusting manufacturer 

23 rebate payments not later than 3 months after 

24 the date that manufacturers receive the inforVerDate Sep 11 2014 04:15 Sep 17, 2015 Jkt 049200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H3513.IH H3513

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1 mation collected under section 1860D– 

2 12(b)(7)(B). 

3 ‘‘(4) LENGTH OF AGREEMENT.—The provisions 

4 of paragraph (4) of section 1927(b) (other than 

5 clauses (iv) and (v) of subparagraph (B)) shall apply 

6 to rebate agreements under this subsection in the 

7 same manner as such paragraph applies to a rebate 

8 agreement under such section. 

9 ‘‘(5) OTHER TERMS AND CONDITIONS.—The 

10 Secretary shall establish other terms and conditions 

11 of the rebate agreement under this subsection, in12 cluding terms and conditions related to compliance, 

13 that are consistent with this subsection. 

14 ‘‘(6) DEFINITIONS.—In this subsection and sec15 tion 1860D–12(b)(7): 

16 ‘‘(A) REBATE ELIGIBLE INDIVIDUAL.—The 

17 term ‘rebate eligible individual’ means— 

18 ‘‘(i) a subsidy eligible individual (as 

19 defined in section 1860D–14(a)(3)(A)); 

20 ‘‘(ii) a Medicaid beneficiary treated as 

21 a subsidy eligible individual under clause 

22 (v) of section 1860D–14(a)(3)(B); and 

23 ‘‘(iii) any part D eligible individual 

24 not described in clause (i) or (ii) who is de25 termined for purposes of the State plan 


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1 under title XIX to be eligible for medical 

2 assistance under clause (i), (iii), or (iv) of 

3 section 1902(a)(10)(E). 

4 ‘‘(B) REBATE PERIOD.—The term ‘rebate 

5 period’ has the meaning given such term in sec6 tion 1927(k)(8).’’. 

7 (b) REPORTING REQUIREMENT FOR THE DETER8 MINATION AND PAYMENT OF REBATES BY MANUFACTUR9 ERS RELATED TO REBATE FOR REBATE ELIGIBLE MEDI10 CARE DRUG PLAN ENROLLEES.— 

11 (1) REQUIREMENTS FOR PDP SPONSORS.—Sec12 tion 1860D–12(b) of the Social Security Act (42 

13 U.S.C. 1395w–112(b)) is amended by adding at the 

14 end the following new paragraph: 

15 ‘‘(7) REPORTING REQUIREMENT FOR THE DE16 TERMINATION AND PAYMENT OF REBATES BY MANU17 FACTURERS RELATED TO REBATE FOR REBATE ELI18 GIBLE MEDICARE DRUG PLAN ENROLLEES.— 

19 ‘‘(A) IN GENERAL.—For purposes of the 

20 rebate under section 1860D–2(f) for contract 

21 years beginning on or after January 1, 2017, 

22 each contract entered into with a PDP sponsor 

23 under this part with respect to a prescription 

24 drug plan shall require that the sponsor comply 

25 with subparagraphs (B) and (C). 


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1 ‘‘(B) REPORT FORM AND CONTENTS.—Not 

2 later than a date specified by the Secretary, a 

3 PDP sponsor of a prescription drug plan under 

4 this part shall report to each manufacturer— 

5 ‘‘(i) information (by National Drug 

6 Code number) on the total number of units 

7 of each dosage, form, and strength of each 

8 drug of such manufacturer dispensed to re9 bate eligible Medicare drug plan enrollees 

10 under any prescription drug plan operated 

11 by the PDP sponsor during the rebate pe12 riod; 

13 ‘‘(ii) information on the price dis14 counts, price concessions, and rebates for 

15 such drugs for such form, strength, and 

16 period; 

17 ‘‘(iii) information on the extent to 

18 which such price discounts, price conces19 sions, and rebates apply equally to rebate 

20 eligible Medicare drug plan enrollees and 

21 PDP enrollees who are not rebate eligible 

22 Medicare drug plan enrollees; and 

23 ‘‘(iv) any additional information that 

24 the Secretary determines is necessary to 

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1 age Medicare drug program rebate eligible 

2 rebate amount (as defined in paragraph 

3 (3)(C) of such section), and to determine 

4 the amount of the rebate required under 

5 this section, for such form, strength, and 

6 period. 

7 Such report shall be in a form consistent with 

8 a standard reporting format established by the 

9 Secretary. 

10 ‘‘(C) SUBMISSION TO SECRETARY.—Each 

11 PDP sponsor shall promptly transmit a copy of 

12 the information reported under subparagraph 

13 (B) to the Secretary for the purpose of audit 

14 oversight and evaluation. 

15 ‘‘(D) CONFIDENTIALITY OF INFORMA16 TION.—The provisions of subparagraph (D) of 

17 section 1927(b)(3), relating to confidentiality of 

18 information, shall apply to information reported 

19 by PDP sponsors under this paragraph in the 

20 same manner that such provisions apply to in21 formation disclosed by manufacturers or whole22 salers under such section, except— 

23 ‘‘(i) that any reference to ‘this sec24 tion’ in clause (i) of such subparagraph 


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1 shall be treated as being a reference to this 

2 section; 

3 ‘‘(ii) the reference to the Director of 

4 the Congressional Budget Office in clause 

5 (iii) of such subparagraph shall be treated 

6 as including a reference to the Medicare 

7 Payment Advisory Commission; and 

8 ‘‘(iii) clause (iv) of such subparagraph 

9 shall not apply. 

10 ‘‘(E) OVERSIGHT.—Information reported 

11 under this paragraph may be used by the In12 spector General of the Department of Health 

13 and Human Services for the statutorily author14 ized purposes of audit, investigation, and eval15 uations. 

16 ‘‘(F) PENALTIES FOR FAILURE TO PRO17 VIDE TIMELY INFORMATION AND PROVISION OF

18 FALSE INFORMATION.—In the case of a PDP 

19 sponsor— 

20 ‘‘(i) that fails to provide information 

21 required under subparagraph (B) on a 

22 timely basis, the sponsor is subject to a 

23 civil money penalty in the amount of 

24 $10,000 for each day in which such infor25 mation has not been provided; or 


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1 ‘‘(ii) that knowingly (as defined in 

2 section 1128A(i)) provides false informa3 tion under such subparagraph, the sponsor 

4 is subject to a civil money penalty in an 

5 amount not to exceed $100,000 for each 

6 item of false information. 

7 Such civil money penalties are in addition to 

8 other penalties as may be prescribed by law. 

9 The provisions of section 1128A (other than 

10 subsections (a) and (b)) shall apply to a civil 

11 money penalty under this subparagraph in the 

12 same manner as such provisions apply to a pen13 alty or proceeding under section 1128A(a).’’. 

14 (2) APPLICATION TO MA ORGANIZATIONS.—Sec15 tion 1857(f)(3) of the Social Security Act (42 

16 U.S.C. 1395w–27(f)(3)) is amended by adding at 

17 the end the following: 

18 ‘‘(D) REPORTING REQUIREMENT RELATED

19 TO REBATE FOR REBATE ELIGIBLE MEDICARE

20 DRUG PLAN ENROLLEES.—Section 1860D– 

21 12(b)(7).’’. 

22 (c) DEPOSIT OF REBATES INTO MEDICARE PRE23 SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) of the 

24 Social Security Act (42 U.S.C. 1395w–116(c)) is amended 

25 by adding at the end the following new paragraph: 


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1 ‘‘(6) REBATE FOR REBATE ELIGIBLE MEDICARE

2 DRUG PLAN ENROLLEES.—Amounts paid under a re3 bate agreement under section 1860D–2(f) shall be 

4 deposited into the Account.’’. 

5 (d) EXCLUSION FROM DETERMINATION OF BEST

6 PRICE AND AVERAGE MANUFACTURER PRICE UNDER

7 MEDICAID.— 

8 (1) EXCLUSION FROM BEST PRICE DETERMINA9 TION.—Section 1927(c)(1)(C)(ii)(I) of the Social Se10 curity Act (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is 

11 amended by inserting ‘‘and amounts paid under a 

12 rebate agreement under section 1860D–2(f)’’ after 

13 ‘‘this section’’. 

14 (2) EXCLUSION FROM AVERAGE MANUFAC15 TURER PRICE DETERMINATION.—Section 

16 1927(k)(1)(B)(i) of the Social Security Act (42 

17 U.S.C. 1396r–8(k)(1)(B)(i)) is amended— 

18 (A) in subclause (IV), by striking ‘‘and’’ 

19 after the semicolon; 

20 (B) in subclause (V), by striking the period 

21 at the end and inserting ‘‘; and’’; and 

22 (C) by adding at the end the following: 

23 ‘‘(VI) amounts paid under a re24 bate agreement under section 1860D– 

25 2(f).’’. 


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1 SEC. 302. APPLYING THE MEDICAID ADDITIONAL REBATE 

2 REQUIREMENT TO GENERIC DRUGS. 

3 (a) IN GENERAL.—Section 1927(c)(3) of the Social 

4 Security Act (42 U.S.C. 1396r–8(c)(3)) is amended— 

5 (1) in subparagraph (A), by striking ‘‘The 

6 amount’’ and inserting ‘‘Except as provided in sub7 paragraph (C), the amount’’; and 

8 (2) by adding at the end the following new sub9 paragraph: 

10 ‘‘(C) ADDITIONAL REBATE.— 

11 ‘‘(i) IN GENERAL.—The amount of 

12 the rebate specified in this paragraph for 

13 a rebate period, with respect to each dos14 age form and strength of a covered out15 patient drug other than a single source 

16 drug or an innovator multiple source drug, 

17 shall be increased in the manner that the 

18 rebate for a dosage form and strength of 

19 a single source drug or an innovator mul20 tiple source drug is increased under sub21 paragraphs (A) and (D) of paragraph (2), 

22 except as provided in clause (ii). 

23 ‘‘(ii) SPECIAL RULES FOR APPLICA24 TION OF PROVISION.—In applying sub25 paragraphs (A) and (D) of paragraph (2) 

26 under clause (i)— 


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1 ‘‘(I) the reference in subpara2 graph (A)(i) of such paragraph to 

3 ‘1990’ shall be deemed a reference to 

4 ‘2014’; 

5 ‘‘(II) subject to clause (iii), the 

6 reference in subparagraph (A)(ii) of 

7 such paragraph to ‘calendar quarter 

8 beginning July 1, 1990’ shall be 

9 deemed a reference to the ‘calendar 

10 quarter in which the average manu11 facturer price for the drug is the low12 est during the 12-calendar quarter pe13 riod ending on September 30, 2014’; 

14 ‘‘(III) subject to clause (iii), the 

15 reference in subparagraph (A)(ii) of 

16 such paragraph to ‘September 1990’ 

17 shall be deemed a reference to ‘the 

18 last month of such calendar quarter’; 

19 ‘‘(IV) the references in subpara20 graph (D) of such paragraph to ‘para21 graph (1)(A)(ii)’, ‘this paragraph’, 

22 and ‘December 31, 2009’ shall be 

23 deemed references to ‘subparagraph 

24 (A)’, ‘this subparagraph’, and ‘De25 cember 31, 2014’, respectively; and 


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1 ‘‘(V) any reference in such para2 graph to a ‘single source drug or an 

3 innovator multiple source drug’ shall 

4 be deemed to be a reference to a drug 

5 to which clause (i) applies. 

6 ‘‘(iii) SPECIAL RULE FOR CERTAIN

7 NONINNOVATOR MULTIPLE SOURCE

8 DRUGS.—In applying paragraph 

9 (2)(A)(ii)(II) under clause (i) with respect 

10 to a covered outpatient drug that is first 

11 sold as a drug other than a single source 

12 drug or an innovator multiple source drug 

13 after the date that is 3 years before the 

14 date of the enactment of this subpara15 graph, such paragraph shall be applied— 

16 ‘‘(I) by substituting ‘the applica17 ble quarter’ for ‘the calendar quarter 

18 beginning July 1, 1990’; and 

19 ‘‘(II) by substituting ‘the last 

20 month in such applicable quarter’ for 

21 ‘September 1990’. 

22 ‘‘(iv) APPLICABLE QUARTER DE23 FINED.—In this subsection, the term ‘ap24 plicable quarter’ means, with respect to a 

25 drug described in clause (iii), the fifth full 


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1 calendar quarter in which the drug is sold 

2 as a drug other than a single source drug 

3 or an innovator multiple source drug.’’. 

4 (b) EFFECTIVE DATE.—The amendments made by 

5 subsection (a) shall apply to rebate periods beginning after 

6 December 31, 2014. 

7 TITLE IV—PAY-FOR-DELAY 

8 BLOCKING 

9 SEC. 401. PRESERVING ACCESS TO AFFORDABLE 

10 GENERICS. 

11 The Federal Trade Commission Act (15 U.S.C. 44 

12 et seq.) is amended by inserting after section 26 (15 

13 U.S.C. 57c–2) the following: 

14 ‘‘SEC. 27. PRESERVING ACCESS TO AFFORDABLE 

15 GENERICS. 

16 ‘‘(a) IN GENERAL.— 

17 ‘‘(1) ENFORCEMENT PROCEEDING.—The Com18 mission may initiate a proceeding to enforce the pro19 visions of this section against the parties to any 

20 agreement resolving or settling, on a final or interim 

21 basis, a patent infringement claim, in connection 

22 with the sale of a drug product. 

23 ‘‘(2) PRESUMPTION AND VIOLATION.—In such 

24 a proceeding, an agreement shall be presumed to 


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1 have anticompetitive effects and be a violation of 

2 this section if— 

3 ‘‘(A) an ANDA filer receives anything of 

4 value, including an exclusive license; and 

5 ‘‘(B) the ANDA filer agrees to limit or 

6 forego research, development, manufacturing, 

7 marketing, or sales of the ANDA product for 

8 any period of time. 

9 ‘‘(b) EXCLUSIONS.—Nothing in this section shall pro10 hibit a resolution or settlement of a patent infringement 

11 claim in which the consideration granted by the NDA 

12 holder to the ANDA filer as part of the resolution or set13 tlement includes only one or more of the following: 

14 ‘‘(1) The right to market the ANDA product in 

15 the United States prior to the expiration of— 

16 ‘‘(A) any patent that is the basis for the 

17 patent infringement claim; or 

18 ‘‘(B) any patent right or other statutory 

19 exclusivity that would prevent the marketing of 

20 such drug. 

21 ‘‘(2) A payment for reasonable litigation ex22 penses not to exceed $7,500,000. 

23 ‘‘(3) A covenant not to sue on any claim that 

24 the ANDA product infringes a United States patent. 

25 ‘‘(c) DEFINITIONS.—In this section: 


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1 ‘‘(1) AGREEMENT.—The term ‘agreement’ 

2 means anything that would constitute an agreement 

3 under section 1 of the Sherman Act (15 U.S.C. 1) 

4 or section 5 of this Act. 

5 ‘‘(2) AGREEMENT RESOLVING OR SETTLING A

6 PATENT INFRINGEMENT CLAIM.—The term ‘agree7 ment resolving or settling a patent infringement 

8 claim’ includes any agreement that is entered into 

9 within 30 days of the resolution or the settlement of 

10 the claim, or any other agreement that is contingent 

11 upon, provides a contingent condition for, or is oth12 erwise related to the resolution or settlement of the 

13 claim. 

14 ‘‘(3) ANDA.—The term ‘ANDA’ means an ab15 breviated new drug application filed under section 

16 505(j) of the Federal Food, Drug, and Cosmetic Act 

17 (21 U.S.C. 355(j)) or a new drug application filed 

18 under section 505(b)(2) of the Federal Food, Drug, 

19 and Cosmetic Act (21 U.S.C. 355(b)(2)). 

20 ‘‘(4) ANDA FILER.—The term ‘ANDA filer’ 

21 means a party that owns or controls an ANDA filed 

22 with the Commission of Food and Drugs or has the 

23 exclusive rights under such ANDA to distribute the 

24 ANDA product. 


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1 ‘‘(5) ANDA PRODUCT.—The term ‘ANDA 

2 product’ means the product to be manufactured 

3 under the ANDA that is the subject of the patent 

4 infringement claim. 

5 ‘‘(6) DRUG PRODUCT.—The term ‘drug prod6 uct’ has the meaning given such term in section 

7 314.3(b) of title 21, Code of Federal Regulations (or 

8 any successor regulation). 

9 ‘‘(7) NDA.—The term ‘NDA’ means a new 

10 drug application filed under section 505(b) of the 

11 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

12 355(b)). 

13 ‘‘(8) NDA HOLDER.—The term ‘NDA holder’ 

14 means— 

15 ‘‘(A) the holder of an approved NDA appli16 cation for a drug product; 

17 ‘‘(B) a person owning or controlling en18 forcement of the patent listed in the Approved 

19 Drug Products With Therapeutic Equivalence 

20 Evaluations (commonly known as the ‘FDA Or21 ange Book’) in connection with the NDA; or 

22 ‘‘(C) the predecessors, subsidiaries, divi23 sions, groups, and affiliates controlled by, con24 trolling, or under common control with any of 

25 the entities described in subparagraphs (A) and 


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1 (B) (such control to be presumed by direct or 

2 indirect share ownership of 50 percent or great3 er), as well as the licensees, licensors, succes4 sors, and assigns of each of the entities. 

5 ‘‘(9) PARTY.—The term ‘party’ means any per6 son, partnership, corporation, or other legal entity. 

7 ‘‘(10) PATENT INFRINGEMENT.—The term 

8 ‘patent infringement’ means infringement of any 

9 patent or of any filed patent application, extension, 

10 reissue, renewal, division, continuation, continuation 

11 in part, reexamination, patent term restoration, pat12 ents of addition, and extensions thereof. 

13 ‘‘(11) PATENT INFRINGEMENT CLAIM.—The 

14 term ‘patent infringement claim’ means any allega15 tion made to an ANDA filer, whether or not in16 cluded in a complaint filed with a court of law, that 

17 its ANDA or ANDA product may infringe any pat18 ent held by, or exclusively licensed to, the NDA 

19 holder of the drug product. 

20 ‘‘(12) STATUTORY EXCLUSIVITY.—The term 

21 ‘statutory exclusivity’ means those prohibitions on 

22 the approval of drug applications under clauses (ii) 

23 through (iv) of section 505(c)(3)(E) (5- and 3-year 

24 data exclusivity), section 527 (orphan drug exclu25 sivity), or section 505A (pediatric exclusivity) of the 


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1 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

2 355(c)(3)(E), 360cc, 355a).’’. 

3 TITLE V—FRAUD 

4 SEC. 501. CONDITIONS ON AWARD OF DRUG EXCLUSIVITY. 

5 Subchapter E of chapter V of the Federal Food, 

6 Drug, and Cosmetic Act (21 U.S.C. 360bbb et seq.) is 

7 amended by adding at the end the following: 

8 ‘‘SEC. 569D. CONDITIONS ON AWARD OF DRUG EXCLU9 SIVITY. 

10 ‘‘(a) TERMINATION OF EXCLUSIVITY.—Notwith11 standing any other provision of this Act, any period of 

12 exclusivity described in subsection (b) granted to a person 

13 or assigned to a person on or after the date of enactment 

14 of this section with respect to a drug shall be terminated 

15 if the person to which such exclusivity was granted or any 

16 person to which such exclusivity is assigned— 

17 ‘‘(1) commits a violation described in subsection 

18 (c)(1) with respect to such drug; or 

19 ‘‘(2) fails to report such a violation as required 

20 by subsection (e). 

21 ‘‘(b) EXCLUSIVITIES AFFECTED.—The periods of ex22 clusivity described in this subsection are those periods of 

23 exclusivity granted under any of the following sections: 

24 ‘‘(1) Clause (ii), (iii), or (iv) of section 

25 505(c)(3)(E). 


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1 ‘‘(2) Clause (iv) of section 505(j)(5)(B). 

2 ‘‘(3) Clause (ii), (iii), or (iv) of section 

3 505(j)(5)(F). 

4 ‘‘(4) Section 505A. 

5 ‘‘(5) Section 505E. 

6 ‘‘(6) Section 527. 

7 ‘‘(7) Section 351(k)(7) of the Public Health 

8 Service Act. 

9 ‘‘(8) Any other provision of this Act that pro10 vides for market exclusivity (or extension of market 

11 exclusivity) with respect to a drug. 

12 ‘‘(c) VIOLATIONS.— 

13 ‘‘(1) IN GENERAL.—A violation described in 

14 this subsection is a violation of a law described in 

15 paragraph (2) that results in— 

16 ‘‘(A) a criminal conviction of a person de17 scribed in subsection (a); 

18 ‘‘(B) a civil judgment against a person de19 scribed in subsection (a); or 

20 ‘‘(C) a settlement agreement in which a 

21 person described in subsection (a) admits to 

22 fault. 

23 ‘‘(2) LAWS DESCRIBED.—The laws described in 

24 this paragraph are the following: 


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1 ‘‘(A) The provisions of this Act that pro2 hibit— 

3 ‘‘(i) the adulteration or misbranding 

4 of a drug; 

5 ‘‘(ii) the making of false statements to 

6 the Secretary or committing fraud; or 

7 ‘‘(iii) the illegal marketing of a drug. 

8 ‘‘(B) The provisions of subchapter III of 

9 chapter 37 of title 31, United States Code 

10 (commonly known as the ‘False Claims Act’). 

11 ‘‘(C) Section 287 of title 18, United States 

12 Code. 

13 ‘‘(D) The Medicare and Medicaid Patient 

14 Protection and Program Act of 1987 (com15 monly known as the ‘Antikickback Statute’). 

16 ‘‘(E) Section 1927 of the Social Security 

17 Act. 

18 ‘‘(F) A State law against fraud comparable 

19 to a law described in subparagraphs (A) 

20 through (E). 

21 ‘‘(d) DATE OF EXCLUSIVITY TERMINATION.—The 

22 date on which the exclusivity shall be terminated as de23 scribed in subsection (a) is the date on which, as applica24 ble— 


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1 ‘‘(1) a final judgment is entered relating to a 

2 violation described in subparagraph (A) or (B) of 

3 subsection (c)(1); or 

4 ‘‘(2)(A) a settlement agreement described in 

5 subsection (c)(1)(C) is approved by a court order 

6 that is or becomes final and nonappealable; or 

7 ‘‘(B) if there is no court order approving a set8 tlement agreement described in subsection (c)(1)(C), 

9 a court order dismissing the applicable case, issued 

10 after the settlement agreement, is or becomes final 

11 and nonappealable. 

12 ‘‘(e) REPORTING OF INFORMATION.—A person de13 scribed in subsection (a) that commits a violation de14 scribed in subsection (c)(1) shall report such violation to 

15 the Secretary no later than 30 days after the date that— 

16 ‘‘(1) a final judgment is entered relating to a 

17 violation described in subparagraph (A) or (B) of 

18 subsection (c)(1); or 

19 ‘‘(2)(A) a settlement agreement described in 

20 subsection (c)(1)(C) is approved by a court order 

21 that is or becomes final and nonappealable; or 

22 ‘‘(B) if there is no court order approving a set23 tlement agreement described in subsection (c)(1)(C), 

24 a court order dismissing the applicable case, issued 


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1 after the settlement agreement, is or becomes final 

2 and nonappealable.’’. 

3 TITLE VI—TRANSPARENCY 

4 SEC. 601. DRUG MANUFACTURER REPORTING. 

5 (a) REPORTING ON DOMESTIC SALES.—The manu6 facturer of a drug approved under section 505 of the Fed7 eral Food, Drug, and Cosmetic Act (21 U.S.C. 355) or 

8 section 351 of the Public Health Service Act (42 U.S.C. 

9 262) shall submit to the Secretary of Health and Human 

10 Services and to Congress an annual report, which shall 

11 be made publicly available, outlining with respect to each 

12 such drug, during the previous calendar year— 

13 (1) the total expenditures of the manufacturer 

14 on— 

15 (A) drug research and development; 

16 (B) clinical trials; 

17 (C) materials and manufacturing; 

18 (D) acquisition costs, including costs for 

19 the purchase of patents and licensing; and 

20 (E) marketing and advertising for the pro21 motion of the drug to consumers and pre22 scribers; 

23 (2) the total profit to the manufacturer attrib24 utable to such drug; 


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1 (3) the total amount of financial assistance the 

2 manufacturer has provided through patient prescrip3 tion assistance programs with respect to such drug, 

4 if any; 

5 (4) any Federal benefits received by the manu6 facturer, including tax credits, grants from the Na7 tional Institutes of Health, and other Federal bene8 fits with respect to such drug; and 

9 (5) any additional information the manufac10 turer chooses to provide related to drug pricing deci11 sions, such as total expenditures on drug research 

12 and development or clinical trials on drugs that 

13 failed to receive approval by the Food and Drug Ad14 ministration. 

15 (b) REPORTING ON FOREIGN SALES.—In the case of 

16 a manufacturer of a drug that sells such drug to the Fed17 eral Government, including through the health programs 

18 of the Department of Veterans Affairs, the Department 

19 of Defense, and the Indian Health Service and through 

20 the Medicare program under title XVIII of the Social Se21 curity Act (42 U.S.C. 1395 et seq.), or that has entered 

22 into an agreement under section 340B of the Public 

23 Health Service Act (42 U.S.C. 256b), the manufacturer 

24 shall include in the report submitted under subsection (a) 

25 information about the price of the drug, and profits from 


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1 and volume of sales of the drug, in each foreign country 

2 in which the drug is sold, as applicable. 

Æ 


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