I 

114TH CONGRESS 

2D SESSION H. R. 6501 

To establish within the Food and Drug Administration the Prescription Drug 

and Medical Device Price Review Board to regulate the prices of certain 

prescription drugs and medical devices, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 8, 2016 

Ms. DELAURO (for herself, Ms. SCHAKOWSKY, Mr. DOGGETT, Mr. 

MCDERMOTT, Mr. HONDA, Ms. MOORE, Ms. KAPTUR, and Mr. WELCH) 

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 establish within the Food and Drug Administration the 

Prescription Drug and Medical Device Price Review 

Board to regulate the prices of certain prescription drugs 

and medical devices, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Prescription Drug and 

5 Medical Device Price Review Board Act of 2016’’. 


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1 SEC. 2. ESTABLISHMENT. 

2 There is established in the Food and Drug Adminis3 tration a board to be known as the Prescription Drug and 

4 Medical Device Price Review Board (in this Act referred 

5 to as the ‘‘Board’’). 

6 SEC. 3. MEMBERSHIP; STAFF. 

7 (a) MEMBERS.—The Board shall be composed of 5 

8 members as follows: 

9 (1) The Commissioner of Food and Drugs (or 

10 the Commissioner’s designee). 

11 (2) The Administrator of the Centers for Medi12 care & Medicaid Services (or the Administrator’s 

13 designee). 

14 (3) The Director of the National Institutes of 

15 Health (or the Director’s designee). 

16 (4) The Secretary of Defense (or the Sec17 retary’s designee). 

18 (5) The Secretary of Veterans Affairs (or the 

19 Secretary’s designee). 

20 (b) CHAIRPERSON.—The Board shall designate 1 

21 member of the Board to serve as the chairperson. 

22 (c) DIRECTOR AND STAFF.— 

23 (1) DIRECTOR.—The Board shall have a direc24 tor who shall be appointed by the chairperson of the 

25 Board, subject to rules prescribed by the Board. 


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1 (2) STAFF.—The director may appoint and fix 

2 the pay of such additional personnel as the chair3 person considers appropriate, subject to rules pre4 scribed by the Board. 

5 (3) APPLICABILITY OF CERTAIN CIVIL SERVICE

6 LAWS.—The director and staff of the Board shall be 

7 appointed subject to the provisions of title 5, United 

8 States Code, governing appointments in the competi9 tive service, and shall be paid in accordance with the 

10 requirements of chapter 51 and subchapter III of 

11 chapter 53 of such title relating to classification and 

12 General Schedule pay rates; except that an indi13 vidual so appointed may not receive pay in excess of 

14 the maximum annual rate of basic pay payable for 

15 grade GS–15 of the General Schedule. 

16 (d) ASSISTANCE FOR THE BOARD.—Subject to sec17 tion 8(g), in carrying out this Act, the Board may seek 

18 assistance from outside experts in the fields of consumer 

19 advocacy, medicine, pharmacology, pharmacy, and pre20 scription drug reimbursement. 

21 (e) INITIAL MEETING.—The Board shall hold its ini22 tial meeting not later than 90 days after the date of the 

23 enactment of this Act. 


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1 SEC. 4. REPORTING REQUIREMENT. 

2 The Board shall require each manufacturer of a pre3 scription drug or medical device that is sold in the United 

4 States to submit to the Board on a periodic basis, at a 

5 level of specificity determined by the Board to be nec6 essary to make a determination under section 6, the fol7 lowing information with respect to the reporting period: 

8 (1) Each type of prescription drug and medical 

9 device that is sold by the manufacturer or an affil10 iate of the manufacturer— 

11 (A) in the United States; or 

12 (B) in a country that is a member of the 

13 Organization for Economic Co-operation and 

14 Development. 

15 (2) The price charged by the manufacturer and 

16 the affiliate for the prescription drug or medical de17 vice in the United States and in any such country, 

18 as applicable. 

19 (3) The costs of the manufacturer and the affil20 iate to produce and market the prescription drug or 

21 medical device for sale in the United States and in 

22 any such country, as applicable. 

23 SEC. 5. PROHIBITION AGAINST EXCESSIVE PRICE. 

24 (a) PROHIBITION.—Beginning on the effective date 

25 of the regulation required by subsection (b), the manufac26 turer of a prescription drug or medical device shall not 


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1 charge an excessive price, as determined pursuant to such 

2 regulation, for such drug or device. 

3 (b) FORMULA.—The Board shall by regulation pre4 scribe a formula for determining whether the average 

5 manufacturer price of such drug or device over an annual 

6 quarter is an excessive price. 

7 (c) DETERMINATION OF EXCESSIVE PRICE.—If the 

8 Board determines, on its own initiative or in response to 

9 a petition submitted under subsection (d), that the manu10 facturer of a prescription drug or medical device charges 

11 an excessive price for such drug or device in violation of 

12 subsection (a)— 

13 (1) the Board shall give the manufacturer— 

14 (A) notice of such violation; and 

15 (B) subject to subsection (d), a period to 

16 correct such violation; and 

17 (2) if the manufacturer fails to correct the vio18 lation by the end of such period, the manufacturer 

19 shall be subject to section 6 of this Act, section 

20 1927(c)(2)(E) of the Social Security Act, as added 

21 by subsection (c) of such section 6, and section 4192 

22 of the Internal Revenue Code of 1986, as added by 

23 subsection (d) of such section 6. 

24 (d) PETITIONS.—Any person may petition the Board 

25 to make a determination under subsection (c) regarding 


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1 the pricing of a prescription drug or medical device. Not 

2 later than 90 days after the date of receipt of such a peti3 tion, the Board shall— 

4 (1) make a determination under subsection (c) 

5 regarding such pricing; or 

6 (2) decline to make such a determination. 

7 (e) CONTINUING VIOLATION.—The Board shall not 

8 be required to give a manufacturer an opportunity to cor9 rect a violation, as described in subsection (c)(1)(B), be10 fore the manufacturer becomes subject to the provisions 

11 described in subsection (c)(2) for such violation, if— 

12 (1) the Board has already provided such an op13 portunity to correct to the manufacturer; and 

14 (2) the Board finds that the violation of sub15 section (a) is a continuation of an earlier violation 

16 with respect to which such an opportunity was pro17 vided. 

18 (f) CONSIDERATIONS.—The formula required by sub19 section (a) shall at a minimum take into consideration— 

20 (1) the average manufacturer price of the pre21 scription drug or medical device over the respective 

22 annual quarter or quarters; 

23 (2) the average manufacturer price of other 

24 prescription drugs or medical devices in the same 

25 therapeutic class over the same quarter or quarters; 


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1 (3) the average price at which the prescription 

2 drug or medical device and other prescription drugs 

3 and medical devices in the same therapeutic class 

4 have been sold by manufacturers in countries other 

5 than the United States; 

6 (4) the costs associated with producing and 

7 marketing the prescription drug or medical device, 

8 the value of the drug or device to patients where suf9 ficient data is available to determine such value, the 

10 total Federal investment in the development of the 

11 drug or device, the size of the patient population re12 ceiving the drug or device, and other factors deter13 minative as to the true cost of production; and 

14 (5) whether the price of the prescription drug 

15 or medical device increased during any annual quar16 ter by a percentage that is more than 2 percent 

17 greater than the CPI increase percentage (as defined 

18 in section 215(i) of the Social Security Act (42 

19 U.S.C. 415)) for the respective annual quarter. 

20 SEC. 6. ENFORCEMENT PROVISIONS. 

21 (a) REDUCED PATENT TERM.—If the Board finds 

22 that the manufacturer of a prescription drug or medical 

23 device, who is also an owner of a patent for such drug 

24 or device, charged an excessive price for such drug or de25 vice in violation of section 5(a), the Board may— 


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1 (1) reduce the term, by not more than 5 years, 

2 of any patent issued under title 35, United States 

3 Code, relating to such drug or device; or 

4 (2) if the term of each patent for such drug or 

5 device has expired, reduce the term, by not more 

6 than 5 years, of another patent owned by the patent 

7 owner relating to a prescription drug or medical de8 vice. 

9 (b) CIVIL PENALTIES.—If the Board determines 

10 under section 5(c) that a manufacturer of a prescription 

11 drug or medical device charged an excessive price for a 

12 prescription drug or medical device in violation of section 

13 5(a), the Board may impose a civil penalty on the manu14 facturer of not more than 10 percent of the manufactur15 er’s gross sales of the drug or device during the period 

16 beginning on the date on which an excessive price is first 

17 charged and ending on the date on which the manufac18 turer ceases to charge an excessive price. 

19 (c) ENFORCEMENT THROUGH INCREASED MEDICAID

20 REBATES.— 

21 (1) IN GENERAL.—Section 1927(c)(2) of the 

22 Social Security Act (42 U.S.C. 1396r–8(c)(2)) is 

23 amended— 


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1 (A) in subparagraph (A), by inserting ‘‘, 

2 subject to subparagraph (E),’’ after ‘‘increased 

3 by’’; and 

4 (B) by adding at the end the following new 

5 subparagraph: 

6 ‘‘(E) DISCOURAGING EXCESSIVE PRICES.— 

7 ‘‘(i) IN GENERAL.—In the case of a 

8 manufacturer of a single source drug or an 

9 innovator multiple source drug with a re10 bate agreement under this section, if the 

11 Prescription Drug and Medical Device 

12 Price Review Board established under sec13 tion 2 of the Prescription Drug and Med14 ical Device Price Review Board Act of 

15 2016 determines under section 5(a) of 

16 such Act that such manufacturer charged, 

17 with respect to a 30-day period, an exces18 sive price for such drug, and the Board de19 termines under clause (ii) to apply an in20 crease amount described in such clause 

21 with respect to such manufacturer and 

22 drug, the amount of the rebate determined 

23 under subparagraph (A) for such manufac24 turer and drug shall be, subject to sub25 paragraph (D), increased by such amount 


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1 for the 4 rebate periods following such 30- 

2 day period. 

3 ‘‘(ii) INCREASED AMOUNT DETER4 MINATION.—For purposes of clause (i), if 

5 the Board described in such clause makes 

6 such a determination under such section 

7 5(a), with respect to a manufacturer and 

8 drug described in such clause, the Board 

9 may determine an increase amount to 

10 apply with respect to such manufacturer 

11 and drug and rebate period described in 

12 such clause. Such increase amount may 

13 not exceed the rebate amount that would 

14 otherwise be applied to such manufacturer 

15 and drug under this section for such rebate 

16 period, without regard to this subpara17 graph.’’. 

18 (2) EFFECTIVE DATE.—This subsection and the 

19 amendments made by this subsection shall apply 

20 with respect to rebate agreements entered into after 

21 the date that is 60 days after the date of the enact22 ment of this Act. 

23 (d) TAX ON EXCESS PRESCRIPTION DRUG AND MED24 ICAL DEVICE PROFITS.— 


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1 (1) DETERMINATION OF AMOUNT.—If the 

2 Board determines under section 5(a) that a manu3 facturer, producer, or importer of a prescription 

4 drug or medical device charged an excessive price for 

5 such prescription drug or medical device during a 

6 taxable year, the Board may determine under this 

7 paragraph a reasonable price for such drug or device 

8 for such taxable year. 

9 (2) IMPOSITION OF TAX.— 

10 (A) IN GENERAL.—The Internal Revenue 

11 Code of 1986 is amended by inserting after sec12 tion 4191 the following new section: 

13 ‘‘SEC. 4192. EXCESSIVE PRESCRIPTION DRUG AND MEDICAL 

14 DEVICE PRICE. 

15 ‘‘(a) IN GENERAL.—There is hereby imposed on the 

16 sale of any prescription drug or medical device by the 

17 manufacturer, producer, or importer a tax equal to the 

18 difference between the price at which such drug or device 

19 is so sold and the reasonable price determined by the Pre20 scription Drug and Medical Device Price Review Board 

21 under section 6(d)(1) of the Prescription Drug and Med22 ical Device Price Review Board Act of 2016 for such drug 

23 or device for the taxable year for sales after the determina24 tion. 


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1 ‘‘(b) PRESCRIPTION DRUG OR MEDICAL DEVICE.— 

2 For purposes of this section, the term ‘prescription drug 

3 or medical device’ means any prescription drug (as defined 

4 in section 9008 of the Patient Protection and Affordable 

5 Care Act) or device (as defined in section 201(h) of the 

6 Federal Food, Drug, and Cosmetic Act) intended for hu7 mans.’’. 

8 (B) CLERICAL AMENDMENT.—The table of 

9 parts for chapter 32 of such Code is amended— 

10 (i) in the item relating to subchapter 

11 E, by striking ‘‘Medical’’ and inserting 

12 ‘‘Drugs and medical’’, and 

13 (ii) by inserting after the item relating 

14 to section 4191 the following new item: 

‘‘Sec. 4192. Excessive prescription drug and medical device price.’’. 

15 (3) EFFECTIVE DATE.—This subsection and the 

16 amendments made by this subsection shall apply 

17 with respect to sales after December 31, 2016. 

18 (e) SAFE AND AFFORDABLE DRUGS FROM AP19 PROVED COUNTRIES.—Chapter VIII of the Federal Food, 

20 Drug, and Cosmetic Act (21 U.S.C. 381 et seq.) is amend21 ed by adding at the end the following: 


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1 ‘‘SEC. 810. IMPORTATION BY INDIVIDUALS OF PRESCRIP2 TION DRUGS, AND DEVICES, FROM AN AP3 PROVED COUNTRY IF MANUFACTURERS ARE 

4 CHARGING AN EXCESSIVE PRICE FOR COM5 PARABLE PRODUCTS IN THE UNITED STATES. 

6 ‘‘(a) IN GENERAL.—Notwithstanding any other pro7 vision of this Act, not later than 180 days after the date 

8 of enactment of this section, the Prescription Drug and 

9 Medical Device Price Review Board (in this section re10 ferred to as the ‘Board’) shall promulgate regulations per11 mitting individuals to safely import from an approved 

12 country into the United States prescription drugs, and de13 vices, that are comparable to prescription drugs, and de14 vices, for which the Board makes a final determination 

15 that the manufacturer is charging or has charged an ex16 cessive price in violation of section 5(a) of the Prescription 

17 Drug and Medical Device Price Review Board Act of 

18 2016. 

19 ‘‘(b) COMPARABLE DEFINED.—For purposes of this 

20 section, the term ‘comparable’ means— 

21 ‘‘(1) with respect to a drug, having the same 

22 active ingredient or ingredients, route of administra23 tion, dosage form, and strength; and 

24 ‘‘(2) with respect to a device, being substan25 tially equivalent. 


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1 ‘‘(c) ASSURANCE OF SAFETY.—For purposes of this 

2 section, the term ‘approved country’ means a country that 

3 is determined by the Secretary to have in effect standards 

4 to ensure the safety of prescription drugs, and of devices, 

5 that are at least as protective as the standards applicable 

6 under Federal law in the United States.’’. 

7 SEC. 7. AUTHORITY. 

8 (a) OBTAINING OFFICIAL DATA.—The chairperson of 

9 the Board may secure directly from any Federal agency 

10 information necessary to enable the Board to carry out 

11 its duties. Upon request of the chairperson, the head of 

12 the agency shall furnish such information to the Board 

13 to the extent such information is not prohibited from dis14 closure by law. 

15 (b) MAILS.—The Board may use the United States 

16 mails in the same manner and under the same conditions 

17 as other Federal agencies. 

18 (c) ADMINISTRATIVE SUPPORT SERVICES.—Upon the 

19 request of the chairperson of the Board, the Administrator 

20 of General Services shall provide to the Board, on a reim21 bursable basis, the administrative support services nec22 essary for the Board to carry out its duties. 

23 (d) CONTRACT AUTHORITY.—The Board may con24 tract with and compensate government and private agen25 cies or persons for the purpose of conducting research, 


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1 surveys, and other services necessary to enable the Board 

2 to carry out its duties. 

3 (e) INVESTIGATIONS.—The Board may make such in4 vestigations as it considers necessary to determine whether 

5 there is or may be a violation of any regulation promul6 gated under this Act and may require or permit any per7 son to file with it a statement in writing, under oath or 

8 otherwise as the Board shall determine, as to all the facts 

9 and circumstances concerning the matter to be inves10 tigated. 

11 (f) SUBPOENA POWER.— 

12 (1) IN GENERAL.—The Board may issue sub13 poenas requiring the attendance and testimony of 

14 witnesses and the production of any evidence relat15 ing to any matter under investigation by the Board. 

16 The attendance of witnesses and the production of 

17 evidence may be required from any place within the 

18 United States at any designated place of hearing 

19 within the United States. 

20 (2) FAILURE TO OBEY A SUBPOENA.—If a per21 son refuses to obey a subpoena issued under para22 graph (1), the Board may apply to a United States 

23 district court for an order requiring that person to 

24 appear before the Board to give testimony, produce 

25 evidence, or both, relating to the matter under invesVerDate Sep 11 2014 22:22 Dec 14, 2016 Jkt 069200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H6501.IH H6501

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1 tigation. The application may be made within the ju2 dicial district where the hearing is conducted or 

3 where that person is found, resides, or transacts 

4 business. Any failure to obey the order of the court 

5 may be punished by the court as civil contempt. 

6 (3) SERVICE OF SUBPOENAS.—The subpoenas 

7 of the Board shall be served in the manner provided 

8 for subpoenas issued by a United States district 

9 court under the Federal Rules of Civil Procedure for 

10 the United States district courts. 

11 (4) SERVICE OF PROCESS.—All process of any 

12 court to which application is made under paragraph 

13 (2) may be served in the judicial district in which 

14 the person required to be served resides or may be 

15 found. 

16 (5) NOTICE.—Upon issuing any subpoena 

17 under this subsection, the Board shall give notice of 

18 such issuance to the appropriate committees of Con19 gress, including the Committee on Appropriations of 

20 the House of Representatives and the Committee on 

21 Appropriations of the Senate. 

22 (g) CONFIDENTIALITY.—Nothing in this Act shall be 

23 construed as authorizing the Board to disclose any infor24 mation that is a trade secret or confidential information 


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1 subject to section 552(b)(4) of title 5, United States Code, 

2 or section 1905 of title 18, United States Code. 

3 SEC. 8. REGULATIONS. 

4 (a) IN GENERAL.—Not later than 1 year after the 

5 date of the initial meeting held under section 4(e), the 

6 Board shall issue final regulations to carry out this Act. 

7 (b) NOTICE AND COMMENT REQUIREMENT.—The 

8 regulations developed under subsection (a) shall be issued 

9 in accordance with the notice and comment procedures es10 tablished under section 553 of title 5, United States Code. 

11 SEC. 9. REPORT TO FEDERAL AGENCIES . 

12 Not later than 1 year after the effective date of the 

13 regulations under section 9 and annually thereafter, the 

14 Board shall submit to each Federal agency that dispenses 

15 or makes payments for the dispensing of prescription 

16 drugs or medical devices a report containing— 

17 (1) a list of each prescription drug and medical 

18 device for which an excessive price was charged dur19 ing the preceding calendar year, as determined by 

20 the Board under section 5; 

21 (2) recommendations to the Federal agency 

22 against dispensing or making payments for the dis23 pensing of the prescription drug or medical device; 

24 and 


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1 (3) recommendations to the Federal agency to 

2 substitute, in place of any drug or device listed pur3 suant to paragraph (1), a similar prescription drug 

4 or medical device that is not sold at an excessive 

5 price. 

6 SEC. 10. REPORT TO CONGRESS. 

7 Not later than 1 year after the initial meeting of the 

8 Board under section 3(e), and annually thereafter, the 

9 Board shall submit to the Congress a report describing 

10 the activities of the Board for the preceding year. 

11 SEC. 11. DEFINITIONS. 

12 In this Act: 

13 (1) The term ‘‘affiliate’’ means, with respect to 

14 a manufacturer, any entity that controls, is con15 trolled by, or is under common control with such 

16 manufacturer. 

17 (2) The term ‘‘average manufacturer price’’ 

18 means the average price charged by the manufac19 turer of a prescription drug or medical device, as ap20 plicable, for sales of the drug or device by the manu21 facturer in the United States over the respective an22 nual quarter. 

23 (3) The term ‘‘medical device’’ means a device 

24 (as defined in section 201 of the Federal Food, 

25 Drug, and Cosmetic Act (21 U.S.C. 321)). 


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1 (4) The term ‘‘prescription drug’’ means a drug 

2 (as defined in section 201 of the Federal Food, 

3 Drug, and Cosmetic Act (21 U.S.C. 321)) that is 

4 subject to section 503(b)(1) of such Act (21 U.S.C. 

5 353(b)(1)). 

Æ 


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