I 

116TH CONGRESS 

1ST SESSION H. R. 3523 

To require the Secretary of Health and Human Services to establish reference 

prices for prescription drugs for purposes of Federal health programs, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 26, 2019 

Mr. WELCH (for himself and Mr. ROONEY of Florida) introduced the following 

bill; which was referred to the Committee on Energy and Commerce, and 

in addition to the Committees on Ways and Means, Armed Services, Veterans’ Affairs, Oversight and Reform, and Natural Resources, 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 require the Secretary of Health and Human Services 

to establish reference prices for prescription drugs for 

purposes of Federal health programs, 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 ‘‘End Price Gouging 

5 for Medications Act’’. 


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1 SEC. 2. REFERENCE PRICES FOR PRESCRIPTION DRUGS. 

2 (a) REFERENCE PRICES.—The Secretary of Health 

3 and Human Services (referred to in this section as the 

4 ‘‘Secretary’’), in accordance with subsection (b), shall es5 tablish annual reference prices for each prescription drug. 

6 Notwithstanding any other provision of law, with respect 

7 to enrollees or beneficiaries in any of the Federal health 

8 programs described in subsection (c), the retail list price 

9 for a drug shall not exceed the reference price for such 

10 drug. 

11 (b) CRITERIA.— 

12 (1) IN GENERAL.—Each year, the Secretary 

13 shall establish the reference price for each prescrip14 tion drug under subsection (a)— 

15 (A) by determining the median retail list 

16 price for the drug among the reference coun17 tries in which the drug is available, if drug pric18 ing information is available for at least three of 

19 such countries; or 

20 (B) in the case of a drug for which drug 

21 pricing information or dosage equivalents are 

22 not available for at least three of the reference 

23 countries, by determining an appropriate price 

24 based on the Secretary’s determination of— 

25 (i) the added therapeutic effect of the 

26 drug; 


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1 (ii) the value of the drug; 

2 (iii) patient access to the drug; 

3 (iv) the costs associated with re4 searching and developing the drug; and 

5 (v) other factors, as the Secretary de6 termines appropriate. 

7 (2) REFERENCE COUNTRIES.—For purposes of 

8 paragraph (1), the reference countries are Japan, 

9 Germany, the United Kingdom, France, Italy, Can10 ada, Australia, Spain, the Netherlands, Switzerland, 

11 and Sweden. 

12 (c) FEDERAL HEALTH PROGRAMS.—The reference 

13 prices established under subsection (a) shall apply with re14 spect to covered inpatient and outpatient drugs under— 

15 (1) the Medicare program under title XVIII of 

16 the Social Security Act (42 U.S.C. 1395 et seq.); 

17 (2) a State Medicaid plan under title XIX of 

18 the Social Security Act (42 U.S.C. 1396 et seq.); 

19 (3) the State Children’s Health Insurance Pro20 gram under title XXI of the Social Security Act (42 

21 U.S.C. 1397aa et seq.); 

22 (4) the TRICARE program under chapter 55 of 

23 title 10, United States Code; 


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1 (5) hospital care and medical services furnished 

2 by the Department of Veterans Affairs under chap3 ters 17 and 18 of title 38, United States Code; 

4 (6) the Federal Employees Health Benefits 

5 Program established under chapter 89 of title 5, 

6 United States Code; and 

7 (7) any health program, service, function, activ8 ity, or facility funded, in whole or part, under the 

9 Indian Health Care Improvement Act (25 U.S.C. 

10 1601 et seq.), including through direct or contract 

11 care provided under such Act or through a contract 

12 or compact under the Indian Self-Determination and 

13 Education Assistance Act (25 U.S.C. 5304 et seq.). 

14 (d) APPLICABILITY TO OTHER PURCHASERS OF

15 DRUGS.—Notwithstanding any other provision of law, a 

16 drug manufacturer shall offer prescription drugs at the 

17 reference price to all individuals, including individuals who 

18 are not insured and individuals who are covered under a 

19 group health plan or group or individual health insurance 

20 coverage. In the case of individuals covered by a group 

21 health plan or group or individual health insurance cov22 erage, such requirement is met if the amount covered 

23 under such plan or coverage plus the cost-sharing amount 

24 does not exceed the reference price. 

25 (e) ENFORCEMENT.— 


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1 (1) CIVIL PENALTY.—A drug manufacturer who 

2 does not comply with the requirements of subsection 

3 (a) shall be subject to a civil penalty, for each year 

4 in which the violation occurs and with respect to 

5 each drug for which the violation occurs, in an 

6 amount equal to 5 times the difference between— 

7 (A) the total amount received by the man8 ufacturer for sales of the drug under the Fed9 eral health programs under subsection (c) for 

10 the year; less 

11 (B) the total amount the manufacturer 

12 would have received for sales of the drug under 

13 such programs for the year if the manufacturer 

14 had complied with subsection (a). 

15 (2) AMOUNTS COLLECTED.—Each year, the 

16 Secretary of the Treasury shall transfer to the Di17 rector of the National Institutes of Health an 

18 amount equal to the amount collected in civil pen19 alties under subsection (e) for the previous year. The 

20 Director of the National Institutes of Health shall 

21 use amounts so transferred for purposes of con22 ducting drug research and development. 

23 (f) APPLICABILITY TO BRAND AND GENERIC

24 DRUGS.—The reference price established under subsection 

25 (a) shall apply to drugs approved under subsection (c) or 


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1 (j) of section 505 of the Federal Food, Drug, and Cos2 metic Act (21 U.S.C. 355) or under subsection (a) or (k) 

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

4 262). 

Æ 


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