I 

116TH CONGRESS 

1ST SESSION H. R. 2038 

To allow State-based, market-oriented, prescription drug negotiations to lower 

pharmaceutical drug prices, to encourage competition, to increase consumer choice and access, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 2, 2019 

Mr. MEADOWS introduced the following bill; which was referred to the 

Committee on the Judiciary 

A BILL 

To allow State-based, market-oriented, prescription drug negotiations to lower pharmaceutical drug prices, to encourage competition, to increase consumer choice and access, 

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 ‘‘State-Based, Market5 Oriented, Prescription Drug Negotiations Act of 2019’’. 


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1 SEC. 2. ANTITRUST EXEMPTION FOR PRIVATE HEALTH IN2 SURER ISSUERS TO NEGOTIATE WHOLESALE 

3 ACQUISITION PRICES OF PRESCRIPTION 

4 DRUGS PURCHASED FROM DRUG MANUFAC5 TURERS. 

6 It shall not be a violation of the antitrust laws for 

7 one or more private health insurer issuers or their des8 ignated agents to jointly negotiate wholesale acquisition 

9 prices of a prescription drug with a manufacturer of a pre10 scription drug with regards to the reimbursement policies 

11 of the insurers of the manufacturer’s drugs so long as no 

12 one single wholesale acquisition price is jointly determined 

13 between the insurance issuers or their designated agents. 

14 SEC. 3. DEFINITIONS. 

15 For purposes of this Act: 

16 (1) ANTITRUST LAWS.—The term ‘‘antitrust 

17 laws’’ has the meaning given it in subsection (a) of 

18 the 1st section of the Clayton Act (15 U.S.C. 12(a)), 

19 except that such term includes section 5 of the Fed20 eral Trade Commission Act (15 U.S.C. 45) to the 

21 extent such section 5 applies to unfair methods of 

22 competition. 

23 (2) HEALTH INSURANCE ISSUER.—The term 

24 ‘‘health insurance issuer’’ means an insurance com25 pany, insurance service, or insurance organization 

26 (including a health maintenance organization, as deVerDate Sep 11 2014 02:40 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2038.IH H2038

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1 fined in paragraph (3)) which is licensed to engage 

2 in the business of insurance in a State and which is 

3 subject to State law which regulates insurance (with4 in the meaning of section 514(b)(2) of the Employee 

5 Retirement Income Security Act of 1974 (29 U.S.C. 

6 1144(b)(2))). Such term does not include a group 

7 health plan. 

8 (3) HEALTH MAINTENANCE ORGANIZATION.— 

9 The term ‘‘health maintenance organization’’ 

10 means— 

11 (A) a federally qualified health mainte12 nance organization (as defined in section 

13 300e(a) of title 42 of the Code of Federal Reg14 ulations), 

15 (B) an organization recognized under State 

16 law as a health maintenance organization, or 

17 (C) a similar organization regulated under 

18 State law for solvency in the same manner and 

19 to the same extent as such a health mainte20 nance organization. 

21 (4) MANUFACTURER.—The term ‘‘manufac22 turer’’ means anyone who is engaged in manufac23 turing, preparing, propagating, compounding, proc24 essing, packaging, repackaging, or labeling of a pre25 scription drug. 


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1 (5) PRESCRIPTION DRUG.—The term ‘‘prescrip2 tion drug’’ means any human drug required by Fed3 eral law or regulation to be dispensed only by a pre4 scription, including finished dosage forms and active 

5 ingredients subject to section 503(b) of the Federal 

6 Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)). 

7 SEC. 4. EFFECTIVE DATE. 

8 This Act shall take effect on the date of the enact9 ment of this Act but shall not apply with respect to con10 duct that occurs before such date. 

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