I 

116TH CONGRESS 

1ST SESSION H. R. 19 

To provide for certain reforms with respect to the Medicare program under 

title XVIII of the Social Security Act, the Medicaid program under 

title XIX of such Act, the Food and Drug Administration, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 9, 2019 

Mr. WALDEN (for himself, Mr. BRADY, Ms. FOXX of North Carolina, Mr. 

COLLINS of Georgia, Mr. BURGESS, Mr. NUNES, Mr. WALBERG, Mr. 

SENSENBRENNER, Mr. SCALISE, Ms. CHENEY, Mr. UPTON, Mr. SHIMKUS, Mr. LATTA, Mr. GUTHRIE, Mrs. RODGERS of Washington, Mr. 

OLSON, Mr. MCKINLEY, Mr. KINZINGER, Mr. GRIFFITH, Mr. BILIRAKIS, 

Mr. JOHNSON of Ohio, Mr. LONG, Mr. BUCSHON, Mr. FLORES, Mrs. 

BROOKS of Indiana, Mr. MULLIN, Mr. HUDSON, Mr. CARTER of Georgia, 

Mr. GIANFORTE, Mr. PALMER, Mr. COLE, Mr. WILLIAMS, Mr. ABRAHAM, 

Mr. KELLER, Mr. RUTHERFORD, Mr. FERGUSON, Mr. KUSTOFF of Tennessee, Mr. RIGGLEMAN, Mr. WESTERMAN, Mr. GRAVES of Louisiana, 

Mr. LAMALFA, Mr. BAIRD, Mr. HUIZENGA, Mr. MURPHY of North Carolina, Mr. CONAWAY, Mr. ALLEN, Mr. WEBER of Texas, Mr. NEWHOUSE, 

Mr. BABIN, Mr. HAGEDORN, Mr. ROUZER, Mr. RICE of South Carolina, 

Mr. WILSON of South Carolina, Mr. PENCE, Mr. HILL of Arkansas, Mr. 

MARSHALL, Mr. BALDERSON, Mr. ADERHOLT, Mr. RODNEY DAVIS of Illinois, Mr. MITCHELL, Mr. CRENSHAW, Mr. JOYCE of Pennsylvania, Mr. 

JOHNSON of South Dakota, Mr. GREEN of Tennessee, Mrs. MILLER, Ms. 

STEFANIK, Mr. BANKS, Mr. COMER, Mr. MCCAUL, Mr. DIAZ-BALART, 

Mr. AMODEI, Mr. NORMAN, Mr. DAVID P. ROE of Tennessee, Mr. BUDD, 

Mr. COOK, Mr. KEVIN HERN of Oklahoma, Mr. CHABOT, Mr. STEUBE, 

Mr. CURTIS, Mr. GROTHMAN, Mr. STEIL, Mr. JOYCE of Ohio, Mr. SMITH

of New Jersey, Mr. GONZALEZ of Ohio, Mr. STAUBER, Mr. BUCHANAN, 

Mr. SMITH of Nebraska, Mr. ARRINGTON, Mr. MARCHANT, Mrs. 

WALORSKI, Mr. KELLY of Pennsylvania, Mr. SMITH of Missouri, Mr. 

LAHOOD, Mr. HOLDING, Mr. ESTES, Mr. REED, Mr. SCHWEIKERT, Mr. 

WENSTRUP, Mrs. ROBY, Mr. RESCHENTHALER, Mr. HURD of Texas, Mr. 

WATKINS, Mr. LUETKEMEYER, Mr. TURNER, Mr. THOMPSON of Pennsylvania, Ms. HERRERA BEUTLER, Mr. GUEST, Mrs. HARTZLER, Mrs. WAGNER, Mr. WALTZ, Mr. WRIGHT, and Mr. GIBBS) 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, 


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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 provide for certain reforms with respect to the Medicare 

program under title XVIII of the Social Security Act, 

the Medicaid program under title XIX of such Act, the 

Food and Drug Administration, 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 ‘‘Lower Costs, More 

5 Cures Act of 2019’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—MEDICARE PARTS B AND D 

Subtitle A—Medicare Part B Provisions 

Sec. 101. Improvements to Medicare site-of-service transparency. 

Sec. 102. Requiring manufacturers of certain single-dose container or single-use 

package drugs payable under part B of the Medicare program 

to provide refunds with respect to discarded amounts of such 

drugs. 

Sec. 103. Providing for variation in payment for certain drugs covered under 

part B of the Medicare program. 

Sec. 104. Establishment of maximum add-on payment for drugs and 

biologicals. 

Sec. 105. Treatment of drug administration services furnished by certain excepted off-campus outpatient departments of a provider. 

Subtitle B—Drug Price Transparency 

Sec. 111. Reporting on explanation for drug price increases. 

Sec. 112. Public disclosure of drug discounts. 


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Sec. 113. Study of pharmaceutical supply chain intermediaries and merger activity. 

Sec. 114. Requiring certain manufacturers to report drug pricing information 

with respect to drugs under the Medicare program. 

Sec. 115. Making prescription drug marketing sample information reported by 

manufacturers available to certain individuals and entities. 

Sec. 116. Requiring prescription drug plan sponsors to include real-time benefit 

information as part of such sponsor’s electronic prescription 

program under the Medicare program. 

Sec. 117. Sense of Congress regarding the need to expand commercially available drug pricing comparison platforms. 

Sec. 118. Technical corrections. 

Subtitle C—Medicare Part D Benefit Redesign 

Sec. 121. Medicare part D benefit redesign. 

Subtitle D—Other Medicare Part D Provisions 

Sec. 131. Transitional coverage and retroactive Medicare part D coverage for 

certain low-income beneficiaries. 

Sec. 132. Allowing the offering of additional prescription drug plans under 

Medicare part D. 

Sec. 133. Allowing certain enrollees of prescription drugs plans and MA–PD 

plans under Medicare program to spread out cost-sharing 

under certain circumstances. 

Sec. 134. Establishing a monthly cap on beneficiary incurred costs for insulin 

products and supplies under a prescription drug plan or MA– 

PD plan. 

Sec. 135. Growth rate of Medicare part D out-of-pocket cost threshold. 

Subtitle E—MedPAC 

Sec. 141. Providing the Medicare Payment Advisory Commission and Medicaid 

and CHIP Payment and Access Commission with access to certain drug payment information, including certain rebate information. 

TITLE II—MEDICAID 

Sec. 201. Sunset of limit on maximum rebate amount for single source drugs 

and innovator multiple source drugs. 

Sec. 202. Medicaid pharmacy and therapeutics committee improvements. 

Sec. 203. GAO report on conflicts of interest in State Medicaid program drug 

use review boards and pharmacy and therapeutics (P&T) committees. 

Sec. 204. Ensuring the accuracy of manufacturer price and drug product information under the Medicaid drug rebate program. 

Sec. 205. Improving transparency and preventing the use of abusive spread 

pricing and related practices in Medicaid. 

Sec. 206. T–MSIS drug data analytics reports. 

Sec. 207. Risk-sharing value-based payment agreements for covered outpatient 

drugs under Medicaid. 

Sec. 208. Applying Medicaid drug rebate requirement to drugs provided as part 

of outpatient hospital services. 

TITLE III—FOOD AND DRUG ADMINISTRATION 


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Subtitle A—CREATES Act 

Sec. 301. Actions for delays of generic drugs and biosimilar biological products. 

Sec. 302. REMS approval process for subsequent filers. 

Sec. 303. Rule of construction. 

Subtitle B—Pay-for-Delay 

Sec. 311. Unlawful agreements. 

Sec. 312. Notice and certification of agreements. 

Sec. 313. Forfeiture of 180-day exclusivity period. 

Sec. 314. Commission litigation authority. 

Sec. 315. Statute of limitations. 

Subtitle C—BLOCKING Act 

Sec. 321. Change conditions of first generic exclusivity to spur access and competition. 

Subtitle D—Purple Book 

Sec. 331. Public listing. 

Sec. 332. Review and report on types of information to be listed. 

Subtitle E—Orange Book 

Sec. 341. Orange Book. 

Sec. 342. GAO report to Congress. 

Subtitle F—Advancing Education on Biosimilars 

Sec. 351. Education on biological products. 

Subtitle G—Streamlining Transition of Biological Products 

Sec. 361. Streamlining the transition of biological products. 

Subtitle H—Over-the-Counter Monograph Safety, Innovation, and Reform 

Sec. 370. Short title; references in subtitle. 

PART 1—OTC DRUG REVIEW

Sec. 371. Regulation of certain nonprescription drugs that are marketed without an approved drug application. 

Sec. 372. Misbranding. 

Sec. 373. Drugs excluded from the over-the-counter drug review. 

Sec. 374. Treatment of Sunscreen Innovation Act. 

Sec. 375. Annual update to Congress on appropriate pediatric indication for 

certain OTC cough and cold drugs. 

Sec. 376. Technical corrections. 

PART 2—USER FEES

Sec. 381. Short title; finding. 

Sec. 382. Fees relating to over-the-counter drugs. 

Subtitle I—Other Provisions 

Sec. 391. Protecting access to biological products. 


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Sec. 392. Orphan drug clarification. 

Sec. 393. Conditions of use for biosimilar biological products. 

Sec. 394. Clarifying the meaning of new chemical entity. 

TITLE IV—REVENUE PROVISIONS 

Sec. 401. Permanent extension of reduction in medical expense deduction floor. 

Sec. 402. Safe harbor for high deductible health plans without deductible for 

insulin. 

Sec. 403. Inclusion of certain over-the-counter medical products as qualified 

medical expenses. 

TITLE V—MISCELLANEOUS 

Sec. 501. Payment for biosimilar biological products during initial period. 

Sec. 502. GAO study and report on average sales price. 

Sec. 503. Requiring prescription drug plans and MA–PD plans to report potential fraud, waste, and abuse to the Secretary of HHS. 

Sec. 504. Establishment of pharmacy quality measures under Medicare part D. 

Sec. 505. Improving coordination between the Food and Drug Administration 

and the Centers for Medicare & Medicaid Services. 

Sec. 506. Patient consultation in Medicare national and local coverage determinations in order to mitigate barriers to inclusion of such perspectives. 

Sec. 507. MedPAC report on shifting coverage of certain Medicare part B 

drugs to Medicare part D. 

Sec. 508. Requirement that direct-to-consumer advertisements for prescription 

drugs and biological products include truthful and non-misleading pricing information. 

Sec. 509. Chief Pharmaceutical Negotiator at the Office of the United States 

Trade Representative. 

Sec. 510. Waiving Medicare coinsurance for colorectal cancer screening tests. 

1 TITLE I—MEDICARE PARTS B 

2 AND D 

3 Subtitle A—Medicare Part B 

4 Provisions 

5 SEC. 101. IMPROVEMENTS TO MEDICARE SITE-OF-SERVICE 

6 TRANSPARENCY. 

7 Section 1834(t) of the Social Security Act (42 U.S.C. 

8 1395m(t)) is amended— 

9 (1) in paragraph (1)— 

10 (A) in the heading, by striking ‘‘IN GEN11 ERAL’’ and inserting ‘‘SITE PAYMENT’’; 


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1 (B) in the matter preceding subparagraph 

2 (A)— 

3 (i) by striking ‘‘or to’’ and inserting ‘‘, 

4 to’’; 

5 (ii) by inserting ‘‘, or to a physician 

6 for services furnished in a physician’s of7 fice’’ after ‘‘surgical center’’; and 

8 (iii) by inserting ‘‘(or 2021 with re9 spect to a physician for services furnished 

10 in a physician’s office)’’ after ‘‘2018’’; and 

11 (C) in subparagraph (A)— 

12 (i) by striking ‘‘and the’’ and insert13 ing ‘‘, the’’; and 

14 (ii) by inserting ‘‘, and the physician 

15 fee schedule under section 1848 (with re16 spect to the practice expense component of 

17 such payment amount)’’ after ‘‘such sec18 tion’’; 

19 (2) by redesignating paragraphs (2) through 

20 (4) as paragraphs (3) through (5), respectively; and 

21 (3) by inserting after paragraph (1) the fol22 lowing new paragraph: 

23 ‘‘(2) PHYSICIAN PAYMENT.—Beginning in 

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1 cluded on the Internet website described in para2 graph (1) to include— 

3 ‘‘(A) the amount paid to a physician under 

4 section 1848 for an item or service for the set5 tings described in paragraph (1); and 

6 ‘‘(B) the estimated amount of beneficiary 

7 liability applicable to the item or service.’’. 

8 SEC. 102. REQUIRING MANUFACTURERS OF CERTAIN SIN9 GLE-DOSE CONTAINER OR SINGLE-USE PACK10 AGE DRUGS PAYABLE UNDER PART B OF THE 

11 MEDICARE PROGRAM TO PROVIDE REFUNDS 

12 WITH RESPECT TO DISCARDED AMOUNTS OF 

13 SUCH DRUGS. 

14 Section 1847A of the Social Security Act (42 U.S.C. 

15 1395–3a) is amended by adding at the end the following 

16 new subsection: 

17 ‘‘(h) REFUND FOR CERTAIN DISCARDED SINGLE18 DOSE CONTAINER OR SINGLE-USE PACKAGE DRUGS.— 

19 ‘‘(1) SECRETARIAL PROVISION OF INFORMA20 TION.— 

21 ‘‘(A) IN GENERAL.—For each calendar 

22 quarter beginning on or after July 1, 2021, the 

23 Secretary shall, with respect to a refundable 

24 single-dose container or single-use package drug 

25 (as defined in paragraph (8)), report to each 


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1 manufacturer (as defined in subsection 

2 (c)(6)(A)) of such refundable single-dose con3 tainer or single-use package drug the following 

4 for the calendar quarter: 

5 ‘‘(i) Subject to subparagraph (C), in6 formation on the total number of units of 

7 the billing and payment code of such drug, 

8 if any, that were discarded during such 

9 quarter, as determined using a mechanism 

10 such as the JW modifier used as of the 

11 date of enactment of this subsection (or 

12 any such successor modifier that includes 

13 such data as determined appropriate by 

14 the Secretary). 

15 ‘‘(ii) The refund amount that the 

16 manufacturer is liable for pursuant to 

17 paragraph (3). 

18 ‘‘(B) DETERMINATION OF DISCARDED

19 AMOUNTS.—For purposes of subparagraph 

20 (A)(i), with respect to a refundable single-dose 

21 container or single-use package drug furnished 

22 during a quarter, the amount of such drug that 

23 was discarded shall be determined based on the 

24 amount of such drug that was unused and dis25 carded for each drug on the date of service. 


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1 ‘‘(C) EXCLUSION OF UNITS OF PACKAGED

2 DRUGS.—The total number of units of the bill3 ing and payment code of a refundable single4 dose container or single-use package drug of a 

5 manufacturer furnished during a calendar quar6 ter for purposes of subparagraph (A)(i), and 

7 the determination of the estimated total allowed 

8 charges for the drug in the quarter for purposes 

9 of paragraph (3)(A)(ii), shall not include such 

10 units that are packaged into the payment 

11 amount for an item or service and are not sepa12 rately payable. 

13 ‘‘(2) MANUFACTURER REQUIREMENT.—For 

14 each calendar quarter beginning on or after July 1, 

15 2021, the manufacturer of a refundable single-dose 

16 container or single-use package drug shall, for such 

17 drug, provide to the Secretary a refund that is equal 

18 to the amount specified in paragraph (3) for such 

19 drug for such quarter. 

20 ‘‘(3) REFUND AMOUNT.— 

21 ‘‘(A) IN GENERAL.—The amount of the re22 fund specified in this paragraph is, with respect 

23 to a refundable single-dose container or single24 use package drug of a manufacturer assigned to 

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1 ter beginning on or after July 1, 2021, an 

2 amount equal to the estimated amount (if any) 

3 by which— 

4 ‘‘(i) the product of— 

5 ‘‘(I) the total number of units of 

6 the billing and payment code for such 

7 drug that were discarded during such 

8 quarter (as determined under para9 graph (1)); and 

10 ‘‘(II)(aa) in the case of a refund11 able single-dose container or single12 use package drug that is a single 

13 source drug or biological, the amount 

14 determined for such drug under sub15 section (b)(4); or 

16 ‘‘(bb) in the case of a refundable 

17 single-dose container or single-use 

18 package drug that is a biosimilar bio19 logical product, the average sales price 

20 determined under subsection 

21 (b)(8)(A); exceeds 

22 ‘‘(ii) an amount equal to the applica23 ble percentage (as defined in subparagraph 

24 (B)) of the estimated total allowed charges 

25 for such drug during the quarter. 


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1 ‘‘(B) APPLICABLE PERCENTAGE DE2 FINED.— 

3 ‘‘(i) IN GENERAL.—For purposes of 

4 subparagraph (A)(ii), the term ‘applicable 

5 percentage’ means— 

6 ‘‘(I) subject to subclause (II), 10 

7 percent; and 

8 ‘‘(II) if applicable, in the case of 

9 a refundable single-dose container or 

10 single-use package drug described in 

11 clause (ii), a percentage specified by 

12 the Secretary pursuant to such clause. 

13 ‘‘(ii) TREATMENT OF DRUGS THAT

14 HAVE UNIQUE CIRCUMSTANCES.—In the 

15 case of a refundable single-dose container 

16 or single-use package drug that has unique 

17 circumstances involving similar loss of 

18 product as that described in paragraph 

19 (8)(B), the Secretary, through notice and 

20 comment rulemaking, may increase the ap21 plicable percentage otherwise applicable 

22 under clause (i)(I) as determined appro23 priate by the Secretary. 

24 ‘‘(4) FREQUENCY.—Amounts required to be re25 funded pursuant to paragraph (2) shall be paid in 


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1 regular intervals (as determined appropriate by the 

2 Secretary). 

3 ‘‘(5) REFUND DEPOSITS.—Amounts paid as re4 funds pursuant to paragraph (2) shall be deposited 

5 into the Federal Supplementary Medical Insurance 

6 Trust Fund established under section 1841. 

7 ‘‘(6) ENFORCEMENT.— 

8 ‘‘(A) AUDITS.— 

9 ‘‘(i) MANUFACTURER AUDITS.—Each 

10 manufacturer of a refundable single-dose 

11 container or single-use package drug that 

12 is required to provide a refund under this 

13 subsection shall be subject to periodic 

14 audit with respect to such drug and such 

15 refunds by the Secretary. 

16 ‘‘(ii) PROVIDER AUDITS.—The Sec17 retary shall conduct periodic audits of 

18 claims submitted under this part with re19 spect to refundable single-dose container or 

20 single-use package drugs in accordance 

21 with the authority under section 1833(e) to 

22 ensure compliance with the requirements 

23 applicable under this subsection. 

24 ‘‘(B) CIVIL MONEY PENALTY.— 


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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall impose a civil money penalty on a 

3 manufacturer of a refundable single-dose 

4 container or single-use package drug who 

5 has failed to comply with the requirement 

6 under paragraph (2) for such drug for a 

7 calendar quarter in an amount equal to the 

8 sum of— 

9 ‘‘(I) the amount that the manu10 facturer would have paid under such 

11 paragraph with respect to such drug 

12 for such quarter; and 

13 ‘‘(II) 25 percent of such amount. 

14 ‘‘(ii) APPLICATION.—The provisions 

15 of section 1128A (other than subsections 

16 (a) and (b)) shall apply to a civil money 

17 penalty under this subparagraph in the 

18 same manner as such provisions apply to a 

19 penalty or proceeding under section 

20 1128A(a). 

21 ‘‘(7) IMPLEMENTATION.—The Secretary shall 

22 implement this subsection through notice and com23 ment rulemaking. 

24 ‘‘(8) DEFINITION OF REFUNDABLE SINGLE25 DOSE CONTAINER OR SINGLE-USE PACKAGE DRUG.— 


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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), in this subsection, the term 

3 ‘refundable single-dose container or single-use 

4 package drug’ means a single source drug or bi5 ological (as defined in section 1847A(c)(6)(D)) 

6 or a biosimilar biological product (as defined in 

7 section 1847A(c)(6)(H)) for which payment is 

8 established under this part and that is fur9 nished from a single-dose container or single10 use package. 

11 ‘‘(B) EXCLUSIONS.—The term ‘refundable 

12 single-dose container or single-use package 

13 drug’ does not include— 

14 ‘‘(i) a drug or biological that is either 

15 a radiopharmaceutical or an imaging 

16 agent; 

17 ‘‘(ii) a drug or biological for which 

18 dosage and administration instructions ap19 proved by the Commissioner of Food and 

20 Drugs require filtration during the drug 

21 preparation process, prior to dilution and 

22 administration, and require that any un23 used portion of such drug after the filtra24 tion process be discarded after the comple25 tion of such filtration process; or 


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1 ‘‘(iii) a drug or biological approved by 

2 the Food and Drug Administration on or 

3 after the date of enactment of this sub4 section and with respect to which payment 

5 has been made under this part for less 

6 than 18 months.’’. 

7 SEC. 103. PROVIDING FOR VARIATION IN PAYMENT FOR 

8 CERTAIN DRUGS COVERED UNDER PART B 

9 OF THE MEDICARE PROGRAM. 

10 (a) IN GENERAL.—Section 1847A(b) of the Social 

11 Security Act (42 U.S.C. 1395w–3a(b)) is amended— 

12 (1) in paragraph (1)— 

13 (A) in subparagraph (A), by inserting after 

14 ‘‘or 106 percent’’ the following: ‘‘(or, for a mul15 tiple source drug (other than autologous cellular 

16 immunotherapy) furnished on or after January 

17 1, 2021, the applicable percent specified in 

18 paragraph (9)(A) for the drug and quarter in19 volved)’’; and 

20 (B) in subparagraph (B) of paragraph (1), 

21 by inserting after ‘‘106 percent’’ the following: 

22 ‘‘(or, for a single source drug or biological 

23 (other than autologous cellular immunotherapy) 

24 furnished on or after January 1, 2021, the ap25 plicable percent specified in paragraph (9)(A) 


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1 for the drug or biological and quarter in2 volved)’’; and 

3 (2) by adding at the end the following new 

4 paragraph: 

5 ‘‘(9) APPLICATION OF VARIABLE PERCENTAGES

6 BASED ON PERCENTILE RANKING OF PER BENE7 FICIARY ALLOWED CHARGES.— 

8 ‘‘(A) APPLICABLE PERCENT TO BE AP9 PLIED.— 

10 ‘‘(i) IN GENERAL.—Subject to clauses 

11 (ii), with respect to a drug or biological 

12 furnished in a calendar quarter beginning 

13 on or after January 1, 2021, if the Sec14 retary determines that the percentile rank 

15 of a drug or biological under subparagraph 

16 (B)(i)(III), with respect to per beneficiary 

17 allowed charges for all such drugs or 

18 biologicals, is— 

19 ‘‘(I) at least equal to the 85th 

20 percentile, the applicable percent for 

21 the drug for such quarter under this 

22 subparagraph is 104 percent; 

23 ‘‘(II) at least equal to the 70th 

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1 centile, such applicable percent is 106 

2 percent; 

3 ‘‘(III) at least equal to the 50th 

4 percentile, but less than the 70th per5 centile, such applicable percent is 108 

6 percent; or 

7 ‘‘(IV) less than the 50th per8 centile, such applicable percent is 110 

9 percent. 

10 ‘‘(ii) CASES WHERE DATA NOT SUFFI11 CIENTLY AVAILABLE TO COMPUTE PER

12 BENEFICIARY ALLOWED CHARGES.—Sub13 ject to clause (iii), in the case of a drug or 

14 biological furnished for which the amount 

15 of payment is determined under subpara16 graph (A) or (B) of paragraph (1) and not 

17 under subsection (c)(4), for calendar quar18 ters during a period in which data are not 

19 sufficiently available to compute a per ben20 eficiary allowed charges for the drug or bi21 ological, the applicable percent is 106 per22 cent. 

23 ‘‘(B) DETERMINATION OF PERCENTILE

24 RANK OF PER BENEFICIARY ALLOWED CHARGES

25 OF DRUGS.— 


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1 ‘‘(i) IN GENERAL.—With respect to a 

2 calendar quarter beginning on or after 

3 January 1, 2021, for drugs and biologicals 

4 for which the amount of payment is deter5 mined under subparagraph (A) or (B) of 

6 paragraph (1), except for drugs or 

7 biologicals for which data are not suffi8 ciently available, the Secretary shall— 

9 ‘‘(I) compute the per beneficiary 

10 allowed charges (as defined in sub11 paragraph (C)) for each such drug or 

12 biological; 

13 ‘‘(II) adjust such per beneficiary 

14 allowed charges for the quarter, to the 

15 extent provided under subparagraph 

16 (D); and 

17 ‘‘(III) array such adjusted per 

18 beneficiary allowed charges for all 

19 such drugs or biologicals from high to 

20 low and rank such drugs or biologicals 

21 by percentile of such arrayed per ben22 eficiary allowed charges. 

23 ‘‘(ii) FREQUENCY.—The Secretary 

24 shall make the computations under clause 

25 (i)(I) every 6 months (or, if necessary, as 


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1 determined by the Secretary, every 9 or 12 

2 months) and such computations shall apply 

3 to succeeding calendar quarters until a 

4 new computation has been made. 

5 ‘‘(iii) APPLICABLE DATA PERIOD.— 

6 For purposes of this paragraph, the term 

7 ‘applicable data period’ means the most re8 cent period for which the data necessary 

9 for making the computations under clause 

10 (i) are available, as determined by the Sec11 retary. 

12 ‘‘(C) PER BENEFICIARY ALLOWED

13 CHARGES DEFINED.—In this paragraph, the 

14 term ‘per beneficiary allowed charges’ means, 

15 with respect to a drug or biological for which 

16 the amount of payment is determined under 

17 subparagraph (A) or (B) of paragraph (1)— 

18 ‘‘(i) the allowed charges for the drug 

19 or biological for which payment is so made 

20 for the applicable data period, as estimated 

21 by the Secretary; divided by 

22 ‘‘(ii) the number of individuals for 

23 whom any payment for the drug or biologi24 cal was made under paragraph (1) for the 


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1 applicable data period, as estimated by the 

2 Secretary. 

3 ‘‘(D) ADJUSTMENT TO REFLECT CHANGES

4 IN AVERAGE SALES PRICE.—In applying this 

5 paragraph for a particular calendar quarter, the 

6 Secretary shall adjust the per beneficiary al7 lowed charges for a drug or biological by multi8 plying such per beneficiary allowed charges 

9 under subparagraph (C) for the applicable data 

10 period by the ratio of— 

11 ‘‘(i) the average sales price for the 

12 drug or biological for the most recent cal13 endar quarter used under subsection 

14 (c)(5)(B); to 

15 ‘‘(ii) the average sales price for the 

16 drug or biological for the calendar quarter 

17 (or the weighted average for the quarters 

18 involved) included in the applicable data 

19 period.’’. 

20 (b) APPLICATION OF JUDICIAL REVIEW PROVI21 SIONS.—Section 1847A(g) of the Social Security Act is 

22 amended— 

23 (1) by striking ‘‘and’’ at the end of paragraph 

24 (4); 


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1 (2) by striking the period at the end of para2 graph (5) and inserting ‘‘; and’’; and 

3 (3) by adding at the end the following new 

4 paragraph: 

5 ‘‘(6) the determination of per beneficiary al6 lowed charges of drugs or biologicals and ranking of 

7 such charges under subsection (b)(9).’’. 

8 SEC. 104. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT 

9 FOR DRUGS AND BIOLOGICALS. 

10 (a) IN GENERAL.—Section 1847A of the Social Secu11 rity Act (42 U.S.C. 1395w–3a), as amended by section 

12 103, is further amended— 

13 (1) in subsection (b)— 

14 (A) in paragraph (1), in the matter pre15 ceding subparagraph (A), by striking ‘‘para16 graph (7)’’ and inserting ‘‘paragraphs (7) and 

17 (10)’’; and 

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

19 paragraph: 

20 ‘‘(10) MAXIMUM ADD-ON PAYMENT AMOUNT.— 

21 ‘‘(A) IN GENERAL.—In determining the 

22 payment amount under the provisions of sub23 paragraph (A), (B), or (C) of paragraph (1) of 

24 this subsection, subsection (c)(4)(A)(ii), or sub25 section (d)(3)(C) for a drug or biological furVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 nished on or after January 1, 2021, if the ap2 plicable add-on payment (as defined in subpara3 graph (B)) for each drug or biological on a 

4 claim for a date of service exceeds the max5 imum add-on payment amount specified under 

6 subparagraph (C) for the drug or biological, 

7 then the payment amount otherwise determined 

8 for the drug or biological under those provi9 sions, as applicable, shall be reduced by the 

10 amount of such excess. 

11 ‘‘(B) APPLICABLE ADD-ON PAYMENT DE12 FINED.—In this paragraph, the term ‘applicable 

13 add-on payment’ means the following amounts, 

14 determined without regard to the application of 

15 subparagraph (A): 

16 ‘‘(i) In the case of a multiple source 

17 drug, an amount equal to the difference 

18 between— 

19 ‘‘(I) the amount that would oth20 erwise be applied under paragraph 

21 (1)(A); and 

22 ‘‘(II) the amount that would be 

23 applied under such paragraph if ‘100 

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1 plicable percent (as defined in para2 graph (9)) for such drug. 

3 ‘‘(ii) In the case of a single source 

4 drug or biological, an amount equal to the 

5 difference between— 

6 ‘‘(I) the amount that would oth7 erwise be applied under paragraph 

8 (1)(B); and 

9 ‘‘(II) the amount that would be 

10 applied under such paragraph if ‘100 

11 percent’ were substituted for the ap12 plicable percent (as defined in para13 graph (9)) for such drug or biological. 

14 ‘‘(iii) In the case of a biosimilar bio15 logical product, the amount otherwise de16 termined under paragraph (8)(B). 

17 ‘‘(iv) In the case of a drug or biologi18 cal during the initial period described in 

19 subsection (c)(4)(A), an amount equal to 

20 the difference between— 

21 ‘‘(I) the amount that would oth22 erwise be applied under subsection 

23 (c)(4)(A)(ii); and 

24 ‘‘(II) the amount that would be 

25 applied under such subsection if ‘100 


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1 percent’ were substituted, as applica2 ble, for— 

3 ‘‘(aa) ‘103 percent’ in sub4 clause (I) of such subsection; or 

5 ‘‘(bb) any percent in excess 

6 of 100 percent applied under 

7 subclause (II) of such subsection. 

8 ‘‘(v) In the case of a drug or biologi9 cal to which subsection (d)(3)(C) applies, 

10 an amount equal to the difference be11 tween— 

12 ‘‘(I) the amount that would oth13 erwise be applied under such sub14 section; and 

15 ‘‘(II) the amount that would be 

16 applied under such subsection if ‘100 

17 percent’ were substituted, as applica18 ble, for— 

19 ‘‘(aa) any percent in excess 

20 of 100 percent applied under 

21 clause (i) of such subsection; or 

22 ‘‘(bb) ‘103 percent’ in clause 

23 (ii) of such subsection. 

24 ‘‘(C) MAXIMUM ADD-ON PAYMENT AMOUNT

25 SPECIFIED.—For purposes of subparagraph 


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1 (A), the maximum add-on payment amount 

2 specified in this subparagraph is— 

3 ‘‘(i) with respect to a drug or biologi4 cal (other than autologous cellular 

5 immunotherapy)— 

6 ‘‘(I) for each of 2021 through 

7 2028, $1,000; and 

8 ‘‘(II) for a subsequent year, the 

9 amount specified in this subparagraph 

10 for the preceding year increased by 

11 the percentage increase in the con12 sumer price index for all urban con13 sumers (all items; United States city 

14 average) for the 12-month period end15 ing with June of the previous year; or 

16 ‘‘(ii) with respect to a drug or biologi17 cal consisting of autologous cellular 

18 immunotherapy— 

19 ‘‘(I) for each of 2021 through 

20 2028, $2,000; and 

21 ‘‘(II) for a subsequent year, the 

22 amount specified in this subparagraph 

23 for the preceding year increased by 

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1 sumers (all items; United States city 

2 average) for the 12-month period end3 ing with June of the previous year. 

4 Any amount determined under this subpara5 graph that is not a multiple of $10 shall be 

6 rounded to the nearest multiple of $10.’’; and 

7 (2) in subsection (c)(4)(A)(ii), by striking ‘‘in 

8 the case’’ and inserting ‘‘subject to subsection 

9 (b)(10), in the case’’. 

10 (b) CONFORMING AMENDMENTS RELATING TO SEPA11 RATELY PAYABLE DRUGS.— 

12 (1) OPPS.—Section 1833(t)(14) of the Social 

13 Security Act (42 U.S.C. 1395l(t)(14)) is amended— 

14 (A) in subparagraph (A)(iii)(II), by insert15 ing ‘‘, subject to subparagraph (I)’’ after ‘‘are 

16 not available’’; and 

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

18 subparagraph: 

19 ‘‘(I) APPLICATION OF MAXIMUM ADD-ON

20 PAYMENT FOR SEPARATELY PAYABLE DRUGS

21 AND BIOLOGICALS.—In establishing the amount 

22 of payment under subparagraph (A) for a speci23 fied covered outpatient drug that is furnished 

24 as part of a covered OPD service (or group of 

25 services) on or after January 1, 2021, if such 


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1 payment is determined based on the average 

2 price for the year established under section 

3 1847A pursuant to clause (iii)(II) of such sub4 paragraph, the provisions of subsection (b)(10) 

5 of section 1847A shall apply to the amount of 

6 payment so established in the same manner as 

7 such provisions apply to the amount of payment 

8 under section 1847A.’’. 

9 (2) ASC.—Section 1833(i)(2)(D) of the Social 

10 Security Act (42 U.S.C. 1395l(i)(2)(D)) is amend11 ed— 

12 (A) by moving clause (v) 6 ems to the left; 

13 (B) by redesignating clause (vi) as clause 

14 (vii); and 

15 (C) by inserting after clause (v) the fol16 lowing new clause: 

17 ‘‘(vi) If there is a separate payment 

18 under the system described in clause (i) for 

19 a drug or biological furnished on or after 

20 January 1, 2021, the provisions of sub21 section (t)(14)(I) shall apply to the estab22 lishment of the amount of payment for the 

23 drug or biological under such system in the 

24 same manner in which such provisions 


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1 apply to the establishment of the amount 

2 of payment under subsection (t)(14)(A).’’. 

3 SEC. 105. TREATMENT OF DRUG ADMINISTRATION SERV4 ICES FURNISHED BY CERTAIN EXCEPTED 

5 OFF-CAMPUS OUTPATIENT DEPARTMENTS OF 

6 A PROVIDER. 

7 Section 1833(t)(16) of the Social Security Act (42 

8 12 U.S.C. 1395l(t)(16)) is amended by adding at the end 

9 the following new subparagraph: 

10 ‘‘(G) SPECIAL PAYMENT RULE FOR DRUG

11 ADMINISTRATION SERVICES FURNISHED BY AN

12 EXCEPTED DEPARTMENT OF A PROVIDER.— 

13 ‘‘(i) IN GENERAL.—In the case of a 

14 covered OPD service that is a drug admin15 istration service (as defined by the Sec16 retary) furnished by a department of a 

17 provider described in clause (ii) or (iv) of 

18 paragraph (21)(B), the payment amount 

19 for such service furnished on or after Jan20 uary 1, 2021, shall be the same payment 

21 amount (as determined in paragraph 

22 (21)(C)) that would apply if the drug ad23 ministration service was furnished by an 

24 off-campus outpatient department of a pro25 vider (as defined in paragraph (21)(B)). 


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1 ‘‘(ii) APPLICATION WITHOUT REGARD

2 TO BUDGET NEUTRALITY.—The reductions 

3 made under this subparagraph— 

4 ‘‘(I) shall not be considered an 

5 adjustment under paragraph (2)(E); 

6 and 

7 ‘‘(II) shall not be implemented in 

8 a budget neutral manner.’’. 

9 Subtitle B—Drug Price 

10 Transparency 

11 SEC. 111. REPORTING ON EXPLANATION FOR DRUG PRICE 

12 INCREASES. 

13 (a) IN GENERAL.—Title III of the Public Health 

14 Service Act (42 U.S.C. 241 et seq.) is amended by adding 

15 at the end the following: 

16 ‘‘PART W—DRUG PRICE REPORTING; DRUG 

17 VALUE FUND 

18 ‘‘SEC. 399OO. REPORTING ON EXPLANATION FOR DRUG 

19 PRICE INCREASES. 

20 ‘‘(a) DEFINITIONS.—In this section: 

21 ‘‘(1) MANUFACTURER.—The term ‘manufac22 turer’ means the person— 

23 ‘‘(A) that holds the application for a drug 

24 approved under section 505 of the Federal 


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1 Food, Drug, and Cosmetic Act or licensed 

2 under section 351 of this Act; or 

3 ‘‘(B) who is responsible for setting the 

4 wholesale acquisition cost for the drug. 

5 ‘‘(2) QUALIFYING DRUG.—The term ‘qualifying 

6 drug’ means any drug that is approved under sub7 section (c) or (j) of section 505 of the Federal Food, 

8 Drug, and Cosmetic Act or licensed under subsection 

9 (a) or (k) of section 351 of this Act— 

10 ‘‘(A) that has a wholesale acquisition cost 

11 of $100 or more, adjusted for inflation occur12 ring after the date of enactment of this section, 

13 for a month’s supply or a typical course of 

14 treatment that lasts less than a month, and 

15 is— 

16 ‘‘(i) subject to section 503(b)(1) of 

17 the Federal Food, Drug, and Cosmetic 

18 Act; 

19 ‘‘(ii) administered or otherwise dis20 pensed to treat a disease or condition af21 fecting more than 200,000 persons in the 

22 United States; and 

23 ‘‘(iii) not a vaccine; and 

24 ‘‘(B) for which, during the previous cal25 endar year, at least 1 dollar of the total amount 


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1 of sales were for individuals enrolled under the 

2 Medicare program under title XVIII of the So3 cial Security Act (42 U.S.C. 1395 et seq.) or 

4 under a State Medicaid plan under title XIX of 

5 such Act (42 U.S.C. 1396 et seq.) or under a 

6 waiver of such plan. 

7 ‘‘(3) WHOLESALE ACQUISITION COST.—The 

8 term ‘wholesale acquisition cost’ has the meaning 

9 given that term in section 1847A(c)(6)(B) of the So10 cial Security Act (42 U.S.C. 1395w–3a(c)(6)(B)). 

11 ‘‘(b) REPORT.— 

12 ‘‘(1) REPORT REQUIRED.—The manufacturer of 

13 a qualifying drug shall submit a report to the Sec14 retary— 

15 ‘‘(A) for each increase in the price of a 

16 qualifying drug that results in an increase in 

17 the wholesale acquisition cost of that drug that 

18 is equal to— 

19 ‘‘(i) 10 percent or more within a sin20 gle calendar year beginning on or after 

21 January 1, 2019; or 

22 ‘‘(ii) 25 percent or more within three 

23 consecutive calendar years for which the 

24 first such calendar year begins on or after 

25 January 1, 2019; and 


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1 ‘‘(B) in the case that the qualifying drug 

2 is first covered under title XVIII with respect 

3 to an applicable year, if the estimated cost or 

4 spending under such title per individual or per 

5 user of such drug (as estimated by the Sec6 retary) for such applicable year (or per course 

7 of treatment in such applicable year, as defined 

8 by the Secretary) is at least $26,000. 

9 ‘‘(2) REPORT DEADLINE.—Each report de10 scribed in paragraph (1) shall be submitted to the 

11 Secretary— 

12 ‘‘(A) in the case of a report with respect 

13 to an increase in the price of a qualifying drug 

14 that occurs during the period beginning on Jan15 uary 1, 2019, and ending on the day that is 60 

16 days after the date of enactment of this section, 

17 not later than 90 days after such date of enact18 ment; 

19 ‘‘(B) in the case of a report with respect 

20 to an increase in the price of a qualifying drug 

21 that occurs after the period described in sub22 paragraph (A), not later than 30 days prior to 

23 the planned effective date of such price increase 

24 for such qualifying drug; and 


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1 ‘‘(C) in the case of a report with respect 

2 to a qualifying drug that meets the criteria de3 scribed in paragraph (1)(B), not later than 30 

4 days after such drug meets such criteria. 

5 ‘‘(c) CONTENTS.—A report under subsection (b), con6 sistent with the standard for disclosures described in sec7 tion 213.3(d) of title 12, Code of Federal Regulations (as 

8 in effect on the date of enactment of this section), shall, 

9 at a minimum, include— 

10 ‘‘(1) with respect to the qualifying drug— 

11 ‘‘(A) the percentage by which the manufac12 turer will raise the wholesale acquisition cost of 

13 the drug within the calendar year or three con14 secutive calendar years as described in sub15 section (b)(1)(A) or (b)(1)(B), if applicable, and 

16 the effective date of such price increase; 

17 ‘‘(B) an explanation for, and description 

18 of, each price increase for such drug that will 

19 occur during the calendar year period described 

20 in subsection (b)(1)(A) or the three consecutive 

21 calendar year period described in subsection 

22 (b)(1)(B), as applicable; 

23 ‘‘(C) if known and different from the man24 ufacturer of the qualifying drug, the identity 

25 of— 


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1 ‘‘(i) the sponsor or sponsors of any in2 vestigational new drug applications under 

3 section 505(i) of the Federal Food, Drug, 

4 and Cosmetic Act for clinical investigations 

5 with respect to such drug, for which the 

6 full reports are submitted as part of the 

7 application— 

8 ‘‘(I) for approval of the drug 

9 under section 505 of such Act; or 

10 ‘‘(II) for licensure of the drug 

11 under section 351 of this Act; and 

12 ‘‘(ii) the sponsor of an application for 

13 the drug approved under such section 505 

14 of the Federal Food, Drug, and Cosmetic 

15 Act or licensed under section 351 of this 

16 Act; 

17 ‘‘(D) a description of the history of the 

18 manufacturer’s price increases for the drug 

19 since the approval of the application for the 

20 drug under section 505 of the Federal Food, 

21 Drug, and Cosmetic Act or the issuance of the 

22 license for the drug under section 351 of this 

23 Act, or since the manufacturer acquired such 

24 approved application or license, if applicable; 


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1 ‘‘(E) the current wholesale acquisition cost 

2 of the drug; 

3 ‘‘(F) the total expenditures of the manu4 facturer on— 

5 ‘‘(i) materials and manufacturing for 

6 such drug; and 

7 ‘‘(ii) acquiring patents and licensing 

8 for such drug; 

9 ‘‘(G) the percentage of total expenditures 

10 of the manufacturer on research and develop11 ment for such drug that was derived from Fed12 eral funds; 

13 ‘‘(H) the total expenditures of the manu14 facturer on research and development for such 

15 drug that is necessary to demonstrate that it 

16 meets applicable statutory standards for ap17 proval under section 505 of the Federal Food, 

18 Drug, and Cosmetic Act or licensure under sec19 tion 351 of this Act, as applicable; 

20 ‘‘(I) the total expenditures of the manufac21 turer on pursuing new or expanded indications 

22 or dosage changes for such drug under section 

23 505 of the Federal Food, Drug, and Cosmetic 

24 Act or section 351 of this Act; 


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1 ‘‘(J) the total expenditures of the manufac2 turer on carrying out postmarket requirements 

3 related to such drug, including under section 

4 505(o)(3) of the Federal Food, Drug, and Cos5 metic Act; 

6 ‘‘(K) the total revenue and the net profit 

7 generated from the qualifying drug for each cal8 endar year since the approval of the application 

9 for the drug under section 505 of the Federal 

10 Food, Drug, and Cosmetic Act or the issuance 

11 of the license for the drug under section 351, 

12 or since the manufacturer acquired such ap13 proved application or license; and 

14 ‘‘(L) the total costs associated with mar15 keting and advertising for the qualifying drug; 

16 ‘‘(2) with respect to the manufacturer— 

17 ‘‘(A) the total revenue and the net profit 

18 of the manufacturer for each of the 1-year pe19 riod described in subsection (b)(1)(A) or the 3- 

20 year period described in subsection (b)(1)(B), 

21 as applicable; 

22 ‘‘(B) all stock-based performance metrics 

23 used by the manufacturer to determine execu24 tive compensation for each of the 1-year period 

25 described in subsection (b)(1)(A) or the 3-year 


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1 period described in subsection (b)(1)(B), as ap2 plicable; and 

3 ‘‘(C) any additional information the manu4 facturer chooses to provide related to drug pric5 ing decisions, such as total expenditures on— 

6 ‘‘(i) drug research and development; 

7 or 

8 ‘‘(ii) clinical trials, including on drugs 

9 that failed to receive approval by the Food 

10 and Drug Administration; and 

11 ‘‘(3) such other related information as the Sec12 retary considers appropriate and as specified by the 

13 Secretary through notice-and-comment rulemaking. 

14 ‘‘(d) INFORMATION PROVIDED.—The manufacturer 

15 of a qualifying drug that is required to submit a report 

16 under subsection (b), shall ensure that such report and 

17 any explanation for, and description of, each price increase 

18 described in subsection (c)(1)(B) shall be truthful, not 

19 misleading, and accurate. 

20 ‘‘(e) CIVIL MONETARY PENALTY.—Any manufac21 turer of a qualifying drug that fails to submit a report 

22 for the drug as required by this section, following notifica23 tion by the Secretary to the manufacturer that the manu24 facturer is not in compliance with this section, shall be 


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1 subject to a civil monetary penalty of $75,000 for each 

2 day on which the violation continues. 

3 ‘‘(f) FALSE INFORMATION.—Any manufacturer that 

4 submits a report for a drug as required by this section 

5 that knowingly provides false information in such report 

6 is subject to a civil monetary penalty in an amount not 

7 to exceed $75,000 for each item of false information. 

8 ‘‘(g) PUBLIC POSTING.— 

9 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

10 the Secretary shall post each report submitted under 

11 subsection (b) on the public website of the Depart12 ment of Health and Human Services the day the 

13 price increase of a qualifying drug is scheduled to go 

14 into effect. 

15 ‘‘(2) FORMAT.—In developing the format in 

16 which reports will be publicly posted under para17 graph (1), the Secretary shall consult with stake18 holders, including beneficiary groups, and shall seek 

19 feedback from consumer advocates and readability 

20 experts on the format and presentation of the con21 tent of such reports to ensure that such reports 

22 are— 

23 ‘‘(A) user-friendly to the public; and 

24 ‘‘(B) written in plain language that con25 sumers can readily understand. 


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1 ‘‘(3) PROTECTED INFORMATION.—Nothing in 

2 this section shall be construed to authorize the pub3 lic disclosure of information submitted by a manu4 facturer that is prohibited from disclosure by appli5 cable laws concerning the protection of trade secrets, 

6 commercial information, and other information cov7 ered under such laws. 

8 ‘‘SEC. 399OO–1. ANNUAL REPORT TO CONGRESS. 

9 ‘‘(a) IN GENERAL.—Subject to subsection (b), the 

10 Secretary shall submit to Congress, and post on the public 

11 website of the Department of Health and Human Services 

12 in a way that is user-friendly to the public and written 

13 in plain language that consumers can readily understand, 

14 an annual report— 

15 ‘‘(1) summarizing the information reported pur16 suant to section 399OO; 

17 ‘‘(2) including copies of the reports and sup18 porting detailed economic analyses submitted pursu19 ant to such section; 

20 ‘‘(3) detailing the costs and expenditures in21 curred by the Department of Health and Human 

22 Services in carrying out section 399OO; and 

23 ‘‘(4) explaining how the Department of Health 

24 and Human Services is improving consumer and 


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1 provider information about drug value and drug 

2 price transparency. 

3 ‘‘(b) PROTECTED INFORMATION.—Nothing in this 

4 section shall be construed to authorize the public disclo5 sure of information submitted by a manufacturer that is 

6 prohibited from disclosure by applicable laws concerning 

7 the protection of trade secrets, commercial information, 

8 and other information covered under such laws.’’. 

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

10 subsection (a) takes effect on the date of enactment of 

11 this Act. 

12 SEC. 112. PUBLIC DISCLOSURE OF DRUG DISCOUNTS. 

13 Section 1150A of the Social Security Act (42 U.S.C. 

14 1320b–23) is amended— 

15 (1) in subsection (c), in the matter preceding 

16 paragraph (1), by inserting ‘‘(other than as per17 mitted under subsection (e))’’ after ‘‘disclosed by the 

18 Secretary’’; and 

19 (2) by adding at the end the following new sub20 section: 

21 ‘‘(e) PUBLIC AVAILABILITY OF CERTAIN INFORMA22 TION.— 

23 ‘‘(1) IN GENERAL.—In order to allow the com24 parison of PBMs’ ability to negotiate rebates, dis25 counts, direct and indirect remuneration fees, adVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 ministrative fees, and price concessions and the 

2 amount of such rebates, discounts, direct and indi3 rect remuneration fees, administrative fees, and 

4 price concessions that are passed through to plan 

5 sponsors, beginning January 1, 2020, the Secretary 

6 shall make available on the Internet website of the 

7 Department of Health and Human Services the in8 formation with respect to the second preceding cal9 endar year provided to the Secretary on generic dis10 pensing rates (as described in paragraph (1) of sub11 section (b)) and information provided to the Sec12 retary under paragraphs (2) and (3) of such sub13 section that, as determined by the Secretary, is with 

14 respect to each PBM. 

15 ‘‘(2) AVAILABILITY OF DATA.—In carrying out 

16 paragraph (1), the Secretary shall ensure the fol17 lowing: 

18 ‘‘(A) CONFIDENTIALITY.—The information 

19 described in such paragraph is displayed in a 

20 manner that prevents the disclosure of informa21 tion, with respect to an individual drug or an 

22 individual plan, on rebates, discounts, direct 

23 and indirect remuneration fees, administrative 

24 fees, and price concessions. 


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1 ‘‘(B) CLASS OF DRUG.—The information 

2 described in such paragraph is made available 

3 by class of drug, using an existing classification 

4 system, but only if the class contains such num5 ber of drugs, as specified by the Secretary (but 

6 not fewer than three drugs), to ensure confiden7 tiality of proprietary information or other infor8 mation that is prevented to be disclosed under 

9 subparagraph (A).’’. 

10 SEC. 113. STUDY OF PHARMACEUTICAL SUPPLY CHAIN 

11 INTERMEDIARIES AND MERGER ACTIVITY. 

12 (a) INITIAL REPORT.—Not later than 1 year after 

13 the date of enactment of this Act, the Commission shall 

14 submit to the appropriate committees of Congress a report 

15 that— 

16 (1) addresses at minimum— 

17 (A) whether pharmacy benefit managers— 

18 (i) charge payers a higher price than 

19 the reimbursement rate at which the phar20 macy benefit managers reimburse com21 peting pharmacies; 

22 (ii) steer patients for anticompetitive 

23 purposes to any pharmacies, including re24 tail, mail-order, or any other type of pharVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 macy, in which the pharmacy benefit man2 ager has an ownership interest; 

3 (iii) audit or review proprietary data, 

4 including acquisition costs, patient infor5 mation, or dispensing information, of com6 peting pharmacies that can be used for 

7 anticompetitive purposes; or 

8 (iv) use formulary designs to increase 

9 the market share of higher cost prescrip10 tion drugs and depress the market share of 

11 lower cost prescription drugs (each net of 

12 rebates and discounts); 

13 (B) how companies and payers assess the 

14 benefits, costs, and risks of contracting with 

15 intermediaries, including pharmacy services ad16 ministrative organizations, and whether more 

17 information about the roles of intermediaries 

18 should be available to consumers and payers; 

19 and 

20 (C) whether there are any specific legal or 

21 regulatory obstacles the Commission currently 

22 faces in ensuring a competitive and transparent 

23 marketplace in the pharmaceutical supply 

24 chain, including the pharmacy benefit manager 


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1 marketplace and pharmacy services administra2 tive organizations; and 

3 (2) provides— 

4 (A) observations or conclusions drawn 

5 from the November 2017 roundtable entitled 

6 ‘‘Understanding Competition in Prescription 

7 Drug Markets: Entry and Supply Chain Dy8 namics’’, and any similar efforts; 

9 (B) specific actions the Commission in10 tends to take as a result of the November 2017 

11 roundtable, and any similar efforts, including a 

12 detailed description of relevant forthcoming ac13 tions, additional research or roundtable discus14 sions, consumer education efforts, or enforce15 ment actions; and 

16 (C) policy or legislative recommendations 

17 to— 

18 (i) improve transparency and competi19 tion in the pharmaceutical supply chain; 

20 (ii) prevent and deter anticompetitive 

21 behavior in the pharmaceutical supply 

22 chain; and 

23 (iii) best ensure that consumers ben24 efit from any cost savings or efficiencies 


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1 that may result from mergers and consoli2 dations. 

3 (b) INTERIM REPORT.—Not later than 180 days 

4 after the date of enactment of this Act, the Commission 

5 shall submit to the appropriate committees of Congress 

6 an interim report on the progress of the report required 

7 by subsection (a), along with preliminary findings and 

8 conclusions based on information collected to that date. 

9 (c) DEFINITIONS.—In this section: 

10 (1) APPROPRIATE COMMITTEES OF CON11 GRESS.—The term ‘‘appropriate committees of Con12 gress’’ means— 

13 (A) the Committee on Energy and Com14 merce of the House of Representatives; 

15 (B) the Committee on the Judiciary of the 

16 Senate; and 

17 (C) the Committee on the Judiciary of the 

18 House of Representatives. 

19 (2) COMMISSION.—The term ‘‘Commission’’ 

20 means the Federal Trade Commission. 


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1 SEC. 114. REQUIRING CERTAIN MANUFACTURERS TO RE2 PORT DRUG PRICING INFORMATION WITH 

3 RESPECT TO DRUGS UNDER THE MEDICARE 

4 PROGRAM. 

5 (a) IN GENERAL.—Section 1847A of the Social Secu6 rity Act (42 U.S.C. 1395w–3a) is amended— 

7 (1) in subsection (b)— 

8 (A) in paragraph (2)(A), by inserting ‘‘or 

9 subsection (f)(2), as applicable’’ before the pe10 riod at the end; 

11 (B) in paragraph (3), in the matter pre12 ceding subparagraph (A), by inserting ‘‘or sub13 section (f)(2), as applicable,’’ before ‘‘deter14 mined by’’; and 

15 (C) in paragraph (6)(A), in the matter 

16 preceding clause (i), by inserting ‘‘or subsection 

17 (f)(2), as applicable,’’ before ‘‘determined by’’; 

18 and 

19 (2) in subsection (f)— 

20 (A) by striking ‘‘For requirements’’ and 

21 inserting the following: 

22 ‘‘(1) IN GENERAL.—For requirements’’; and 

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

24 paragraph: 

25 ‘‘(2) MANUFACTURERS WITHOUT A REBATE

26 AGREEMENT UNDER TITLE XIX.— 


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1 ‘‘(A) IN GENERAL.—If the manufacturer 

2 of a drug or biological described in subpara3 graph (C), (E), or (G) of section 1842(o)(1) or 

4 in section 1881(b)(14)(B) that is payable under 

5 this part has not entered into and does not 

6 have in effect a rebate agreement described in 

7 subsection (b) of section 1927, for calendar 

8 quarters beginning on or after January 1, 

9 2020, such manufacturer shall report to the 

10 Secretary the information described in sub11 section (b)(3)(A)(iii) of such section 1927 with 

12 respect to such drug or biological in a time and 

13 manner specified by the Secretary. For pur14 poses of applying this paragraph, a drug or bio15 logical described in the previous sentence in16 cludes items, services, supplies, and products 

17 that are payable under this part as a drug or 

18 biological. 

19 ‘‘(B) AUDIT.—Information reported under 

20 subparagraph (A) is subject to audit by the In21 spector General of the Department of Health 

22 and Human Services. 

23 ‘‘(C) VERIFICATION.—The Secretary may 

24 survey wholesalers and manufacturers that di25 rectly distribute drugs described in subparaVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 graph (A), when necessary, to verify manufac2 turer prices and manufacturer’s average sales 

3 prices (including wholesale acquisition cost) if 

4 required to make payment reported under sub5 paragraph (A). The Secretary may impose a 

6 civil monetary penalty in an amount not to ex7 ceed $100,000 on a wholesaler, manufacturer, 

8 or direct seller, if the wholesaler, manufacturer, 

9 or direct seller of such a drug refuses a request 

10 for information about charges or prices by the 

11 Secretary in connection with a survey under 

12 this subparagraph or knowingly provides false 

13 information. The provisions of section 1128A 

14 (other than subsections (a) (with respect to 

15 amounts of penalties or additional assessments) 

16 and (b)) shall apply to a civil money penalty 

17 under this subparagraph in the same manner as 

18 such provisions apply to a penalty or proceeding 

19 under section 1128A(a). 

20 ‘‘(D) CONFIDENTIALITY.—Notwith21 standing any other provision of law, information 

22 disclosed by manufacturers or wholesalers 

23 under this paragraph (other than the wholesale 

24 acquisition cost for purposes of carrying out 

25 this section) is confidential and shall not be disVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 closed by the Secretary in a form which dis2 closes the identity of a specific manufacturer or 

3 wholesaler or prices charged for drugs by such 

4 manufacturer or wholesaler, except— 

5 ‘‘(i) as the Secretary determines to be 

6 necessary to carry out this section (includ7 ing the determination and implementation 

8 of the payment amount), or to carry out 

9 section 1847B; 

10 ‘‘(ii) to permit the Comptroller Gen11 eral of the United States to review the in12 formation provided; and 

13 ‘‘(iii) to permit the Director of the 

14 Congressional Budget Office to review the 

15 information provided.’’. 

16 (b) ENFORCEMENT.—Section 1847A of such Act (42 

17 U.S.C. 1395w–3a) is further amended— 

18 (1) in subsection (d)(4)— 

19 (A) in subparagraph (A), by striking ‘‘IN

20 GENERAL’’ and inserting ‘‘MISREPRESENTA21 TION’’; 

22 (B) in subparagraph (B), by striking ‘‘sub23 paragraph (B)’’ and inserting ‘‘subparagraph 

24 (A), (B), or (C)’’; 


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1 (C) by redesignating subparagraph (B) as 

2 subparagraph (D); and 

3 (D) by inserting after subparagraph (A) 

4 the following new subparagraphs: 

5 ‘‘(B) FAILURE TO PROVIDE TIMELY INFOR6 MATION.—If the Secretary determines that a 

7 manufacturer described in subsection (f)(2) has 

8 failed to report on information described in sec9 tion 1927(b)(3)(A)(iii) with respect to a drug or 

10 biological in accordance with such subsection, 

11 the Secretary shall apply a civil money penalty 

12 in an amount of $10,000 for each day the man13 ufacturer has failed to report such information 

14 and such amount shall be paid to the Treasury. 

15 ‘‘(C) FALSE INFORMATION.—Any manu16 facturer required to submit information under 

17 subsection (f)(2) that knowingly provides false 

18 information is subject to a civil money penalty 

19 in an amount not to exceed $100,000 for each 

20 item of false information. Such civil money pen21 alties are in addition to other penalties as may 

22 be prescribed by law.’’; and 

23 (2) in subsection (c)(6)(A), by striking the pe24 riod at the end and inserting ‘‘, except that, for pur25 poses of subsection (f)(2), the Secretary may, if the 


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1 Secretary determines appropriate, exclude repack2 agers of a drug or biological from such term.’’. 

3 (c) MANUFACTURERS WITH A REBATE AGREE4 MENT.— 

5 (1) IN GENERAL.—Section 1927(b)(3)(A) of the 

6 Social Security Act (42 U.S.C. 1396r–8(b)(3)(A)) is 

7 amended by adding at the end the following new 

8 sentence: ‘‘For purposes of applying clause (iii), a 

9 drug or biological described in the flush matter fol10 lowing such clause includes items, services, supplies, 

11 and products that are payable under this part as a 

12 drug or biological.’’. 

13 (2) TECHNICAL AMENDMENT.—Section 

14 1927(b)(3)(A)(iii) of the Social Security Act (42 

15 U.S.C. 1396r–8(b)(3)(A)(iii)) is amended by striking 

16 ‘‘section 1881(b)(13)(A)(ii)’’ and inserting ‘‘section 

17 1881(b)(14)(B)’’. 

18 (d) REPORT.—Not later than January 1, 2021, the 

19 Inspector General of the Department of Health and 

20 Human Services shall assess and submit to Congress a 

21 report on the accuracy of average sales price information 

22 submitted by manufacturers under section 1847A of the 

23 Social Security Act (42 U.S.C. 1395w–3a). Such report 

24 shall include any recommendations on how to improve the 

25 accuracy of such information. 


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1 SEC. 115. MAKING PRESCRIPTION DRUG MARKETING SAM2 PLE INFORMATION REPORTED BY MANUFAC3 TURERS AVAILABLE TO CERTAIN INDIVID4 UALS AND ENTITIES. 

5 (a) IN GENERAL.—Section 1128H of the Social Secu6 rity Act (42 U.S.C. 1320a–7i) is amended— 

7 (1) by redesignating subsection (b) as sub8 section (e); and 

9 (2) by inserting after subsection (a) the fol10 lowing new subsections: 

11 ‘‘(b) DATA SHARING AGREEMENTS.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall enter 

13 into agreements with the specified data sharing indi14 viduals and entities described in paragraph (2) 

15 under which— 

16 ‘‘(A) upon request of such an individual or 

17 entity, as applicable, the Secretary makes avail18 able to such individual or entity the information 

19 submitted under subsection (a) by manufactur20 ers and authorized distributors of record; and 

21 ‘‘(B) such individual or entity agrees to 

22 not disclose publicly or to another individual or 

23 entity any information that identifies a par24 ticular practitioner or health care facility. 

25 ‘‘(2) SPECIFIED DATA SHARING INDIVIDUALS

26 AND ENTITIES.—For purposes of paragraph (1), the 


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1 specified data sharing individuals and entities de2 scribed in this paragraph are the following: 

3 ‘‘(A) OVERSIGHT AGENCIES.—Health over4 sight agencies (as defined in section 164.501 of 

5 title 45, Code of Federal Regulations), includ6 ing the Centers for Medicare & Medicaid Serv7 ices, the Office of the Inspector General of the 

8 Department of Health and Human Services, the 

9 Government Accountability Office, the Congres10 sional Budget Office, the Medicare Payment 

11 Advisory Commission, and the Medicaid and 

12 CHIP Payment and Access Commission. 

13 ‘‘(B) RESEARCHERS.—Individuals who 

14 conduct scientific research (as defined in sec15 tion 164.501 of title 45, Code of Federal Regu16 lations) in relevant areas as determined by the 

17 Secretary. 

18 ‘‘(C) PAYERS.—Private and public health 

19 care payers, including group health plans, 

20 health insurance coverage offered by health in21 surance issuers, Federal health programs, and 

22 State health programs. 

23 ‘‘(3) EXEMPTION FROM FREEDOM OF INFORMA24 TION ACT.—Except as described in paragraph (1), 

25 the Secretary may not be compelled to disclose the 


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1 information submitted under subsection (a) to any 

2 individual or entity. For purposes of section 552 of 

3 title 5, United States Code (commonly referred to as 

4 the Freedom of Information Act), this paragraph 

5 shall be considered a statute described in subsection 

6 (b)(3)(B) of such section. 

7 ‘‘(c) PENALTIES.— 

8 ‘‘(1) DATA SHARING AGREEMENTS.—Subject to 

9 paragraph (3), any specified data sharing individual 

10 or entity described in subsection (b)(2) that violates 

11 the terms of a data sharing agreement the individual 

12 or entity has with the Secretary under subsection 

13 (b)(1) shall be subject to a civil money penalty of 

14 not less than $1,000, but not more than $10,000, 

15 for each such violation. Such penalty shall be im16 posed and collected in the same manner as civil 

17 money penalties under subsection (a) of section 

18 1128A are imposed and collected under that section. 

19 ‘‘(2) FAILURE TO REPORT.—Subject to para20 graph (3), any manufacturer or authorized dis21 tributor of record of an applicable drug under sub22 section (a) that fails to submit information required 

23 under such subsection in a timely manner in accord24 ance with rules or regulations promulgated to carry 

25 out such subsection shall be subject to a civil money 


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1 penalty of not less than $1,000, but not more than 

2 $10,000, for each such failure. Such penalty shall be 

3 imposed and collected in the same manner as civil 

4 money penalties under subsection (a) of section 

5 1128A are imposed and collected under that section. 

6 ‘‘(3) LIMITATION.—The total amount of civil 

7 money penalties imposed under paragraph (1) or (2) 

8 with respect to a year and an individual or entity de9 scribed in paragraph (1) or a manufacturer or dis10 tributor described in paragraph (2), respectively, 

11 shall not exceed $150,000. 

12 ‘‘(d) DRUG SAMPLE DISTRIBUTION INFORMATION.— 

13 ‘‘(1) IN GENERAL.—Not later than January 1 

14 of each year (beginning with 2021), the Secretary 

15 shall maintain a list containing information related 

16 to the distribution of samples of applicable drugs. 

17 Such list shall provide the following information with 

18 respect to the preceding year: 

19 ‘‘(A) The name of the manufacturer or au20 thorized distributor of record of an applicable 

21 drug for which samples were requested or dis22 tributed under this section. 

23 ‘‘(B) The quantity and class of drug sam24 ples requested. 


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1 ‘‘(C) The quantity and class of drug sam2 ples distributed. 

3 ‘‘(2) PUBLIC AVAILABILITY.—The Secretary 

4 shall make the information in such list available to 

5 the public on the Internet website of the Food and 

6 Drug Administration.’’. 

7 (b) FDA MAINTENANCE OF INFORMATION.—The 

8 Food and Drug Administration shall maintain information 

9 available to affected reporting companies to ensure their 

10 ability to fully comply with the requirements of section 

11 1128H of the Social Security Act. 

12 (c) PROHIBITION ON DISTRIBUTION OF SAMPLES OF

13 OPIOIDS.—Section 503(d) of the Federal Food, Drug, and 

14 Cosmetic Act (21 U.S.C. 353(d)) is amended— 

15 (1) by moving the margin of paragraph (4) 2 

16 ems to the left; and 

17 (2) by adding at the end the following: 

18 ‘‘(5) No person may distribute a drug sample of a 

19 drug that is— 

20 ‘‘(A) an applicable drug (as defined in section 

21 1128H(e) of the Social Security Act); 

22 ‘‘(B) a controlled substance (as defined in sec23 tion 102 of the Controlled Substances Act) for which 

24 the findings required under section 202(b)(2) of 

25 such Act have been made; and 


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1 ‘‘(C) approved under section 505 for use in the 

2 management or treatment of pain (other than for 

3 the management or treatment of a substance use 

4 disorder).’’. 

5 (d) MEDPAC REPORT.—Not later than 3 years after 

6 the date of the enactment of this Act, the Medicare Pay7 ment Advisory Commission shall conduct a study on the 

8 impact of drug samples on provider prescribing practices 

9 and health care costs and may, as the Commission deems 

10 appropriate, make recommendations on such study. 

11 SEC. 116. REQUIRING PRESCRIPTION DRUG PLAN SPON12 SORS TO INCLUDE REAL-TIME BENEFIT IN13 FORMATION AS PART OF SUCH SPONSOR’S 

14 ELECTRONIC PRESCRIPTION PROGRAM 

15 UNDER THE MEDICARE PROGRAM. 

16 Section 1860D–4(e)(2) of the Social Security Act (42 

17 U.S.C. 1395w–104(e)(2)) is amended— 

18 (1) in subparagraph (D), by striking ‘‘To the 

19 extent’’ and inserting ‘‘Except as provided in sub20 paragraph (F), to the extent’’; and 

21 (2) by adding at the end the following new sub22 paragraph: 

23 ‘‘(F) REAL-TIME BENEFIT INFORMA24 TION.— 


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1 ‘‘(i) IN GENERAL.—Not later than 

2 January 1, 2021, the program shall imple3 ment real-time benefit tools that are capa4 ble of integrating with a prescribing health 

5 care professional’s electronic prescribing or 

6 electronic health record system for the 

7 transmission of formulary and benefit in8 formation in real time to prescribing health 

9 care professionals. With respect to a cov10 ered part D drug, such tools shall be capa11 ble of transmitting such information spe12 cific to an individual enrolled in a prescrip13 tion drug plan. Such information shall in14 clude the following: 

15 ‘‘(I) A list of any clinically-appro16 priate alternatives to such drug in17 cluded in the formulary of such plan. 

18 ‘‘(II) Cost-sharing information 

19 for such drug and such alternatives, 

20 including a description of any vari21 ance in cost-sharing based on the 

22 pharmacy dispensing such drug or 

23 such alternatives. 

24 ‘‘(III) Information relating to 

25 whether such drug is included in the 


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1 formulary of such plan and any prior 

2 authorization or other utilization man3 agement requirements applicable to 

4 such drug and such alternatives so in5 cluded. 

6 ‘‘(ii) ELECTRONIC TRANSMISSION.— 

7 The provisions of subclauses (I) and (II) of 

8 clause (ii) of subparagraph (E) shall apply 

9 to an electronic transmission described in 

10 clause (i) in the same manner as such pro11 visions apply with respect to an electronic 

12 transmission described in clause (i) of such 

13 subparagraph. 

14 ‘‘(iii) SPECIAL RULE FOR 2021.—The 

15 program shall be deemed to be in compli16 ance with clause (i) for 2021 if the pro17 gram complies with the provisions of sec18 tion 423.160(b)(7) of title 42, Code of 

19 Federal Regulations (or a successor regula20 tion), for such year. 

21 ‘‘(iv) RULE OF CONSTRUCTION.— 

22 Nothing in this subparagraph shall be con23 strued as to allow a real-time benefits tool 

24 to steer an individual, without the consent 

25 of the individual, to a particular pharmacy 


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1 or pharmacy setting over their preferred 

2 pharmacy setting nor prohibit the designa3 tion of a preferred pharmacy under such 

4 tool.’’. 

5 SEC. 117. SENSE OF CONGRESS REGARDING THE NEED TO 

6 EXPAND COMMERCIALLY AVAILABLE DRUG 

7 PRICING COMPARISON PLATFORMS. 

8 It is the sense of Congress that— 

9 (1) commercially available drug pricing com10 parison platforms can, at no cost, help patients find 

11 the lowest price for their medications at their local 

12 pharmacy; 

13 (2) such platforms should be integrated, to the 

14 maximum extent possible, in the health care delivery 

15 ecosystem; and 

16 (3) pharmacy benefit managers should work to 

17 disclose generic and brand name drug prices to such 

18 platforms to ensure that— 

19 (A) patients can benefit from the lowest 

20 possible price available to them; and 

21 (B) overall drug prices can be reduced as 

22 more educated purchasing decisions are made 

23 based on price transparency. 


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1 SEC. 118. TECHNICAL CORRECTIONS. 

2 (a) IN GENERAL.—Section 3022(b) of the Public 

3 Health Service Act (42 U.S.C. 300jj–52(b)) is amended 

4 by adding at the end the following new paragraph: 

5 ‘‘(4) APPLICATION OF AUTHORITIES UNDER IN6 SPECTOR GENERAL ACT OF 1978.—In carrying out 

7 this subsection, the Inspector General shall have the 

8 same authorities as provided under section 6 of the 

9 Inspector General Act of 1978 (5 U.S.C. App.).’’. 

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

11 subsection (a) shall take effect as if included in the enact12 ment of the 21st Century Cures Act (Public Law 114– 

13 255). 

14 Subtitle C—Medicare Part D 

15 Benefit Redesign 

16 SEC. 121. MEDICARE PART D BENEFIT REDESIGN. 

17 (a) BENEFIT STRUCTURE REDESIGN.—Section 

18 1860D–2(b) of the Social Security Act (42 U.S.C. 1395w– 

19 102(b)) is amended— 

20 (1) in paragraph (2)— 

21 (A) in subparagraph (A)— 

22 (i) in the matter preceding clause (i), 

23 by inserting ‘‘for a year preceding 2022 

24 and for costs above the annual deductible 

25 specified in paragraph (1) and up to the 

26 annual out-of-pocket threshold specified in 


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1 paragraph (4)(B) for 2022 and each subse2 quent year’’ after ‘‘paragraph (3)’’; and 

3 (ii) in clause (i), by inserting after 

4 ‘‘25 percent’’ the following: ‘‘(or, for 2022 

5 and each subsequent year, 15 percent)’’; 

6 (B) in subparagraph (C)— 

7 (i) in clause (i), in the matter pre8 ceding subclause (I), by inserting ‘‘for a 

9 year preceding 2022,’’ after ‘‘paragraph 

10 (4),’’; and 

11 (ii) in clause (ii)(III), by striking 

12 ‘‘and each subsequent year’’ and inserting 

13 ‘‘and 2021’’; and 

14 (C) in subparagraph (D)— 

15 (i) in clause (i)— 

16 (I) in the matter preceding sub17 clause (I), by inserting ‘‘for a year 

18 preceding 2022,’’ after ‘‘paragraph 

19 (4),’’; and 

20 (II) in subclause (I)(bb), by 

21 striking ‘‘a year after 2018’’ and in22 serting ‘‘each of years 2018 through 

23 2021’’; and 

24 (ii) in clause (ii)(V), by striking 

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1 serting ‘‘each of years 2019 through 

2 2021’’; 

3 (2) in paragraph (3)(A)— 

4 (A) in the matter preceding clause (i), by 

5 inserting ‘‘for a year preceding 2022,’’ after 

6 ‘‘and (4),’’; and 

7 (B) in clause (ii), by striking ‘‘for a subse8 quent year’’ and inserting ‘‘for each of years 

9 2007 through 2021’’; and 

10 (3) in paragraph (4)— 

11 (A) in subparagraph (A)— 

12 (i) in clause (i)— 

13 (I) by redesignating subclauses 

14 (I) and (II) as items (aa) and (bb), 

15 respectively, and indenting appro16 priately; 

17 (II) in the matter preceding item 

18 (aa), as redesignated by subclause (I), 

19 by striking ‘‘is equal to the greater 

20 of—’’ and inserting ‘‘is equal to— 

21 ‘‘(I) for a year preceding 2022, 

22 the greater of—’’; 

23 (III) by striking the period at the 

24 end of item (bb), as redesignated by 


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1 subclause (I), and inserting ‘‘; and’’; 

2 and 

3 (IV) by adding at the end the fol4 lowing: 

5 ‘‘(II) for 2022 and each suc6 ceeding year, $0.’’; and 

7 (ii) in clause (ii)— 

8 (I) by striking ‘‘clause (i)(I)’’ and 

9 inserting ‘‘clause (i)(I)(aa)’’; and 

10 (II) by adding at the end the fol11 lowing new sentence: ‘‘The Secretary 

12 shall continue to calculate the dollar 

13 amounts specified in clause (i)(I)(aa), 

14 including with the adjustment under 

15 this clause, after 2021 for purposes of 

16 section 1860D–14(a)(1)(D)(iii).’’; 

17 (B) in subparagraph (B)— 

18 (i) in clause (i)— 

19 (I) in subclause (V), by striking 

20 ‘‘or’’ at the end; 

21 (II) in subclause (VI)— 

22 (aa) by striking ‘‘for a sub23 sequent year’’ and inserting ‘‘for 

24 2021’’; and 


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1 (bb) by striking the period 

2 at the end and inserting a semi3 colon; and 

4 (III) by adding at the end the 

5 following new subclauses: 

6 ‘‘(VII) for 2022, is equal to 

7 $3,100; or 

8 ‘‘(VIII) for a subsequent year, is 

9 equal to the amount specified in this 

10 subparagraph for the previous year, 

11 increased by the annual percentage in12 crease described in paragraph (6) for 

13 the year involved.’’; and 

14 (ii) in clause (ii), by striking ‘‘clause 

15 (i)(II)’’ and inserting ‘‘clause (i)’’; 

16 (C) in subparagraph (C)(i), by striking 

17 ‘‘and for amounts’’ and inserting ‘‘and for a 

18 year preceding 2022 for amounts’’; and 

19 (D) in subparagraph (E), by striking ‘‘In 

20 applying’’ and inserting ‘‘For each of 2011 

21 through 2021, in applying’’. 

22 (b) DECREASING REINSURANCE PAYMENT

23 AMOUNT.—Section 1860D–15(b)(1) of the Social Security 

24 Act (42 U.S.C. 1395w–115(b)(1)) is amended— 


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1 (1) by striking ‘‘equal to 80 percent’’ and in2 serting ‘‘equal to— 

3 ‘‘(A) for a year preceding 2022, 80 per4 cent’’; 

5 (2) in subparagraph (A), as added by para6 graph (1), by striking the period at the end and in7 serting ‘‘; and’’; and 

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

10 ‘‘(B) for 2022 and each subsequent year, 

11 the sum of— 

12 ‘‘(i) an amount equal to 20 percent of 

13 the allowable reinsurance costs (as speci14 fied in paragraph (2)) attributable to that 

15 portion of gross covered prescription drug 

16 costs as specified in paragraph (3) in17 curred in the coverage year after such indi18 vidual has incurred costs that exceed the 

19 annual out-of-pocket threshold specified in 

20 section 1860D–2(b)(4)(B) with respect to 

21 applicable drugs (as defined in section 

22 1860D–14B(g)(2)); and 

23 ‘‘(ii) an amount equal to 30 percent of 

24 the allowable reinsurance costs (as speci25 fied in paragraph (2)) attributable to that 


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1 portion of gross covered prescription drug 

2 costs as specified in paragraph (3) in3 curred in the coverage year after such indi4 vidual has incurred costs that exceed the 

5 annual out-of-pocket threshold specified in 

6 section 1860D–2(b)(4)(B) with respect to 

7 covered part D drugs that are not applica8 ble drugs (as so defined).’’. 

9 (c) MANUFACTURER DISCOUNT PROGRAM.— 

10 (1) IN GENERAL.—Part D of title XVIII of the 

11 Social Security Act is amended by inserting after 

12 section 1860D–14A (42 U.S.C. 1495w–114) the fol13 lowing new section: 

14 ‘‘SEC. 1860D–14B. MANUFACTURER DISCOUNT PROGRAM. 

15 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab16 lish a manufacturer discount program (in this section re17 ferred to as the ‘program’). Under the program, the Sec18 retary shall enter into agreements described in subsection 

19 (b) with manufacturers and provide for the performance 

20 of the duties described in subsection (c). The Secretary 

21 shall establish a model agreement for use under the pro22 gram by not later than January 1, 2021, in consultation 

23 with manufacturers, and allow for comment on such model 

24 agreement. 

25 ‘‘(b) TERMS OF AGREEMENT.— 


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1 ‘‘(1) IN GENERAL.— 

2 ‘‘(A) AGREEMENT.—An agreement under 

3 this section shall require the manufacturer to 

4 provide applicable beneficiaries access to dis5 counted prices for applicable drugs of the man6 ufacturer that are dispensed on or after Janu7 ary 1, 2022. 

8 ‘‘(B) PROVISION OF DISCOUNTED PRICES

9 AT THE POINT-OF-SALE.—The discounted prices 

10 described in subparagraph (A) shall be provided 

11 to the applicable beneficiary at the pharmacy or 

12 by the mail order service at the point-of-sale of 

13 an applicable drug. 

14 ‘‘(2) PROVISION OF APPROPRIATE DATA.—Each 

15 manufacturer with an agreement in effect under this 

16 section shall collect and have available appropriate 

17 data, as determined by the Secretary, to ensure that 

18 it can demonstrate to the Secretary compliance with 

19 the requirements under the program. 

20 ‘‘(3) COMPLIANCE WITH REQUIREMENTS FOR

21 ADMINISTRATION OF PROGRAM.—Each manufac22 turer with an agreement in effect under this section 

23 shall comply with requirements imposed by the Sec24 retary or a third party with a contract under sub25 section (d)(3), as applicable, for purposes of adminVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 istering the program, including any determination 

2 under subparagraph (A) of subsection (c)(1) or pro3 cedures established under such subsection (c)(1). 

4 ‘‘(4) LENGTH OF AGREEMENT.— 

5 ‘‘(A) IN GENERAL.—An agreement under 

6 this section shall be effective for an initial pe7 riod of not less than 12 months and shall be 

8 automatically renewed for a period of not less 

9 than 1 year unless terminated under subpara10 graph (B). 

11 ‘‘(B) TERMINATION.— 

12 ‘‘(i) BY THE SECRETARY.—The Sec13 retary may provide for termination of an 

14 agreement under this section for a knowing 

15 and willful violation of the requirements of 

16 the agreement or other good cause shown. 

17 Such termination shall not be effective ear18 lier than 30 days after the date of notice 

19 to the manufacturer of such termination. 

20 The Secretary shall provide, upon request, 

21 a manufacturer with a hearing concerning 

22 such a termination, and such hearing shall 

23 take place prior to the effective date of the 

24 termination with sufficient time for such 


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1 effective date to be repealed if the Sec2 retary determines appropriate. 

3 ‘‘(ii) BY A MANUFACTURER.—A man4 ufacturer may terminate an agreement 

5 under this section for any reason. Any 

6 such termination shall be effective, with re7 spect to a plan year— 

8 ‘‘(I) if the termination occurs be9 fore January 30 of a plan year, as of 

10 the day after the end of the plan year; 

11 and 

12 ‘‘(II) if the termination occurs on 

13 or after January 30 of a plan year, as 

14 of the day after the end of the suc15 ceeding plan year. 

16 ‘‘(iii) EFFECTIVENESS OF TERMI17 NATION.—Any termination under this sub18 paragraph shall not affect discounts for 

19 applicable drugs of the manufacturer that 

20 are due under the agreement before the ef21 fective date of its termination. 

22 ‘‘(iv) NOTICE TO THIRD PARTY.—The 

23 Secretary shall provide notice of such ter24 mination to a third party with a contract 

25 under subsection (d)(3) within not less 


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1 than 30 days before the effective date of 

2 such termination. 

3 ‘‘(5) EFFECTIVE DATE OF AGREEMENT.—An 

4 agreement under this section shall take effect on a 

5 date determined appropriate by the Secretary, which 

6 may be at the start of a calendar quarter. 

7 ‘‘(c) DUTIES DESCRIBED.—The duties described in 

8 this subsection are the following: 

9 ‘‘(1) ADMINISTRATION OF PROGRAM.—Admin10 istering the program, including— 

11 ‘‘(A) the determination of the amount of 

12 the discounted price of an applicable drug of a 

13 manufacturer; 

14 ‘‘(B) the establishment of procedures 

15 under which discounted prices are provided to 

16 applicable beneficiaries at pharmacies or by 

17 mail order service at the point-of-sale of an ap18 plicable drug; 

19 ‘‘(C) the establishment of procedures to 

20 ensure that, not later than the applicable num21 ber of calendar days after the dispensing of an 

22 applicable drug by a pharmacy or mail order 

23 service, the pharmacy or mail order service is 

24 reimbursed for an amount equal to the dif25 ference between— 


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1 ‘‘(i) the negotiated price of the appli2 cable drug; and 

3 ‘‘(ii) the discounted price of the appli4 cable drug; 

5 ‘‘(D) the establishment of procedures to 

6 ensure that the discounted price for an applica7 ble drug under this section is applied before any 

8 coverage or financial assistance under other 

9 health benefit plans or programs that provide 

10 coverage or financial assistance for the pur11 chase or provision of prescription drug coverage 

12 on behalf of applicable beneficiaries as the Sec13 retary may specify; and 

14 ‘‘(E) providing a reasonable dispute resolu15 tion mechanism to resolve disagreements be16 tween manufacturers, applicable beneficiaries, 

17 and the third party with a contract under sub18 section (d)(3). 

19 ‘‘(2) MONITORING COMPLIANCE.— 

20 ‘‘(A) IN GENERAL.—The Secretary shall 

21 monitor compliance by a manufacturer with the 

22 terms of an agreement under this section. 

23 ‘‘(B) NOTIFICATION.—If a third party 

24 with a contract under subsection (d)(3) deter25 mines that the manufacturer is not in compliVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 ance with such agreement, the third party shall 

2 notify the Secretary of such noncompliance for 

3 appropriate enforcement under subsection (e). 

4 ‘‘(3) COLLECTION OF DATA FROM PRESCRIP5 TION DRUG PLANS AND MA–PD PLANS.—The Sec6 retary may collect appropriate data from prescrip7 tion drug plans and MA–PD plans in a timeframe 

8 that allows for discounted prices to be provided for 

9 applicable drugs under this section. 

10 ‘‘(d) ADMINISTRATION.— 

11 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

12 the Secretary shall provide for the implementation of 

13 this section, including the performance of the duties 

14 described in subsection (c). 

15 ‘‘(2) LIMITATION.—In providing for the imple16 mentation of this section, the Secretary shall not re17 ceive or distribute any funds of a manufacturer 

18 under the program. 

19 ‘‘(3) CONTRACT WITH THIRD PARTIES.—The 

20 Secretary shall enter into a contract with 1 or more 

21 third parties to administer the requirements estab22 lished by the Secretary in order to carry out this 

23 section. At a minimum, the contract with a third 

24 party under the preceding sentence shall require 

25 that the third party— 


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1 ‘‘(A) receive and transmit information be2 tween the Secretary, manufacturers, and other 

3 individuals or entities the Secretary determines 

4 appropriate; 

5 ‘‘(B) receive, distribute, or facilitate the 

6 distribution of funds of manufacturers to ap7 propriate individuals or entities in order to 

8 meet the obligations of manufacturers under 

9 agreements under this section; 

10 ‘‘(C) provide adequate and timely informa11 tion to manufacturers, consistent with the 

12 agreement with the manufacturer under this 

13 section, as necessary for the manufacturer to 

14 fulfill its obligations under this section; and 

15 ‘‘(D) permit manufacturers to conduct 

16 periodic audits, directly or through contracts, of 

17 the data and information used by the third 

18 party to determine discounts for applicable 

19 drugs of the manufacturer under the program. 

20 ‘‘(4) PERFORMANCE REQUIREMENTS.—The 

21 Secretary shall establish performance requirements 

22 for a third party with a contract under paragraph 

23 (3) and safeguards to protect the independence and 

24 integrity of the activities carried out by the third 

25 party under the program under this section. 


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1 ‘‘(5) ADMINISTRATION.—Chapter 35 of title 44, 

2 United States Code, shall not apply to the program 

3 under this section. 

4 ‘‘(e) ENFORCEMENT.— 

5 ‘‘(1) AUDITS.—Each manufacturer with an 

6 agreement in effect under this section shall be sub7 ject to periodic audit by the Secretary. 

8 ‘‘(2) CIVIL MONEY PENALTY.— 

9 ‘‘(A) IN GENERAL.—The Secretary shall 

10 impose a civil money penalty on a manufacturer 

11 that fails to provide applicable beneficiaries dis12 counts for applicable drugs of the manufacturer 

13 in accordance with such agreement for each 

14 such failure in an amount the Secretary deter15 mines is commensurate with the sum of— 

16 ‘‘(i) the amount that the manufac17 turer would have paid with respect to such 

18 discounts under the agreement, which will 

19 then be used to pay the discounts which 

20 the manufacturer had failed to provide; 

21 and 

22 ‘‘(ii) 25 percent of such amount. 

23 ‘‘(B) APPLICATION.—The provisions of 

24 section 1128A (other than subsections (a) and 

25 (b)) shall apply to a civil money penalty under 


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1 this paragraph in the same manner as such 

2 provisions apply to a penalty or proceeding 

3 under section 1128A(a). 

4 ‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF

5 OTHER COVERED PART D DRUGS.—Nothing in this sec6 tion shall prevent an applicable beneficiary from pur7 chasing a covered part D drug that is not on the formulary 

8 of the prescription drug plan or MA–PD plan that the 

9 applicable beneficiary is enrolled in. 

10 ‘‘(g) DEFINITIONS.—In this section: 

11 ‘‘(1) APPLICABLE BENEFICIARY.—The term 

12 ‘applicable beneficiary’ means an individual who, on 

13 the date of dispensing a covered part D drug— 

14 ‘‘(A) is enrolled in a prescription drug plan 

15 or an MA–PD plan; 

16 ‘‘(B) is not enrolled in a qualified retiree 

17 prescription drug plan; and 

18 ‘‘(C) has incurred costs for covered part D 

19 drugs in the year that are equal to or exceed 

20 the annual deductible specified in section 

21 1860D–2(b)(1) for such year. 

22 ‘‘(2) APPLICABLE DRUG.—The term ‘applicable 

23 drug’ means, with respect to an applicable bene24 ficiary, a covered part D drug— 


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1 ‘‘(A) approved under a new drug applica2 tion under section 505(c) of the Federal Food, 

3 Drug, and Cosmetic Act or, in the case of a bio4 logic product, licensed under section 351 of the 

5 Public Health Service Act (including a product 

6 licensed under subsection (k) of such section); 

7 and 

8 ‘‘(B)(i) if the PDP sponsor of the prescrip9 tion drug plan or the MA organization offering 

10 the MA–PD plan uses a formulary, which is on 

11 the formulary of the prescription drug plan or 

12 MA–PD plan that the applicable beneficiary is 

13 enrolled in; 

14 ‘‘(ii) if the PDP sponsor of the prescrip15 tion drug plan or the MA organization offering 

16 the MA–PD plan does not use a formulary, for 

17 which benefits are available under the prescrip18 tion drug plan or MA–PD plan that the appli19 cable beneficiary is enrolled in; or 

20 ‘‘(iii) is provided through an exception or 

21 appeal. 

22 ‘‘(3) APPLICABLE NUMBER OF CALENDAR

23 DAYS.—The term ‘applicable number of calendar 

24 days’ means— 


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1 ‘‘(A) with respect to claims for reimburse2 ment submitted electronically, 14 days; and 

3 ‘‘(B) with respect to claims for reimburse4 ment submitted otherwise, 30 days. 

5 ‘‘(4) DISCOUNTED PRICE.— 

6 ‘‘(A) IN GENERAL.—The term ‘discounted 

7 price’ means, with respect to an applicable drug 

8 of a manufacturer furnished during a year to 

9 an applicable beneficiary, 90 percent of the ne10 gotiated price of such drug. 

11 ‘‘(B) CLARIFICATION.—Nothing in this 

12 section shall be construed as affecting the re13 sponsibility of an applicable beneficiary for pay14 ment of a dispensing fee for an applicable drug. 

15 ‘‘(C) SPECIAL CASE FOR CLAIMS SPANNING

16 DEDUCTIBLE.—In the case where the entire 

17 amount of the negotiated price of an individual 

18 claim for an applicable drug with respect to an 

19 applicable beneficiary does not fall at or above 

20 the annual deductible specified in section 

21 1860D–2(b)(1) for the year, the manufacturer 

22 of the applicable drug shall provide the dis23 counted price under this section on only the 

24 portion of the negotiated price of the applicable 


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1 drug that falls at or above such annual deduct2 ible. 

3 ‘‘(5) MANUFACTURER.—The term ‘manufac4 turer’ means any entity which is engaged in the pro5 duction, preparation, propagation, compounding, 

6 conversion, or processing of prescription drug prod7 ucts, either directly or indirectly by extraction from 

8 substances of natural origin, or independently by 

9 means of chemical synthesis, or by a combination of 

10 extraction and chemical synthesis. Such term does 

11 not include a wholesale distributor of drugs or a re12 tail pharmacy licensed under State law. 

13 ‘‘(6) NEGOTIATED PRICE.—The term ‘nego14 tiated price’ has the meaning given such term in sec15 tion 1860D–2(d)(1)(B), except that such negotiated 

16 price shall not include any dispensing fee for an ap17 plicable drug. 

18 ‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG

19 PLAN.—The term ‘qualified retiree prescription drug 

20 plan’ has the meaning given such term in section 

21 11860D–22(a)(2).’’. 

22 (2) SUNSET OF MEDICARE COVERAGE GAP DIS23 COUNT PROGRAM.—Section 1860D–14A of the So24 cial Security Act (42 U.S.C. 1395–114a) is amend25 ed— 


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1 (A) in subsection (a), in the first sentence, 

2 by striking ‘‘The Secretary’’ and inserting 

3 ‘‘Subject to subsection (h), the Secretary’’; and 

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

5 subsection: 

6 ‘‘(h) SUNSET OF PROGRAM.— 

7 ‘‘(1) IN GENERAL.—The program shall not 

8 apply to applicable drugs dispensed on or after Jan9 uary 1, 2022, and, subject to paragraph (2), agree10 ments under this section shall be terminated as of 

11 such date. 

12 ‘‘(2) CONTINUED APPLICATION FOR APPLICA13 BLE DRUGS DISPENSED PRIOR TO SUNSET.—The 

14 provisions of this section (including all responsibil15 ities and duties) shall continue to apply after Janu16 ary 1, 2022, with respect to applicable drugs dis17 pensed prior to such date.’’. 

18 (3) INCLUSION OF ACTUARIAL VALUE OF MANU19 FACTURER DISCOUNTS IN BIDS.—Section 1860D–11 

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

21 is amended— 

22 (A) in subsection (b)(2)(C)(iii)— 

23 (i) by striking ‘‘assumptions regarding 

24 the reinsurance’’ and inserting ‘‘assump25 tions regarding— 


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1 ‘‘(I) the reinsurance’’; and 

2 (ii) by adding at the end the fol3 lowing: 

4 ‘‘(II) for 2022 and each subse5 quent year, the manufacturer dis6 counts provided under section 1860D– 

7 14B subtracted from the actuarial 

8 value to produce such bid; and’’; and 

9 (B) in subsection (c)(1)(C)— 

10 (i) by striking ‘‘an actuarial valuation 

11 of the reinsurance’’ and inserting ‘‘an ac12 tuarial valuation of— 

13 ‘‘(i) the reinsurance’’; 

14 (ii) in clause (i), as added by clause 

15 (i) of this subparagraph, by adding ‘‘and’’ 

16 at the end; and 

17 (iii) by adding at the end the fol18 lowing: 

19 ‘‘(ii) for 2022 and each subsequent 

20 year, the manufacturer discounts provided 

21 under section 1860D–14B;’’. 

22 (d) DETERMINATION OF ALLOWABLE REINSURANCE

23 COSTS.—Section 1860D–15(b) of the Social Security Act 

24 (42 U.S.C. 1395w–115(b)) is amended— 

25 (1) in paragraph (2)— 


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1 (A) by striking ‘‘COSTS.—For purposes’’ 

2 and inserting ‘‘COSTS.— 

3 ‘‘(A) IN GENERAL.—Subject to subpara4 graph (B), for purposes’’; and 

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

6 subparagraph: 

7 ‘‘(B) INCLUSION OF MANUFACTURER DIS8 COUNTS ON APPLICABLE DRUGS.—For purposes 

9 of applying subparagraph (A), the term ‘allow10 able reinsurance costs’ shall include the portion 

11 of the negotiated price (as defined in section 

12 1860D–14B(g)(6)) of an applicable drug (as 

13 defined in section 1860D–14(g)(2)) that was 

14 paid by a manufacturer under the manufacturer 

15 discount program under section 1860D–14B.’’; 

16 and 

17 (2) in paragraph (3)— 

18 (A) in the first sentence, by striking ‘‘For 

19 purposes’’ and inserting ‘‘Subject to paragraph 

20 (2)(B), for purposes’’; and 

21 (B) in the second sentence, by inserting 

22 ‘‘or, in the case of an applicable drug, by a 

23 manufacturer’’ after ‘‘by the individual or 

24 under the plan’’. 


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1 (e) UPDATING RISK ADJUSTMENT METHODOLOGIES

2 TO ACCOUNT FOR PART D MODERNIZATION REDE3 SIGN.—Section 1860D–15(c) of the Social Security Act 

4 (42 U.S.C. 1395w–115(c)) is amended by adding at the 

5 end the following new paragraph: 

6 ‘‘(3) UPDATING RISK ADJUSTMENT METH7 ODOLOGIES TO ACCOUNT FOR PART D MODERNIZA8 TION REDESIGN.—The Secretary shall update the 

9 risk adjustment model used to adjust bid amounts 

10 pursuant to this subsection as appropriate to take 

11 into account changes in benefits under this part pur12 suant to the amendments made by section 121 of 

13 the Lower Costs, More Cures Act of 2019.’’. 

14 (f) CONDITIONS FOR COVERAGE OF DRUGS UNDER

15 THIS PART.—Section 1860D–43 of the Social Security 

16 Act (42 U.S.C. 1395w–153) is amended— 

17 (1) in subsection (a)— 

18 (A) in paragraph (2), by striking ‘‘and’’ at 

19 the end; 

20 (B) in paragraph (3), by striking the pe21 riod at the end and inserting a semicolon; and 

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

23 paragraphs: 

24 ‘‘(4) participate in the manufacturer discount 

25 program under section 1860D–14B; 


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1 ‘‘(5) have entered into and have in effect an 

2 agreement described in subsection (b) of such sec3 tion 1860D–14B with the Secretary; and 

4 ‘‘(6) have entered into and have in effect, under 

5 terms and conditions specified by the Secretary, a 

6 contract with a third party that the Secretary has 

7 entered into a contract with under subsection (d)(3) 

8 of such section 1860D–14B.’’; 

9 (2) by striking subsection (b) and inserting the 

10 following: 

11 ‘‘(b) EFFECTIVE DATE.—Paragraphs (1) through (3) 

12 of subsection (a) shall apply to covered part D drugs dis13 pensed under this part on or after January 1, 2011, and 

14 before January 1, 2022, and paragraphs (4) through (6) 

15 of such subsection shall apply to covered part D drugs 

16 dispensed on or after January 1, 2022.’’; and 

17 (3) in subsection (c), by striking paragraph (2) 

18 and inserting the following: 

19 ‘‘(2) the Secretary determines that in the period 

20 beginning on January 1, 2011, and ending on De21 cember 31, 2011 (with respect to paragraphs (1) 

22 through (3) of subsection (a)), or the period begin23 ning on January 1, 2022, and ending December 31, 

24 2022 (with respect to paragraphs (4) through (6) of 


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1 such subsection), there were extenuating cir2 cumstances.’’. 

3 (g) CONFORMING AMENDMENTS.— 

4 (1) Section 1860D–2 of the Social Security Act 

5 (42 U.S.C. 1395w–102) is amended— 

6 (A) in subsection (a)(2)(A)(i)(I), by strik7 ing ‘‘, or an increase in the initial’’ and insert8 ing ‘‘or for a year preceding 2022 an increase 

9 in the initial’’; 

10 (B) in subsection (c)(1)(C)— 

11 (i) in the subparagraph heading, by 

12 striking ‘‘AT INITIAL COVERAGE LIMIT’’; 

13 and 

14 (ii) by inserting ‘‘for a year preceding 

15 2022 or the annual out-of-pocket threshold 

16 specified in subsection (b)(4)(B) for the 

17 year for 2022 and each subsequent year’’ 

18 after ‘‘subsection (b)(3) for the year’’ each 

19 place it appears; and 

20 (C) in subsection (d)(1)(A), by striking ‘‘or 

21 an initial’’ and inserting ‘‘or for a year pre22 ceding 2022, an initial’’. 

23 (2) Section 1860D–4(a)(4)(B)(i) of the Social 

24 Security Act (42 U.S.C. 1395w–104(a)(4)(B)(i)) is 


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1 amended by striking ‘‘the initial’’ and inserting ‘‘for 

2 a year preceding 2022, the initial’’. 

3 (3) Section 1860D–14(a) of the Social Security 

4 Act (42 U.S.C. 1395w–114(a)) is amended— 

5 (A) in paragraph (1)— 

6 (i) in subparagraph (C), by striking 

7 ‘‘The continuation’’ and inserting ‘‘For a 

8 year preceding 2022, the continuation’’; 

9 (ii) in subparagraph (D)(iii), by strik10 ing ‘‘1860D–2(b)(4)(A)(i)(I)’’ and insert11 ing ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’; and 

12 (iii) in subparagraph (E), by striking 

13 ‘‘The elimination’’ and inserting ‘‘For a 

14 year preceding 2022, the elimination’’; and 

15 (B) in paragraph (2)— 

16 (i) in subparagraph (C), by striking 

17 ‘‘The continuation’’ and inserting ‘‘For a 

18 year preceding 2022, the continuation’’; 

19 and 

20 (ii) in subparagraph (E)— 

21 (I) by inserting ‘‘for a year pre22 ceding 2022,’’ after ‘‘subsection (c)’’; 

23 and 


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1 (II) by striking ‘‘1860D– 

2 2(b)(4)(A)(i)(I)’’ and inserting 

3 ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’. 

4 (4) Section 1860D–21(d)(7) of the Social Secu5 rity Act (42 U.S.C. 1395w–131(d)(7)) is amended 

6 by striking ‘‘section 1860D–2(b)(4)(B)(i)’’ and in7 serting ‘‘section 1860D–2(b)(4)(C)(i)’’. 

8 (5) Section 1860D–22(a)(2)(A) of the Social 

9 Security Act (42 U.S.C. 1395w–132(a)(2)(A)) is 

10 amended— 

11 (A) by striking ‘‘the value of any discount’’ 

12 and inserting the following: ‘‘the value of— 

13 ‘‘(i) for years prior to 2022, any dis14 count’’; 

15 (B) in clause (i), as inserted by subpara16 graph (A) of this paragraph, by striking the pe17 riod at the end and inserting ‘‘; and’’; and 

18 (C) by adding at the end the following new 

19 clause: 

20 ‘‘(ii) for 2022 and each subsequent 

21 year, any discount provided pursuant to 

22 section 1860D–14B.’’. 

23 (6) Section 1860D–41(a)(6) of the Social Secu24 rity Act (42 U.S.C. 1395w–151(a)(6)) is amended— 


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1 (A) by inserting ‘‘for a year before 2022’’ 

2 after ‘‘1860D–2(b)(3)’’; and 

3 (B) by inserting ‘‘for such year’’ before the 

4 period. 

5 (h) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to plan year 2022 and subsequent 

7 plan years. 

8 Subtitle D—Other Medicare Part D 

9 Provisions 

10 SEC. 131. TRANSITIONAL COVERAGE AND RETROACTIVE 

11 MEDICARE PART D COVERAGE FOR CERTAIN 

12 LOW-INCOME BENEFICIARIES. 

13 Section 1860D–14 of the Social Security Act (42 

14 U.S.C. 1395w–114) is amended— 

15 (1) by redesignating subsection (e) as sub16 section (f); and 

17 (2) by adding after subsection (d) the following 

18 new subsection: 

19 ‘‘(e) LIMITED INCOME NEWLY ELIGIBLE TRANSI20 TION PROGRAM.— 

21 ‘‘(1) IN GENERAL.—Beginning not later than 

22 January 1, 2021, the Secretary shall carry out a 

23 program to provide transitional coverage for covered 

24 part D drugs for LI NET eligible individuals in ac25 cordance with this subsection. 


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1 ‘‘(2) LI NET ELIGIBLE INDIVIDUAL DEFINED.— 

2 For purposes of this subsection, the term ‘LI NET 

3 eligible individual’ means a part D eligible individual 

4 who— 

5 ‘‘(A) meets the requirements of clauses (ii) 

6 and (iii) of subsection (a)(3)(A); and 

7 ‘‘(B) has not yet enrolled in a prescription 

8 drug plan or an MA–PD plan, or, who has so 

9 enrolled, but with respect to whom coverage 

10 under such plan has not yet taken effect. 

11 ‘‘(3) TRANSITIONAL COVERAGE.—For purposes 

12 of this subsection, the term ‘transitional coverage’ 

13 means, with respect to an LI NET eligible indi14 vidual— 

15 ‘‘(A) immediate access to covered part D 

16 drugs at the point-of-sale during the period that 

17 begins on the first day of the month such indi18 vidual is determined to meet the requirements 

19 of clauses (ii) and (iii) of subsection (a)(3)(A) 

20 and ends on the date that coverage under a pre21 scription drug plan or MA–PD plan takes effect 

22 with respect to such individual; and 

23 ‘‘(B) in the case of an LI NET eligible in24 dividual who is a full-benefit dual eligible indi25 vidual (as defined in section 1935(c)(6)) or a 


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1 recipient of supplemental security income bene2 fits under title XVI, retroactive coverage (in the 

3 form of reimbursement of the amounts that 

4 would have been paid under this part had such 

5 individual been enrolled in a prescription drug 

6 plan or MA–PD plan) of covered part D drugs 

7 purchased by such individual during the period 

8 that begins on the date that is the later of— 

9 ‘‘(i) the date that such individual was 

10 first eligible for a low-income subsidy 

11 under this part; or 

12 ‘‘(ii) the date that is 36 months prior 

13 to the date such individual enrolls in a pre14 scription drug plan or MA–PD plan, and 

15 ends on the date that coverage under such 

16 plan takes effect. 

17 ‘‘(4) PROGRAM ADMINISTRATION.— 

18 ‘‘(A) SINGLE POINT OF CONTACT.—The 

19 Secretary shall, to the extent feasible, admin20 ister the program under this subsection through 

21 a contract with a single program administrator. 

22 ‘‘(B) BENEFIT DESIGN.—The Secretary 

23 shall ensure that the transitional coverage pro24 vided to LI NET eligible individuals under this 

25 subsection— 


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1 ‘‘(i) provides access to all covered part 

2 D drugs under an open formulary; 

3 ‘‘(ii) permits all pharmacies deter4 mined by the Secretary to be in good 

5 standing to process claims under the pro6 gram; 

7 ‘‘(iii) is consistent with such require8 ments as the Secretary considers necessary 

9 to improve patient safety and ensure ap10 propriate dispensing of medication; and 

11 ‘‘(iv) meets such other requirements 

12 as the Secretary may establish. 

13 ‘‘(5) RELATIONSHIP TO OTHER PROVISIONS OF

14 THIS TITLE; WAIVER AUTHORITY.— 

15 ‘‘(A) IN GENERAL.—The following provi16 sions shall not apply with respect to the pro17 gram under this subsection: 

18 ‘‘(i) Paragraphs (1) and (3)(B) of sec19 tion 1860D–4(a) (relating to dissemination 

20 of general information; availability of infor21 mation on changes in formulary through 

22 the internet). 

23 ‘‘(ii) Subparagraphs (A) and (B) of 

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1 ments on development and application of 

2 formularies; formulary development). 

3 ‘‘(iii) Paragraphs (1)(C) and (2) of 

4 section 1860D–4(c) (relating to medication 

5 therapy management program). 

6 ‘‘(B) WAIVER AUTHORITY.—The Secretary 

7 may waive such other requirements of title XI 

8 and this title as may be necessary to carry out 

9 the purposes of the program established under 

10 this subsection.’’. 

11 SEC. 132. ALLOWING THE OFFERING OF ADDITIONAL PRE12 SCRIPTION DRUG PLANS UNDER MEDICARE 

13 PART D. 

14 (a) RESCINDING AND ISSUANCE OF NEW GUID15 ANCE.—Not later than one year after the date of the en16 actment of this Act, the Secretary of Health and Human 

17 Services (in this section referred to as the ‘‘Secretary’’) 

18 shall— 

19 (1) rescind sections of any sub-regulatory guid20 ance that limit the number of prescription drug 

21 plans in each PDP region that may be offered by a 

22 PDP sponsor under part D of title XVIII of the So23 cial Security Act (42 U.S.C. 1395w–101 et seq.); 

24 and 


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1 (2) issue new guidance specifying that a PDP 

2 sponsor may offer up to 4 (or a greater number if 

3 determined appropriate by the Secretary) prescrip4 tion drug plans in each PDP region, except in cases 

5 where the PDP sponsor may offer up to 2 additional 

6 plans in a PDP region pursuant to section 1860D– 

7 11(d)(4) of the Social Security Act (42 U.S.C. 

8 1395w–111(d)(4)), as added by subsection (b). 

9 (b) OFFERING OF ADDITIONAL PLANS.—Section 

10 1860D–11(d) of the Social Security Act (42 U.S.C. 

11 1395w–111(d)) is amended by adding at the end the fol12 lowing new paragraph: 

13 ‘‘(4) OFFERING OF ADDITIONAL PLANS.— 

14 ‘‘(A) IN GENERAL.—For plan year 2022 

15 and each subsequent plan year, a PDP sponsor 

16 may offer up to 2 additional prescription drug 

17 plans in a PDP region (in addition to any limit 

18 established by the Secretary under this part) 

19 provided that the PDP sponsor complies with 

20 subparagraph (B) with respect to at least one 

21 such prescription drug plan. 

22 ‘‘(B) REQUIREMENTS.—In order to be eli23 gible to offer up to 2 additional plans in a PDP 

24 region pursuant to subparagraph (A), a PDP 

25 sponsor must ensure that, with respect to at 


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1 least one such prescription drug plan, the spon2 sor or any entity that provides pharmacy bene3 fits management services under a contract with 

4 any such sponsor or plan does not receive direct 

5 or indirect remuneration, as defined in section 

6 423.308 of title 42, Code of Federal Regula7 tions (or any successor regulation), unless at 

8 least 25 percent of the aggregate reductions in 

9 price or other remuneration received by the 

10 PDP sponsor or entity from drug manufactur11 ers with respect to the plan and plan year— 

12 ‘‘(i) are reflected at the point-of-sale 

13 to the enrollee; or 

14 ‘‘(ii) are used to reduce total bene15 ficiary cost-sharing estimated by the PDP 

16 sponsor for prescription drug coverage 

17 under the plan in the annual bid submitted 

18 by the PDP sponsor under section 1860D– 

19 11(b). 

20 ‘‘(C) DEFINITION OF REDUCTIONS IN

21 PRICE.—For purposes of subparagraph (B), the 

22 term ‘reductions in price’ refers only to collect23 ible amounts, as determined by the Secretary, 

24 which excludes amounts which after adjudica25 tion and reconciliation with pharmacies and 


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1 manufacturers are duplicate in nature, contrary 

2 to other contractual clauses, or otherwise ineli3 gible (such as due to beneficiary disenrollment 

4 or coordination of benefits).’’. 

5 (c) RULE OF CONSTRUCTION.—Nothing in the provi6 sions of, or amendments made by, this section shall be 

7 construed as limiting the ability of the Secretary to in8 crease any limit otherwise applicable on the number of 

9 prescription drug plans that a PDP sponsor may offer, 

10 at the discretion of the PDP sponsor, in a PDP region 

11 under part D of title XVIII of the Social Security Act (42 

12 U.S.C. 1395w–101 et seq.). 

13 SEC. 133. ALLOWING CERTAIN ENROLLEES OF PRESCRIP14 TION DRUGS PLANS AND MA–PD PLANS 

15 UNDER MEDICARE PROGRAM TO SPREAD 

16 OUT COST-SHARING UNDER CERTAIN CIR17 CUMSTANCES. 

18 (a) STANDARD PRESCRIPTION DRUG COVERAGE.— 

19 Section 1860D–2(b)(2) of the Social Security Act (42 

20 U.S.C. 1395w–102(b)(2)), as amended by section 121, is 

21 further amended— 

22 (1) in subparagraph (A), by striking ‘‘Subject 

23 to subparagraphs (C) and (D)’’ and inserting ‘‘Sub24 ject to subparagraphs (C), (D), and (E)’’; and 


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

3 ‘‘(E) ENROLLEE OPTION REGARDING

4 SPREADING COST-SHARING.— 

5 ‘‘(i) IN GENERAL.—The Secretary 

6 shall establish by regulation a process 

7 under which, with respect to plan year 

8 2022 and subsequent plan years, a pre9 scription drug plan or an MA–PD plan 

10 shall, in the case of a part D eligible indi11 vidual enrolled with such plan for such 

12 plan year with respect to whom the plan 

13 projects that the dispensing of a covered 

14 part D drug to such individual will result 

15 in the individual incurring costs within a 

16 30-day period that are equal to a signifi17 cant percentage (as specified by the Sec18 retary pursuant to such regulation) of the 

19 annual out-of-pocket threshold specified in 

20 paragraph (4)(B) for such plan year, pro21 vide such individual with the option to 

22 make the coinsurance payment required 

23 under subparagraph (A) for such costs in 

24 the form of equal monthly installments 

25 over the remainder of such plan year. 


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1 ‘‘(ii) SIGNIFICANT PERCENTAGE LIMI2 TATIONS.—In specifying a significant per3 centage pursuant to the regulation estab4 lished by the Secretary under clause (i), 

5 the Secretary may not specify a percentage 

6 that is less than 30 percent or greater 

7 than 100 percent.’’. 

8 (b) ALTERNATIVE PRESCRIPTION DRUG COV9 ERAGE.—Section 1860D–2(c) of the Social Security Act 

10 (42 U.S.C. 1395w–102(c)) is amended by adding at the 

11 end the following new paragraph: 

12 ‘‘(4) SAME ENROLLEE OPTION REGARDING

13 SPREADING COST-SHARING.—For plan year 2022 

14 and subsequent plan years, the coverage provides the 

15 enrollee option regarding spreading cost-sharing de16 scribed in and required under subsection 

17 (b)(2)(E).’’. 

18 SEC. 134. ESTABLISHING A MONTHLY CAP ON BENEFICIARY 

19 INCURRED COSTS FOR INSULIN PRODUCTS 

20 AND SUPPLIES UNDER A PRESCRIPTION 

21 DRUG PLAN OR MA–PD PLAN. 

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

23 Security Act (42 U.S.C. 1395w–102), as amended by sec24 tions 121 and 133, is further amended— 

25 (1) in subsection (b)(2)— 


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1 (A) in subparagraph (A), by striking ‘‘and 

2 (E)’’ and inserting ‘‘(E), and (F)’’; 

3 (B) in subparagraph (B), by striking ‘‘and 

4 (D)’’ and inserting ‘‘(D), and (F)’’; and 

5 (C) by adding at the end the following new 

6 subparagraph: 

7 ‘‘(F) CAP ON INCURRED COSTS FOR INSU8 LIN PRODUCTS AND SUPPLIES.— 

9 ‘‘(i) IN GENERAL.—The coverage pro10 vides benefits, for costs above the annual 

11 deductible specified in paragraph (1) and 

12 up to the annual out-of-pocket threshold 

13 described in paragraph (4)(B) and with re14 spect to a month (beginning with January 

15 of 2022), with cost sharing that is equal to 

16 $0 for a specified covered part D drug (as 

17 defined in clause (iii)) furnished to an indi18 vidual who has incurred costs during such 

19 month with respect to specified covered 

20 part D drugs equal to— 

21 ‘‘(I) for months occurring in 

22 2022, $50; or 

23 ‘‘(II) for months occurring in a 

24 subsequent year, the amount applica25 ble under this clause for months ocVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 curring in the year preceding such 

2 subsequent year, increased by the an3 nual percentage increase specified in 

4 paragraph (6) for such subsequent 

5 year and rounded to the nearest dol6 lar. 

7 ‘‘(ii) APPLICATION.—The provisions 

8 of clauses (i) through (iii) of paragraph 

9 (4)(C) shall apply with respect to the de10 termination of the incurred costs for speci11 fied covered part D drugs for purposes of 

12 clause (i) in the same manner as such pro13 visions apply with respect to the deter14 mination of incurred costs for covered part 

15 D drugs for purposes of paragraph (4)(A). 

16 ‘‘(iii) SPECIFIED COVERED PART D

17 DRUG.—For purposes of this subpara18 graph, the term ‘specified covered part D 

19 drug’ means a covered part D drug that 

20 is— 

21 ‘‘(I) insulin; or 

22 ‘‘(II) a medical supply associated 

23 with the injection of insulin (as de24 fined in regulations of the Secretary 


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1 promulgated pursuant to subsection 

2 (e)(1)(B)).’’; and 

3 (2) in subsection (c), by adding at the end the 

4 following new paragraph: 

5 ‘‘(5) SAME PROTECTION WITH RESPECT TO EX6 PENDITURES FOR INSULIN AND CERTAIN MEDICAL

7 SUPPLIES.—The coverage provides the coverage re8 quired under subsection (b)(2)(F).’’. 

9 (b) CONFORMING AMENDMENTS.— 

10 (1) IN GENERAL.—Section 1860D–14(a)(1)(D) 

11 of the Social Security Act (42 U.S.C. 1395w– 

12 114(a)(1)(D)), as amended by section 121, is fur13 ther amended— 

14 (A) in clause (ii), by striking ‘‘section 

15 1860D–2(b)(2)’’ and inserting ‘‘section 1860D– 

16 2(b)(2)(A)’’; and 

17 (B) in clause (iii), by striking ‘‘section 

18 1860D–2(b)(2)’’ and inserting ‘‘section 1860D– 

19 2(b)(2)(A)’’. 

20 (2) EFFECTIVE DATE.—The amendments made 

21 by paragraph (1) shall apply with respect to plan 

22 year 2022 and each subsequent plan year. 


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1 SEC. 135. GROWTH RATE OF MEDICARE PART D OUT-OF2 POCKET COST THRESHOLD. 

3 (a) PROVIDING MEDICARE PART D BENEFICIARIES

4 WITH CERTAIN 2020 OFFSET PAYMENTS.—Section 

5 1860D–2(b)(4) of the Social Security Act (42 U.S.C. 

6 1395w–102(b)(4)) is amended by adding at the end the 

7 following new subparagraph: 

8 ‘‘(F) 2020 OFFSET PAYMENTS.— 

9 ‘‘(i) IN GENERAL.—Subject to clause 

10 (iv), the Secretary shall provide for pay11 ment from the Medicare Prescription Drug 

12 Account as follows: 

13 ‘‘(I) In the case of a specified in14 dividual (as defined in clause (ii)(I)) 

15 who as of the last day of a calendar 

16 quarter in 2020 has incurred costs for 

17 covered part D drugs so that the indi18 vidual has exceeded the annual out-of19 pocket threshold applied under sub20 paragraph (B)(i)(V) for 2020, pay21 ment to the individual by not later 

22 than 15th day of the third month fol23 lowing the end of such quarter of the 

24 amount by which such threshold so 

25 applied exceeded the target threshold 

26 for 2020. 


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1 ‘‘(II) In the case of a specified 

2 individual who is not described in sub3 clause (I) and who as of the last day 

4 of 2020 has incurred costs for covered 

5 part D drugs so that the individual 

6 has exceeded the target threshold for 

7 2020, payment to the individual by 

8 not later than December 31, 2021, of 

9 the amount by which such incurred 

10 costs exceeded the target threshold for 

11 2020. 

12 ‘‘(ii) DEFINITIONS.—For purposes of 

13 this subparagraph: 

14 ‘‘(I) SPECIFIED INDIVIDUAL.— 

15 The term ‘specified individual’ means 

16 an individual who— 

17 ‘‘(aa) is enrolled in a pre18 scription drug plan or an MA– 

19 PD plan; 

20 ‘‘(bb) is not enrolled in a 

21 qualified retiree prescription drug 

22 plan; and 

23 ‘‘(cc) is not entitled to an in24 come-related subsidy under sec25 tion 1860D–14(a). 


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1 ‘‘(II) TARGET THRESHOLD FOR

2 2020.—the term ‘target threshold for 

3 2020’ means the annual out-of-pocket 

4 threshold that would have been ap5 plied under subparagraph (B)(i) for 

6 2020 if such threshold had been de7 termined in accordance with subclause 

8 (IV) of such subparagraph instead of 

9 subclause (V) of such subparagraph. 

10 ‘‘(iii) NOTIFICATION.—In the case of 

11 any specified individual who during 2020 

12 has incurred costs for covered part D 

13 drugs so that the individual has exceeded 

14 the target threshold for 2020, the Sec15 retary shall, not later than September 30, 

16 2021, provide to such individual a notifica17 tion informing such individual of such indi18 vidual’s right to a payment described in 

19 clause (i) and the estimated timing of such 

20 payment. 

21 ‘‘(iv) CLARIFICATION.—The Secretary 

22 shall provide only 1 payment under this 

23 subparagraph with respect to any indi24 vidual. 


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1 ‘‘(v) IMPLEMENTATION.—The Sec2 retary may implement this subparagraph 

3 by program instruction or otherwise.’’. 

4 (b) REDUCED GROWTH RATE FOR 2021 OF MEDI5 CARE PART D OUT-OF-POCKET COST THRESHOLD.—Sec6 tion 1860D–2(b)(4)(B)(i) of the Social Security Act (42 

7 U.S.C. 1395w–102(b)(4)(B)(i)) is amended— 

8 (1) in subclause (V), by striking at the end 

9 ‘‘or’’; 

10 (2) by redesignating subclause (VI) as sub11 clause (VIII); and 

12 (3) by inserting after subclause (V) the fol13 lowing new subclauses: 

14 ‘‘(VI) for 2021, is equal to the 

15 amount that would have been applied 

16 under this subparagraph for 2020 if 

17 such amount had been determined in 

18 accordance with subclause (IV) in19 stead of subclause (V), increased by 

20 the lesser of— 

21 ‘‘(aa) the annual percentage 

22 increase described in paragraph 

23 (7) for 2021, plus 2 percentage 

24 points; or 


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1 ‘‘(bb) the annual percentage 

2 increase described in paragraph 

3 (6) for 2021; 

4 ‘‘(VII) for 2022, is equal to the 

5 amount that would have been applied 

6 under this subparagraph for 2022 if 

7 the amendments made by section 

8 1101(d)(1) of the Health Care and 

9 Education Reconciliation Act of 2010 

10 and by section 135 of the Lower 

11 Costs, More Cures Act of 2019 had 

12 not been enacted; or’’. 

13 Subtitle E—MedPAC 

14 SEC. 141. PROVIDING THE MEDICARE PAYMENT ADVISORY 

15 COMMISSION AND MEDICAID AND CHIP PAY16 MENT AND ACCESS COMMISSION WITH AC17 CESS TO CERTAIN DRUG PAYMENT INFORMA18 TION, INCLUDING CERTAIN REBATE INFOR19 MATION. 

20 (a) ACCESS TO CERTAIN PART D PAYMENT DATA.— 

21 Section 1860D–15(f) of the Social Security Act (42 

22 U.S.C. 1395w–115(f)) is amended— 

23 (1) in paragraph (2)— 

24 (A) in subparagraph (A)(ii), by striking 

25 ‘‘and’’ at the end; 


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1 (B) in subparagraph (B), by striking the 

2 period at the end and inserting ‘‘; and’’; and 

3 (C) by inserting at the end the following 

4 new subparagraph: 

5 ‘‘(C) by the Executive Director of the 

6 Medicare Payment Advisory Commission for 

7 purposes of monitoring, making recommenda8 tions, and analysis of the program under this 

9 title and by the Executive Director of the Med10 icaid and CHIP Payment and Access Commis11 sion for purposes of monitoring, making rec12 ommendations, and analysis of the Medicaid 

13 program established under title XIX and the 

14 Children’s Health Insurance Program under 

15 title XXI.’’; and 

16 (2) by adding at the end the following new 

17 paragraph: 

18 ‘‘(3) ADDITIONAL RESTRICTIONS ON DISCLO19 SURE OF INFORMATION.—The Executive Directors 

20 described in paragraph (2)(C) shall not disclose any 

21 of the following information disclosed to such Execu22 tive Directors or obtained by such Executive Direc23 tors pursuant to such paragraph, with respect to a 

24 prescription drug plan offered by a PDP sponsor: 


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1 ‘‘(A) The specific amounts or the identity 

2 of the source of any rebates, price concessions, 

3 or other forms of direct or indirect remunera4 tion under such prescription drug plan. 

5 ‘‘(B) Information submitted with the bid 

6 submitted under section 1860D–11 by such 

7 PDP sponsor. 

8 ‘‘(C) In the case of such information from 

9 prescription drug event records, in a form that 

10 would not be permitted under section 

11 423.505(m) of title 42, Code of Federal Regula12 tions, or any successor regulation, if made by 

13 the Centers for Medicare & Medicaid Services.’’. 

14 (b) ACCESS TO CERTAIN REBATE AND PAYMENT

15 DATA UNDER MEDICARE AND MEDICAID.—Section 

16 1927(b)(3)(D) of the Social Security Act (42 U.S.C. 

17 1396r–8(b)(3)(D)) is amended— 

18 (1) in the matter before clause (i), by striking 

19 ‘‘subsection (a)(6)(A)(ii)’’ and inserting ‘‘subsection 

20 (a)(6)(A)’’; 

21 (2) in clause (v), by striking ‘‘and’’ at the end; 

22 (3) in clause (vi), by striking the period at the 

23 end and inserting ‘‘, and’’; 

24 (4) by inserting after clause (vi) the following 

25 new clause: 


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1 ‘‘(vii) to permit the Executive Direc2 tor of the Medicare Payment Advisory 

3 Commission and the Executive Director of 

4 the Medicaid and CHIP Payment and Ac5 cess Commission to review the information 

6 provided.’’; 

7 (5) in the matter at the end, by striking 

8 ‘‘1860D–4(c)(2)(E)’’ and inserting ‘‘1860D– 

9 4(c)(2)(G)’’; and 

10 (6) by adding at the end the following new sen11 tence: ‘‘Any information disclosed to the Executive 

12 Director of the Medicare Payment Advisory Commis13 sion or the Executive Director of the Medicaid and 

14 CHIP Payment and Access Commission pursuant to 

15 this subparagraph shall not be disclosed by either 

16 such Executive Director in a form which discloses 

17 the identity of a specific manufacturer or wholesaler 

18 or prices charged for drugs by such manufacturer or 

19 wholesaler.’’. 

20 TITLE II—MEDICAID 

21 SEC. 201. SUNSET OF LIMIT ON MAXIMUM REBATE AMOUNT 

22 FOR SINGLE SOURCE DRUGS AND INNO23 VATOR MULTIPLE SOURCE DRUGS. 

24 Section 1927(c)(2)(D) of the Social Security Act (42 

25 U.S.C. 1396r–8(c)(2)(D)) is amended by inserting after 


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1 ‘‘December 31, 2009,’’ the following: ‘‘and before January 

2 1, 2023,’’. 

3 SEC. 202. MEDICAID PHARMACY AND THERAPEUTICS COM4 MITTEE IMPROVEMENTS. 

5 (a) IN GENERAL.—Subparagraph (A) of section 

6 1927(d)(4) of the Social Security Act (42 U.S.C. 1396r– 

7 8(d)(4)) is amended to read as follows: 

8 ‘‘(A)(i) The formulary is developed and re9 viewed by a pharmacy and therapeutics com10 mittee consisting of physicians, pharmacists, 

11 and other appropriate individuals appointed by 

12 the Governor of the State. 

13 ‘‘(ii) Subject to clause (vi), the State estab14 lishes and implements a conflict of interest pol15 icy for the pharmacy and therapeutics com16 mittee that— 

17 ‘‘(I) is publicly accessible; 

18 ‘‘(II) requires all committee members 

19 to complete, on at least an annual basis, a 

20 disclosure of relationships, associations, 

21 and financial dealings that may affect their 

22 independence of judgement in committee 

23 matters; and 

24 ‘‘(III) contains clear processes, such 

25 as recusal from voting or discussion, for 


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1 those members who report a conflict of in2 terest, along with appropriate processes to 

3 address any instance where a member fails 

4 to report a conflict of interest. 

5 ‘‘(iii) The membership of the pharmacy 

6 and therapeutics committee— 

7 ‘‘(I) includes at least 1 actively prac8 ticing physician and at least 1 actively 

9 practicing pharmacist, each of whom— 

10 ‘‘(aa) is independent and free of 

11 conflict with respect to manufacturers 

12 and Medicaid participating plans or 

13 subcontractors, including pharmacy 

14 benefit managers; and 

15 ‘‘(bb) has expertise in the care of 

16 1 or more Medicaid-specific popu17 lations such as elderly or disabled in18 dividuals, children with complex med19 ical needs, or low-income individuals 

20 with chronic illnesses; and 

21 ‘‘(II) is made publicly available. 

22 ‘‘(iv) At the option of the State, the 

23 State’s drug use review board established under 

24 subsection (g)(3) may serve as the pharmacy 

25 and therapeutics committee provided the State 


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1 ensures that such board meets the requirements 

2 of clauses (ii) and (iii). 

3 ‘‘(v) The State reviews and has final ap4 proval of the formulary established by the phar5 macy and therapeutics committee. 

6 ‘‘(vi) If the Secretary determines it appro7 priate or necessary based on the findings and 

8 recommendations of the Comptroller General of 

9 the United States in the report submitted to 

10 Congress under section 203 of the Lower Costs, 

11 More Cures Act of 2019, the Secretary shall 

12 issue guidance that States must follow for es13 tablishing conflict of interest policies for the 

14 pharmacy and therapeutics committee in ac15 cordance with the requirements of clause (ii), 

16 including appropriate standards and require17 ments for identifying, addressing, and reporting 

18 on conflicts of interest.’’. 

19 (b) APPLICATION TO MEDICAID MANAGED CARE OR20 GANIZATIONS.—Clause (xiii) of section 1903(m)(2)(A) of 

21 the Social Security Act (42 U.S.C. 1396b(m)(2)(A)) is 

22 amended— 

23 (1) by striking ‘‘and (III)’’ and inserting 

24 ‘‘(III)’’; 


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1 (2) by striking the period at the end and insert2 ing ‘‘, and (IV) any formulary used by the entity for 

3 covered outpatient drugs dispensed to individuals eli4 gible for medical assistance who are enrolled with 

5 the entity is developed and reviewed by a pharmacy 

6 and therapeutics committee that meets the require7 ments of clauses (ii) and (iii) of section 

8 1927(d)(4)(A).’’; and 

9 (3) by moving the left margin 2 ems to the left. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall take effect on the date that is 1 year 

12 after the date of enactment of this Act. 

13 SEC. 203. GAO REPORT ON CONFLICTS OF INTEREST IN 

14 STATE MEDICAID PROGRAM DRUG USE RE15 VIEW BOARDS AND PHARMACY AND THERA16 PEUTICS (P&T) COMMITTEES. 

17 (a) INVESTIGATION.—The Comptroller General of the 

18 United States shall conduct an investigation of potential 

19 or existing conflicts of interest among members of State 

20 Medicaid program State drug use review boards (in this 

21 section referred to as ‘‘DUR Boards’’) and pharmacy and 

22 therapeutics committees (in this section referred to as 

23 ‘‘P&T Committees’’). 

24 (b) REPORT.—Not later than 24 months after the 

25 date of enactment of this Act, the Comptroller General 


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1 shall submit to Congress a report on the investigation con2 ducted under subsection (a) that includes the following: 

3 (1) A description outlining how DUR Boards 

4 and P&T Committees operate in States, including 

5 details with respect to— 

6 (A) the structure and operation of DUR 

7 Boards and statewide P&T Committees; 

8 (B) States that operate separate P&T 

9 Committees for their fee-for-service Medicaid 

10 program and their Medicaid managed care or11 ganizations or other Medicaid managed care ar12 rangements (collectively referred to in this sec13 tion as ‘‘Medicaid MCOs)’’; and 

14 (C) States that allow Medicaid MCOs to 

15 have their own P&T Committees and the extent 

16 to which pharmacy benefit managers administer 

17 or participate in such P&T Committees. 

18 (2) A description outlining the differences be19 tween DUR Boards established in accordance with 

20 section 1927(g)(3) of the Social Security Act (42 

21 U.S.C. 1396r(g)(3)) and P&T Committees. 

22 (3) A description outlining the tools P&T Com23 mittees may use to determine Medicaid drug cov24 erage and utilization management policies. 


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1 (4) An analysis of whether and how States or 

2 P&T Committees establish participation and inde3 pendence requirements for DUR Boards and P&T 

4 Committees, including with respect to entities with 

5 connections with drug manufacturers, State Med6 icaid programs, managed care organizations, and 

7 other entities or individuals in the pharmaceutical 

8 industry. 

9 (5) A description outlining how States, DUR 

10 Boards, or P&T Committees define conflicts of inter11 est. 

12 (6) A description of how DUR Boards and P&T 

13 Committees address conflicts of interest, including 

14 who is responsible for implementing such policies. 

15 (7) A description of the tools, if any, States use 

16 to ensure that there are no conflicts of interest on 

17 DUR Boards and P&T Committees. 

18 (8) An analysis of the effectiveness of tools 

19 States use to ensure that there are no conflicts of 

20 interest on DUR Boards and P&T Committees and, 

21 if applicable, recommendations as to how such tools 

22 could be improved. 

23 (9) A review of strategies States may use to 

24 guard against conflicts of interest on DUR Boards 

25 and P&T Committees and to ensure compliance with 


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1 the requirements of titles XI and XIX of the Social 

2 Security Act (42 U.S.C. 1301 et seq., 1396 et seq.) 

3 and access to effective, clinically appropriate, and 

4 medically necessary drug treatments for Medicaid 

5 beneficiaries, including recommendations for such 

6 legislative and administrative actions as the Comp7 troller General determines appropriate. 

8 SEC. 204. ENSURING THE ACCURACY OF MANUFACTURER 

9 PRICE AND DRUG PRODUCT INFORMATION 

10 UNDER THE MEDICAID DRUG REBATE PRO11 GRAM. 

12 (a) AUDIT OF MANUFACTURER PRICE AND DRUG

13 PRODUCT INFORMATION.— 

14 (1) IN GENERAL.—Subparagraph (B) of section 

15 1927(b)(3) of the Social Security Act (42 U.S.C. 

16 1396r–8(b)(3)) is amended to read as follows: 

17 ‘‘(B) AUDITS AND SURVEYS OF MANUFAC18 TURER PRICE AND DRUG PRODUCT INFORMA19 TION.— 

20 ‘‘(i) AUDITS.—The Secretary shall 

21 conduct ongoing audits of the price and 

22 drug product information reported by man23 ufacturers under subparagraph (A) for the 

24 most recently ended rebate period to en25 sure the accuracy and timeliness of such 


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1 information. In conducting such audits, the 

2 Secretary may employ evaluations, surveys, 

3 statistical sampling, predictive analytics 

4 and other relevant tools and methods. 

5 ‘‘(ii) VERIFICATIONS SURVEYS OF AV6 ERAGE MANUFACTURER PRICE AND MANU7 FACTURER’S AVERAGE SALES PRICE.—In 

8 addition to the audits required under 

9 clause (i), the Secretary may survey whole10 salers and manufacturers (including manu11 facturers that directly distribute their cov12 ered outpatient drugs (in this subpara13 graph referred to as ‘direct sellers’)), when 

14 necessary, to verify manufacturer prices 

15 and manufacturer’s average sales prices 

16 (including wholesale acquisition cost) to 

17 make payment reported under subpara18 graph (A). 

19 ‘‘(iii) PENALTIES.—In addition to 

20 other penalties as may be prescribed by 

21 law, including under subparagraph (C) of 

22 this paragraph, the Secretary may impose 

23 a civil monetary penalty in an amount not 

24 to exceed $185,000 on an annual basis on 

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1 er, if the wholesaler, manufacturer, or di2 rect seller of a covered outpatient drug re3 fuses a request for information about 

4 charges or prices by the Secretary in con5 nection with an audit or survey under this 

6 subparagraph or knowingly provides false 

7 information. The provisions of section 

8 1128A (other than subsections (a) (with 

9 respect to amounts of penalties or addi10 tional assessments) and (b)) shall apply to 

11 a civil money penalty under this clause in 

12 the same manner as such provisions apply 

13 to a penalty or proceeding under section 

14 1128A(a). 

15 ‘‘(iv) REPORTS.— 

16 ‘‘(I) REPORT TO CONGRESS.— 

17 The Secretary shall, not later than 18 

18 months after date of enactment of 

19 this subparagraph, submit a report to 

20 the Committee on Energy and Com21 merce of the House of Representatives 

22 and the Committee on Finance of the 

23 Senate regarding additional regulatory 

24 or statutory changes that may be re25 quired in order to ensure accurate and 


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1 timely reporting and oversight of 

2 manufacturer price and drug product 

3 information, including whether 

4 changes should be made to reasonable 

5 assumption requirements to ensure 

6 such assumptions are reasonable and 

7 accurate or whether another method8 ology for ensuring accurate and timely 

9 reporting of price and drug product 

10 information should be considered to 

11 ensure the integrity of the drug rebate 

12 program under this section. 

13 ‘‘(II) ANNUAL REPORTS.—The 

14 Secretary shall, on at least an annual 

15 basis, submit a report to the Com16 mittee on Energy and Commerce of 

17 the House of Representatives and the 

18 Committee on Finance of the Senate 

19 summarizing the results of the audits 

20 and surveys conducted under this sub21 paragraph during the period that is 

22 the subject of the report. 

23 ‘‘(III) CONTENT.—Each report 

24 submitted under subclause (II) shall, 

25 with respect to the period that is the 


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1 subject of the report, include sum2 maries of— 

3 ‘‘(aa) error rates in the 

4 price, drug product, and other 

5 relevant information supplied by 

6 manufacturers under subpara7 graph (A); 

8 ‘‘(bb) the timeliness with 

9 which manufacturers, whole10 salers, and direct sellers provide 

11 information required under sub12 paragraph (A) or under clause (i) 

13 or (ii) of this subparagraph; 

14 ‘‘(cc) the number of manu15 facturers, wholesalers, and direct 

16 sellers and drug products audited 

17 under this subparagraph; 

18 ‘‘(dd) the types of price and 

19 drug product information re20 viewed under the audits con21 ducted under this subparagraph; 

22 ‘‘(ee) the tools and meth23 odologies employed in such au24 dits; 


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1 ‘‘(ff) the findings of such 

2 audits, including which manufac3 turers, if any, were penalized 

4 under this subparagraph; and 

5 ‘‘(gg) such other relevant in6 formation as the Secretary shall 

7 deem appropriate. 

8 ‘‘(IV) PROTECTION OF INFORMA9 TION.—In preparing a report required 

10 under subclause (II), the Secretary 

11 shall redact such proprietary informa12 tion as the Secretary determines ap13 propriate to prevent disclosure of, and 

14 to safeguard, such information. 

15 ‘‘(v) APPROPRIATIONS.—Out of any 

16 funds in the Treasury not otherwise appro17 priated, there is appropriated to the Sec18 retary $2,000,000 for fiscal year 2020 and 

19 each fiscal year thereafter to carry out this 

20 subparagraph.’’. 

21 (2) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall take effect on the first day 

23 of the first fiscal quarter that begins after the date 

24 of enactment of this Act. 


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1 (b) INCREASED PENALTIES FOR NONCOMPLIANCE

2 WITH REPORTING REQUIREMENTS.— 

3 (1) INCREASED PENALTY FOR LATE REPORTING

4 OF INFORMATION.—Section 1927(b)(3)(C)(i) of the 

5 Social Security Act (42 U.S.C. 1396r–8(b)(3)(C)(i)) 

6 is amended by striking ‘‘increased by $10,000 for 

7 each day in which such information has not been 

8 provided and such amount shall be paid to the 

9 Treasury’’ and inserting ‘‘, for each covered out10 patient drug with respect to which such information 

11 is not provided, $50,000 for the first day that such 

12 information is not provided on a timely basis and 

13 $19,000 for each subsequent day that such informa14 tion is not provided’’. 

15 (2) INCREASED PENALTY FOR KNOWINGLY RE16 PORTING FALSE INFORMATION.—Section 

17 1927(b)(3)(C)(ii) of the Social Security Act (42 

18 U.S.C. 1396r–8(b)(3)(C)(ii)) is amended by striking 

19 ‘‘$100,000’’ and inserting ‘‘$500,000’’. 

20 (3) EFFECTIVE DATE.—The amendments made 

21 by this subsection shall take effect on the first day 

22 of the first fiscal quarter that begins after the date 

23 of enactment of this Act. 


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1 SEC. 205. IMPROVING TRANSPARENCY AND PREVENTING 

2 THE USE OF ABUSIVE SPREAD PRICING AND 

3 RELATED PRACTICES IN MEDICAID. 

4 (a) PASS-THROUGH PRICING REQUIRED.— 

5 (1) IN GENERAL.—Section 1927(e) of the So6 cial Security Act (42 U.S.C. 1396r–8(e)) is amended 

7 by adding at the end the following: 

8 ‘‘(6) PASS-THROUGH PRICING REQUIRED.—A 

9 contract between the State and a pharmacy benefit 

10 manager (referred to in this paragraph as a ‘PBM’), 

11 or a contract between the State and a managed care 

12 entity or other specified entity (as such terms are 

13 defined in section 1903(m)(9)(D)) that includes pro14 visions making the entity responsible for coverage of 

15 covered outpatient drugs dispensed to individuals en16 rolled with the entity, shall require that payment for 

17 such drugs and related administrative services (as 

18 applicable), including payments made by a PBM on 

19 behalf of the State or entity, is based on a pass20 through pricing model under which— 

21 ‘‘(A) any payment made by the entity of 

22 the PBM (as applicable) for such a drug— 

23 ‘‘(i) is limited to— 

24 ‘‘(I) ingredient cost; and 

25 ‘‘(II) a professional dispensing 

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1 sional dispensing fee that the State 

2 plan or waiver would pay if the plan 

3 or waiver was making the payment di4 rectly; 

5 ‘‘(ii) is passed through in its entirety 

6 by the entity or PBM to the pharmacy 

7 that dispenses the drug; and 

8 ‘‘(iii) is made in a manner that is con9 sistent with section 1902(a)(30)(A) and 

10 sections 447.512, 447.514, and 447.518 of 

11 title 42, Code of Federal Regulations (or 

12 any successor regulation), as if such re13 quirements applied directly to the entity or 

14 the PBM; 

15 ‘‘(B) payment to the entity or the PBM 

16 (as applicable) for administrative services per17 formed by the entity or PBM is limited to a 

18 reasonable administrative fee that covers the 

19 reasonable cost of providing such services; 

20 ‘‘(C) the entity or the PBM (as applicable) 

21 shall make available to the State, and the Sec22 retary upon request, all costs and payments re23 lated to covered outpatient drugs and accom24 panying administrative services incurred, re25 ceived, or made by the entity or the PBM, inVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00123 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 cluding ingredient costs, professional dispensing 

2 fees, administrative fees, post-sale and post-in3 voice fees. Discounts, or related adjustments 

4 such as direct and indirect remuneration fees, 

5 and any and all remuneration; and 

6 ‘‘(D) any form of spread pricing whereby 

7 any amount charged or claimed by the entity or 

8 the PBM (as applicable) is in excess of the 

9 amount paid to the pharmacies on behalf of the 

10 entity, including any post-sale or post-invoice 

11 fees, discounts, or related adjustments such as 

12 direct and indirect remuneration fees or assess13 ments (after allowing for a reasonable adminis14 trative fee as described in subparagraph (B)) is 

15 not allowable for purposes of claiming Federal 

16 matching payments under this title.’’. 

17 (2) CONFORMING AMENDMENT.—Clause (xiii) 

18 of section 1903(m)(2)(A) of such Act (42 U.S.C. 

19 1396b(m)(2)(A)), as amended by section 202, is fur20 ther amended— 

21 (A) by striking ‘‘and (IV)’’ and inserting 

22 ‘‘(IV)’’; and 

23 (B) by inserting before the period at the 

24 end the following: ‘‘, and (V) pharmacy benefit 

25 management services provided by the entity, or 


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1 provided by a pharmacy benefit manager on be2 half of the entity under a contract or other ar3 rangement between the entity and the phar4 macy benefit manager, shall comply with the re5 quirements of section 1927(e)(6)’’. 

6 (3) EFFECTIVE DATE.—The amendments made 

7 by this subsection apply to contracts between States 

8 and managed care entities, other specified entities, 

9 or pharmacy benefits managers that are entered into 

10 or renewed on or after the date that is 18 months 

11 after the date of enactment of this Act. 

12 (b) SURVEY OF RETAIL PRICES.— 

13 (1) IN GENERAL.—Section 1927(f) of the Social 

14 Security Act (42 U.S.C. 1396r–8(f)) is amended— 

15 (A) by striking ‘‘and’’ after the semicolon 

16 at the end of paragraph (1)(A)(i) and all that 

17 precedes it through ‘‘(1)’’ and inserting the fol18 lowing: 

19 ‘‘(1) SURVEY OF RETAIL PRICES.—The Sec20 retary shall conduct a survey of retail community 

21 drug prices, to include at least the national average 

22 drug acquisition cost, as follows: 

23 ‘‘(A) USE OF VENDOR.—The Secretary 

24 may contract services for— 


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1 ‘‘(i) with respect to retail community 

2 pharmacies, the determination on a month3 ly basis of retail survey prices of the na4 tional average drug acquisition cost for 

5 covered outpatient drugs for such phar6 macies, net of all discounts and rebates (to 

7 the extent any information with respect to 

8 such discounts and rebates is available), 

9 the average reimbursement received for 

10 such drugs by such pharmacies from all 

11 sources of payment, including third par12 ties, and, to the extent available, the usual 

13 and customary charges to consumers for 

14 such drugs; and’’; 

15 (B) by adding at the end of paragraph (1) 

16 the following: 

17 ‘‘(F) SURVEY REPORTING.—In order to 

18 meet the requirement of section 1902(a)(54), a 

19 State shall require that any retail community 

20 pharmacy in the State that receives any pay21 ment, administrative fee, discount, or rebate re22 lated to the dispensing of covered outpatient 

23 drugs to individuals receiving benefits under 

24 this title, regardless of whether such payment, 

25 fee, discount, or rebate is received from the 


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1 State or a managed care entity directly or from 

2 a pharmacy benefit manager or another entity 

3 that has a contract with the State or a man4 aged care entity, shall respond to surveys of re5 tail prices conducted under this subsection. 

6 ‘‘(G) SURVEY INFORMATION.—Information 

7 on retail community prices obtained under this 

8 paragraph shall be made publicly available and 

9 shall include at least the following: 

10 ‘‘(i) The monthly response rate of the 

11 survey including a list of pharmacies not in 

12 compliance with subparagraph (F). 

13 ‘‘(ii) The sampling frame and number 

14 of pharmacies sampled monthly. 

15 ‘‘(iii) Characteristics of reporting 

16 pharmacies, including type (such as inde17 pendent or chain), geographic or regional 

18 location, and dispensing volume. 

19 ‘‘(iv) Reporting of a separate national 

20 average drug acquisition cost for each drug 

21 for independent retail pharmacies and 

22 chain operated pharmacies. 

23 ‘‘(v) Information on price concessions 

24 including on and off invoice discounts, re25 bates, and other price concessions. 


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1 ‘‘(vi) Information on average profes2 sional dispensing fees paid. 

3 ‘‘(H) PENALTIES.— 

4 ‘‘(i) FAILURE TO PROVIDE TIMELY IN5 FORMATION.—A retail community phar6 macy that fails to respond to a survey con7 ducted under this subsection on a timely 

8 basis may be subject to a civil monetary 

9 penalty in the amount of $10,000 for each 

10 day in which such information has not 

11 been provided. 

12 ‘‘(ii) FALSE INFORMATION.—A retail 

13 community pharmacy that knowingly pro14 vides false information in response to a 

15 survey conducted under this subsection 

16 may be subject to a civil money penalty in 

17 an amount not to exceed $100,000 for 

18 each item of false information. 

19 ‘‘(iii) OTHER PENALTIES.—Any civil 

20 money penalties imposed under this sub21 paragraph shall be in addition to other 

22 penalties as may be prescribed by law. The 

23 provisions of section 1128A (other than 

24 subsections (a) and (b)) shall apply to a 

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1 graph in the same manner as such provi2 sions apply to a penalty or proceedings 

3 under section 1128A(a). 

4 ‘‘(I) REPORT ON SPECIALTY PHAR5 MACIES.— 

6 ‘‘(i) IN GENERAL.—Not later than 1 

7 year after the effective date of this sub8 paragraph, the Secretary shall submit a re9 port to Congress examining specialty drug 

10 coverage and reimbursement under this 

11 title. 

12 ‘‘(ii) CONTENT OF REPORT.—Such re13 port shall include a description of how 

14 State Medicaid programs define specialty 

15 drugs, how much State Medicaid programs 

16 pay for specialty drugs, how States and 

17 managed care plans determine payment for 

18 specialty drugs, the settings in which spe19 cialty drugs are dispensed (such as retail 

20 community pharmacies or specialty phar21 macies), whether acquisition costs for spe22 cialty drugs are captured in the national 

23 average drug acquisition cost survey, and 

24 recommendations as to whether specialty 

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1 vey of retail prices to ensure national aver2 age drug acquisition costs capture drugs 

3 sold at specialty pharmacies and how such 

4 specialty pharmacies should be defined.’’; 

5 (C) in paragraph (2)— 

6 (i) in subparagraph (A), by inserting 

7 ‘‘, including payments rates under Med8 icaid managed care plans,’’ after ‘‘under 

9 this title’’; and 

10 (ii) in subparagraph (B), by inserting 

11 ‘‘and the basis for such dispensing fees’’ 

12 before the semicolon; and 

13 (D) in paragraph (4), by inserting ‘‘, and 

14 $5,000,000 for fiscal year 2020 and each fiscal 

15 year thereafter,’’ after ‘‘2010’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by this subsection take effect on the 1st day of the 

18 1st quarter that begins on or after the date that is 

19 18 months after the date of enactment of this Act. 

20 (c) MANUFACTURER REPORTING OF WHOLESALE

21 ACQUISITION COST.—Section 1927(b)(3) of such Act (42 

22 U.S.C. 1396r–8(b)(3)), as amended by section 141, is fur23 ther amended— 

24 (1) in subparagraph (A)(i)— 


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1 (A) in subclause (I), by striking ‘‘and’’ 

2 after the semicolon; 

3 (B) in subclause (II), by adding ‘‘and’’ 

4 after the semicolon; 

5 (C) by moving the left margins of sub6 clauses (I) and (II) 2 ems to the right; and 

7 (D) by adding at the end the following: 

8 ‘‘(III) in the case of rebate peri9 ods that begin on or after the date of 

10 enactment of this subclause, on the 

11 wholesale acquisition cost (as defined 

12 in section 1847A(c)(6)(B)) for cov13 ered outpatient drugs for the rebate 

14 period under the agreement (including 

15 for all such drugs that are sold under 

16 a new drug application approved 

17 under section 505(c) of the Federal 

18 Food, Drug, and Cosmetic Act);’’; and 

19 (2) in subparagraph (D)— 

20 (A) in the matter preceding clause (i), by 

21 inserting ‘‘and clause (vii) of this subpara22 graph’’ after ‘‘1847A’’; 

23 (B) in clause (vi), by striking ‘‘and’’ after 

24 the comma; 


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1 (C) in clause (vii), by striking the period 

2 and inserting ‘‘, and’’; and 

3 (D) by inserting after clause (vii) the fol4 lowing: 

5 ‘‘(viii) to the Secretary to disclose 

6 (through a website accessible to the public) 

7 the most recently reported wholesale acqui8 sition cost (as defined in section 

9 1847A(c)(6)(B)) for each covered out10 patient drug (including for all such drugs 

11 that are sold under a new drug application 

12 approved under section 505(c) of the Fed13 eral Food, Drug, and Cosmetic Act), as re14 ported under subparagraph (A)(i)(III).’’. 

15 SEC. 206. T–MSIS DRUG DATA ANALYTICS REPORTS. 

16 (a) IN GENERAL.—Not later than May 1 of each cal17 endar year beginning with calendar year 2021, the Sec18 retary of Health and Human Services (in this section re19 ferred to as the ‘‘Secretary’’) shall publish on a website 

20 of the Centers for Medicare & Medicaid Services that is 

21 accessible to the public a report of the most recently avail22 able data on provider prescribing patterns under the Med23 icaid program. 

24 (b) CONTENT OF REPORT.— 


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1 (1) REQUIRED CONTENT.—Each report re2 quired under subsection (a) for a calendar year shall 

3 include the following information with respect to 

4 each State (and, to the extent available, with respect 

5 to Puerto Rico, the United States Virgin Islands, 

6 Guam, the Northern Mariana Islands, and American 

7 Samoa): 

8 (A) A comparison of covered outpatient 

9 drug (as defined in section 1927(k)(2) of the 

10 Social Security Act (42 U.S.C. 1396r–8(k)(2))) 

11 prescribing patterns under the State Medicaid 

12 plan or waiver of such plan (including drugs 

13 prescribed on a fee-for-service basis and drugs 

14 prescribed under managed care arrangements 

15 under such plan or waiver)— 

16 (i) across all forms or models of reim17 bursement used under the plan or waiver; 

18 (ii) within specialties and subspecial19 ties, as defined by the Secretary; 

20 (iii) by episodes of care for— 

21 (I) each chronic disease category, 

22 as defined by the Secretary, that is 

23 represented in the 10 conditions that 

24 accounted for the greatest share of 

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1 er during the year that is the subject 

2 of the report; 

3 (II) procedural groupings; and 

4 (III) rare disease diagnosis codes; 

5 (iv) by patient demographic character6 istics, including race (to the extent that 

7 the Secretary determines that there is suf8 ficient data available with respect to such 

9 characteristic in a majority of States), gen10 der, and age; 

11 (v) by patient high-utilizer or risk sta12 tus; and 

13 (vi) by high and low resource settings 

14 by facility and place of service categories, 

15 as determined by the Secretary. 

16 (B) In the case of medical assistance for 

17 covered outpatient drugs (as so defined) pro18 vided under a State Medicaid plan or waiver of 

19 such plan in a managed care setting, an anal20 ysis of the differences in managed care pre21 scribing patterns when a covered outpatient 

22 drug is prescribed in a managed care setting as 

23 compared to when the drug is prescribed in a 

24 fee-for-service setting. 


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1 (2) ADDITIONAL CONTENT.—A report required 

2 under subsection (a) for a calendar year may include 

3 State-specific information about prescription utiliza4 tion management tools under State Medicaid plans 

5 or waivers of such plans, including— 

6 (A) a description of prescription utilization 

7 management tools under State programs to pro8 vide long-term services and supports under a 

9 State Medicaid plan or a waiver of such plan; 

10 (B) a comparison of prescription utilization 

11 management tools applicable to populations cov12 ered under a State Medicaid plan waiver under 

13 section 1115 of the Social Security Act (42 

14 U.S.C. 1315) and the models applicable to pop15 ulations that are not covered under the waiver; 

16 (C) a comparison of the prescription utili17 zation management tools employed by different 

18 Medicaid managed care organizations, phar19 macy benefit managers, and related entities 

20 within the State; 

21 (D) a comparison of the prescription utili22 zation management tools applicable to each en23 rollment category under a State Medicaid plan 

24 or waiver; and 


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1 (E) a comparison of the prescription utili2 zation management tools applicable under the 

3 State Medicaid plan or waiver by patient high4 utilizer or risk status. 

5 (3) ADDITIONAL ANALYSIS.—To the extent 

6 practicable, the Secretary shall include in each re7 port published under subsection (a)— 

8 (A) analyses of national, State, and local 

9 patterns of Medicaid population-based pre10 scribing behaviors; and 

11 (B) recommendations for administrative or 

12 legislative action to improve the effectiveness of, 

13 and reduce costs for, covered outpatient drugs 

14 under Medicaid while ensuring timely bene15 ficiary access to medically necessary covered 

16 outpatient drugs. 

17 (c) USE OF T–MSIS DATA.—Each report required 

18 under subsection (a) shall— 

19 (1) be prepared using data and definitions from 

20 the Transformed Medicaid Statistical Information 

21 System (T–MSIS) data set (or a successor data set) 

22 that is not more than 24 months old on the date 

23 that the report is published; and 

24 (2) as appropriate, include a description with 

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1 ness of the data, as well as any necessary caveats 

2 describing the limitations of the data reported to the 

3 Secretary by the State that are sufficient to commu4 nicate the appropriate uses for the information. 

5 (d) PREPARATION OF REPORT.—Each report re6 quired under subsection (a) shall be prepared by the Ad7 ministrator for the Centers for Medicare & Medicaid Serv8 ices. 

9 (e) APPROPRIATION.—For fiscal year 2020 and each 

10 fiscal year thereafter, there is appropriated to the Sec11 retary $2,000,000 to carry out this section. 

12 SEC. 207. RISK-SHARING VALUE-BASED PAYMENT AGREE13 MENTS FOR COVERED OUTPATIENT DRUGS 

14 UNDER MEDICAID. 

15 (a) IN GENERAL.—Section 1927 of the Social Secu16 rity Act (42 U.S.C. 1396r–8) is amended by adding at 

17 the end the following new subsection: 

18 ‘‘(l) STATE OPTION TO PAY FOR COVERED OUT19 PATIENT DRUGS THROUGH RISK-SHARING VALUE-BASED

20 AGREEMENTS.— 

21 ‘‘(1) IN GENERAL.—Beginning January 1, 

22 2022, a State shall have the option to pay (whether 

23 on a fee-for-service or managed care basis) for cov24 ered outpatient drugs that are potentially curative 

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1 ministered to individuals under this title by entering 

2 into a risk-sharing value-based payment agreement 

3 with the manufacturer of the drug in accordance 

4 with the requirements of this subsection. 

5 ‘‘(2) SECRETARIAL APPROVAL.— 

6 ‘‘(A) IN GENERAL.—A State shall submit a 

7 request to the Secretary to enter into a risk8 sharing value based payment agreement, and 

9 the Secretary shall not approve a proposed risk10 sharing value-based payment agreement be11 tween a State and a manufacturer for payment 

12 for a covered outpatient drug of the manufac13 turer unless the following requirements are met: 

14 ‘‘(i) MANUFACTURER IS PARTY TO RE15 BATE AGREEMENT AND IN COMPLIANCE

16 WITH REQUIREMENTS.—The manufacturer 

17 has a rebate agreement in effect as re18 quired under subsections (a) and (b) of 

19 this section and is in compliance with all 

20 applicable requirements under this title. 

21 ‘‘(ii) NO INCREASE TO PROJECTED

22 NET FEDERAL SPENDING.— 

23 ‘‘(I) IN GENERAL.—The Chief 

24 Actuary certifies that the projected 

25 payments for each covered outpatient 


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1 drug under such proposed agreement 

2 would not result in greater estimated 

3 Federal spending under this title than 

4 the net Federal spending that would 

5 result in the absence of the agree6 ment. 

7 ‘‘(II) NET FEDERAL SPENDING

8 DEFINED.—For purposes of this sub9 section, the term ‘net Federal spend10 ing’ means the amount of Federal 

11 payments the Chief Actuary estimates 

12 would be made under this title for ad13 ministering a covered outpatient drug 

14 to an individual eligible for medical 

15 assistance under a State plan or a 

16 waiver of such plan, reduced by the 

17 amount of all rebates the Chief Actu18 ary estimates would be paid with re19 spect to the administering of such 

20 drug, including all rebates under this 

21 title and any supplemental or other 

22 additional rebates, in the absence of 

23 such an agreement. 

24 ‘‘(III) INFORMATION.—The Chief 

25 Actuary shall make the certifications 


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1 required under this clause based on 

2 the most recently available and reli3 able drug pricing and product infor4 mation. The State and manufacturer 

5 shall provide the Secretary and the 

6 Chief Actuary with all necessary infor7 mation required to make the estimates 

8 needed for such certifications. 

9 ‘‘(iii) LAUNCH AND LIST PRICE JUS10 TIFICATIONS.—The manufacturer submits 

11 all relevant information and supporting 

12 documentation necessary for pricing deci13 sions as deemed appropriate by the Sec14 retary, which shall be truthful and non15 misleading, including manufacturer infor16 mation and supporting documentation for 

17 launch price or list price increases, and 

18 any applicable justification required under 

19 section 1128L. 

20 ‘‘(iv) CONFIDENTIALITY OF INFORMA21 TION; PENALTIES.—The provisions of sub22 paragraphs (C) and (D) of subsection 

23 (b)(3) shall apply to a manufacturer that 

24 fails to submit the information and docu25 mentation required under clauses (ii) and 


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1 (iii) on a timely basis, or that knowingly 

2 provides false or misleading information, in 

3 the same manner as such provisions apply 

4 to a manufacturer with a rebate agreement 

5 under this section. 

6 ‘‘(B) CONSIDERATION OF STATE REQUEST

7 FOR APPROVAL.— 

8 ‘‘(i) IN GENERAL.—The Secretary 

9 shall treat a State request for approval of 

10 a risk-sharing value-based payment agree11 ment in the same manner that the Sec12 retary treats a State plan amendment, and 

13 subpart B of part 430 of title 42, Code of 

14 Federal Regulations, including, subject to 

15 clause (ii), the timing requirements of sec16 tion 430.16 of such title (as in effect on 

17 the date of enactment of this subsection), 

18 shall apply to a request for approval of a 

19 risk-sharing value-based payment agree20 ment in the same manner as such subpart 

21 applies to a State plan amendment. 

22 ‘‘(ii) TIMING.—The Secretary shall 

23 consult with the Commissioner of Food 

24 and Drugs as required under subpara25 graph (C) and make a determination on 


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1 whether to approve a request from a State 

2 for approval of a proposed risk-sharing 

3 value-based payment agreement (or request 

4 additional information necessary to allow 

5 the Secretary to make a determination 

6 with respect to such request for approval) 

7 within the time period, to the extent prac8 ticable, specified in section 430.16 of title 

9 42, Code of Federal Regulations (as in ef10 fect on the date of enactment of this sub11 section), but in no case shall the Secretary 

12 take more than 180 days after the receipt 

13 of such request for approval or response to 

14 such request for additional information to 

15 make such a determination (or request ad16 ditional information). 

17 ‘‘(C) CONSULTATION WITH THE COMMIS18 SIONER OF FOOD AND DRUGS.—In considering 

19 whether to approve a risk-sharing value-based 

20 payment agreement, the Secretary, to the ex21 tent necessary, shall consult with the Commis22 sioner of Food and Drugs to determine whether 

23 the relevant clinical parameters specified in 

24 such agreement are appropriate. 


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1 ‘‘(3) INSTALLMENT-BASED PAYMENT STRUC2 TURE.— 

3 ‘‘(A) IN GENERAL.—A risk-sharing value4 based payment agreement shall provide for a 

5 payment structure under which, for every in6 stallment year of the agreement (subject to sub7 paragraph (B)), the State shall pay the total in8 stallment year amount in equal installments to 

9 be paid at regular intervals over a period of 

10 time that shall be specified in the agreement. 

11 ‘‘(B) REQUIREMENTS FOR INSTALLMENT

12 PAYMENTS.— 

13 ‘‘(i) TIMING OF FIRST PAYMENT.— 

14 The State shall make the first of the in15 stallment payments described in subpara16 graph (A) for an installment year not later 

17 than 30 days after the end of such year. 

18 ‘‘(ii) LENGTH OF INSTALLMENT PE19 RIOD.—The period of time over which the 

20 State shall make the installment payments 

21 described in subparagraph (A) for an in22 stallment year shall not be longer than 5 

23 years. 

24 ‘‘(iii) NONPAYMENT OR REDUCED

25 PAYMENT OF INSTALLMENTS FOLLOWING


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1 A FAILURE TO MEET CLINICAL PARAM2 ETER.—If, prior to the payment date (as 

3 specified in the agreement) of any install4 ment payment described in subparagraph 

5 (A) or any other alternative date or time 

6 frame (as otherwise specified in the agree7 ment), the covered outpatient drug which 

8 is subject to the agreement fails to meet a 

9 relevant clinical parameter of the agree10 ment, the agreement shall provide that— 

11 ‘‘(I) the installment payment 

12 shall not be made; or 

13 ‘‘(II) the installment payment 

14 shall be reduced by a percentage spec15 ified in the agreement that is based 

16 on the outcome achieved by the drug 

17 relative to the relevant clinical param18 eter. 

19 ‘‘(4) NOTICE OF INTENT.— 

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graph (B), a manufacturer of a covered out22 patient drug shall not be eligible to enter into 

23 a risk-sharing value-based payment agreement 

24 under this subsection with respect to such drug 

25 unless the manufacturer notifies the Secretary 


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1 that the manufacturer is interested in entering 

2 into such an agreement with respect to such 

3 drug. The decision to submit and timing of a 

4 request to enter into a proposed risk-sharing 

5 value-based payment agreement shall remain 

6 solely within the discretion of the State and 

7 shall only be effective upon Secretarial approval 

8 as required under this subsection. 

9 ‘‘(B) TREATMENT OF SUBSEQUENTLY AP10 PROVED DRUGS.— 

11 ‘‘(i) IN GENERAL.—In the case of a 

12 manufacturer of a covered outpatient drug 

13 approved under section 505 of the Federal 

14 Food, Drug, and Cosmetic Act or licensed 

15 under section 351 of the Public Health 

16 Service Act after the date of enactment of 

17 this subsection, not more than 90 days 

18 after meeting with the Food and Drug Ad19 ministration following phase II clinical 

20 trials for such drug (or, in the case of a 

21 drug described in clause (ii), not later than 

22 March 31, 2022), the manufacturer must 

23 notify the Secretary of the manufacturer’s 

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1 section with respect to such drug. If no 

2 such meeting has occurred, the Secretary 

3 may use discretion as to whether a poten4 tially curative treatment intended for one5 time use may qualify for a risk-sharing 

6 value-based payment agreement under this 

7 section. A manufacturer notification of in8 terest shall not have any influence on a de9 cision for approval by the Food and Drug 

10 Administration. 

11 ‘‘(ii) APPLICATION TO CERTAIN SUB12 SEQUENTLY APPROVED DRUGS.—A drug 

13 described in this clause is a covered out14 patient drug of a manufacturer— 

15 ‘‘(I) that is approved under sec16 tion 505 of the Federal Food, Drug, 

17 and Cosmetic Act or licensed under 

18 section 351 of the Public Health Serv19 ice Act after the date of enactment of 

20 this subsection; and 

21 ‘‘(II) with respect to which, as of 

22 January 1, 2022, more than 90 days 

23 have passed after the manufacturer’s 

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1 ministration following phase II clinical 

2 trials for such drug. 

3 ‘‘(iii) PARALLEL APPROVAL.—The 

4 Secretary, in coordination with the Admin5 istrator of the Centers for Medicare & 

6 Medicaid Services and the Commissioner of 

7 Food and Drugs, shall, to the extent prac8 ticable, approve a State’s request to enter 

9 into a proposed risk-sharing value-based 

10 payment agreement that otherwise meets 

11 the requirements of this subsection at the 

12 time that such a drug is approved by the 

13 Food and Drug Administration to help 

14 provide that no State that wishes to enter 

15 into such an agreement is required to pay 

16 for the drug in full at one time if the State 

17 is seeking to pay over a period of time as 

18 outlined in the proposed agreement. 

19 ‘‘(iv) RULE OF CONSTRUCTION.— 

20 Nothing in this paragraph shall be applied 

21 or construed to modify or affect the time22 frames or factors involved in the Sec23 retary’s determination of whether to ap24 prove or license a drug under section 505 

25 of the Federal Food, Drug, and Cosmetic 


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1 Act or section 351 of the Public Health 

2 Service Act. 

3 ‘‘(5) SPECIAL PAYMENT RULES.— 

4 ‘‘(A) IN GENERAL.—Except as otherwise 

5 provided in this paragraph, with respect to an 

6 individual who is administered a unit of a cov7 ered outpatient drug that is purchased under a 

8 State plan by a State Medicaid agency under a 

9 risk-sharing value-based payment agreement in 

10 an installment year, the State shall remain lia11 ble to the manufacturer of such drug for pay12 ment for such unit without regard to whether 

13 the individual remains enrolled in the State 

14 plan under this title (or a waiver of such plan) 

15 for each installment year for which the State is 

16 to make installment payments for covered out17 patient drugs purchased under the agreement 

18 in such year. 

19 ‘‘(B) DEATH.—In the case of an individual 

20 described in subparagraph (A) who dies during 

21 the period described in such subparagraph, the 

22 State plan shall not be liable for any remaining 

23 payment for the unit of the covered outpatient 

24 drug administered to the individual which is 


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1 owed under the agreement described in such 

2 subparagraph. 

3 ‘‘(C) WITHDRAWAL OF APPROVAL.—In the 

4 case of a covered outpatient drug that is the 

5 subject of a risk-sharing value-based agreement 

6 between a State and a manufacturer under this 

7 subsection, including a drug approved in ac8 cordance with section 506(c) of the Federal 

9 Food, Drug, and Cosmetic Act, and such drug 

10 is the subject of an application that has been 

11 withdrawn by the Secretary, the State plan 

12 shall not be liable for any remaining payment 

13 that is owed under the agreement. 

14 ‘‘(D) ALTERNATIVE ARRANGEMENT UNDER

15 AGREEMENT.—Subject to approval by the Sec16 retary, the terms of a proposed risk-sharing 

17 value-based payment agreement submitted for 

18 approval by a State may provide that subpara19 graph (A) shall not apply. 

20 ‘‘(E) GUIDANCE.—Not later than January 

21 1, 2022, the Secretary shall issue guidance to 

22 States establishing a process for States to no23 tify the Secretary when an individual who is ad24 ministered a unit of a covered outpatient drug 

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1 sharing value-based payment agreement ceases 

2 to be enrolled under the State plan under this 

3 title (or a waiver of such plan) or dies before 

4 the end of the installment period applicable to 

5 such unit under the agreement. 

6 ‘‘(6) TREATMENT OF PAYMENTS UNDER RISK7 SHARING VALUE-BASED AGREEMENTS FOR PUR8 POSES OF AVERAGE MANUFACTURER PRICE; BEST

9 PRICE.—The Secretary shall treat any payments 

10 made to the manufacturer of a covered outpatient 

11 drug under a risk-sharing value-based payment 

12 agreement under this subsection during a rebate pe13 riod in the same manner that the Secretary treats 

14 payments made under a State supplemental rebate 

15 agreement under sections 447.504(c)(19) and 

16 447.505(c)(7) of title 42, Code of Federal Regula17 tions (or any successor regulations), for purposes of 

18 determining average manufacturer price and best 

19 price under this section with respect to the covered 

20 outpatient drug and a rebate period and for pur21 poses of offsets required under subsection (b)(1)(B). 

22 ‘‘(7) ASSESSMENTS AND REPORT TO CON23 GRESS.— 

24 ‘‘(A) ASSESSMENTS.— 


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1 ‘‘(i) IN GENERAL.—Not later than 

2 180 days after the end of each assessment 

3 period of any risk-sharing value-based pay4 ment agreement for a State approved 

5 under this subsection, the Secretary shall 

6 conduct an evaluation of such agreement 

7 which shall include an evaluation by the 

8 Chief Actuary to determine whether pro9 gram spending under the risk-sharing 

10 value-based payment agreement aligned 

11 with the projections for the agreement 

12 made under paragraph (2)(A)(ii), including 

13 an assessment of whether actual Federal 

14 spending under this title under the agree15 ment was less or more than net Federal 

16 spending would have been in the absence 

17 of the agreement. 

18 ‘‘(ii) ASSESSMENT PERIOD.—For pur19 poses of clause (i)— 

20 ‘‘(I) the first assessment period 

21 for a risk-sharing value-based pay22 ment agreement shall be the period of 

23 time over which payments are sched24 uled to be made under the agreement 

25 for the first 10 individuals who are 


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1 administered covered outpatient drugs 

2 under the agreement except that such 

3 period shall not exceed the 5-year pe4 riod after the date on which the Sec5 retary approves the agreement; and 

6 ‘‘(II) each subsequent assessment 

7 period for a risk-sharing value-based 

8 payment agreement shall be the 5- 

9 year period following the end of the 

10 previous assessment period. 

11 ‘‘(B) RESULTS OF ASSESSMENTS.— 

12 ‘‘(i) TERMINATION OPTION.—If the 

13 Secretary determines as a result of the as14 sessment by the Chief Actuary under sub15 paragraph (A) that the actual Federal 

16 spending under this title for any covered 

17 outpatient drug that was the subject of the 

18 State’s risk-sharing value-based payment 

19 agreement was greater than the net Fed20 eral spending that would have resulted in 

21 the absence of the agreement, the Sec22 retary may terminate approval of such 

23 agreement and shall immediately conduct 

24 an assessment under this paragraph of any 

25 other ongoing risk-sharing value-based 


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1 payment agreement to which the same 

2 manufacturer is a party. 

3 ‘‘(ii) REPAYMENT REQUIRED.— 

4 ‘‘(I) IN GENERAL.—If the Sec5 retary determines as a result of the 

6 assessment by the Chief Actuary 

7 under subparagraph (A) that the Fed8 eral spending under the risk-sharing 

9 value-based agreement for a covered 

10 outpatient drug that was subject to 

11 such agreement was greater than the 

12 net Federal spending that would have 

13 resulted in the absence of the agree14 ment, the manufacturer shall repay 

15 the difference to the State and Fed16 eral governments in a timely manner 

17 as determined by the Secretary. 

18 ‘‘(II) TERMINATION FOR FAIL19 URE TO PAY.—The failure of a manu20 facturer to make repayments required 

21 under subclause (I) in a timely man22 ner shall result in immediate termi23 nation of all risk-sharing value-based 

24 agreements to which the manufacturer 

25 is a party. 


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1 ‘‘(III) ADDITIONAL PEN2 ALTIES.—In the case of a manufac3 turer that fails to make repayments 

4 required under subclause (I), the Sec5 retary may treat such manufacturer 

6 in the same manner as a manufac7 turer that fails to pay required re8 bates under this section, and the Sec9 retary may— 

10 ‘‘(aa) suspend or terminate 

11 the manufacturer’s rebate agree12 ment under this section; and 

13 ‘‘(bb) pursue any other rem14 edy that would be available if the 

15 manufacturer had failed to pay 

16 required rebates under this sec17 tion. 

18 ‘‘(C) REPORT TO CONGRESS.—Not later 

19 than 5 years after the first risk-sharing value20 based payment agreement is approved under 

21 this subsection, the Secretary shall submit to 

22 Congress and make available to the public a re23 port that includes— 

24 ‘‘(i) an assessment of the impact of 

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1 ments on access for individuals who are eli2 gible for benefits under a State plan or 

3 waiver under this title to medically nec4 essary covered outpatient drugs and re5 lated treatments; 

6 ‘‘(ii) an analysis of the impact of such 

7 agreements on overall State and Federal 

8 spending under this title; 

9 ‘‘(iii) an assessment of the impact of 

10 such agreements on drug prices, including 

11 launch price and price increases; and 

12 ‘‘(iv) such recommendations to Con13 gress as the Secretary deems appropriate. 

14 ‘‘(8) GUIDANCE AND REGULATIONS.— 

15 ‘‘(A) IN GENERAL.—Not later than Janu16 ary 1, 2022, the Secretary shall issue guidance 

17 to States seeking to enter into risk-sharing 

18 value-based payment agreements under this 

19 subsection that includes a model template for 

20 such agreements. The Secretary may issue any 

21 additional guidance or promulgate regulations 

22 as necessary to implement and enforce the pro23 visions of this subsection. 

24 ‘‘(B) MODEL AGREEMENTS.— 


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1 ‘‘(i) IN GENERAL.—If a State ex2 presses an interest in pursuing a risk-shar3 ing value-based payment agreement under 

4 this subsection with a manufacturer for 

5 the purchase of a covered outpatient drug, 

6 the Secretary may share with such State 

7 any risk-sharing value-based agreement be8 tween a State and the manufacturer for 

9 the purchase of such drug that has been 

10 approved under this subsection. While such 

11 shared agreement may serve as a template 

12 for a State that wishes to propose, the use 

13 of a previously approved agreement shall 

14 not affect the submission and approval 

15 process for approval of a proposed risk16 sharing value-based payment agreement 

17 under this subsection, including the re18 quirements under paragraph (2)(A). 

19 ‘‘(ii) CONFIDENTIALITY.—In the case 

20 of a risk-sharing value-based payment 

21 agreement that is disclosed to a State by 

22 the Secretary under this subparagraph and 

23 that is only in effect with respect to a sin24 gle State, the confidentiality of information 


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1 provisions described in subsection 

2 (b)(3)(D) shall apply to such information. 

3 ‘‘(C) OIG CONSULTATION.— 

4 ‘‘(i) IN GENERAL.—The Secretary 

5 shall consult with the Office of the Inspec6 tor General of the Department of Health 

7 and Human Services to determine whether 

8 there are potential program integrity con9 cerns with agreement approvals or tem10 plates and address accordingly. 

11 ‘‘(ii) OIG POLICY UPDATES AS NEC12 ESSARY.—The Inspector General of the 

13 Department of Health and Human Serv14 ices shall review and update, as necessary, 

15 any policies or guidelines of the Office of 

16 the Inspector General of the Department 

17 of Human Services (including policies re18 lated to the enforcement of section 1128B) 

19 to accommodate the use of risk-sharing 

20 value-based payment agreements in accord21 ance with this section. 

22 ‘‘(9) RULES OF CONSTRUCTION.— 

23 ‘‘(A) MODIFICATIONS.—Nothing in this 

24 subsection or any regulations promulgated 

25 under this subsection shall prohibit a State 


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1 from requesting a modification from the Sec2 retary to the terms of a risk-sharing value3 based payment agreement. A modification that 

4 is expected to result in any increase to pro5 jected net State or Federal spending under the 

6 agreement shall be subject to recertification by 

7 the Chief Actuary as described in paragraph 

8 (2)(A)(ii) before the modification may be ap9 proved. 

10 ‘‘(B) REBATE AGREEMENTS.—Nothing in 

11 this subsection shall be construed as requiring 

12 a State to enter into a risk-sharing value-based 

13 payment agreement or as limiting or super14 seding the ability of a State to enter into a sup15 plemental rebate agreement for a covered out16 patient drug. 

17 ‘‘(C) FFP FOR PAYMENTS UNDER RISK18 SHARING VALUE-BASED PAYMENT AGREE19 MENTS.—Federal financial participation shall 

20 be available under this title for any payment 

21 made by a State to a manufacturer for a cov22 ered outpatient drug under a risk-sharing 

23 value-based payment agreement in accordance 

24 with this subsection, except that no Federal fi25 nancial participation shall be available for any 


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1 payment made by a State to a manufacturer 

2 under such an agreement on and after the ef3 fective date of a disapproval of such agreement 

4 by the Secretary. 

5 ‘‘(D) CONTINUED APPLICATION OF OTHER

6 PROVISIONS.—Except as expressly provided in 

7 this subsection, nothing in this subsection or in 

8 any regulations promulgated under this sub9 section shall affect the application of any other 

10 provision of this Act. 

11 ‘‘(10) APPROPRIATIONS.—For fiscal year 2020 

12 and each fiscal year thereafter, there are appro13 priated to the Secretary $5,000,000 for the purpose 

14 of carrying out this subsection. 

15 ‘‘(11) DEFINITIONS.—In this subsection: 

16 ‘‘(A) CHIEF ACTUARY.—The term ‘Chief 

17 Actuary’ means the Chief Actuary of the Cen18 ters for Medicare & Medicaid Services. 

19 ‘‘(B) INSTALLMENT YEAR.—The term ‘in20 stallment year’ means, with respect to a risk21 sharing value-based payment agreement, a 12- 

22 month period during which a covered outpatient 

23 drug is administered under the agreement. 

24 ‘‘(C) POTENTIALLY CURATIVE TREATMENT

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1 tentially curative treatment intended for one2 time use’ means a treatment that consists of 

3 the administration of a covered outpatient drug 

4 that— 

5 ‘‘(i) is a form of gene therapy for a 

6 rare disease, as defined by the Commis7 sioner of Food and Drugs, designated 

8 under section 526 of the Federal Food, 

9 Drug, and Cosmetics Act, and approved 

10 under section 505 of such Act or licensed 

11 under subsection (a) or (k) of section 351 

12 of the Public Health Service Act to treat 

13 a serious or life-threatening disease or con14 dition; 

15 ‘‘(ii) if administered in accordance 

16 with the labeling of such drug, is expected 

17 to result in either— 

18 ‘‘(I) the cure of such disease or 

19 condition; or 

20 ‘‘(II) a reduction in the symp21 toms of such disease or condition to 

22 the extent that such disease or condi23 tion is not expected to lead to early 

24 mortality; and 


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1 ‘‘(iii) is expected to achieve a result 

2 described in clause (ii), which may be 

3 achieved over an extended period of time, 

4 after not more than 3 administrations. 

5 ‘‘(D) RELEVANT CLINICAL PARAMETER.— 

6 The term ‘relevant clinical parameter’ means, 

7 with respect to a covered outpatient drug that 

8 is the subject of a risk-sharing value-based pay9 ment agreement— 

10 ‘‘(i) a clinical endpoint specified in the 

11 drug’s labeling or supported by one or 

12 more of the compendia described in section 

13 1861(t)(2)(B)(ii)(I) that— 

14 ‘‘(I) is able to be measured or 

15 evaluated on an annual basis for each 

16 year of the agreement on an inde17 pendent basis by a provider or other 

18 entity; and 

19 ‘‘(II) is required to be achieved 

20 (based on observed metrics in patient 

21 populations) under the terms of the 

22 agreement; or 

23 ‘‘(ii) a surrogate endpoint (as defined 

24 in section 507(e)(9) of the Federal Food, 

25 Drug, and Cosmetic Act), including those 


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1 developed by patient-focused drug develop2 ment tools, that— 

3 ‘‘(I) is able to be measured or 

4 evaluated on an annual basis for each 

5 year of the agreement on an inde6 pendent basis by a provider or other 

7 entity; and 

8 ‘‘(II) has been qualified by the 

9 Food and Drug Administration. 

10 ‘‘(E) RISK-SHARING VALUE-BASED PAY11 MENT AGREEMENT.—The term ‘risk-sharing 

12 value-based payment agreement’ means an 

13 agreement between a State plan and a manu14 facturer— 

15 ‘‘(i) for the purchase of a covered out16 patient drug of the manufacturer that is a 

17 potentially curative treatment intended for 

18 one-time use; 

19 ‘‘(ii) under which payment for such 

20 drug shall be made pursuant to an install21 ment-based payment structure that meets 

22 the requirements of paragraph (3); 

23 ‘‘(iii) which conditions payment on the 

24 achievement of at least 2 relevant clinical 


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1 parameters (as defined in subparagraph 

2 (C)); 

3 ‘‘(iv) which provides that— 

4 ‘‘(I) the State plan will directly 

5 reimburse the manufacturer for the 

6 drug; or 

7 ‘‘(II) a third party will reimburse 

8 the manufacture in a manner ap9 proved by the Secretary; and 

10 ‘‘(v) is approved by the Secretary in 

11 accordance with paragraph (2). 

12 ‘‘(F) TOTAL INSTALLMENT YEAR

13 AMOUNT.—The term ‘total installment year 

14 amount’ means, with respect to a risk-sharing 

15 value-based payment agreement for the pur16 chase of a covered outpatient drug and an in17 stallment year, an amount equal to the product 

18 of— 

19 ‘‘(i) the unit price of the drug charged 

20 under the agreement; and 

21 ‘‘(ii) the number of units of such drug 

22 administered under the agreement during 

23 such installment year.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Section 1903(i)(10)(A) of the Social Secu2 rity Act (42 U.S.C. 1396b(i)(10)(A)) is amended by 

3 striking ‘‘or unless section 1927(a)(3) applies’’ and 

4 inserting ‘‘, section 1927(a)(3) applies with respect 

5 to such drugs, or such drugs are the subject of a 

6 risk-sharing value-based payment agreement under 

7 section 1927(l)’’. 

8 (2) Section 1927(b) of the Social Security Act 

9 (42 U.S.C. 1396r–8(b)) is amended— 

10 (A) in paragraph (1)(A), by inserting ‘‘(ex11 cept for drugs for which payment is made by a 

12 State under a risk-sharing value-based payment 

13 agreement under subsection (l))’’ after ‘‘under 

14 the State plan for such period’’; and 

15 (B) in paragraph (3)— 

16 (i) in subparagraph (C)(i), by insert17 ing ‘‘or subsection (l)(2)(A)’’ after ‘‘sub18 paragraph (A)’’; and 

19 (ii) in subparagraph (D), in the mat20 ter preceding clause (i), by inserting ‘‘, 

21 under subsection (l)(2)(A),’’ after ‘‘under 

22 this paragraph’’. 


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1 SEC. 208. APPLYING MEDICAID DRUG REBATE REQUIRE2 MENT TO DRUGS PROVIDED AS PART OF OUT3 PATIENT HOSPITAL SERVICES. 

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

5 Security Act (42 U.S.C. 1396r–8(k)(3)) is amended to 

6 read as follows: 

7 ‘‘(3) LIMITING DEFINITION.— 

8 ‘‘(A) IN GENERAL.—The term ‘covered 

9 outpatient drug’ does not include any drug, bio10 logical product, or insulin provided as part of, 

11 or as incident to and in the same setting as, 

12 any of the following (and for which payment 

13 may be made under this title as part of pay14 ment for the following and not as direct reim15 bursement for the drug): 

16 ‘‘(i) Inpatient hospital services. 

17 ‘‘(ii) Hospice services. 

18 ‘‘(iii) Dental services, except that 

19 drugs for which the State plan authorizes 

20 direct reimbursement to the dispensing 

21 dentist are covered outpatient drugs. 

22 ‘‘(iv) Physicians’ services. 

23 ‘‘(v) Outpatient hospital services. 

24 ‘‘(vi) Nursing facility services and 

25 services provided by an intermediate care 

26 facility for the mentally retarded. 


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1 ‘‘(vii) Other laboratory and x-ray serv2 ices. 

3 ‘‘(viii) Renal dialysis. 

4 ‘‘(B) OTHER EXCLUSIONS.—Such term 

5 also does not include any such drug or product 

6 for which a National Drug Code number is not 

7 required by the Food and Drug Administration 

8 or a drug or biological used for a medical indi9 cation which is not a medically accepted indica10 tion. 

11 ‘‘(C) STATE OPTION.—At the option of a 

12 State, such term may include any drug, biologi13 cal product, or insulin for which the State is 

14 the primary payer under this title or a dem15 onstration project concerning this title, and that 

16 is provided on an outpatient basis as part of, or 

17 as incident to and in the same setting as, de18 scribed in clause (iv) or (v) of subparagraph (A) 

19 and for which payment is made as part of pay20 ment for such services. 

21 ‘‘(D) NO EFFECT ON BEST PRICE.—Any 

22 drug, biological product, or insulin excluded 

23 from the definition of such term as a result of 

24 this paragraph shall be treated as a covered 

25 outpatient drug for purposes of determining the 


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1 best price (as defined in subsection (c)(1)(C)) 

2 for such drug, biological product, or insulin.’’. 

3 (b) EFFECTIVE DATE; IMPLEMENTATION GUID4 ANCE.— 

5 (1) IN GENERAL.—The amendment made by 

6 subsection (a) shall take effect on the date that is 

7 1 year after the date of enactment of this Act. 

8 (2) IMPLEMENTATION AND GUIDANCE.—Not 

9 later than 1 year after the date of enactment of this 

10 Act, the Secretary of Health and Human Services 

11 shall issue guidance and relevant informational bul12 letins for States, manufacturers (as defined in sec13 tion 1927(k)(5) of the Social Security Act (42 

14 U.S.C. 1396r–8(k)(5))), and other relevant stake15 holders, including health care providers, regarding 

16 implementation of the amendment made by sub17 section (a). 

18 TITLE III—FOOD AND DRUG 

19 ADMINISTRATION 

20 Subtitle A—CREATES Act 

21 SEC. 301. ACTIONS FOR DELAYS OF GENERIC DRUGS AND 

22 BIOSIMILAR BIOLOGICAL PRODUCTS. 

23 (a) DEFINITIONS.—In this section— 

24 (1) the term ‘‘commercially reasonable, market25 based terms’’ means— 


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1 (A) a nondiscriminatory price for the sale 

2 of the covered product at or below, but not 

3 greater than, the most recent wholesale acquisi4 tion cost for the drug, as defined in section 

5 1847A(c)(6)(B) of the Social Security Act (42 

6 U.S.C. 1395w–3a(c)(6)(B)); 

7 (B) a schedule for delivery that results in 

8 the transfer of the covered product to the eligi9 ble product developer consistent with the timing 

10 under subsection (b)(2)(A)(iv); and 

11 (C) no additional conditions are imposed 

12 on the sale of the covered product; 

13 (2) the term ‘‘covered product’’— 

14 (A) means— 

15 (i) any drug approved under sub16 section (c) or (j) of section 505 of the Fed17 eral Food, Drug, and Cosmetic Act (21 

18 U.S.C. 355) or biological product licensed 

19 under subsection (a) or (k) of section 351 

20 of the Public Health Service Act (42 

21 U.S.C. 262); 

22 (ii) any combination of a drug or bio23 logical product described in clause (i); or 

24 (iii) when reasonably necessary to 

25 support approval of an application under 


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1 section 505 of the Federal Food, Drug, 

2 and Cosmetic Act (21 U.S.C. 355), or sec3 tion 351 of the Public Health Service Act 

4 (42 U.S.C. 262), as applicable, or other5 wise meet the requirements for approval 

6 under either such section, any product, in7 cluding any device, that is marketed or in8 tended for use with such a drug or biologi9 cal product; and 

10 (B) does not include any drug or biological 

11 product that appears on the drug shortage list 

12 in effect under section 506E of the Federal 

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

14 356e), unless— 

15 (i) the drug or biological product has 

16 been on the drug shortage list in effect 

17 under such section 506E continuously for 

18 more than 6 months; or 

19 (ii) the Secretary determines that in20 clusion of the drug or biological product as 

21 a covered product is likely to contribute to 

22 alleviating or preventing a shortage; 

23 (3) the term ‘‘device’’ has the meaning given 

24 the term in section 201 of the Federal Food, Drug, 

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


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1 (4) the term ‘‘eligible product developer’’ means 

2 a person that seeks to develop a product for ap3 proval pursuant to an application for approval under 

4 subsection (b)(2) or (j) of section 505 of the Federal 

5 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or 

6 for licensing pursuant to an application under sec7 tion 351(k) of the Public Health Service Act (42 

8 U.S.C. 262(k)); 

9 (5) the term ‘‘license holder’’ means the holder 

10 of an application approved under subsection (c) or 

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

12 Cosmetic Act (21 U.S.C. 355) or the holder of a li13 cense under subsection (a) or (k) of section 351 of 

14 the Public Health Service Act (42 U.S.C. 262) for 

15 a covered product; 

16 (6) the term ‘‘REMS’’ means a risk evaluation 

17 and mitigation strategy under section 505–1 of the 

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

19 355–1); 

20 (7) the term ‘‘REMS with ETASU’’ means a 

21 REMS that contains elements to assure safe use 

22 under section 505–1(f) of the Federal Food, Drug, 

23 and Cosmetic Act (21 U.S.C. 355–1(f)); 

24 (8) the term ‘‘Secretary’’ means the Secretary 

25 of Health and Human Services; 


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1 (9) the term ‘‘single, shared system of elements 

2 to assure safe use’’ means a single, shared system 

3 of elements to assure safe use under section 505– 

4 1(f) of the Federal Food, Drug, and Cosmetic Act 

5 (21 U.S.C. 355–1(f)); and 

6 (10) the term ‘‘sufficient quantities’’ means an 

7 amount of a covered product that the eligible prod8 uct developer determines allows it to— 

9 (A) conduct testing to support an applica10 tion under— 

11 (i) subsection (b)(2) or (j) of section 

12 505 of the Federal Food, Drug, and Cos13 metic Act (21 U.S.C. 355); or 

14 (ii) section 351(k) of the Public 

15 Health Service Act (42 U.S.C. 262(k)); 

16 and 

17 (B) fulfill any regulatory requirements re18 lating to approval of such an application. 

19 (b) CIVIL ACTION FOR FAILURE TO PROVIDE SUFFI20 CIENT QUANTITIES OF A COVERED PRODUCT.— 

21 (1) IN GENERAL.—An eligible product developer 

22 may bring a civil action against the license holder 

23 for a covered product seeking relief under this sub24 section in an appropriate district court of the United 

25 States alleging that the license holder has declined 


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1 to provide sufficient quantities of the covered prod2 uct to the eligible product developer on commercially 

3 reasonable, market-based terms. 

4 (2) ELEMENTS.— 

5 (A) IN GENERAL.—To prevail in a civil ac6 tion brought under paragraph (1), an eligible 

7 product developer shall prove, by a preponder8 ance of the evidence— 

9 (i) that— 

10 (I) the covered product is not 

11 subject to a REMS with ETASU; or 

12 (II) if the covered product is sub13 ject to a REMS with ETASU— 

14 (aa) the eligible product de15 veloper has obtained a covered 

16 product authorization from the 

17 Secretary in accordance with sub18 paragraph (B); and 

19 (bb) the eligible product de20 veloper has provided a copy of 

21 the covered product authorization 

22 to the license holder; 

23 (ii) that, as of the date on which the 

24 civil action is filed, the product developer 

25 has not obtained sufficient quantities of 


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1 the covered product on commercially rea2 sonable, market-based terms; 

3 (iii) that the eligible product developer 

4 has submitted a written request to pur5 chase sufficient quantities of the covered 

6 product to the license holder and such re7 quest— 

8 (I) was sent to a named cor9 porate officer of the license holder; 

10 (II) was made by certified or reg11 istered mail with return receipt re12 quested; 

13 (III) specified an individual as 

14 the point of contact for the license 

15 holder to direct communications re16 lated to the sale of the covered prod17 uct to the eligible product developer 

18 and a means for electronic and writ19 ten communications with that indi20 vidual; and 

21 (IV) specified an address to 

22 which the covered product was to be 

23 shipped upon reaching an agreement 

24 to transfer the covered product; and 


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1 (iv) that the license holder has not de2 livered to the eligible product developer 

3 sufficient quantities of the covered product 

4 on commercially reasonable, market-based 

5 terms— 

6 (I) for a covered product that is 

7 not subject to a REMS with ETASU, 

8 by the date that is 31 days after the 

9 date on which the license holder re10 ceived the request for the covered 

11 product; and 

12 (II) for a covered product that is 

13 subject to a REMS with ETASU, by 

14 31 days after the later of— 

15 (aa) the date on which the 

16 license holder received the re17 quest for the covered product; or 

18 (bb) the date on which the 

19 license holder received a copy of 

20 the covered product authorization 

21 issued by the Secretary in ac22 cordance with subparagraph (B). 

23 (B) AUTHORIZATION FOR COVERED PROD24 UCT SUBJECT TO A REMS WITH ETASU.— 


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1 (i) REQUEST.—An eligible product de2 veloper may submit to the Secretary a 

3 written request for the eligible product de4 veloper to be authorized to obtain suffi5 cient quantities of an individual covered 

6 product subject to a REMS with ETASU. 

7 (ii) AUTHORIZATION.—Not later than 

8 120 days after the date on which a request 

9 under clause (i) is received, the Secretary 

10 shall, by written notice, authorize the eligi11 ble product developer to obtain sufficient 

12 quantities of an individual covered product 

13 subject to a REMS with ETASU for pur14 poses of— 

15 (I) development and testing that 

16 does not involve human clinical trials, 

17 if the eligible product developer has 

18 agreed to comply with any conditions 

19 the Secretary determines necessary; or 

20 (II) development and testing that 

21 involves human clinical trials, if the 

22 eligible product developer has— 

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1 rials for testing that include pro2 tections that provide safety pro3 tections comparable to those pro4 vided by the REMS for the cov5 ered product; or 

6 (BB) otherwise satisfied the 

7 Secretary that such protections 

8 will be provided; and 

9 (bb) met any other require10 ments the Secretary may estab11 lish. 

12 (iii) NOTICE.—A covered product au13 thorization issued under this subparagraph 

14 shall state that the provision of the covered 

15 product by the license holder under the 

16 terms of the authorization will not be a 

17 violation of the REMS for the covered 

18 product. 

19 (3) AFFIRMATIVE DEFENSE.—In a civil action 

20 brought under paragraph (1), it shall be an affirma21 tive defense, on which the defendant has the burden 

22 of persuasion by a preponderance of the evidence— 

23 (A) that, on the date on which the eligible 

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1 cient quantities of the covered product from the 

2 license holder— 

3 (i) neither the license holder nor any 

4 of its agents, wholesalers, or distributors 

5 was engaged in the manufacturing or com6 mercial marketing of the covered product; 

7 and 

8 (ii) neither the license holder nor any 

9 of its agents, wholesalers, or distributors 

10 otherwise had access to inventory of the 

11 covered product to supply to the eligible 

12 product developer on commercially reason13 able, market-based terms; 

14 (B) that— 

15 (i) the license holder sells the covered 

16 product through agents, distributors, or 

17 wholesalers; 

18 (ii) the license holder has placed no 

19 restrictions, explicit or implicit, on its 

20 agents, distributors, or wholesalers to sell 

21 covered products to eligible product devel22 opers; and 

23 (iii) the covered product can be pur24 chased by the eligible product developer in 

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1 sonable, market-based terms from the 

2 agents, distributors, or wholesalers of the 

3 license holder; or 

4 (C) that the license holder made an offer 

5 to the individual specified pursuant to para6 graph (2)(A)(iii)(III), by a means of commu7 nication (electronic, written, or both) specified 

8 pursuant to such paragraph, to sell sufficient 

9 quantities of the covered product to the eligible 

10 product developer at commercially reasonable 

11 market-based terms— 

12 (i) for a covered product that is not 

13 subject to a REMS with ETASU, by the 

14 date that is 14 days after the date on 

15 which the license holder received the re16 quest for the covered product, and the eli17 gible product developer did not accept such 

18 offer by the date that is 7 days after the 

19 date on which the eligible product devel20 oper received such offer from the license 

21 holder; or 

22 (ii) for a covered product that is sub23 ject to a REMS with ETASU, by the date 

24 that is 20 days after the date on which the 

25 license holder received the request for the 


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1 covered product, and the eligible product 

2 developer did not accept such offer by the 

3 date that is 10 days after the date on 

4 which the eligible product developer re5 ceived such offer from the license holder. 

6 (4) REMEDIES.— 

7 (A) IN GENERAL.—If an eligible product 

8 developer prevails in a civil action brought 

9 under paragraph (1), the court shall— 

10 (i) order the license holder to provide 

11 to the eligible product developer without 

12 delay sufficient quantities of the covered 

13 product on commercially reasonable, mar14 ket-based terms; 

15 (ii) award to the eligible product de16 veloper reasonable attorney’s fees and costs 

17 of the civil action; and 

18 (iii) award to the eligible product de19 veloper a monetary amount sufficient to 

20 deter the license holder from failing to pro21 vide eligible product developers with suffi22 cient quantities of a covered product on 

23 commercially reasonable, market-based 

24 terms, if the court finds, by a preponder25 ance of the evidence— 


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1 (I) that the license holder delayed 

2 providing sufficient quantities of the 

3 covered product to the eligible product 

4 developer without a legitimate busi5 ness justification; or 

6 (II) that the license holder failed 

7 to comply with an order issued under 

8 clause (i). 

9 (B) MAXIMUM MONETARY AMOUNT.—A 

10 monetary amount awarded under subparagraph 

11 (A)(iii) shall not be greater than the revenue 

12 that the license holder earned on the covered 

13 product during the period— 

14 (i) beginning on— 

15 (I) for a covered product that is 

16 not subject to a REMS with ETASU, 

17 the date that is 31 days after the date 

18 on which the license holder received 

19 the request; or 

20 (II) for a covered product that is 

21 subject to a REMS with ETASU, the 

22 date that is 31 days after the later 

23 of— 


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1 (aa) the date on which the 

2 license holder received the re3 quest; or 

4 (bb) the date on which the 

5 license holder received a copy of 

6 the covered product authorization 

7 issued by the Secretary in ac8 cordance with paragraph (2)(B); 

9 and 

10 (ii) ending on the date on which the 

11 eligible product developer received suffi12 cient quantities of the covered product. 

13 (C) AVOIDANCE OF DELAY.—The court 

14 may issue an order under subparagraph (A)(i) 

15 before conducting further proceedings that may 

16 be necessary to determine whether the eligible 

17 product developer is entitled to an award under 

18 clause (ii) or (iii) of subparagraph (A), or the 

19 amount of any such award. 

20 (c) LIMITATION OF LIABILITY.—A license holder for 

21 a covered product shall not be liable for any claim under 

22 Federal, State, or local law arising out of the failure of 

23 an eligible product developer to follow adequate safeguards 

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1 ing transportation, handling, use, or disposal of the cov2 ered product by the eligible product developer. 

3 (d) NO VIOLATION OF REMS.—Section 505–1 of the 

4 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355– 

5 1) is amended by adding at the end the following new sub6 section: 

7 ‘‘(l) PROVISION OF SAMPLES NOT A VIOLATION OF

8 STRATEGY.—The provision of samples of a covered prod9 uct to an eligible product developer (as those terms are 

10 defined in section 301(a) of the Lower Costs, More Cures 

11 Act of 2019) shall not be considered a violation of the 

12 requirements of any risk evaluation and mitigation strat13 egy that may be in place under this section for such 

14 drug.’’. 

15 (e) RULE OF CONSTRUCTION.— 

16 (1) DEFINITION.—In this subsection, the term 

17 ‘‘antitrust laws’’— 

18 (A) has the meaning given the term in 

19 subsection (a) of the first section of the Clayton 

20 Act (15 U.S.C. 12); and 

21 (B) includes section 5 of the Federal 

22 Trade Commission Act (15 U.S.C. 45) to the 

23 extent that such section applies to unfair meth24 ods of competition. 


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1 (2) ANTITRUST LAWS.—Nothing in this section 

2 shall be construed to limit the operation of any pro3 vision of the antitrust laws. 

4 SEC. 302. REMS APPROVAL PROCESS FOR SUBSEQUENT 

5 FILERS. 

6 Section 505–1 of the Federal Food, Drug, and Cos7 metic Act (21 U.S.C. 355–1), as amended by section 301, 

8 is further amended— 

9 (1) in subsection (g)(4)(B)— 

10 (A) in clause (i) by striking ‘‘or’’ after the 

11 semicolon; 

12 (B) in clause (ii) by striking the period at 

13 the end and inserting ‘‘; or’’; and 

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

15 ‘‘(iii) accommodate different, com16 parable aspects of the elements to assure 

17 safe use for a drug that is the subject of 

18 an application under section 505(j), and 

19 the applicable listed drug.’’; 

20 (2) in subsection (i)(1), by striking subpara21 graph (C) and inserting the following: 

22 ‘‘(C)(i) Elements to assure safe use, if re23 quired under subsection (f) for the listed drug, 

24 which, subject to clause (ii), for a drug that is 


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1 the subject of an application under section 

2 505(j) may use— 

3 ‘‘(I) a single, shared system with the 

4 listed drug under subsection (f); or 

5 ‘‘(II) a different, comparable aspect of 

6 the elements to assure safe use under sub7 section (f). 

8 ‘‘(ii) The Secretary may require a drug 

9 that is the subject of an application under sec10 tion 505(j) and the listed drug to use a single, 

11 shared system under subsection (f), if the Sec12 retary determines that no different, comparable 

13 aspect of the elements to assure safe use could 

14 satisfy the requirements of subsection (f).’’; 

15 (3) in subsection (i), by adding at the end the 

16 following: 

17 ‘‘(3) SHARED REMS.—If the Secretary ap18 proves, in accordance with paragraph (1)(C)(i)(II), a 

19 different, comparable aspect of the elements to as20 sure safe use under subsection (f) for a drug that 

21 is the subject of an abbreviated new drug application 

22 under section 505(j), the Secretary may require that 

23 such different comparable aspect of the elements to 

24 assure safe use can be used with respect to any 

25 other drug that is the subject of an application 


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1 under section 505(j) or 505(b) that references the 

2 same listed drug.’’; and 

3 (4) by adding at the end the following: 

4 ‘‘(m) SEPARATE REMS.—When used in this section, 

5 the terms ‘different, comparable aspect of the elements to 

6 assure safe use’ or ‘different, comparable approved risk 

7 evaluation and mitigation strategies’ means a risk evalua8 tion and mitigation strategy for a drug that is the subject 

9 of an application under section 505(j) that uses different 

10 methods or operational means than the strategy required 

11 under subsection (a) for the applicable listed drug, or 

12 other application under section 505(j) with the same such 

13 listed drug, but achieves the same level of safety as such 

14 strategy.’’. 

15 SEC. 303. RULE OF CONSTRUCTION. 

16 (a) IN GENERAL.—Nothing in this subtitle, the 

17 amendments made by this subtitle, or in section 505–1 

18 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

19 355–1), shall be construed as— 

20 (1) prohibiting a license holder from providing 

21 an eligible product developer access to a covered 

22 product in the absence of an authorization under 

23 this subtitle; or 

24 (2) in any way negating the applicability of a 

25 REMS with ETASU, as otherwise required under 


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1 such section 505–1, with respect to such covered 

2 product. 

3 (b) DEFINITIONS.—In this section, the terms ‘‘cov4 ered product’’, ‘‘eligible product developer’’, ‘‘license hold5 er’’, and ‘‘REMS with ETASU’’ have the meanings given 

6 such terms in section 301(a). 

7 Subtitle B—Pay-for-Delay 

8 SEC. 311. UNLAWFUL AGREEMENTS. 

9 (a) AGREEMENTS PROHIBITED.—Subject to sub10 sections (b) and (c), it shall be unlawful for an NDA or 

11 BLA holder and a subsequent filer (or for two subsequent 

12 filers) to enter into, or carry out, an agreement resolving 

13 or settling a covered patent infringement claim on a final 

14 or interim basis if under such agreement— 

15 (1) a subsequent filer directly or indirectly re16 ceives from such holder (or in the case of such an 

17 agreement between two subsequent filers, the other 

18 subsequent filer) anything of value, including a li19 cense; and 

20 (2) the subsequent filer agrees to limit or fore21 go research on, or development, manufacturing, 

22 marketing, or sales, for any period of time, of the 

23 covered product that is the subject of the application 

24 described in subparagraph (A) or (B) of subsection 

25 (g)(8). 


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1 (b) EXCLUSION.—It shall not be unlawful under sub2 section (a) if a party to an agreement described in such 

3 subsection demonstrates by clear and convincing evidence 

4 that the value described in subsection (a)(1) is compensa5 tion solely for other goods or services that the subsequent 

6 filer has promised to provide. 

7 (c) LIMITATION.—Nothing in this section shall pro8 hibit an agreement resolving or settling a covered patent 

9 infringement claim in which the consideration granted by 

10 the NDA or BLA holder to the subsequent filer (or from 

11 one subsequent filer to another) as part of the resolution 

12 or settlement includes only one or more of the following: 

13 (1) The right to market the covered product 

14 that is the subject of the application described in 

15 subparagraph (A) or (B) of subsection (g)(8) in the 

16 United States before the expiration of— 

17 (A) any patent that is the basis of the cov18 ered patent infringement claim; or 

19 (B) any patent right or other statutory ex20 clusivity that would prevent the marketing of 

21 such covered product. 

22 (2) A payment for reasonable litigation ex23 penses not to exceed $7,500,000 in the aggregate. 

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

25 such covered product infringes a patent. 


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1 (d) ENFORCEMENT BY FEDERAL TRADE COMMIS2 SION.— 

3 (1) GENERAL APPLICATION.—The requirements 

4 of this section apply, according to their terms, to an 

5 NDA or BLA holder or subsequent filer that is— 

6 (A) a person, partnership, or corporation 

7 over which the Commission has authority pur8 suant to section 5(a)(2) of the Federal Trade 

9 Commission Act (15 U.S.C. 45(a)(2)); or 

10 (B) a person, partnership, or corporation 

11 over which the Commission would have author12 ity pursuant to such section but for the fact 

13 that such person, partnership, or corporation is 

14 not organized to carry on business for its own 

15 profit or that of its members. 

16 (2) UNFAIR OR DECEPTIVE ACTS OR PRACTICES

17 ENFORCEMENT AUTHORITY.— 

18 (A) IN GENERAL.—A violation of this sec19 tion shall be treated as an unfair or deceptive 

20 act or practice in violation of section 5(a)(1) of 

21 the Federal Trade Commission Act (15 U.S.C. 

22 45(a)(1)). 

23 (B) POWERS OF COMMISSION.—Except as 

24 provided in subparagraph (C) and paragraphs 

25 (1)(B) and (3)— 


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1 (i) the Commission shall enforce this 

2 section in the same manner, by the same 

3 means, and with the same jurisdiction, 

4 powers, and duties as though all applicable 

5 terms and provisions of the Federal Trade 

6 Commission Act (15 U.S.C. 41 et seq.) 

7 were incorporated into and made a part of 

8 this section; and 

9 (ii) any NDA or BLA holder or subse10 quent filer that violates this section shall 

11 be subject to the penalties and entitled to 

12 the privileges and immunities provided in 

13 the Federal Trade Commission Act. 

14 (C) JUDICIAL REVIEW.—In the case of a 

15 cease and desist order issued by the Commis16 sion under section 5 of the Federal Trade Com17 mission Act (15 U.S.C. 45) for violation of this 

18 section, a party to such order may obtain judi19 cial review of such order as provided in such 

20 section 5, except that— 

21 (i) such review may only be obtained 

22 in— 

23 (I) the United States Court of 

24 Appeals for the District of Columbia 

25 Circuit; 


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1 (II) the United States Court of 

2 Appeals for the circuit in which the 

3 ultimate parent entity, as defined in 

4 section 801.1(a)(3) of title 16, Code 

5 of Federal Regulations, or any suc6 cessor thereto, of the NDA or BLA 

7 holder (if any such holder is a party 

8 to such order) is incorporated as of 

9 the date that the application described 

10 in subparagraph (A) or (B) of sub11 section (g)(8) or an approved applica12 tion that is deemed to be a license for 

13 a biological product under section 

14 351(k) of the Public Health Service 

15 Act (42 U.S.C. 262(k)) pursuant to 

16 section 7002(e)(4) of the Biologics 

17 Price Competition and Innovation Act 

18 of 2009 (Public Law 111–148; 124 

19 Stat. 817) is submitted to the Com20 missioner of Food and Drugs; or 

21 (III) the United States Court of 

22 Appeals for the circuit in which the 

23 ultimate parent entity, as so defined, 

24 of any subsequent filer that is a party 

25 to such order is incorporated as of the 


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1 date that the application described in 

2 subparagraph (A) or (B) of subsection 

3 (g)(8) is submitted to the Commis4 sioner of Food and Drugs; and 

5 (ii) the petition for review shall be 

6 filed in the court not later than 30 days 

7 after such order is served on the party 

8 seeking review. 

9 (3) ADDITIONAL ENFORCEMENT AUTHORITY.— 

10 (A) CIVIL PENALTY.—The Commission 

11 may commence a civil action to recover a civil 

12 penalty in a district court of the United States 

13 against any NDA or BLA holder or subsequent 

14 filer that violates this section. 

15 (B) SPECIAL RULE FOR RECOVERY OF

16 PENALTY IF CEASE AND DESIST ORDER

17 ISSUED.— 

18 (i) IN GENERAL.—If the Commission 

19 has issued a cease and desist order in a 

20 proceeding under section 5 of the Federal 

21 Trade Commission Act (15 U.S.C. 45) for 

22 violation of this section— 

23 (I) the Commission may com24 mence a civil action under subpara25 graph (A) to recover a civil penalty 


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1 against any party to such order at 

2 any time before the expiration of the 

3 1-year period beginning on the date 

4 on which such order becomes final 

5 under section 5(g) of such Act (15 

6 U.S.C. 45(g)); and 

7 (II) in such civil action, the find8 ings of the Commission as to the ma9 terial facts in such proceeding shall be 

10 conclusive, unless— 

11 (aa) the terms of such order 

12 expressly provide that the Com13 mission’s findings shall not be 

14 conclusive; or 

15 (bb) such order became final 

16 by reason of section 5(g)(1) of 

17 such Act (15 U.S.C. 45(g)(1)), in 

18 which case such findings shall be 

19 conclusive if supported by evi20 dence. 

21 (ii) RELATIONSHIP TO PENALTY FOR

22 VIOLATION OF AN ORDER.—The penalty 

23 provided in clause (i) for violation of this 

24 section is separate from and in addition to 

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1 tion of an order of the Commission under 

2 section 5(l) of the Federal Trade Commis3 sion Act (15 U.S.C. 45(l)). 

4 (C) AMOUNT OF PENALTY.— 

5 (i) IN GENERAL.—The amount of a 

6 civil penalty imposed in a civil action under 

7 subparagraph (A) on a party to an agree8 ment described in subsection (a) shall be 

9 sufficient to deter violations of this section, 

10 but in no event greater than— 

11 (I) if such party is the NDA or 

12 BLA holder (or, in the case of an 

13 agreement between two subsequent fil14 ers, the subsequent filer who gave the 

15 value described in subsection (a)(1)), 

16 the greater of— 

17 (aa) 3 times the value re18 ceived by such NDA or BLA 

19 holder (or by such subsequent 

20 filer) that is reasonably attrib21 utable to the violation of this sec22 tion; or 

23 (bb) 3 times the value given 

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1 ably attributable to the violation 

2 of this section; and 

3 (II) if such party is the subse4 quent filer (or, in the case of an 

5 agreement between two subsequent fil6 ers, the subsequent filer who received 

7 the value described in subsection 

8 (a)(1)), 3 times the value received by 

9 such subsequent filer that is reason10 ably attributable to the violation of 

11 this section. 

12 (ii) FACTORS FOR CONSIDERATION.— 

13 In determining such amount, the court 

14 shall take into account— 

15 (I) the nature, circumstances, ex16 tent, and gravity of the violation; 

17 (II) with respect to the violator, 

18 the degree of culpability, any history 

19 of violations, the ability to pay, any 

20 effect on the ability to continue doing 

21 business, profits earned by the NDA 

22 or BLA holder (or, in the case of an 

23 agreement between two subsequent fil24 ers, the subsequent filer who gave the 

25 value described in subsection (a)(1)), 


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1 compensation received by the subse2 quent filer (or, in the case of an 

3 agreement between two subsequent fil4 ers, the subsequent filer who received 

5 the value described in subsection 

6 (a)(1)), and the amount of commerce 

7 affected; and 

8 (III) other matters that justice 

9 requires. 

10 (D) INJUNCTIONS AND OTHER EQUITABLE

11 RELIEF.—In a civil action under subparagraph 

12 (A), the United States district courts are em13 powered to grant mandatory injunctions and 

14 such other and further equitable relief as they 

15 deem appropriate. 

16 (4) REMEDIES IN ADDITION.—Remedies pro17 vided in this subsection are in addition to, and not 

18 in lieu of, any other remedy provided by Federal 

19 law. 

20 (5) PRESERVATION OF AUTHORITY OF COMMIS21 SION.—Nothing in this section shall be construed to 

22 affect any authority of the Commission under any 

23 other provision of law. 

24 (e) FEDERAL TRADE COMMISSION RULEMAKING.— 

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1 gated under section 553 of title 5, United States Code, 

2 exempt from this section certain agreements described in 

3 subsection (a) if the Commission finds such agreements 

4 to be in furtherance of market competition and for the 

5 benefit of consumers. 

6 (f) ANTITRUST LAWS.—Nothing in this section shall 

7 modify, impair, limit, or supersede the applicability of the 

8 antitrust laws as defined in subsection (a) of the first sec9 tion of the Clayton Act (15 U.S.C. 12(a)), and of section 

10 5 of the Federal Trade Commission Act (15 U.S.C. 45) 

11 to the extent that such section 5 applies to unfair methods 

12 of competition. Nothing in this section shall modify, im13 pair, limit, or supersede the right of a subsequent filer 

14 to assert claims or counterclaims against any person, 

15 under the antitrust laws or other laws relating to unfair 

16 competition. 

17 (g) DEFINITIONS.—In this section: 

18 (1) AGREEMENT RESOLVING OR SETTLING A

19 COVERED PATENT INFRINGEMENT CLAIM.—The 

20 term ‘‘agreement resolving or settling a covered pat21 ent infringement claim’’ means any agreement 

22 that— 

23 (A) resolves or settles a covered patent in24 fringement claim; or 


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1 (B) is contingent upon, provides for a con2 tingent condition for, or is otherwise related to 

3 the resolution or settlement of a covered patent 

4 infringement claim. 

5 (2) COMMISSION.—The term ‘‘Commission’’ 

6 means the Federal Trade Commission. 

7 (3) COVERED PATENT INFRINGEMENT CLAIM.— 

8 The term ‘‘covered patent infringement claim’’ 

9 means an allegation made by the NDA or BLA hold10 er to a subsequent filer (or, in the case of an agree11 ment between two subsequent filers, by one subse12 quent filer to another), whether or not included in 

13 a complaint filed with a court of law, that— 

14 (A) the submission of the application de15 scribed in subparagraph (A) or (B) of para16 graph (9), or the manufacture, use, offering for 

17 sale, sale, or importation into the United States 

18 of a covered product that is the subject of such 

19 an application— 

20 (i) in the case of an agreement be21 tween an NDA or BLA holder and a sub22 sequent filer, infringes any patent owned 

23 by, or exclusively licensed to, the NDA or 

24 BLA holder of the covered product; or 


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1 (ii) in the case of an agreement be2 tween two subsequent filers, infringes any 

3 patent owned by the subsequent filer; or 

4 (B) in the case of an agreement between 

5 an NDA or BLA holder and a subsequent filer, 

6 the covered product to be manufactured under 

7 such application uses a covered product as 

8 claimed in a published patent application. 

9 (4) COVERED PRODUCT.—The term ‘‘covered 

10 product’’ means a drug (as defined in section 201(g) 

11 of the Federal Food, Drug, and Cosmetic Act (21 

12 U.S.C. 321(g))), including a biological product (as 

13 defined in section 351(i) of the Public Health Serv14 ice Act (42 U.S.C. 262(i))). 

15 (5) NDA OR BLA HOLDER.—The term ‘‘NDA 

16 or BLA holder’’ means— 

17 (A) the holder of— 

18 (i) an approved new drug application 

19 filed under section 505(b)(1) of the Fed20 eral Food, Drug, and Cosmetic Act (21 

21 U.S.C. 355(b)(1)) for a covered product; 

22 or 

23 (ii) a biologics license application filed 

24 under section 351(a) of the Public Health 


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1 Service Act (42 U.S.C. 262(a)) with re2 spect to a biological product; 

3 (B) a person owning or controlling enforce4 ment of the patent on— 

5 (i) the list published under section 

6 505(j)(7) of the Federal Food, Drug, and 

7 Cosmetic Act (21 U.S.C. 355(j)(7)) in con8 nection with the application described in 

9 subparagraph (A)(i); or 

10 (ii) any list published under section 

11 351 of the Public Health Service Act (42 

12 U.S.C. 262) comprised of patents associ13 ated with biologics license applications filed 

14 under section 351(a) of such Act (42 

15 U.S.C. 262(a)); or 

16 (C) the predecessors, subsidiaries, divi17 sions, groups, and affiliates controlled by, con18 trolling, or under common control with any en19 tity described in subparagraph (A) or (B) (such 

20 control to be presumed by direct or indirect 

21 share ownership of 50 percent or greater), as 

22 well as the licensees, licensors, successors, and 

23 assigns of each of the entities. 


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1 (6) PATENT.—The term ‘‘patent’’ means a pat2 ent issued by the United States Patent and Trade3 mark Office. 

4 (7) STATUTORY EXCLUSIVITY.—The term 

5 ‘‘statutory exclusivity’’ means those prohibitions on 

6 the submission or approval of drug applications 

7 under clauses (ii) through (iv) of section 

8 505(c)(3)(E) (5- and 3-year exclusivity), clauses (ii) 

9 through (iv) of section 505(j)(5)(F) (5-year and 3- 

10 year exclusivity), section 505(j)(5)(B)(iv) (180-day 

11 exclusivity), section 527 (orphan drug exclusivity), 

12 section 505A (pediatric exclusivity), or section 505E 

13 (qualified infectious disease product exclusivity) of 

14 the Federal Food, Drug, and Cosmetic Act (21 

15 U.S.C. 355(c)(3)(E), 355(j)(5)(B)(iv), 355(j)(5)(F), 

16 360cc, 355a, 355f), or prohibitions on the submis17 sion or licensing of biologics license applications 

18 under section 351(k)(6) (interchangeable biological 

19 product exclusivity) or section 351(k)(7) (biological 

20 product reference product exclusivity) of the Public 

21 Health Service Act (42 U.S.C. 262(k)(6), (7)). 

22 (8) SUBSEQUENT FILER.—The term ‘‘subse23 quent filer’’ means— 

24 (A) in the case of a drug, a party that 

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1 cation submitted pursuant to section 505(j) of 

2 the Federal Food, Drug, and Cosmetic Act (21 

3 U.S.C. 355(j)) or a new drug application sub4 mitted pursuant to section 505(b)(2) of the 

5 Federal Food, Drug, and Cosmetic Act (21 

6 U.S.C. 355(b)(2)) and filed under section 

7 505(b)(1) of such Act (21 U.S.C. 355(b)(1)) or 

8 has the exclusive rights to distribute the cov9 ered product that is the subject of such applica10 tion; or 

11 (B) in the case of a biological product, a 

12 party that owns or controls an application filed 

13 with the Food and Drug Administration under 

14 section 351(k) of the Public Health Service Act 

15 (42 U.S.C. 262(k)) or has the exclusive rights 

16 to distribute the biological product that is the 

17 subject of such application. 

18 (h) EFFECTIVE DATE.—This section applies with re19 spect to agreements described in subsection (a) entered 

20 into on or after the date of the enactment of this Act. 

21 SEC. 312. NOTICE AND CERTIFICATION OF AGREEMENTS. 

22 (a) NOTICE OF ALL AGREEMENTS.—Section 1111(7) 

23 of the Medicare Prescription Drug, Improvement, and 

24 Modernization Act of 2003 (21 U.S.C. 355 note) is 

25 amended by inserting ‘‘or the owner of a patent for which 


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1 a claim of infringement could reasonably be asserted 

2 against any person for making, using, offering to sell, sell3 ing, or importing into the United States a biological prod4 uct that is the subject of a biosimilar biological product 

5 application’’ before the period at the end. 

6 (b) CERTIFICATION OF AGREEMENTS.—Section 1112 

7 of such Act (21 U.S.C. 355 note) is amended by adding 

8 at the end the following: 

9 ‘‘(d) CERTIFICATION.—The Chief Executive Officer 

10 or the company official responsible for negotiating any 

11 agreement under subsection (a) or (b) that is required to 

12 be filed under subsection (c) shall, within 30 days of such 

13 filing, execute and file with the Assistant Attorney General 

14 and the Commission a certification as follows: ‘I declare 

15 that the following is true, correct, and complete to the best 

16 of my knowledge: The materials filed with the Federal 

17 Trade Commission and the Department of Justice under 

18 section 1112 of the Medicare Prescription Drug, Improve19 ment, and Modernization Act of 2003, with respect to the 

20 agreement referenced in this certification— 

21 ‘‘ ‘(1) represent the complete, final, and exclu22 sive agreement between the parties; 

23 ‘‘ ‘(2) include any ancillary agreements that are 

24 contingent upon, provide a contingent condition for, 


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1 were entered into within 30 days of, or are otherwise 

2 related to, the referenced agreement; and 

3 ‘‘ ‘(3) include written descriptions of any oral 

4 agreements, representations, commitments, or prom5 ises between the parties that are responsive to sub6 section (a) or (b) of such section 1112 and have not 

7 been reduced to writing.’.’’. 

8 SEC. 313. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD. 

9 Section 505(j)(5)(D)(i)(V) of the Federal Food, 

10 Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) 

11 is amended by inserting ‘‘section 311 of the Lower Costs, 

12 More Cures Act of 2019 or’’ after ‘‘that the agreement 

13 has violated’’. 

14 SEC. 314. COMMISSION LITIGATION AUTHORITY. 

15 Section 16(a)(2) of the Federal Trade Commission 

16 Act (15 U.S.C. 56(a)(2)) is amended— 

17 (1) in subparagraph (D), by striking ‘‘or’’ after 

18 the semicolon; 

19 (2) in subparagraph (E), by inserting ‘‘or’’ 

20 after the semicolon; and 

21 (3) by inserting after subparagraph (E) the fol22 lowing: 

23 ‘‘(F) under section 311(d)(3)(A) of the 

24 Lower Costs, More Cures Act of 2019;’’. 


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1 SEC. 315. STATUTE OF LIMITATIONS. 

2 (a) IN GENERAL.—Except as provided in subsection 

3 (b), the Commission shall commence any administrative 

4 proceeding or civil action to enforce section 311 of this 

5 Act not later than 6 years after the date on which the 

6 parties to the agreement file the Notice of Agreement as 

7 provided by section 1112(c)(2) and (d) of the Medicare 

8 Prescription Drug, Improvement, and Modernization Act 

9 of 2003 (21 U.S.C. 355 note). 

10 (b) CIVIL ACTION AFTER ISSUANCE OF CEASE AND

11 DESIST ORDER.—If the Commission has issued a cease 

12 and desist order under section 5 of the Federal Trade 

13 Commission Act (15 U.S.C. 45) for violation of section 

14 311 of this Act and the proceeding for the issuance of 

15 such order was commenced within the period required by 

16 subsection (a) of this section, such subsection does not 

17 prohibit the commencement, after such period, of a civil 

18 action under section 311(d)(3)(A) against a party to such 

19 order or a civil action under subsection (l) of such section 

20 5 for violation of such order. 

21 Subtitle C—BLOCKING Act 

22 SEC. 321. CHANGE CONDITIONS OF FIRST GENERIC EXCLU23 SIVITY TO SPUR ACCESS AND COMPETITION. 

24 (a) IN GENERAL.—Section 505(j)(5)(B)(iv) of the 

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

26 355(j)(5)(B)(iv)) is amended— 


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1 (1) in subclause (I), by striking ‘‘180 days 

2 after’’ and all that follows through the period at the 

3 end and inserting the following: ‘‘180 days after the 

4 earlier of— 

5 ‘‘(aa) the date of the first com6 mercial marketing of the drug (includ7 ing the commercial marketing of the 

8 listed drug) by any first applicant; or 

9 ‘‘(bb) the applicable date speci10 fied in subclause (III).’’; and 

11 (2) by adding at the end the following new sub12 clause: 

13 ‘‘(III) APPLICABLE DATE.—The appli14 cable date specified in this subclause, with 

15 respect to an application for a drug de16 scribed in subclause (I), is the date on 

17 which each of the following conditions is 

18 first met: 

19 ‘‘(aa) The approval of such an 

20 application could be made effective, 

21 but for the eligibility of a first appli22 cant for 180-day exclusivity under 

23 this clause. 

24 ‘‘(bb) At least 30 months have 

25 passed since the date of submission of 


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1 an application for the drug by at least 

2 one first applicant. 

3 ‘‘(cc) Approval of an application 

4 for the drug submitted by at least one 

5 first applicant is not precluded under 

6 clause (iii). 

7 ‘‘(dd) No application for the drug 

8 submitted by any first applicant is ap9 proved at the time the conditions 

10 under items (aa), (bb), and (cc) are 

11 all met, regardless of whether such an 

12 application is subsequently ap13 proved.’’. 

14 (b) INFORMATION.—The Secretary of Health and 

15 Human Services shall— 

16 (1) not later than 120 days after the date of 

17 enactment of this Act, publish, as appropriate and 

18 available, information sufficient to allow applicants 

19 to assess whether the conditions described in section 

20 505(j)(5)(B)(iv)(III) of the Federal Food, Drug, and 

21 Cosmetic Act (as added by subsection (a)) are satis22 fied for all applications where the exclusivity period 

23 under clause (iv)(I) of section 505(j)(5)(B) of the 

24 Federal Food, Drug, and Cosmetic Act (as amended 

25 by such subsection) has not expired; and 


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1 (2) publish updates to such information to re2 flect the most recent information available to the 

3 Secretary. 

4 Subtitle D—Purple Book 

5 SEC. 331. PUBLIC LISTING. 

6 Section 351(k) of the Public Health Service Act (42 

7 U.S.C. 262(k)) is amended by adding at the end the fol8 lowing: 

9 ‘‘(9) PUBLIC LISTING.— 

10 ‘‘(A) IN GENERAL.— 

11 ‘‘(i) INITIAL PUBLICATION.—Not later 

12 than 180 days after the date of enactment 

13 of the Lower Costs, More Cures Act of 

14 2019, the Secretary shall publish and 

15 make available to the public in a search16 able, electronic format— 

17 ‘‘(I) a list in alphabetical order of 

18 the nonproprietary or proper name of 

19 each biological product for which a 

20 biologics license under subsection (a) 

21 or this subsection is in effect, or that 

22 has been deemed to be licensed under 

23 this section pursuant to section 

24 7002(e)(4) of the Biologics Price 


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1 Competition and Innovation Act of 

2 2009, as of such date of enactment; 

3 ‘‘(II) the date of approval of the 

4 marketing application and the applica5 tion number; and 

6 ‘‘(III) the marketing or licensure 

7 status of the biological product for 

8 which a biologics license under sub9 section (a) or this subsection is in ef10 fect or that has been deemed to be li11 censed under this section pursuant to 

12 section 7002(e)(4) of the Biologics 

13 Price Competition and Innovation Act 

14 of 2009. 

15 ‘‘(ii) REVISIONS.—Every 30 days 

16 after the publication of the first list under 

17 clause (i), the Secretary shall revise the list 

18 to include each biological product which 

19 has been licensed under subsection (a) or 

20 this subsection during the 30-day period. 

21 ‘‘(iii) PATENT INFORMATION.—Not 

22 later than 30 days after a list of patents 

23 under subsection (l)(3)(A), or a supple24 ment to such list under subsection (l)(7), 

25 has been provided by the reference product 


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1 sponsor to the subsection (k) applicant re2 specting a biological product included on 

3 the list published under this subparagraph, 

4 the reference product sponsor shall provide 

5 such list of patents (or supplement there6 to) and their corresponding expiry dates to 

7 the Secretary, and the Secretary shall, in 

8 revisions made under clause (ii), include 

9 such information for such biological prod10 uct. Within 30 days of providing any sub11 sequent or supplemental list of patents to 

12 any subsequent subsection (k) applicant 

13 under subsection (l)(3)(A) or (l)(7), the 

14 reference product sponsor shall update the 

15 information provided to the Secretary 

16 under this clause with any additional pat17 ents from such subsequent or supplemental 

18 list and their corresponding expiry dates. 

19 ‘‘(iv) LISTING OF EXCLUSIVITIES.— 

20 For each biological product included on the 

21 list published under this subparagraph, the 

22 Secretary shall specify each exclusivity pe23 riod that is applicable and has not con24 cluded under paragraph (6) or paragraph 

25 (7). 


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1 ‘‘(B) WITHDRAWAL OR SUSPENSION OF LI2 CENSURE.—If the licensing of a biological prod3 uct was withdrawn or suspended for safety, pu4 rity, or potency reasons, it may not be pub5 lished in the list under subparagraph (A). If the 

6 withdrawal or suspension occurred after its 

7 publication in such list, the reference product 

8 sponsor shall notify the Secretary that— 

9 ‘‘(i) the biological product shall be im10 mediately removed from such list— 

11 ‘‘(I) for the same period as the 

12 withdrawal or suspension; or 

13 ‘‘(II) if the biological product has 

14 been withdrawn from sale, for the pe15 riod of withdrawal from sale or, if ear16 lier, the period ending on the date the 

17 Secretary determines that the with18 drawal from sale is not for safety, pu19 rity, or potency reasons; and 

20 ‘‘(ii) a notice of the removal shall be 

21 published in the Federal Register.’’. 


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1 SEC. 332. REVIEW AND REPORT ON TYPES OF INFORMA2 TION TO BE LISTED. 

3 Not later than 3 years after the date of enactment 

4 of this Act, the Secretary of Health and Human Services 

5 shall— 

6 (1) solicit public comment regarding the type of 

7 information, if any, that should be added to or re8 moved from the list required by paragraph (9) of 

9 section 351(k) of the Public Health Service Act (42 

10 U.S.C. 262(k)), as added by section 331; and 

11 (2) transmit to Congress an evaluation of such 

12 comments, including any recommendations about the 

13 types of information that should be added to or re14 moved from the list. 

15 Subtitle E—Orange Book 

16 SEC. 341. ORANGE BOOK. 

17 (a) SUBMISSION OF PATENT INFORMATION FOR

18 BRAND NAME DRUGS.—Paragraph (1) of section 505(b) 

19 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

20 355(b)) is amended to read as follows: 

21 ‘‘(b)(1) Any person may file with the Secretary an 

22 application with respect to any drug subject to the provi23 sions of subsection (a). Such persons shall submit to the 

24 Secretary as part of the application— 


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1 ‘‘(A) full reports of investigations which have 

2 been made to show whether or not such drug is safe 

3 for use and whether such drug is effective in use; 

4 ‘‘(B) a full list of the articles used as compo5 nents of such drug; 

6 ‘‘(C) a full statement of the composition of such 

7 drug; 

8 ‘‘(D) a full description of the methods used in, 

9 and the facilities and controls used for, the manufac10 ture, processing, and packing of such drug; 

11 ‘‘(E) such samples of such drug and of the arti12 cles used as components thereof as the Secretary 

13 may require; 

14 ‘‘(F) specimens of the labeling proposed to be 

15 used for such drug; 

16 ‘‘(G) any assessments required under section 

17 505B; and 

18 ‘‘(H) patent information, with respect to each 

19 patent for which a claim of patent infringement 

20 could reasonably be asserted if a person not licensed 

21 by the owner engaged in the manufacture, use, or 

22 sale of the drug, and consistent with the following 

23 requirements: 


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1 ‘‘(i) The applicant shall file with the appli2 cation the patent number and the expiration 

3 date of— 

4 ‘‘(I) any patent which claims the drug 

5 for which the applicant submitted the ap6 plication and is a drug substance (includ7 ing active ingredient) patent or a drug 

8 product (including formulation and com9 position) patent; and 

10 ‘‘(II) any patent which claims the 

11 method of using such drug. 

12 ‘‘(ii) If an application is filed under this 

13 subsection for a drug and a patent of the type 

14 described in clause (i) which claims such drug 

15 or a method of using such drug is issued after 

16 the filing date but before approval of the appli17 cation, the applicant shall amend the applica18 tion to include such patent information. 

19 Upon approval of the application, the Secretary shall pub20 lish the information submitted under subparagraph (H). 

21 The Secretary shall, in consultation with the Director of 

22 the National Institutes of Health and with representatives 

23 of the drug manufacturing industry, review and develop 

24 guidance, as appropriate, on the inclusion of women and 


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1 minorities in clinical trials required by subparagraph 

2 (A).’’. 

3 (b) CONFORMING CHANGES TO REQUIREMENTS FOR

4 SUBSEQUENT SUBMISSION OF PATENT INFORMATION.— 

5 Section 505(c)(2) of the Federal Food, Drug, and Cos6 metic Act (21 U.S.C. 355(j)(7)) is amended— 

7 (1) by inserting after ‘‘the patent number and 

8 the expiration date of any patent which’’ the fol9 lowing: ‘‘fulfills the criteria in subsection (b) and’’; 

10 (2) by inserting after the first sentence the fol11 lowing: ‘‘Patent information that is not the type of 

12 patent information required by subsection (b) shall 

13 not be submitted.’’; and 

14 (3) by inserting after ‘‘could not file patent in15 formation under subsection (b) because no patent’’ 

16 the following: ‘‘of the type required to be submitted 

17 in subsection (b)’’. 

18 (c) LISTING OF EXCLUSIVITIES.—Subparagraph (A) 

19 of section 505(j)(7) of the Federal Food, Drug, and Cos20 metic Act (21 U.S.C. 355(j)(7)) is amended by adding at 

21 the end the following: 

22 ‘‘(iv) For each drug included on the list, the Sec23 retary shall specify each exclusivity period that is applica24 ble and has not concluded under— 


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1 ‘‘(I) clause (ii), (iii), or (iv) of subsection 

2 (c)(3)(E) of this section; 

3 ‘‘(II) clause (iv) or (v) of paragraph (5)(B) of 

4 this subsection; 

5 ‘‘(III) clause (ii), (iii), or (iv) of paragraph 

6 (5)(F) of this subsection; 

7 ‘‘(IV) section 505A; 

8 ‘‘(V) section 505E; or 

9 ‘‘(VI) section 527(a).’’. 

10 (d) REMOVAL OF INVALID PATENTS.— 

11 (1) IN GENERAL.—Section 505(j)(7) of the 

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

13 355(j)(7)) is amended by adding at the end the fol14 lowing: 

15 ‘‘(D)(i) The holder of an application approved under 

16 subsection (c) for a drug on the list shall notify within 

17 14 days the Secretary in writing if either of the following 

18 occurs: 

19 ‘‘(I) The Patent Trial and Appeals Board issues 

20 a decision from which no appeal has been or can be 

21 taken that a patent for such drug is invalid. 

22 ‘‘(II) A court issues a decision from which no 

23 appeal has been or can be taken that a patent for 

24 such drug is invalid. 


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1 ‘‘(ii) The holder of an approved application shall in2 clude in any notification under clause (i) a copy of the 

3 decision described in subclause (I) or (II) of clause (i). 

4 ‘‘(iii) The Secretary shall remove from the list any 

5 patent that is determined to be invalid in a decision de6 scribed in subclause (I) or (II) of clause (i)— 

7 ‘‘(I) promptly; but 

8 ‘‘(II) not before the expiration of any 180-day 

9 exclusivity period under paragraph (5)(B)(iv) that 

10 relies on a certification described in paragraph 

11 (2)(A)(vii)(IV) that such patent was invalid.’’. 

12 (2) APPLICABILITY.—Subparagraph (D) of sec13 tion 505(j)(7) of the Federal Food, Drug, and Cos14 metic Act (21 U.S.C. 355(j)(7)), as added by para15 graph (1), applies only with respect to a decision de16 scribed in such subparagraph that is issued on or 

17 after the date of enactment of this Act. 

18 (e) REVIEW AND REPORT.—Not later than one year 

19 after the date of enactment of this Act, the Secretary of 

20 Health and Human Services, acting through the Commis21 sioner of Food and Drugs, shall— 

22 (1) solicit public comment regarding the types 

23 of patent information that should be included on the 

24 list under section 507(j)(7) of the Federal Food, 

25 Drug, and Cosmetic Act (21 U.S.C. 355(j)(7)); and 


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1 (2) transmit to the Congress an evaluation of 

2 such comments, including any recommendations 

3 about the types of patent information that should be 

4 included on or removed from such list. 

5 SEC. 342. GAO REPORT TO CONGRESS. 

6 (a) IN GENERAL.—Not later than one year after the 

7 date of enactment of this Act, the Comptroller General 

8 of the United States (referred to in this section as the 

9 ‘‘Comptroller General’’) shall submit to the Committee on 

10 Energy and Commerce of the House of Representatives 

11 a report on the patents included in the list published under 

12 section 505(j)(7) of the Federal Food, Drug and Cosmetic 

13 Act (21 U.S.C. 355(j)(7)), including an analysis and eval14 uation of the types of patents included in such list and 

15 the claims such patents make about the products they 

16 claim. 

17 (b) CONTENTS.—The Comptroller General shall in18 clude in the report under subsection (a)— 

19 (1) data on the number of— 

20 (A) patents included in the list published 

21 under paragraph (7) of section 505(j) of the 

22 Federal Food, Drug and Cosmetic Act (21 

23 U.S.C. 355(j)), that claim the active ingredient 

24 or formulation of a drug in combination with a 

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1 gether comprising the finished dosage form of 

2 the drug; and 

3 (B) claims in each patent that claim a de4 vice that is used for the delivery of the drug, 

5 but do not claim such device in combination 

6 with an active ingredient or formulation of a 

7 drug; 

8 (2) data on the date of inclusion in the list 

9 under paragraph (7) of such section 505(j) for all 

10 patents under such list, as compared to patents that 

11 claim a method of using the drug in combination 

12 with a device; 

13 (3) an analysis regarding the impact of includ14 ing on the list under paragraph (7) of such section 

15 505(j) certain types of patent information for drug 

16 product applicants and approved application holders, 

17 including an analysis of whether— 

18 (A) the listing of the patents described in 

19 paragraph (1)(A) delayed the market entry of 

20 one or more drugs approved under such section 

21 505(j); and 

22 (B) not listing the patents described in 

23 paragraph (1)(A) would delay the market entry 

24 of one or more such drugs; and 


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1 (4) recommendations about which kinds of pat2 ents relating to devices described in paragraph 

3 (1)(A) should be submitted to the Secretary of 

4 Health and Human Services for inclusion on the list 

5 under paragraph (7) of such section 505(j) and 

6 which patents should not be required to be so sub7 mitted. 

8 Subtitle F—Advancing Education 

9 on Biosimilars 

10 SEC. 351. EDUCATION ON BIOLOGICAL PRODUCTS. 

11 (a) WEBSITE; CONTINUING EDUCATION.—Subpart 1 

12 of part F of title III of the Public Health Service Act (42 

13 U.S.C. 262 et seq.) is amended by adding at the end the 

14 following: 

15 ‘‘SEC. 352A. EDUCATION ON BIOLOGICAL PRODUCTS. 

16 ‘‘(a) INTERNET WEBSITE.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall main18 tain and operate an internet website to provide edu19 cational materials for health care providers, patients, 

20 and caregivers, regarding the meaning of the terms, 

21 and the standards for review and licensing of, bio22 logical products, including biosimilar biological prod23 ucts and interchangeable biosimilar biological prod24 ucts. 


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1 ‘‘(2) CONTENT.—Educational materials pro2 vided under paragraph (1) may include— 

3 ‘‘(A) explanations of key statutory and 

4 regulatory terms, including ‘biosimilar’ and 

5 ‘interchangeable’, and clarification regarding 

6 the use of interchangeable biosimilar biological 

7 products; 

8 ‘‘(B) information related to development 

9 programs for biological products, including bio10 similar biological products and interchangeable 

11 biosimilar biological products and relevant clin12 ical considerations for prescribers, which may 

13 include, as appropriate and applicable, informa14 tion related to the comparability of such biologi15 cal products; 

16 ‘‘(C) an explanation of the process for re17 porting adverse events for biological products, 

18 including biosimilar biological products and 

19 interchangeable biosimilar biological products; 

20 and 

21 ‘‘(D) an explanation of the relationship be22 tween biosimilar biological products and inter23 changeable biosimilar biological products li24 censed under section 351(k) and reference 

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1 ing the standards for review and licensing of 

2 each such type of biological product. 

3 ‘‘(3) FORMAT.—The educational materials pro4 vided under paragraph (1) may be— 

5 ‘‘(A) in formats such as webinars, con6 tinuing medical education modules, videos, fact 

7 sheets, infographics, stakeholder toolkits, or 

8 other formats as appropriate and applicable; 

9 and 

10 ‘‘(B) tailored for the unique needs of 

11 health care providers, patients, caregivers, and 

12 other audiences, as the Secretary determines 

13 appropriate. 

14 ‘‘(4) OTHER INFORMATION.—In addition to the 

15 information described in paragraph (2), the Sec16 retary shall continue to publish the following infor17 mation: 

18 ‘‘(A) The action package of each biological 

19 product licensed under subsection (a) or (k). 

20 ‘‘(B) The summary review of each biologi21 cal product licensed under subsection (a) or (k). 

22 ‘‘(5) CONFIDENTIAL AND TRADE SECRET IN23 FORMATION.—This subsection does not authorize 

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1 mercial or financial information, or other matter de2 scribed in section 552(b) of title 5. 

3 ‘‘(b) CONTINUING EDUCATION.—The Secretary shall 

4 advance education and awareness among health care pro5 viders regarding biological products, including biosimilar 

6 biological products and interchangeable biosimilar biologi7 cal products, as appropriate, including by developing or 

8 improving continuing education programs that advance 

9 the education of such providers on the prescribing of, and 

10 relevant clinical considerations with respect to, biological 

11 products, including biosimilar biological products and 

12 interchangeable biosimilar biological products.’’. 

13 (b) APPLICATION UNDER THE MEDICARE MERIT14 BASED INCENTIVE PAYMENT SYSTEM.—Section 

15 1848(q)(5)(C) of the Social Security Act (42 U.S.C. 

16 1395w–4(q)(5)(C)) is amended by adding at the end the 

17 following new clause: 

18 ‘‘(iv) CLINICAL MEDICAL EDUCATION

19 PROGRAM ON BIOSIMILAR BIOLOGICAL

20 PRODUCTS.—Completion of a clinical med21 ical education program developed or im22 proved under section 352A(b) of the Public 

23 Health Service Act by a MIPS eligible pro24 fessional during a performance period shall 

25 earn such eligible professional one-half of 


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1 the highest potential score for the perform2 ance category described in paragraph 

3 (2)(A)(iii) for such performance period. A 

4 MIPS eligible professional may only count 

5 the completion of such a program for pur6 poses of such category one time during the 

7 eligible professional’s lifetime.’’. 

8 Subtitle G—Streamlining 

9 Transition of Biological Products 

10 SEC. 361. STREAMLINING THE TRANSITION OF BIOLOGICAL 

11 PRODUCTS. 

12 Section 7002(e)(4) of the Biologics Price Competition 

13 and Innovation Act of 2009 (Public Law 111–148) is 

14 amended— 

15 (1) by striking ‘‘An approved application’’ and 

16 inserting the following: 

17 ‘‘(A) IN GENERAL.—An approved applica18 tion’’; 

19 (2) by adding at the end the following: 

20 ‘‘(B) TREATMENT OF CERTAIN APPLICA21 TIONS.— 

22 ‘‘(i) IN GENERAL.—With respect to an 

23 application for a biological product sub24 mitted under subsection (b) or (j) of sec25 tion 505 of the Federal Food, Drug, and 


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1 Cosmetic Act (21 U.S.C. 355) that is filed 

2 not later than March 23, 2019, the Sec3 retary shall continue to review such appli4 cation under such section 505, even if such 

5 review continues after March 23, 2020. 

6 ‘‘(ii) EFFECT ON LISTED DRUGS.— 

7 Only for purposes of carrying out clause 

8 (i), with respect to any applicable listed 

9 drug with respect to such application, the 

10 following shall apply: 

11 ‘‘(I) Any drug that is a biological 

12 product that has been deemed licensed 

13 under section 351 of the Public 

14 Health Service Act (42 U.S.C. 262) 

15 pursuant to subparagraph (A) and 

16 that is referenced in an application 

17 described in clause (i), shall continue 

18 to be identified as a listed drug on the 

19 list published pursuant to section 

20 505(j)(7) of the Federal Food, Drug, 

21 and Cosmetic Act, and the informa22 tion for such drug on such list shall 

23 not be revised after March 20, 2020, 

24 until— 


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1 ‘‘(aa) such drug is removed 

2 from such list in accordance with 

3 subclause (III) or subparagraph 

4 (C) of such section 505(j)(7); or 

5 ‘‘(bb) this subparagraph no 

6 longer has force or effect. 

7 ‘‘(II) Any drug that is a biologi8 cal product that has been deemed li9 censed under section 351 of the Pub10 lic Health Service Act (42 U.S.C. 

11 262) pursuant to subparagraph (A) 

12 and that is referenced in an applica13 tion described in clause (i) shall be 

14 subject only to requirements applica15 ble to biological products licensed 

16 under such section. 

17 ‘‘(III) Upon approval under sub18 section (c) or (j) of section 505 of the 

19 Federal Food, Drug, and Cosmetic 

20 Act of an application described in 

21 clause (i), the Secretary shall remove 

22 from the list published pursuant to 

23 section 505(j)(7) of the Federal Food, 

24 Drug, and Cosmetic Act any listed 

25 drug that is a biological product that 


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1 has been deemed licensed under sec2 tion 351 of the Public Health Service 

3 Act pursuant to subparagraph (A) 

4 and that is referenced in such ap5 proved application, unless such listed 

6 drug is referenced in one or more ad7 ditional applications described in 

8 clause (i). 

9 ‘‘(iii) DEEMED LICENSURE.—Upon 

10 approval of an application described in 

11 clause (i), such approved application shall 

12 be deemed to be a license for the biological 

13 product under section 351 of the Public 

14 Health Service Act, pursuant to subpara15 graph (A), and any period of exclusivity, as 

16 applicable, shall be determined in accord17 ance with such section. 

18 ‘‘(iv) RULE OF CONSTRUCTION.— 

19 ‘‘(I) APPLICATION OF CERTAIN

20 PROVISIONS.— 

21 ‘‘(aa) PATENT CERTIFI22 CATION OR STATEMENT.—An ap23 plication described in clause (i) 

24 shall contain a patent certifi25 cation or statement described in, 


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1 as applicable, section 505(b)(2) 

2 of the Federal Food, Drug, and 

3 Cosmetic Act or clauses (vii) and 

4 (viii) of section 505(j)(2)(A) of 

5 such Act and, with respect to any 

6 listed drug referenced in such ap7 plication, comply with related re8 quirements concerning any timely 

9 filed patent information listed 

10 pursuant to section 505(j)(7). 

11 ‘‘(bb) DATE OF AP12 PROVAL.—The earliest possible 

13 date on which any pending appli14 cation described in clause (i) may 

15 be approved shall be determined 

16 based on— 

17 ‘‘(AA) the last expira18 tion date of any applicable 

19 period of exclusivity that 

20 would prevent such approval 

21 and that is described in sec22 tion 505(c)(3)(E), 

23 505(j)(5)(B)(iv), 

24 505(j)(5)(F), 505A, 505E, 

25 or 527 of the Federal Food, 


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1 Drug, and Cosmetic Act; 

2 and 

3 ‘‘(BB) if the application 

4 was submitted under section 

5 505(b)(2) of the Federal 

6 Food, Drug, and Cosmetic 

7 Act and references any list8 ed drug, the last applicable 

9 date determined under sub10 paragraph (A), (B), or (C) 

11 of section 505(c)(3) of such 

12 Act, or, if the application 

13 was submitted under section 

14 505(j) of such Act, the last 

15 applicable date determined 

16 under clause (i), (ii), or (iii) 

17 of section 505(j)(5)(B). 

18 ‘‘(II) RULE OF CONSTRUCTION

19 WITH RESPECT TO EXCLUSIVITY.— 

20 Nothing in this subparagraph shall be 

21 construed to affect section 

22 351(k)(7)(D) of the Public Health 

23 Service Act. 

24 ‘‘(v) AUTHORIZED DISCLOSURE.—The 

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1 cation after March 23, 2020, pursuant to 

2 clause (i), and continue to identify any ap3 plicable listed drug pursuant to clause (ii) 

4 on the list published pursuant to section 

5 505(j)(7) of the Federal Food, Drug, and 

6 Cosmetic Act, even if such review or listing 

7 may reveal the existence of such applica8 tion and the identity of any listed drug for 

9 which the investigations described in sec10 tion 505(b)(1)(A) of the Federal Food, 

11 Drug, and Cosmetic Act are relied upon by 

12 the applicant for approval of the pending 

13 application. Nothing in this subparagraph 

14 shall be construed as authorizing the Sec15 retary to disclose any other information 

16 that is a trade secret or confidential infor17 mation described in section 552(b)(4) of 

18 title 5, United States Code. 

19 ‘‘(vi) SUNSET.—Beginning on October 

20 1, 2022, this subparagraph shall have no 

21 force or effect and any applications de22 scribed in clause (i) that have not been ap23 proved shall be deemed withdrawn.’’. 


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1 Subtitle H—Over-the-Counter 

2 Monograph Safety, Innovation, 

3 and Reform 

4 SEC. 370. SHORT TITLE; REFERENCES IN SUBTITLE. 

5 (a) SHORT TITLE.—This subtitle may be cited as the 

6 ‘‘Over-the-Counter Monograph Safety, Innovation, and 

7 Reform Act of 2019’’. 

8 (b) REFERENCES.—Except as otherwise specified, 

9 any reference to ‘‘this Act’’ contained in this subtitle shall 

10 be treated as referring only to the provisions of this sub11 title. 

12 PART 1—OTC DRUG REVIEW 

13 SEC. 371. REGULATION OF CERTAIN NONPRESCRIPTION 

14 DRUGS THAT ARE MARKETED WITHOUT AN 

15 APPROVED DRUG APPLICATION. 

16 (a) IN GENERAL.—Chapter V of the Federal Food, 

17 Drug, and Cosmetic Act is amended by inserting after sec18 tion 505F of such Act (21 U.S.C. 355g) the following: 

19 ‘‘SEC. 505G. REGULATION OF CERTAIN NONPRESCRIPTION 

20 DRUGS THAT ARE MARKETED WITHOUT AN 

21 APPROVED DRUG APPLICATION. 

22 ‘‘(a) NONPRESCRIPTION DRUGS MARKETED WITH23 OUT AN APPROVED APPLICATION.—Nonprescription 

24 drugs marketed without an approved drug application 

25 under section 505, as of the date of the enactment of this 


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1 section, shall be treated in accordance with this sub2 section. 

3 ‘‘(1) DRUGS SUBJECT TO A FINAL MONOGRAPH; 

4 CATEGORY I DRUGS SUBJECT TO A TENTATIVE

5 FINAL MONOGRAPH.—A drug is deemed to be gen6 erally recognized as safe and effective under section 

7 201(p)(1), not a new drug under section 201(p), and 

8 not subject to section 503(b)(1), if— 

9 ‘‘(A) the drug is— 

10 ‘‘(i) in conformity with the require11 ments for nonprescription use of a final 

12 monograph issued under part 330 of title 

13 21, Code of Federal Regulations (except as 

14 provided in paragraph (2)), the general re15 quirements for nonprescription drugs, and 

16 conditions or requirements under sub17 sections (b), (c), and (k); and 

18 ‘‘(ii) except as permitted by an order 

19 issued under subsection (b) or, in the case 

20 of a minor change in the drug, in con21 formity with an order issued under sub22 section (c), in a dosage form that, imme23 diately prior to the date of the enactment 

24 of this section, has been used to a material 


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1 extent and for a material time under sec2 tion 201(p)(2); or 

3 ‘‘(B) the drug is— 

4 ‘‘(i) classified in category I for safety 

5 and effectiveness under a tentative final 

6 monograph that is the most recently appli7 cable proposal or determination issued 

8 under part 330 of title 21, Code of Federal 

9 Regulations; 

10 ‘‘(ii) in conformity with the proposed 

11 requirements for nonprescription use of 

12 such tentative final monograph, any appli13 cable subsequent determination by the Sec14 retary, the general requirements for non15 prescription drugs, and conditions or re16 quirements under subsections (b), (c), and 

17 (k); and 

18 ‘‘(iii) except as permitted by an order 

19 issued under subsection (b) or, in the case 

20 of a minor change in the drug, in con21 formity with an order issued under sub22 section (c), in a dosage form that, imme23 diately prior to the date of the enactment 

24 of this section, has been used to a material 


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1 extent and for a material time under sec2 tion 201(p)(2). 

3 ‘‘(2) TREATMENT OF SUNSCREEN DRUGS.— 

4 With respect to sunscreen drugs subject to this sec5 tion, the applicable requirements in terms of con6 formity with a final monograph, for purposes of 

7 paragraph (1)(A)(i), shall be the requirements speci8 fied in part 352 of title 21, Code of Federal Regula9 tions, as published on May 21, 1999, beginning on 

10 page 27687 of volume 64 of the Federal Register, 

11 except that the applicable requirements governing ef12 fectiveness and labeling shall be those specified in 

13 section 201.327 of title 21, Code of Federal Regula14 tions. 

15 ‘‘(3) CATEGORY III DRUGS SUBJECT TO A TEN16 TATIVE FINAL MONOGRAPH; CATEGORY I DRUGS

17 SUBJECT TO PROPOSED MONOGRAPH OR ADVANCE

18 NOTICE OF PROPOSED RULEMAKING.—A drug that 

19 is not described in paragraph (1), (2), or (4) is not 

20 required to be the subject of an application approved 

21 under section 505, and is not subject to section 

22 503(b)(1), if— 

23 ‘‘(A) the drug is— 

24 ‘‘(i) classified in category III for safe25 ty or effectiveness in the preamble of a 


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1 proposed rule establishing a tentative final 

2 monograph that is the most recently appli3 cable proposal or determination for such 

4 drug issued under part 330 of title 21, 

5 Code of Federal Regulations; 

6 ‘‘(ii) in conformity with— 

7 ‘‘(I) the conditions of use, includ8 ing indication and dosage strength, if 

9 any, described for such category III 

10 drug in such preamble or in an appli11 cable subsequent proposed rule; 

12 ‘‘(II) the proposed requirements 

13 for drugs classified in such tentative 

14 final monograph in category I in the 

15 most recently proposed rule estab16 lishing requirements related to such 

17 tentative final monograph and in any 

18 final rule establishing requirements 

19 that are applicable to the drug; and 

20 ‘‘(III) the general requirements 

21 for nonprescription drugs and condi22 tions or requirements under sub23 section (b) or (k); and 

24 ‘‘(iii) in a dosage form that, imme25 diately prior to the date of the enactment 


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1 of this section, had been used to a material 

2 extent and for a material time under sec3 tion 201(p)(2); or 

4 ‘‘(B) the drug is— 

5 ‘‘(i) classified in category I for safety 

6 and effectiveness under a proposed mono7 graph or advance notice of proposed rule8 making that is the most recently applicable 

9 proposal or determination for such drug 

10 issued under part 330 of title 21, Code of 

11 Federal Regulations; 

12 ‘‘(ii) in conformity with the require13 ments for nonprescription use of such pro14 posed monograph or advance notice of pro15 posed rulemaking, any applicable subse16 quent determination by the Secretary, the 

17 general requirements for nonprescription 

18 drugs, and conditions or requirements 

19 under subsection (b) or (k); and 

20 ‘‘(iii) in a dosage form that, imme21 diately prior to the date of the enactment 

22 of this section, has been used to a material 

23 extent and for a material time under sec24 tion 201(p)(2). 


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1 ‘‘(4) CATEGORY II DRUGS DEEMED NEW

2 DRUGS.—A drug that is classified in category II for 

3 safety or effectiveness under a tentative final mono4 graph or that is subject to a determination to be not 

5 generally recognized as safe and effective in a pro6 posed rule that is the most recently applicable pro7 posal issued under part 330 of title 21, Code of Fed8 eral Regulations, shall be deemed to be a new drug 

9 under section 201(p), misbranded under section 

10 502(ee), and subject to the requirement for an ap11 proved new drug application under section 505 be12 ginning on the day that is 180 calendar days after 

13 the date of the enactment of this section, unless, be14 fore such day, the Secretary determines that it is in 

15 the interest of public health to extend the period 

16 during which the drug may be marketed without 

17 such an approved new drug application. 

18 ‘‘(5) DRUGS NOT GRASE DEEMED NEW

19 DRUGS.—A drug that the Secretary has determined 

20 not to be generally recognized as safe and effective 

21 under section 201(p)(1) under a final determination 

22 issued under part 330 of title 21, Code of Federal 

23 Regulations, shall be deemed to be a new drug under 

24 section 201(p), misbranded under section 502(ee), 


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1 and subject to the requirement for an approved new 

2 drug application under section 505. 

3 ‘‘(6) OTHER DRUGS DEEMED NEW DRUGS.— 

4 Except as provided in subsection (m), a drug is 

5 deemed to be a new drug under section 201(p) and 

6 misbranded under section 502(ee) if the drug— 

7 ‘‘(A) is not subject to section 503(b)(1); 

8 and 

9 ‘‘(B) is not described in paragraph (1), 

10 (2), (3), (4), or (5), or subsection (b)(1)(B). 

11 ‘‘(b) ADMINISTRATIVE ORDERS.— 

12 ‘‘(1) IN GENERAL.— 

13 ‘‘(A) DETERMINATION.—The Secretary 

14 may, on the initiative of the Secretary or at the 

15 request of one or more requestors, issue an ad16 ministrative order determining whether there 

17 are conditions under which a specific drug, a 

18 class of drugs, or a combination of drugs, is de19 termined to be— 

20 ‘‘(i) not subject to section 503(b)(1); 

21 and 

22 ‘‘(ii) generally recognized as safe and 

23 effective under section 201(p)(1). 

24 ‘‘(B) EFFECT.—A drug or combination of 

25 drugs shall be deemed to not require approval 


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1 under section 505 if such drug or combination 

2 of drugs— 

3 ‘‘(i) is determined by the Secretary to 

4 meet the conditions specified in clauses (i) 

5 and (ii) of subparagraph (A); 

6 ‘‘(ii) is marketed in conformity with 

7 an administrative order under this sub8 section; 

9 ‘‘(iii) meets the general requirements 

10 for nonprescription drugs; and 

11 ‘‘(iv) meets the requirements under 

12 subsections (c) and (k). 

13 ‘‘(C) STANDARD.—The Secretary shall find 

14 that a drug is not generally recognized as safe 

15 and effective under section 201(p)(1) if— 

16 ‘‘(i) the evidence shows that the drug 

17 is not generally recognized as safe and ef18 fective under section 201(p)(1); or 

19 ‘‘(ii) the evidence is inadequate to 

20 show that the drug is generally recognized 

21 as safe and effective under section 

22 201(p)(1). 

23 ‘‘(2) ADMINISTRATIVE ORDERS INITIATED BY

24 THE SECRETARY.— 


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1 ‘‘(A) IN GENERAL.—In issuing an adminis2 trative order under paragraph (1) upon the 

3 Secretary’s initiative, the Secretary shall— 

4 ‘‘(i) make reasonable efforts to notify 

5 informally, not later than 2 business days 

6 before the issuance of the proposed order, 

7 the sponsors of drugs who have a listing in 

8 effect under section 510(j) for the drugs or 

9 combination of drugs that will be subject 

10 to the administrative order; 

11 ‘‘(ii) after any such reasonable efforts 

12 of notification— 

13 ‘‘(I) issue a proposed administra14 tive order by publishing it on the 

15 website of the Food and Drug Admin16 istration and include in such order the 

17 reasons for the issuance of such order; 

18 and 

19 ‘‘(II) publish a notice of avail20 ability of such proposed order in the 

21 Federal Register; 

22 ‘‘(iii) except as provided in subpara23 graph (B), provide for a public comment 

24 period with respect to such proposed order 

25 of not less than 45 calendar days; and 


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1 ‘‘(iv) if, after completion of the pro2 ceedings specified in clauses (i) through 

3 (iii), the Secretary determines that it is ap4 propriate to issue a final administrative 

5 order— 

6 ‘‘(I) issue the final administrative 

7 order, together with a detailed state8 ment of reasons, which order shall not 

9 take effect until the time for request10 ing judicial review under paragraph 

11 (3)(D)(ii) has expired; 

12 ‘‘(II) publish a notice of such 

13 final administrative order in the Fed14 eral Register; 

15 ‘‘(III) afford requestors of drugs 

16 that will be subject to such order the 

17 opportunity for formal dispute resolu18 tion up to the level of the Director of 

19 the Center for Drug Evaluation and 

20 Research, which initially must be re21 quested within 45 calendar days of 

22 the issuance of the order, and, for 

23 subsequent levels of appeal, within 30 

24 calendar days of the prior decision; 

25 and 


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1 ‘‘(IV) except with respect to 

2 drugs described in paragraph (3)(B), 

3 upon completion of the formal dispute 

4 resolution procedure, inform the per5 sons which sought such dispute reso6 lution of their right to request a hear7 ing. 

8 ‘‘(B) EXCEPTIONS.—When issuing an ad9 ministrative order under paragraph (1) on the 

10 Secretary’s initiative proposing to determine 

11 that a drug described in subsection (a)(3) is not 

12 generally recognized as safe and effective under 

13 section 201(p)(1), the Secretary shall follow the 

14 procedures in subparagraph (A), except that— 

15 ‘‘(i) the proposed order shall include 

16 notice of— 

17 ‘‘(I) the general categories of 

18 data the Secretary has determined 

19 necessary to establish that the drug is 

20 generally recognized as safe and effec21 tive under section 201(p)(1); and 

22 ‘‘(II) the format for submissions 

23 by interested persons; 

24 ‘‘(ii) the Secretary shall provide for a 

25 public comment period of no less than 180 


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1 calendar days with respect to such pro2 posed order, except when the Secretary de3 termines, for good cause, that a shorter pe4 riod is in the interest of public health; and 

5 ‘‘(iii) any person who submits data in 

6 such comment period shall include a cer7 tification that the person has submitted all 

8 evidence created, obtained, or received by 

9 that person that is both within the cat10 egories of data identified in the proposed 

11 order and relevant to a determination as to 

12 whether the drug is generally recognized as 

13 safe and effective under section 201(p)(1). 

14 ‘‘(3) HEARINGS; JUDICIAL REVIEW.— 

15 ‘‘(A) IN GENERAL.—Only a person who 

16 participated in each stage of formal dispute res17 olution under subclause (III) of paragraph 

18 (2)(A)(iv) of an administrative order with re19 spect to a drug may request a hearing con20 cerning a final administrative order issued 

21 under such paragraph with respect to such 

22 drug. If a hearing is sought, such person must 

23 submit a request for a hearing, which shall be 

24 based solely on information in the administra25 tive record, to the Secretary not later than 30 


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1 calendar days after receiving notice of the final 

2 decision of the formal dispute resolution proce3 dure. 

4 ‘‘(B) NO HEARING REQUIRED WITH RE5 SPECT TO ORDERS RELATING TO CERTAIN

6 DRUGS.— 

7 ‘‘(i) IN GENERAL.—The Secretary 

8 shall not be required to provide notice and 

9 an opportunity for a hearing pursuant to 

10 paragraph (2)(A)(iv) if the final adminis11 trative order involved relates to a drug— 

12 ‘‘(I) that is described in sub13 section (a)(3)(A); and 

14 ‘‘(II) with respect to which no 

15 human or non-human data studies rel16 evant to the safety or effectiveness of 

17 such drug have been submitted to the 

18 administrative record since the 

19 issuance of the most recent tentative 

20 final monograph relating to such 

21 drug. 

22 ‘‘(ii) HUMAN DATA STUDIES AND

23 NON-HUMAN DATA DEFINED.—In this sub24 paragraph: 


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1 ‘‘(I) The term ‘human data stud2 ies’ means clinical trials of safety or 

3 effectiveness (including actual use 

4 studies), pharmacokinetics studies, or 

5 bioavailability studies. 

6 ‘‘(II) The term ‘non-human data’ 

7 means data from testing other than 

8 with human subjects which provides 

9 information concerning safety or ef10 fectiveness. 

11 ‘‘(C) HEARING PROCEDURES.— 

12 ‘‘(i) DENIAL OF REQUEST FOR HEAR13 ING.—If the Secretary determines that in14 formation submitted in a request for a 

15 hearing under subparagraph (A) with re16 spect to a final administrative order issued 

17 under paragraph (2)(A)(iv) does not iden18 tify the existence of a genuine and sub19 stantial question of material fact, the Sec20 retary may deny such request. In making 

21 such a determination, the Secretary may 

22 consider only information and data that 

23 are based on relevant and reliable scientific 

24 principles and methodologies. 


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1 ‘‘(ii) SINGLE HEARING FOR MULTIPLE

2 RELATED REQUESTS.—If more than one 

3 request for a hearing is submitted with re4 spect to the same administrative order 

5 under subparagraph (A), the Secretary 

6 may direct that a single hearing be con7 ducted in which all persons whose hearing 

8 requests were granted may participate. 

9 ‘‘(iii) PRESIDING OFFICER.—The pre10 siding officer of a hearing requested under 

11 subparagraph (A) shall— 

12 ‘‘(I) be designated by the Sec13 retary; 

14 ‘‘(II) not be an employee of the 

15 Center for Drug Evaluation and Re16 search; and 

17 ‘‘(III) not have been previously 

18 involved in the development of the ad19 ministrative order involved or pro20 ceedings relating to that administra21 tive order. 

22 ‘‘(iv) RIGHTS OF PARTIES TO HEAR23 ING.—The parties to a hearing requested 

24 under subparagraph (A) shall have the 

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1 mony of expert witnesses, and to cross-ex2 amine witnesses presented by other parties. 

3 Where appropriate, the presiding officer 

4 may require that cross-examination by par5 ties representing substantially the same in6 terests be consolidated to promote effi7 ciency and avoid duplication. 

8 ‘‘(v) FINAL DECISION.— 

9 ‘‘(I) At the conclusion of a hear10 ing requested under subparagraph 

11 (A), the presiding officer of the hear12 ing shall issue a decision containing 

13 findings of fact and conclusions of 

14 law. The decision of the presiding offi15 cer shall be final. 

16 ‘‘(II) The final decision may not 

17 take effect until the period under sub18 paragraph (D)(ii) for submitting a re19 quest for judicial review of such deci20 sion expires. 

21 ‘‘(D) JUDICIAL REVIEW OF FINAL ADMIN22 ISTRATIVE ORDER.— 

23 ‘‘(i) IN GENERAL.—The procedures 

24 described in section 505(h) shall apply 

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1 ministrative orders issued under this sub2 section in the same manner and to the 

3 same extent as such section applies to an 

4 order described in such section except that 

5 the judicial review shall be taken by filing 

6 in an appropriate district court of the 

7 United States in lieu of the appellate 

8 courts specified in such section. 

9 ‘‘(ii) PERIOD TO SUBMIT A REQUEST

10 FOR JUDICIAL REVIEW.—A person eligible 

11 to request a hearing under this paragraph 

12 and seeking judicial review of a final ad13 ministrative order issued under this sub14 section shall file such request for judicial 

15 review not later than 60 calendar days 

16 after the latest of— 

17 ‘‘(I) the date on which notice of 

18 such order is published; 

19 ‘‘(II) the date on which a hearing 

20 with respect to such order is denied 

21 under subparagraph (B) or (C)(i); 

22 ‘‘(III) the date on which a final 

23 decision is made following a hearing 

24 under subparagraph (C)(v); or 


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1 ‘‘(IV) if no hearing is requested, 

2 the date on which the time for re3 questing a hearing expires. 

4 ‘‘(4) EXPEDITED PROCEDURE WITH RESPECT

5 TO ADMINISTRATIVE ORDERS INITIATED BY THE

6 SECRETARY.— 

7 ‘‘(A) IMMINENT HAZARD TO THE PUBLIC

8 HEALTH.— 

9 ‘‘(i) IN GENERAL.—In the case of a 

10 determination by the Secretary that a 

11 drug, class of drugs, or combination of 

12 drugs subject to this section poses an im13 minent hazard to the public health, the 

14 Secretary, after first making reasonable ef15 forts to notify, not later than 48 hours be16 fore issuance of such order under this sub17 paragraph, sponsors who have a listing in 

18 effect under section 510(j) for such drug 

19 or combination of drugs— 

20 ‘‘(I) may issue an interim final 

21 administrative order for such drug, 

22 class of drugs, or combination of 

23 drugs under paragraph (1), together 

24 with a detailed statement of the rea25 sons for such order; 


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1 ‘‘(II) shall publish in the Federal 

2 Register a notice of availability of any 

3 such order; and 

4 ‘‘(III) shall provide for a public 

5 comment period of at least 45 cal6 endar days with respect to such in7 terim final order. 

8 ‘‘(ii) NONDELEGATION.—The Sec9 retary may not delegate the authority to 

10 issue an interim final administrative order 

11 under this subparagraph. 

12 ‘‘(B) SAFETY LABELING CHANGES.— 

13 ‘‘(i) IN GENERAL.—In the case of a 

14 determination by the Secretary that a 

15 change in the labeling of a drug, class of 

16 drugs, or combination of drugs subject to 

17 this section is reasonably expected to miti18 gate a significant or unreasonable risk of 

19 a serious adverse event associated with use 

20 of the drug, the Secretary may— 

21 ‘‘(I) make reasonable efforts to 

22 notify informally, not later than 48 

23 hours before the issuance of the in24 terim final order, the sponsors of 

25 drugs who have a listing in effect 


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1 under section 510(j) for such drug or 

2 combination of drugs; 

3 ‘‘(II) after reasonable efforts of 

4 notification, issue an interim final ad5 ministrative order in accordance with 

6 paragraph (1) to require such change, 

7 together with a detailed statement of 

8 the reasons for such order; 

9 ‘‘(III) publish in the Federal 

10 Register a notice of availability of 

11 such order; and 

12 ‘‘(IV) provide for a public com13 ment period of at least 45 calendar 

14 days with respect to such interim final 

15 order. 

16 ‘‘(ii) CONTENT OF ORDER.—An in17 terim final order issued under this sub18 paragraph with respect to the labeling of a 

19 drug may provide for new warnings and 

20 other information required for safe use of 

21 the drug. 

22 ‘‘(C) EFFECTIVE DATE.—An order under 

23 subparagraph (A) or (B) shall take effect on a 

24 date specified by the Secretary. 


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1 ‘‘(D) FINAL ORDER.—After the completion 

2 of the proceedings in subparagraph (A) or (B), 

3 the Secretary shall— 

4 ‘‘(i) issue a final order in accordance 

5 with paragraph (1); 

6 ‘‘(ii) publish a notice of availability of 

7 such final administrative order in the Fed8 eral Register; and 

9 ‘‘(iii) afford sponsors of such drugs 

10 that will be subject to such an order the 

11 opportunity for formal dispute resolution 

12 up to the level of the Director of the Cen13 ter for Drug Evaluation and Research, 

14 which must initially be within 45 calendar 

15 days of the issuance of the order, and for 

16 subsequent levels of appeal, within 30 cal17 endar days of the prior decision. 

18 ‘‘(E) HEARINGS.—A sponsor of a drug 

19 subject to a final order issued under subpara20 graph (D) and that participated in each stage 

21 of formal dispute resolution under clause (iii) of 

22 such subparagraph may request a hearing on 

23 such order. The provisions of subparagraphs 

24 (A), (B), and (C) of paragraph (3), other than 

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1 spect to a hearing on such order in the same 

2 manner and to the same extent as such provi3 sions apply with respect to a hearing on an ad4 ministrative order issued under paragraph 

5 (2)(A)(iv). 

6 ‘‘(F) TIMING.— 

7 ‘‘(i) FINAL ORDER AND HEARING.— 

8 The Secretary shall— 

9 ‘‘(I) not later than 6 months 

10 after the date on which the comment 

11 period closes under subparagraph (A) 

12 or (B), issue a final order in accord13 ance with paragraph (1); and 

14 ‘‘(II) not later than 12 months 

15 after the date on which such final 

16 order is issued, complete any hearing 

17 under subparagraph (E). 

18 ‘‘(ii) DISPUTE RESOLUTION RE19 QUEST.—The Secretary shall specify in an 

20 interim final order issued under subpara21 graph (A) or (B) such shorter periods for 

22 requesting dispute resolution under sub23 paragraph (D)(iii) as are necessary to 

24 meet the requirements of this subpara25 graph. 


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1 ‘‘(G) JUDICIAL REVIEW.—A final order 

2 issued pursuant to subparagraph (F) shall be 

3 subject to judicial review in accordance with 

4 paragraph (3)(D). 

5 ‘‘(5) ADMINISTRATIVE ORDER INITIATED AT

6 THE REQUEST OF A REQUESTOR.— 

7 ‘‘(A) IN GENERAL.—In issuing an adminis8 trative order under paragraph (1) at the re9 quest of a requestor with respect to certain 

10 drugs, classes of drugs, or combinations of 

11 drugs— 

12 ‘‘(i) the Secretary shall, after receiv13 ing a request under this subparagraph, de14 termine whether the request is sufficiently 

15 complete and formatted to permit a sub16 stantive review; 

17 ‘‘(ii) if the Secretary determines that 

18 the request is sufficiently complete and for19 matted to permit a substantive review, the 

20 Secretary shall— 

21 ‘‘(I) file the request; and 

22 ‘‘(II) initiate proceedings with re23 spect to issuing an administrative 

24 order in accordance with paragraphs 

25 (2) and (3); and 


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1 ‘‘(iii) except as provided in paragraph 

2 (6), if the Secretary determines that a re3 quest does not meet the requirements for 

4 filing or is not sufficiently complete and 

5 formatted to permit a substantive review, 

6 the requestor may demand that the request 

7 be filed over protest, and the Secretary 

8 shall initiate proceedings to review the re9 quest in accordance with paragraph (2)(A). 

10 ‘‘(B) REQUEST TO INITIATE PRO11 CEEDINGS.— 

12 ‘‘(i) IN GENERAL.—A requestor seek13 ing an administrative order under para14 graph (1) with respect to certain drugs, 

15 classes of drugs, or combinations of drugs, 

16 shall submit to the Secretary a request to 

17 initiate proceedings for such order in the 

18 form and manner as specified by the Sec19 retary. Such requestor may submit a re20 quest under this subparagraph for the 

21 issuance of an administrative order— 

22 ‘‘(I) determining whether a drug 

23 is generally recognized as safe and ef24 fective under section 201(p)(1), ex25 empt from section 503(b)(1), and not 


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1 required to be the subject of an ap2 proved application under section 505; 

3 or 

4 ‘‘(II) determining whether a 

5 change to a condition of use of a drug 

6 is generally recognized as safe and ef7 fective under section 201(p)(1), ex8 empt from section 503(b)(1), and not 

9 required to be the subject of an ap10 proved application under section 505, 

11 if, absent such a changed condition of 

12 use, such drug is— 

13 ‘‘(aa) generally recognized 

14 as safe and effective under sec15 tion 201(p)(1) in accordance with 

16 subsection (a)(1), (a)(2), or an 

17 order under this subsection; or 

18 ‘‘(bb) subject to subsection 

19 (a)(3), but only if such requestor 

20 initiates such request in conjunc21 tion with a request for the Sec22 retary to determine whether such 

23 drug is generally recognized as 

24 safe and effective under section 

25 201(p)(1), which is filed by the 


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1 Secretary under subparagraph 

2 (A)(ii). 

3 ‘‘(ii) EXCEPTION.—The Secretary is 

4 not required to complete review of a re5 quest for a change described in clause 

6 (i)(II) if the Secretary determines that 

7 there is an inadequate basis to find the 

8 drug is generally recognized as safe and ef9 fective under section 201(p)(1) under para10 graph (1) and issues a final order an11 nouncing that determination. 

12 ‘‘(iii) WITHDRAWAL.—The requestor 

13 may withdraw a request under this para14 graph, according to the procedures set 

15 forth pursuant to subsection (d)(2)(B). 

16 Notwithstanding any other provision of 

17 this section, if such request is withdrawn, 

18 the Secretary may cease proceedings under 

19 this subparagraph. 

20 ‘‘(C) EXCLUSIVITY.— 

21 ‘‘(i) IN GENERAL.—A final adminis22 trative order issued in response to a re23 quest under this section shall have the ef24 fect of authorizing solely the order re25 questor (or the licensees, assignees, or sucVerDate Sep 11 2014 04:12 Dec 12, 2019 Jkt 099200 PO 00000 Frm 00256 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 cessors in interest of such requestor with 

2 respect to the subject of such order), for a 

3 period of 18 months following the effective 

4 date of such final order and beginning on 

5 the date the requestor may lawfully market 

6 such drugs pursuant to the order, to mar7 ket drugs— 

8 ‘‘(I) incorporating changes de9 scribed in clause (ii); and 

10 ‘‘(II) subject to the limitations 

11 under clause (iv). 

12 ‘‘(ii) CHANGES DESCRIBED.—A 

13 change described in this clause is a change 

14 subject to an order specified in clause (i), 

15 which— 

16 ‘‘(I) provides for a drug to con17 tain an active ingredient (including 

18 any ester or salt of the active ingre19 dient) not previously incorporated in a 

20 drug described in clause (iii); or 

21 ‘‘(II) provides for a change in the 

22 conditions of use of a drug, for which 

23 new human data studies conducted or 

24 sponsored by the requestor (or for 

25 which the requestor has an exclusive 


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1 right of reference) were essential to 

2 the issuance of such order. 

3 ‘‘(iii) DRUGS DESCRIBED.—The drugs 

4 described in this clause are drugs— 

5 ‘‘(I) specified in subsection 

6 (a)(1), (a)(2), or (a)(3); 

7 ‘‘(II) subject to a final order 

8 issued under this section; 

9 ‘‘(III) subject to a final sun10 screen order (as defined in section 

11 586(2)(A)); or 

12 ‘‘(IV) described in subsection 

13 (m)(1), other than drugs subject to an 

14 active enforcement action under chap15 ter III of this Act. 

16 ‘‘(iv) LIMITATIONS ON EXCLU17 SIVITY.— 

18 ‘‘(I) IN GENERAL.—Only one 18- 

19 month period under this subpara20 graph shall be granted, under each 

21 order described in clause (i), with re22 spect to changes (to the drug subject 

23 to such order) which are either— 


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1 ‘‘(aa) changes described in 

2 clause (ii)(I), relating to active 

3 ingredients; or 

4 ‘‘(bb) changes described in 

5 clause (ii)(II), relating to condi6 tions of use. 

7 ‘‘(II) NO EXCLUSIVITY AL8 LOWED.—No exclusivity shall apply to 

9 changes to a drug which are— 

10 ‘‘(aa) the subject of a Tier 2 

11 OTC monograph order request 

12 (as defined in section 744L); 

13 ‘‘(bb) safety-related changes, 

14 as defined by the Secretary, or 

15 any other changes the Secretary 

16 considers necessary to assure 

17 safe use; or 

18 ‘‘(cc) changes related to 

19 methods of testing safety or effi20 cacy. 

21 ‘‘(v) NEW HUMAN DATA STUDIES DE22 FINED.—In this subparagraph, the term 

23 ‘new human data studies’ means clinical 

24 trials of safety or effectiveness (including 

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1 ies, or bioavailability studies, the results of 

2 which— 

3 ‘‘(I) have not been relied on by 

4 the Secretary to support— 

5 ‘‘(aa) a proposed or final de6 termination that a drug described 

7 in subclause (I), (II), or (III) of 

8 clause (iii) is generally recognized 

9 as safe and effective under sec10 tion 201(p)(1); or 

11 ‘‘(bb) approval of a drug 

12 that was approved under section 

13 505; and 

14 ‘‘(II) do not duplicate the results 

15 of another study that was relied on by 

16 the Secretary to support— 

17 ‘‘(aa) a proposed or final de18 termination that a drug described 

19 in subclause (I), (II), or (III) of 

20 clause (iii) is generally recognized 

21 as safe and effective under sec22 tion 201(p)(1); or 

23 ‘‘(bb) approval of a drug 

24 that was approved under section 

25 505. 


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1 ‘‘(6) INFORMATION REGARDING SAFE NON2 PRESCRIPTION MARKETING AND USE AS CONDITION

3 FOR FILING A GENERALLY RECOGNIZED AS SAFE

4 AND EFFECTIVE REQUEST.— 

5 ‘‘(A) IN GENERAL.—In response to a re6 quest under this section that a drug described 

7 in subparagraph (B) be generally recognized as 

8 safe and effective, the Secretary— 

9 ‘‘(i) may file such request, if the re10 quest includes information specified under 

11 subparagraph (C) with respect to safe non12 prescription marketing and use of such 

13 drug; or 

14 ‘‘(ii) if the request fails to include in15 formation specified under subparagraph 

16 (C), shall refuse to file such request and 

17 require that nonprescription marketing of 

18 the drug be pursuant to a new drug appli19 cation as described in subparagraph (D). 

20 ‘‘(B) DRUG DESCRIBED.—A drug de21 scribed in this subparagraph is a nonprescrip22 tion drug which contains an active ingredient 

23 not previously incorporated in a drug— 

24 ‘‘(i) specified in subsection (a)(1), 

25 (a)(2), or (a)(3); 


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1 ‘‘(ii) subject to a final order under 

2 this section; or 

3 ‘‘(iii) subject to a final sunscreen 

4 order (as defined in section 586(2)(A)). 

5 ‘‘(C) INFORMATION DEMONSTRATING

6 PRIMA FACIE SAFE NONPRESCRIPTION MAR7 KETING AND USE.—Information specified in 

8 this subparagraph, with respect to a request de9 scribed in subparagraph (A)(i), is— 

10 ‘‘(i) information sufficient for a prima 

11 facie demonstration that the drug subject 

12 to such request has a verifiable history of 

13 being marketed and safely used by con14 sumers in the United States as a non15 prescription drug under comparable condi16 tions of use; 

17 ‘‘(ii) if the drug has not been pre18 viously marketed in the United States as a 

19 nonprescription drug, information suffi20 cient for a prima facie demonstration that 

21 the drug was marketed and safely used 

22 under comparable conditions of marketing 

23 and use in a country listed in section 

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1 retary in accordance with section 

2 802(b)(1)(B)— 

3 ‘‘(I) for such period as needed to 

4 provide reasonable assurances con5 cerning the safe nonprescription use 

6 of the drug; and 

7 ‘‘(II) during such time was sub8 ject to sufficient monitoring by a reg9 ulatory body considered acceptable by 

10 the Secretary for such monitoring 

11 purposes, including for adverse events 

12 associated with nonprescription use of 

13 the drug; or 

14 ‘‘(iii) if the Secretary determines that 

15 information described in clause (i) or (ii) is 

16 not needed to provide a prima facie dem17 onstration that the drug can be safely mar18 keted and used as a nonprescription drug, 

19 such other information the Secretary deter20 mines is sufficient for such purposes. 

21 ‘‘(D) MARKETING PURSUANT TO NEW

22 DRUG APPLICATION.—In the case of a request 

23 described in subparagraph (A)(ii), the drug 

24 subject to such request may be resubmitted for 

25 filing only if— 


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1 ‘‘(i) the drug is marketed as a non2 prescription drug, under conditions of use 

3 comparable to the conditions specified in 

4 the request, for such period as the Sec5 retary determines appropriate (not to ex6 ceed 5 consecutive years) pursuant to an 

7 application approved under section 505; 

8 and 

9 ‘‘(ii) during such period, 1,000,000 

10 retail packages of the drug, or an equiva11 lent quantity as determined by the Sec12 retary, were distributed for retail sale, as 

13 determined in such manner as the Sec14 retary finds appropriate. 

15 ‘‘(E) RULE OF APPLICATION.—Except in 

16 the case of a request involving a drug described 

17 in section 586(9), as in effect on January 1, 

18 2017, if the Secretary refuses to file a request 

19 under this paragraph, the requestor may not 

20 file such request over protest under paragraph 

21 (5)(A)(iii). 

22 ‘‘(7) PACKAGING.—An administrative order 

23 issued under paragraph (2), (4)(A), or (5) may in24 clude requirements for the packaging of a drug to 

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1 quirements may include unit dose packaging, re2 quirements for products intended for use by pedi3 atric populations, requirements to reduce risk of 

4 harm from unsupervised ingestion, and other appro5 priate requirements. This paragraph does not au6 thorize the Food and Drug Administration to re7 quire standards or testing procedures as described in 

8 part 1700 of title 16, Code of Federal Regulations. 

9 ‘‘(8) FINAL AND TENTATIVE FINAL MONO10 GRAPHS FOR CATEGORY I DRUGS DEEMED FINAL

11 ADMINISTRATIVE ORDERS.— 

12 ‘‘(A) IN GENERAL.—A final monograph or 

13 tentative final monograph described in subpara14 graph (B) shall be deemed to be a final admin15 istrative order under this subsection and may 

16 be amended, revoked, or otherwise modified in 

17 accordance with the procedures of this sub18 section. 

19 ‘‘(B) MONOGRAPHS DESCRIBED.—For pur20 poses of subparagraph (A), a final monograph 

21 or tentative final monograph is described in this 

22 subparagraph if it— 

23 ‘‘(i) establishes conditions of use for a 

24 drug described in paragraph (1) or (2) of 

25 subsection (a); and 


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1 ‘‘(ii) represents the most recently pro2 mulgated version of such conditions, in3 cluding as modified, in whole or in part, by 

4 any proposed or final rule. 

5 ‘‘(C) DEEMED ORDERS INCLUDE HARMO6 NIZING TECHNICAL AMENDMENTS.—The 

7 deemed establishment of a final administrative 

8 order under subparagraph (A) shall be con9 strued to include any technical amendments to 

10 such order as the Secretary determines nec11 essary to ensure that such order is appro12 priately harmonized, in terms of terminology or 

13 cross-references, with the applicable provisions 

14 of this Act (and regulations thereunder) and 

15 any other orders issued under this section. 

16 ‘‘(c) PROCEDURE FOR MINOR CHANGES.— 

17 ‘‘(1) IN GENERAL.—Minor changes in the dos18 age form of a drug that is described in paragraph 

19 (1) or (2) of subsection (a) or the subject of an 

20 order issued under subsection (b) may be made by 

21 a requestor without the issuance of an order under 

22 subsection (b) if— 

23 ‘‘(A) the requestor maintains such infor24 mation as is necessary to demonstrate that the 

25 change— 


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1 ‘‘(i) will not affect the safety or effec2 tiveness of the drug; and 

3 ‘‘(ii) will not materially affect the ex4 tent of absorption or other exposure to the 

5 active ingredient in comparison to a suit6 able reference product; and 

7 ‘‘(B) the change is in conformity with the 

8 requirements of an applicable administrative 

9 order issued by the Secretary under paragraph 

10 (3). 

11 ‘‘(2) ADDITIONAL INFORMATION.— 

12 ‘‘(A) ACCESS TO RECORDS.—A sponsor 

13 shall submit records requested by the Secretary 

14 relating to such a minor change under section 

15 704(a)(4), within 15 business days of receiving 

16 such a request, or such longer period as the 

17 Secretary may provide. 

18 ‘‘(B) INSUFFICIENT INFORMATION.—If the 

19 Secretary determines that the information con20 tained in such records is not sufficient to dem21 onstrate that the change does not affect the 

22 safety or effectiveness of the drug or materially 

23 affect the extent of absorption or other expo24 sure to the active ingredient, the Secretary— 


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1 ‘‘(i) may so inform the sponsor of the 

2 drug in writing; and 

3 ‘‘(ii) if the Secretary so informs the 

4 sponsor, shall provide the sponsor of the 

5 drug with a reasonable opportunity to pro6 vide additional information. 

7 ‘‘(C) FAILURE TO SUBMIT SUFFICIENT IN8 FORMATION.—If the sponsor fails to provide 

9 such additional information within a time pre10 scribed by the Secretary, or if the Secretary de11 termines that such additional information does 

12 not demonstrate that the change does not— 

13 ‘‘(i) affect the safety or effectiveness 

14 of the drug; or 

15 ‘‘(ii) materially affect the extent of 

16 absorption or other exposure to the active 

17 ingredient in comparison to a suitable ref18 erence product, 

19 the drug as modified is a new drug under sec20 tion 201(p) and shall be deemed to be mis21 branded under section 502(ee). 

22 ‘‘(3) DETERMINING WHETHER A CHANGE WILL

23 AFFECT SAFETY OR EFFECTIVENESS.— 

24 ‘‘(A) IN GENERAL.—The Secretary shall 

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1 fying requirements for determining whether a 

2 minor change made by a sponsor pursuant to 

3 this subsection will affect the safety or effective4 ness of a drug or materially affect the extent of 

5 absorption or other exposure to an active ingre6 dient in the drug in comparison to a suitable 

7 reference product, together with guidance for 

8 applying those orders to specific dosage forms. 

9 ‘‘(B) STANDARD PRACTICES.—The orders 

10 and guidance issued by the Secretary under 

11 subparagraph (A) shall take into account rel12 evant public standards and standard practices 

13 for evaluating the quality of drugs, and may 

14 take into account the special needs of popu15 lations, including children. 

16 ‘‘(d) CONFIDENTIALITY OF INFORMATION SUB17 MITTED TO THE SECRETARY.— 

18 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

19 any information, including reports of testing con20 ducted on the drug or drugs involved, that is sub21 mitted by a requestor in connection with proceedings 

22 on an order under this section (including any minor 

23 change under subsection (c)) and is a trade secret 

24 or confidential information subject to section 

25 552(b)(4) of title 5, United States Code, or section 


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1 1905 of title 18, United States Code, shall not be 

2 disclosed to the public unless the requestor consents 

3 to that disclosure. 

4 ‘‘(2) PUBLIC AVAILABILITY.— 

5 ‘‘(A) IN GENERAL.—Except as provided in 

6 subparagraph (B), the Secretary shall— 

7 ‘‘(i) make any information submitted 

8 by a requestor in support of a request 

9 under subsection (b)(5)(A) available to the 

10 public not later than the date on which the 

11 proposed order is issued; and 

12 ‘‘(ii) make any information submitted 

13 by any other person with respect to an 

14 order requested (or initiated by the Sec15 retary) under subsection (b), available to 

16 the public upon such submission. 

17 ‘‘(B) LIMITATIONS ON PUBLIC AVAIL18 ABILITY.—Information described in subpara19 graph (A) shall not be made public if— 

20 ‘‘(i) the information pertains to phar21 maceutical quality information, unless such 

22 information is necessary to establish stand23 ards under which a drug is generally rec24 ognized as safe and effective under section 

25 201(p)(1); 


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1 ‘‘(ii) the information is submitted in a 

2 requestor-initiated request, but the re3 questor withdraws such request, in accord4 ance with withdrawal procedures estab5 lished by the Secretary, before the Sec6 retary issues the proposed order; 

7 ‘‘(iii) the Secretary requests and ob8 tains the information under subsection (c) 

9 and such information is not submitted in 

10 relation to an order under subsection (b); 

11 or 

12 ‘‘(iv) the information is of the type 

13 contained in raw datasets. 

14 ‘‘(e) UPDATES TO DRUG LISTING INFORMATION.— 

15 A sponsor who makes a change to a drug subject to this 

16 section shall submit updated drug listing information for 

17 the drug in accordance with section 510(j) within 30 cal18 endar days of the date when the drug is first commercially 

19 marketed, except that a sponsor who was the order re20 questor with respect to an order subject to subsection 

21 (b)(5)(C) (or a licensee, assignee, or successor in interest 

22 of such requestor) shall submit updated drug listing infor23 mation on or before the date when the drug is first com24 mercially marketed. 


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1 ‘‘(f) APPROVALS UNDER SECTION 505.—The provi2 sions of this section shall not be construed to preclude a 

3 person from seeking or maintaining the approval of an ap4 plication for a drug under sections 505(b)(1), 505(b)(2), 

5 and 505(j). A determination under this section that a drug 

6 is not subject to section 503(b)(1), is generally recognized 

7 as safe and effective under section 201(p)(1), and is not 

8 a new drug under section 201(p) shall constitute a finding 

9 that the drug is safe and effective that may be relied upon 

10 for purposes of an application under section 505(b)(2), so 

11 that the applicant shall be required to submit for purposes 

12 of such application only information needed to support any 

13 modification of the drug that is not covered by such deter14 mination under this section. 

15 ‘‘(g) PUBLIC AVAILABILITY OF ADMINISTRATIVE OR16 DERS.—The Secretary shall establish, maintain, update 

17 (as determined necessary by the Secretary but no less fre18 quently than annually), and make publicly available, with 

19 respect to orders issued under this section— 

20 ‘‘(1) a repository of each final order and in21 terim final order in effect, including the complete 

22 text of the order; and 

23 ‘‘(2) a listing of all orders proposed and under 

24 development under subsection (b)(2), including— 


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1 ‘‘(A) a brief description of each such order; 

2 and 

3 ‘‘(B) the Secretary’s expectations, if re4 sources permit, for issuance of proposed orders 

5 over a 3-year period. 

6 ‘‘(h) DEVELOPMENT ADVICE TO SPONSORS OR RE7 QUESTORS.—The Secretary shall establish procedures 

8 under which sponsors or requestors may meet with appro9 priate officials of the Food and Drug Administration to 

10 obtain advice on the studies and other information nec11 essary to support submissions under this section and other 

12 matters relevant to the regulation of nonprescription 

13 drugs and the development of new nonprescription drugs 

14 under this section. 

15 ‘‘(i) PARTICIPATION OF MULTIPLE SPONSORS OR RE16 QUESTORS.—The Secretary shall establish procedures to 

17 facilitate efficient participation by multiple sponsors or re18 questors in proceedings under this section, including provi19 sion for joint meetings with multiple sponsors or reques20 tors or with organizations nominated by sponsors or re21 questors to represent their interests in a proceeding. 

22 ‘‘(j) ELECTRONIC FORMAT.—All submissions under 

23 this section shall be in electronic format. 

24 ‘‘(k) EFFECT ON EXISTING REGULATIONS GOV25 ERNING NONPRESCRIPTION DRUGS.— 


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1 ‘‘(1) REGULATIONS OF GENERAL APPLICA2 BILITY TO NONPRESCRIPTION DRUGS.—Except as 

3 provided in this subsection, nothing in this section 

4 supersedes regulations establishing general require5 ments for nonprescription drugs, including regula6 tions of general applicability contained in parts 201, 

7 250, and 330 of title 21, Code of Federal Regula8 tions, or any successor regulations. The Secretary 

9 shall establish or modify such regulations by means 

10 of rulemaking in accordance with section 553 of title 

11 5, United States Code. 

12 ‘‘(2) REGULATIONS ESTABLISHING REQUIRE13 MENTS FOR SPECIFIC NONPRESCRIPTION DRUGS.— 

14 ‘‘(A) The provisions of section 310.545 of 

15 title 21, Code of Federal Regulations, as in ef16 fect on the day before the date of the enact17 ment of this section, shall be deemed to be a 

18 final order under subsection (b). 

19 ‘‘(B) Regulations in effect on the day be20 fore the date of the enactment of this section, 

21 establishing requirements for specific non22 prescription drugs marketed pursuant to this 

23 section (including such requirements in parts 

24 201 and 250 of title 21, Code of Federal Regu25 lations), shall be deemed to be final orders 


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1 under subsection (b), only as they apply to 

2 drugs— 

3 ‘‘(i) subject to paragraph (1), (2), (3), 

4 or (4) of subsection (a); or 

5 ‘‘(ii) otherwise subject to an order 

6 under this section. 

7 ‘‘(3) WITHDRAWAL OF REGULATIONS.—The 

8 Secretary shall withdraw regulations establishing 

9 final monographs and the procedures governing the 

10 over-the-counter drug review under part 330 and 

11 other relevant parts of title 21, Code of Federal 

12 Regulations (as in effect on the day before the date 

13 of the enactment of this section), or make technical 

14 changes to such regulations to ensure conformity 

15 with appropriate terminology and cross references. 

16 Notwithstanding subchapter II of chapter 5 of title 

17 5, United States Code, any such withdrawal or tech18 nical changes shall be made without public notice 

19 and comment and shall be effective upon publication 

20 through notice in the Federal Register (or upon such 

21 date as specified in such notice). 

22 ‘‘(l) GUIDANCE.—The Secretary shall issue guidance 

23 that specifies— 


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1 ‘‘(1) the procedures and principles for formal 

2 meetings between the Secretary and sponsors or re3 questors for drugs subject to this section; 

4 ‘‘(2) the format and content of data submis5 sions to the Secretary under this section; 

6 ‘‘(3) the format of electronic submissions to the 

7 Secretary under this section; 

8 ‘‘(4) consolidated proceedings for appeal and 

9 the procedures for such proceedings where appro10 priate; and 

11 ‘‘(5) for minor changes in drugs, recommenda12 tions on how to comply with the requirements in or13 ders issued under subsection (c)(3). 

14 ‘‘(m) RULE OF CONSTRUCTION.— 

15 ‘‘(1) IN GENERAL.—This section shall not af16 fect the treatment or status of a nonprescription 

17 drug— 

18 ‘‘(A) that is marketed without an applica19 tion approved under section 505 as of the date 

20 of the enactment of this section; 

21 ‘‘(B) that is not subject to an order issued 

22 under this section; and 

23 ‘‘(C) to which paragraphs (1), (2), (3), (4), 

24 or (5) of subsection (a) do not apply. 


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1 ‘‘(2) TREATMENT OF PRODUCTS PREVIOUSLY

2 FOUND TO BE SUBJECT TO TIME AND EXTENT RE3 QUIREMENTS.— 

4 ‘‘(A) Notwithstanding subsection (a), a 

5 drug described in subparagraph (B) may only 

6 be lawfully marketed, without an application 

7 approved under section 505, pursuant to an 

8 order issued under this section. 

9 ‘‘(B) A drug described in this subpara10 graph is a drug which, prior to the date of the 

11 enactment of this section, the Secretary deter12 mined in a proposed or final rule to be ineligible 

13 for review under the OTC drug review (as such 

14 phrase ‘OTC drug review’ was used in section 

15 330.14 of title 21, Code of Federal Regulations, 

16 as in effect on the day before the date of the 

17 enactment of this section). 

18 ‘‘(3) PRESERVATION OF AUTHORITY.— 

19 ‘‘(A) Nothing in paragraph (1) shall be 

20 construed to preclude or limit the applicability 

21 of any provision of this Act other than this sec22 tion. 

23 ‘‘(B) Nothing in subsection (a) shall be 

24 construed to prohibit the Secretary from issuing 

25 an order under this section finding a drug to be 


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1 not generally recognized as safe and effective 

2 under section 201(p)(1), as the Secretary deter3 mines appropriate. 

4 ‘‘(n) INVESTIGATIONAL NEW DRUGS.—A drug is not 

5 subject to this section if an exemption for investigational 

6 use under section 505(i) is in effect for such drug. 

7 ‘‘(o) INAPPLICABILITY OF PAPERWORK REDUCTION

8 ACT.—Chapter 35 of title 44, United States Code, shall 

9 not apply to collections of information made under this 

10 section. 

11 ‘‘(p) INAPPLICABILITY OF NOTICE AND COMMENT

12 RULEMAKING AND OTHER REQUIREMENTS.—The re13 quirements of subsection (b) shall apply with respect to 

14 orders issued under this section instead of the require15 ments of subchapter II of chapter 5 of title 5, United 

16 States Code. 

17 ‘‘(q) DEFINITIONS.—In this section: 

18 ‘‘(1) The term ‘nonprescription drug’ refers to 

19 a drug not subject to the requirements of section 

20 503(b)(1). 

21 ‘‘(2) The term ‘sponsor’ refers to any person 

22 marketing, manufacturing, or processing a drug 

23 that— 

24 ‘‘(A) is listed pursuant to section 510(j); 

25 and 


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1 ‘‘(B) is or will be subject to an administra2 tive order under this section of the Food and 

3 Drug Administration. 

4 ‘‘(3) The term ‘requestor’ refers to any person 

5 or group of persons marketing, manufacturing, proc6 essing, or developing a drug.’’. 

7 (b) GAO STUDY.—Not later than 4 years after the 

8 date of enactment of this Act, the Comptroller General 

9 of the United States shall submit a study to the Com10 mittee on Energy and Commerce of the House of Rep11 resentatives and the Committee on Health, Education, 

12 Labor, and Pensions of the Senate addressing the effec13 tiveness and overall impact of exclusivity under section 

14 505G of the Federal Food, Drug, and Cosmetic Act, as 

15 added by subsection (a), and section 586C of such Act 

16 (21 U.S.C. 360fff–3), including the impact of such exclu17 sivity on consumer access. Such study shall include— 

18 (1) an analysis of the impact of exclusivity 

19 under such section 505G for nonprescription drug 

20 products, including— 

21 (A) the number of nonprescription drug 

22 products that were granted exclusivity and the 

23 indication for which the nonprescription drug 

24 products were determined to be generally recog25 nized as safe and effective; 


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1 (B) whether the exclusivity for such drug 

2 products was granted for— 

3 (i) a new active ingredient (including 

4 any ester or salt of the active ingredient); 

5 or 

6 (ii) changes in the conditions of use of 

7 a drug, for which new human data studies 

8 conducted or sponsored by the requestor 

9 were essential; 

10 (C) whether, and to what extent, the exclu11 sivity impacted the requestor’s or sponsor’s de12 cision to develop the drug product; 

13 (D) an analysis of the implementation of 

14 the exclusivity provision in such section 505G, 

15 including— 

16 (i) the resources used by the Food 

17 and Drug Administration; 

18 (ii) the impact of such provision on 

19 innovation, as well as research and devel20 opment in the nonprescription drug mar21 ket; 

22 (iii) the impact of such provision on 

23 competition in the nonprescription drug 

24 market; 


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1 (iv) the impact of such provision on 

2 consumer access to nonprescription drug 

3 products; 

4 (v) the impact of such provision on 

5 the prices of nonprescription drug prod6 ucts; and 

7 (vi) whether the administrative orders 

8 initiated by requestors under such section 

9 505G have been sufficient to encourage the 

10 development of nonprescription drug prod11 ucts that would likely not be otherwise de12 veloped, or developed in as timely a man13 ner; and 

14 (E) whether the administrative orders ini15 tiated by requestors under such section 505G 

16 have been sufficient incentive to encourage in17 novation in the nonprescription drug market; 

18 and 

19 (2) an analysis of the impact of exclusivity 

20 under such section 586C for sunscreen ingredients, 

21 including— 

22 (A) the number of sunscreen ingredients 

23 that were granted exclusivity and the specific 

24 ingredient that was determined to be generally 

25 recognized as safe and effective; 


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1 (B) whether, and to what extent, the exclu2 sivity impacted the requestor’s or sponsor’s de3 cision to develop the sunscreen ingredient; 

4 (C) whether, and to what extent, the sun5 screen ingredient granted exclusivity had pre6 viously been available outside of the United 

7 States; 

8 (D) an analysis of the implementation of 

9 the exclusivity provision in such section 586C, 

10 including— 

11 (i) the resources used by the Food 

12 and Drug Administration; 

13 (ii) the impact of such provision on 

14 innovation, as well as research and devel15 opment in the sunscreen market; 

16 (iii) the impact of such provision on 

17 competition in the sunscreen market; 

18 (iv) the impact of such provision on 

19 consumer access to sunscreen products; 

20 (v) the impact of such provision on 

21 the prices of sunscreen products; and 

22 (vi) whether the administrative orders 

23 initiated by requestors under such section 

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1 ess has been sufficient to encourage the 

2 development of sunscreen ingredients that 

3 would likely not be otherwise developed, or 

4 developed in as timely a manner; and 

5 (E) whether the administrative orders ini6 tiated by requestors under such section 586C 

7 have been sufficient incentive to encourage in8 novation in the sunscreen market. 

9 (c) CONFORMING AMENDMENT.—Section 751(d)(1) 

10 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

11 379r(d)(1)) is amended— 

12 (1) in the matter preceding subparagraph (A)— 

13 (A) by striking ‘‘final regulation promul14 gated’’ and inserting ‘‘final order under section 

15 505G’’; and 

16 (B) by striking ‘‘and not misbranded’’; and 

17 (2) in subparagraph (A), by striking ‘‘regula18 tion in effect’’ and inserting ‘‘regulation or order in 

19 effect’’. 

20 SEC. 372. MISBRANDING. 

21 Section 502 of the Federal Food, Drug, and Cosmetic 

22 Act (21 U.S.C. 352) is amended by adding at the end the 

23 following: 

24 ‘‘(ee) If it is a nonprescription drug that is subject 

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1 proved under section 505, and does not comply with the 

2 requirements under section 505G. 

3 ‘‘(ff) If it is a drug and it was manufactured, pre4 pared, propagated, compounded, or processed in a facility 

5 for which fees have not been paid as required by section 

6 744M.’’. 

7 SEC. 373. DRUGS EXCLUDED FROM THE OVER-THE8 COUNTER DRUG REVIEW. 

9 (a) IN GENERAL.—Nothing in this Act (or the 

10 amendments made by this Act) shall apply to any non11 prescription drug (as defined in section 505G(q) of the 

12 Federal Food, Drug, and Cosmetic Act, as added by sec13 tion 1001 of this Act) which was excluded by the Food 

14 and Drug Administration from the Over-the-Counter 

15 Drug Review in accordance with the paragraph numbered 

16 25 on page 9466 of volume 37 of the Federal Register, 

17 published on May 11, 1972. 

18 (b) RULE OF CONSTRUCTION.—Nothing in this sec19 tion shall be construed to preclude or limit the applica20 bility of any other provision of the Federal Food, Drug, 

21 and Cosmetic Act (21 U.S.C. 301 et seq.). 

22 SEC. 374. TREATMENT OF SUNSCREEN INNOVATION ACT. 

23 (a) REVIEW OF NONPRESCRIPTION SUNSCREEN AC24 TIVE INGREDIENTS.— 


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1 (1) APPLICABILITY OF SECTION 505G FOR

2 PENDING SUBMISSIONS.— 

3 (A) IN GENERAL.—A sponsor of a non4 prescription sunscreen active ingredient or com5 bination of nonprescription sunscreen active in6 gredients that, as of the date of enactment of 

7 this Act, is subject to a proposed sunscreen 

8 order under section 586C of the Federal Food, 

9 Drug, and Cosmetic Act (21 U.S.C. 360fff–3) 

10 may elect, by means of giving written notifica11 tion to the Secretary of Health and Human 

12 Services within 180 calendar days of the enact13 ment of this Act, to transition into the review 

14 of such ingredient or combination of ingredients 

15 pursuant to the process set out in section 505G 

16 of the Federal Food, Drug, and Cosmetic Act, 

17 as added by section 1001 of this Act. 

18 (B) ELECTION EXERCISED.—Upon receipt 

19 by the Secretary of Health and Human Services 

20 of a timely notification under subparagraph 

21 (A)— 

22 (i) the proposed sunscreen order in23 volved is deemed to be a request for an 

24 order under subsection (b) of section 505G 

25 of the Federal Food, Drug, and Cosmetic 


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1 Act, as added by section 1001 of this Act; 

2 and 

3 (ii) such order is deemed to have been 

4 accepted for filing under subsection 

5 (b)(6)(A)(i) of such section 505G. 

6 (C) ELECTION NOT EXERCISED.—If a noti7 fication under subparagraph (A) is not received 

8 by the Secretary of Health and Human Services 

9 within 180 calendar days of the date of enact10 ment of this Act, the review of the proposed 

11 sunscreen order described in subparagraph 

12 (A)— 

13 (i) shall continue under section 586C 

14 of the Federal Food, Drug, and Cosmetic 

15 Act (21 U.S.C. 360fff–3); and 

16 (ii) shall not be eligible for review 

17 under section 505G, added by section 1001 

18 of this Act. 

19 (2) DEFINITIONS.—In this subsection, the 

20 terms ‘‘sponsor’’, ‘‘nonprescription’’, ‘‘sunscreen ac21 tive ingredient’’, and ‘‘proposed sunscreen order’’ 

22 have the meanings given to those terms in section 

23 586 of the Federal Food, Drug, and Cosmetic Act 

24 (21 U.S.C. 360fff). 

25 (b) AMENDMENTS TO SUNSCREEN PROVISIONS.— 


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1 (1) FINAL SUNSCREEN ORDERS.—Paragraph 

2 (3) of section 586C(e) of the Federal Food, Drug, 

3 and Cosmetic Act (21 U.S.C. 360fff–3(e)) is amend4 ed to read as follows: 

5 ‘‘(3) RELATIONSHIP TO ORDERS UNDER SEC6 TION 505G.—A final sunscreen order shall be deemed 

7 to be a final order under section 505G.’’. 

8 (2) MEETINGS.—Paragraph (7) of section 

9 586C(b) of the Federal Food, Drug, and Cosmetic 

10 Act (21 U.S.C. 360fff–3(b)) is amended— 

11 (A) by striking ‘‘A sponsor may request’’ 

12 and inserting the following: 

13 ‘‘(A) IN GENERAL.—A sponsor may re14 quest’’; and 

15 (B) by adding at the end the following: 

16 ‘‘(B) CONFIDENTIAL MEETINGS.—A spon17 sor may request one or more confidential meet18 ings with respect to a proposed sunscreen order, 

19 including a letter deemed to be a proposed sun20 screen order under paragraph (3), to discuss 

21 matters relating to data requirements to sup22 port a general recognition of safety and effec23 tiveness involving confidential information and 

24 public information related to such proposed 

25 sunscreen order, as appropriate. The Secretary 


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1 shall convene a confidential meeting with such 

2 sponsor in a reasonable time period. If a spon3 sor requests more than one confidential meeting 

4 for the same proposed sunscreen order, the Sec5 retary may refuse to grant an additional con6 fidential meeting request if the Secretary deter7 mines that such additional confidential meeting 

8 is not reasonably necessary for the sponsor to 

9 advance its proposed sunscreen order, or if the 

10 request for a confidential meeting fails to in11 clude sufficient information upon which to base 

12 a substantive discussion. The Secretary shall 

13 publish a post-meeting summary of each con14 fidential meeting under this subparagraph that 

15 does not disclose confidential commercial infor16 mation or trade secrets. This subparagraph 

17 does not authorize the disclosure of confidential 

18 commercial information or trade secrets subject 

19 to 552(b)(4) of title 5, United States Code, or 

20 section 1905 of title 18, United States Code.’’. 

21 (3) EXCLUSIVITY.—Section 586C of the Fed22 eral Food, Drug, and Cosmetic Act (21 U.S.C. 

23 360fff–3) is amended by adding at the end the fol24 lowing: 

25 ‘‘(f) EXCLUSIVITY.— 


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1 ‘‘(1) IN GENERAL.—A final sunscreen order 

2 shall have the effect of authorizing solely the order 

3 requestor (or the licensees, assignees, or successors 

4 in interest of such requestor with respect to the sub5 ject of such request and listed under paragraph (5)) 

6 for a period of 18 months, to market a sunscreen in7 gredient under this section incorporating changes 

8 described in paragraph (2) subject to the limitations 

9 under paragraph (4), beginning on the date the re10 questor (or any licensees, assignees, or successors in 

11 interest of such requestor with respect to the subject 

12 of such request and listed under paragraph (5)) may 

13 lawfully market such sunscreen ingredient pursuant 

14 to the order. 

15 ‘‘(2) CHANGES DESCRIBED.—A change de16 scribed in this paragraph is a change subject to an 

17 order specified in paragraph (1) that permits a sun18 screen to contain an active sunscreen ingredient not 

19 previously incorporated in a marketed sunscreen list20 ed in paragraph (3). 

21 ‘‘(3) MARKETED SUNSCREEN.—The marketed 

22 sunscreen ingredients described in this paragraph 

23 are sunscreen ingredients— 

24 ‘‘(A) marketed in accordance with a final 

25 monograph for sunscreen drug products set 


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1 forth at part 352 of title 21, Code of Federal 

2 Regulations (as published at 64 Fed. Reg. 

3 27687); or 

4 ‘‘(B) marketed in accordance with a final 

5 order issued under this section. 

6 ‘‘(4) LIMITATIONS ON EXCLUSIVITY.—Only one 

7 18-month period may be granted per ingredient 

8 under paragraph (1). 

9 ‘‘(5) LISTING OF LICENSEES, ASSIGNEES, OR

10 SUCCESSORS IN INTEREST.—Requestors shall submit 

11 to the Secretary at the time when a drug subject to 

12 such request is introduced or delivered for introduc13 tion into interstate commerce, a list of licensees, as14 signees, or successors in interest under paragraph 

15 (1).’’. 

16 (4) SUNSET PROVISION.—Subchapter I of chap17 ter V of the Federal Food, Drug, and Cosmetic Act 

18 (21 U.S.C. 360fff et seq.) is amended by adding at 

19 the end the following: 

20 ‘‘SEC. 586H. SUNSET. 

21 ‘‘This subchapter shall cease to be effective at the end 

22 of fiscal year 2022.’’. 

23 (5) TREATMENT OF FINAL SUNSCREEN

24 ORDER.—The Federal Food, Drug, and Cosmetic 


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1 Act is amended by striking section 586E of such Act 

2 (21 U.S.C. 360fff–5). 

3 (c) TREATMENT OF AUTHORITY REGARDING FINAL4 IZATION OF SUNSCREEN MONOGRAPH.— 

5 (1) IN GENERAL.— 

6 (A) REVISION OF FINAL SUNSCREEN

7 ORDER.—Not later than November 26, 2019, 

8 the Secretary of Health and Human Services 

9 (referred to in this subsection as the ‘‘Sec10 retary’’) shall amend and revise the final ad11 ministrative order concerning nonprescription 

12 sunscreen (referred to in this subsection as the 

13 ‘‘sunscreen order’’) for which the content, prior 

14 to the date of enactment of this Act, was rep15 resented by the final monograph for sunscreen 

16 drug products set forth in part 352 of title 21, 

17 Code of Federal Regulations (as in effect on 

18 May 21, 1999). 

19 (B) ISSUANCE OF REVISED SUNSCREEN

20 ORDER; EFFECTIVE DATE.—A revised sunscreen 

21 order described in subparagraph (A) shall be— 

22 (i) issued in accordance with the pro23 cedures described in section 505G(c)(2) of 

24 the Federal Food, Drug, and Cosmetic 

25 Act; 


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1 (ii) issued in proposed form not later 

2 than May 28, 2019; 

3 (iii) effective not later than November 

4 26, 2020; and 

5 (iv) issued by the Secretary at least 1 

6 year prior to the effective date of the re7 vised order. 

8 (2) REPORTS.—If a revised sunscreen order 

9 issued under paragraph (1) does not include provi10 sions related to the effectiveness of various sun pro11 tection factor levels, and does not address all dosage 

12 forms known to the Secretary to be used in sun13 screens marketed in the United States without a 

14 new drug application approved under section 505 of 

15 the Federal Food, Drug, and Cosmetic Act (21 

16 U.S.C. 355), the Secretary shall submit a report to 

17 the Committee on Energy and Commerce of the 

18 House of Representatives and the Committee on 

19 Health, Education, Labor, and Pensions of the Sen20 ate on the rationale for omission of such provisions 

21 from such order, and a plan and timeline to compile 

22 any information necessary to address such provisions 

23 through such order. 

24 (d) TREATMENT OF NON-SUNSCREEN TIME AND EX25 TENT APPLICATIONS.— 


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1 (1) IN GENERAL.—Any application described in 

2 section 586F of the Federal Food, Drug, and Cos3 metic Act (21 U.S.C. 360fff–6) that was submitted 

4 to the Secretary pursuant to section 330.14 of title 

5 21, Code of Federal Regulations, as such provisions 

6 were in effect immediately prior to the date of enact7 ment date of this Act, shall be extinguished as of 

8 such date of enactment, subject to paragraph (2). 

9 (2) ORDER REQUEST.—Nothing in paragraph 

10 (1) precludes the submission of an order request 

11 under section 505G(b) of the Federal Food, Drug, 

12 and Cosmetic Act, as added by section 1001 of this 

13 Act, with respect to a drug that was the subject of 

14 an application extinguished under paragraph (1). 

15 SEC. 375. ANNUAL UPDATE TO CONGRESS ON APPRO16 PRIATE PEDIATRIC INDICATION FOR CER17 TAIN OTC COUGH AND COLD DRUGS. 

18 (a) IN GENERAL.—Subject to subsection (c), the Sec19 retary of Health and Human Services shall, beginning not 

20 later than 1 year after the date of enactment of this Act, 

21 annually submit to the Committee on Energy and Com22 merce of the House of Representatives and the Committee 

23 on Health, Education, Labor, and Pensions of the Senate 

24 a letter describing the progress of the Food and Drug Ad25 ministration— 


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1 (1) in evaluating the cough and cold monograph 

2 described in subsection (b) with respect to children 

3 under age 6; and 

4 (2) as appropriate, revising such cough and cold 

5 monograph to address such children through the 

6 order process under section 505G(b) of the Federal 

7 Food, Drug, and Cosmetic Act, as added by section 

8 1001 of this Act. 

9 (b) COUGH AND COLD MONOGRAPH DESCRIBED.— 

10 The cough and cold monograph described in this sub11 section consists of the conditions under which nonprescrip12 tion drugs containing antitussive, expectorant, nasal de13 congestant, or antihistamine active ingredients (or com14 binations thereof) are generally recognized as safe and ef15 fective, as specified in part 341 of title 21, Code of Federal 

16 Regulations (as in effect immediately prior to the date of 

17 enactment of this Act), and included in an order deemed 

18 to be established under section 505G(b) of the Federal 

19 Food, Drug, and Cosmetic Act, as added by section 1001 

20 of this Act. 

21 (c) DURATION OF AUTHORITY.—The requirement 

22 under subsection (a) shall terminate as of the date of a 

23 letter submitted by the Secretary of Health and Human 

24 Services pursuant to such subsection in which the Sec25 retary indicates that the Food and Drug Administration 


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1 has completed its evaluation and revised, in a final order, 

2 as applicable, the cough and cold monograph as described 

3 in subsection (a)(2). 

4 SEC. 376. TECHNICAL CORRECTIONS. 

5 (a) IMPORTS AND EXPORTS.—Section 

6 801(e)(4)(E)(iii) of the Federal Food, Drug, and Cosmetic 

7 Act (21 U.S.C. 381(e)(4)(E)(iii)) is amended by striking 

8 ‘‘subparagraph’’ each place such term appears and insert9 ing ‘‘paragraph’’. 

10 (b) FDA REAUTHORIZATION ACT OF 2017.— 

11 (1) IN GENERAL.—Section 905(b)(4) of the 

12 FDA Reauthorization Act of 2017 (Public Law 115– 

13 52) is amended by striking ‘‘Section 744H(e)(2)(B)’’ 

14 and inserting ‘‘Section 744H(f)(2)(B)’’. 

15 (2) EFFECTIVE DATE.—The amendment made 

16 by paragraph (1) shall take effect as of the enact17 ment of the FDA Reauthorization Act of 2017 

18 (Public Law 115–52). 

19 PART 2—USER FEES 

20 SEC. 381. SHORT TITLE; FINDING. 

21 (a) SHORT TITLE.—This part may be cited as the 

22 ‘‘Over-the-Counter Monograph User Fee Act of 2019’’. 

23 (b) FINDING.—The Congress finds that the fees au24 thorized by the amendments made in this part will be dedi25 cated to OTC monograph drug activities, as set forth in 


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1 the goals identified for purposes of part 10 of subchapter 

2 C of chapter VII of the Federal Food, Drug, and Cosmetic 

3 Act, in the letters from the Secretary of Health and 

4 Human Services to the Chairman of the Committee on 

5 Health, Education, Labor, and Pensions of the Senate and 

6 the Chairman of the Committee on Energy and Commerce 

7 of the House of Representatives, as set forth in the Con8 gressional Record. 

9 SEC. 382. FEES RELATING TO OVER-THE-COUNTER DRUGS. 

10 Subchapter C of chapter VII of the Federal Food, 

11 Drug, and Cosmetic Act (21 U.S.C. 379f et seq.) is 

12 amended by inserting after part 9 the following: 

13 ‘‘PART 10—FEES RELATING TO OVER-THE14 COUNTER DRUGS 

15 ‘‘SEC. 744L. DEFINITIONS. 

16 ‘‘In this part: 

17 ‘‘(1) The term ‘affiliate’ means a business enti18 ty that has a relationship with a second business en19 tity if, directly or indirectly— 

20 ‘‘(A) one business entity controls, or has 

21 the power to control, the other business entity; 

22 or 

23 ‘‘(B) a third party controls, or has power 

24 to control, both of the business entities. 


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1 ‘‘(2) The term ‘contract manufacturing organi2 zation facility’ means an OTC monograph drug facil3 ity where neither the owner of such manufacturing 

4 facility nor any affiliate of such owner or facility 

5 sells the OTC monograph drug produced at such fa6 cility directly to wholesalers, retailers, or consumers 

7 in the United States. 

8 ‘‘(3) The term ‘costs of resources allocated for 

9 OTC monograph drug activities’ means the expenses 

10 in connection with OTC monograph drug activities 

11 for— 

12 ‘‘(A) officers and employees of the Food 

13 and Drug Administration, contractors of the 

14 Food and Drug Administration, advisory com15 mittees, and costs related to such officers, em16 ployees, and committees and costs related to 

17 contracts with such contractors; 

18 ‘‘(B) management of information, and the 

19 acquisition, maintenance, and repair of com20 puter resources; 

21 ‘‘(C) leasing, maintenance, renovation, and 

22 repair of facilities and acquisition, maintenance, 

23 and repair of fixtures, furniture, scientific 

24 equipment, and other necessary materials and 

25 supplies; and 


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1 ‘‘(D) collecting fees under section 744M 

2 and accounting for resources allocated for OTC 

3 monograph drug activities. 

4 ‘‘(4) The term ‘FDA establishment identifier’ is 

5 the unique number automatically generated by Food 

6 and Drug Administration’s Field Accomplishments 

7 and Compliance Tracking System (FACTS) (or any 

8 successor system). 

9 ‘‘(5) The term ‘OTC monograph drug’ means a 

10 nonprescription drug without an approved new drug 

11 application which is governed by the provisions of 

12 section 505G. 

13 ‘‘(6) The term ‘OTC monograph drug activities’ 

14 means activities of the Secretary associated with 

15 OTC monograph drugs and inspection of facilities 

16 associated with such products, including the fol17 lowing activities: 

18 ‘‘(A) The activities necessary for review 

19 and evaluation of OTC monographs and OTC 

20 monograph order requests, including— 

21 ‘‘(i) orders proposing or finalizing ap22 plicable conditions of use for OTC mono23 graph drugs; 

24 ‘‘(ii) orders affecting status regarding 

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1 ness of an OTC monograph ingredient or 

2 combination of ingredients under specified 

3 conditions of use; 

4 ‘‘(iii) all OTC monograph drug devel5 opment and review activities, including 

6 intra-agency collaboration; 

7 ‘‘(iv) regulation and policy develop8 ment activities related to OTC monograph 

9 drugs; 

10 ‘‘(v) development of product standards 

11 for products subject to review and evalua12 tion; 

13 ‘‘(vi) meetings referred to in section 

14 505G(i); 

15 ‘‘(vii) review of labeling prior to 

16 issuance of orders related to OTC mono17 graph drugs or conditions of use; and 

18 ‘‘(viii) regulatory science activities re19 lated to OTC monograph drugs. 

20 ‘‘(B) Inspections related to OTC mono21 graph drugs. 

22 ‘‘(C) Monitoring of clinical and other re23 search conducted in connection with OTC 

24 monograph drugs. 


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1 ‘‘(D) Safety activities with respect to OTC 

2 monograph drugs, including— 

3 ‘‘(i) collecting, developing, and review4 ing safety information on OTC monograph 

5 drugs, including adverse event reports; 

6 ‘‘(ii) developing and using improved 

7 adverse event data-collection systems, in8 cluding information technology systems; 

9 and 

10 ‘‘(iii) developing and using improved 

11 analytical tools to assess potential safety 

12 risks, including access to external data13 bases. 

14 ‘‘(E) Other activities necessary for imple15 mentation of section 505G. 

16 ‘‘(7) The term ‘OTC monograph order request’ 

17 means a request for an order submitted under sec18 tion 505G(b)(5). 

19 ‘‘(8) The term ‘Tier 1 OTC monograph order 

20 request’ means any OTC monograph order request 

21 not determined to be a Tier 2 OTC monograph 

22 order request. 

23 ‘‘(9)(A) The term ‘Tier 2 OTC monograph 

24 order request’ means, subject to subparagraph (B), 

25 an OTC monograph order request for— 


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1 ‘‘(i) the reordering of existing information 

2 in the drug facts label of an OTC monograph 

3 drug; 

4 ‘‘(ii) the addition of information to the 

5 other information section of the drug facts label 

6 of an OTC monograph drug, as limited by sec7 tion 201.66(c)(7) of title 21, Code of Federal 

8 Regulations (or any successor regulations); 

9 ‘‘(iii) modification to the directions for use 

10 section of the drug facts label of an OTC mono11 graph drug, if such changes conform to changes 

12 made pursuant to section 505G(c)(3)(A); 

13 ‘‘(iv) the standardization of the concentra14 tion or dose of a specific finalized ingredient 

15 within a particular finalized monograph; 

16 ‘‘(v) a change to ingredient nomenclature 

17 to align with nomenclature of a standards-set18 ting organization; or 

19 ‘‘(vi) addition of an interchangeable term 

20 in accordance with section 330.1 of title 21, 

21 Code of Federal Regulations (or any successor 

22 regulations). 

23 ‘‘(B) The Secretary may, based on program im24 plementation experience or other factors found ap25 propriate by the Secretary, characterize any OTC 


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1 monograph order request as a Tier 2 OTC mono2 graph order request (including recharacterizing a re3 quest from Tier 1 to Tier 2) and publish such deter4 mination in a proposed order issued pursuant to sec5 tion 505G. 

6 ‘‘(10)(A) The term ‘OTC monograph drug facil7 ity’ means a foreign or domestic business or other 

8 entity that— 

9 ‘‘(i) is— 

10 ‘‘(I) under one management, either di11 rect or indirect; and 

12 ‘‘(II) at one geographic location or ad13 dress engaged in manufacturing or proc14 essing the finished dosage form of an OTC 

15 monograph drug; 

16 ‘‘(ii) includes a finished dosage form man17 ufacturer facility in a contractual relationship 

18 with the sponsor of one or more OTC mono19 graph drugs to manufacture or process such 

20 drugs; and 

21 ‘‘(iii) does not include a business or other 

22 entity whose only manufacturing or processing 

23 activities are one or more of the following: pro24 duction of clinical research supplies, testing, or 

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1 taining multiple products, for such purposes as 

2 creating multipacks, when each monograph 

3 drug product contained within the overpack4 aging is already in a final packaged form prior 

5 to placement in the outer overpackaging. 

6 ‘‘(B) For purposes of subparagraph (A)(i)(II), 

7 separate buildings or locations within close proximity 

8 are considered to be at one geographic location or 

9 address if the activities conducted in such buildings 

10 or locations are— 

11 ‘‘(i) closely related to the same business 

12 enterprise; 

13 ‘‘(ii) under the supervision of the same 

14 local management; and 

15 ‘‘(iii) under a single FDA establishment 

16 identifier and capable of being inspected by the 

17 Food and Drug Administration during a single 

18 inspection. 

19 ‘‘(C) If a business or other entity would meet 

20 criteria specified in subparagraph (A), but for being 

21 under multiple management, the business or other 

22 entity is deemed to constitute multiple facilities, one 

23 per management entity, for purposes of this para24 graph. 


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1 ‘‘(11) The term ‘OTC monograph drug meet2 ing’ means any meeting regarding the content of a 

3 proposed OTC monograph order request. 

4 ‘‘(12) The term ‘person’ includes an affiliate of 

5 a person. 

6 ‘‘(13) The terms ‘requestor’ and ‘sponsor’ have 

7 the meanings given such terms in section 505G. 

8 ‘‘SEC. 744M. AUTHORITY TO ASSESS AND USE OTC MONO9 GRAPH FEES. 

10 ‘‘(a) TYPES OF FEES.—Beginning with fiscal year 

11 2019, the Secretary shall assess and collect fees in accord12 ance with this section as follows: 

13 ‘‘(1) FACILITY FEE.— 

14 ‘‘(A) IN GENERAL.—Each person that 

15 owns a facility identified as an OTC monograph 

16 drug facility on December 31 of the fiscal year 

17 or at any time during the preceding 12-month 

18 period shall be assessed an annual fee for each 

19 such facility as determined under subsection 

20 (c). 

21 ‘‘(B) EXCEPTIONS.— 

22 ‘‘(i) A fee shall not be assessed under 

23 subparagraph (A) if the identified OTC 

24 monograph drug facility— 


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1 ‘‘(I) has ceased all activities re2 lated to OTC monograph drugs prior 

3 to January 31, 2019, for the first pro4 gram year, and December 31 of the 

5 fiscal year for subsequent fiscal years; 

6 and 

7 ‘‘(II) has updated its registration 

8 to reflect such change under the re9 quirements for drug establishment 

10 registration set forth in section 510. 

11 ‘‘(ii) The amount of the fee for a con12 tract manufacturing organization facility 

13 shall be equal to two-thirds of the amount 

14 of the fee for an OTC monograph drug fa15 cility that is not a contract manufacturing 

16 organization facility. 

17 ‘‘(C) AMOUNT.—The amount of fees estab18 lished under subparagraph (A) shall be estab19 lished under subsection (c). 

20 ‘‘(D) DUE DATE.— 

21 ‘‘(i) FOR FIRST PROGRAM YEAR.—For 

22 fiscal year 2019, the facility fees required 

23 under subparagraph (A) shall be due 45 

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1 eral Register notice provided for under 

2 subsection (c)(4)(A). 

3 ‘‘(ii) SUBSEQUENT FISCAL YEARS.— 

4 For each fiscal year after fiscal year 2019, 

5 the facility fees required under subpara6 graph (A) shall be due on the later of— 

7 ‘‘(I) the first business day of 

8 June of such year; or 

9 ‘‘(II) the first business day after 

10 the enactment of an appropriations 

11 Act providing for the collection and 

12 obligation of fees under this section 

13 for such year. 

14 ‘‘(2) OTC MONOGRAPH ORDER REQUEST

15 FEE.— 

16 ‘‘(A) IN GENERAL.—Each person that sub17 mits an OTC monograph order request shall be 

18 subject to a fee for an OTC monograph order 

19 request. The amount of such fee shall be— 

20 ‘‘(i) for a Tier 1 OTC monograph 

21 order request, $500,000, adjusted for in22 flation for the fiscal year (as determined 

23 under subsection (c)(1)(B)); and 

24 ‘‘(ii) for a Tier 2 OTC monograph 

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1 tion for the fiscal year (as determined 

2 under subsection (c)(1)(B)). 

3 ‘‘(B) DUE DATE.—The OTC monograph 

4 order request fees required under subparagraph 

5 (A) shall be due on the date of submission of 

6 the OTC monograph order request. 

7 ‘‘(C) EXCEPTION FOR CERTAIN SAFETY

8 CHANGES.—A person who is named as the re9 questor in an OTC monograph order shall not 

10 be subject to a fee under subparagraph (A) if 

11 the Secretary finds that the OTC monograph 

12 order request seeks to change the drug facts la13 beling of an OTC monograph drug in a way 

14 that would add to or strengthen— 

15 ‘‘(i) a contraindication, warning, or 

16 precaution; 

17 ‘‘(ii) a statement about risk associated 

18 with misuse or abuse; or 

19 ‘‘(iii) an instruction about dosage and 

20 administration that is intended to increase 

21 the safe use of the OTC monograph drug. 

22 ‘‘(D) REFUND OF FEE IF ORDER REQUEST

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1 tially characterized as Tier 1 shall be re-charac2 terized as a Tier 2 OTC monograph order re3 quest, and the requestor has paid a Tier 1 fee 

4 in accordance with subparagraph (A)(i), the 

5 Secretary shall refund the requestor the dif6 ference between the Tier 1 and Tier 2 fees de7 termined under subparagraphs (A)(i) and 

8 (A)(ii), respectively. 

9 ‘‘(E) REFUND OF FEE IF ORDER REQUEST

10 REFUSED FOR FILING OR WITHDRAWN BEFORE

11 FILING.—The Secretary shall refund 75 percent 

12 of the fee paid under subparagraph (B) for any 

13 order request which is refused for filing or was 

14 withdrawn before being accepted or refused for 

15 filing. 

16 ‘‘(F) FEES FOR ORDER REQUESTS PRE17 VIOUSLY REFUSED FOR FILING OR WITHDRAWN

18 BEFORE FILING.—An OTC monograph order 

19 request that was submitted but was refused for 

20 filing, or was withdrawn before being accepted 

21 or refused for filing, shall be subject to the full 

22 fee under subparagraph (A) upon being resub23 mitted or filed over protest. 

24 ‘‘(G) REFUND OF FEE IF ORDER REQUEST

25 WITHDRAWN.—If an order request is withdrawn 


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1 after the order request was filed, the Secretary 

2 may refund the fee or a portion of the fee if no 

3 substantial work was performed on the order 

4 request after the application was filed. The Sec5 retary shall have the sole discretion to refund a 

6 fee or a portion of the fee under this subpara7 graph. A determination by the Secretary con8 cerning a refund under this subparagraph shall 

9 not be reviewable. 

10 ‘‘(3) REFUNDS.— 

11 ‘‘(A) IN GENERAL.—Other than refunds 

12 provided pursuant to any of subparagraphs (D) 

13 through (G) of paragraph (2), the Secretary 

14 shall not refund any fee paid under paragraph 

15 (1) except as provided in subparagraph (B). 

16 ‘‘(B) DISPUTES CONCERNING FEES.—To 

17 qualify for the return of a fee claimed to have 

18 been paid in error under paragraph (1) or (2), 

19 a person shall submit to the Secretary a written 

20 request justifying such return within 180 cal21 endar days after such fee was paid. 

22 ‘‘(4) NOTICE.—Within the timeframe specified 

23 in subsection (c), the Secretary shall publish in the 

24 Federal Register the amount of the fees under para25 graph (1) for such fiscal year. 


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1 ‘‘(b) FEE REVENUE AMOUNTS.— 

2 ‘‘(1) FISCAL YEAR 2019.—For fiscal year 2019, 

3 fees under subsection (a)(1) shall be established to 

4 generate a total facility fee revenue amount equal to 

5 the sum of— 

6 ‘‘(A) the annual base revenue for fiscal 

7 year 2019 (as determined under paragraph 

8 (3)); 

9 ‘‘(B) the dollar amount equal to the oper10 ating reserve adjustment for the fiscal year, if 

11 applicable (as determined under subsection 

12 (c)(2)); and 

13 ‘‘(C) additional direct cost adjustments (as 

14 determined under subsection (c)(3)). 

15 ‘‘(2) SUBSEQUENT FISCAL YEARS.—For each of 

16 the fiscal years 2020 through 2023, fees under sub17 section (a)(1) shall be established to generate a total 

18 facility fee revenue amount equal to the sum of— 

19 ‘‘(A) the annual base revenue for the fiscal 

20 year (as determined under paragraph (3)); 

21 ‘‘(B) the dollar amount equal to the infla22 tion adjustment for the fiscal year (as deter23 mined under subsection (c)(1)); 

24 ‘‘(C) the dollar amount equal to the oper25 ating reserve adjustment for the fiscal year, if 


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1 applicable (as determined under subsection 

2 (c)(2)); 

3 ‘‘(D) additional direct cost adjustments (as 

4 determined under subsection (c)(3)); and 

5 ‘‘(E) additional dollar amounts for each 

6 fiscal year as follows: 

7 ‘‘(i) $7,000,000 for fiscal year 2020. 

8 ‘‘(ii) $6,000,000 for fiscal year 2021. 

9 ‘‘(iii) $7,000,000 for fiscal year 2022. 

10 ‘‘(iv) $3,000,000 for fiscal year 2023. 

11 ‘‘(3) ANNUAL BASE REVENUE.—For purposes 

12 of paragraphs (1)(A) and (2)(A), the dollar amount 

13 of the annual base revenue for a fiscal year shall 

14 be— 

15 ‘‘(A) for fiscal year 2019, $8,000,000; and 

16 ‘‘(B) for fiscal years 2020 through 2023, 

17 the dollar amount of the total revenue amount 

18 established under this subsection for the pre19 vious fiscal year, not including any adjustments 

20 made under subsection (c)(2) or (c)(3). 

21 ‘‘(c) ADJUSTMENTS; ANNUAL FEE SETTING.— 

22 ‘‘(1) INFLATION ADJUSTMENT.— 

23 ‘‘(A) IN GENERAL.—For purposes of sub24 section (b)(2)(B), the dollar amount of the in25 flation adjustment to the annual base revenue 


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1 for fiscal year 2020 and each subsequent fiscal 

2 year shall be equal to the product of— 

3 ‘‘(i) such annual base revenue for the 

4 fiscal year under subsection (b)(2); and 

5 ‘‘(ii) the inflation adjustment percent6 age under subparagraph (C). 

7 ‘‘(B) OTC MONOGRAPH ORDER REQUEST

8 FEES.—For purposes of subsection (a)(2), the 

9 dollar amount of the inflation adjustment to the 

10 fee for OTC monograph order requests for fis11 cal year 2020 and each subsequent fiscal year 

12 shall be equal to the product of— 

13 ‘‘(i) the applicable fee under sub14 section (a)(2) for the preceding fiscal year; 

15 and 

16 ‘‘(ii) the inflation adjustment percent17 age under subparagraph (C). 

18 ‘‘(C) INFLATION ADJUSTMENT PERCENT19 AGE.—The inflation adjustment percentage 

20 under this subparagraph for a fiscal year is 

21 equal to— 

22 ‘‘(i) for each of fiscal years 2020 and 

23 2021, the average annual percent change 

24 that occurred in the Consumer Price Index 

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1 more, DC–MD–VA–WV; Not Seasonally 

2 Adjusted; All items; Annual Index) for the 

3 first 3 years of the preceding 4 years of 

4 available data; and 

5 ‘‘(ii) for each of fiscal years 2022 and 

6 2023, the sum of— 

7 ‘‘(I) the average annual percent 

8 change in the cost, per full-time equiv9 alent position of the Food and Drug 

10 Administration, of all personnel com11 pensation and benefits paid with re12 spect to such positions for the first 3 

13 years of the preceding 4 fiscal years, 

14 multiplied by the proportion of per15 sonnel compensation and benefits 

16 costs to total costs of OTC mono17 graph drug activities for the first 3 

18 years of the preceding 4 fiscal years; 

19 and 

20 ‘‘(II) the average annual percent 

21 change that occurred in the Consumer 

22 Price Index for urban consumers 

23 (Washington-Baltimore, DC–MD–VA– 

24 WV; Not Seasonally Adjusted; All 

25 items; Annual Index) for the first 3 


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1 years of the preceding 4 years of 

2 available data multiplied by the pro3 portion of all costs other than per4 sonnel compensation and benefits 

5 costs to total costs of OTC mono6 graph drug activities for the first 3 

7 years of the preceding 4 fiscal years. 

8 ‘‘(2) OPERATING RESERVE ADJUSTMENT.— 

9 ‘‘(A) IN GENERAL.—For fiscal year 2019 

10 and subsequent fiscal years, for purposes of 

11 subsections (b)(1)(B) and (b)(2)(C), the Sec12 retary may, in addition to adjustments under 

13 paragraph (1), further increase the fee revenue 

14 and fees if such an adjustment is necessary to 

15 provide operating reserves of carryover user 

16 fees for OTC monograph drug activities for not 

17 more than the number of weeks specified in 

18 subparagraph (B). 

19 ‘‘(B) NUMBER OF WEEKS.—The number of 

20 weeks specified in this subparagraph is— 

21 ‘‘(i) 3 weeks for fiscal year 2019; 

22 ‘‘(ii) 7 weeks for fiscal year 2020; 

23 ‘‘(iii) 10 weeks for fiscal year 2021; 

24 ‘‘(iv) 10 weeks for fiscal year 2022; 

25 and 


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1 ‘‘(v) 10 weeks for fiscal year 2023. 

2 ‘‘(C) DECREASE.—If the Secretary has 

3 carryover balances for such process in excess of 

4 10 weeks of the operating reserves referred to 

5 in subparagraph (A), the Secretary shall de6 crease the fee revenue and fees referred to in 

7 such subparagraph to provide for not more than 

8 10 weeks of such operating reserves. 

9 ‘‘(D) RATIONALE FOR ADJUSTMENT.—If 

10 an adjustment under this paragraph is made, 

11 the rationale for the amount of the increase or 

12 decrease (as applicable) in fee revenue and fees 

13 shall be contained in the annual Federal Reg14 ister notice under paragraph (4) establishing 

15 fee revenue and fees for the fiscal year involved. 

16 ‘‘(3) ADDITIONAL DIRECT COST ADJUST17 MENT.—The Secretary shall, in addition to adjust18 ments under paragraphs (1) and (2), further in19 crease the fee revenue and fees for purposes of sub20 section (b)(2)(D) by an amount equal to— 

21 ‘‘(A) $14,000,000 for fiscal year 2019; 

22 ‘‘(B) $7,000,000 for fiscal year 2020; 

23 ‘‘(C) $4,000,000 for fiscal year 2021; 

24 ‘‘(D) $3,000,000 for fiscal year 2022; and 

25 ‘‘(E) $3,000,000 for fiscal year 2023. 


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1 ‘‘(4) ANNUAL FEE SETTING.— 

2 ‘‘(A) FISCAL YEAR 2019.—The Secretary 

3 shall, not later than the second Monday in 

4 March of 2019— 

5 ‘‘(i) establish OTC monograph drug 

6 facility fees for fiscal year 2019 under sub7 section (a), based on the revenue amount 

8 for such year under subsection (b) and the 

9 adjustments provided under this sub10 section; and 

11 ‘‘(ii) publish fee revenue, facility fees, 

12 and OTC monograph order requests in the 

13 Federal Register. 

14 ‘‘(B) SUBSEQUENT FISCAL YEARS.—The 

15 Secretary shall, not later than the second Mon16 day in March of each fiscal year that begins 

17 after September 30, 2019— 

18 ‘‘(i) establish for each such fiscal 

19 year, based on the revenue amounts under 

20 subsection (b) and the adjustments pro21 vided under this subsection— 

22 ‘‘(I) OTC monograph drug facil23 ity fees under subsection (a)(1); and 


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1 ‘‘(II) OTC monograph order re2 quest fees under subsection (a)(2); 

3 and 

4 ‘‘(ii) publish such fee revenue 

5 amounts, facility fees, and OTC mono6 graph order request fees in the Federal 

7 Register. 

8 ‘‘(d) IDENTIFICATION OF FACILITIES.—Each person 

9 that owns an OTC monograph drug facility shall submit 

10 to the Secretary the information required under this sub11 section each year. Such information shall, for each fiscal 

12 year— 

13 ‘‘(1) be submitted as part of the requirements 

14 for drug establishment registration set forth in sec15 tion 510; and 

16 ‘‘(2) include for each such facility, at a min17 imum, identification of the facility’s business oper18 ation as that of an OTC monograph drug facility. 

19 ‘‘(e) EFFECT OF FAILURE TO PAY FEES.— 

20 ‘‘(1) OTC MONOGRAPH DRUG FACILITY FEE.— 

21 ‘‘(A) IN GENERAL.—Failure to pay the fee 

22 under subsection (a)(1) within 20 calendar days 

23 of the due date as specified in subparagraph 

24 (D) of such subsection shall result in the fol25 lowing: 


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1 ‘‘(i) The Secretary shall place the fa2 cility on a publicly available arrears list. 

3 ‘‘(ii) All OTC monograph drugs man4 ufactured in such a facility or containing 

5 an ingredient manufactured in such a facil6 ity shall be deemed misbranded under sec7 tion 502(ff). 

8 ‘‘(B) APPLICATION OF PENALTIES.—The 

9 penalties under this paragraph shall apply until 

10 the fee established by subsection (a)(1) is paid. 

11 ‘‘(2) ORDER REQUESTS.—An OTC monograph 

12 order request submitted by a person subject to fees 

13 under subsection (a) shall be considered incomplete 

14 and shall not be accepted for filing by the Secretary 

15 until all fees owed by such person under this section 

16 have been paid. 

17 ‘‘(3) MEETINGS.—A person subject to fees 

18 under this section shall be considered ineligible for 

19 OTC monograph drug meetings until all such fees 

20 owed by such person have been paid. 

21 ‘‘(f) CREDITING AND AVAILABILITY OF FEES.— 

22 ‘‘(1) IN GENERAL.—Fees authorized under sub23 section (a) shall be collected and available for obliga24 tion only to the extent and in the amount provided 

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1 thorized to remain available until expended. Such 

2 sums as may be necessary may be transferred from 

3 the Food and Drug Administration salaries and ex4 penses appropriation account without fiscal year lim5 itation to such appropriation account for salaries 

6 and expenses with such fiscal year limitation. The 

7 sums transferred shall be available solely for OTC 

8 monograph drug activities. 

9 ‘‘(2) COLLECTIONS AND APPROPRIATION

10 ACTS.— 

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (C), the fees authorized by this section 

13 shall be collected and available in each fiscal 

14 year in an amount not to exceed the amount 

15 specified in appropriation Acts, or otherwise 

16 made available for obligation, for such fiscal 

17 year. 

18 ‘‘(B) USE OF FEES AND LIMITATION.— 

19 The fees authorized by this section shall be 

20 available to defray increases in the costs of the 

21 resources allocated for OTC monograph drug 

22 activities (including increases in such costs for 

23 an additional number of full-time equivalent po24 sitions in the Department of Health and 

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1 ties), only if the Secretary allocates for such 

2 purpose an amount for such fiscal year (exclud3 ing amounts from fees collected under this sec4 tion) no less than $12,000,000, multiplied by 

5 the adjustment factor applicable to the fiscal 

6 year involved under subsection (c)(1). 

7 ‘‘(C) COMPLIANCE.—The Secretary shall 

8 be considered to have met the requirements of 

9 subparagraph (B) in any fiscal year if the costs 

10 funded by appropriations and allocated for OTC 

11 monograph drug activities are not more than 15 

12 percent below the level specified in such sub13 paragraph. 

14 ‘‘(D) PROVISION FOR EARLY PAYMENTS IN

15 SUBSEQUENT YEARS.—Payment of fees author16 ized under this section for a fiscal year (after 

17 fiscal year 2019), prior to the due date for such 

18 fees, may be accepted by the Secretary in ac19 cordance with authority provided in advance in 

20 a prior year appropriations Act. 

21 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.— 

22 For each of the fiscal years 2019 through 2023, 

23 there is authorized to be appropriated for fees under 

24 this section an amount equal to the total amount of 

25 fees assessed for such fiscal year under this section. 


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1 ‘‘(g) COLLECTION OF UNPAID FEES.—In any case 

2 where the Secretary does not receive payment of a fee as3 sessed under subsection (a) within 30 calendar days after 

4 it is due, such fee shall be treated as a claim of the United 

5 States Government subject to subchapter II of chapter 37 

6 of title 31, United States Code. 

7 ‘‘(h) CONSTRUCTION.—This section may not be con8 strued to require that the number of full-time equivalent 

9 positions in the Department of Health and Human Serv10 ices, for officers, employers, and advisory committees not 

11 engaged in OTC monograph drug activities, be reduced 

12 to offset the number of officers, employees, and advisory 

13 committees so engaged. 

14 ‘‘SEC. 744N. REAUTHORIZATION; REPORTING REQUIRE15 MENTS. 

16 ‘‘(a) PERFORMANCE REPORT.—Beginning with fiscal 

17 year 2019, and not later than 120 calendar days after the 

18 end of each fiscal year thereafter for which fees are col19 lected under this part, the Secretary shall prepare and 

20 submit to the Committee on Energy and Commerce of the 

21 House of Representatives and the Committee on Health, 

22 Education, Labor, and Pensions of the Senate a report 

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1 graph Safety, Innovation, and Reform Act of 2019 during 

2 such fiscal year and the future plans of the Food and 

3 Drug Administration for meeting such goals. 

4 ‘‘(b) FISCAL REPORT.—Not later than 120 calendar 

5 days after the end of fiscal year 2019 and each subsequent 

6 fiscal year for which fees are collected under this part, 

7 the Secretary shall prepare and submit to the Committee 

8 on Energy and Commerce of the House of Representatives 

9 and the Committee on Health, Education, Labor, and 

10 Pensions of the Senate a report on the implementation 

11 of the authority for such fees during such fiscal year and 

12 the use, by the Food and Drug Administration, of the fees 

13 collected for such fiscal year. 

14 ‘‘(c) PUBLIC AVAILABILITY.—The Secretary shall 

15 make the reports required under subsections (a) and (b) 

16 available to the public on the internet website of the Food 

17 and Drug Administration. 

18 ‘‘(d) REAUTHORIZATION.— 

19 ‘‘(1) CONSULTATION.—In developing rec20 ommendations to present to the Congress with re21 spect to the goals described in subsection (a), and 

22 plans for meeting the goals, for OTC monograph 

23 drug activities for the first 5 fiscal years after fiscal 

24 year 2023, and for the reauthorization of this part 


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1 for such fiscal years, the Secretary shall consult 

2 with— 

3 ‘‘(A) the Committee on Energy and Com4 merce of the House of Representatives; 

5 ‘‘(B) the Committee on Health, Education, 

6 Labor, and Pensions of the Senate; 

7 ‘‘(C) scientific and academic experts; 

8 ‘‘(D) health care professionals; 

9 ‘‘(E) representatives of patient and con10 sumer advocacy groups; and 

11 ‘‘(F) the regulated industry. 

12 ‘‘(2) PUBLIC REVIEW OF RECOMMENDA13 TIONS.—After negotiations with the regulated indus14 try, the Secretary shall— 

15 ‘‘(A) present the recommendations devel16 oped under paragraph (1) to the congressional 

17 committees specified in such paragraph; 

18 ‘‘(B) publish such recommendations in the 

19 Federal Register; 

20 ‘‘(C) provide for a period of 30 calendar 

21 days for the public to provide written comments 

22 on such recommendations; 

23 ‘‘(D) hold a meeting at which the public 

24 may present its views on such recommenda25 tions; and 


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1 ‘‘(E) after consideration of such public 

2 views and comments, revise such recommenda3 tions as necessary. 

4 ‘‘(3) TRANSMITTAL OF RECOMMENDATIONS.— 

5 Not later than January 15, 2023, the Secretary 

6 shall transmit to the Congress the revised rec7 ommendations under paragraph (2), a summary of 

8 the views and comments received under such para9 graph, and any changes made to the recommenda10 tions in response to such views and comments.’’. 

11 Subtitle I—Other Provisions 

12 SEC. 391. PROTECTING ACCESS TO BIOLOGICAL PRODUCTS. 

13 Section 351(k)(7) of the Public Health Service Act 

14 (42 U.S.C. 262(k)(7)) is amended by adding at the end 

15 the following: 

16 ‘‘(D) DEEMED LICENSES.— 

17 ‘‘(i) NO ADDITIONAL EXCLUSIVITY

18 THROUGH DEEMING.—An approved appli19 cation that is deemed to be a license for a 

20 biological product under this section pursu21 ant to section 7002(e)(4) of the Biologics 

22 Price Competition and Innovation Act of 

23 2009 shall not be treated as having been 

24 first licensed under subsection (a) for pur25 poses of subparagraphs (A) and (B). 


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1 ‘‘(ii) APPLICATION OF LIMITATIONS

2 ON EXCLUSIVITY.—Subparagraph (C) shall 

3 apply with respect to a reference product 

4 referred to in such subparagraph that was 

5 the subject of an approved application that 

6 was deemed to be a license pursuant to 

7 section 7002(e)(4) of the Biologics Price 

8 Competition and Innovation Act of 2009. 

9 ‘‘(iii) APPLICABILITY.—The exclu10 sivity periods described in section 527, sec11 tion 505A(b)(1)(A)(ii), and section 

12 505A(c)(1)(A)(ii) of the Federal Food, 

13 Drug, and Cosmetic Act shall continue to 

14 apply to a biological product after an ap15 proved application for the biological prod16 uct is deemed to be a license for the bio17 logical product under subsection (a) pursu18 ant to section 7002(e)(4) of the Biologics 

19 Price Competition and Innovation Act of 

20 2009.’’. 

21 SEC. 392. ORPHAN DRUG CLARIFICATION. 

22 Section 527(c) of the Federal Food, Drug, and Cos23 metic Act (21 U.S.C. 360cc(c)) is amended by adding at 

24 the end the following: 


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1 ‘‘(3) APPLICABILITY.—This subsection applies 

2 to any drug designated under section 526 for which 

3 an application was approved under section 505 of 

4 this Act or licensed under section 351 of the Public 

5 Health Service Act after the date of enactment of 

6 the FDA Reauthorization Act of 2017, regardless of 

7 the date on which such drug was designated under 

8 section 526.’’. 

9 SEC. 393. CONDITIONS OF USE FOR BIOSIMILAR BIOLOGI10 CAL PRODUCTS. 

11 Section 351(k)(2)(A)(iii) of the Public Health Service 

12 Act (42 U.S.C. 262(k)(2)(A)(iii)) is amended— 

13 (1) in subclause (I), by striking ‘‘; and’’ and in14 serting a semicolon; 

15 (2) in subclause (II), by striking the period and 

16 inserting ‘‘; and’’; and 

17 (3) by adding at the end the following: 

18 ‘‘(III) may include information to 

19 show that the conditions of use pre20 scribed, recommended, or suggested in 

21 the labeling proposed for the biological 

22 product have been previously approved 

23 for the reference product.’’. 


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1 SEC. 394. CLARIFYING THE MEANING OF NEW CHEMICAL 

2 ENTITY. 

3 Chapter V of the Federal Food, Drug, and Cosmetic 

4 Act is amended— 

5 (1) in section 505 (21 U.S.C. 355)— 

6 (A) in subsection (c)(3)(E)— 

7 (i) in clause (ii), by striking ‘‘active 

8 ingredient (including any ester or salt of 

9 the active ingredient)’’ and inserting ‘‘ac10 tive moiety (as defined by the Secretary in 

11 section 314.3 of title 21, Code of Federal 

12 Regulations (or any successor regula13 tions))’’; and 

14 (ii) in clause (iii), by striking ‘‘active 

15 ingredient (including any ester or salt of 

16 the active ingredient)’’ and inserting ‘‘ac17 tive moiety (as defined by the Secretary in 

18 section 314.3 of title 21, Code of Federal 

19 Regulations (or any successor regula20 tions))’’; 

21 (B) in subsection (j)(5)(F)— 

22 (i) in clause (ii), by striking ‘‘active 

23 ingredient (including any ester or salt of 

24 the active ingredient)’’ and inserting ‘‘ac25 tive moiety (as defined by the Secretary in 

26 section 314.3 of title 21, Code of Federal 


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1 Regulations (or any successor regula2 tions))’’; and 

3 (ii) in clause (iii), by striking ‘‘active 

4 ingredient (including any ester or salt of 

5 the active ingredient)’’ and inserting ‘‘ac6 tive moiety (as defined by the Secretary in 

7 section 314.3 of title 21, Code of Federal 

8 Regulations (or any successor regula9 tions))’’; 

10 (C) in subsection (l)(2)(A)(i), by striking 

11 ‘‘active ingredient (including any ester or salt of 

12 the active ingredient)’’ and inserting ‘‘active 

13 moiety (as defined by the Secretary in section 

14 314.3 of title 21, Code of Federal Regulations 

15 (or any successor regulations))’’; 

16 (D) in subsection (s), in the matter pre17 ceding paragraph (1), by striking ‘‘active ingre18 dient (including any ester or salt of the active 

19 ingredient)’’ and inserting ‘‘active moiety (as 

20 defined by the Secretary in section 314.3 of 

21 title 21, Code of Federal Regulations (or any 

22 successor regulations))’’; and 

23 (E) in subsection (u)(1), in the matter pre24 ceding subparagraph (A)— 


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1 (i) by striking ‘‘active ingredient (in2 cluding any ester or salt of the active in3 gredient)’’ and inserting ‘‘active moiety (as 

4 defined by the Secretary in section 314.3 

5 of title 21, Code of Federal Regulations (or 

6 any successor regulations))’’; and 

7 (ii) by striking ‘‘same active ingre8 dient’’ and inserting ‘‘same active moiety’’; 

9 (2) in section 512(c)(2)(F) (21 U.S.C. 

10 360b(c)(2)(F))— 

11 (A) in clause (i), by striking ‘‘active ingre12 dient (including any ester or salt of the active 

13 ingredient)’’ and inserting ‘‘active moiety (as 

14 defined by the Secretary in section 314.3 of 

15 title 21, Code of Federal Regulations (or any 

16 successor regulations))’’; 

17 (B) in clause (ii), by striking ‘‘active ingre18 dient (including any ester or salt of the active 

19 ingredient)’’ and inserting ‘‘active moiety (as 

20 defined by the Secretary in section 314.3 of 

21 title 21, Code of Federal Regulations (or any 

22 successor regulations))’’; and 

23 (C) in clause (v), by striking ‘‘active ingre24 dient (including any ester or salt of the active 

25 ingredient)’’ and inserting ‘‘active moiety (as 


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1 defined by the Secretary in section 314.3 of 

2 title 21, Code of Federal Regulations (or any 

3 successor regulations))’’; 

4 (3) in section 524(a)(4)(C) (21 U.S.C. 

5 360n(a)(4)(C)), by striking ‘‘active ingredient (in6 cluding any ester or salt of the active ingredient)’’ 

7 and inserting ‘‘active moiety (as defined by the Sec8 retary in section 314.3 of title 21, Code of Federal 

9 Regulations (or any successor regulations))’’; 

10 (4) in section 529(a)(4)(A)(ii) (21 U.S.C. 

11 360ff(a)(4)(A)(ii)), by striking ‘‘active ingredient 

12 (including any ester or salt of the active ingredient)’’ 

13 and inserting ‘‘active moiety (as defined by the Sec14 retary in section 314.3 of title 21, Code of Federal 

15 Regulations (or any successor regulations))’’; and 

16 (5) in section 565A(a)(4)(D) (21 U.S.C. 

17 360bbb–4a(a)(4)(D)), by striking ‘‘active ingredient 

18 (including any ester or salt of the active ingredient)’’ 

19 and inserting ‘‘active moiety (as defined by the Sec20 retary in section 314.3 of title 21, Code of Federal 

21 Regulations (or any successor regulations))’’. 


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1 TITLE IV—REVENUE 

2 PROVISIONS 

3 SEC. 401. PERMANENT EXTENSION OF REDUCTION IN MED4 ICAL EXPENSE DEDUCTION FLOOR. 

5 (a) IN GENERAL.—Section 213(a) of the Internal 

6 Revenue Code of 1986 is amended by striking ‘‘10 per7 cent’’ and inserting ‘‘7.5 percent’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Section 213 of such Code is amended by 

10 striking subsection (f). 

11 (2) Section 56(b)(1) of such Code is amended 

12 by striking subparagraph (B) and by redesignating 

13 subparagraphs (C), (D), (E), and (F), as subpara14 graphs (B), (C), (D), and (E), respectively. 

15 (c) EFFECTIVE DATE.—The amendment made by 

16 this section shall apply to taxable years ending after De17 cember 31, 2019. 

18 SEC. 402. SAFE HARBOR FOR HIGH DEDUCTIBLE HEALTH 

19 PLANS WITHOUT DEDUCTIBLE FOR INSULIN. 

20 (a) IN GENERAL.—Section 223(c)(2)(C) of the Inter21 nal Revenue Code of 1986 is amended by inserting ‘‘or 

22 for insulin or any device for the delivery of insulin’’ before 

23 the period at the end. 


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

2 this section shall apply to months beginning after the date 

3 of the enactment of this Act. 

4 SEC. 403. INCLUSION OF CERTAIN OVER-THE-COUNTER 

5 MEDICAL PRODUCTS AS QUALIFIED MEDICAL 

6 EXPENSES. 

7 (a) HSAS.—Section 223(d)(2) of the Internal Rev8 enue Code of 1986 is amended— 

9 (1) by striking the last sentence of subpara10 graph (A) and inserting the following: ‘‘For pur11 poses of this subparagraph, amounts paid for men12 strual care products shall be treated as paid for 

13 medical care.’’; and 

14 (2) by adding at the end the following new sub15 paragraph: 

16 ‘‘(D) MENSTRUAL CARE PRODUCT.—For 

17 purposes of this paragraph, the term ‘menstrual 

18 care product’ means a tampon, pad, liner, cup, 

19 sponge, or similar product used by individuals 

20 with respect to menstruation or other genital21 tract secretions.’’. 

22 (b) ARCHER MSAS.—Section 220(d)(2)(A) of such 

23 Code is amended by striking the last sentence and insert24 ing the following: ‘‘For purposes of this subparagraph, 

25 amounts paid for menstrual care products (as defined in 


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1 section 223(d)(2)(D)) shall be treated as paid for medical 

2 care.’’. 

3 (c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS

4 AND HEALTH REIMBURSEMENT ARRANGEMENTS.—Sec5 tion 106 of such Code is amended by striking subsection 

6 (f) and inserting the following new subsection: 

7 ‘‘(f) REIMBURSEMENTS FOR MENSTRUAL CARE

8 PRODUCTS.—For purposes of this section and section 

9 105, expenses incurred for menstrual care products (as 

10 defined in section 223(d)(2)(D)) shall be treated as in11 curred for medical care.’’. 

12 (d) EFFECTIVE DATES.— 

13 (1) DISTRIBUTIONS FROM SAVINGS AC14 COUNTS.—The amendment made by subsections (a) 

15 and (b) shall apply to amounts paid after December 

16 31, 2019. 

17 (2) REIMBURSEMENTS.—The amendment made 

18 by subsection (c) shall apply to expenses incurred 

19 after December 31, 2019. 

20 TITLE V—MISCELLANEOUS 

21 SEC. 501. PAYMENT FOR BIOSIMILAR BIOLOGICAL PROD22 UCTS DURING INITIAL PERIOD. 

23 Section 1847A(c)(4) of the Social Security Act (42 

24 U.S.C. 1395w–3a(c)(4)) is amended— 


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1 (1) in each of subparagraphs (A) and (B), by 

2 redesignating clauses (i) and (ii) as subclauses (I) 

3 and (II), respectively, and moving such subclauses 2 

4 ems to the right; 

5 (2) by redesignating subparagraphs (A) and 

6 (B) as clauses (i) and (ii) and moving such clauses 

7 2 ems to the right; 

8 (3) by striking ‘‘UNAVAILABLE.—In the case’’ 

9 and inserting ‘‘UNAVAILABLE.— 

10 ‘‘(A) IN GENERAL.—Subject to subpara11 graph (B), in the case’’; and 

12 (4) by adding at the end the following new sub13 paragraph: 

14 ‘‘(B) LIMITATION ON PAYMENT AMOUNT

15 FOR BIOSIMILAR BIOLOGICAL PRODUCTS DUR16 ING INITIAL PERIOD.—In the case of a bio17 similar biological product furnished on or after 

18 July 1, 2020, in lieu of applying subparagraph 

19 (A) during the initial period described in such 

20 subparagraph with respect to the biosimilar bio21 logical product, the amount payable under this 

22 section for the biosimilar biological product is 

23 the lesser of the following: 


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1 ‘‘(i) The amount determined under 

2 clause (ii) of such subparagraph for the 

3 biosimilar biological product. 

4 ‘‘(ii) The amount determined under 

5 subsection (b)(1)(B) for the reference bio6 logical product.’’. 

7 SEC. 502. GAO STUDY AND REPORT ON AVERAGE SALES 

8 PRICE. 

9 (a) STUDY.— 

10 (1) IN GENERAL.—The Comptroller General of 

11 the United States (in this section referred to as the 

12 ‘‘Comptroller General’’) shall conduct a study on 

13 spending for applicable drugs under part B of title 

14 XVIII of the Social Security Act. 

15 (2) APPLICABLE DRUGS DEFINED.—In this sec16 tion, the term ‘‘applicable drugs’’ means drugs and 

17 biologicals— 

18 (A) for which reimbursement under such 

19 part B is based on the average sales price of 

20 the drug or biological; and 

21 (B) that account for the largest percentage 

22 of total spending on drugs and biologicals under 

23 such part B (as determined by the Comptroller 

24 General, but in no case less than 25 drugs or 

25 biologicals). 


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1 (3) REQUIREMENTS.—The study under para2 graph (1) shall include an analysis of the following: 

3 (A) The extent to which each applicable 

4 drug is paid for— 

5 (i) under such part B for Medicare 

6 beneficiaries; or 

7 (ii) by private payers in the commer8 cial market. 

9 (B) Any change in Medicare spending or 

10 Medicare beneficiary cost-sharing that would 

11 occur if the average sales price of an applicable 

12 drug was based solely on payments by private 

13 payers in the commercial market. 

14 (C) The extent to which drug manufactur15 ers provide rebates, discounts, or other price 

16 concessions to private payers in the commercial 

17 market for applicable drugs, which the manu18 facturer includes in its average sales price cal19 culation, for— 

20 (i) formulary placement; 

21 (ii) utilization management consider22 ations; or 

23 (iii) other purposes. 


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1 (D) Barriers to drug manufacturers pro2 viding such price concessions for applicable 

3 drugs. 

4 (E) Other areas determined appropriate by 

5 the Comptroller General. 

6 (b) REPORT.—Not later than 2 years after the date 

7 of the enactment of this Act, the Comptroller General shall 

8 submit to Congress a report on the study conducted under 

9 subsection (a), together with recommendations for such 

10 legislation and administrative action as the Secretary de11 termines appropriate. 

12 SEC. 503. REQUIRING PRESCRIPTION DRUG PLANS AND 

13 MA–PD PLANS TO REPORT POTENTIAL 

14 FRAUD, WASTE, AND ABUSE TO THE SEC15 RETARY OF HHS. 

16 Section 1860D–4 of the Social Security Act (42 

17 U.S.C. 1395w–104) is amended by adding at the end the 

18 following new subsection: 

19 ‘‘(p) REPORTING POTENTIAL FRAUD, WASTE, AND

20 ABUSE.—Beginning January 1, 2021, the PDP sponsor 

21 of a prescription drug plan shall report to the Secretary, 

22 as specified by the Secretary— 

23 ‘‘(1) any substantiated or suspicious activities 

24 (as defined by the Secretary) with respect to the 


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1 program under this part as it relates to fraud, 

2 waste, and abuse; and 

3 ‘‘(2) any steps made by the PDP sponsor after 

4 identifying such activities to take corrective ac5 tions.’’. 

6 SEC. 504. ESTABLISHMENT OF PHARMACY QUALITY MEAS7 URES UNDER MEDICARE PART D. 

8 Section 1860D–4(c) of the Social Security Act (42 

9 U.S.C. 1395w–104(c)) is amended by adding at the end 

10 the following new paragraph: 

11 ‘‘(8) APPLICATION OF PHARMACY QUALITY

12 MEASURES.— 

13 ‘‘(A) IN GENERAL.—A PDP sponsor that 

14 implements incentive payments to a pharmacy 

15 or price concessions paid by a pharmacy based 

16 on quality measures shall use measures estab17 lished or approved by the Secretary under sub18 paragraph (B) with respect to payment for cov19 ered part D drugs dispensed by such pharmacy. 

20 ‘‘(B) STANDARD PHARMACY QUALITY

21 MEASURES.—The Secretary shall establish or 

22 approve standard quality measures from a con23 sensus and evidence-based organization for pay24 ments described in subparagraph (A). Such 

25 measures shall focus on patient health outcomes 


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1 and be based on proven criteria measuring 

2 pharmacy performance. 

3 ‘‘(C) EFFECTIVE DATE.—The requirement 

4 under subparagraph (A) shall take effect for 

5 plan years beginning on or after January 1, 

6 2023, or such earlier date specified by the Sec7 retary if the Secretary determines there are suf8 ficient measures established or approved under 

9 subparagraph (B) to meet the requirement 

10 under subparagraph (A).’’. 

11 SEC. 505. IMPROVING COORDINATION BETWEEN THE FOOD 

12 AND DRUG ADMINISTRATION AND THE CEN13 TERS FOR MEDICARE & MEDICAID SERVICES. 

14 (a) IN GENERAL.— 

15 (1) PUBLIC MEETING.— 

16 (A) IN GENERAL.—Not later than 12 

17 months after the date of the enactment of this 

18 Act, the Secretary of Health and Human Serv19 ices (referred to in this section as the ‘‘Sec20 retary’’) shall convene a public meeting for the 

21 purposes of discussing and providing input on 

22 improvements to coordination between the Food 

23 and Drug Administration and the Centers for 

24 Medicare & Medicaid Services in preparing for 

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1 scribed in subsection (c) on the market in the 

2 United States. 

3 (B) ATTENDEES.—The public meeting 

4 shall include— 

5 (i) representatives of relevant Federal 

6 agencies, including representatives from 

7 each of the medical product centers within 

8 the Food and Drug Administration and 

9 representatives from the coding, coverage, 

10 and payment offices within the Centers for 

11 Medicare & Medicaid Services; 

12 (ii) stakeholders with expertise in the 

13 research and development of novel medical 

14 products, including manufacturers of such 

15 products; 

16 (iii) representatives of commercial 

17 health insurance payers; 

18 (iv) stakeholders with expertise in the 

19 administration and use of novel medical 

20 products, including physicians; and 

21 (v) stakeholders representing patients 

22 and with expertise in the utilization of pa23 tient experience data in medical product 

24 development. 


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1 (C) TOPICS.—The public meeting shall in2 clude a discussion of— 

3 (i) the status of the drug and medical 

4 device development pipeline related to the 

5 availability of novel medical products; 

6 (ii) the anticipated expertise necessary 

7 to review the safety and effectiveness of 

8 such products at the Food and Drug Ad9 ministration and current gaps in such ex10 pertise, if any; 

11 (iii) the expertise necessary to make 

12 coding, coverage, and payment decisions 

13 with respect to such products within the 

14 Centers for Medicare & Medicaid Services, 

15 and current gaps in such expertise, if any; 

16 (iv) trends in the differences in the 

17 data necessary to determine the safety and 

18 effectiveness of a novel medical product 

19 and the data necessary to determine 

20 whether a novel medical product meets the 

21 reasonable and necessary requirements for 

22 coverage and payment under title XVIII of 

23 the Social Security Act pursuant to section 

24 1862(a)(1)(A) of such Act (42 U.S.C. 

25 1395y(a)(1)(A)); 


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1 (v) the availability of information for 

2 sponsors of such novel medical products to 

3 meet each of those requirements; and 

4 (vi) the coordination of information 

5 related to significant clinical improvement 

6 over existing therapies for patients between 

7 the Food and Drug Administration and the 

8 Centers for Medicare & Medicaid Services 

9 with respect to novel medical products. 

10 (D) TRADE SECRETS AND CONFIDENTIAL

11 INFORMATION.—No information discussed as a 

12 part of the public meeting under this paragraph 

13 shall be construed as authorizing the Secretary 

14 to disclose any information that is a trade se15 cret or confidential information subject to sec16 tion 552(b)(4) of title 5, United States Code. 

17 (2) IMPROVING TRANSPARENCY OF CRITERIA

18 FOR MEDICARE COVERAGE.— 

19 (A) DRAFT GUIDANCE.—Not later than 18 

20 months after the public meeting under para21 graph (1), the Secretary shall update the final 

22 guidance titled ‘‘National Coverage Determina23 tions with Data Collection as a Condition of 

24 Coverage: Coverage with Evidence Develop25 ment’’ to address any opportunities to improve 


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1 the availability and coordination of information 

2 as described in clauses (iv) through (vi) of para3 graph (1)(C). 

4 (B) FINAL GUIDANCE.—Not later than 12 

5 months after issuing draft guidance under sub6 paragraph (A), the Secretary shall finalize the 

7 updated guidance to address any such opportu8 nities. 

9 (b) REPORT ON CODING, COVERAGE, AND PAYMENT

10 PROCESSES UNDER MEDICARE FOR NOVEL MEDICAL

11 PRODUCTS.—Not later than 12 months after the date of 

12 the enactment of this Act, the Secretary shall publish a 

13 report on the Internet website of the Department of 

14 Health and Human Services regarding processes under 

15 the Medicare program under title XVIII of the Social Se16 curity Act (42 U.S.C. 1395 et seq.) with respect to the 

17 coding, coverage, and payment of novel medical products 

18 described in subsection (c). Such report shall include the 

19 following: 

20 (1) A description of challenges in the coding, 

21 coverage, and payment processes under the Medicare 

22 program for novel medical products. 

23 (2) Recommendations to— 

24 (A) incorporate patient experience data 

25 (such as the impact of a disease or condition on 


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1 the lives of patients and patient treatment pref2 erences) into the coverage and payment proc3 esses within the Centers for Medicare & Med4 icaid Services; 

5 (B) decrease the length of time to make 

6 national and local coverage determinations 

7 under the Medicare program (as those terms 

8 are defined in subparagraph (A) and (B), re9 spectively, of section 1862(l)(6) of the Social 

10 Security Act (42 U.S.C. 1395y(l)(6))); 

11 (C) streamline the coverage process under 

12 the Medicare program and incorporate input 

13 from relevant stakeholders into such coverage 

14 determinations; and 

15 (D) identify potential mechanisms to incor16 porate novel payment designs similar to those 

17 in development in commercial insurance plans 

18 and State plans under title XIX of such Act 

19 (42 U.S.C. 1396 et seq.) into the Medicare pro20 gram. 

21 (c) NOVEL MEDICAL PRODUCTS DESCRIBED.—For 

22 purposes of this section, a novel medical product described 

23 in this subsection is a medical product, including a drug, 

24 biological (including gene and cell therapy), or medical de25 vice, that has been designated as a breakthrough therapy 


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1 under section 506(a) of the Federal Food, Drug, and Cos2 metic Act (21 U.S.C. 356(a)), a breakthrough device 

3 under section 515B of such Act (21 U.S.C. 360e–3), or 

4 a regenerative advanced therapy under section 506(g) of 

5 such Act (21 U.S.C. 356(g)). 

6 SEC. 506. PATIENT CONSULTATION IN MEDICARE NA7 TIONAL AND LOCAL COVERAGE DETERMINA8 TIONS IN ORDER TO MITIGATE BARRIERS TO 

9 INCLUSION OF SUCH PERSPECTIVES. 

10 Section 1862(l) of the Social Security Act (42 U.S.C. 

11 1395y(l)) is amended by adding at the end the following 

12 new paragraph: 

13 ‘‘(7) PATIENT CONSULTATION IN NATIONAL

14 AND LOCAL COVERAGE DETERMINATIONS.—The Sec15 retary may consult with patients and organizations 

16 representing patients in making national and local 

17 coverage determinations.’’. 

18 SEC. 507. MEDPAC REPORT ON SHIFTING COVERAGE OF 

19 CERTAIN MEDICARE PART B DRUGS TO MEDI20 CARE PART D. 

21 (a) STUDY.—The Medicare Payment Advisory Com22 mission (in this section referred to as the ‘‘Commission’’) 

23 shall conduct a study on shifting coverage of certain drugs 

24 and biologicals for which payment is currently made under 

25 part B of title XVIII of the Social Security Act (42 U.S.C. 


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1 1395j et seq.) to part D of such title (42 U.S.C. 1395w– 

2 21 et seq.). Such study shall include an analysis of— 

3 (1) differences in program structures and pay4 ment methods for drugs and biologicals covered 

5 under such parts B and D, including effects of such 

6 a shift on program spending, beneficiary cost-shar7 ing liability, and utilization management techniques 

8 for such drugs and biologicals; and 

9 (2) the feasibility and policy implications of 

10 shifting coverage of drugs and biologicals for which 

11 payment is currently made under such part B to 

12 such part D. 

13 (b) REPORT.— 

14 (1) IN GENERAL.—Not later than June 30, 

15 2021, the Commission shall submit to Congress a re16 port containing the results of the study conducted 

17 under subsection (a). 

18 (2) CONTENTS.—The report under paragraph 

19 (1) shall include information, and recommendations 

20 as the Commission deems appropriate, regarding— 

21 (A) formulary design under such part D; 

22 (B) the ability of the benefit structure 

23 under such part D to control total spending on 

24 drugs and biologicals for which payment is cur25 rently made under such part B; 


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1 (C) changes to the bid process under such 

2 part D, if any, that may be necessary to inte3 grate coverage of such drugs and biologicals 

4 into such part D; 

5 (D) any other changes to the program that 

6 Congress should consider in determining wheth7 er to shift coverage of such drugs and 

8 biologicals from such part B to such part D; 

9 and 

10 (E) the feasibility and policy implications 

11 of creating a methodology to preserve the 

12 healthcare provider’s ability to take title of the 

13 drug, including a methodology under which— 

14 (i) prescription drug plans negotiate 

15 reimbursement rates and other arrange16 ments with drug manufacturers on behalf 

17 of a wholesaler; 

18 (ii) wholesalers purchase the drugs 

19 from the manufacturers at the negotiated 

20 rate and ship them through distributors to 

21 physicians to administer to patients; 

22 (iii) physicians and hospitals purchase 

23 the drug from the wholesaler via the dis24 tributor; 


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1 (iv) after administering the drug, the 

2 physician submits a claim to the MAC for 

3 their drug administration fee; 

4 (v) to be reimbursed for the purchase 

5 of the drug from the distributor, the physi6 cian furnishes the claim for the drug itself 

7 to the wholesaler and the wholesaler would 

8 refund the cost of the drug to the physi9 cian; and 

10 (vi) the wholesaler passes this claim to 

11 the PDP to receive reimbursement. 

12 SEC. 508. REQUIREMENT THAT DIRECT-TO-CONSUMER AD13 VERTISEMENTS FOR PRESCRIPTION DRUGS 

14 AND BIOLOGICAL PRODUCTS INCLUDE 

15 TRUTHFUL AND NON-MISLEADING PRICING 

16 INFORMATION. 

17 Part A of title XI of the Social Security Act is 

18 amended by adding at the end the following new section: 

19 ‘‘SEC. 1150C. REQUIREMENT THAT DIRECT-TO-CONSUMER 

20 ADVERTISEMENTS FOR PRESCRIPTION 

21 DRUGS AND BIOLOGICAL PRODUCTS IN22 CLUDE TRUTHFUL AND NON-MISLEADING 

23 PRICING INFORMATION. 

24 ‘‘(a) IN GENERAL.—The Secretary shall require that 

25 each direct-to-consumer advertisement for a prescription 


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1 drug or biological product for which payment is available 

2 under title XVIII or XIX includes an appropriate disclo3 sure of truthful and non-misleading pricing information 

4 with respect to the drug or product. 

5 ‘‘(b) DETERMINATION BY CMS.—The Secretary, act6 ing through the Administrator of the Centers for Medicare 

7 & Medicaid Services, shall determine the components of 

8 the requirement under subsection (a), such as the forms 

9 of advertising, the manner of disclosure, the price point 

10 listing, and the price information for disclosure.’’. 

11 SEC. 509. CHIEF PHARMACEUTICAL NEGOTIATOR AT THE 

12 OFFICE OF THE UNITED STATES TRADE REP13 RESENTATIVE. 

14 (a) IN GENERAL.—Section 141 of the Trade Act of 

15 1974 (19 U.S.C. 2171) is amended— 

16 (1) in subsection (b)(2)— 

17 (A) by striking ‘‘and one Chief Innovation 

18 and Intellectual Property Negotiator’’ and in19 serting ‘‘one Chief Innovation and Intellectual 

20 Property Negotiator, and one Chief Pharma21 ceutical Negotiator’’; 

22 (B) by striking ‘‘or the Chief Innovation 

23 and Intellectual Property Negotiator’’ and in24 serting ‘‘the Chief Innovation and Intellectual 


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1 Property Negotiator, or the Chief Pharma2 ceutical Negotiator’’; and 

3 (C) by striking ‘‘and the Chief Innovation 

4 and Intellectual Property Negotiator’’ and in5 serting ‘‘the Chief Innovation and Intellectual 

6 Property Negotiator, and the Chief Pharma7 ceutical Negotiator’’; and 

8 (2) in subsection (c), by adding at the end the 

9 following new paragraph: 

10 ‘‘(7) The principal function of the Chief Phar11 maceutical Negotiator shall be to conduct trade ne12 gotiations and to enforce trade agreements relating 

13 to United States pharmaceutical products and serv14 ices. The Chief Pharmaceutical Negotiator shall be 

15 a vigorous advocate on behalf of United States phar16 maceutical interests. The Chief Pharmaceutical Ne17 gotiator shall perform such other functions as the 

18 United States Trade Representative may direct.’’. 

19 (b) COMPENSATION.—Section 5314 of title 5, United 

20 States Code, is amended by striking ‘‘Chief Innovation 

21 and Intellectual Property Negotiator, Office of the United 

22 States Trade Representative.’’ and inserting the following: 

23 ‘‘Chief Innovation and Intellectual Property Ne24 gotiator, Office of the United States Trade Rep25 resentative. 


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1 ‘‘Chief Pharmaceutical Negotiator, Office of the 

2 United States Trade Representative.’’. 

3 (c) REPORT REQUIRED.—Not later than the date 

4 that is one year after the appointment of the first Chief 

5 Pharmaceutical Negotiator pursuant to paragraph (2) of 

6 section 141(b) of the Trade Act of 1974, as amended by 

7 subsection (a), and annually thereafter, the United States 

8 Trade Representative shall submit to the Committee on 

9 Finance of the Senate and the Committee on Ways and 

10 Means of the House of Representatives a report describing 

11 in detail— 

12 (1) enforcement actions taken by the United 

13 States Trade Representative during the one-year pe14 riod preceding the submission of the report to en15 sure the protection of United States pharmaceutical 

16 products and services; and 

17 (2) other actions taken by the United States 

18 Trade Representative to advance United States 

19 pharmaceutical products and services. 

20 SEC. 510. WAIVING MEDICARE COINSURANCE FOR 

21 COLORECTAL CANCER SCREENING TESTS. 

22 Section 1833(a) of the Social Security Act (42 U.S.C. 

23 1395l(a)) is amended— 

24 (1) by moving the flush text following para25 graph (9) 2 ems to the left; and 


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1 (2) by adding at the end of such flush text the 

2 following new sentence: ‘‘For items and services fur3 nished on or after January 1, 2021, paragraph 

4 (1)(Y) shall apply with respect to a colorectal cancer 

5 screening test regardless of the code that is billed 

6 for the establishment of a diagnosis as a result of 

7 the test, or for the removal of tissue or other matter 

8 or other procedure that is furnished in connection 

9 with, as a result of, and in the same clinical encoun10 ter as the screening test.’’. 

Æ 


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