I 

116TH CONGRESS 

1ST SESSION H. R. 2296 

To require reporting regarding certain drug price increases, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 12, 2019 

Ms. SCHAKOWSKY (for herself and Mr. ROONEY of Florida) introduced the 

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

A BILL 

To require reporting regarding certain drug price increases, 

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 ‘‘Fair Accountability 

5 and Innovative Research Drug Pricing Act of 2019’’ or 

6 the ‘‘FAIR Drug Pricing Act of 2019’’. 


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1 SEC. 2. REPORTING ON JUSTIFICATION FOR DRUG PRICE 

2 INCREASES. 

3 Title III of the Public Health Service Act (42 U.S.C. 

4 241 et seq.) is amended by adding at the end the fol5 lowing: 

6 ‘‘PART W—DRUG PRICE REPORTING; DRUG 

7 VALUE FUND 

8 ‘‘SEC. 399OO. REPORTING ON JUSTIFICATION FOR DRUG 

9 PRICE INCREASES. 

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

11 ‘‘(1) MANUFACTURER.—The term ‘manufac12 turer’ means the person— 

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

14 approved under section 505 of the Federal 

15 Food, Drug, and Cosmetic Act or the license 

16 issued under section 351 of the Public Health 

17 Service Act; or 

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

19 price for the drug. 

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

21 drug’ means any drug that is approved under sub22 section (c) or (j) of section 505 of the Federal Food, 

23 Drug, and Cosmetic Act or licensed under subsection 

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

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

26 of $100 or more per month supply or per a 


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1 course of treatment that lasts less than a 

2 month and is— 

3 ‘‘(i)(I) subject to section 503(b)(1) of 

4 the Federal Food, Drug, and Cosmetic 

5 Act; or 

6 ‘‘(II) commonly administered by hos7 pitals (as determined by the Secretary); 

8 ‘‘(ii) not designated as a drug for a 

9 rare disease or condition under section 526 

10 of the Federal Food, Drug, and Cosmetic 

11 Act; and 

12 ‘‘(iii) not designated by the Secretary 

13 as a vaccine; and 

14 ‘‘(B) for which, during the previous cal15 endar year, at least 1 dollar of the total amount 

16 of sales were for individuals enrolled under the 

17 Medicare program under title XVIII of the So18 cial Security Act (42 U.S.C. 1395 et seq.) or 

19 under a State Medicaid plan under title XIX of 

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

21 waiver of such plan. 

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

23 term ‘wholesale acquisition cost’ has the meaning 

24 given that term in section 1847A(c)(6)(B) of the So25 cial Security Act (42 U.S.C. 1395w–3a(c)(6)(B)). 


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1 ‘‘(b) REPORT.— 

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

3 a qualifying drug shall submit a report to the Sec4 retary for each price increase of a qualifying drug 

5 that will result in an increase in the wholesale acqui6 sition cost of that drug that is equal to— 

7 ‘‘(A) 10 percent or more over a 12-month 

8 period; or 

9 ‘‘(B) 25 percent or more over a 36-month 

10 period. 

11 ‘‘(2) REPORT DEADLINE.—Each report de12 scribed in paragraph (1) shall be submitted to the 

13 Secretary not later than 30 days prior to the 

14 planned effective date of such price increase. 

15 ‘‘(c) CONTENTS.—A report under subsection (b) 

16 shall, at a minimum, include— 

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

18 ‘‘(A) the percentage by which the manufac19 turer will raise the wholesale acquisition cost of 

20 the drug on the planned effective date of such 

21 price increase; 

22 ‘‘(B) a justification for, and description of, 

23 each manufacturer’s price increase that will 

24 occur during the 12-month period described in 


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1 subsection (b)(1)(A) or the 36-month period de2 scribed in subsection (b)(1)(B), as applicable; 

3 ‘‘(C) the identity of the initial developer of 

4 the drug; 

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

6 manufacturer’s price increases for the drug 

7 since the approval of the application for the 

8 drug under section 505 of the Federal Food, 

9 Drug, and Cosmetic Act or the issuance of the 

10 license for the drug under section 351, or since 

11 the manufacturer acquired such approved appli12 cation or license; 

13 ‘‘(E) the current list price of the drug; 

14 ‘‘(F) the total expenditures of the manu15 facturer on— 

16 ‘‘(i) materials and manufacturing for 

17 such drug; and 

18 ‘‘(ii) acquiring patents and licensing 

19 for such drug; 

20 ‘‘(G) the percentage of total expenditures 

21 of the manufacturer on research and develop22 ment for such drug that was derived from Fed23 eral funds; 


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1 ‘‘(H) the total expenditures of the manu2 facturer on research and development for such 

3 drug that is used for— 

4 ‘‘(i) basic and preclinical research; 

5 ‘‘(ii) clinical research; 

6 ‘‘(iii) new drug development; 

7 ‘‘(iv) pursuing new or expanded indi8 cations for such drug through supple9 mental applications under section 505 of 

10 the Federal Food, Drug, and Cosmetic Act 

11 or section 351 of the Public Health Service 

12 Act; and 

13 ‘‘(v) carrying out postmarket require14 ments related to such drug, including those 

15 under section 505(o)(3) of the Federal 

16 Food, Drug, and Cosmetic Act; 

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

18 generated from the qualifying drug for each cal19 endar year since the approval of the application 

20 for the drug under section 505 of the Federal 

21 Food, Drug, and Cosmetic Act or the issuance 

22 of the license for the drug under section 351, 

23 or since the manufacturer acquired such ap24 proved application or license; and 


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1 ‘‘(J) the total costs associated with mar2 keting and advertising for the qualifying drug; 

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

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

5 of the manufacturer for each of the 12- and 36- 

6 month periods preceding the submission of the 

7 report; 

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

9 used by the manufacturer to determine execu10 tive compensation for each of the 12- and 36- 

11 month periods preceding the submission of the 

12 report; and 

13 ‘‘(C) any additional information the manu14 facturer chooses to provide related to drug pric15 ing decisions, such as total expenditures on— 

16 ‘‘(i) drug research and development; 

17 or 

18 ‘‘(ii) clinical trials on drugs that failed 

19 to receive approval by the Food and Drug 

20 Administration; and 

21 ‘‘(3) such other related information as the Sec22 retary considers appropriate. 

23 ‘‘(d) CIVIL PENALTY.—Any manufacturer of a quali24 fying drug that fails to submit a report for the drug as 


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1 required by this section shall be subject to a civil penalty 

2 of $100,000 for each day on which the violation continues. 

3 ‘‘(e) PUBLIC POSTING.— 

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

5 not later than 30 days after the submission of a re6 port under subsection (b), the Secretary shall post 

7 the report on the public website of the Department 

8 of Health and Human Services. 

9 ‘‘(2) FORMAT.—In developing the format of 

10 such report for public posting, the Secretary shall 

11 consult stakeholders, including beneficiary groups, 

12 and shall seek feedback on the content and format 

13 from consumer advocates and readability experts to 

14 ensure such public reports are user-friendly to the 

15 public and are written in plain language that con16 sumers can readily understand. 

17 ‘‘(3) TRADE SECRETS AND CONFIDENTIAL IN18 FORMATION.—In carrying out this section, the Sec19 retary shall enforce applicable law concerning the 

20 protection of confidential commercial information 

21 and trade secrets. 

22 ‘‘SEC. 399OO–1. USE OF CIVIL PENALTY AMOUNTS. 

23 ‘‘The Secretary shall, without further appropriation, 

24 collect civil penalties under section 399OO and use the 

25 funds derived from such civil penalties, in addition to any 


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1 other amounts available to the Secretary, to carry out ac2 tivities described in this part and to improve consumer and 

3 provider information about drug value and drug price 

4 transparency. 

5 ‘‘SEC. 399OO–2. ANNUAL REPORT TO CONGRESS. 

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

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

8 website of the Department of Health and Human Services 

9 in a way that is easy to use and understand, an annual 

10 report— 

11 ‘‘(1) summarizing the information reported pur12 suant to section 399OO; and 

13 ‘‘(2) including copies of the reports and sup14 porting detailed economic analyses submitted pursu15 ant to such section. 

16 ‘‘(b) TRADE SECRETS AND CONFIDENTIAL INFORMA17 TION.—In carrying out this section, the Secretary shall 

18 enforce applicable law concerning the protection of con19 fidential commercial information and trade secrets.’’. 

Æ 


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