I 

116TH CONGRESS 

1ST SESSION H. R. 4619 

To amend title XVIII of the Social Security Act to require drug manufacturers to pay a Medicare part D rebate for certain drugs if the price 

of such drugs increases faster than inflation. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 8, 2019 

Ms. SCHAKOWSKY (for herself, Mr. HIGGINS of New York, and Ms. WILD) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and 

Means, 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 amend title XVIII of the Social Security Act to require 

drug manufacturers to pay a Medicare part D rebate 

for certain drugs if the price of such drugs increases 

faster than inflation. 

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 ‘‘Pharmaceutical Re5 bates for Excessive Pricing Above Inflation Act’’ or the 

6 ‘‘Pharmaceutical REPAI Act’’. 


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1 SEC. 2. MEDICARE PART D PRESCRIPTION DRUG INFLA2 TION REBATE BY MANUFACTURERS. 

3 Part D of title XVIII of the Social Security Act is 

4 amended by inserting after section 1860D–14A (42 

5 U.S.C. 1395w–114a) the following new section: 

6 ‘‘SEC. 1860D–14B. MANUFACTURER REBATE FOR CERTAIN 

7 DRUGS WITH PRICES INCREASING FASTER 

8 THAN INFLATION. 

9 ‘‘(a) IN GENERAL.—Subject to the provisions of this 

10 section, in order for coverage to be available under this 

11 part for a part D rebatable drug of a manufacturer dis12 pensed during an applicable year, the manufacturer must 

13 have entered into and have in effect an agreement de14 scribed in subsection (b). For purposes of this section the 

15 term ‘applicable year’ means a year beginning with 2022. 

16 ‘‘(b) AGREEMENTS.— 

17 ‘‘(1) TERMS OF AGREEMENT.—An agreement 

18 described in this subsection, with respect to a manu19 facturer of a part D rebatable drug, is an agreement 

20 under which the following applies: 

21 ‘‘(A) SECRETARIAL PROVISION OF INFOR22 MATION.—Not later than 9 months after the 

23 end of each applicable year with respect to 

24 which the agreement is in effect, the Secretary, 

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1 turer, reports to the manufacturer the following 

2 for such year: 

3 ‘‘(i) Information on the total units (as 

4 defined in subsection (g)(2)) dispensed for 

5 each dosage form and strength with re6 spect to such part D rebatable drug and 

7 year. 

8 ‘‘(ii) Information on the amount (if 

9 any) of the excess average manufacturer 

10 price increase described in subsection 

11 (c)(1)(B) for each dosage form and 

12 strength with respect to such drug and 

13 year. 

14 ‘‘(iii) The rebate amount specified 

15 under subsection (c) for each dosage form 

16 and strength with respect to such drug and 

17 year. 

18 ‘‘(B) MANUFACTURER REQUIREMENTS.— 

19 For each applicable year with respect to which 

20 the agreement is in effect, the manufacturer of 

21 the part D rebatable drug, for each dosage 

22 form and strength with respect to such drug, 

23 not later than 30 days after the date of receipt 

24 from the Secretary of the information described 

25 in subparagraph (A) for such year, provides to 


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1 the Secretary a rebate that is equal to the 

2 amount specified in subsection (c) for such dos3 age form and strength with respect to such 

4 drug for such year. 

5 ‘‘(2) LENGTH OF AGREEMENT.— 

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

7 this section, with respect to a part D rebatable 

8 drug, shall be effective for an initial period of 

9 not less than one year and shall be automati10 cally renewed for a period of not less than one 

11 year unless terminated under subparagraph 

12 (B). 

13 ‘‘(B) TERMINATION.— 

14 ‘‘(i) BY SECRETARY.—The Secretary 

15 may provide for termination of an agree16 ment under this section for violation of the 

17 requirements of the agreement or other 

18 good cause shown. Such termination shall 

19 not be effective earlier than 60 days after 

20 the date of notice of such termination. The 

21 Secretary shall provide, upon request, a 

22 manufacturer with a hearing concerning 

23 such a termination, but such hearing shall 

24 not delay the effective date of the termi25 nation. 


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1 ‘‘(ii) BY A MANUFACTURER.—A man2 ufacturer may terminate an agreement 

3 under this section for any reason. Any 

4 such termination shall not be effective 

5 until the year beginning at least 60 days 

6 after the date the manufacturer provides 

7 notice to the Secretary. 

8 ‘‘(C) EFFECTIVENESS OF TERMINATION.— 

9 Any termination under this paragraph shall not 

10 affect rebates due under the agreement under 

11 this section before the effective date of its ter12 mination. 

13 ‘‘(D) DELAY BEFORE REENTRY.—In the 

14 case of any agreement under this section with 

15 a manufacturer which is terminated in a plan 

16 year, another such agreement with the manu17 facturer (or a successor manufacturer) may not 

18 be entered into before the subsequent plan year, 

19 unless the Secretary finds good cause for an 

20 earlier reinstatement of such an agreement. 

21 ‘‘(3) INFORMATION.—For purposes of carrying 

22 out this section, the Secretary shall use information 

23 submitted by manufacturers under section 

24 1927(b)(3). 

25 ‘‘(c) REBATE AMOUNT.— 


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1 ‘‘(1) IN GENERAL.—For purposes of this sec2 tion, the amount specified in this subsection for a 

3 dosage form and strength with respect to a part D 

4 rebatable drug and applicable year is, subject to sub5 paragraphs (B) and (C) of paragraph (3), the 

6 amount equal to the product of— 

7 ‘‘(A) the total average number of units 

8 weighted by, and dispensed for, such dosage 

9 form and strength with respect to such part D 

10 rebatable drug and year; and 

11 ‘‘(B) the amount (if any) by which— 

12 ‘‘(i) the average manufacturer price 

13 (as defined in subsection (g)) paid for such 

14 dosage form and strength with respect to 

15 such part D rebatable drug during the 

16 year; exceeds 

17 ‘‘(ii) the inflation-adjusted payment 

18 amount determined under paragraph (2) 

19 for such dosage form and strength with re20 spect to such part D rebatable drug during 

21 the year. 

22 ‘‘(2) DETERMINATION OF INFLATION-ADJUSTED

23 PAYMENT AMOUNT.—The inflation-adjusted payment 

24 amount determined under this paragraph for a dos25 age form and strength with respect to a part D 


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1 rebatable drug for an applicable year, subject to sub2 paragraphs (A) and (D) of paragraph (3), is— 

3 ‘‘(A) the average manufacturer price paid 

4 for such dosage form and strength with respect 

5 to such drug in the payment amount bench6 mark year (as defined in subsection (g)(3)); in7 creased by 

8 ‘‘(B) the percentage by which the rebate 

9 period CPI–U (as defined in subsection (g)(5)) 

10 for the applicable year exceeds the benchmark 

11 period CPI–U (as defined in subsection (g)(4)). 

12 ‘‘(3) SPECIAL TREATMENT OF CERTAIN DRUGS

13 AND EXEMPTION.— 

14 ‘‘(A) SUBSEQUENTLY APPROVED DRUGS.— 

15 In the case of a part D rebatable drug first ap16 proved by the Food and Drug Administration 

17 after January 1, 2016, subparagraph (A) of 

18 paragraph (2) shall be applied as if the term 

19 ‘payment amount benchmark year’ were defined 

20 under subsection (g)(3) as the first year begin21 ning after the day on which the drug was first 

22 marketed and subparagraph (B) of paragraph 

23 (2) shall be applied as if the term ‘benchmark 

24 period CPI–U’ were defined under subsection 

25 (g)(4) as if the reference to ‘January 2016’ 


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1 under such subsection were a reference to ‘Jan2 uary of the first year beginning after the date 

3 on which the drug was first marketed by any 

4 manufacturer’. 

5 ‘‘(B) EXEMPTION FOR SHORTAGES.—The 

6 Secretary may reduce or waive the rebate under 

7 paragraph (1) with respect to a part D rebata8 ble drug in the case of a shortage of such drug 

9 or other exigent circumstances, as determined 

10 by the Secretary. 

11 ‘‘(C) TREATMENT OF NEW FORMULA12 TIONS.— 

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

14 part D rebatable drug that is a line exten15 sion of a single source drug or an inno16 vator multiple source drug that is an oral 

17 solid dosage form, the Secretary shall es18 tablish a formula for determining the 

19 amount specified in this subsection with 

20 respect to such part D rebatable drug and 

21 an applicable year with consideration of 

22 the single source drug or an innovator 

23 multiple source drug. 

24 ‘‘(ii) LINE EXTENSION DEFINED.—In 

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1 sion’ means, with respect to a part D reba2 table drug, a new formulation of the drug 

3 (as determined by the Secretary), such as 

4 an extended release formulation, but does 

5 not include an abuse-deterrent formulation 

6 of the drug (as determined by the Sec7 retary), regardless of whether such abuse8 deterrent formulation is an extended re9 lease formulation. 

10 ‘‘(d) REBATE DEPOSITS.—Amounts paid as rebates 

11 under subsection (c) shall be deposited into the Medicare 

12 Prescription Drug Account in the Federal Supplementary 

13 Medical Insurance Trust Fund established under section 

14 1841. 

15 ‘‘(e) CIVIL MONEY PENALTY.—In the case of a man16 ufacturer of a part D rebatable drug with an agreement 

17 in effect under this section who has failed to comply with 

18 the terms of the agreement under subsection (b)(1)(B) 

19 with respect to such drug for an applicable year, the Sec20 retary may impose a civil money penalty on such manufac21 turer in an amount equal to 125 percent of the amount 

22 specified in subsection (c) for such drug for such year. 

23 The provisions of section 1128A (other than subsections 

24 (a) (with respect to amounts of penalties or additional as25 sessments) and (b)) shall apply to a civil money penalty 


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1 under this subsection in the same manner as such provi2 sions apply to a penalty or proceeding under section 

3 1128A(a). 

4 ‘‘(f) JUDICIAL REVIEW.—There shall be no judicial 

5 review of the following: 

6 ‘‘(1) The determination of units under this sec7 tion. 

8 ‘‘(2) The determination of whether a drug is a 

9 part D rebatable drug under this section. 

10 ‘‘(3) The calculation of the rebate amount 

11 under this section. 

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

13 ‘‘(1) PART D REBATABLE DRUG DEFINED.— 

14 ‘‘(A) IN GENERAL.—The term ‘part D 

15 rebatable drug’ means a drug or biological that 

16 would (without application of this section) be a 

17 covered part D drug, except such term shall, 

18 with respect to an applicable year, not include 

19 such a drug or biological if the average total 

20 cost under a prescription drug plan under this 

21 part or MA–PD plan under part C for such 

22 year per individual who uses such a drug or bi23 ological, as determined by the Secretary, are 

24 less than, subject to subparagraph (B), $100, 

25 as determined by the Secretary using the most 


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1 recent data available or, if data is not available, 

2 as estimated by the Secretary. 

3 ‘‘(B) INCREASE.—The dollar amount ap4 plied under subparagraph (A)— 

5 ‘‘(i) for 2023, shall be the dollar 

6 amount specified under such subparagraph 

7 for 2022, increased by the percentage in8 crease in the consumer price index for all 

9 urban consumers (United States city aver10 age) as of January of 2022; and 

11 ‘‘(ii) for a subsequent year, shall be 

12 the dollar amount specified in this sub13 paragraph (or subparagraph (A)) for the 

14 previous year, increased by the percentage 

15 increase in the consumer price index for all 

16 urban consumers (United States city aver17 age) as of January of the previous year. 

18 Any dollar amount specified under this sub19 paragraph that is not a multiple of $10 shall be 

20 rounded to the nearest multiple of $10. 

21 ‘‘(2) UNIT DEFINED.—The term ‘unit’ means, 

22 with respect to a part D rebatable drug, the lowest 

23 identifiable quantity (such as a capsule or tablet, 

24 milligram of molecules, or grams) of the part D 

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1 rolled under a prescription drug plan under this part 

2 or an MA–PD plan under part C. 

3 ‘‘(3) PAYMENT AMOUNT BENCHMARK YEAR.— 

4 The term ‘payment amount benchmark year’ means 

5 the year beginning January 1, 2016. 

6 ‘‘(4) BENCHMARK PERIOD CPI–U.—The term 

7 ‘benchmark period CPI–U’ means the consumer 

8 price index for all urban consumers (United States 

9 city average) for January 2016. 

10 ‘‘(5) REBATE PERIOD CPI–U.—The term ‘rebate 

11 period CPI–U’ means, with respect to an applicable 

12 year, the consumer price index for all urban con13 sumers (United States city average) for January of 

14 such year. 

15 ‘‘(6) AVERAGE MANUFACTURER PRICE.—The 

16 term ‘average manufacturer price’ has the meaning, 

17 with respect to a part D rebatable drug of a manu18 facturer for an applicable year, given such term in 

19 section 1927(k)(1), with respect to a covered out20 patient drug of a manufacturer for a rebate period 

21 under section 1927. For purposes of applying the 

22 previous sentence, with respect to a part D rebatable 

23 drug of a manufacturer and an applicable year, the 

24 Secretary shall use the information with respect to 

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1 ported by the manufacturer under section 

2 1927(b)(3) with respect to each of the quarters in 

3 the applicable year and calculate an annual average 

4 manufacturer price for such applicable year as the 

5 average of such average manufacturer prices for 

6 each such quarter, weighted by units of such drug 

7 sold or dispensed with respect to such applicable 

8 year.’’. 

Æ 


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