I 

116TH CONGRESS 

1ST SESSION H. R. 465 

To significantly lower prescription drug prices for patients in the United 

States by ending government-granted monopolies for manufacturers who 

charge drug prices that are higher than the median prices at which 

the drugs are available in other countries. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 10, 2019 

Mr. KHANNA (for himself, Mr. WELCH, Mr. CUMMINGS, Ms. OCASIO-CORTEZ, 

Ms. SCHAKOWSKY, Mr. POCAN, Ms. OMAR, Ms. DELAURO, Mr. NEGUSE, 

Ms. LEE of California, Ms. TLAIB, Ms. PRESSLEY, Ms. GABBARD, Mr. 

DEFAZIO, and Ms. JAYAPAL) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to 

the Committee on the Judiciary, 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 significantly lower prescription drug prices for patients 

in the United States by ending government-granted monopolies for manufacturers who charge drug prices that 

are higher than the median prices at which the drugs 

are available in other countries. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Prescription Drug 

3 Price Relief Act of 2019’’. 

4 SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED DRUGS. 

5 (a) IN GENERAL.—The Secretary, not later than 1 

6 year after the date of enactment of this Act, shall establish 

7 a process to conduct a review of all brand name drugs, 

8 not less frequently than once per calendar year, under 

9 which the Secretary determines under subsection (b) 

10 whether the price of each such drug is excessive. 

11 (b) EXCESSIVE PRICE DETERMINATIONS.— 

12 (1) INTERNATIONAL REFERENCE PRICE.— 

13 (A) IN GENERAL.—The Secretary shall de14 termine that any brand name drug for which 

15 the domestic average manufacturing price ex16 ceeds the median price charged for such drug in 

17 the 5 reference countries to have an excessive 

18 price. In assessing the extent to which the price 

19 is excessive, the Secretary shall consider the 

20 factors described in paragraph (2). 

21 (B) REFERENCE COUNTRIES.—In this Act, 

22 the term ‘‘reference countries’’ means Canada, 

23 the United Kingdom, Germany, France, and 

24 Japan. 

25 (C) REQUIREMENT WITH RESPECT TO

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1 TRY INFORMATION IS NOT AVAILABLE.—The 

2 Secretary shall make a determination under 

3 paragraph (1) for every brand name drug for 

4 which pricing information is available for at 

5 least 3 of the 5 reference countries. 

6 (2) DETERMINATIONS BASED ON OTHER FAC7 TORS.—With respect to any brand name drug that 

8 is not determined to have an excessive price by oper9 ation of paragraph (1) (including any drug for which 

10 there is insufficient data to make such a determina11 tion under such paragraph), the Secretary shall de12 termine that such drug has an excessive price if the 

13 price of the drug is higher than reasonable taking 

14 into account the following factors: 

15 (A) The size of the affected patient popu16 lation. 

17 (B) The value of the drug to patients, in18 cluding the impact of the price on access to the 

19 drug and the relationship of the price of the 

20 drug to its therapeutic health benefits. 

21 (C) The risk adjusted value of Federal 

22 Government subsidies and investments related 

23 to the drug. 

24 (D) The costs associated with development 

25 of the drug. 


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1 (E) Whether the drug provided a signifi2 cant improvement in health outcomes, com3 pared to other therapies available at the time of 

4 its approval. 

5 (F) The cumulative global revenues gen6 erated by the drug. 

7 (G) Whether the domestic average manu8 facturer price of the drug increased during any 

9 annual quarter by a percentage that is more 

10 than the percentage increase in the consumer 

11 price index for all urban consumers for the re12 spective annual quarter. 

13 (H) Other factors the Secretary determines 

14 appropriate. 

15 (c) PETITION FOR DETERMINATION.— 

16 (1) IN GENERAL.—Any person may petition the 

17 Secretary, in accordance with section 553(e) of title 

18 5, United States Code, to make an excessive drug 

19 price determination for an applicable drug under 

20 subsection (b)(2). Not later than 90 days after the 

21 date of receipt of such a petition, subject to para22 graph (2), the Secretary shall— 

23 (A) make a determination under subsection 

24 (b)(2) regarding such drug; or 


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1 (B)(i) decline to make such a determina2 tion; and 

3 (ii) make public the reasons why the Sec4 retary has declined to make such a determina5 tion. 

6 (2) EXCEPTION.—The Secretary shall not make 

7 a determination under subsection (b)(2) for a drug 

8 in response to a petition under this section more fre9 quently than once per calendar year. 

10 (3) PUBLIC AVAILABILITY.—The Secretary 

11 shall make any petitions submitted under this sub12 section, together with any documentation related to 

13 the petitions and the Secretary’s determinations on 

14 such petitions and rationale for such determinations, 

15 publicly available, including by posting such informa16 tion on the database under section 5. 

17 SEC. 3. ENDING GOVERNMENT-GRANTED MONOPOLIES FOR 

18 EXCESSIVELY PRICED DRUGS. 

19 (a) EXCESSIVE DRUG PRICE AUTHORITY.—With re20 spect to any brand name drug, if the Secretary determines 

21 under section 2 that the price of the drug is excessive, 

22 the Secretary— 

23 (1) shall waive or void any government-granted 

24 exclusivities with respect to such drug, effective on 


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1 the date that the excessive price determination under 

2 section 2 is made for such drug; and 

3 (2) shall grant open, non-exclusive licenses al4 lowing any person to make, use, offer to sell or sell, 

5 or import into the United States such drug, and to 

6 rely upon the regulatory test data of such drug, in 

7 accordance with section 4. 

8 (b) EXPEDITED REVIEW.—The Secretary shall 

9 prioritize the review of, and act within 8 months of the 

10 date of the submission of a generic drug application or 

11 a biosimilar biological product application if such applica12 tion references a drug licensed under subsection (a)(2). 

13 (c) CIVIL ACTIONS.—If the Secretary determines that 

14 the manufacturer of an excessively priced drug (as deter15 mined under section 2(a)) has increased the price of such 

16 drug during the period beginning on the date on which 

17 such price determination is made and ending on the date 

18 on which an entity begins manufacturing the drug under 

19 an open, non-exclusive license under subsection (a)(2), the 

20 Secretary may file a civil action in the United States dis21 trict court for the district in which the manufacturer is 

22 located, or in the United States district court for the Dis23 trict of Columbia, to recover damages in an amount equal 

24 to not less than the total amount of revenue derived by 

25 the manufacturer as a result of any such price increase 


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1 during such period. In actions brought under this sub2 section, the district courts shall have jurisdiction to grant 

3 all appropriate relief including, but not limited to, injunc4 tive relief and compensatory damages. 

5 SEC. 4. EXCESSIVE DRUG PRICE LICENSE. 

6 (a) REASONABLE ROYALTY.— 

7 (1) IN GENERAL.—An entity accepting an open, 

8 non-exclusive license under section 3(a)(2) shall pay 

9 a reasonable royalty to the holder of a patent that 

10 claims the drug or that claims a use of the drug or 

11 to the holder of an application approved under sub12 section 505(c) of the Federal Food, Drug, and Cos13 metic Act or section 351(a) of the Public Health 

14 Service Act for which any government-granted exclu15 sivity with respect to the drug was terminated under 

16 section 5(a)(1). 

17 (2) ROYALTY RATE.—Such royalty rate shall 

18 be— 

19 (A) a percentage of sales, where the per20 centage rate is no higher than the average roy21 alty rate estimated from the data provided by 

22 the Internal Revenue Service for pharma23 ceutical manufacturer Federal income tax re24 turns; or 


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1 (B) an amount as determined by the Sec2 retary, taking into account— 

3 (i) the value of the drug to patients; 

4 (ii) the size of the affected patient 

5 population; 

6 (iii) the risk adjusted value of the 

7 Federal Government subsidies and invest8 ments related to the drug; 

9 (iv) whether the drug provided a sig10 nificant improvement in health outcomes, 

11 compared to other therapies available at 

12 the time of the approval; 

13 (v) the extent to which the brand 

14 name drug manufacturer has recovered 

15 risk adjusted investments related to the 

16 drug, including the investments related to 

17 the invention, regulatory test data and any 

18 other relevant research and development 

19 costs; and 

20 (vi) any other information the Sec21 retary determines appropriate. 

22 (b) REQUIREMENTS.— 

23 (1) IN GENERAL.—A royalty rate under sub24 section (a) shall be consistent with making drugs 

25 available to purchasers, including Federal, State, 


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1 local, and nongovernmental purchasers and individ2 uals, at prices that are affordable and reasonable. 

3 Under no condition shall a royalty be set at a rate 

4 that would cause a product for which an open, non5 exclusive license was issued under section 3 to be 

6 sold at an excessive price, as determined under sec7 tion 2. 

8 (2) MULTIPLE AFFECTED PARTIES.—In the 

9 case that there is one or more holders or investors 

10 in the patented inventions related to the drug in ad11 dition to the brand name manufacturer, the royalty 

12 rate shall be divided among the holders or investors 

13 (including such manufacturer) in a manner agreed 

14 upon by the manufacturer and other holders or in15 vestors, or, in the absence of such an agreement, in 

16 a manner the Secretary determines to be appro17 priate. 

18 (3) PRICE.—An entity accepting an open, non19 exclusive license under section 3(a)(2) shall sell the 

20 drug at a price not higher than the excessive price 

21 determined for that drug under section 2(b). 

22 SEC. 5. PUBLIC EXCESSIVE DRUG PRICE DATABASE. 

23 (a) EXCESSIVE DRUG PRICE DATABASE.— 

24 (1) IN GENERAL.—The Secretary shall establish 

25 and maintain a comprehensive, up-to-date database 


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1 of brand name drugs and the excessive price deter2 minations for such drugs under section 2. 

3 (2) CONTENTS.—The database shall include, at 

4 a minimum, for each brand name drug, for the ap5 plicable calendar year— 

6 (A) the name of the drug; 

7 (B) the manufacturer; 

8 (C) whether the drug was determined 

9 under section 2(b) to have an excessive price; 

10 (D) the number of petitions the Secretary 

11 received under section 2(c) to make an exces12 sive price determination for the drug, together 

13 with the information described in section 

14 2(c)(3); 

15 (E) the number of open, non-exclusive li16 censes the Secretary has granted under section 

17 3(a)(2) for generic drug or biosimilar biological 

18 product versions of the drug; and 

19 (F) the number of applications under sub20 section (b)(2) or (j) of section 505 of the Fed21 eral Food, Drug, and Cosmetic Act or under 

22 section 351(k) of the Public Health Service Act 

23 submitted to the Secretary, pursuant to such a 

24 license granted under section 3(a)(2), and the 


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1 number of such applications that have been ap2 proved. 

3 (3) CERTAIN DETERMINATIONS.—With respect 

4 to a determination made under section 2(b)(1), the 

5 Secretary shall publish on the database such deter6 mination in accordance with paragraph (1) within 

7 30 days of receiving domestic and international pric8 ing information from manufacturers under section 6. 

9 (b) ANNUAL REPORTS TO CONGRESS.—Not later 

10 than 60 days after the first excessive price review under 

11 section 2 is complete, and annually thereafter, the Sec12 retary shall submit to Congress a report describing the 

13 excessive drug price review for the preceding year. The 

14 report shall contain summary data regarding— 

15 (1) the total number of drugs that were re16 viewed; 

17 (2) the total number of drugs determined to be 

18 excessively priced under each of paragraphs (1) and 

19 (2) of section 2(b), and the name and manufacturer 

20 of each such drug; 

21 (3) the total number of drugs determined to be 

22 excessively priced, listed by manufacturer; 

23 (4) the extent to which the prices of the drugs 

24 identified under section 2 were higher than reason25 able, on average; 


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1 (5) the total number of drugs for which an 

2 open-non-exclusive license has been granted under 

3 section 3(a)(2); 

4 (6) the total number of generic drug or bio5 similar biological product applications received and 

6 approved that reference a drug so licensed; 

7 (7) the median approval time for generic drug 

8 or biosimilar biological product applications that ref9 erence a drug so licensed; 

10 (8) the total number of petitions the Secretary 

11 received under section 2(c) to make excessive price 

12 determinations for drugs; 

13 (9) a list of any manufacturers who failed to re14 port information as required under section 6; and 

15 (10) other appropriate information, as the Sec16 retary determines or as Congress requests. 

17 (c) PUBLIC AVAILABILITY.—The Secretary shall 

18 make the information in the database described in sub19 section (a) and the report in subsection (b) publicly avail20 able, including on the internet website of the Food and 

21 Drug Administration, in a manner that is easy to find and 

22 understand. 

23 SEC. 6. DRUG MANUFACTURER REPORTING. 

24 (a) IN GENERAL.—Each manufacturer shall submit 

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1 quire, an annual report that includes the following infor2 mation for each brand name drug of the manufacturer, 

3 with respect to the previous calendar year: 

4 (1) The average manufacturer price of the drug 

5 in the United States and in the reference countries, 

6 for the entire year, and broken down for each quar7 ter of the year. 

8 (2) The wholesale acquisition cost of the drug 

9 in the United States and in the reference countries, 

10 for the entire year, and broken down for each quar11 ter of the year. 

12 (3) Cumulative global revenues generated by 

13 the drug. 

14 (4) Annual net sales revenue generated by the 

15 drug in the United States and in the reference coun16 tries, for the entire year, and broken down for each 

17 quarter of the year. 

18 (5) Total expenditures on domestic and foreign 

19 drug research and development related to the drug, 

20 itemized by— 

21 (A) basic and preclinical research; 

22 (B) clinical research, reported separately 

23 for each clinical trial; 


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1 (C) development of alternative dosage 

2 forms and strengths for the drug molecule or 

3 combinations, including the molecule; 

4 (D) other drug development activities, such 

5 as nonclinical laboratory studies and record and 

6 report maintenance; 

7 (E) pursuing new or expanded indications 

8 for such drug through supplemental applica9 tions under section 505 of the Federal Food, 

10 Drug, and Cosmetic Act; and 

11 (F) carrying out postmarket requirements 

12 related to such drug, including under section 

13 505(o)(3) of the Federal Food, Drug, and Cos14 metic Act. 

15 (6) Total expenditures on domestic and foreign 

16 marketing and advertising related to the drug. 

17 (7) Investments in human clinical trials related 

18 to the drug, by each trial and each year, including 

19 grants, research contracts, tax credits or deductions, 

20 and reimbursements from public or private health 

21 plans or insurance, and any other public sector sub22 sidies or incentives, such as the fair market value or 

23 priority review vouchers or other considerations. 

24 (8) The estimated size of the affected patient 

25 population. 


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1 (9) Additional information the manufacturer 

2 chooses to provide related to drug pricing decisions, 

3 such as information related to the methodology used 

4 to set the price of the drug. 

5 (10) Additional information as the Secretary 

6 determines necessary to carry out this Act, including 

7 information for previous years. 

8 (b) REPORT DUE DATE.—Applicable manufacturers 

9 shall submit the reports described in subsection (a) not 

10 later than January 15 of the year following the date of 

11 enactment of this Act, and of each year thereafter. 

12 (c) PENALTY FOR NONCOMPLIANCE.— 

13 (1) IN GENERAL.—Any manufacturer that fails 

14 to submit information for a drug as required by this 

15 section on a timely basis or that knowingly provides 

16 false information shall be liable for a civil monetary 

17 penalty, as determined by the Secretary under para18 graph (2), in addition to any other penalty under 

19 other applicable provisions of law. 

20 (2) AMOUNT OF PENALTY.—The amount of a 

21 civil penalty under paragraph (1) shall be equal to 

22 the product of— 

23 (A) an amount, as determined appropriate 

24 by the Secretary, which is— 


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1 (i) not less than 0.5 percent of the 

2 gross revenues from sales for the previous 

3 calendar year of the drug for which the in4 formation was not submitted; and 

5 (ii) not greater than 1 percent of the 

6 gross revenues from sales for the previous 

7 calendar year of such drug; and 

8 (B) the number of days in the period be9 tween— 

10 (i) the report due date under sub11 section (b); and 

12 (ii) the date on which the Secretary 

13 receives the information required to be re14 ported by the manufacturer under this sec15 tion. 

16 (3) USE OF CIVIL PENALTY.—The Secretary 

17 shall collect the civil penalties under this subsection 

18 and shall use such funds to support competitive re19 search grant programs of the National Institutes of 

20 Health. 

21 SEC. 7. PROHIBITION OF ANTICOMPETITIVE BEHAVIOR. 

22 No manufacturer may engage in anticompetitive be23 havior violating section 5(a) of the Federal Trade Com24 mission Act (15 U.S.C. 45(a)) with another manufacturer 

25 that may interfere with the issuance and implementation 


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1 of open, non-exclusive licenses under this Act or otherwise 

2 run contrary to the public interest in the availability of 

3 affordable prescription drugs. 

4 SEC. 8. DEFINITIONS. 

5 For the purposes of this Act: 

6 (1) AVERAGE MANUFACTURER PRICE.— 

7 (A) IN GENERAL.—The term ‘‘average 

8 manufacturer price’’, with respect to a drug, 

9 subject to subparagraph (B), has the meaning 

10 given such term in section 1927(k)(1) of the 

11 Social Security Act (42 U.S.C. 1396r–8(k)(1)); 

12 or with respect to a drug for which there is no 

13 average manufacturer price as so defined, such 

14 term shall mean the wholesale acquisition cost 

15 (as defined in section 1847A(c)(6)(B) of the 

16 Social Security Act (42 U.S.C. 1395w– 

17 3a(c)(6)(B)) of the drug. 

18 (B) APPLICATION TO REFERENCE COUN19 TRIES.—With respect to reference countries, 

20 the term ‘‘average manufacturer price’’, as de21 fined in subparagraph (A), shall be determined 

22 based on the price of the drug in the applicable 

23 reference country. 

24 (2) BIOSIMILAR BIOLOGICAL PRODUCT.—The 

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1 cal product licensed pursuant to an application 

2 under section 351(k) of the Public Health Service 

3 Act (42 U.S.C. 262(k)). 

4 (3) BRAND NAME DRUG.—The term ‘‘brand 

5 name drug’’ means a drug that is— 

6 (A) approved under section 505(c) of the 

7 Federal Food, Drug, and Cosmetic Act (21 

8 U.S.C. 355(c)) or a biological product licensed 

9 under section 351(a) of the Public Health Serv10 ice Act (42 U.S.C. 262(a)); 

11 (B) subject to section 503(b)(1) of the 

12 Federal Food, Drug, and Cosmetic Act (21 

13 U.S.C. 353(b)(1)); and 

14 (C) claimed in a patent or the use of which 

15 is claimed in a patent. 

16 (4) GENERIC DRUG.—The term ‘‘generic drug’’ 

17 means a drug approved pursuant to an application 

18 under section (b)(2) or (j) of the Federal Food, 

19 Drug, and Cosmetic Act (21 U.S.C. 355). 

20 (5) GOVERNMENT-GRANTED EXCLUSIVITY.— 

21 The term ‘‘government-granted exclusivity’’ means 

22 prohibitions on the submission or approval of drug 

23 applications granted under any of the following: 


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1 (A) Clauses (ii) through (v) of section 

2 505(c)(3)(E) of the Federal Food, Drug, and 

3 Cosmetic Act (21 U.S.C. 355(c)(3)(E)). 

4 (B) Section 505(j)(5)(B)(iv) of the Federal 

5 Food, Drug, and Cosmetic Act (21 U.S.C. 

6 355(j)(5)(B)(iv)) or clause (ii), (iii), or (iv) of 

7 section 505(j)(5)(F) of such Act. 

8 (C) Section 505A of the Federal Food, 

9 Drug, and Cosmetic Act (21 U.S.C. 355a). 

10 (D) Section 505E of the Federal Food, 

11 Drug, and Cosmetic Act (21 U.S.C. 355f). 

12 (E) Section 527 of the Federal Food, 

13 Drug, and Cosmetic Act (21 U.S.C. 360cc). 

14 (F) Section 351(k)(7) of the Public Health 

15 Service Act (42 U.S.C. 262(k)(7)). 

16 (G) Any other provision of law that pro17 vides for exclusivity (or extension of exclusivity) 

18 with respect to a drug. 

19 (6) MANUFACTURER.—The term ‘‘manufac20 turer’’ means the holder of an application approved 

21 under section 505 of the Federal Food, Drug, and 

22 Cosmetic Act (21 U.S.C. 355) or of a license issued 

23 under section 351 of the Public Health Service Act 

24 (42 U.S.C. 262). 


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1 (7) OPEN, NON-EXCLUSIVE LICENSE.—The 

2 term ‘‘open, non-exclusive license’’ means a license 

3 that authorizes any person to use a patent held by 

4 a manufacturer that claims a brand name drug or 

5 a use of a brand name drug or rely upon regulatory 

6 test data for such drug, including patents held in 

7 common by the manufacturer and other entities, 

8 needed to produce, manufacture, import, export, dis9 tribute, offer in liquidation, sell, buy, or use such 

10 brand name drug. 

11 (8) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of Health and Human Services. 

Æ 


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