II 

116TH CONGRESS 

1ST SESSION S. 1391 

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

purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 9, 2019 

Ms. BALDWIN (for herself, Mr. BRAUN, Ms. MURKOWSKI, and Ms. SMITH) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

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’’. 

6 SEC. 2. REPORTING ON JUSTIFICATION FOR DRUG PRICE 

7 INCREASES. 

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

9 241 et seq.) is amended by adding at the end the fol10 lowing: 


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1 ‘‘PART W—DRUG PRICE REPORTING; DRUG 

2 VALUE FUND 

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

4 PRICE INCREASES. 

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

6 ‘‘(1) MANUFACTURER.—The term ‘manufac7 turer’ means the person— 

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

9 approved under section 505 of the Federal 

10 Food, Drug, and Cosmetic Act or the license 

11 issued under section 351 of this Act; or 

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

13 price for the drug. 

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

15 drug’ means any drug that is approved under sub16 section (c) or (j) of section 505 of the Federal Food, 

17 Drug, and Cosmetic Act or licensed under subsection 

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

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

20 of $100 or more per month supply, or per a 

21 course of treatment that lasts less than a 

22 month, and is— 

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

24 the Federal Food, Drug, and Cosmetic 

25 Act; or 


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1 ‘‘(II) commonly administered by hos2 pitals (as determined by the Secretary); 

3 and 

4 ‘‘(ii) not designated by the Secretary 

5 as a vaccine; and 

6 ‘‘(B) for which, during the previous cal7 endar year, at least 1 dollar of the total amount 

8 of sales were for individuals enrolled under the 

9 Medicare program under title XVIII of the So10 cial Security Act (42 U.S.C. 1395 et seq.) or 

11 under a State Medicaid plan under title XIX of 

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

13 waiver of such plan. 

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

15 term ‘wholesale acquisition cost’ has the meaning 

16 given that term in section 1847A(c)(6)(B) of the So17 cial Security Act (42 U.S.C. 1395w–3a(c)(6)(B)). 

18 ‘‘(b) REPORT.— 

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

20 a qualifying drug shall submit a report to the Sec21 retary for each price increase of a qualifying drug 

22 that will result in an increase in the wholesale acqui23 sition cost of that drug that is equal to— 

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

25 period; or 


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

2 period. 

3 ‘‘(2) REPORT DEADLINE.—Each report de4 scribed in paragraph (1) shall be submitted to the 

5 Secretary not later than 30 days prior to the 

6 planned effective date of such price increase. 

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

8 shall, at a minimum, include— 

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

10 ‘‘(A) the percentage by which the manufac11 turer will raise the wholesale acquisition cost of 

12 the drug on the planned effective date of such 

13 price increase; 

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

15 each manufacturer’s price increase that will 

16 occur during the 12-month period described in 

17 subsection (b)(1)(A) or the 36-month period de18 scribed in subsection (b)(1)(B), as applicable; 

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

20 the drug; 

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

22 manufacturer’s price increases for the drug 

23 since the approval of the application for the 

24 drug under section 505 of the Federal Food, 

25 Drug, and Cosmetic Act or the issuance of the 


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1 license for the drug under section 351, or since 

2 the manufacturer acquired such approved appli3 cation or license; 

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

5 ‘‘(F) the total expenditures of the manu6 facturer on— 

7 ‘‘(i) materials and manufacturing for 

8 such drug; and 

9 ‘‘(ii) acquiring patents and licensing 

10 for such drug; 

11 ‘‘(G) the percentage of total expenditures 

12 of the manufacturer on research and develop13 ment for such drug that was derived from Fed14 eral funds; 

15 ‘‘(H) the total expenditures of the manu16 facturer on research and development for such 

17 drug that is used for— 

18 ‘‘(i) basic and preclinical research; 

19 ‘‘(ii) clinical research; 

20 ‘‘(iii) new drug development; 

21 ‘‘(iv) pursuing new or expanded indi22 cations for such drug through supple23 mental applications under section 505 of 

24 the Federal Food, Drug, and Cosmetic Act 

25 or section 351 of this Act; and 


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1 ‘‘(v) carrying out postmarket require2 ments related to such drug, including those 

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

4 Food, Drug, and Cosmetic Act; 

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

6 generated from the qualifying drug for each cal7 endar year since the approval of the application 

8 for the drug under section 505 of the Federal 

9 Food, Drug, and Cosmetic Act or the issuance 

10 of the license for the drug under section 351, 

11 or since the manufacturer acquired such ap12 proved application or license; and 

13 ‘‘(J) the total costs associated with mar14 keting and advertising for the qualifying drug; 

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

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

17 of the manufacturer— 

18 ‘‘(i) for the 12-month period pre19 ceding the date of the report, in the case 

20 of a report based on an increase described 

21 in subsection (b)(1)(A); or 

22 ‘‘(ii) for the 36-month period pre23 ceding the date of the report, in the case 

24 of a report based on an increase described 

25 in subsection (b)(1)(B); 


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

2 used by the manufacturer to determine execu3 tive compensation— 

4 ‘‘(i) for the 12-month period pre5 ceding the date of the report, in the case 

6 of a report based on an increase described 

7 in subsection (b)(1)(A); or 

8 ‘‘(ii) for the 36-month period pre9 ceding the date of the report, in the case 

10 of a report based on an increase described 

11 in subsection (b)(1)(B); and 

12 ‘‘(C) any additional information the manu13 facturer chooses to provide related to drug pric14 ing decisions, such as total expenditures on— 

15 ‘‘(i) drug research and development; 

16 or 

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

18 to receive approval by the Food and Drug 

19 Administration; and 

20 ‘‘(3) such other related information as the Sec21 retary considers appropriate. 

22 ‘‘(d) CIVIL PENALTY.—Any manufacturer of a quali23 fying drug that fails to submit a report for the drug as 

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

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


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1 ‘‘(e) PUBLIC POSTING.— 

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

3 not later than 30 days after the submission of a re4 port under subsection (b), the Secretary shall post 

5 the report on the public website of the Department 

6 of Health and Human Services. 

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

8 such report for public posting, the Secretary shall 

9 consult stakeholders, including beneficiary groups, 

10 and shall seek feedback on the content and format 

11 from consumer advocates and readability experts to 

12 ensure such public reports are user-friendly to the 

13 public and are written in plain language that con14 sumers can readily understand. 

15 ‘‘(3) TRADE SECRETS AND CONFIDENTIAL IN16 FORMATION.—In carrying out this section the Sec17 retary shall enforce current law concerning the pro18 tection of confidential commercial information and 

19 trade secrets.’’. 

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

21 ‘‘The Secretary shall, without further appropriation, 

22 collect civil penalties under section 399OO and use the 

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

24 other amounts available to the Secretary, to carry out ac25 tivities described in this part and to improve consumer and 


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1 provider information about drug value and drug price 

2 transparency. 

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

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

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

6 website of the Department of Health and Human Services 

7 in a way that is easy to find, use, and understand, an 

8 annual report— 

9 ‘‘(1) summarizing the information reported pur10 suant to section 399OO; and 

11 ‘‘(2) including copies of the reports and sup12 porting detailed economic analyses submitted pursu13 ant to such section. 

14 ‘‘(b) TRADE SECRETS AND CONFIDENTIAL INFORMA15 TION.—In carrying out this section the Secretary shall en16 force current law concerning the protection of confidential 

17 commercial information and trade secrets.’’. 

Æ 


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