I 

115TH CONGRESS 

2D SESSION H. R. 5739 

To establish within the Department of Health and Human Services the 

Prescription Drug and Medical Device Price Review Board to regulate 

the prices of certain prescription drugs and medical devices, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 9, 2018 

Ms. DELAURO (for herself, Mr. DOGGETT, and Ms. MOORE) 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, 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 establish within the Department of Health and Human 

Services the Prescription Drug and Medical Device Price 

Review Board to regulate the prices of certain prescription drugs and medical devices, 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 ‘‘Prescription Drug and 

5 Medical Device Price Review Board Act of 2018’’. 


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1 SEC. 2. ESTABLISHMENT. 

2 There is established in the Department of Health and 

3 Human Services a board to be known as the Prescription 

4 Drug and Medical Device Price Review Board (in this Act 

5 referred to as the ‘‘Board’’). 

6 SEC. 3. MEMBERSHIP; STAFF. 

7 (a) MEMBERS.—The Board shall be composed of 5 

8 members as follows: 

9 (1) The Assistant Secretary for Planning and 

10 Evaluation of the Department of Health and Human 

11 Services (or the Assistant Secretary’s designee). 

12 (2) The Administrator of the Centers for Medi13 care & Medicaid Services (or the Administrator’s 

14 designee). 

15 (3) The Assistant Director for the Health Serv16 ices Division of the Federal Bureau of Prisons (or 

17 the Assistant Director’s designee). 

18 (4) The Secretary of Defense (or the Sec19 retary’s designee). 

20 (5) The Secretary of Veterans Affairs (or the 

21 Secretary’s designee). 

22 (6) The Commissioner of Food and Drugs (or 

23 the Commissioner’s designee). 

24 (b) CHAIRPERSON.—The Board shall designate 1 

25 member of the Board to serve as the chairperson. 

26 (c) DIRECTOR AND STAFF.— 


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1 (1) DIRECTOR.—The Board shall have a direc2 tor who shall be appointed by the chairperson of the 

3 Board, subject to rules prescribed by the Board. 

4 (2) STAFF.—The director may appoint and fix 

5 the pay of such additional personnel as the chair6 person considers appropriate, subject to rules pre7 scribed by the Board. 

8 (3) APPLICABILITY OF CERTAIN CIVIL SERVICE

9 LAWS.—The director and staff of the Board shall be 

10 appointed subject to the provisions of title 5, United 

11 States Code, governing appointments in the competi12 tive service, and shall be paid in accordance with the 

13 requirements of chapter 51 and subchapter III of 

14 chapter 53 of such title relating to classification and 

15 General Schedule pay rates; except that an indi16 vidual so appointed may not receive pay in excess of 

17 the maximum annual rate of basic pay payable for 

18 grade GS–15 of the General Schedule. 

19 (d) ASSISTANCE FOR THE BOARD.—Subject to sec20 tion 7(g), in carrying out this Act, the Board— 

21 (1) may seek assistance from outside experts in 

22 the fields of consumer advocacy, medicine, pharma23 cology, pharmacy, and prescription drug reimburse24 ment; and 


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1 (2) shall establish and maintain an advisory 

2 group and a stakeholder group for purposes of seek3 ing such assistance. 

4 (e) INITIAL MEETING.—The Board shall hold its ini5 tial meeting not later than 90 days after the date of the 

6 enactment of this Act. 

7 SEC. 4. REPORTING REQUIREMENTS. 

8 (a) REPORTING BY MANUFACTURERS.—The Board 

9 shall require each manufacturer of a prescription drug or 

10 medical device that is sold in the United States to submit 

11 to the Board on a periodic basis, at a level of specificity 

12 determined by the Board to be necessary to make a deter13 mination under section 5, the following information with 

14 respect to the reporting period: 

15 (1) Each type of prescription drug and medical 

16 device that is sold by the manufacturer or an affil17 iate of the manufacturer— 

18 (A) in the United States; or 

19 (B) in a country that is a member of the 

20 Organization for Economic Co-operation and 

21 Development. 

22 (2) The price charged by the manufacturer and 

23 the affiliate for the prescription drug or medical de24 vice in the United States and in any such country, 

25 as applicable. 


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1 (3) The costs of the manufacturer and the affil2 iate to produce and market the prescription drug or 

3 medical device for sale in the United States and in 

4 any such country, as applicable. 

5 (b) REPORTING BY CBO.—The Director of the Con6 gressional Budget Office shall submit an annual report to 

7 the Board on trends in the prices charged for prescription 

8 drugs and medical devices. 

9 SEC. 5. PROHIBITION AGAINST EXCESSIVE PRICE. 

10 (a) PROHIBITION.—Beginning on the effective date 

11 of the regulation required by subsection (b), the manufac12 turer of a prescription drug or medical device shall not 

13 charge an excessive price, as determined pursuant to such 

14 regulation, for such drug or device. 

15 (b) FORMULA.—The Board shall by regulation pre16 scribe a formula for determining whether the average 

17 manufacturer price of such drug or device over an annual 

18 quarter is an excessive price. 

19 (c) DETERMINATION OF EXCESSIVE PRICE.—If the 

20 Board determines, on its own initiative or in response to 

21 a petition submitted under subsection (d), that the manu22 facturer of a prescription drug or medical device charges 

23 an excessive price for such drug or device in violation of 

24 subsection (a)— 

25 (1) the Board shall give the manufacturer— 


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1 (A) notice of such violation; and 

2 (B) subject to subsection (d), a period to 

3 correct such violation; and 

4 (2) if the manufacturer fails to correct the vio5 lation by the end of such period, the manufacturer 

6 shall be subject to section 6 of this Act, section 

7 1927(c)(2)(E) of the Social Security Act, as added 

8 by subsection (c) of such section 6, and section 4192 

9 of the Internal Revenue Code of 1986, as added by 

10 subsection (d) of such section 6. 

11 (d) PETITIONS.—Any person may petition the Board 

12 to make a determination under subsection (c) regarding 

13 the pricing of a prescription drug or medical device. Not 

14 later than 90 days after the date of receipt of such a peti15 tion, the Board shall— 

16 (1) make a determination under subsection (c) 

17 regarding such pricing; or 

18 (2) decline to make such a determination. 

19 (e) CONTINUING VIOLATION.—The Board shall not 

20 be required to give a manufacturer an opportunity to cor21 rect a violation, as described in subsection (c)(1)(B), be22 fore the manufacturer becomes subject to the provisions 

23 described in subsection (c)(2) for such violation, if— 

24 (1) the Board has already provided such an op25 portunity to correct to the manufacturer; and 


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1 (2) the Board finds that the violation of sub2 section (a) is a continuation of an earlier violation 

3 with respect to which such an opportunity was pro4 vided. 

5 (f) CONSIDERATIONS.—The formula required by sub6 section (a) shall at a minimum take into consideration— 

7 (1) the average manufacturer price of the pre8 scription drug or medical device over the respective 

9 annual quarter or quarters; 

10 (2) the average manufacturer price of other 

11 prescription drugs or medical devices in the same 

12 therapeutic class over the same quarter or quarters; 

13 (3) the average price at which the prescription 

14 drug or medical device and other prescription drugs 

15 and medical devices in the same therapeutic class 

16 have been sold by manufacturers in countries other 

17 than the United States; 

18 (4) the costs associated with producing and 

19 marketing the prescription drug or medical device, 

20 the value of the drug or device to patients where suf21 ficient data is available to determine such value, the 

22 total Federal investment in the development of the 

23 drug or device, the size of the patient population re24 ceiving the drug or device, and other factors deter25 minative as to the true cost of production; and 


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1 (5) whether the price of the prescription drug 

2 or medical device increased during any annual quar3 ter by a percentage that is more than 2 percent 

4 greater than the CPI increase percentage (as defined 

5 in section 215(i) of the Social Security Act (42 

6 U.S.C. 415)) for the respective annual quarter. 

7 SEC. 6. ENFORCEMENT PROVISIONS. 

8 (a) REDUCED PATENT TERM.—If the Board finds 

9 that the manufacturer of a prescription drug or medical 

10 device, who is also an owner of a patent for such drug 

11 or device, charged an excessive price for such drug or de12 vice in violation of section 5(a), the Board may— 

13 (1) reduce the term, by not more than 5 years, 

14 of any patent issued under title 35, United States 

15 Code, relating to such drug or device; or 

16 (2) if the term of each patent for such drug or 

17 device has expired, reduce the term, by not more 

18 than 5 years, of another patent owned by the patent 

19 owner relating to a prescription drug or medical de20 vice. 

21 (b) CIVIL PENALTIES.—If the Board determines 

22 under section 5(c) that a manufacturer of a prescription 

23 drug or medical device charged an excessive price for a 

24 prescription drug or medical device in violation of section 

25 5(a), the Board may impose a civil penalty on the manuVerDate Sep 11 2014 03:38 May 23, 2018 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5739.IH H5739

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1 facturer of not more than 10 percent of the manufactur2 er’s gross sales of the drug or device during the period 

3 beginning on the date on which an excessive price is first 

4 charged and ending on the date on which the manufac5 turer ceases to charge an excessive price. 

6 (c) ENFORCEMENT THROUGH INCREASED MEDICAID

7 REBATES.— 

8 (1) IN GENERAL.—Section 1927(c)(2) of the 

9 Social Security Act (42 U.S.C. 1396r–8(c)(2)) is 

10 amended— 

11 (A) in subparagraph (A), by inserting ‘‘, 

12 subject to subparagraph (E),’’ after ‘‘increased 

13 by’’; and 

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

15 subparagraph: 

16 ‘‘(E) DISCOURAGING EXCESSIVE PRICES.— 

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

18 manufacturer of a single source drug or an 

19 innovator multiple source drug with a re20 bate agreement under this section, if the 

21 Prescription Drug and Medical Device 

22 Price Review Board established under sec23 tion 2 of the Prescription Drug and Med24 ical Device Price Review Board Act of 

25 2018 determines under section 5(a) of 


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1 such Act that such manufacturer charged, 

2 with respect to a 30-day period, an exces3 sive price for such drug, and the Board de4 termines under clause (ii) to apply an in5 creased amount described in such clause 

6 with respect to such manufacturer and 

7 drug, the amount of the rebate determined 

8 under subparagraph (A) for such manufac9 turer and drug shall be, subject to sub10 paragraph (D), increased by such amount 

11 for the 4 rebate periods following such 30- 

12 day period. 

13 ‘‘(ii) INCREASED AMOUNT DETER14 MINATION.—For purposes of clause (i), if 

15 the Board described in such clause makes 

16 such a determination under such section 

17 5(a), with respect to a manufacturer and 

18 drug described in such clause, the Board 

19 may determine an increased amount to 

20 apply with respect to such manufacturer 

21 and drug and rebate period described in 

22 such clause. Such increased amount may 

23 not exceed the rebate amount that would 

24 otherwise be applied to such manufacturer 

25 and drug under this section for such rebate 


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1 period, without regard to this subpara2 graph.’’. 

3 (2) EFFECTIVE DATE.—This subsection and the 

4 amendments made by this subsection shall apply 

5 with respect to rebate agreements entered into after 

6 the date that is 60 days after the date of the enact7 ment of this Act. 

8 (d) TAX ON EXCESS PRESCRIPTION DRUG AND MED9 ICAL DEVICE PROFITS.— 

10 (1) DETERMINATION OF AMOUNT.—If the 

11 Board determines under section 5(a) that a manu12 facturer, producer, or importer of a prescription 

13 drug or medical device charged an excessive price for 

14 such prescription drug or medical device during a 

15 taxable year, the Board may determine under this 

16 paragraph a reasonable price for such drug or device 

17 for such taxable year. 

18 (2) IMPOSITION OF TAX.— 

19 (A) IN GENERAL.—The Internal Revenue 

20 Code of 1986 is amended by inserting after sec21 tion 4191 the following new section: 

22 ‘‘SEC. 4192. EXCESSIVE PRESCRIPTION DRUG AND MEDICAL 

23 DEVICE PRICE. 

24 ‘‘(a) IN GENERAL.—There is hereby imposed on the 

25 sale of any prescription drug or medical device by the 


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1 manufacturer, producer, or importer a tax equal to the 

2 difference between the price at which such drug or device 

3 is so sold and the reasonable price determined by the Pre4 scription Drug and Medical Device Price Review Board 

5 under section 6(d)(1) of the Prescription Drug and Med6 ical Device Price Review Board Act of 2018 for such drug 

7 or device for the taxable year for sales after the determina8 tion. 

9 ‘‘(b) PRESCRIPTION DRUG OR MEDICAL DEVICE.— 

10 For purposes of this section, the term ‘prescription drug 

11 or medical device’ means any prescription drug (as defined 

12 in section 9008 of the Patient Protection and Affordable 

13 Care Act) or device (as defined in section 201(h) of the 

14 Federal Food, Drug, and Cosmetic Act) intended for hu15 mans.’’. 

16 (B) CLERICAL AMENDMENT.—The table of 

17 parts for chapter 32 of such Code is amended— 

18 (i) in the item relating to subchapter 

19 E, by striking ‘‘Medical’’ and inserting 

20 ‘‘Drugs and medical’’, and 

21 (ii) by inserting after the item relating 

22 to section 4191 the following new item: 

‘‘Sec. 4192. Excessive prescription drug and medical device price.’’. 

23 (3) EFFECTIVE DATE.—This subsection and the 

24 amendments made by this subsection shall apply 

25 with respect to sales after December 31, 2018. 


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1 (e) SAFE AND AFFORDABLE DRUGS FROM AP2 PROVED COUNTRIES.—Chapter VIII of the Federal Food, 

3 Drug, and Cosmetic Act (21 U.S.C. 381 et seq.) is amend4 ed by adding at the end the following: 

5 ‘‘SEC. 810. IMPORTATION BY INDIVIDUALS OF PRESCRIP6 TION DRUGS, AND DEVICES, FROM AN AP7 PROVED COUNTRY IF MANUFACTURERS ARE 

8 CHARGING AN EXCESSIVE PRICE FOR COM9 PARABLE PRODUCTS IN THE UNITED STATES. 

10 ‘‘(a) IN GENERAL.—Notwithstanding any other pro11 vision of this Act, not later than 180 days after the date 

12 of enactment of this section, the Prescription Drug and 

13 Medical Device Price Review Board (in this section re14 ferred to as the ‘Board’) shall promulgate regulations per15 mitting individuals to safely import from an approved 

16 country into the United States prescription drugs, and de17 vices, that are comparable to prescription drugs, and de18 vices, for which the Board makes a final determination 

19 that the manufacturer is charging or has charged an ex20 cessive price in violation of section 5(a) of the Prescription 

21 Drug and Medical Device Price Review Board Act of 

22 2018. 

23 ‘‘(b) COMPARABLE DEFINED.—For purposes of this 

24 section, the term ‘comparable’ means— 


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1 ‘‘(1) with respect to a drug, having the same 

2 active ingredient or ingredients, route of administra3 tion, dosage form, and strength; and 

4 ‘‘(2) with respect to a device, being substan5 tially equivalent. 

6 ‘‘(c) ASSURANCE OF SAFETY.—For purposes of this 

7 section, the term ‘approved country’ means a country that 

8 is determined by the Secretary to have in effect standards 

9 to ensure the safety of prescription drugs, and of devices, 

10 that are at least as protective as the standards applicable 

11 under Federal law in the United States.’’. 

12 SEC. 7. AUTHORITY. 

13 (a) OBTAINING OFFICIAL DATA.—The chairperson of 

14 the Board may secure directly from any Federal agency 

15 information necessary to enable the Board to carry out 

16 its duties. Upon request of the chairperson, the head of 

17 the agency shall furnish such information to the Board 

18 to the extent such information is not prohibited from dis19 closure by law. 

20 (b) MAILS.—The Board may use the United States 

21 mails in the same manner and under the same conditions 

22 as other Federal agencies. 

23 (c) ADMINISTRATIVE SUPPORT SERVICES.—Upon the 

24 request of the chairperson of the Board, the Administrator 

25 of General Services shall provide to the Board, on a reimVerDate Sep 11 2014 03:38 May 23, 2018 Jkt 079200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H5739.IH H5739

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1 bursable basis, the administrative support services nec2 essary for the Board to carry out its duties. 

3 (d) CONTRACT AUTHORITY.—The Board may con4 tract with and compensate government and private agen5 cies or persons for the purpose of conducting research, 

6 surveys, and other services necessary to enable the Board 

7 to carry out its duties. 

8 (e) INVESTIGATIONS.—The Board may make such in9 vestigations as it considers necessary to determine whether 

10 there is or may be a violation of any regulation promul11 gated under this Act and may require or permit any per12 son to file with it a statement in writing, under oath or 

13 otherwise as the Board shall determine, as to all the facts 

14 and circumstances concerning the matter to be inves15 tigated. 

16 (f) SUBPOENA POWER.— 

17 (1) IN GENERAL.—The Board may issue sub18 poenas requiring the attendance and testimony of 

19 witnesses and the production of any evidence relat20 ing to any matter under investigation by the Board. 

21 The attendance of witnesses and the production of 

22 evidence may be required from any place within the 

23 United States at any designated place of hearing 

24 within the United States. 


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1 (2) FAILURE TO OBEY A SUBPOENA.—If a per2 son refuses to obey a subpoena issued under para3 graph (1), the Board may apply to a United States 

4 district court for an order requiring that person to 

5 appear before the Board to give testimony, produce 

6 evidence, or both, relating to the matter under inves7 tigation. The application may be made within the ju8 dicial district where the hearing is conducted or 

9 where that person is found, resides, or transacts 

10 business. Any failure to obey the order of the court 

11 may be punished by the court as civil contempt. 

12 (3) SERVICE OF SUBPOENAS.—The subpoenas 

13 of the Board shall be served in the manner provided 

14 for subpoenas issued by a United States district 

15 court under the Federal Rules of Civil Procedure for 

16 the United States district courts. 

17 (4) SERVICE OF PROCESS.—All process of any 

18 court to which application is made under paragraph 

19 (2) may be served in the judicial district in which 

20 the person required to be served resides or may be 

21 found. 

22 (5) NOTICE.—Upon issuing any subpoena 

23 under this subsection, the Board shall give notice of 

24 such issuance to the appropriate committees of Con25 gress, including the Committee on Appropriations of 


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1 the House of Representatives and the Committee on 

2 Appropriations of the Senate. 

3 (g) CONFIDENTIALITY.—Nothing in this Act shall be 

4 construed as authorizing the Board to disclose any infor5 mation that is a trade secret or confidential information 

6 subject to section 552(b)(4) of title 5, United States Code, 

7 or section 1905 of title 18, United States Code. 

8 SEC. 8. REGULATIONS. 

9 (a) IN GENERAL.—Not later than 1 year after the 

10 date of the initial meeting held under section 3(e), the 

11 Board shall issue final regulations to carry out this Act. 

12 (b) NOTICE AND COMMENT REQUIREMENT.—The 

13 regulations developed under subsection (a) shall be issued 

14 in accordance with the notice and comment procedures es15 tablished under section 553 of title 5, United States Code. 

16 SEC. 9. REPORT TO FEDERAL AGENCIES. 

17 Not later than 1 year after the effective date of the 

18 regulations under section 8 and annually thereafter, the 

19 Board shall submit to each Federal agency that dispenses 

20 or makes payments for the dispensing of prescription 

21 drugs or medical devices a report containing— 

22 (1) a list of each prescription drug and medical 

23 device for which an excessive price was charged dur24 ing the preceding calendar year, as determined by 

25 the Board under section 5; 


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1 (2) recommendations to the Federal agency 

2 against dispensing or making payments for the dis3 pensing of the prescription drug or medical device; 

4 and 

5 (3) recommendations to the Federal agency to 

6 substitute, in place of any drug or device listed pur7 suant to paragraph (1), a similar prescription drug 

8 or medical device that is not sold at an excessive 

9 price. 

10 SEC. 10. REPORT TO CONGRESS. 

11 Not later than 1 year after the initial meeting of the 

12 Board under section 3(e), and annually thereafter, the 

13 Board shall submit to the Congress a report describing 

14 the activities of the Board for the preceding year. 

15 SEC. 11. DEFINITIONS. 

16 In this Act: 

17 (1) The term ‘‘affiliate’’ means, with respect to 

18 a manufacturer, any entity that controls, is con19 trolled by, or is under common control with such 

20 manufacturer. 

21 (2) The term ‘‘average manufacturer price’’ 

22 means the average price charged by the manufac23 turer of a prescription drug or medical device, as ap24 plicable, for sales of the drug or device by the manuVerDate Sep 11 2014 03:38 May 23, 2018 Jkt 079200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\H5739.IH H5739

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1 facturer in the United States over the respective an2 nual quarter. 

3 (3) The term ‘‘medical device’’ means a device 

4 (as defined in section 201 of the Federal Food, 

5 Drug, and Cosmetic Act (21 U.S.C. 321)). 

6 (4) The term ‘‘prescription drug’’ means a drug 

7 (as defined in section 201 of the Federal Food, 

8 Drug, and Cosmetic Act (21 U.S.C. 321)) that is 

9 subject to section 503(b)(1) of such Act (21 U.S.C. 

10 353(b)(1)). 

Æ 


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