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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4895 Introduced in House (IH)]

<DOC>

118th CONGRESS
  1st Session
                                H. R. 4895

 To amend title XI of the Social Security Act to expand the drug price 
              negotiation program, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 26, 2023

    Mr. Pallone (for himself, Mr. Neal, and Mr. Scott of Virginia) 
 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 Education and the Workforce, 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 XI of the Social Security Act to expand the drug price 
              negotiation program, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Lowering Drug Costs for American 
Families Act''.

SEC. 2. EXPANDING THE DRUG PRICE NEGOTIATION PROGRAM.

    (a) Increasing the Number of Drugs Subject to Negotiation.--Section 
1192(a)(4) of the Social Security Act (42 U.S.C. 1320f-1(a)(4)) is 
amended by striking ``20'' each place it appears and inserting ``50'' 
in each such place.
    (b) Expansion of Definition of Maximum Fair Price Eligible 
Individual.--Section 1191(c)(2) of the Social Security Act (42 U.S.C. 
1320f-1(c)(2)) is amended--
            (1) in subparagraph (A), by inserting ``, or a participant, 
        beneficiary, or enrollee who is enrolled under a group health 
        plan or health insurance coverage offered in the group or 
        individual market (as such terms are defined in section 2791 of 
        the Public Health Service Act) with respect to which there is 
        in effect an agreement with the Secretary under section 1197 
        with respect to such selected drug as so furnished or 
        dispensed'' after ``such selected drug''; and
            (2) in subparagraph (B), by inserting ``, or a participant, 
        beneficiary, or enrollee who is enrolled under a group health 
        plan or health insurance coverage offered in the group or 
        individual market (as such terms are defined in section 2791 of 
        the Public Health Service Act) with respect to which there is 
        in effect an agreement with the Secretary under section 1197 
        with respect to such selected drug as so furnished or 
        administered'' after ``such selected drug''.
    (c) Application of Administrative Procedures to New Maximum Fair 
Price Eligible Individuals.--Section 1196(a)(3) of the Social Security 
Act (42 U.S.C. 1320f-5(a)(3)) is amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) in subparagraph (B), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(C) maximum fair price eligible individuals not 
                described in subparagraph (A) or (B).''.
    (d) Health Insurer Agreements.--Part E of title XI of the Social 
Security Act (42 U.S.C. 1320f et seq.) is amended--
            (1) by redesignating sections 1197 and 1198 as sections 
        1198 and 1199, respectively; and
            (2) by inserting after section 1196 the following new 
        section:

``SEC. 1197. VOLUNTARY PARTICIPATION BY OTHER HEALTH PLANS.

    ``(a) Agreement To Participate Under Program.--
            ``(1) In general.--Subject to paragraph (2), under the 
        program under this part the Secretary shall be treated as 
        having in effect an agreement with a group health plan or 
        health insurance issuer offering group or individual health 
        insurance coverage (as such terms are defined in section 2791 
        of the Public Health Service Act), with respect to a price 
        applicability period and a selected drug with respect to such 
        period--
                    ``(A) in the case such selected drug furnished or 
                dispensed at a pharmacy or by mail order service if 
                coverage is provided under such plan or coverage during 
                such period for such selected drug as so furnished or 
                dispensed; and
                    ``(B) in the case such selected drug furnished or 
                administered by a hospital, physician, or other 
                provider of services or supplier if coverage is 
                provided under such plan or coverage during such period 
                for such selected drug as so furnished or administered.
            ``(2) Opting out of agreement.--The Secretary shall not be 
        treated as having in effect an agreement under the program 
        under this part with a group health plan or health insurance 
        issuer offering group or individual health insurance coverage 
        with respect to a price applicability period and a selected 
        drug with respect to such period if such a plan or issuer 
        affirmatively elects, through a process specified by the 
        Secretary, not to participate under the program with respect to 
        such period and drug.
    ``(b) Publication of Election.--With respect to each price 
applicability period and each selected drug with respect to such 
period, the Secretary and the Secretary of Labor and the Secretary of 
the Treasury, as applicable, shall make public a list of each group 
health plan and each health insurance issuer offering group or 
individual health insurance coverage, with respect to which coverage is 
provided under such plan or coverage for such drug, that has elected 
under subsection (a) not to participate under the program with respect 
to such period and drug.''.
    (e) Application to Group Health Plans and Health Insurance 
Coverage.--
            (1) PHSA.--Part D of title XXVII of the Public Health 
        Service Act (42 U.S.C. 300gg-111 et seq.) is amended by adding 
        at the end the following new section:

``SEC. 2799A-11. DRUG PRICE NEGOTIATION PROGRAM AND APPLICATION OF 
              MAXIMUM FAIR PRICES.

    ``(a) In General.--In the case of a group health plan or health 
insurance issuer offering group or individual health insurance coverage 
that is treated under section 1197 of the Social Security Act as having 
in effect an agreement with the Secretary under the Drug Price 
Negotiation Program under part E of title XI of such Act, with respect 
to a price applicability period (as defined in section 1191(b) of such 
Act) and a selected drug (as defined in section 1192(c) of such Act) 
with respect to such period for which coverage is provided under such 
plan or coverage--
            ``(1) the provisions of such part shall apply--
                    ``(A) in the case the drug is furnished or 
                dispensed at a pharmacy or by a mail order service, to 
                such plan or coverage, and to the participants, 
                beneficiaries, and enrollees enrolled under such plan 
                or coverage, during such period, with respect to such 
                selected drug, in the same manner as such provisions 
                apply to prescription drug plans and MA-PD plans, and 
                to participants, beneficiaries, and enrollees enrolled 
                under such prescription drug plans and MA-PD plans 
                during such period; and
                    ``(B) in the case the drug is furnished or 
                administered by a hospital, physician, or other 
                provider of services or supplier, to such plan or 
                coverage, and to the participants, beneficiaries, and 
                enrollees enrolled under such plan or coverage, and to 
                hospitals, physicians, and other providers of services 
                and suppliers during such period, with respect to such 
                drug in the same manner as such provisions apply to the 
                Secretary, to participants, beneficiaries, and 
                enrollees entitled to benefits under part A of title 
                XVIII or enrolled under part B of such title, and to 
                hospitals, physicians, and other providers and 
                suppliers participating under title XVIII during such 
                period;
            ``(2) the plan or issuer shall apply any cost-sharing 
        responsibilities under such plan or coverage, with respect to 
        such selected drug, by substituting an amount not more than the 
        maximum fair price negotiated under such part E of title XI for 
        such drug in lieu of the drug price upon which the cost-sharing 
        would have otherwise applied, and such cost-sharing 
        responsibilities with respect to such selected drug may not 
        exceed such maximum fair price; and
            ``(3) the Secretary shall apply the provisions of such part 
        E to such plan, issuer, and coverage, such participants, 
        beneficiaries, and enrollees so enrolled in such plans and 
        coverage, and such hospitals, physicians, and other providers 
        and suppliers participating in such plans and coverage.
    ``(b) Notification Regarding Nonparticipation in Drug Price 
Negotiation Program.--A group health plan or a health insurance issuer 
offering group or individual health insurance coverage shall publicly 
disclose, in a manner and in accordance with a process specified by the 
Secretary, any election made under section 1197 of the Social Security 
Act by such plan or issuer to not participate in the Drug Price 
Negotiation Program under part E of title XI of such Act with respect 
to a selected drug (as defined in section 1192(c) of such Act) for 
which coverage is provided under such plan or coverage before the 
beginning of the plan year for which such election was made.''.
            (2) ERISA.--
                    (A) In general.--Subpart B of part 7 of subtitle B 
                of title I of the Employee Retirement Income Security 
                Act of 1974 (29 U.S.C. 1181 et seq.) is amended by 
                adding at the end the following new section:

``SEC. 726. DRUG PRICE NEGOTIATION PROGRAM AND APPLICATION OF MAXIMUM 
              FAIR PRICES.

    ``(a) In General.--In the case of a group health plan or health 
insurance issuer offering group health insurance coverage that is 
treated under section 1197 of the Social Security Act as having in 
effect an agreement with the Secretary of Health and Human Services 
under the Drug Price Negotiation Program under part E of title XI of 
such Act, with respect to a price applicability period (as defined in 
section 1191(b) of such Act) and a selected drug (as defined in section 
1192(c) of such Act) with respect to such period for which coverage is 
provided under such plan or coverage--
            ``(1) the provisions of such part shall apply, as 
        applicable--
                    ``(A) in the case the drug is furnished or 
                dispensed at a pharmacy or by a mail order service, to 
                such plan or coverage, and to the participants and 
                beneficiaries enrolled under such plan or coverage, 
                during such period, with respect to such selected drug, 
                in the same manner as such provisions apply to 
                prescription drug plans and MA-PD plans, and to 
                participants and beneficiaries enrolled under such 
                prescription drug plans and MA-PD plans during such 
                period; and
                    ``(B) in the case the drug is furnished or 
                administered by a hospital, physician, or other 
                provider of services or supplier, to the group health 
                plan or coverage offered by an issuer, to the 
                participants and beneficiaries enrolled under such 
                plans or coverage, and to hospitals, physicians, and 
                other providers of services and suppliers during such 
                period, with respect to such drug in the same manner as 
                such provisions apply to the Secretary of Health and 
                Human Services, to participants and beneficiaries 
                entitled to benefits under part A of title XVIII or 
                enrolled under part B of such title, and to hospitals, 
                physicians, and other providers and suppliers 
                participating under title XVIII during such period;
            ``(2) the plan or issuer shall apply any cost-sharing 
        responsibilities under such plan or coverage, with respect to 
        such selected drug, by substituting an amount not more than the 
        maximum fair price negotiated under such part E of title XI for 
        such drug in lieu of the drug price upon which the cost-sharing 
        would have otherwise applied, and such cost-sharing 
        responsibilities with respect to such selected drug may not 
        exceed such maximum fair price; and
            ``(3) the Secretary shall apply the provisions of such part 
        E to such plan, issuer, and coverage, and such participants and 
        beneficiaries so enrolled in such plans.
    ``(b) Notification Regarding Nonparticipation in Drug Price 
Negotiation Program.--A group health plan or a health insurance issuer 
offering group health insurance coverage shall publicly disclose in a 
manner and in accordance with a process specified by the Secretary any 
election made under section 1197 of the Social Security Act by the plan 
or issuer to not participate in the Drug Price Negotiation Program 
under part E of title XI of such Act with respect to a selected drug 
(as defined in section 1192(c) of such Act) for which coverage is 
provided under such plan or coverage before the beginning of the plan 
year for which such election was made.''.
                    (B) Application to retiree and certain small group 
                health plans.--Section 732(a) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1191a(a)) is amended by striking ``section 711'' and 
                inserting ``sections 711 and 726''.
                    (C) Clerical amendment.--The table of sections for 
                subpart B of part 7 of subtitle B of title I of the 
                Employee Retirement Income Security Act of 1974 is 
                amended by adding at the end the following:

``Sec. 726. Drug Price Negotiation Program and application of maximum 
                            fair prices.''.
            (3) IRC.--
                    (A) In general.--Subchapter B of chapter 100 of the 
                Internal Revenue Code of 1986 is amended by adding at 
                the end the following new section:

``SEC. 9826. DRUG PRICE NEGOTIATION PROGRAM AND APPLICATION OF MAXIMUM 
              FAIR PRICES.

    ``(a) In General.--In the case of a group health plan that is 
treated under section 1197 of the Social Security Act as having in 
effect an agreement with the Secretary of Health and Human Services 
under the Drug Price Negotiation Program under part E of title XI of 
such Act, with respect to a price applicability period (as defined in 
section 1191(b) of such Act) and a selected drug (as defined in section 
1192(c) of such Act) with respect to such period for which coverage is 
provided under such plan--
            ``(1) the provisions of such part shall apply, as 
        applicable--
                    ``(A) if coverage of such selected drug is provided 
                under such plan if the drug is furnished or dispensed 
                at a pharmacy or by a mail order service, to the plan, 
                and to the participants and beneficiaries enrolled 
                under such plan during such period, with respect to 
                such selected drug, in the same manner as such 
                provisions apply to prescription drug plans and MA-PD 
                plans, and to participants and beneficiaries enrolled 
                under such prescription drug plans and MA-PD plans 
                during such period; and
                    ``(B) if coverage of such selected drug is provided 
                under such plan if the drug is furnished or 
                administered by a hospital, physician, or other 
                provider of services or supplier, to the plan, to the 
                participants and beneficiaries enrolled under such 
                plan, and to hospitals, physicians, and other providers 
                of services and suppliers during such period, with 
                respect to such drug in the same manner as such 
                provisions apply to the Secretary of Health and Human 
                Services, to participants and beneficiaries entitled to 
                benefits under part A of title XVIII or enrolled under 
                part B of such title, and to hospitals, physicians, and 
                other providers and suppliers participating under title 
                XVIII during such period;
            ``(2) the plan shall apply any cost-sharing 
        responsibilities under such plan, with respect to such selected 
        drug, by substituting an amount not more than the maximum fair 
        price negotiated under such part E of title XI for such drug in 
        lieu of the drug price upon which the cost-sharing would have 
        otherwise applied, and such cost-sharing responsibilities with 
        respect to such selected drug may not exceed such maximum fair 
        price; and
            ``(3) the Secretary shall apply the provisions of such part 
        E to such plan and such participants and beneficiaries so 
        enrolled in such plan.
    ``(b) Notification Regarding Nonparticipation in Drug Price 
Negotiation Program.--A group health plan shall publicly disclose in a 
manner and in accordance with a process specified by the Secretary any 
election made under section 1197 of the Social Security Act by the plan 
to not participate in the Drug Price Negotiation Program under part E 
of title XI of such Act with respect to a selected drug (as defined in 
section 1192(c) of such Act) for which coverage is provided under such 
plan before the beginning of the plan year for which such election was 
made.''.
                    (B) Application to retiree and certain small group 
                health plans.--Section 9831(a)(2) of the Internal 
                Revenue Code of 1986 is amended by inserting ``other 
                than with respect to section 9826,'' before ``any group 
                health plan''.
                    (C) Clerical amendment.--The table of sections for 
                subchapter B of chapter 100 of such Code is amended by 
                adding at the end the following new item:

``Sec. 9826. Drug Price Negotiation Program and application of maximum 
                            fair prices.''.

SEC. 3. APPLICATION OF PRESCRIPTION DRUG INFLATION REBATES TO DRUGS 
              FURNISHED IN THE COMMERCIAL MARKET.

    (a) Part B Drugs.--
            (1) Application of prescription drug inflation rebates to 
        drugs furnished in the commercial market.--Section 1847A(i) of 
        the Social Security Act (42 U.S.C. 1395w-3a(i)) is amended--
                    (A) in paragraph (1)(A)(i), by striking ``units'' 
                and inserting ``billing units'';
                    (B) in paragraph (2)(A), by striking ``for which 
                payment is made under this part'' and inserting ``that 
                would be payable under this part if such drug were 
                furnished to an individual enrolled under this part''; 
                and
                    (C) in paragraph (3)--
                            (i) in subparagraph (A)(i), by striking 
                        ``units'' and inserting ``billing units''; and
                            (ii) by striking subparagraph (B) and 
                        inserting the following:
                    ``(B) Total number of billing units.--For purposes 
                of subparagraph (A)(i), the total number of billing 
                units with respect to a part B rebatable drug is 
                determined as follows:
                            ``(i) Determine the total number of units 
                        equal to--
                                    ``(I) the total number of units, as 
                                reported under subsection (c)(1)(B) for 
                                each National Drug Code of such drug 
                                during the calendar quarter that is two 
                                calendar quarters prior to the calendar 
                                quarter as described in subparagraph 
                                (A), minus
                                    ``(II) the total number of units 
                                with respect to each National Drug Code 
                                of such drug for which payment was made 
                                under a State plan under title XIX (or 
                                waiver of such plan), as reported by 
                                States under section 1927(b)(2)(A) for 
                                the rebate period that is the same 
                                calendar quarter as described in 
                                subclause (I).
                            ``(ii) Convert the units determined under 
                        clause (i) to billing units for the billing and 
                        payment code of such drug, using a methodology 
                        similar to the methodology used under this 
                        section, by dividing the units determined under 
                        clause (i) for each National Drug Code of such 
                        drug by the billing unit for the billing and 
                        payment code of such drug.
                            ``(iii) Compute the sum of the billing 
                        units for each National Drug Code of such drug 
                        in clause (ii).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply with respect to calendar quarters beginning after 
        the date of the enactment of this Act.
    (b) Covered Part D Drugs.--
            (1) Application of prescription drug inflation rebates to 
        drugs furnished in the commercial market.--Section 1860D-14B of 
        the Social Security Act (42 U.S.C. 1395w-114b) is amended--
                    (A) in subsection (b)--
                            (i) in paragraph (1)--
                                    (I) in subparagraph (A)(i), by 
                                striking ``the total number of units'' 
                                and all that follows through the 
                                semicolon and inserting the following: 
                                ``the total number of units that are 
                                used to calculate the average 
                                manufacturer price of such dosage form 
                                and strength with respect to such part 
                                D rebatable drug, as reported by the 
                                manufacturer of such drug under section 
                                1927 for each month, with respect to 
                                such period;''; and
                                    (II) by striking subparagraph (B) 
                                and inserting the following:
                    ``(B) Excluded units.--For purposes of subparagraph 
                (A)(i), the Secretary shall exclude from the total 
                number of units for a dosage form and strength with 
                respect to a part D rebatable drug, with respect to an 
                applicable period, the following:
                            ``(i) Units of each dosage form and 
                        strength of such part D rebatable drug for 
                        which payment was made under a State plan under 
                        title XIX (or waiver of such plan), as reported 
                        by States under section 1927(b)(2)(A).
                            ``(ii) Units of each dosage form and 
                        strength of such part D rebatable drug for 
                        which a rebate is paid under section 1847A(i).
                            ``(iii) Beginning with plan year 2026, 
                        units of each dosage form and strength of such 
                        part D rebatable drug for which the 
                        manufacturer provides a discount under the 
                        program under section 340B of the Public Health 
                        Service Act.''; and
                            (ii) in paragraph (6), by striking 
                        ``information.--The Secretary'' and all that 
                        follows through ``rebatable covered part D drug 
                        dispensed'' and inserting the following: ``AMP 
                        reports.--The Secretary shall provide for a 
                        method and process under which, in the case of 
                        a manufacturer of a part D rebatable drug that 
                        submits revisions to information submitted 
                        under section 1927 by the manufacturer with 
                        respect to such drug''; and
                    (B) by striking subsection (d) and inserting the 
                following:
    ``(d) Information.--For purposes of carrying out this section, the 
Secretary shall use information submitted by manufacturers under 
section 1927(b)(3) and information submitted by States under section 
1927(b)(2)(A).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply with respect to applicable periods (as defined in 
        section 1860D-14B(g)(7) of the Social Security Act (42 U.S.C. 
        1395w-114b(g)(7))) beginning after the date of the enactment of 
        this Act.
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