152 
(f) CONSIDERATIONS.—The formula required by sub-
section (a) shall at a minimum take into consideration— 
(1) the average manufacturer price of the pre-
scription drug or medical device over the respective 
annual quarter or quarters; 
(2) the average manufacturer price of other 
prescription drugs or medical devices in the same 
therapeutic class over the same quarter or quarters; 
(3) the average price at which the prescription 
drug or medical device and other prescription drugs 
and medical devices in the same therapeutic class 
have been sold by manufacturers in countries other 
than the United States; 
(4) the costs associated with producing and 
marketing the prescription drug or medical device, 
the value of the drug or device to patients where suf-
ficient data is available to determine such value, the 
total Federal investment in the development of the 
drug or device, the size of the patient population re-
ceiving the drug or device, and other factors deter-
minative as to the true cost of production; and 
(5) whether the price of the prescription drug 
or medical device increased during any annual quar-
ter by a percentage that is more than 2 percent 
greater than the CPI increase percentage (as defined 
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153 
in section 215(i) of the Social Security Act (42 
U.S.C. 415)) for the respective annual quarter. 
(g) VALUE
OR
COST-EFFECTIVENESS
ASSESS-
MENTS.—The use of Quality-Adjusted Life Years, Dis-
ability-Adjusted Life Years, or other similar mechanisms 
is prohibited for use in value or cost-effectiveness assess-
ments for purposes of this section. 
SEC. 304. ENFORCEMENT PROVISIONS. 
(a) REDUCED PATENT TERM.—If the Board finds 
that the manufacturer of a prescription drug or medical 
device, who is also an owner of a patent for such drug 
or device, charged an excessive price for such drug or de-
vice in violation of section 303(a), the Board may— 
(1) reduce the term, by not more than 5 years, 
of any patent issued under title 35, United States 
Code, relating to such drug or device; or 
(2) if the term of each patent for such drug or 
device has expired, reduce the term, by not more 
than 5 years, of another patent owned by the patent 
owner relating to a prescription drug or medical de-
vice. 
(b) CIVIL PENALTIES.—If the Board determines 
under section 303(c) that a manufacturer of a prescription 
drug or medical device charged an excessive price for a 
prescription drug or medical device in violation of section 
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154 
303(a), the Board may impose a civil penalty on the man-
ufacturer of not more than 10 percent of the manufactur-
er’s gross sales of the drug or device during the period 
beginning on the date on which an excessive price is first 
charged and ending on the date on which the manufac-
turer ceases to charge an excessive price. 
(c) TAX ON EXCESS PRESCRIPTION DRUG AND MED-
ICAL DEVICE PROFITS.— 
(1) DETERMINATION
OF
AMOUNT.—If the 
Board determines under section 303(a) that a man-
ufacturer, producer, or importer of a prescription 
drug or medical device charged an excessive price for 
such prescription drug or medical device during a 
taxable year, the Board may determine under this 
paragraph a reasonable price for such drug or device 
for such taxable year. 
(2) IMPOSITION OF TAX.— 
(A) IN GENERAL.—The Internal Revenue 
Code of 1986 is amended by inserting after sec-
tion 4191 the following new section: 
‘‘SEC. 4192. EXCESSIVE PRESCRIPTION DRUG AND MEDICAL 
DEVICE PRICE. 
‘‘(a) IN GENERAL.—There is hereby imposed on the 
sale of any prescription drug or medical device by the 
manufacturer, producer, or importer a tax equal to the 
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difference between the price at which such drug or device 
is so sold and the reasonable price determined by the Pre-
scription Drug and Medical Device Price Review Board 
under section 303(c)(1) of the Medicare for America Act 
for such drug or device for the taxable year for sales after 
the determination. 
‘‘(b) PRESCRIPTION DRUG OR MEDICAL DEVICE.— 
For purposes of this section, the term ‘prescription drug 
or medical device’ means any prescription drug (as defined 
in section 9008 of the Patient Protection and Affordable 
Care Act) or device (as defined in section 201(h) of the 
Federal Food, Drug, and Cosmetic Act) intended for hu-
mans.’’. 
(B) CLERICAL AMENDMENT.—The table of 
parts for chapter 32 of such Code is amended— 
(i) in the item relating to subchapter 
E, by striking ‘‘Medical’’ and inserting 
‘‘Drugs and medical’’; and 
(ii) by inserting after the item relating 
to section 4191 the following new item: 
‘‘SEC. 4192. EXCESSIVE PRESCRIPTION DRUG AND MEDICAL 
DEVICE PRICE.’’. 
(3) EFFECTIVE DATE.—This subsection and the 
amendments made by this subsection shall apply 
with respect to sales after December 31, 2025. 
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156 
SEC. 305. AUTHORITY. 
(a) OBTAINING OFFICIAL DATA.—The chairperson of 
the Board may secure directly from any Federal agency 
information necessary to enable the Board to carry out 
its duties. Upon request of the chairperson, the head of 
the agency shall furnish such information to the Board 
to the extent such information is not prohibited from dis-
closure by law. 
(b) MAILS.—The Board may use the United States 
mails in the same manner and under the same conditions 
as other Federal agencies. 
(c) ADMINISTRATIVE SUPPORT SERVICES.—Upon the 
request of the chairperson of the Board, the Administrator 
of General Services shall provide to the Board, on a reim-
bursable basis, the administrative support services nec-
essary for the Board to carry out its duties. 
(d) CONTRACT AUTHORITY.—The Board may con-
tract with and compensate government and private agen-
cies or persons for the purpose of conducting research, 
surveys, and other services necessary to enable the Board 
to carry out its duties. 
(e) INVESTIGATIONS.—The Board may make such in-
vestigations as it considers necessary to determine whether 
there is or may be a violation of any regulation promul-
gated under this Act and may require or permit any per-
son to file with it a statement in writing, under oath or 
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157 
otherwise as the Board shall determine, as to all the facts 
and circumstances concerning the matter to be inves-
tigated. 
(f) SUBPOENA POWER.— 
(1) IN GENERAL.—The Board may issue sub-
poenas requiring the attendance and testimony of 
witnesses and the production of any evidence relat-
ing to any matter under investigation by the Board. 
The attendance of witnesses and the production of 
evidence may be required from any place within the 
United States at any designated place of hearing 
within the United States. 
(2) FAILURE TO OBEY A SUBPOENA.—If a per-
son refuses to obey a subpoena issued under para-
graph (1), the Board may apply to a United States 
district court for an order requiring that person to 
appear before the Board to give testimony, produce 
evidence, or both, relating to the matter under inves-
tigation. The application may be made within the ju-
dicial district where the hearing is conducted or 
where that person is found, resides, or transacts 
business. Any failure to obey the order of the court 
may be punished by the court as civil contempt. 
(3) SERVICE OF SUBPOENAS.—The subpoenas 
of the Board shall be served in the manner provided 
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for subpoenas issued by a United States district 
court under the Federal Rules of Civil Procedure for 
the United States district courts. 
(4) SERVICE OF PROCESS.—All process of any 
court to which application is made under paragraph 
(2) may be served in the judicial district in which 
the person required to be served resides or may be 
found. 
(5) NOTICE.—Upon issuing any subpoena 
under this subsection, the Board shall give notice of 
such issuance to the appropriate committees of Con-
gress, including the Committee on Appropriations of 
the House of Representatives and the Committee on 
Appropriations of the Senate. 
(g) CONFIDENTIALITY.—Under this title, the Sec-
retary shall enforce applicable law concerning a trade se-
cret or confidential information subject to section 
552(b)(4) of title 5, United States Code, or section 1905 
of title 18. 
SEC. 306. REGULATIONS. 
(a) IN GENERAL.—Not later than 1 year after the 
date of the initial meeting held under section 302(e), the 
Board shall issue final regulations to carry out this Act. 
(b) NOTICE
AND COMMENT REQUIREMENT.—The 
regulations developed under subsection (a) shall be issued 
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159 
in accordance with the notice and comment procedures es-
tablished under section 553 of title 5, United States Code. 
SEC. 307. REPORT TO FEDERAL AGENCIES. 
Not later than 1 year after the effective date of the 
regulations under section 306 and annually thereafter, the 
Board shall submit to each Federal agency that dispenses 
or makes payments for the dispensing of prescription 
drugs or medical devices a report containing a list of each 
prescription drug and medical device for which an exces-
sive price was charged during the preceding calendar year, 
as determined by the Board under section 303. The Sec-
retary shall make this report publicly available. 
SEC. 308. DEFINITIONS. 
In this title: 
(1) AFFILIATE.—The term ‘‘affiliate’’ means, 
with respect to a manufacturer, any entity that con-
trols, is controlled by, or is under common control 
with such manufacturer. 
(2) AVERAGE
MANUFACTURER
PRICE.—The 
term ‘‘average manufacturer price’’ means the aver-
age price charged by the manufacturer of a prescrip-
tion drug or medical device, as applicable, for sales 
of the drug or device by the manufacturer in the 
United States over the respective annual quarter. 
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(3) MEDICAL DEVICE.—The term ‘‘medical de-
vice’’ means a device (as defined in section 201 of 
the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 321)). 
(4) PRESCRIPTION DRUG.—The term ‘‘prescrip-
tion drug’’ means a drug (as defined in section 201 
of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 321)) that is subject to section 503(b)(1) of 
such Act (21 U.S.C. 353(b)(1)). 
(5) MANUFACTURER.—The term ‘‘manufac-
turer’’ means the person— 
(A) that holds the application for a drug 
approved under section 505 of the Federal 
Food, Drug, and Cosmetic Act or the license 
issued under section 351 of the Public Health 
Service Act; or 
(B) who is responsible for setting the price 
for the drug. 
(6) WHOLESALE ACQUISITION COST.—The term 
‘‘wholesale acquisition cost’’ has the meaning given 
that term in section 1847A(c)(6)(B) of the Social 
Security Act (42 U.S.C. 1395w–3a(c)(6)(B)). 
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SEC. 309. MORATORIUM ON DIRECT-TO-CONSUMER DRUG 
ADVERTISING. 
The Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 301 et seq.) is amended— 
(1) in section 301 (21 U.S.C. 331), by adding 
at the end the following: 
‘‘(eee) The conduct of direct-to-consumer advertising 
of a drug in violation of section 506J.’’; and’’. 
(2) in chapter V, by inserting after section 506I 
(21 U.S.C. 356f) the following: 
‘‘SEC. 506J. DIRECT-TO-CONSUMER DRUG ADVERTISING. 
‘‘(a) PROHIBITIONS.— 
‘‘(1) FIRST THREE YEARS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), no person shall conduct direct-to- 
consumer advertising of a drug for which an 
application is submitted under section 505(b) 
before the end of the 3-year period beginning 
on the date of the approval of such application. 
‘‘(B) WAIVER.—The Secretary may waive 
the application of subparagraph (A) to a drug 
during the third year of the 3-year period de-
scribed in such subparagraph if— 
‘‘(i) the sponsor of the drug submits 
an application to the Secretary pursuant to 
subparagraph (C); and 
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‘‘(ii) the Secretary, after considering 
the application and any accompanying ma-
terials, determines that direct-to-consumer 
advertising of the drug would have an af-
firmative value to public health. 
‘‘(C) APPLICATION FOR WAIVER.—To seek 
a waiver under subparagraph (B), the sponsor 
of a drug shall submit an application to the 
Secretary at such time, in such manner, and 
containing such information as the Secretary 
may require. 
‘‘(2) SUBSEQUENT YEARS.—The Secretary may 
prohibit direct-to-consumer advertising of a drug 
during the period beginning at the end of the 3-year 
period described in paragraph (1)(A) if the Sec-
retary determines that the drug has significant ad-
verse health effects based on post-approval studies, 
risk-benefit analyses, adverse event reports, the sci-
entific literature, any clinical or observational stud-
ies, or any other appropriate resource. 
‘‘(b) REGULATIONS.—Not later than 1 year after the 
date of the enactment of this section, the Secretary shall 
revise the regulations promulgated under this Act gov-
erning drug advertisements to the extent necessary to im-
plement this section. 
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