I 
116TH CONGRESS 
1ST SESSION H. R. 5039 
To lower the prices of excessively costly life-sustaining prescription drugs 
under part D of the Medicare program by requiring the Secretary of 
Health and Human Services to negotiate their prices, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 12, 2019 
Mr. LIPINSKI introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committee on 
Ways and Means, 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 lower the prices of excessively costly life-sustaining pre-
scription drugs under part D of the Medicare program 
by requiring the Secretary of Health and Human Serv-
ices to negotiate their prices, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Life-Sustaining Pre-
scription Drug Price Relief Act of 2019’’. 
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SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED LIFE- 
SUSTAINING PRESCRIPTION DRUGS. 
(a) IN GENERAL.—The Secretary, not later than 1 
year after the date of enactment of this Act, shall establish 
a process to conduct a review of all life-sustaining pre-
scription drugs, not less frequently than once per calendar 
year, under which the Secretary determines under sub-
section (b) whether the price of each such drug is exces-
sive. 
(b) EXCESSIVE PRICE DETERMINATIONS.— 
(1) INTERNATIONAL REFERENCE PRICE.— 
(A) IN GENERAL.—The Secretary shall de-
termine that any life-sustaining prescription 
drug for which the domestic average manufac-
turing price exceeds 110 percent of the average 
price charged for such drug in the 5 reference 
countries to have an excessive price. In assess-
ing the extent to which the price is excessive, 
the Secretary shall consider the factors de-
scribed in paragraph (2). 
(B) REFERENCE COUNTRIES.—In this Act, 
the term ‘‘reference countries’’ means Canada, 
the United Kingdom, Germany, France, and 
Japan. 
(C) REQUIREMENT
WITH
RESPECT
TO 
DRUGS FOR WHICH CERTAIN REFERENCE COUN-
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TRY
INFORMATION
IS
NOT
AVAILABLE.—The 
Secretary shall make a determination under 
paragraph (1) for every life-sustaining prescrip-
tion drug for which pricing information is avail-
able for at least 3 of the 5 reference countries. 
(2) DETERMINATIONS BASED ON OTHER FAC-
TORS.—With respect to any life-sustaining prescrip-
tion drug that is not determined to have an excessive 
price by operation of paragraph (1) (including any 
drug for which there is insufficient data to make 
such a determination under such paragraph), the 
Secretary shall determine that such drug has an ex-
cessive price if the price of the drug is higher than 
reasonable taking into account the following factors: 
(A) The size of the affected patient popu-
lation. 
(B) The risk adjusted value of Federal 
Government subsidies and investments related 
to the drug. 
(C) The costs associated with development 
of the drug. 
(D) Whether the drug provided a signifi-
cant improvement in health outcomes, com-
pared to other therapies available at the time of 
its approval. 
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(E) The cumulative global revenues gen-
erated by the drug. 
(F) Whether the domestic average manu-
facturer price of the drug increased during any 
annual quarter by a percentage that is more 
than the percentage increase in the consumer 
price index for all urban consumers for the re-
spective annual quarter. 
(G) Other factors the Secretary determines 
appropriate. 
(c) PETITION FOR DETERMINATION.— 
(1) IN GENERAL.—Any person may petition the 
Secretary, in accordance with section 553(e) of title 
5, United States Code, to make an excessive drug 
price determination for an applicable drug under 
subsection (b)(2). Not later than 90 days after the 
date of receipt of such a petition, subject to para-
graph (2), the Secretary shall— 
(A) make a determination under subsection 
(b)(2) regarding such drug; or 
(B)(i) decline to make such a determina-
tion; and 
(ii) make public the reasons why the Sec-
retary has declined to make such a determina-
tion. 
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(2) EXCEPTION.—The Secretary shall not make 
a determination under subsection (b)(2) for a drug 
in response to a petition under this section more fre-
quently than once per calendar year. 
(3) 
PUBLIC
AVAILABILITY.—The 
Secretary 
shall make any petitions submitted under this sub-
section, together with any documentation related to 
the petitions and the Secretary’s determinations on 
such petitions and rationale for such determinations, 
publicly available, including by posting such informa-
tion on the database under section 5. 
SEC. 3. ABOLISHING THE PROHIBITION ON MEDICARE NE-
GOTIATION OF DRUG PRICES AND REQUIR-
ING 
THE 
SECRETARY 
OF 
HEALTH 
AND 
HUMAN SERVICES TO NEGOTIATE PRICES OF 
LIFE-SUSTAINING 
PRESCRIPTION 
DRUGS 
FURNISHED UNDER PART D OF THE MEDI-
CARE PROGRAM. 
Section 1860D–11 of the Social Security Act (42 
U.S.C. 1395w–111) is amended by striking subsection (i) 
and inserting the following new subsection: 
‘‘(i) REQUIREMENT TO NEGOTIATE PRICES WITH 
RESPECT TO CERTAIN LIFE-SUSTAINING PRESCRIPTION 
DRUGS.— 
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‘‘(1) IN GENERAL.—With respect to any life- 
sustaining prescription drug (as defined in section 
6(4) of the Life-Sustaining Prescription Drug Price 
Relief Act of 2019), if the Secretary determines 
under section 2 of such Act that the price of the 
drug is excessive, the Secretary shall, notwith-
standing any other provision of law, negotiate with 
manufacturers, prescription drug plan sponsors, and 
MA organizations the total payment (including any 
discounts, rebates, and other price concessions) that 
may be made by such sponsors and organizations 
during a negotiated price period (as specified by the 
Secretary) for such drugs with respect to such drugs 
furnished to individuals who are enrolled under a 
prescription drug plan or under an MA–PD plan of-
fered by such sponsor or organization, respectively. 
‘‘(2) PRICE LIMITATION.—In the case of a life- 
sustaining prescription drug that is negotiated by 
the Secretary pursuant to paragraph (1), the total 
payment described in such paragraph may not ex-
ceed 110 percent of the average price charged for 
such drug in the 5 reference countries described in 
section 2(b)(1)(B) of such Act (in this section re-
ferred to as the ‘international reference price’). 
‘‘(3) ENFORCEMENT.— 
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‘‘(A) IN GENERAL.—In the case of a man-
ufacturer of a life-sustaining prescription drug 
for which the Secretary has made a determina-
tion described in paragraph (1) that fails to 
enter into a negotiation and agree on a total 
payment with respect to such drugs as de-
scribed in such paragraph within 9 months of 
such determination— 
‘‘(i) if such drug has an international 
reference price, the Secretary shall assess 
a civil monetary penalty equal to 2 times 
the difference between the total revenue for 
such drug from all sales in the United 
States made beginning after the date that 
is 9 months after such determination and 
the total revenue for such drug from all 
such sales made after such date that would 
have been received if the manufacturer 
charged the international reference price 
for such drug; and 
‘‘(ii) if such drug has an international 
reference price, the Secretary shall assess 
a civil monetary penalty equal to 50 per-
cent of the revenue from all United States 
sales of the drug in the first 90 days after 
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the date that is 9 months after such deter-
mination, 75 percent of the value of all 
revenue from such sales during the fol-
lowing 90 days, and 95 percent of all rev-
enue from such sales in subsequent days 
until such time as an agreement is reached 
or an international reference price is avail-
able. 
‘‘(B) DEPOSIT INTO TRUST FUND.—Civil 
monetary penalties collected pursuant to sub-
paragraph (A) shall be deposited into the Fed-
eral Hospital Insurance Trust Fund.’’. 
SEC. 4. PUBLIC EXCESSIVE DRUG PRICE DATABASE. 
(a) EXCESSIVE DRUG PRICE DATABASE.— 
(1) IN GENERAL.—The Secretary shall establish 
and maintain a comprehensive, up-to-date database 
of life-sustaining prescription drugs and the exces-
sive price determinations for such drugs under sec-
tion 2. 
(2) CONTENTS.—The database shall include, at 
a minimum, for each life-sustaining prescription 
drug, for the applicable calendar year— 
(A) the name of the drug; 
(B) the manufacturer; 
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(C) whether the drug was determined 
under section 2(b) to have an excessive price; 
and 
(D) the number of petitions the Secretary 
received under section 2(c) to make an exces-
sive price determination for the drug, together 
with the information described in section 
2(c)(3). 
(3) CERTAIN DETERMINATIONS.—With respect 
to a determination made under section 2(b)(1), the 
Secretary shall publish on the database such deter-
mination in accordance with paragraph (1) within 
30 days of receiving domestic and international pric-
ing information from manufacturers under section 6. 
(b) ANNUAL REPORTS
TO CONGRESS.—Not later 
than 60 days after the first excessive price review under 
section 2 is complete, and annually thereafter, the Sec-
retary shall submit to Congress a report describing the 
excessive drug price review for the preceding year. The 
report shall contain summary data regarding— 
(1) the total number of drugs that were re-
viewed; 
(2) the total number of drugs determined to be 
excessively priced under each of paragraphs (1) and 
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(2) of section 2(b), and the name and manufacturer 
of each such drug; 
(3) the total number of drugs determined to be 
excessively priced, listed by manufacturer; 
(4) the extent to which the prices of the drugs 
identified under section 2 were higher than reason-
able, on average; 
(5) the total number of petitions the Secretary 
received under section 2(c) to make excessive price 
determinations for drugs; 
(6) a list of any manufacturers who failed to re-
port information as required under section 6; and 
(7) other appropriate information, as the Sec-
retary determines or as Congress requests. 
(c) PUBLIC
AVAILABILITY.—The Secretary shall 
make the information in the database described in sub-
section (a) and the report in subsection (b) publicly avail-
able, including on the internet website of the Food and 
Drug Administration, in a manner that is easy to find and 
understand. 
SEC. 5. DRUG MANUFACTURER REPORTING. 
(a) IN GENERAL.—Each manufacturer shall submit 
to the Secretary, in such format as the Secretary may re-
quire, an annual report that includes the following infor-
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mation for each life-sustaining prescription drug of the 
manufacturer, with respect to the previous calendar year: 
(1) The average manufacturer price of the drug 
in the United States and in the reference countries, 
for the entire year, and broken down for each quar-
ter of the year. 
(2) The wholesale acquisition cost of the drug 
in the United States and in the reference countries, 
for the entire year, and broken down for each quar-
ter of the year. 
(3) Cumulative global revenues generated by 
the drug. 
(4) Annual net sales revenue generated by the 
drug in the United States and in the reference coun-
tries, for the entire year, and broken down for each 
quarter of the year. 
(5) Total expenditures on domestic and foreign 
drug research and development related to the drug, 
itemized by— 
(A) basic and preclinical research; 
(B) clinical research, reported separately 
for each clinical trial; 
(C) development of alternative dosage 
forms and strengths for the drug molecule or 
combinations, including the molecule; 
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(D) other drug development activities, such 
as nonclinical laboratory studies and record and 
report maintenance; 
(E) pursuing new or expanded indications 
for such drug through supplemental applica-
tions under section 505 of the Federal Food, 
Drug, and Cosmetic Act; and 
(F) carrying out postmarket requirements 
related to such drug, including under section 
505(o)(3) of the Federal Food, Drug, and Cos-
metic Act. 
(6) Total expenditures on domestic and foreign 
marketing and advertising related to the drug. 
(7) Investments in human clinical trials related 
to the drug, by each trial and each year, including 
grants, research contracts, tax credits or deductions, 
and reimbursements from public or private health 
plans or insurance, and any other public sector sub-
sidies or incentives, such as the fair market value or 
priority review vouchers or other considerations. 
(8) The estimated size of the affected patient 
population. 
(9) Additional information the manufacturer 
chooses to provide related to drug pricing decisions, 
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such as information related to the methodology used 
to set the price of the drug. 
(10) Additional information as the Secretary 
determines necessary to carry out this Act, including 
information for previous years. 
(b) REPORT DUE DATE.—Applicable manufacturers 
shall submit the reports described in subsection (a) not 
later than January 15 of the year following the date of 
enactment of this Act, and of each year thereafter. 
(c) PENALTY FOR NONCOMPLIANCE.— 
(1) IN GENERAL.—Any manufacturer that fails 
to submit information for a drug as required by this 
section on a timely basis or that knowingly provides 
false information shall be liable for a civil monetary 
penalty, as determined by the Secretary under para-
graph (2), in addition to any other penalty under 
other applicable provisions of law. 
(2) AMOUNT OF PENALTY.—The amount of a 
civil penalty under paragraph (1) shall be equal to 
the product of— 
(A) an amount, as determined appropriate 
by the Secretary, which is— 
(i) not less than 0.5 percent of the 
gross revenues from sales for the previous 
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Social Security Act (42 U.S.C. 1396r–8(k)(1)); 
or with respect to a drug for which there is no 
average manufacturer price as so defined, such 
term shall mean the wholesale acquisition cost 
(as defined in section 1847A(c)(6)(B) of the 
Social 
Security 
Act 
(42 
U.S.C. 
1395w– 
3a(c)(6)(B)) of the drug. 
(B) APPLICATION TO REFERENCE COUN-
TRIES.—With respect to reference countries, 
the term ‘‘average manufacturer price’’, as de-
fined in subparagraph (A), shall be determined 
based on the price of the drug in the applicable 
reference country. 
(2) BIOSIMILAR
BIOLOGICAL
PRODUCT.—The 
term ‘‘biosimilar biological product’’ means a biologi-
cal product licensed pursuant to an application 
under section 351(k) of the Public Health Service 
Act (42 U.S.C. 262(k)). 
(3) GENERIC DRUG.—The term ‘‘generic drug’’ 
means a drug approved pursuant to an application 
under section (b)(2) or (j) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 355). 
(4) LIFE-SUSTAINING
PRESCRIPTION
DRUG.— 
The term ‘‘life-sustaining prescription drug’’ means 
a drug that is— 
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(A) approved under subsection (c) or (j) of 
section 505 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355) or a biological 
product licensed under subsection (a) or (k) of 
section 351 of the Public Health Service Act 
(42 U.S.C. 262); 
(B) subject to section 503(b)(1) of the 
Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 353(b)(1)); and 
(C) life-sustaining (as such term is defined 
in regulation pursuant to section 506C of the 
Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 356c)). 
(5) MANUFACTURER.—The term ‘‘manufac-
turer’’ means the holder of an application approved 
under section 505 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355) or of a license issued 
under section 351 of the Public Health Service Act 
(42 U.S.C. 262). 
(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
Æ 
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