I 
114TH CONGRESS 
2D SESSION 
H. R. 6501 
To establish within the Food and Drug Administration 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 
DECEMBER 8, 2016 
Ms. DELAURO
(for herself, Ms. SCHAKOWSKY, Mr. DOGGETT, Mr. 
MCDERMOTT, Mr. HONDA, Ms. MOORE, Ms. KAPTUR, and Mr. WELCH) 
introduced the following bill; which was referred to the Committee on En-
ergy 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 with-
in the jurisdiction of the committee concerned 
A BILL 
To establish within the Food and Drug Administration the 
Prescription Drug and Medical Device Price Review 
Board to regulate the prices of certain prescription drugs 
and medical devices, 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 ‘‘Prescription Drug and 
Medical Device Price Review Board Act of 2016’’. 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
SEC. 2. ESTABLISHMENT. 
There is established in the Food and Drug Adminis-
tration a board to be known as the Prescription Drug and 
Medical Device Price Review Board (in this Act referred 
to as the ‘‘Board’’). 
SEC. 3. MEMBERSHIP; STAFF. 
(a) MEMBERS.—The Board shall be composed of 5 
members as follows: 
(1) The Commissioner of Food and Drugs (or 
the Commissioner’s designee). 
(2) The Administrator of the Centers for Medi-
care & Medicaid Services (or the Administrator’s 
designee). 
(3) The Director of the National Institutes of 
Health (or the Director’s designee). 
(4) The Secretary of Defense (or the Sec-
retary’s designee). 
(5) The Secretary of Veterans Affairs (or the 
Secretary’s designee). 
(b) CHAIRPERSON.—The Board shall designate 1 
member of the Board to serve as the chairperson. 
(c) DIRECTOR AND STAFF.— 
(1) DIRECTOR.—The Board shall have a direc-
tor who shall be appointed by the chairperson of the 
Board, subject to rules prescribed by the Board. 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
(2) STAFF.—The director may appoint and fix 
the pay of such additional personnel as the chair-
person considers appropriate, subject to rules pre-
scribed by the Board. 
(3) APPLICABILITY OF CERTAIN CIVIL SERVICE 
LAWS.—The director and staff of the Board shall be 
appointed subject to the provisions of title 5, United 
States Code, governing appointments in the competi-
tive service, and shall be paid in accordance with the 
requirements of chapter 51 and subchapter III of 
chapter 53 of such title relating to classification and 
General Schedule pay rates; except that an indi-
vidual so appointed may not receive pay in excess of 
the maximum annual rate of basic pay payable for 
grade GS–15 of the General Schedule. 
(d) ASSISTANCE FOR THE BOARD.—Subject to sec-
tion 8(g), in carrying out this Act, the Board may seek 
assistance from outside experts in the fields of consumer 
advocacy, medicine, pharmacology, pharmacy, and pre-
scription drug reimbursement. 
(e) INITIAL MEETING.—The Board shall hold its ini-
tial meeting not later than 90 days after the date of the 
enactment of this Act. 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
SEC. 4. REPORTING REQUIREMENT. 
The Board shall require each manufacturer of a pre-
scription drug or medical device that is sold in the United 
States to submit to the Board on a periodic basis, at a 
level of specificity determined by the Board to be nec-
essary to make a determination under section 6, the fol-
lowing information with respect to the reporting period: 
(1) Each type of prescription drug and medical 
device that is sold by the manufacturer or an affil-
iate of the manufacturer— 
(A) in the United States; or 
(B) in a country that is a member of the 
Organization for Economic Co-operation and 
Development. 
(2) The price charged by the manufacturer and 
the affiliate for the prescription drug or medical de-
vice in the United States and in any such country, 
as applicable. 
(3) The costs of the manufacturer and the affil-
iate to produce and market the prescription drug or 
medical device for sale in the United States and in 
any such country, as applicable. 
SEC. 5. PROHIBITION AGAINST EXCESSIVE PRICE. 
(a) PROHIBITION.—Beginning on the effective date 
of the regulation required by subsection (b), the manufac-
turer of a prescription drug or medical device shall not 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
charge an excessive price, as determined pursuant to such 
regulation, for such drug or device. 
(b) FORMULA.—The Board shall by regulation pre-
scribe a formula for determining whether the average 
manufacturer price of such drug or device over an annual 
quarter is an excessive price. 
(c) DETERMINATION OF EXCESSIVE PRICE.—If the 
Board determines, on its own initiative or in response to 
a petition submitted under subsection (d), that the manu-
facturer of a prescription drug or medical device charges 
an excessive price for such drug or device in violation of 
subsection (a)— 
(1) the Board shall give the manufacturer— 
(A) notice of such violation; and 
(B) subject to subsection (d), a period to 
correct such violation; and 
(2) if the manufacturer fails to correct the vio-
lation by the end of such period, the manufacturer 
shall be subject to section 6 of this Act, section 
1927(c)(2)(E) of the Social Security Act, as added 
by subsection (c) of such section 6, and section 4192 
of the Internal Revenue Code of 1986, as added by 
subsection (d) of such section 6. 
(d) PETITIONS.—Any person may petition the Board 
to make a determination under subsection (c) regarding 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
the pricing of a prescription drug or medical device. Not 
later than 90 days after the date of receipt of such a peti-
tion, the Board shall— 
(1) make a determination under subsection (c) 
regarding such pricing; or 
(2) decline to make such a determination. 
(e) CONTINUING VIOLATION.—The Board shall not 
be required to give a manufacturer an opportunity to cor-
rect a violation, as described in subsection (c)(1)(B), be-
fore the manufacturer becomes subject to the provisions 
described in subsection (c)(2) for such violation, if— 
(1) the Board has already provided such an op-
portunity to correct to the manufacturer; and 
(2) the Board finds that the violation of sub-
section (a) is a continuation of an earlier violation 
with respect to which such an opportunity was pro-
vided. 
(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; 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
(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 
in section 215(i) of the Social Security Act (42 
U.S.C. 415)) for the respective annual quarter. 
SEC. 6. 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 5(a), the Board may— 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
(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 5(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 
5(a), the Board may impose a civil penalty on the manu-
facturer 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) ENFORCEMENT THROUGH INCREASED MEDICAID 
REBATES.— 
(1) IN
GENERAL.—Section 1927(c)(2) of the 
Social Security Act (42 U.S.C. 1396r–8(c)(2)) is 
amended— 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
(A) in subparagraph (A), by inserting ‘‘, 
subject to subparagraph (E),’’ after ‘‘increased 
by’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(E) DISCOURAGING EXCESSIVE PRICES.— 
‘‘(i) IN GENERAL.—In the case of a 
manufacturer of a single source drug or an 
innovator multiple source drug with a re-
bate agreement under this section, if the 
Prescription Drug and Medical Device 
Price Review Board established under sec-
tion 2 of the Prescription Drug and Med-
ical Device Price Review Board Act of 
2016 determines under section 5(a) of 
such Act that such manufacturer charged, 
with respect to a 30-day period, an exces-
sive price for such drug, and the Board de-
termines under clause (ii) to apply an in-
crease amount described in such clause 
with respect to such manufacturer and 
drug, the amount of the rebate determined 
under subparagraph (A) for such manufac-
turer and drug shall be, subject to sub-
paragraph (D), increased by such amount 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
for the 4 rebate periods following such 30- 
day period. 
‘‘(ii) INCREASED
AMOUNT
DETER-
MINATION.—For purposes of clause (i), if 
the Board described in such clause makes 
such a determination under such section 
5(a), with respect to a manufacturer and 
drug described in such clause, the Board 
may determine an increase amount to 
apply with respect to such manufacturer 
and drug and rebate period described in 
such clause. Such increase amount may 
not exceed the rebate amount that would 
otherwise be applied to such manufacturer 
and drug under this section for such rebate 
period, without regard to this subpara-
graph.’’. 
(2) EFFECTIVE DATE.—This subsection and the 
amendments made by this subsection shall apply 
with respect to rebate agreements entered into after 
the date that is 60 days after the date of the enact-
ment of this Act. 
(d) TAX ON EXCESS PRESCRIPTION DRUG AND MED-
ICAL DEVICE PROFITS.— 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
(1) DETERMINATION
OF
AMOUNT.—If the 
Board determines under section 5(a) that a manu-
facturer, 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 
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 6(d)(1) of the Prescription Drug and Med-
ical Device Price Review Board Act of 2016 for such drug 
or device for the taxable year for sales after the determina-
tion. 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
‘‘(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, 2016. 
(e) SAFE
AND AFFORDABLE DRUGS FROM AP-
PROVED COUNTRIES.—Chapter VIII of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 381 et seq.) is amend-
ed by adding at the end the following: 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
‘‘SEC. 810. IMPORTATION BY INDIVIDUALS OF PRESCRIP-
TION DRUGS, AND DEVICES, FROM AN AP-
PROVED COUNTRY IF MANUFACTURERS ARE 
CHARGING AN EXCESSIVE PRICE FOR COM-
PARABLE PRODUCTS IN THE UNITED STATES. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of this Act, not later than 180 days after the date 
of enactment of this section, the Prescription Drug and 
Medical Device Price Review Board (in this section re-
ferred to as the ‘Board’) shall promulgate regulations per-
mitting individuals to safely import from an approved 
country into the United States prescription drugs, and de-
vices, that are comparable to prescription drugs, and de-
vices, for which the Board makes a final determination 
that the manufacturer is charging or has charged an ex-
cessive price in violation of section 5(a) of the Prescription 
Drug and Medical Device Price Review Board Act of 
2016. 
‘‘(b) COMPARABLE DEFINED.—For purposes of this 
section, the term ‘comparable’ means— 
‘‘(1) with respect to a drug, having the same 
active ingredient or ingredients, route of administra-
tion, dosage form, and strength; and 
‘‘(2) with respect to a device, being substan-
tially equivalent. 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
‘‘(c) ASSURANCE OF SAFETY.—For purposes of this 
section, the term ‘approved country’ means a country that 
is determined by the Secretary to have in effect standards 
to ensure the safety of prescription drugs, and of devices, 
that are at least as protective as the standards applicable 
under Federal law in the United States.’’. 
SEC. 7. 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, 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
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 
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-
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
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 
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.—Nothing in this Act shall be 
construed as authorizing the Board to disclose any infor-
mation that is a trade secret or confidential information 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
subject to section 552(b)(4) of title 5, United States Code, 
or section 1905 of title 18, United States Code. 
SEC. 8. REGULATIONS. 
(a) IN GENERAL.—Not later than 1 year after the 
date of the initial meeting held under section 4(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 
in accordance with the notice and comment procedures es-
tablished under section 553 of title 5, United States Code. 
SEC. 9. REPORT TO FEDERAL AGENCIES . 
Not later than 1 year after the effective date of the 
regulations under section 9 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— 
(1) a list of each prescription drug and medical 
device for which an excessive price was charged dur-
ing the preceding calendar year, as determined by 
the Board under section 5; 
(2) recommendations to the Federal agency 
against dispensing or making payments for the dis-
pensing of the prescription drug or medical device; 
and 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS
(3) recommendations to the Federal agency to 
substitute, in place of any drug or device listed pur-
suant to paragraph (1), a similar prescription drug 
or medical device that is not sold at an excessive 
price. 
SEC. 10. REPORT TO CONGRESS. 
Not later than 1 year after the initial meeting of the 
Board under section 3(e), and annually thereafter, the 
Board shall submit to the Congress a report describing 
the activities of the Board for the preceding year. 
SEC. 11. DEFINITIONS. 
In this Act: 
(1) The term ‘‘affiliate’’ means, with respect to 
a manufacturer, any entity that controls, is con-
trolled by, or is under common control with such 
manufacturer. 
(2) The term ‘‘average manufacturer price’’ 
means the average price charged by the manufac-
turer of a prescription drug or medical device, as ap-
plicable, for sales of the drug or device by the manu-
facturer in the United States over the respective an-
nual quarter. 
(3) The term ‘‘medical device’’ means a device 
(as defined in section 201 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 321)). 
VerDate Sep 11 2014 
22:22 Dec 14, 2016
Jkt 069200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H6501.IH
H6501
asabaliauskas on DSK3SPTVN1PROD with BILLS