I 
115TH CONGRESS 
1ST SESSION H. R. 2439 
To require reporting regarding certain drug price increases, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 16, 2017 
Ms. SCHAKOWSKY (for herself, Ms. DELAURO, Mr. DOGGETT, Mr. CUMMINGS, 
and Mr. WELCH) introduced the following bill; which was referred to the 
Committee on Energy and Commerce 
A BILL 
To require reporting regarding certain drug price increases, 
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 ‘‘Fair Accountability 
and Innovative Research Drug Pricing Act of 2017’’. 
SEC. 2. REPORTING ON JUSTIFICATION FOR DRUG PRICE 
INCREASES. 
Title III of the Public Health Service Act (42 U.S.C. 
241 et seq.) is amended by adding at the end the fol-
lowing: 
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‘‘PART W—DRUG PRICE REPORTING; DRUG 
VALUE FUND 
‘‘SEC. 399OO. REPORTING ON JUSTIFICATION FOR DRUG 
PRICE INCREASES. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) 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. 
‘‘(2) QUALIFYING DRUG.—The term ‘qualifying 
drug’ means any drug that is approved under sub-
section (c) or (j) of section 505 of the Federal Food, 
Drug, and Cosmetic Act or licensed under subsection 
(a) or (k) of section 351 of this Act— 
‘‘(A) that has a wholesale acquisition cost 
of $100 or more per month supply or per a 
course of treatment that lasts less than a 
month and is— 
‘‘(i)(I) subject to section 503(b)(1) of 
the Federal Food, Drug, and Cosmetic 
Act; or 
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‘‘(II) commonly administered by hos-
pitals (as determined by the Secretary); 
‘‘(ii) not designated as a drug for a 
rare disease or condition under section 526 
of the Federal Food, Drug, and Cosmetic 
Act; and 
‘‘(iii) not designated by the Secretary 
as a vaccine; and 
‘‘(B) for which, during the previous cal-
endar year, at least 1 dollar of the total amount 
of sales were for individuals enrolled under the 
Medicare program under title XVIII of the So-
cial Security Act (42 U.S.C. 1395 et seq.) or 
under a State Medicaid plan under title XIX of 
such Act (42 U.S.C. 1396 et seq.) or under a 
waiver of such plan. 
‘‘(3) WHOLESALE
ACQUISITION
COST.—The 
term ‘wholesale acquisition cost’ has the meaning 
given that term in section 1847A(c)(6)(B) of the So-
cial Security Act (42 U.S.C. 1395w–3a(c)(6)(B)). 
‘‘(b) REPORT.— 
‘‘(1) REPORT REQUIRED.—The manufacturer of 
a qualifying drug shall submit a report to the Sec-
retary for each price increase of a qualifying drug 
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that will result in an increase in the wholesale acqui-
sition cost of that drug that is equal to— 
‘‘(A) 10 percent or more over a 12-month 
period; or 
‘‘(B) 25 percent or more over a 36-month 
period. 
‘‘(2) REPORT
DEADLINE.—Each report de-
scribed in paragraph (1) shall be submitted to the 
Secretary not later than 30 days prior to the 
planned effective date of such price increase. 
‘‘(c) CONTENTS.—A report under subsection (b) 
shall, at a minimum, include— 
‘‘(1) with respect to the qualifying drug— 
‘‘(A) the percentage by which the manufac-
turer will raise the wholesale acquisition cost of 
the drug on the planned effective date of such 
price increase; 
‘‘(B) a justification for, and description of, 
each manufacturer’s price increase that oc-
curred during the 12-month period described in 
subsection (b)(1)(A) or the 36-month period de-
scribed in subsection (b)(1)(B), as applicable; 
‘‘(C) the identity of the initial developer of 
the drug; 
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‘‘(B) all stock-based performance metrics 
used by the manufacturer to determine execu-
tive compensation for the 12-month period de-
scribed in subsection (b)(1)(A) or the 36-month 
period described in subsection (b)(1)(B), as ap-
plicable; and 
‘‘(C) any additional information the manu-
facturer chooses to provide related to drug pric-
ing decisions, such as total expenditures on— 
‘‘(i) drug research and development; 
or 
‘‘(ii) clinical trials on drugs that failed 
to receive approval by the Food and Drug 
Administration; and 
‘‘(3) such other related information as the Sec-
retary considers appropriate. 
‘‘(d) CIVIL PENALTY.—Any manufacturer of a quali-
fying drug that fails to submit a report for the drug as 
required by this section shall be subject to a civil penalty 
of $100,000 for each day on which the violation continues. 
‘‘(e) PUBLIC POSTING.— 
‘‘(1) IN GENERAL.—Subject to paragraph (3), 
not later than 30 days after the submission of a re-
port under subsection (b), the Secretary shall post 
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the report on the public website of the Department 
of Health and Human Services. 
‘‘(2) FORMAT.—In developing the format of 
such report for public posting, the Secretary shall 
consult stakeholders, including beneficiary groups, 
and shall seek feedback on the content and format 
from consumer advocates and readability experts to 
ensure such public reports are user-friendly to the 
public and are written in plain language that con-
sumers can readily understand. 
‘‘(3) TRADE SECRETS AND CONFIDENTIAL IN-
FORMATION.—In carrying out this section, the Sec-
retary shall enforce applicable law concerning the 
protection of confidential commercial information 
and trade secrets.’’. 
‘‘SEC. 399OO–1. USE OF CIVIL PENALTY AMOUNTS. 
‘‘The Secretary shall collect the civil penalties under 
section 399OO, in addition to any other amounts avail-
able, and without further appropriation, and shall use 
such funds to carry out activities described in this part 
and to improve consumer and provider information about 
drug value and drug price transparency. 
‘‘SEC. 399OO–2. ANNUAL REPORT TO CONGRESS. 
‘‘(a) IN GENERAL.—Subject to subsection (b), the 
Secretary shall submit to Congress, and post on the public 
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website of the Department of Health and Human Services 
in a way that is easy to use and understand, an annual 
report— 
‘‘(1) summarizing the information reported pur-
suant to section 399OO; and 
‘‘(2) including copies of the reports and sup-
porting detailed economic analyses submitted pursu-
ant to such section. 
‘‘(b) TRADE SECRETS AND CONFIDENTIAL INFORMA-
TION.—In carrying out this section, the Secretary shall 
enforce applicable law concerning the protection of con-
fidential commercial information and trade secrets.’’. 
Æ 
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