I 
116TH CONGRESS 
1ST SESSION 
H. R. 465 
To significantly lower prescription drug prices for patients in the United 
States by ending government-granted monopolies for manufacturers who 
charge drug prices that are higher than the median prices at which 
the drugs are available in other countries. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 10, 2019 
Mr. KHANNA (for himself, Mr. WELCH, Mr. CUMMINGS, Ms. OCASIO-CORTEZ, 
Ms. SCHAKOWSKY, Mr. POCAN, Ms. OMAR, Ms. DELAURO, Mr. NEGUSE, 
Ms. LEE of California, Ms. TLAIB, Ms. PRESSLEY, Ms. GABBARD, Mr. 
DEFAZIO, and Ms. JAYAPAL) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce, and in addition to 
the Committee on the Judiciary, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To significantly lower prescription drug prices for patients 
in the United States by ending government-granted mo-
nopolies for manufacturers who charge drug prices that 
are higher than the median prices at which the drugs 
are available in other countries. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Prescription Drug 
Price Relief Act of 2019’’. 
SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED 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 brand name drugs, 
not less frequently than once per calendar year, under 
which the Secretary determines under subsection (b) 
whether the price of each such drug is excessive. 
(b) EXCESSIVE PRICE DETERMINATIONS.— 
(1) INTERNATIONAL REFERENCE PRICE.— 
(A) IN GENERAL.—The Secretary shall de-
termine that any brand name drug for which 
the domestic average manufacturing price ex-
ceeds the median price charged for such drug in 
the 5 reference countries to have an excessive 
price. In assessing the extent to which the price 
is excessive, the Secretary shall consider the 
factors described 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 brand name drug for 
which pricing information is available for at 
least 3 of the 5 reference countries. 
(2) DETERMINATIONS BASED ON OTHER FAC-
TORS.—With respect to any brand name drug that 
is not determined to have an excessive price by oper-
ation of paragraph (1) (including any drug for which 
there is insufficient data to make such a determina-
tion under such paragraph), the Secretary shall de-
termine that such drug has an excessive 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 value of the drug to patients, in-
cluding the impact of the price on access to the 
drug and the relationship of the price of the 
drug to its therapeutic health benefits. 
(C) The risk adjusted value of Federal 
Government subsidies and investments related 
to the drug. 
(D) The costs associated with development 
of the drug. 
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(E) Whether the drug provided a signifi-
cant improvement in health outcomes, com-
pared to other therapies available at the time of 
its approval. 
(F) The cumulative global revenues gen-
erated by the drug. 
(G) 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. 
(H) 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 
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(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. 
(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. ENDING GOVERNMENT-GRANTED MONOPOLIES FOR 
EXCESSIVELY PRICED DRUGS. 
(a) EXCESSIVE DRUG PRICE AUTHORITY.—With re-
spect to any brand name drug, if the Secretary determines 
under section 2 that the price of the drug is excessive, 
the Secretary— 
(1) shall waive or void any government-granted 
exclusivities with respect to such drug, effective on 
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the date that the excessive price determination under 
section 2 is made for such drug; and 
(2) shall grant open, non-exclusive licenses al-
lowing any person to make, use, offer to sell or sell, 
or import into the United States such drug, and to 
rely upon the regulatory test data of such drug, in 
accordance with section 4. 
(b) EXPEDITED
REVIEW.—The Secretary shall 
prioritize the review of, and act within 8 months of the 
date of the submission of a generic drug application or 
a biosimilar biological product application if such applica-
tion references a drug licensed under subsection (a)(2). 
(c) CIVIL ACTIONS.—If the Secretary determines that 
the manufacturer of an excessively priced drug (as deter-
mined under section 2(a)) has increased the price of such 
drug during the period beginning on the date on which 
such price determination is made and ending on the date 
on which an entity begins manufacturing the drug under 
an open, non-exclusive license under subsection (a)(2), the 
Secretary may file a civil action in the United States dis-
trict court for the district in which the manufacturer is 
located, or in the United States district court for the Dis-
trict of Columbia, to recover damages in an amount equal 
to not less than the total amount of revenue derived by 
the manufacturer as a result of any such price increase 
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during such period. In actions brought under this sub-
section, the district courts shall have jurisdiction to grant 
all appropriate relief including, but not limited to, injunc-
tive relief and compensatory damages. 
SEC. 4. EXCESSIVE DRUG PRICE LICENSE. 
(a) REASONABLE ROYALTY.— 
(1) IN GENERAL.—An entity accepting an open, 
non-exclusive license under section 3(a)(2) shall pay 
a reasonable royalty to the holder of a patent that 
claims the drug or that claims a use of the drug or 
to the holder of an application approved under sub-
section 505(c) of the Federal Food, Drug, and Cos-
metic Act or section 351(a) of the Public Health 
Service Act for which any government-granted exclu-
sivity with respect to the drug was terminated under 
section 5(a)(1). 
(2) ROYALTY RATE.—Such royalty rate shall 
be— 
(A) a percentage of sales, where the per-
centage rate is no higher than the average roy-
alty rate estimated from the data provided by 
the Internal Revenue Service for pharma-
ceutical manufacturer Federal income tax re-
turns; or 
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(B) an amount as determined by the Sec-
retary, taking into account— 
(i) the value of the drug to patients; 
(ii) the size of the affected patient 
population; 
(iii) the risk adjusted value of the 
Federal Government subsidies and invest-
ments related to the drug; 
(iv) whether the drug provided a sig-
nificant improvement in health outcomes, 
compared to other therapies available at 
the time of the approval; 
(v) the extent to which the brand 
name drug manufacturer has recovered 
risk adjusted investments related to the 
drug, including the investments related to 
the invention, regulatory test data and any 
other relevant research and development 
costs; and 
(vi) any other information the Sec-
retary determines appropriate. 
(b) REQUIREMENTS.— 
(1) IN GENERAL.—A royalty rate under sub-
section (a) shall be consistent with making drugs 
available to purchasers, including Federal, State, 
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local, and nongovernmental purchasers and individ-
uals, at prices that are affordable and reasonable. 
Under no condition shall a royalty be set at a rate 
that would cause a product for which an open, non- 
exclusive license was issued under section 3 to be 
sold at an excessive price, as determined under sec-
tion 2. 
(2) MULTIPLE
AFFECTED
PARTIES.—In the 
case that there is one or more holders or investors 
in the patented inventions related to the drug in ad-
dition to the brand name manufacturer, the royalty 
rate shall be divided among the holders or investors 
(including such manufacturer) in a manner agreed 
upon by the manufacturer and other holders or in-
vestors, or, in the absence of such an agreement, in 
a manner the Secretary determines to be appro-
priate. 
(3) PRICE.—An entity accepting an open, non- 
exclusive license under section 3(a)(2) shall sell the 
drug at a price not higher than the excessive price 
determined for that drug under section 2(b). 
SEC. 5. 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 
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of brand name drugs and the excessive price deter-
minations for such drugs under section 2. 
(2) CONTENTS.—The database shall include, at 
a minimum, for each brand name drug, for the ap-
plicable calendar year— 
(A) the name of the drug; 
(B) the manufacturer; 
(C) whether the drug was determined 
under section 2(b) to have an excessive price; 
(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); 
(E) the number of open, non-exclusive li-
censes the Secretary has granted under section 
3(a)(2) for generic drug or biosimilar biological 
product versions of the drug; and 
(F) the number of applications under sub-
section (b)(2) or (j) of section 505 of the Fed-
eral Food, Drug, and Cosmetic Act or under 
section 351(k) of the Public Health Service Act 
submitted to the Secretary, pursuant to such a 
license granted under section 3(a)(2), and the 
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number of such applications that have been ap-
proved. 
(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 
(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; 
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(5) the total number of drugs for which an 
open-non-exclusive license has been granted under 
section 3(a)(2); 
(6) the total number of generic drug or bio-
similar biological product applications received and 
approved that reference a drug so licensed; 
(7) the median approval time for generic drug 
or biosimilar biological product applications that ref-
erence a drug so licensed; 
(8) the total number of petitions the Secretary 
received under section 2(c) to make excessive price 
determinations for drugs; 
(9) a list of any manufacturers who failed to re-
port information as required under section 6; and 
(10) 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. 6. DRUG MANUFACTURER REPORTING. 
(a) IN GENERAL.—Each manufacturer shall submit 
to the Secretary, in such format as the Secretary may re-
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quire, an annual report that includes the following infor-
mation for each brand name 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; 
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(C) development of alternative dosage 
forms and strengths for the drug molecule or 
combinations, including the molecule; 
(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. 
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(9) Additional information the manufacturer 
chooses to provide related to drug pricing decisions, 
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— 
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(i) not less than 0.5 percent of the 
gross revenues from sales for the previous 
calendar year of the drug for which the in-
formation was not submitted; and 
(ii) not greater than 1 percent of the 
gross revenues from sales for the previous 
calendar year of such drug; and 
(B) the number of days in the period be-
tween— 
(i) the report due date under sub-
section (b); and 
(ii) the date on which the Secretary 
receives the information required to be re-
ported by the manufacturer under this sec-
tion. 
(3) USE
OF
CIVIL
PENALTY.—The Secretary 
shall collect the civil penalties under this subsection 
and shall use such funds to support competitive re-
search grant programs of the National Institutes of 
Health. 
SEC. 7. PROHIBITION OF ANTICOMPETITIVE BEHAVIOR. 
No manufacturer may engage in anticompetitive be-
havior violating section 5(a) of the Federal Trade Com-
mission Act (15 U.S.C. 45(a)) with another manufacturer 
that may interfere with the issuance and implementation 
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of open, non-exclusive licenses under this Act or otherwise 
run contrary to the public interest in the availability of 
affordable prescription drugs. 
SEC. 8. DEFINITIONS. 
For the purposes of this Act: 
(1) AVERAGE MANUFACTURER PRICE.— 
(A) IN
GENERAL.—The term ‘‘average 
manufacturer price’’, with respect to a drug, 
subject to subparagraph (B), has the meaning 
given such term in section 1927(k)(1) of the 
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-
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cal product licensed pursuant to an application 
under section 351(k) of the Public Health Service 
Act (42 U.S.C. 262(k)). 
(3) BRAND
NAME
DRUG.—The term ‘‘brand 
name drug’’ means a drug that is— 
(A) approved under section 505(c) of the 
Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355(c)) or a biological product licensed 
under section 351(a) of the Public Health Serv-
ice Act (42 U.S.C. 262(a)); 
(B) subject to section 503(b)(1) of the 
Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 353(b)(1)); and 
(C) claimed in a patent or the use of which 
is claimed in a patent. 
(4) 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). 
(5) GOVERNMENT-GRANTED
EXCLUSIVITY.— 
The term ‘‘government-granted exclusivity’’ means 
prohibitions on the submission or approval of drug 
applications granted under any of the following: 
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(A) Clauses (ii) through (v) of section 
505(c)(3)(E) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355(c)(3)(E)). 
(B) Section 505(j)(5)(B)(iv) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 
355(j)(5)(B)(iv)) or clause (ii), (iii), or (iv) of 
section 505(j)(5)(F) of such Act. 
(C) Section 505A of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 355a). 
(D) Section 505E of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 355f). 
(E) Section 527 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 360cc). 
(F) Section 351(k)(7) of the Public Health 
Service Act (42 U.S.C. 262(k)(7)). 
(G) Any other provision of law that pro-
vides for exclusivity (or extension of exclusivity) 
with respect to a drug. 
(6) 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). 
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(7) OPEN, 
NON-EXCLUSIVE
LICENSE.—The 
term ‘‘open, non-exclusive license’’ means a license 
that authorizes any person to use a patent held by 
a manufacturer that claims a brand name drug or 
a use of a brand name drug or rely upon regulatory 
test data for such drug, including patents held in 
common by the manufacturer and other entities, 
needed to produce, manufacture, import, export, dis-
tribute, offer in liquidation, sell, buy, or use such 
brand name drug. 
(8) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
Æ 
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