I 
116TH CONGRESS 
1ST SESSION H. R. 1046 
To amend title XVIII of the Social Security Act to require the Secretary 
of Health and Human Services to negotiate prices of prescription drugs 
furnished under part D of the Medicare program. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 7, 2019 
Mr. DOGGETT (for himself, Mr. WELCH, Mr. CUMMINGS, Ms. ADAMS, Ms. 
BASS, Mrs. BEATTY, Mr. BLUMENAUER, Ms. BONAMICI, Mr. CART-
WRIGHT, Mr. CASE, Mr. CASTEN of Illinois, Ms. CASTOR of Florida, Mr. 
CASTRO of Texas, Ms. JUDY CHU of California, Mr. CICILLINE, Mr. 
CISNEROS, Mr. CLAY, Mr. CLEAVER, Mr. COHEN, Mr. COURTNEY, Mr. 
CRIST, Mr. CROW, Mr. DANNY K. DAVIS of Illinois, Mr. DEFAZIO, Ms. 
DELAURO, Mr. DESAULNIER, Mrs. DINGELL, Mr. MICHAEL F. DOYLE 
of Pennsylvania, Ms. ESCOBAR, Mr. ESPAILLAT, Mr. EVANS, Ms. 
FRANKEL, Mr. GALLEGO, Mr. GARAMENDI, Mr. GOLDEN, Mr. GONZALEZ 
of Texas, Mr. GREEN of Texas, Mr. GRIJALVA, Ms. HAALAND, Mr. 
HARDER of California, Mr. HASTINGS, Mr. HIGGINS of New York, Ms. 
HILL of California, Ms. JACKSON LEE, Ms. JAYAPAL, Ms. JOHNSON of 
Texas, Ms. KAPTUR, Mr. KHANNA, Mr. KIM, Mrs. KIRKPATRICK, Mr. 
KRISHNAMOORTHI, Mr. LANGEVIN, Mr. LARSON of Connecticut, Mr. 
LAWSON of Florida, Ms. LEE of California, Mrs. LEE of Nevada, Mr. 
LEVIN of Michigan, Mr. LEWIS, Mr. LIPINSKI, Mr. LOEBSACK, Ms. LOF-
GREN, Mr. LOWENTHAL, Mr. LYNCH, Mrs. CAROLYN B. MALONEY of 
New York, Mr. SEAN PATRICK MALONEY of New York, Ms. MCCOLLUM, 
Mr. MCNERNEY, Ms. MOORE, Mr. NADLER, Mrs. NAPOLITANO, Mr. 
NEGUSE, Ms. NORTON, Ms. OCASIO-CORTEZ, Ms. OMAR, Mr. PERL-
MUTTER, Mr. PETERSON, Mr. PHILLIPS, Ms. PINGREE, Mr. POCAN, Ms. 
PORTER, Ms. PRESSLEY, Mr. RASKIN, Mr. RICHMOND, Mr. ROSE of New 
York, Ms. ROYBAL-ALLARD, Mr. RUPPERSBERGER, Mr. RUSH, Mr. 
RYAN, Mr. SARBANES, Ms. SCHAKOWSKY, Mr. SCHIFF, Mr. SCOTT of 
Virginia, Mr. SERRANO, Mr. SHERMAN, Ms. SLOTKIN, Ms. SPANBERGER, 
Mr. SUOZZI, Mr. TAKANO, Mr. THOMPSON of Mississippi, Ms. TITUS, Ms. 
TLAIB, Mrs. TORRES of California, Ms. VELA´ZQUEZ, Mr. VISCLOSKY, Ms. 
WASSERMAN SCHULTZ, Ms. WATERS, Ms. WILD, Mr. YARMUTH, and Mr. 
MALINOWSKI) introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committee 
on Ways and Means, for a period to be subsequently determined by the 
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Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to require 
the Secretary of Health and Human Services to negotiate 
prices of prescription drugs furnished under part D of 
the Medicare program. 
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 ‘‘Medicare Negotiation 
and Competitive Licensing Act of 2019’’. 
SEC. 2. REQUIRING THE SECRETARY OF HEALTH AND 
HUMAN SERVICES TO NEGOTIATE PRICES OF 
PRESCRIPTION DRUGS FURNISHED UNDER 
PART D OF THE MEDICARE 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) NEGOTIATION OF LOWER DRUG PRICES.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Secretary shall, for plan years 
beginning on or after the date of the enactment of 
this subsection, negotiate with pharmaceutical man-
ufacturers the prices (including discounts, rebates, 
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and other price concessions) that may be charged to 
PDP sponsors and MA organizations during a nego-
tiated price period (as specified by the Secretary) for 
covered part D drugs for part D eligible individuals 
who are enrolled under a prescription drug plan or 
under an MA–PD plan. In negotiating such prices 
under this section, the Secretary shall take into ac-
count the following factors: 
‘‘(A) The comparative clinical effectiveness 
and cost effectiveness, when available from an 
impartial source, of such drug. 
‘‘(B) The budgetary impact of providing 
coverage of such drug. 
‘‘(C) The number of similarly effective 
drugs or alternative treatment regimens for 
each approved use of such drug. 
‘‘(D) The associated financial burden on 
patients that utilize such drug. 
‘‘(E) The associated unmet patient need 
for such drug. 
‘‘(F) The total revenues from global sales 
obtained by the manufacturer for such drug 
and the associated investment in research and 
development of such drug by the manufacturer. 
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‘‘(2) FINALIZATION OF NEGOTIATED PRICE.— 
The negotiated price of each covered part D drug for 
a negotiated price period shall be finalized not later 
than 30 days before a PDP sponsor is required to 
submit information described in subsection (b)(2) 
for the first plan year in such negotiated price pe-
riod. 
‘‘(3) COMPETITIVE LICENSING AUTHORITY.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
exclusivity under clause (iii) or (iv) of section 
505(j)(5)(F) of the Federal Food, Drug, and 
Cosmetic Act, clause (iii) or (iv) of section 
505(c)(3)(E) of such Act, section 351(k)(7)(A) 
of the Public Health Service Act, or section 
527(a) of the Federal Food, Drug, and Cos-
metic Act, or by an extension of such exclusivity 
under section 505A of such Act or section 505E 
of such Act, and any other provision of law that 
provides for market exclusivity (or extension of 
market exclusivity) with respect to a drug, in 
the case that the Secretary is unable to success-
fully negotiate an appropriate price for a cov-
ered part D drug for a negotiated price period, 
the Secretary shall authorize the use of any 
patent, clinical trial data, or other exclusivity 
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granted by the Federal government with respect 
to such drug as the Secretary determines ap-
propriate for purposes of manufacturing such 
drug for sale under a prescription drug plan or 
MA–PD plan. Any entity making use of a com-
petitive license to use patent, clinical trial data, 
or other exclusivity under this section shall pro-
vide to the manufacturer holding such exclu-
sivity reasonable compensation, as determined 
by the Secretary based on the following factors: 
‘‘(i) The risk-adjusted value of any 
Federal government subsidies and invest-
ments in research and development used to 
support the development of such drug. 
‘‘(ii) The risk-adjusted value of any 
investment made by such manufacturer in 
the research and development of such 
drug. 
‘‘(iii) The impact of the price, includ-
ing license compensation payments, on 
meeting the medical need of all patients. 
‘‘(iv) The relationship between the 
price of such drug, including compensation 
payments, and the health benefits of such 
drug. 
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‘‘(v) Other relevant factors determined 
appropriate by the Secretary to provide 
reasonable compensation. 
‘‘(B) REASONABLE
COMPENSATION.—The 
manufacturer described in subparagraph (A) 
may seek recovery against the United States in 
the United States Court of Federal Claims. 
‘‘(C) INTERIM PERIOD.— 
‘‘(i) IN GENERAL.—Until 1 year after 
a drug described in subparagraph (A) is 
approved under section 505(j) of the Fed-
eral Food, Drug, and Cosmetic Act or sec-
tion 351(k) of the Public Health Service 
Act and is provided under license issued by 
the Secretary under such subparagraph, 
PDP plans and MA–PD plans shall not 
pay more for such drug than the average 
of the prices available, during the most re-
cent 12-month period for which data is 
available prior to the beginning of such ne-
gotiated price period, from the manufac-
turer to any wholesaler, retailer, provider, 
health maintenance organization, nonprofit 
entity, or governmental entity in the ten 
OECD (Organization for Economic Co-
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operation and Development) countries that 
have the largest gross domestic product 
with a per capita income that is not less 
than half the per capita income of the 
United States. 
‘‘(ii) FEDERAL
PROGRAM
LICENS-
ING.—If such drug is not made available 
at the price determined, the Secretary shall 
authorize such entities to use any patent, 
clinical trial data, or other exclusivity 
granted by the Federal government with 
respect to such drug as the Secretary de-
termines appropriate for purposes of man-
ufacturing such drug for sale under any 
Federal program, including those provided 
by Medicare, Medicaid, Veterans Affairs, 
the Department of Defense, and the Coast 
Guard. 
‘‘(D) AUTHORIZATION FOR SECRETARY TO 
PROCURE DRUGS DIRECTLY.— 
‘‘(i) IN
GENERAL.—The Secretary 
may procure a drug manufactured pursu-
ant to a competitive license under subpara-
graph (A) for purposes of this part or pur-
suant to a Federal program license under 
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subparagraph (C)(ii) for purposes of a 
Federal program directly from the entity 
manufacturing the drug pursuant to such 
a license. 
‘‘(ii) CLARIFICATION REGARDING AP-
PLICATION
OF
BUY
AMERICAN
ACT.—In 
the case where the Secretary procures a 
drug under this subparagraph, the provi-
sions of chapter 83 of title 41, United 
States Code (commonly referred to as the 
‘Buy American Act’) shall apply. 
‘‘(E) PRIORITY FOR U.S. MANUFACTURERS 
IN AUTHORIZING COMPETITIVE LICENSES.—In 
authorizing a competitive license under this 
paragraph, the Secretary— 
‘‘(i) shall give preference to entities 
that the Secretary determines have the 
highest safety and security standards; and 
‘‘(ii) may give priority to entities that 
will manufacture such drug in the United 
States. 
‘‘(4) FDA REVIEW OF LICENSED DRUG APPLI-
CATIONS.—The Secretary shall prioritize review of 
applications under section 505(j) of the Federal 
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Food, Drug, and Cosmetic Act for drugs licensed 
under paragraph (3)(A). 
‘‘(5) PROHIBITION
OF
ANTICOMPETITIVE
BE-
HAVIOR.—No drug manufacturer may engage in 
anticompetitive behavior with another manufacturer 
that may interfere with the issuance and implemen-
tation of a competitive license or run contrary to 
public policy. 
‘‘(6) REQUIRED
REPORTING.—The Secretary 
may require pharmaceutical manufacturers to dis-
close to the Secretary such information that the Sec-
retary determines necessary for purposes of carrying 
out this subsection. 
‘‘(7) CLARIFICATION.—Nothing in this sub-
section shall be construed as preventing the sponsor 
of a prescription drug plan or an organization offer-
ing an MA–PD plan from obtaining a discount or 
reduction of the price for a covered part D drug 
below the price negotiated by the Secretary.’’. 
Æ 
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