I 
117TH CONGRESS 
1ST SESSION H. R. 4811 
To amend title XVIII of the Social Security Act to require the Secretary 
of Health and Human Services to negotiate prices of drugs furnished 
under the Medicare program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 29, 2021 
Mr. DOGGETT (for himself, Mr. BEYER, Mr. BLUMENAUER, Mr. BOWMAN, 
Ms. BUSH, Mr. CARTWRIGHT, Mr. CASTRO of Texas, Mr. CICILLINE, Mr. 
CLEAVER, Mr. COHEN, Mr. DEFAZIO, Ms. DELAURO, Mrs. DINGELL, 
Ms. ESCOBAR, Mr. ESPAILLAT, Mr. GARAMENDI, Mr. GARCI´A of Illinois, 
Mr. GREEN of Texas, Mr. GRIJALVA, Ms. JACKSON LEE, Ms. JAYAPAL, 
Mr. KAHELE, Ms. KAPTUR, Mr. KHANNA, Mr. KIM of New Jersey, Mr. 
KRISHNAMOORTHI, Mr. LANGEVIN, Ms. LEE of California, Mr. LEVIN of 
Michigan, Mr. LOWENTHAL, Mr. MCNERNEY, Mr. MFUME, Mr. NADLER, 
Mr. NEGUSE, Ms. NORTON, Ms. OCASIO-CORTEZ, Ms. OMAR, Mr. PERL-
MUTTER, Ms. PINGREE, Mr. POCAN, Ms. PORTER, Ms. PRESSLEY, Mr. 
RASKIN, Ms. SCHAKOWSKY, Mr. SHERMAN, Mr. TAKANO, Mr. THOMPSON 
of Mississippi, Ms. TITUS, Ms. TLAIB, Mr. TORRES of New York, Mr. 
VELA, Mr. YARMUTH, Ms. LEGER FERNANDEZ, Ms. MOORE of Wis-
consin, Ms. WATERS, Ms. CHU, Ms. NEWMAN, and Ms. VELA´ZQUEZ) in-
troduced the following bill; which was referred to the Committee on En-
ergy and Commerce, and in addition to the Committees on Ways and 
Means, Oversight and Reform, Veterans’ Affairs, and Armed Services, 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 com-
mittee concerned 
A BILL 
To amend title XVIII of the Social Security Act to require 
the Secretary of Health and Human Services to negotiate 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6652
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
prices of drugs furnished under the Medicare program, 
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 ‘‘Medicare Negotiation 
and Competitive Licensing Act of 2021’’. 
SEC. 2. REQUIRING THE SECRETARY OF HEALTH AND 
HUMAN SERVICES TO NEGOTIATE PRICES OF 
DRUGS FURNISHED UNDER THE MEDICARE 
PROGRAM. 
(a) PART D.—Section 1860D–11 of the Social Secu-
rity 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 negotiated prices (including discounts, 
rebates, and other price concessions) that may be 
charged to PDP sponsors and MA organizations 
during a negotiated price period (as specified by the 
Secretary) for specified covered part D drugs for 
such plan year for part D eligible individuals who 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
are enrolled under a prescription drug plan or under 
an MA–PD plan. 
‘‘(2) NEGOTIATION CONSIDERATIONS.— 
‘‘(A) 
FACTORS.—In 
negotiating 
such 
prices under paragraph (1), the Secretary shall 
take into account the following factors: 
‘‘(i) The comparative clinical effective-
ness and cost effectiveness, when available 
from an impartial source, of such drug. 
‘‘(ii) The budgetary impact of pro-
viding coverage of such drug. 
‘‘(iii) The number of similarly effec-
tive drugs or alternative treatment regi-
mens for each approved use of such drug. 
‘‘(iv) The associated financial burden 
on patients that utilize such drug. 
‘‘(v) The associated unmet patient 
need for such drug. 
‘‘(vi) 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. 
‘‘(B) ASSESSMENT OF FACTORS.—For pur-
poses of assessing the factors described in sub-
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
paragraph (A) with respect to a covered part D 
drug, the Secretary shall, as soon as prac-
ticable, establish a value assessment process 
consisting of standardized measures for such 
factors. With respect to a negotiation that oc-
curs before the Secretary establishes such a 
process, the Secretary may use such other as-
sessments as the Secretary determines appro-
priate (such as assessments used with respect 
to ascertaining the value of drugs by the Sec-
retary of Veterans Affairs, the Patient-Centered 
Outcomes Research Institute, the Institute for 
Clinical and Economic Review, and other coun-
tries). 
‘‘(3) SPECIFIED COVERED PART D DRUGS.—In 
this subsection, the term ‘specified covered part D 
drug’ means, with respect to a negotiated price pe-
riod beginning during— 
‘‘(A) the first plan year beginning on or 
after the date of the enactment of this sub-
section, a covered part D drug that is a sole 
source 
drug 
(as 
defined 
in 
section 
1833(t)(14)(F)(i))— 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(i) with respect to which gross reve-
nues for the preceding plan year were 
$100,000,000 or greater; or 
‘‘(ii) that contains an active ingredient 
that was first approved by the Adminis-
trator for Food and Drugs not later than 
10 years prior to the beginning of such 
first plan year; 
‘‘(B) the second plan year beginning on or 
after the date of the enactment of this sub-
section, a covered part D drug that is a sole 
source drug (as so defined) or a biosimilar bio-
logical product; 
‘‘(C) the third plan year beginning on or 
after the date of the enactment of this sub-
section, a covered part D drug— 
‘‘(i) that is described in subparagraph 
(B); or 
‘‘(ii) with respect to which, during the 
preceding plan year, fewer than 3 manu-
facturers (other than the manufacturer of 
such drug) marketed a generic version of 
such drug; and 
‘‘(D) the fourth plan year beginning on or 
after the date of the enactment of this sub-
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
section or a subsequent plan year, a covered 
part D drug. 
‘‘(4) NEGOTIATED PRICE LIMITATIONS AND FI-
NALIZATION.—The negotiated price of each specified 
covered part D drug for a negotiated price period— 
‘‘(A) may not be less than an amount nec-
essary to allow such manufacturer to recoup 
such manufacturer’s research and development 
costs associated with such drug; 
‘‘(B) subject to subparagraph (A), may not 
exceed 110 percent of the median price of such 
drug for the preceding plan year in the 10 
countries of the Organisation for Economic Co-
operation and Development with the highest 
gross domestic product and with a per capita 
income that is not less than half the per capita 
income of the United States for such preceding 
plan year; and 
‘‘(C) shall be finalized not later than 30 
days before a PDP sponsor is required to sub-
mit information described in subsection (b)(2) 
for the first plan year in such negotiated price 
period. 
‘‘(5) COMPETITIVE LICENSING AUTHORITY.— 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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 speci-
fied covered part D drug for a negotiated price 
period, the Secretary shall authorize the use of 
any patent, clinical trial data, or other exclu-
sivity granted by the Federal government with 
respect to such drug as the Secretary deter-
mines appropriate for purposes of manufac-
turing such drug for sale under a Federal 
health care program, the insurance program 
under chapter 89 of title 5, United States Code, 
or a group health plan or health insurance cov-
erage offered by a health insurance issuer. Any 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
entity making use of a competitive license to 
use patent, clinical trial data, or other exclu-
sivity under this section shall provide to the 
manufacturer holding such exclusivity reason-
able compensation, as determined by the Sec-
retary 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. 
‘‘(v) Other relevant factors determined 
appropriate by the Secretary to provide 
reasonable compensation. 
‘‘(B) REASONABLE COMPENSATION.— 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(i) LIMITATIONS.—Reasonable com-
pensation described in subparagraph (A) 
with respect to a specified covered out-
patient drug and a plan year may not be 
made in an amount— 
‘‘(I) less than an amount nec-
essary to allow such manufacturer to 
recoup such manufacturer’s research 
and development costs associated with 
such drug; and 
‘‘(II) subject to subclause (I), 
greater than 12 percent of the nego-
tiated price set by the Secretary for 
such drug and such plan year. 
‘‘(ii) RECOVERY.—The manufacturer 
described in subparagraph (A) may seek 
recovery against the United States in the 
United States Court of Federal Claims. 
‘‘(C) INTERIM PERIOD.—Until 1 year after 
a drug described in subparagraph (A) is ap-
proved under section 505(j) of the Federal 
Food, Drug, and Cosmetic Act or section 
351(k) of the Public Health Service Act and is 
provided under license issued by the Secretary 
under such subparagraph, PDP plans and MA– 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
PD plans shall not pay more for such drug 
than 110 percent of the median of the prices 
available, during the most recent 12-month pe-
riod for which data is available prior to the be-
ginning of such negotiated price period, from 
the manufacturer to any wholesaler, retailer, 
provider, health maintenance organization, non-
profit entity, or governmental entity in the ten 
Organisation for Economic Cooperation and 
Development countries that have the largest 
gross domestic product with a per capita in-
come that is not less than half the per capita 
income of the United States. 
‘‘(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 
subparagraph (C)(ii) for purposes of a 
Federal program directly from the entity 
manufacturing the drug pursuant to such 
a license. 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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. 
‘‘(6) FDA REVIEW OF LICENSED DRUG APPLI-
CATIONS.—The Secretary shall prioritize review of 
applications under section 505(j) of the Federal 
Food, Drug, and Cosmetic Act for drugs licensed 
under paragraph (3)(A). 
‘‘(7) PROHIBITION
OF
ANTICOMPETITIVE
BE-
HAVIOR.—No drug manufacturer may engage in 
anticompetitive behavior with another manufacturer 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
that may interfere with the issuance and implemen-
tation of a competitive license or run contrary to 
public policy. 
‘‘(8) REQUIRED
REPORTING.—The Secretary 
may require pharmaceutical manufacturers or any 
other entity to disclose to the Secretary such infor-
mation that the Secretary determines necessary for 
purposes of carrying out this subsection. 
‘‘(9) 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. 
‘‘(10) PUBLICATION
OF
NEGOTIATED
PRICES 
AND CONTRACT TERMS.—The Secretary shall make 
available on a public website the price negotiated 
under this subsection, and any contract terms asso-
ciated with such price, with respect to each specified 
covered part D drug.’’. 
(b) PART B.— 
(1) IN GENERAL.—Section 1842(o) of the So-
cial Security Act (42 U.S.C. 1395u(o)) is amended 
by adding at the end the following new paragraph: 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(8)(A) Notwithstanding any preceding provision of 
this subsection, in the case of a drug or biological de-
scribed in paragraph (1) furnished during a negotiated 
price period beginning on or after January 1 of the first 
year beginning on or after the date of the enactment of 
this paragraph, the amount payable under this part for 
such drug or biological shall be equal to the negotiated 
price for such drug or biological and period, as established 
pursuant to subparagraph (B). 
‘‘(B) The provisions of section 1860D–11(i) shall be 
applied to the negotiation of a negotiated price for a drug 
or biological described in subparagraph (A) and a nego-
tiated price period in a similar manner (as determined by 
the Secretary) as such provisions apply with respect to the 
negotiation of a negotiated price for a specified part D 
drug for a negotiated price period under such section.’’. 
(2) APPLICATION TO MA.—Section 1852 of the 
Social Security Act (42 U.S.C. 1395w–22) is amend-
ed by adding at the end the following new sub-
section: 
‘‘(o) LIMITATION ON REIMBURSEMENT FOR CERTAIN 
DRUGS.—In the case of a drug or biological furnished dur-
ing a negotiated price period (as defined for purposes of 
section 1842(o)(8)) for which payment may be made 
under such section, the total reimbursement for such drug 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
or biological made by an Medicare Advantage plan may 
not exceed the negotiated price for such drug or biological 
and period established pursuant to such section.’’. 
SEC. 3. IDENTIFICATION OF PRESCRIPTION DRUG PRICE 
SPIKES. 
(a) DEFINITIONS.—In this section: 
(1) APPLICABLE ENTITY.—The term ‘‘applica-
ble entity’’ means the holder of an application ap-
proved under subsection (c) or (j) of section 505 of 
the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355) or of a license issued under subsection 
(a) or (k) of section 351 of the Public Health Serv-
ice Act (42 U.S.C. 262) for a drug described in 
paragraph (5)(A). 
(2) AVERAGE
MANUFACTURER
PRICE.—The 
term ‘‘average manufacturer price’’— 
(A) has the same meaning given such term 
under section 1927(k)(1) of the Social Security 
Act (42 U.S.C. 1396r–8(k)(1)); or 
(B) with respect to a drug for which there 
is no average manufacturer price as so defined, 
such term shall mean the wholesale acquisition 
cost of the drug. 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
(3) COMMERCE.—The term ‘‘commerce’’ has 
the meaning given such term in section 4 of the 
Federal Trade Commission Act (15 U.S.C. 44). 
(4) INSPECTOR GENERAL.—The term ‘‘Inspec-
tor General’’ means the Inspector General of the De-
partment of Health and Human Services. 
(5) PRESCRIPTION DRUG.— 
(A) IN GENERAL.—The term ‘‘prescription 
drug’’ means any drug (as defined in section 
201(g) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 321(g))), including a com-
bination product whose primary mode of action 
is determined under section 503(g) of such Act 
(21 U.S.C. 353(g)) to be that of a drug, and 
that— 
(i) is subject to section 503(b)(1) of 
the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 353(b)(1)); and 
(ii) is covered by a Federal health 
care program (as defined in section 
1128B(f) of the Social Security Act (42 
U.S.C. 1320a–7b(f))). 
(B) 
TREATMENT
OF
REFORMULATED 
DRUGS.—For purposes of this section, a pre-
scription drug with respect to which the Sec-
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
retary of Health and Human Services has ap-
proved any minor reformulation that does not 
produce a meaningful therapeutic benefit, the 
drug that was approved prior to any such refor-
mulation and the drug with any such reformu-
lation shall be considered one prescription drug. 
(6) PRICE SPIKE.— 
(A) IN GENERAL.—The term ‘‘price spike’’ 
means an increase in the average manufacturer 
price in commerce of a prescription drug for 
which the price spike percentage is equal to or 
greater than applicable price increase allowance. 
(B) 
PRICE
SPIKE
PERCENTAGE.—The 
price spike percentage is the percentage (if any) 
by which— 
(i) the average manufacturer price of 
a prescription drug in commerce for the 
calendar year; exceeds 
(ii) the average manufacturer price of 
such prescription drug in commerce for the 
calendar year preceding such year. 
(C) APPLICABLE PRICE INCREASE ALLOW-
ANCE.—The applicable price increase allowance 
for any calendar year is the percentage (round-
ed to the nearest one-tenth of 1 percent) by 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
which the C–CPI–U (as defined in section 
1(f)(6) of the Internal Revenue Code of 1986) 
for that year exceeds the C–CPI–U for the pre-
ceding calendar year. 
(7) PRICE SPIKE REVENUE.— 
(A) IN GENERAL.—The price spike revenue 
for any calendar year is an amount equal to— 
(i) the gross price spike revenue, 
minus 
(ii) the adjustment amount. 
(B) GROSS PRICE SPIKE REVENUE.—The 
gross price spike revenue for any calendar year 
is an amount equal to the product of— 
(i) an amount equal to the difference 
between clause (i) of paragraph (6)(B) and 
clause (ii) of such paragraph; and 
(ii) the total number of units of the 
prescription drug which were sold in com-
merce in such calendar year. 
(C) ADJUSTMENT AMOUNT.—The adjust-
ment amount is the amount, if any, of the gross 
price spike revenue which the Inspector General 
has determined is due solely to an increase in 
the cost of the inputs necessary to manufacture 
the prescription drug subject to the price spike. 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
(b) SUBMISSION BY PHARMACEUTICAL COMPANIES 
OF INFORMATION TO INSPECTOR GENERAL.— 
(1) IN GENERAL.—For each prescription drug, 
the applicable entity shall submit to the Inspector 
General a quarterly report that includes the fol-
lowing: 
(A) For each prescription drug of the ap-
plicable entity— 
(i) the total number of units of the 
prescription drug which were sold in com-
merce in the preceding calendar quarter; 
(ii) the average and median price per 
unit of such prescription drug in commerce 
in the preceding calendar quarter, disag-
gregated by month; and 
(iii) the gross revenues from sales of 
such prescription drug in commerce in the 
preceding calendar quarter. 
(B) Such information related to increased 
input costs or public health considerations as 
the applicable entity may wish the Inspector 
General to consider in making a determination 
under clause (ii) of subsection (c)(2)(B) or an 
assessment in clause (iii) of such subsection for 
the preceding calendar quarter. 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
(C) Such information related to any antici-
pated increased input costs for the subsequent 
calendar quarter as the applicable entity may 
wish the Inspector General to consider in mak-
ing a determination under clause (ii) of sub-
section (c)(2)(B) or an assessment in clause 
(iii) of such subsection for such calendar quar-
ter. 
(2) PENALTY FOR FAILURE TO SUBMIT.— 
(A) IN GENERAL.—An applicable entity de-
scribed in paragraph (1) that fails to submit in-
formation to the Inspector General regarding a 
prescription drug, as required by such para-
graph, before the date specified in paragraph 
(3) shall be liable for a civil penalty, as deter-
mined under subparagraph (B). 
(B) AMOUNT OF PENALTY.—The amount 
of the civil penalty shall be equal to the product 
of— 
(i) an amount, as determined appro-
priate by the Inspector General, which is— 
(I) not less than 0.5 percent of 
the gross revenues from sales of the 
prescription drug described in sub-
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
paragraph (A) for the preceding cal-
endar year, and 
(II) not greater than 1 percent of 
the gross revenues from sales of such 
prescription drug for the preceding 
calendar year, and 
(ii) the number of days in the period 
between— 
(I) the applicable date specified 
in paragraph (3), and 
(II) the date on which the In-
spector General receives the informa-
tion described in paragraph (1) from 
the applicable entity. 
(3) SUBMISSION DEADLINE.—An applicable en-
tity shall submit each quarterly report described in 
paragraph (1) not later than January 17, April 18, 
June 15, and September 15 of each calendar year. 
(c) ASSESSMENT BY INSPECTOR GENERAL.— 
(1) IN GENERAL.—Not later than the last day 
in February of each year, the Inspector General, in 
consultation with other relevant Federal agencies 
(including the Federal Trade Commission), shall— 
(A) complete an assessment of the infor-
mation the Inspector General received pursuant 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
to subsection (b)(1) with respect to sales of pre-
scription drugs in the preceding calendar year; 
and 
(B) in the case of any prescription drug 
which satisfies the conditions described in para-
graph (1) or (2) of subsection (d), submit a rec-
ommendation to the Secretary of Health and 
Human Services that such drug be exempted 
from application of the tax imposed under sec-
tion 4192 of the Internal Revenue Code of 1986 
(as added by section 3 of this Act) for such 
year. 
(2) ELEMENTS.—The assessment required by 
paragraph (1)(A) shall include the following: 
(A) Identification of each price spike relat-
ing to a prescription drug in the preceding cal-
endar year. 
(B) For each price spike identified under 
subparagraph (A)— 
(i) a determination of the price spike 
revenue; 
(ii) a determination regarding the ac-
curacy of the information submitted by the 
applicable entity regarding increased input 
costs; and 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
(iii) an assessment of the rationale of 
the applicable entity for the price spike. 
(d) EXEMPTION OF CERTAIN DRUGS.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services, upon recommendation of the In-
spector General pursuant to subsection (c)(1)(B), 
may exempt any prescription drug which has been 
subject to a price spike during the preceding cal-
endar year from application of the tax imposed 
under section 4192 of the Internal Revenue Code of 
1986 for such year, if the Secretary determines 
that— 
(A) based on information submitted pursu-
ant to subsection (b)(1)(B), a for-cause price 
increase exemption should apply; or 
(B)(i) the prescription drug which has 
been subject to a price spike has an average 
manufacturer price of not greater than $10 for 
a 30 day supply; and 
(ii) such drug is marketed by not less than 
3 other holders of applications approved under 
subsection (c) or (j) of section 505 of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C. 
355), where such applications approved under 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
such subsection (j) use as a reference drug the 
drug so approved under such subsection (c). 
(2) CLARIFICATION.—In considering, under 
paragraph (1)(A), information submitted pursuant 
to subsection (b)(1)(B), the Secretary— 
(A) has the discretion to determine that 
such information does not warrant a for-cause 
price increase exemption; and 
(B) shall exclude from such consideration 
any information submitted by the applicable en-
tity threatening to curtail or limit production of 
the prescription drug if the Secretary does not 
grant an exemption from the application of the 
tax under section 4192 of the Internal Revenue 
Code of 1986. 
(e) INSPECTOR GENERAL REPORT
TO INTERNAL 
REVENUE SERVICE.— 
(1) IN GENERAL.—Subject to paragraph (3), 
not later than the last day in February of each year, 
the Inspector General shall transmit to the Internal 
Revenue Service a report on the findings of the In-
spector General with respect to the information the 
Inspector General received under subsection (b)(1) 
with respect to the preceding calendar year and the 
assessment carried out by the Inspector General 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
under subsection (c)(1)(A) with respect to such in-
formation. 
(2) CONTENTS.—The report transmitted under 
paragraph (1) shall include the following: 
(A) The information received under sub-
section (b)(1) with respect to the preceding cal-
endar year. 
(B) The price spikes identified under sub-
paragraph (A) of subsection (c)(2). 
(C) The price spike revenue determinations 
made under subparagraph (B)(i) of such sub-
section. 
(D) The determinations and assessments 
made under clauses (ii) and (iii) of subpara-
graph (B) of such subsection. 
(3) NOTICE
AND
OPPORTUNITY
FOR
HEAR-
ING.— 
(A) IN
GENERAL.—No report shall be 
transmitted to the Internal Revenue Service 
under paragraph (1) in regards to a prescrip-
tion drug unless the Inspector General has pro-
vided the applicable entity with— 
(i) the assessment of such drug under 
subsection (c)(1)(A); and 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
(ii) notice of their right to a hearing 
in regards to such assessment. 
(B) NOTICE.—The notice required under 
subparagraph (A) shall be provided to the ap-
plicable entity not later than 30 days after com-
pletion of the assessment under subsection 
(c)(1)(A). 
(C) REQUEST FOR HEARING.—Subject to 
subparagraph (E), an applicable entity may re-
quest a hearing before the Secretary of Health 
and Human Services not later than 30 days 
after the date on which the notice under sub-
paragraph (B) is received. 
(D) COMPLETION
OF
HEARING.—In the 
case of an applicable entity which requests a 
hearing pursuant to subparagraph (C), the Sec-
retary of Health and Human Services shall, not 
later than 12 months after the date on which 
the assessment under subsection (c)(1)(A) was 
completed by the Inspector General— 
(i) make a final determination in re-
gards to the accuracy of such assessment; 
and 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
(ii) provide the report described in 
paragraph (2) to the Internal Revenue 
Service. 
(E) LIMITATION.—An applicable entity 
may request a hearing under subparagraph (C) 
with respect to a particular prescription drug 
only once within a 5-year period. 
(4) PUBLICATION.— 
(A) IN GENERAL.—Not later than the last 
day in February of each year, subject to sub-
paragraph (B), the Inspector General shall 
make the report transmitted under paragraph 
(1) available to the public, including on the 
Internet website of the Inspector General, sub-
ject to subparagraph (B). 
(B) 
PROPRIETARY
INFORMATION.—The 
Inspector General shall ensure that any infor-
mation made public in accordance with sub-
paragraph (A) excludes trade secrets and con-
fidential commercial information. 
(f) NOTIFICATION.—The Secretary of the Treasury, 
in conjunction with the Inspector General, shall notify, at 
such time and in such manner as the Secretary of the 
Treasury shall provide, each applicable entity in regard 
to any prescription drug which has been determined to 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(III) all calendar years in which 
the taxable prescription drug was sold 
in commerce. 
‘‘(ii) BASE
YEAR.—The base year 
shall be the calendar year immediately pre-
ceding the applicable period. 
‘‘(3) CUMULATIVE
PRICE
SPIKE
REVENUE.— 
For purposes of paragraph (1), the cumulative price 
spike revenue for any taxable prescription drug shall 
be an amount equal to— 
‘‘(A) an amount equal to the product of— 
‘‘(i) an amount (not less than zero) 
equal to— 
‘‘(I) the average manufacturer 
price of such prescription drug in 
commerce for the preceding calendar 
year, minus 
‘‘(II) the average manufacturer 
price of such prescription drug in 
commerce for the base year, and 
‘‘(ii) the total number of units of such 
prescription drug which were sold in com-
merce in the preceding calendar year, 
minus 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(B) an amount equal to the sum of the 
adjustment amounts, if any, determined under 
section 3(a)(7)(C) of the Medicare Negotiation 
and Competitive Licensing Act of 2021 for each 
calendar year during the applicable period. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) 
TAXABLE
PRESCRIPTION
DRUG.—The 
term ‘taxable prescription drug’ means a prescrip-
tion drug which has been identified by the Inspector 
General of the Department of Health and Human 
Services as being subject to a price spike. 
‘‘(2) OTHER TERMS.—The terms ‘applicable en-
tity’, ‘average manufacturer price’, ‘price spike’, 
‘price spike percentage’, and ‘price spike revenue’ 
have the same meaning given such terms under sec-
tion 3(a) of the Medicare Negotiation and Competi-
tive Licensing Act of 2021.’’. 
(b) CLERICAL AMENDMENTS.— 
(1) The heading of subchapter E of chapter 32 
of the Internal Revenue Code of 1986 is amended by 
striking ‘‘Medical Devices’’ and inserting ‘‘Cer-
tain Medical Devices and Prescription 
Drugs’’. 
(2) The table of subchapters for chapter 32 of 
such Code is amended by striking the item relating 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
to subchapter E and inserting the following new 
item: 
‘‘SUBCHAPTER E. CERTAIN MEDICAL DEVICES AND PRESCRIPTION DRUGS’’. 
(3) The table of sections for subchapter E of 
chapter 32 of such Code is amended by adding at 
the end the following new item: 
‘‘Sec. 4192. Prescription drugs subject to price spikes.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after the date of the enact-
ment of this Act. 
SEC. 5. APPLICATION OF MEDICARE PRICES TO OTHER IN-
SURERS AND THE UNINSURED. 
(a) FEDERAL HEALTH CARE PROGRAMS.—Part A of 
title XI of the Social Security Act (42 U.S.C. 1301 et seq.) 
is amended by adding at the end the following new section: 
‘‘SEC. 1150C. APPLICATION OF MEDICARE NEGOTIATED 
PRICES. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, the price recognized under a Federal health 
care program (as defined in section 1128B) or the insur-
ance program established under chapter 89 of title 5, 
United States Code, for a specified covered part D drug 
(as defined in section 1860D–11(i)), or a drug or biologi-
cal for which payment may be made under section 
1842(o), with respect to a year for which coverage is pro-
vided under such Federal health care program or such in-
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
surance program may not exceed the price for such drug 
established under such section 1860D–11(i) or 1842(o), 
as applicable. 
‘‘(b) APPLICATION
OF OTHER PROVISIONS.—The 
provisions of section 1860D–11(i) shall apply with respect 
to a Federal health care program and the insurance pro-
gram established under chapter 89 of title 5, United 
States Code, in the same manner as such provisions apply 
with respect to a prescription drug plan or an MA–PD 
plan under part D or C, respectively, of title XVIII.’’. 
(b) PRIVATE INSURER.—Subpart II of part A of title 
XXVII of the Public Health Service Act (42 U.S.C. 
300gg–11 et seq.) is amended by adding at the end the 
following new section: 
‘‘SEC. 2730. APPLICATION OF MEDICARE NEGOTIATED 
PRICES. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, the price recognized under a group health 
plan, or under individual or group health insurance cov-
erage offered by a health insurance issuer, for a specified 
covered part D drug (as defined in section 1860D–11(i)), 
or a drug or biological for which payment may be made 
under section 1842(o), with respect to a year for which 
coverage is provided under such plan or such coverage may 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
not exceed the price for such drug established under such 
section 1860D–11(i) or 1842(o), as applicable. 
‘‘(b) APPLICATION
OF OTHER PROVISIONS.—The 
provisions of section 1860D–11(i) shall apply with respect 
to a group health plan, or individual or group health insur-
ance coverage offered by a health insurance issuer, in the 
same manner as such provisions apply with respect to a 
prescription drug plan or an MA–PD plan under part D 
or C, respectively, of title XVIII.’’. 
(c) UNINSURED.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, the amount that a pharmacy fur-
nishing a drug to a specified individual (as defined 
in paragraph (2)) may require as payment for such 
drug from such individual shall not exceed the price 
for such drug established under section 1860D–11(i) 
of the Social Security Act (42 U.S.C. 1395w–111(i)) 
(or, if applicable, under section 1842(o)(8) of such 
Act). 
(2) DEFINITION.—For purposes of paragraph 
(1), the term ‘‘specified individual’’ means, with re-
spect to a drug, an individual who is not covered, or 
who has no coverage with respect to such drug, 
under a group health plan or group or individual 
health insurance coverage (as such terms are defined 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
in section 2791 of the Public Health Service Act (42 
U.S.C. 300gg–91)) or under a Federal health care 
program (as defined in section 1128B of the Social 
Security Act, but including the insurance program 
established under chapter 89 of title 5, United 
States Code). 
(3) ENFORCEMENT.—The Secretary of Health 
and Human Services may impose a civil monetary 
penalty of not more than $10,000 per day on a 
pharmacy for a violation of paragraph (1). 
SEC. 6. MANUFACTURER PROVISION OF INFORMATION. 
(a) IN GENERAL.—In the case of a manufacturer of 
a drug or biological subject to a competitive licensing 
agreement under section 1860D–11(i)(5) of the Social Se-
curity Act, as added by this Act, such manufacturer shall, 
upon request from an entity electing to manufacture such 
drug or biological, provide to such entity materials, data, 
and information relating to the manufacture or supply of 
such drug or biological, including— 
(1) cellular clones and hybridoma stocks; 
(2) plasmids, plasmid maps, and sequences of 
antibody complementarity determining regions; 
(3) physicochemical and biophysical character-
ization; 
(4) growth conditions and protocols; 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
(5) attenuation or inactivation protocols; 
(6) extraction and purification protocols; 
(7) synthetic work-up and schemes; 
(8) sufficient quantities of the drug or biologi-
cal for testing; 
(9) the protocols and methods used for testing 
the drug or biological; and 
(10) the expected outcomes from those proto-
cols. 
(b) ENFORCEMENT.—The Secretary of Health and 
Human Services may impose a civil monetary penalty on 
a manufacturer of not more than $10,000 per day for a 
violation of subsection (a). 
SEC. 7. APPLICABILITY OF NEGOTIATED PRICE TO PRE-
SCRIPTION DRUGS FURNISHED BY THE DE-
PARTMENT OF DEFENSE AND THE DEPART-
MENT OF VETERANS AFFAIRS. 
(a) IN GENERAL.—Section 8126(a) of title 38, 
United States Code, is amended— 
(1) in paragraph (2), by inserting ‘‘, but may 
not exceed the amount of the price negotiated by the 
Secretary of Health and Human Services under sec-
tion 1860D–11(i) of the Social Security Act (42 
U.S.C. 1395w–111(i)) (as amended by the Medicare 
Negotiation and Competitive Licensing Act of 2019) 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
for a specified covered part D drug (as defined in 
such section) (or, if applicable, may not exceed the 
amount of the price negotiated by the Secretary of 
Health 
and 
Human 
Services 
under 
section 
1842(o)(8) of such Act for a drug or biological pay-
able under such section) that is a covered drug of 
a manufacturer’’ after ‘‘best interests of the Depart-
ment or such Federal agencies’’; and 
(2) in paragraph (3), by inserting ‘‘or, for a 
covered drug of a manufacturer that is a specified 
covered part D drug (as defined in section 1860D– 
11(i) of the Social Security Act (42 U.S.C. 1395w– 
111(i)) (as amended by the Medicare Negotiation 
and Competitive Licensing Act of 2019)) or a drug 
or biological for which payment may be made under 
section 1842(o)(8) of such Act, the price negotiated 
by the Secretary of Health and Human Services 
under such section 1806D–11(i) or 1842(o)(8) (as 
applicable) for the specified covered part D drug or 
the drug or biological’’ after ‘‘the price charged 
under the Federal Supply Schedule at the time the 
drug is procured’’. 
(b) DEPARTMENT
OF DEFENSE ELEMENTS
FOR 
PURPOSES OF PRICING STANDARDS.—Section 1074g(f) of 
title 10, United States Code, is amended— 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
(1) in the header, by inserting ‘‘AND NATIONAL 
MAIL-ORDER PHARMACY PROGRAM’’ after ‘‘PHAR-
MACY PROGRAM’’; 
(2) by striking ‘‘the TRICARE retail pharmacy 
program shall be treated as an element of the De-
partment of Defense’’ and inserting ‘‘the TRICARE 
retail pharmacy program and the national mail-order 
pharmacy program shall be treated as elements of 
the Department of Defense’’; and 
(3) by striking ‘‘provided by pharmacies under 
the program’’ and inserting ‘‘provided under such 
programs’’. 
SEC. 8. SPECIFIED COVERED PART D DRUGS EXCISE TAX. 
(a) IN GENERAL.—Subchapter E of chapter 32 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new section: 
‘‘SEC. 4193. SPECIFIED COVERED PART D DRUGS. 
‘‘(a) IN GENERAL.—There is hereby imposed on the 
sale by the manufacturer, producer, or importer of any 
specified covered part D drug for a price in excess of the 
negotiated price in violation of section 1860D–11(i)(5)(C) 
of the Social Security Act during any period described in 
such section a tax equal to 100 percent of the price for 
which so sold. 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00040
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(b) DEFINITIONS.—The terms ‘specified covered 
part D drug’ and ‘negotiated price’ have the meaning such 
terms have under section 1860D–11 of the Social Security 
Act.’’. 
(b) CLERICAL AMENDMENTS.— 
(1) The heading of subchapter E of chapter 32 
of the Internal Revenue Code of 1986 is amended by 
striking 
‘‘Medical 
Devices’’ 
and 
inserting 
‘‘Other Medical Products’’. 
(2) The table of subchapters for chapter 32 of 
such Code is amended by striking the item relating 
to subchapter E and inserting the following new 
item: 
‘‘SUBCHAPTER E. OTHER MEDICAL PRODUCTS’’. 
(3) The table of sections for subchapter E of 
chapter 32 of such Code is amended by adding at 
the end the following new item: 
‘‘Sec. 4193. Specified covered part D drugs.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales on or after the date that 
is 1 year after the date of the enactment of this Act. 
SEC. 9. DRUG MANUFACTURER REPORTING. 
Part P of title III of the Public Health Service Act 
(42 U.S.C. 280g et seq.) is amended by adding at the end 
the following: 
VerDate Sep 11 2014 
22:03 Aug 13, 2021
Jkt 019200
PO 00000
Frm 00041
Fmt 6652
Sfmt 6201
E:\BILLS\H4811.IH
H4811
pamtmann on DSKBC07HB2PROD with BILLS