(B) who is responsible for setting the price 
for the drug. 
(5) 
PRICE
GOUGING.—The 
term 
‘‘price 
gouging’’ means an increase in the average manufac-
turer price of a qualifying drug that— 
(A) is in substantial excess of an amount 
that could be reasonably justified by an increase 
in cost of producing the drug or by an increase 
in cost due to appropriate expansion of access 
to the drug to promote public health; and 
(B) because of insufficient competition in 
the marketplace, consumers cannot reasonably 
avoid. 
(6) QUALIFYING DRUG.—The term ‘‘qualifying 
drug’’ means any drug, including a combination 
product whose primary mode of action is determined 
under section 503(g) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 353(g)) to be that of 
a drug, that— 
(A) is subject to section 503(b)(1) of the 
Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 353(b)(1)); and 
(B) is covered by a Federal health care 
program. 
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(7) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
SEC. 3. PRICE GOUGING PROHIBITED. 
(a) IN GENERAL.—A manufacturer shall not engage 
in price gouging in the sale of a qualifying drug. 
(b) PRESUMPTION.—Price gouging shall be presumed 
if the average manufacturer price has increased— 
(1) 10 percent or more within the previous 12- 
month period; 
(2) 20 percent or more in the previous 36- 
month period; or 
(3) 30 percent or more within the previous 60- 
month period. 
(c) NOTICE BY SECRETARY.—The Secretary shall no-
tify the manufacturer of an increase, within the previous 
2 years, in the average manufacturer price of a qualifying 
drug the Secretary has reason to believe constitutes price 
gouging, by sending notice to the manufacturer, request-
ing a statement of justification for the increase, which 
may include— 
(1) itemizing the components of the cost of pro-
ducing the qualifying drug; 
(2) identifying the circumstances and timing of 
an increase in materials or manufacturing costs that 
caused an increase in the average manufacturer 
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price of the qualifying drug within the 5-year period 
preceding the date of the average manufacturer 
price increase; 
(3) identifying the circumstances and timing of 
any expenditures made by the manufacturer to ex-
pand access to the qualifying drug and explaining 
any improvement in public health associated with 
those expenditures; 
(4) providing sales and price information for 
other qualifying drugs with similar therapeutic ef-
fects, as relevant to assessing the extent of competi-
tion in the marketplace, and the choice available to 
consumers; and 
(5) providing any other information that the 
manufacturer believes to be relevant to a determina-
tion of whether a violation of this Act has occurred. 
(d) STATEMENT.—Not later than 45 days after the 
date on which a manufacturer receives a statement under 
subsection (c), the manufacturer shall submit to the Sec-
retary a statement described in subsection (c). 
(e) DETERMINATION BY SECRETARY.—If the Sec-
retary determines, after review of the statement of jus-
tification, or based on reasonable belief if the manufac-
turer fails to submit a statement of justification as re-
quired, that the manufacturer has engaged in price 
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gouging with respect to a qualifying drug, the Secretary 
shall notify the manufacturer of the determination. 
(f) REMEDY.— 
(1) IN
GENERAL.—The Secretary may order 
that a manufacturer determined under subsection 
(e) to have engaged in price gouging with respect to 
a qualifying drug— 
(A) restore to any consumer, including a 
third-party payor, any excessive amount paid as 
a result of a price increase that violates this 
Act; 
(B) make the drug available to partici-
pants of any qualified health plan or Federal 
health plan for a period of up to 1 year at the 
price at which the drug was made available to 
consumers immediately before the violation of 
this Act; or 
(C) if the price gouging is done knowingly, 
or occurs after a previous determination by the 
Secretary or price gouging by the manufac-
turer, pay a civil penalty of up to 3 times the 
excessive amount the manufacturer received as 
a result of a violation of this Act. 
(2) APPEALS.—Any person adversely affected 
by a determination of the Secretary under this sub-
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section may obtain review of the determination in 
accordance with section 1128A(e) of the Social Secu-
rity Act (42 U.S.C. 1320a–7a(e)). 
(g) ENFORCEMENT BY ATTORNEY GENERAL.— 
(1) IN
GENERAL.—If a manufacturer deter-
mined under subsection (e) to have engaged in price 
gouging fails to comply with an order of the Sec-
retary under subsection (f), the Secretary may refer 
the matter to the Attorney General for enforcement. 
(2) SUBPOENAS.—The Attorney General may 
subpoena documents or testimony as may assist in 
establishing whether the manufacturer engaged in 
price gouging in violation of this Act. 
(3) ACTION.—The Attorney General may bring 
an action in an appropriate district court for relief, 
including any relief described in subsection (f) and 
such further relief as the court determines is appro-
priate. 
SEC. 4. EFFECTIVE DATE; APPLICABILITY. 
This Act shall— 
(1) take effect on January 1, 2019; and 
(2) apply with respect to all increases in the av-
erage manufacturer price of a qualifying drug occur-
ring on or after that date. 
Æ 
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