I 
114TH CONGRESS 
2D SESSION 
H. R. 6043 
To require reporting regarding certain drug price increases, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 15, 2016 
Ms. SCHAKOWSKY (for herself, Ms. DELAURO, Mr. MCDERMOTT, Mr. CUM-
MINGS, Mrs. KIRKPATRICK, Mr. DOGGETT, 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 2016’’. 
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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: 
‘‘PART W—DRUG PRICE REPORTING; DRUG 
VALUE FUND 
‘‘SEC. 399OO. REPORTING ON JUSTIFICATION FOR DRUG 
PRICE INCREASES. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) AVERAGE
MANUFACTURER
PRICE.—The 
term ‘average manufacturer price’ has the meaning 
given the term in section 1927(k)(1) of the Social 
Security Act (42 U.S.C. 1396r–8(k)(1)). 
‘‘(2) 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. 
‘‘(3) 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, 
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Drug, and Cosmetic Act or licensed under subsection 
(a) or (k) of section 351 of this Act— 
‘‘(A) that is— 
‘‘(i)(I) subject to section 503(b)(1) of 
the Federal Food, Drug, and Cosmetic 
Act; or 
‘‘(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. 
‘‘(b) REPORT.— 
‘‘(1) REPORT REQUIRED.—The manufacturer of 
a qualifying drug shall submit a report to the Sec-
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retary for each price increase of a qualifying drug 
that will result in an increase in the average manu-
facturer price of that drug that is equal to 10 per-
cent or more over a 12-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 average manufacturer price 
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); 
‘‘(C) the identity of the initial developer of 
the drug; 
‘‘(D) a description of the history of the 
manufacturer’s price increases for the drug 
since the approval of the application for the 
drug under section 505 of the Federal Food, 
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Drug, and Cosmetic Act or the issuance of the 
license for the drug under section 351, or since 
the manufacturer acquired such approved appli-
cation or license; 
‘‘(E) the current list price of the drug; 
‘‘(F) the total expenditures of the manu-
facturer on— 
‘‘(i) materials and manufacturing for 
such drug; and 
‘‘(ii) acquiring patents and licensing 
for such drug; 
‘‘(G) the percentage of total expenditures 
of the manufacturer on research and develop-
ment for such drug that was derived from Fed-
eral funds; 
‘‘(H) the total expenditures of the manu-
facturer on research and development for such 
drug that is used for— 
‘‘(i) basic and preclinical research; 
‘‘(ii) clinical research; 
‘‘(iii) new drug development; 
‘‘(iv) pursuing new or expanded indi-
cations for such drug through supple-
mental applications under section 505 of 
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the Federal Food, Drug, and Cosmetic 
Act; and 
‘‘(v) carrying out postmarket require-
ments related to such drug, including those 
under section 505(o)(3) of such Act; 
‘‘(I) the total revenue and the net profit 
generated from the qualifying drug for each cal-
endar year since the approval of the application 
for the drug under section 505 of the Federal 
Food, Drug, and Cosmetic Act or the issuance 
of the license for the drug under section 351, 
or since the manufacturer acquired such ap-
proved application or license; and 
‘‘(J) the total costs associated with mar-
keting and advertising for the qualifying drug; 
‘‘(2) with respect to the manufacturer— 
‘‘(A) the total revenue and the net profit 
of the manufacturer for the 12-month period 
described in subsection (b)(1); 
‘‘(B) the amount the manufacturer has 
spent on dividends and stock repurchases and 
the specific metrics used by the manufacturer 
to determine executive compensation, including 
any stock-based performance metrics, for the 
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12-month period described in subsection (b)(1); 
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) COMPLIANCE
DETERMINATIONS.—In deter-
mining whether a manufacturer may have been required 
to submit a report under this section, and otherwise mak-
ing determinations about manufacturer compliance with 
the requirements of this section, the Inspector General of 
the Department of Health and Human Services shall an-
nually review and consider the average manufacturer price 
information submitted under section 447.510 of title 42, 
Code of Federal Regulations, or any successor regulations. 
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‘‘(f) 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 
the report on the public Web site 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 ensure 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. 
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‘‘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 
Web site of the Department of Health and Human Serv-
ices in a way that is easy to use and understand, an an-
nual 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 en-
sure the protection of confidential commercial information 
and trade secrets.’’. 
Æ 
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