I 
116TH CONGRESS 
1ST SESSION H. R. 3947 
To lower the cost of prescription drugs, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 24, 2019 
Mr. MEADOWS introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committees on 
Ways and Means, the Judiciary, Armed Services, and Oversight and Re-
form, 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 committee concerned 
A BILL 
To lower the cost of prescription drugs, 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; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Competition Prescription Act of 2019’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—ELIMINATING DELAYS OF GENERIC DRUGS AND 
BIOSIMILAR PRODUCTS 
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Sec. 101. Actions for delays of generic drugs and biosimilar biological products. 
Sec. 102. REMS approval process for subsequent filers. 
TITLE II—INCREASING ACCESS TO DRUGS AND BIOSIMILAR 
PRODUCTS 
Sec. 201. Expedited development and priority review for generic complex drug 
products. 
Sec. 202. Increasing pharmaceutical options to treat an unmet medical need. 
Sec. 203. Preemption of State barriers to the substitution of biosimilar prod-
ucts. 
Sec. 204. Expedited process for biological products authorized for marketing in 
European Union. 
TITLE III—PRESCRIPTION DRUG PRICING AND COMPETITION 
Sec. 301. Medicare drug coverage. 
Sec. 302. Fee transparency between pharmacies and PBMs. 
Sec. 303. Sunset of limit on maximum rebate amount for single source drugs 
and innovator multiple source drugs. 
Sec. 304. Regulation of manufacturer-sponsored copay contributions. 
TITLE IV—PATENT DISCLOSURE REQUIREMENTS 
Sec. 401. Patent disclosure and transparency requirements. 
Sec. 402. Antitrust exemption for health insurance issuers to negotiate whole-
sale acquisition prices of prescription drugs purchased from 
drug manufacturers. 
Sec. 403. Fair treatment of Medicare part B billing codes for the prescribing 
of biosimilars. 
TITLE V—FIXING GLOBAL FREELOADING 
Sec. 501. Chief Pharmaceutical Negotiator in the Office of the United States 
Trade Representative. 
TITLE I—ELIMINATING DELAYS 
OF GENERIC DRUGS AND BIO-
SIMILAR PRODUCTS 
SEC. 101. ACTIONS FOR DELAYS OF GENERIC DRUGS AND 
BIOSIMILAR BIOLOGICAL PRODUCTS. 
(a) DEFINITIONS.—In this section— 
(1) the term ‘‘commercially reasonable, market- 
based terms’’ means— 
(A) a nondiscriminatory price for the sale 
of the covered product at or below, but not 
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greater than, the most recent wholesale acquisi-
tion cost for the drug, as defined in section 
1847A(c)(6)(B) of the Social Security Act (42 
U.S.C. 1395w–3a(c)(6)(B)); 
(B) a schedule for delivery that results in 
the transfer of the covered product to the eligi-
ble product developer consistent with the timing 
under subsection (b)(2)(A)(iv); and 
(C) no additional conditions are imposed 
on the sale of the covered product; 
(2) the term ‘‘covered product’’— 
(A) means— 
(i) any drug approved under sub-
section (c) or (j) of section 505 of the Fed-
eral Food, Drug, and Cosmetic Act (21 
U.S.C. 355) or biological product licensed 
under subsection (a) or (k) of section 351 
of the Public Health Service Act (42 
U.S.C. 262); 
(ii) any combination of a drug or bio-
logical product described in clause (i); or 
(iii) when reasonably necessary to 
support approval of an application under 
section 505 of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 355), or sec-
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tion 351 of the Public Health Service Act 
(42 U.S.C. 262), as applicable, or other-
wise meet the requirements for approval 
under either such section, any product, in-
cluding any device, that is marketed or in-
tended for use with such a drug or biologi-
cal product; and 
(B) does not include any drug or biological 
product that appears on the drug shortage list 
in effect under section 506E of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 
356e), unless— 
(i) the drug or biological product has 
been on the drug shortage list in effect 
under such section 506E continuously for 
more than 6 months; or 
(ii) the Secretary determines that in-
clusion of the drug or biological product as 
a covered product is likely to contribute to 
alleviating or preventing a shortage; 
(3) the term ‘‘device’’ has the meaning given 
the term in section 201 of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 321); 
(4) the term ‘‘eligible product developer’’ means 
a person that seeks to develop a product for ap-
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proval pursuant to an application for approval under 
subsection (b)(2) or (j) of section 505 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 355) or 
for licensing pursuant to an application under sec-
tion 351(k) of the Public Health Service Act (42 
U.S.C. 262(k)); 
(5) the term ‘‘license holder’’ means the holder 
of an application approved under subsection (c) or 
(j) of section 505 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355) or the holder of a li-
cense under subsection (a) or (k) of section 351 of 
the Public Health Service Act (42 U.S.C. 262) for 
a covered product; 
(6) the term ‘‘REMS’’ means a risk evaluation 
and mitigation strategy under section 505–1 of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355–1); 
(7) the term ‘‘REMS with ETASU’’ means a 
REMS that contains elements to assure safe use 
under section 505–1(f) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 355–1(f)); 
(8) the term ‘‘Secretary’’ means the Secretary 
of Health and Human Services; 
(9) the term ‘‘single, shared system of elements 
to assure safe use’’ means a single, shared system 
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of elements to assure safe use under section 505– 
1(f) of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 355–1(f)); and 
(10) the term ‘‘sufficient quantities’’ means an 
amount of a covered product that the eligible prod-
uct developer determines allows it to— 
(A) conduct testing to support an applica-
tion under— 
(i) subsection (b)(2) or (j) of section 
505 of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 355); or 
(ii) section 351(k) of the Public 
Health Service Act (42 U.S.C. 262(k)); 
and 
(B) fulfill any regulatory requirements re-
lating to approval of such an application. 
(b) CIVIL ACTION FOR FAILURE TO PROVIDE SUFFI-
CIENT QUANTITIES OF A COVERED PRODUCT.— 
(1) IN GENERAL.—An eligible product developer 
may bring a civil action against the license holder 
for a covered product seeking relief under this sub-
section in an appropriate district court of the United 
States alleging that the license holder has declined 
to provide sufficient quantities of the covered prod-
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uct to the eligible product developer on commercially 
reasonable, market-based terms. 
(2) ELEMENTS.— 
(A) IN GENERAL.—To prevail in a civil ac-
tion brought under paragraph (1), an eligible 
product developer shall prove, by a preponder-
ance of the evidence— 
(i) that— 
(I) the covered product is not 
subject to a REMS with ETASU; or 
(II) if the covered product is sub-
ject to a REMS with ETASU— 
(aa) the eligible product de-
veloper has obtained a covered 
product authorization from the 
Secretary in accordance with sub-
paragraph (B); and 
(bb) the eligible product de-
veloper has provided a copy of 
the covered product authorization 
to the license holder; 
(ii) that, as of the date on which the 
civil action is filed, the product developer 
has not obtained sufficient quantities of 
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the covered product on commercially rea-
sonable, market-based terms; 
(iii) that the eligible product developer 
has requested to purchase sufficient quan-
tities of the covered product from the li-
cense holder; and 
(iv) that the license holder has not de-
livered to the eligible product developer 
sufficient quantities of the covered product 
on commercially reasonable, market-based 
terms— 
(I) for a covered product that is 
not subject to a REMS with ETASU, 
by the date that is 31 days after the 
date on which the license holder re-
ceived the request for the covered 
product; and 
(II) for a covered product that is 
subject to a REMS with ETASU, by 
31 days after the later of— 
(aa) the date on which the 
license holder received the re-
quest for the covered product; or 
(bb) the date on which the 
license holder received a copy of 
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the covered product authorization 
issued by the Secretary in ac-
cordance with subparagraph (B). 
(B) AUTHORIZATION FOR COVERED PROD-
UCT SUBJECT TO A REMS WITH ETASU.— 
(i) REQUEST.—An eligible product de-
veloper may submit to the Secretary a 
written request for the eligible product de-
veloper to be authorized to obtain suffi-
cient quantities of an individual covered 
product subject to a REMS with ETASU. 
(ii) AUTHORIZATION.—Not later than 
120 days after the date on which a request 
under clause (i) is received, the Secretary 
shall, by written notice, authorize the eligi-
ble product developer to obtain sufficient 
quantities of an individual covered product 
subject to a REMS with ETASU for pur-
poses of— 
(I) development and testing that 
does not involve human clinical trials, 
if the eligible product developer has 
agreed to comply with any conditions 
the Secretary determines necessary; or 
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(II) development and testing that 
involves human clinical trials, if the 
eligible product developer has— 
(aa)(AA) submitted proto-
cols, 
informed 
consent 
docu-
ments, and informational mate-
rials for testing that include pro-
tections that provide safety pro-
tections comparable to those pro-
vided by the REMS for the cov-
ered product; or 
(BB) otherwise satisfied the 
Secretary that such protections 
will be provided; and 
(bb) met any other require-
ments the Secretary may estab-
lish. 
(iii) NOTICE.—A covered product au-
thorization issued under this subparagraph 
shall state that the provision of the covered 
product by the license holder under the 
terms of the authorization will not be a 
violation of the REMS for the covered 
product. 
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(3) AFFIRMATIVE DEFENSE.—In a civil action 
brought under paragraph (1), it shall be an affirma-
tive defense, on which the defendant has the burden 
of persuasion by a preponderance of the evidence— 
(A) that, on the date on which the eligible 
product developer requested to purchase suffi-
cient quantities of the covered product from the 
license holder— 
(i) neither the license holder nor any 
of its agents, wholesalers, or distributors 
was engaged in the manufacturing or com-
mercial marketing of the covered product; 
and 
(ii) neither the license holder nor any 
of its agents, wholesalers, or distributors 
otherwise had access to inventory of the 
covered product to supply to the eligible 
product developer on commercially reason-
able, market-based terms; 
(B) that— 
(i) the license holder sells the covered 
product through agents, distributors, or 
wholesalers; 
(ii) the license holder has placed no 
restrictions, explicit or implicit, on its 
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agents, distributors, or wholesalers to sell 
covered products to eligible product devel-
opers; and 
(iii) the covered product can be pur-
chased by the eligible product developer in 
sufficient quantities on commercially rea-
sonable, market-based terms from the 
agents, distributors, or wholesalers of the 
license holder; or 
(C) that the license holder made an offer 
to sell sufficient quantities of the covered prod-
uct to the eligible product developer at commer-
cially reasonable market-based terms— 
(i) for a covered product that is not 
subject to a REMS with ETASU, by the 
date that is 14 days after the date on 
which the license holder received the re-
quest for the covered product, and the eli-
gible product developer did not accept such 
offer by the date that is 7 days after the 
date on which the eligible product devel-
oper received such offer from the license 
holder; or 
(ii) for a covered product that is sub-
ject to a REMS with ETASU, by the date 
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that is 20 days after the date on which the 
license holder received the request for the 
covered product, and the eligible product 
developer did not accept such offer by the 
date that is 10 days after the date on 
which the eligible product developer re-
ceived such offer from the license holder. 
(4) METHODS
FOR
TRANSMISSION
OF
RE-
QUESTS FOR COVERED PRODUCTS.—A written re-
quest for a covered product, offer to sell a covered 
product, or acceptance of such an offer between the 
eligible product developer and the license holder 
shall be made by— 
(A) certified or registered mail with return 
receipt requested; 
(B) personal delivery; or 
(C) electronic means. 
(5) REMEDIES.— 
(A) IN GENERAL.—If an eligible product 
developer prevails in a civil action brought 
under paragraph (1), the court shall— 
(i) order the license holder to provide 
to the eligible product developer without 
delay sufficient quantities of the covered 
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product on commercially reasonable, mar-
ket-based terms; 
(ii) award to the eligible product de-
veloper reasonable attorney’s fees and costs 
of the civil action; and 
(iii) award to the eligible product de-
veloper a monetary amount sufficient to 
deter the license holder from failing to pro-
vide eligible product developers with suffi-
cient quantities of a covered product on 
commercially 
reasonable, 
market-based 
terms, if the court finds, by a preponder-
ance of the evidence— 
(I) that the license holder delayed 
providing sufficient quantities of the 
covered product to the eligible product 
developer without a legitimate busi-
ness justification; or 
(II) that the license holder failed 
to comply with an order issued under 
clause (i). 
(B) MAXIMUM
MONETARY
AMOUNT.—A 
monetary amount awarded under subparagraph 
(A)(iii) shall not be greater than the revenue 
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that the license holder earned on the covered 
product during the period— 
(i) beginning on— 
(I) for a covered product that is 
not subject to a REMS with ETASU, 
the date that is 31 days after the date 
on which the license holder received 
the request; or 
(II) for a covered product that is 
subject to a REMS with ETASU, the 
date that is 31 days after the later 
of— 
(aa) the date on which the 
license holder received the re-
quest; or 
(bb) the date on which the 
license holder received a copy of 
the covered product authorization 
issued by the Secretary in ac-
cordance with paragraph (2)(B); 
and 
(ii) ending on the date on which the 
eligible product developer received suffi-
cient quantities of the covered product. 
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(C) AVOIDANCE
OF
DELAY.—The court 
may issue an order under subparagraph (A)(i) 
before conducting further proceedings that may 
be necessary to determine whether the eligible 
product developer is entitled to an award under 
clause (ii) or (iii) of subparagraph (A), or the 
amount of any such award. 
(c) LIMITATION OF LIABILITY.—A license holder for 
a covered product shall not be liable for any claim under 
Federal, State, or local law arising out of the failure of 
an eligible product developer to follow adequate safeguards 
to assure safe use of the covered product during develop-
ment or testing activities described in this section, includ-
ing transportation, handling, use, or disposal of the cov-
ered product by the eligible product developer. 
(d) NO VIOLATION OF REMS.—Section 505–1 of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355– 
1) is amended by adding at the end the following new sub-
section: 
‘‘(l) PROVISION OF SAMPLES NOT A VIOLATION OF 
STRATEGY.—The provision of samples of a covered prod-
uct to an eligible product developer (as those terms are 
defined in section 2(a) of the Creating and Restoring 
Equal Access to Equivalent Samples Act of 2019) shall 
not be considered a violation of the requirements of any 
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risk evaluation and mitigation strategy that may be in 
place under this section for such drug.’’. 
(e) RULE OF CONSTRUCTION.— 
(1) DEFINITION.—In this subsection, the term 
‘‘antitrust laws’’— 
(A) has the meaning given the term in 
subsection (a) of the first section of the Clayton 
Act (15 U.S.C. 12); and 
(B) includes section 5 of the Federal 
Trade Commission Act (15 U.S.C. 45) to the 
extent that such section applies to unfair meth-
ods of competition. 
(2) ANTITRUST LAWS.—Nothing in this section 
shall be construed to limit the operation of any pro-
vision of the antitrust laws. 
SEC. 102. REMS APPROVAL PROCESS FOR SUBSEQUENT 
FILERS. 
Section 505–1 of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 355–1), as amended by section 101, 
is further amended— 
(1) in subsection (g)(4)(B)— 
(A) in clause (i) by striking ‘‘or’’ after the 
semicolon; 
(B) in clause (ii) by striking the period at 
the end and inserting ‘‘; or’’; and 
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(C) by adding at the end the following: 
‘‘(iii) accommodate different, com-
parable aspects of the elements to assure 
safe use for a drug that is the subject of 
an application under section 505(j), and 
the applicable listed drug.’’; 
(2) in subsection (i)(1), by striking subpara-
graph (C) and inserting the following: 
‘‘(C)(i) Elements to assure safe use, if re-
quired under subsection (f) for the listed drug, 
which, subject to clause (ii), for a drug that is 
the subject of an application under section 
505(j) may use— 
‘‘(I) a single, shared system with the 
listed drug under subsection (f); or 
‘‘(II) a different, comparable aspect of 
the elements to assure safe use under sub-
section (f). 
‘‘(ii) The Secretary may require a drug 
that is the subject of an application under sec-
tion 505(j) and the listed drug to use a single, 
shared system under subsection (f), if the Sec-
retary determines that no different, comparable 
aspect of the elements to assure safe use could 
satisfy the requirements of subsection (f).’’; 
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(3) in subsection (i), by adding at the end the 
following: 
‘‘(3) SHARED
REMS.—If the Secretary ap-
proves, in accordance with paragraph (1)(C)(i)(II), a 
different, comparable aspect of the elements to as-
sure safe use under subsection (f) for a drug that 
is the subject of an abbreviated new drug application 
under section 505(j), the Secretary may require that 
such different comparable aspect of the elements to 
assure safe use can be used with respect to any 
other drug that is the subject of an application 
under section 505(j) or 505(b) that references the 
same listed drug.’’; and 
(4) by adding at the end the following: 
‘‘(m) SEPARATE REMS.—When used in this section, 
the terms ‘different, comparable aspect of the elements to 
assure safe use’ or ‘different, comparable approved risk 
evaluation and mitigation strategies’ means a risk evalua-
tion and mitigation strategy for a drug that is the subject 
of an application under section 505(j) that uses different 
methods or operational means than the strategy required 
under subsection (a) for the applicable listed drug, or 
other application under section 505(j) with the same such 
listed drug, but achieves the same level of safety as such 
strategy.’’. 
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TITLE II—INCREASING ACCESS 
TO DRUGS AND BIOSIMILAR 
PRODUCTS 
SEC. 201. EXPEDITED DEVELOPMENT AND PRIORITY RE-
VIEW FOR GENERIC COMPLEX DRUG PROD-
UCTS. 
Subchapter A of chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend-
ed by adding at the end the following: 
‘‘SEC. 524B. EXPEDITED DEVELOPMENT AND PRIORITY RE-
VIEW FOR GENERIC COMPLEX DRUG PROD-
UCTS. 
‘‘(a) ESTABLISHMENT OF PROGRAM.—The Secretary 
shall establish a program to expedite the development of, 
and provide priority review under section 505(j) for, ge-
neric complex drug products. 
‘‘(b) REQUEST FOR DESIGNATION.—A sponsor of a 
generic complex drug product may request that the Sec-
retary designate such product for expedited development 
and priority review under this section. 
‘‘(c) DESIGNATION PROCESS.— 
‘‘(1) IN GENERAL.—Not later than 60 calendar 
days after the receipt of a request under subsection 
(c), the Secretary shall determine whether the prod-
uct that is the subject of the request meets the cri-
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teria under subsection (e) to be considered a generic 
complex drug product. If the Secretary determines 
that the product meets the criteria, the Secretary 
shall designate the product for expedited develop-
ment and priority review. 
‘‘(2) REVIEW.—Review of a request under sub-
section (b) shall be undertaken by a team that is 
composed of experienced staff and senior managers 
of the Food and Drug Administration. 
‘‘(3) WITHDRAWAL.—The Secretary may not 
withdraw a designation granted under this section 
on the basis of the criteria under subsection (e) no 
longer applying because of the subsequent clearance 
or approval of any other product. 
‘‘(d) EXPEDITED DEVELOPMENT AND PRIORITY RE-
VIEW GUIDANCE.— 
‘‘(1) CONTENT.—Not later than December 31, 
2021, the Secretary shall issue guidance on the im-
plementation of this section. Such guidance shall— 
‘‘(A) set forth the process by which a per-
son may seek a designation under subsection 
(c); 
‘‘(B) provide a template for requests under 
subsection (b); 
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‘‘(C) identify the criteria the Secretary will 
use in evaluating a request for designation 
under this section; and 
‘‘(D) identify the criteria and processes the 
Secretary will use to expedite the development 
and review of products designated under this 
section. 
‘‘(2) PROCESS.—Prior to finalizing the guid-
ance under paragraph (1), the Secretary shall seek 
public comment on a draft version of that guidance. 
‘‘(e) GENERIC
COMPLEX
DRUG
PRODUCT
DE-
FINED.—In this section, the term ‘generic complex drug 
product’ means a product that represents a complex ther-
apy that consists of or includes a drug for approval under 
section 505(j) and that— 
‘‘(1)(A) contains complex active ingredients 
(such as peptides, polymeric compounds, complex 
mixtures of active ingredients, and naturally sourced 
ingredients); 
‘‘(B) is composed of complex formulations (such 
as liposomes or colloids); 
‘‘(C) requires a complex route of delivery (such 
as locally acting drugs such as dermatological prod-
ucts and complex ophthalmological products and otic 
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dosage forms that are formulated as suspensions, 
emulsions, or gels); or 
‘‘(D) involves a complex dosage form (such as 
transdermals, metered dose inhalers, or extended re-
lease injectables); 
‘‘(2) presents as a complex drug-device com-
bination product (such as auto injectors or metered 
dose inhalers); or 
‘‘(3) is a product that would benefit from early 
scientific engagement due to complexity or uncer-
tainty concerning the approval pathway under sec-
tion 505(j).’’. 
SEC. 202. INCREASING PHARMACEUTICAL OPTIONS TO 
TREAT AN UNMET MEDICAL NEED. 
Subsection (b) of section 506 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 356) is amended by 
adding at the end the following: 
‘‘(4) UNMET MEDICAL NEED.—For purposes of 
paragraph (1), a drug shall be deemed to address an 
unmet medical need for a disease or condition if 
fewer than 3 available drugs exist for the treatment 
of such disease or condition.’’. 
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SEC. 203. PREEMPTION OF STATE BARRIERS TO THE SUB-
STITUTION OF BIOSIMILAR PRODUCTS. 
No State, or any political subdivision thereof, may 
prohibit a pharmacy or pharmacist from dispensing, in 
place of a biological reference product, any product that, 
pursuant to section 351(k) of the Public Health Service 
Act (42 U.S.C. 262(k)), has been determined by the Sec-
retary of Health and Human Services to be interchange-
able with the reference product in accordance with sub-
sections (a) and (k)(4) of such Act (42 U.S.C. 262(a), 
(k)(4)). 
SEC. 204. EXPEDITED PROCESS FOR BIOLOGICAL PROD-
UCTS AUTHORIZED FOR MARKETING IN EU-
ROPEAN UNION. 
Section 351(a) of the Public Health Service Act (42 
U.S.C. 262(a)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) PRODUCTS AUTHORIZED FOR MARKETING 
IN EUROPEAN UNION.—In considering whether to li-
cense a biological product under this subsection or 
subsection (k), the Secretary may expedite the li-
censing process if the biological product has been 
authorized for marketing by the European Medicines 
Agency and such authorization remains in effect.’’. 
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TITLE III—PRESCRIPTION DRUG 
PRICING AND COMPETITION 
SEC. 301. MEDICARE DRUG COVERAGE. 
Notwithstanding any other provision of law, the Sec-
retary of Health and Human Services may alter payments 
for prescription drugs, including biologicals, provided 
through the Medicare part B program by paying at rates 
that, based on the average sales price plus 6 percent in 
the year of implementation of this Act, grow at the con-
sumer price index (CPI Prescription Drugs). 
SEC. 302. FEE TRANSPARENCY BETWEEN PHARMACIES AND 
PBMS. 
(a) PROHIBITING MEDICARE PDP SPONSORS AND 
MA–PD ORGANIZATIONS FROM RETROACTIVELY REDUC-
ING PAYMENT ON CLEAN CLAIMS SUBMITTED BY PHAR-
MACIES.— 
(1) IN GENERAL.—Section 1860D–12(b)(4)(A) 
of the Social Security Act (42 U.S.C. 1395w– 
112(b)(4)(A)) is amended by adding at the end the 
following new clause: 
‘‘(iv) PROHIBITING RETROACTIVE RE-
DUCTIONS
IN
PAYMENTS
ON
CLEAN 
CLAIMS.—Each contract entered into with 
a PDP sponsor under this part with re-
spect to a prescription drug plan offered 
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by such sponsor shall provide that after 
the date of receipt of a clean claim sub-
mitted by a pharmacy, the PDP sponsor 
(or an agent of the PDP sponsor) may not 
retroactively reduce payment on such claim 
directly or indirectly through aggregated 
effective rate or otherwise except in the 
case such claim is found to not be a clean 
claim (such as in the case of a claim lack-
ing required substantiating documentation) 
during the course of a routine audit as 
permitted pursuant to written agreement 
between the PDP sponsor (or such an 
agent) and such pharmacy. The previous 
sentence shall not prohibit any retroactive 
increase in payment to a pharmacy pursu-
ant to a written agreement between a PDP 
sponsor (or an agent of such sponsor) and 
such pharmacy.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by subsection (a) shall apply with respect to con-
tracts entered into on or after January 1, 2021. 
(b) ELIMINATION OF DIR FEES.— 
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(1) PHARMACY
BENEFITS
MANAGER
STAND-
ARDS UNDER THE MEDICARE PROGRAM FOR PRE-
SCRIPTION DRUG PLANS AND MA–PD PLANS.— 
(A) IN
GENERAL.—Section 1860D–12(b) 
of the Social Security Act (42 U.S.C. 1395w– 
112(b)) is amended by adding at the end the 
following new paragraph: 
‘‘(7) PHARMACY
BENEFITS
MANAGER
TRANS-
PARENCY
REQUIREMENTS.—Each contract entered 
into with a PDP sponsor under this part with re-
spect to a prescription drug plan offered by such 
sponsor or with an MA organization offering an 
MA–PD plan under part C shall provide that the 
sponsor or organization, respectively, may not enter 
into a contract with any pharmacy benefits manager 
(referred to in this paragraph as a ‘PBM’) to man-
age the prescription drug coverage provided under 
such plan, or to control the costs of the prescription 
drug coverage under such plan, unless the PBM ad-
heres to the following criteria when handling person-
ally identifiable utilization and claims data or other 
sensitive patient data: 
‘‘(A) The PBM may not transmit any per-
sonally identifiable utilization, protected health 
information, or claims data, with respect to a 
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plan enrollee, to a pharmacy owned by a PBM 
if the plan enrollee has not voluntarily elected 
in writing or via secure electronic means to fill 
that particular prescription at the PBM-owned 
pharmacy. 
‘‘(B) The PBM may not require that a 
plan enrollee use a retail pharmacy, mail order 
pharmacy, specialty pharmacy, or other phar-
macy entity providing pharmacy services in 
which the PBM has an ownership interest or 
that has an ownership interest in the PBM, or 
provide an incentive to a plan enrollee to en-
courage the enrollee to use a retail pharmacy, 
mail order pharmacy, specialty pharmacy, or 
other pharmacy entity providing pharmacy serv-
ices in which the PBM has an ownership inter-
est or that has an ownership interest in the 
PBM, if the incentive is applicable only to such 
pharmacies.’’. 
(B) REGULAR UPDATE OF PRESCRIPTION 
DRUG PRICING STANDARD.—Paragraph (6) of 
section 1860D–12(b) of the Social Security Act 
(42 U.S.C. 1395w–112(b)) is amended to read 
as follows: 
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‘‘(6) REGULAR
UPDATE
OF
PRESCRIPTION 
DRUG PRICING STANDARD.— 
‘‘(A) IN GENERAL.—If the PDP sponsor of 
a prescription drug plan (or MA organization 
offering an MA–PD plan) uses a standard for 
reimbursement (as described in subparagraph 
(B)) of pharmacies based on the cost of a drug, 
each contract entered into with such sponsor 
under this part (or organization under part C) 
with respect to the plan shall provide that the 
sponsor (or organization) shall— 
‘‘(i) update such standard not less fre-
quently than once every 7 days, beginning 
with an initial update on January 1 of 
each year, to accurately reflect the market 
price of acquiring the drug; 
‘‘(ii) disclose to applicable pharmacies 
and the contracting entities of such phar-
macies the sources used for making any 
such update immediately without require-
ment of request; 
‘‘(iii) if the source for such a standard 
for reimbursement is not publicly available, 
disclose to the applicable pharmacies and 
the respective contracting entities of such 
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pharmacies all individual drug prices to be 
so updated in advance of the use of such 
prices for the reimbursement of claims; 
‘‘(iv) establish a process to appeal, in-
vestigate, and resolve disputes regarding 
individual drug prices that are less than 
the pharmacy acquisition price for such 
drug, which must be adjudicated within 7 
days of the pharmacy filing its appeal; and 
‘‘(v) provide all such pricing data in 
an .xml spreadsheet format or a com-
parable easily accessible and complete 
spreadsheet format. 
‘‘(B) 
PRESCRIPTION
DRUG
PRICING 
STANDARD
DEFINED.—For purposes of sub-
paragraph (A), a standard for reimbursement 
of a pharmacy is any methodology or formula 
for varying the pricing of a drug or drugs dur-
ing the term of the pharmacy reimbursement 
contract that is based on the cost of the drug 
involved, including drug pricing references and 
amounts that are based upon average wholesale 
price, wholesale average cost, average manufac-
turer price, average sales price, maximum al-
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lowable cost (MAC), or other costs, whether 
publicly available or not.’’. 
(C) EFFECTIVE DATE.—The amendments 
made by this section shall apply to plan years 
beginning on or after January 1, 2020. 
(2) REGULAR UPDATE OF PRESCRIPTION DRUG 
PRICING STANDARD UNDER TRICARE RETAIL PHAR-
MACY
PROGRAM.—Section 1074g(d) of title 10, 
United States Code, is amended by adding at the 
end the following new paragraph: 
‘‘(3) To the extent practicable, with respect to the 
TRICARE retail pharmacy program described in sub-
section (a)(2)(E)(ii), the Secretary shall ensure that a con-
tract entered into with a TRICARE managed care support 
contractor includes requirements described in section 
1860D–12(b)(6) of the Social Security Act (42 U.S.C. 
1395w–112(b)(6)) to ensure the provision of information 
regarding the pricing standard for prescription drugs.’’. 
(3) PRESCRIPTION
DRUG
TRANSPARENCY
IN 
THE FEDERAL EMPLOYEES HEALTH BENEFITS PRO-
GRAM.— 
(A) IN GENERAL.—Section 8902 of title 5, 
United States Code, is amended by adding at 
the end the following new subsections: 
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‘‘(p) A contract may not be made or a plan approved 
under this chapter under which a carrier has an agree-
ment with a pharmacy benefits manager (in this sub-
section referred to as a ‘PBM’) to manage prescription 
drug coverage or to control the costs of the prescription 
drug coverage unless the carrier and PBM adhere to the 
following criteria: 
‘‘(1) The PBM may not transmit any personally 
identifiable utilization, protected health information, 
or claims data with respect to an individual enrolled 
under such contract or plan to a pharmacy owned by 
the PBM if the individual has not voluntarily elected 
in writing or via secure electronic means to fill that 
particular prescription at such a pharmacy. 
‘‘(2) The PBM may not require that an indi-
vidual enrolled under such contract or plan use a re-
tail pharmacy, mail order pharmacy, specialty phar-
macy, or other pharmacy entity providing pharmacy 
services in which the PBM has an ownership interest 
or that has an ownership interest in the PBM or 
provide an incentive to a plan enrollee to encourage 
the enrollee to use a retail pharmacy, mail order 
pharmacy, specialty pharmacy, or other pharmacy 
entity providing pharmacy services in which the 
PBM has an ownership interest or that has an own-
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ership interest in the PBM, if the incentive is appli-
cable only to such pharmacies. 
‘‘(q)(1) If a contract made or plan approved under 
this chapter provides for a standard for reimbursement 
(as described in paragraph (2)) with respect to a prescrip-
tion drug plan, such contract or plan shall provide that 
the applicable carrier— 
‘‘(A) update such standard not less frequently 
than once every 7 days, beginning with an initial up-
date on January 1 of each year, to accurately reflect 
the market price of acquiring the drug; 
‘‘(B) disclose to applicable pharmacies and the 
contracting entities of such pharmacies the sources 
used for making any such update immediately with-
out requirement of request; 
‘‘(C) if the source for such a standard for reim-
bursement is not publicly available, disclose to the 
applicable pharmacies and contracting entities of 
such pharmacies all individual drug prices to be so 
updated in advance of the use of such prices for the 
reimbursement of claims; 
‘‘(D) establish a process to appeal, investigate, 
and resolve disputes regarding individual drug prices 
that are less than the pharmacy acquisition price for 
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such drug, which must be adjudicated within 7 days 
of the pharmacy filing its appeal; and 
‘‘(E) provide all such pricing data in an .xml 
spreadsheet format or a comparable easily accessible 
and complete spreadsheet format. 
‘‘(2) For purposes of paragraph (1), a standard for 
reimbursement of a pharmacy is any methodology or for-
mula for varying the pricing of a drug or drugs during 
the term of the pharmacy reimbursement contract that is 
based on the cost of the drug involved, including drug pric-
ing references and amounts that are based upon average 
wholesale price, wholesale average cost, average manufac-
turer price, average sales price, maximum allowable cost, 
or other costs, whether publicly available or not.’’. 
(B) APPLICATION.—The amendment made 
by subparagraph (A) shall apply to any contract 
entered into under section 8902 of title 5, 
United States Code, on or after the date of en-
actment of this section. 
SEC. 303. SUNSET OF LIMIT ON MAXIMUM REBATE AMOUNT 
FOR SINGLE SOURCE DRUGS AND INNO-
VATOR MULTIPLE SOURCE DRUGS. 
Section 1927(c)(2)(D) of the Social Security Act (42 
U.S.C. 1396r–8(c)(2)(D)) is amended by inserting after 
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‘‘December 31, 2009,’’ the following: ‘‘and before Decem-
ber 31, 2024,’’. 
SEC. 304. REGULATION OF MANUFACTURER-SPONSORED 
COPAY CONTRIBUTIONS. 
Notwithstanding any other provision of law, the Sec-
retary of Health and Human Services may establish a 
mechanism prohibiting drug manufacturers from contrib-
uting financially to patient copays, and establish a system 
of penalizing such behavior. 
TITLE IV—PATENT DISCLOSURE 
REQUIREMENTS 
SEC. 401. PATENT DISCLOSURE AND TRANSPARENCY RE-
QUIREMENTS. 
(a) IN GENERAL.— 
(1) IN GENERAL.—Section 351 of the Public 
Health Service Act (42 U.S.C. 262) is amended by 
adding at the end the following: 
‘‘(o) ADDITIONAL REQUIREMENTS WITH RESPECT 
TO PATENTS.— 
‘‘(1) PUBLICATION OF INFORMATION.— 
‘‘(A) IN GENERAL.—Within 1 year of the 
date of enactment of the Biologic Patent Trans-
parency Act, the Secretary shall publish and 
make available to the public a single, easily 
searchable list that includes— 
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‘‘(i) the proper and proprietary name 
of each biological product licensed or 
deemed to be licensed under subsection (a) 
or (k); 
‘‘(ii) the date of approval and applica-
tion number for each such biological prod-
uct; 
‘‘(iii) the marketing status, dosage 
form, route of administration, strength, 
and, if applicable, reference product, for 
each such biological product; 
‘‘(iv) the licensure status for each 
such biological product, including whether 
the license at the time of listing is ap-
proved, withdrawn, or revoked; 
‘‘(v) for each such biological product 
that is a reference product for which an 
exclusivity period applies, and for which 
the Secretary has determined the dates of 
such exclusivity period, under subsection 
(k)(7)(A) or subsection (k)(7)(B) of this 
section or under section 527 of the Federal 
Food, Drug, and Cosmetic Act, including 
any extension of such exclusivity period in 
accordance with subsection (m) of this sec-
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tion, the date on which such exclusivity pe-
riod expires; 
‘‘(vi) any determination of biosimi-
larity or interchangeability for each such 
biological product; and 
‘‘(vii) information regarding approved 
indications for each such biological prod-
uct, in such manner as the Secretary de-
termines appropriate. 
‘‘(B) UPDATES.—Every 30 days after the 
publication of the first list under subparagraph 
(A), the Secretary shall revise the list to in-
clude— 
‘‘(i)(I) each biological product licensed 
under subsection (a) or (k) during the 30- 
day period; and 
‘‘(II) with respect to each biological 
product described in subclause (I), the in-
formation described in clauses (i) through 
(vii) of subparagraph (A); and 
‘‘(ii) any updates to information pre-
viously published in accordance with sub-
paragraph (A).’’. 
(2) PUBLIC
LISTING
OF
PATENT
INFORMA-
TION.— 
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(A) 
IN
GENERAL.—The 
Secretary 
of 
Health and Human Services shall include in the 
recommendations 
transmitted 
to 
Congress 
under section 744I(f) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 379j–53(f)) 
recommendations with respect to the collection 
and publication of patent information in the list 
described in section 351(o) of the Public Health 
Service Act (42 U.S.C. 262), as added by para-
graph (1). 
(B) DEVELOPMENT.—In developing rec-
ommendations under subparagraph (A), the 
Secretary of Health and Human Services may 
consult with the Federal Trade Commission, 
the Director of the United States Patent and 
Trademark Office, and the Federal Trade Com-
mission, in addition to the entities listed in sec-
tion 744I(f)(1) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 379j–53(f)(1)). 
(b) RULE OF CONSTRUCTION.—Nothing in this sec-
tion, including the amendment made by this section, shall 
be construed to require or allow the Secretary of Health 
and Human Services to delay the review or approval of 
a biologic license application under section 351 of the Pub-
lic Health Service Act (42 U.S.C. 262). 
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SEC. 402. ANTITRUST EXEMPTION FOR HEALTH INSURANCE 
ISSUERS TO NEGOTIATE WHOLESALE ACQUI-
SITION PRICES OF PRESCRIPTION DRUGS 
PURCHASED FROM DRUG MANUFACTURERS. 
(a) EXEMPTION.—It shall not be a violation of the 
antitrust laws for one or more health insurance issuers 
or their designated agents to jointly negotiate wholesale 
acquisition prices of a prescription drug with a manufac-
turer of a prescription drug with regards to the reimburse-
ment policies of the insurers of the manufacturer’s drugs 
so long as no single wholesale acquisition price is jointly 
determined between the insurance issuers or their des-
ignated agents. 
(b) DEFINITIONS.—For purposes of this section: 
(1) ANTITRUST
LAWS.—The term ‘‘antitrust 
laws’’ has the meaning given it in subsection (a) of 
the 1st section of the Clayton Act (15 U.S.C. 12(a)), 
except that such term includes section 5 of the Fed-
eral Trade Commission Act (15 U.S.C. 45) to the 
extent such section 5 applies to unfair methods of 
competition. 
(2) HEALTH
INSURANCE
ISSUER.—The term 
‘‘health insurance issuer’’ has the meaning given 
that term in section 2791(b) of the Public Health 
Service Act (42 U.S.C. 300gg–91(b)). 
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(3) HEALTH MAINTENANCE ORGANIZATION.— 
The 
term 
‘‘health 
maintenance 
organization’’ 
means— 
(A) a federally qualified health mainte-
nance organization (as defined in section 
300e(a) of title 42 of the Code of Federal Reg-
ulations), 
(B) an organization recognized under State 
law as a health maintenance organization, or 
(C) a similar organization regulated under 
State law for solvency in the same manner and 
to the same extent as such a health mainte-
nance organization. 
(4) MANUFACTURER.—The term ‘‘manufac-
turer’’ means anyone who is engaged in manufac-
turing, preparing, propagating, compounding, proc-
essing, packaging, repackaging, or labeling of a pre-
scription drug. 
(5) PRESCRIPTION DRUG.—The term ‘‘prescrip-
tion drug’’ means a drug for human use subject to 
section 503(b)(1) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 353(b)(1)). 
(c) EFFECTIVE DATE.—This section shall take effect 
on the date of the enactment of this Act but shall not 
apply with respect to conduct that occurs before such date. 
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SEC. 403. FAIR TREATMENT OF MEDICARE PART B BILLING 
CODES 
FOR 
THE 
PRESCRIBING 
OF 
BIOSIMILARS. 
Section 1847A of the Social Security Act (42 U.S.C. 
1395w–3a) is amended by adding at the end the following 
new subsection: 
‘‘(h) USE
OF CERTAIN CODES.—Notwithstanding 
any previous provision of this section, for purposes of pay-
ment of biological biosimilar product the Secretary of 
Health and Human Services shall assign a uniform Com-
mon Procedure System code to describe all such products 
that share a common reference product.’’. 
TITLE V—FIXING GLOBAL 
FREELOADING 
SEC. 501. CHIEF PHARMACEUTICAL NEGOTIATOR IN THE 
OFFICE OF THE UNITED STATES TRADE REP-
RESENTATIVE. 
(a) IN GENERAL.—Section 141 of the Trade Act of 
1974 (19 U.S.C. 2171) is amended— 
(1) in subsection (b)(2)— 
(A) by striking ‘‘and one Chief Innovation 
and Intellectual Property Negotiator’’ and in-
serting ‘‘one Chief Innovation and Intellectual 
Property Negotiator, and one Chief Pharma-
ceutical Negotiator’’; 
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(B) by striking ‘‘or the Chief Innovation 
and Intellectual Property Negotiator’’ and in-
serting ‘‘the Chief Innovation and Intellectual 
Property Negotiator, or the Chief Pharma-
ceutical Negotiator’’; and 
(C) by striking ‘‘and the Chief Innovation 
and Intellectual Property Negotiator’’ and in-
serting ‘‘the Chief Innovation and Intellectual 
Property Negotiator, and the Chief Pharma-
ceutical Negotiator’’; and 
(2) in subsection (c), by adding at the end the 
following new paragraph: 
‘‘(7) The principal function of the Chief Phar-
maceutical Negotiator shall be to conduct trade ne-
gotiations and to enforce trade agreements relating 
to United States pharmaceutical products and serv-
ices. The Chief Pharmaceutical Negotiator shall be 
a vigorous advocate on behalf of United States phar-
maceutical interests, including patients and United 
States pharmaceutical workers. The Chief Pharma-
ceutical Negotiator shall perform such other func-
tions as the United States Trade Representative 
may direct.’’. 
(b) COMPENSATION.—Section 5314 of title 5, United 
States Code is amended by striking ‘‘Chief Innovation and 
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Intellectual Property Negotiator, Office of the United 
States Trade Representative.’’ and inserting the following: 
‘‘Chief Innovation and Intellectual Property Nego-
tiator, Office of the United States Trade Representative. 
‘‘Chief Pharmaceutical Negotiator, Office of the 
United States Trade Representative.’’. 
(c) REPORT REQUIRED.—Not later than one year 
after the appointment of the first Chief Pharmaceutical 
Negotiator pursuant to paragraph (2) of section 141(b) 
of the Trade Act of 1974, as amended by subsection (a), 
and annually thereafter, the United States Trade Rep-
resentative shall submit to the Committee on Finance of 
the Senate and the Committee on Ways and Means of the 
House of Representatives a report describing in detail— 
(1) enforcement actions taken by the Trade 
Representative during the one-year period preceding 
the submission of the report to ensure the protection 
of United States pharmaceutical products and serv-
ices; and 
(2) other actions taken by the Trade Represent-
ative to advance United States pharmaceutical prod-
ucts and services. 
Æ 
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Frm 00043
Fmt 6652
Sfmt 6301
E:\BILLS\H3947.IH
H3947
kjohnson on DSK79L0C42 with BILLS