I 
115TH CONGRESS 
2D SESSION 
H. R. 5739 
To establish within the Department of Health and Human Services the 
Prescription Drug and Medical Device Price Review Board to regulate 
the prices of certain prescription drugs and medical devices, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 9, 2018 
Ms. DELAURO (for herself, Mr. DOGGETT, and Ms. MOORE) introduced the 
following bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committees on Ways and Means, and the 
Judiciary, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To establish within the Department of Health and Human 
Services the Prescription Drug and Medical Device Price 
Review Board to regulate the prices of certain prescrip-
tion drugs and medical devices, 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 ‘‘Prescription Drug and 
Medical Device Price Review Board Act of 2018’’. 
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SEC. 2. ESTABLISHMENT. 
There is established in the Department of Health and 
Human Services a board to be known as the Prescription 
Drug and Medical Device Price Review Board (in this Act 
referred to as the ‘‘Board’’). 
SEC. 3. MEMBERSHIP; STAFF. 
(a) MEMBERS.—The Board shall be composed of 5 
members as follows: 
(1) The Assistant Secretary for Planning and 
Evaluation of the Department of Health and Human 
Services (or the Assistant Secretary’s designee). 
(2) The Administrator of the Centers for Medi-
care & Medicaid Services (or the Administrator’s 
designee). 
(3) The Assistant Director for the Health Serv-
ices Division of the Federal Bureau of Prisons (or 
the Assistant Director’s designee). 
(4) The Secretary of Defense (or the Sec-
retary’s designee). 
(5) The Secretary of Veterans Affairs (or the 
Secretary’s designee). 
(6) The Commissioner of Food and Drugs (or 
the Commissioner’s designee). 
(b) CHAIRPERSON.—The Board shall designate 1 
member of the Board to serve as the chairperson. 
(c) DIRECTOR AND STAFF.— 
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(1) DIRECTOR.—The Board shall have a direc-
tor who shall be appointed by the chairperson of the 
Board, subject to rules prescribed by the Board. 
(2) STAFF.—The director may appoint and fix 
the pay of such additional personnel as the chair-
person considers appropriate, subject to rules pre-
scribed by the Board. 
(3) APPLICABILITY OF CERTAIN CIVIL SERVICE 
LAWS.—The director and staff of the Board shall be 
appointed subject to the provisions of title 5, United 
States Code, governing appointments in the competi-
tive service, and shall be paid in accordance with the 
requirements of chapter 51 and subchapter III of 
chapter 53 of such title relating to classification and 
General Schedule pay rates; except that an indi-
vidual so appointed may not receive pay in excess of 
the maximum annual rate of basic pay payable for 
grade GS–15 of the General Schedule. 
(d) ASSISTANCE FOR THE BOARD.—Subject to sec-
tion 7(g), in carrying out this Act, the Board— 
(1) may seek assistance from outside experts in 
the fields of consumer advocacy, medicine, pharma-
cology, pharmacy, and prescription drug reimburse-
ment; and 
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(2) shall establish and maintain an advisory 
group and a stakeholder group for purposes of seek-
ing such assistance. 
(e) INITIAL MEETING.—The Board shall hold its ini-
tial meeting not later than 90 days after the date of the 
enactment of this Act. 
SEC. 4. REPORTING REQUIREMENTS. 
(a) REPORTING BY MANUFACTURERS.—The Board 
shall require each manufacturer of a prescription drug or 
medical device that is sold in the United States to submit 
to the Board on a periodic basis, at a level of specificity 
determined by the Board to be necessary to make a deter-
mination under section 5, the following information with 
respect to the reporting period: 
(1) Each type of prescription drug and medical 
device that is sold by the manufacturer or an affil-
iate of the manufacturer— 
(A) in the United States; or 
(B) in a country that is a member of the 
Organization for Economic Co-operation and 
Development. 
(2) The price charged by the manufacturer and 
the affiliate for the prescription drug or medical de-
vice in the United States and in any such country, 
as applicable. 
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(3) The costs of the manufacturer and the affil-
iate to produce and market the prescription drug or 
medical device for sale in the United States and in 
any such country, as applicable. 
(b) REPORTING BY CBO.—The Director of the Con-
gressional Budget Office shall submit an annual report to 
the Board on trends in the prices charged for prescription 
drugs and medical devices. 
SEC. 5. PROHIBITION AGAINST EXCESSIVE PRICE. 
(a) PROHIBITION.—Beginning on the effective date 
of the regulation required by subsection (b), the manufac-
turer of a prescription drug or medical device shall not 
charge an excessive price, as determined pursuant to such 
regulation, for such drug or device. 
(b) FORMULA.—The Board shall by regulation pre-
scribe a formula for determining whether the average 
manufacturer price of such drug or device over an annual 
quarter is an excessive price. 
(c) DETERMINATION OF EXCESSIVE PRICE.—If the 
Board determines, on its own initiative or in response to 
a petition submitted under subsection (d), that the manu-
facturer of a prescription drug or medical device charges 
an excessive price for such drug or device in violation of 
subsection (a)— 
(1) the Board shall give the manufacturer— 
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(A) notice of such violation; and 
(B) subject to subsection (d), a period to 
correct such violation; and 
(2) if the manufacturer fails to correct the vio-
lation by the end of such period, the manufacturer 
shall be subject to section 6 of this Act, section 
1927(c)(2)(E) of the Social Security Act, as added 
by subsection (c) of such section 6, and section 4192 
of the Internal Revenue Code of 1986, as added by 
subsection (d) of such section 6. 
(d) PETITIONS.—Any person may petition the Board 
to make a determination under subsection (c) regarding 
the pricing of a prescription drug or medical device. Not 
later than 90 days after the date of receipt of such a peti-
tion, the Board shall— 
(1) make a determination under subsection (c) 
regarding such pricing; or 
(2) decline to make such a determination. 
(e) CONTINUING VIOLATION.—The Board shall not 
be required to give a manufacturer an opportunity to cor-
rect a violation, as described in subsection (c)(1)(B), be-
fore the manufacturer becomes subject to the provisions 
described in subsection (c)(2) for such violation, if— 
(1) the Board has already provided such an op-
portunity to correct to the manufacturer; and 
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(2) the Board finds that the violation of sub-
section (a) is a continuation of an earlier violation 
with respect to which such an opportunity was pro-
vided. 
(f) CONSIDERATIONS.—The formula required by sub-
section (a) shall at a minimum take into consideration— 
(1) the average manufacturer price of the pre-
scription drug or medical device over the respective 
annual quarter or quarters; 
(2) the average manufacturer price of other 
prescription drugs or medical devices in the same 
therapeutic class over the same quarter or quarters; 
(3) the average price at which the prescription 
drug or medical device and other prescription drugs 
and medical devices in the same therapeutic class 
have been sold by manufacturers in countries other 
than the United States; 
(4) the costs associated with producing and 
marketing the prescription drug or medical device, 
the value of the drug or device to patients where suf-
ficient data is available to determine such value, the 
total Federal investment in the development of the 
drug or device, the size of the patient population re-
ceiving the drug or device, and other factors deter-
minative as to the true cost of production; and 
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(5) whether the price of the prescription drug 
or medical device increased during any annual quar-
ter by a percentage that is more than 2 percent 
greater than the CPI increase percentage (as defined 
in section 215(i) of the Social Security Act (42 
U.S.C. 415)) for the respective annual quarter. 
SEC. 6. ENFORCEMENT PROVISIONS. 
(a) REDUCED PATENT TERM.—If the Board finds 
that the manufacturer of a prescription drug or medical 
device, who is also an owner of a patent for such drug 
or device, charged an excessive price for such drug or de-
vice in violation of section 5(a), the Board may— 
(1) reduce the term, by not more than 5 years, 
of any patent issued under title 35, United States 
Code, relating to such drug or device; or 
(2) if the term of each patent for such drug or 
device has expired, reduce the term, by not more 
than 5 years, of another patent owned by the patent 
owner relating to a prescription drug or medical de-
vice. 
(b) CIVIL PENALTIES.—If the Board determines 
under section 5(c) that a manufacturer of a prescription 
drug or medical device charged an excessive price for a 
prescription drug or medical device in violation of section 
5(a), the Board may impose a civil penalty on the manu-
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facturer of not more than 10 percent of the manufactur-
er’s gross sales of the drug or device during the period 
beginning on the date on which an excessive price is first 
charged and ending on the date on which the manufac-
turer ceases to charge an excessive price. 
(c) ENFORCEMENT THROUGH INCREASED MEDICAID 
REBATES.— 
(1) IN
GENERAL.—Section 1927(c)(2) of the 
Social Security Act (42 U.S.C. 1396r–8(c)(2)) is 
amended— 
(A) in subparagraph (A), by inserting ‘‘, 
subject to subparagraph (E),’’ after ‘‘increased 
by’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(E) DISCOURAGING EXCESSIVE PRICES.— 
‘‘(i) IN GENERAL.—In the case of a 
manufacturer of a single source drug or an 
innovator multiple source drug with a re-
bate agreement under this section, if the 
Prescription Drug and Medical Device 
Price Review Board established under sec-
tion 2 of the Prescription Drug and Med-
ical Device Price Review Board Act of 
2018 determines under section 5(a) of 
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such Act that such manufacturer charged, 
with respect to a 30-day period, an exces-
sive price for such drug, and the Board de-
termines under clause (ii) to apply an in-
creased amount described in such clause 
with respect to such manufacturer and 
drug, the amount of the rebate determined 
under subparagraph (A) for such manufac-
turer and drug shall be, subject to sub-
paragraph (D), increased by such amount 
for the 4 rebate periods following such 30- 
day period. 
‘‘(ii) INCREASED
AMOUNT
DETER-
MINATION.—For purposes of clause (i), if 
the Board described in such clause makes 
such a determination under such section 
5(a), with respect to a manufacturer and 
drug described in such clause, the Board 
may determine an increased amount to 
apply with respect to such manufacturer 
and drug and rebate period described in 
such clause. Such increased amount may 
not exceed the rebate amount that would 
otherwise be applied to such manufacturer 
and drug under this section for such rebate 
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period, without regard to this subpara-
graph.’’. 
(2) EFFECTIVE DATE.—This subsection and the 
amendments made by this subsection shall apply 
with respect to rebate agreements entered into after 
the date that is 60 days after the date of the enact-
ment of this Act. 
(d) TAX ON EXCESS PRESCRIPTION DRUG AND MED-
ICAL DEVICE PROFITS.— 
(1) DETERMINATION
OF
AMOUNT.—If the 
Board determines under section 5(a) that a manu-
facturer, producer, or importer of a prescription 
drug or medical device charged an excessive price for 
such prescription drug or medical device during a 
taxable year, the Board may determine under this 
paragraph a reasonable price for such drug or device 
for such taxable year. 
(2) IMPOSITION OF TAX.— 
(A) IN GENERAL.—The Internal Revenue 
Code of 1986 is amended by inserting after sec-
tion 4191 the following new section: 
‘‘SEC. 4192. EXCESSIVE PRESCRIPTION DRUG AND MEDICAL 
DEVICE PRICE. 
‘‘(a) IN GENERAL.—There is hereby imposed on the 
sale of any prescription drug or medical device by the 
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manufacturer, producer, or importer a tax equal to the 
difference between the price at which such drug or device 
is so sold and the reasonable price determined by the Pre-
scription Drug and Medical Device Price Review Board 
under section 6(d)(1) of the Prescription Drug and Med-
ical Device Price Review Board Act of 2018 for such drug 
or device for the taxable year for sales after the determina-
tion. 
‘‘(b) PRESCRIPTION DRUG OR MEDICAL DEVICE.— 
For purposes of this section, the term ‘prescription drug 
or medical device’ means any prescription drug (as defined 
in section 9008 of the Patient Protection and Affordable 
Care Act) or device (as defined in section 201(h) of the 
Federal Food, Drug, and Cosmetic Act) intended for hu-
mans.’’. 
(B) CLERICAL AMENDMENT.—The table of 
parts for chapter 32 of such Code is amended— 
(i) in the item relating to subchapter 
E, by striking ‘‘Medical’’ and inserting 
‘‘Drugs and medical’’, and 
(ii) by inserting after the item relating 
to section 4191 the following new item: 
‘‘Sec. 4192. Excessive prescription drug and medical device price.’’. 
(3) EFFECTIVE DATE.—This subsection and the 
amendments made by this subsection shall apply 
with respect to sales after December 31, 2018. 
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(e) SAFE
AND AFFORDABLE DRUGS FROM AP-
PROVED COUNTRIES.—Chapter VIII of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 381 et seq.) is amend-
ed by adding at the end the following: 
‘‘SEC. 810. IMPORTATION BY INDIVIDUALS OF PRESCRIP-
TION DRUGS, AND DEVICES, FROM AN AP-
PROVED COUNTRY IF MANUFACTURERS ARE 
CHARGING AN EXCESSIVE PRICE FOR COM-
PARABLE PRODUCTS IN THE UNITED STATES. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of this Act, not later than 180 days after the date 
of enactment of this section, the Prescription Drug and 
Medical Device Price Review Board (in this section re-
ferred to as the ‘Board’) shall promulgate regulations per-
mitting individuals to safely import from an approved 
country into the United States prescription drugs, and de-
vices, that are comparable to prescription drugs, and de-
vices, for which the Board makes a final determination 
that the manufacturer is charging or has charged an ex-
cessive price in violation of section 5(a) of the Prescription 
Drug and Medical Device Price Review Board Act of 
2018. 
‘‘(b) COMPARABLE DEFINED.—For purposes of this 
section, the term ‘comparable’ means— 
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‘‘(1) with respect to a drug, having the same 
active ingredient or ingredients, route of administra-
tion, dosage form, and strength; and 
‘‘(2) with respect to a device, being substan-
tially equivalent. 
‘‘(c) ASSURANCE OF SAFETY.—For purposes of this 
section, the term ‘approved country’ means a country that 
is determined by the Secretary to have in effect standards 
to ensure the safety of prescription drugs, and of devices, 
that are at least as protective as the standards applicable 
under Federal law in the United States.’’. 
SEC. 7. AUTHORITY. 
(a) OBTAINING OFFICIAL DATA.—The chairperson of 
the Board may secure directly from any Federal agency 
information necessary to enable the Board to carry out 
its duties. Upon request of the chairperson, the head of 
the agency shall furnish such information to the Board 
to the extent such information is not prohibited from dis-
closure by law. 
(b) MAILS.—The Board may use the United States 
mails in the same manner and under the same conditions 
as other Federal agencies. 
(c) ADMINISTRATIVE SUPPORT SERVICES.—Upon the 
request of the chairperson of the Board, the Administrator 
of General Services shall provide to the Board, on a reim-
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bursable basis, the administrative support services nec-
essary for the Board to carry out its duties. 
(d) CONTRACT AUTHORITY.—The Board may con-
tract with and compensate government and private agen-
cies or persons for the purpose of conducting research, 
surveys, and other services necessary to enable the Board 
to carry out its duties. 
(e) INVESTIGATIONS.—The Board may make such in-
vestigations as it considers necessary to determine whether 
there is or may be a violation of any regulation promul-
gated under this Act and may require or permit any per-
son to file with it a statement in writing, under oath or 
otherwise as the Board shall determine, as to all the facts 
and circumstances concerning the matter to be inves-
tigated. 
(f) SUBPOENA POWER.— 
(1) IN GENERAL.—The Board may issue sub-
poenas requiring the attendance and testimony of 
witnesses and the production of any evidence relat-
ing to any matter under investigation by the Board. 
The attendance of witnesses and the production of 
evidence may be required from any place within the 
United States at any designated place of hearing 
within the United States. 
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(2) FAILURE TO OBEY A SUBPOENA.—If a per-
son refuses to obey a subpoena issued under para-
graph (1), the Board may apply to a United States 
district court for an order requiring that person to 
appear before the Board to give testimony, produce 
evidence, or both, relating to the matter under inves-
tigation. The application may be made within the ju-
dicial district where the hearing is conducted or 
where that person is found, resides, or transacts 
business. Any failure to obey the order of the court 
may be punished by the court as civil contempt. 
(3) SERVICE OF SUBPOENAS.—The subpoenas 
of the Board shall be served in the manner provided 
for subpoenas issued by a United States district 
court under the Federal Rules of Civil Procedure for 
the United States district courts. 
(4) SERVICE OF PROCESS.—All process of any 
court to which application is made under paragraph 
(2) may be served in the judicial district in which 
the person required to be served resides or may be 
found. 
(5) NOTICE.—Upon issuing any subpoena 
under this subsection, the Board shall give notice of 
such issuance to the appropriate committees of Con-
gress, including the Committee on Appropriations of 
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