I
107TH CONGRESS
1ST SESSION
H. R. 1574
To provide for prices of pharmaceutical products that are fair to the producer
and the consumer, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 24, 2001
Mr. OWENS introduced the following bill; which was referred to the Committee
on Energy and Commerce, and in addition to the Committee on the Judi-
ciary, 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 provide for prices of pharmaceutical products that are
fair to the producer and the consumer, 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 ‘‘Pharmaceutical Prod-
ucts Price Equity Act’’.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Modern life enhancing and life sustaining
drugs are the products of decades of scientific re-
search and practice.
(2) The refining and production of products by
American pharmaceutical enterprises must be appro-
priately compensated.
(3) The pricing of American pharmaceutical
products varies greatly from country to country with
the corporate owners of such products voluntarily
assuming no losses by always selling their products
above the cost of production.
(4) Considering the vital life and death nature
of pharmaceutical products, it is appropriate that
the United States Government, in harmony with
other nations belonging to the World Trade Organi-
zation, should engage in the reasonable regulation of
the prices of pharmaceutical products.
SEC. 3. REASONABLE LIMITS ON PROFITS OF PHARMA-
CEUTICAL PRODUCTS.
(a) PRESIDENTIAL
AUTHORITY.—The President
shall issue such orders and regulations, and establish such
procedures and reporting requirements, as the President
determines to be appropriate to ensure that no pharma-
ceutical product (as defined by the President in such regu-
lation or order) is sold to any consumer in the United
States at a price that is more than 6 percent above the
average retail price at which such pharmaceutical product
is sold in the 5 most industrialized, free-market countries,
other than the United States, as determined by the Presi-
dent.
(b) DELEGATION.—The President may delegate the
performance of any function under this section to any offi-
cer of any Federal department or agency who has been
appointed by the President, by and with the consent of
the Senate.
(c) CONFIDENTIALITY OF INFORMATION.—All infor-
mation reported to or otherwise obtained by any person
exercising any authority under this section which contains
or relates to a trade secret or other matter referred to
in section 1905 of title 18, United States Code, shall be
considered confidential for purposes of that section, except
that such information may be disclosed to any other offi-
cer or employee of the United States involved in carrying
out this section solely for the purpose of carrying out, and
enforcing compliance with, this section.
(d) SUBPOENA POWER AND PRODUCTION OF DOCU-
MENTS.—
(1) IN GENERAL.—The officer of any agency or
department to whom the President has delegated
any authority under this section, may—
(A) examine any books, papers, records, or
other data of any person which is relevant to
the enforcement of this section or to any rec-
ordkeeping or reporting requirement prescribed
for the purpose of carrying out this section; and
(B) summon any person, an officer or em-
ployee of any person (including a former officer
or employee), or any person having possession,
custody, or care of the reports and records re-
quired to be made or maintained pursuant to
this section, to appear at a time and place
named in the summons and to produce such
books, papers, records, or other data, and to
give testimony, under oath, as may be relevant
or material to an investigation or procedure
under this section.
(2) ADMINISTRATIVE ASPECTS OF SUMMONS.—
(A) PRODUCTION AT DESIGNATED SITE.—
A summons issued pursuant to this section may
require that books, papers, records, or other
data stored or maintained at any place be pro-
duced at any designated location in any State
or in any territory or other place subject to the
jurisdiction of the United States not more than
500 miles distant from any place where the per-
son summoned operates or conducts business in
the United States.
(B) FEES AND TRAVEL EXPENSES.—Per-
sons summoned under this section shall be paid
the same fees and mileage for travel in the
United States that are paid witnesses in the
courts of the United States.
(C) NO LIABILITY FOR EXPENSES.—The
United States shall not be liable for any ex-
pense, other than an expense described in sub-
paragraph (B), incurred in connection with the
production of books, papers, records, or other
data under this section.
(3) SERVICE OF SUMMONS.—Service of a sum-
mons issued under this section may be by registered
mail or in such other manner calculated to give ac-
tual notice as the officer delegated by the President
may prescribe by regulation.
(4) CONTUMACY OR REFUSAL.—
(A) REFERRAL TO ATTORNEY GENERAL.—
In case of contumacy by a person issued a sum-
mons under this subsection or a refusal by such
person to obey such summons, the officer
issuing the summons shall refer the matter to
the Attorney General.
(B) JURISDICTION OF COURT.—The Attor-
ney General may invoke the aid of any court of
the United States within the jurisdiction of
which—
(i) the investigation which gave rise to
the summons is being or has been carried
on;
(ii) the person summoned is an inhab-
itant; or
(iii) the person summoned carries on
business or may be found,
to compel compliance with the summons.
(C) COURT ORDER.—The court may issue
an order requiring the person summoned to ap-
pear before the Secretary or his delegate to
produce books, papers, records, and other data,
to give testimony as may be necessary to ex-
plain how such material was compiled and
maintained, and to pay the costs of the pro-
ceeding.
(D) FAILURE TO COMPLY WITH ORDER.—
Any failure to obey the order of the court may
be punished by the court as a contempt thereof.
(E) SERVICE OF PROCESS.—All process in
any case under this subsection may be served in
any judicial district in which such person may
be found.
SEC. 4. ENFORCEMENT.
(a) INJUNCTIONS AND OTHER RELIEF.—
(1) IN GENERAL.—Whenever it appears to the
officer authorized by the President to exercise au-
thority under this Act, that any person has engaged,
is engaged, or is about to engage in any act or prac-
tice that constitutes a violation of any regulation or
order prescribed or issued pursuant to section 3, the
officer may request the Attorney General to bring an
action in an appropriate district court of the United
States to enjoin such act or practice.
(2) REMEDIES.—Upon a proper showing in any
action under paragraph (1), the court—
(A) shall issue a temporary restraining
order or grant a preliminary or permanent in-
junction without bond;
(B) may also issue a mandatory injunction
commanding any person to comply with any
order or injunction issued or granted under
subparagraph (A); and
(C) may order restitution of moneys re-
ceived in violation of any regulation prescribed
or order issued under section 3 or any order
issued or injunction granted under this section.
(b) PENALTIES.—
(1) CRIMINAL.—Whoever knowingly violates
any regulation prescribed or order issued under sec-
tion 3 shall be fined not more than the amount
equal to 200 percent of the amount of the sale re-
lated to each violation.
(2) CIVIL.—
(A) IN GENERAL.—Whoever violates any
regulation prescribed or order issued under sec-
tion 3 shall be liable to the United States for
a civil penalty of not more than 200 percent of
the amount by which such person was unjustly
enriched in connection with such violation.
(B) CONTINUING VIOLATIONS.—A separate
violation occurs for each sale of a pharma-
ceutical product in violation of a regulation pre-
scribed or order issued under section 3.
(C) ASSESSMENT.—
(i) WRITTEN
NOTICE.—Any penalty
imposed under subparagraph (A) may be
assessed and collected by the officer au-
thorized by the President to exercise au-
thority under this Act by written notice.
(ii) FINALITY
OF
ASSESSMENT.—If,
with respect to any assessment under
clause (i), a hearing is not requested pur-
suant to subparagraph (F) within the pe-
riod of time allowed under such subpara-
graph, the assessment shall constitute a
final and unappealable order.
(D) AUTHORITY
TO
MODIFY
OR
REMIT
PENALTY.—Any officer authorized by the Presi-
dent to exercise authority under this Act may
compromise, modify, or remit any penalty which
such officer may assess or had already assessed
under subparagraph (A).
(E) 
MITIGATING
FACTORS.—In 
deter-
mining the amount of any penalty imposed
under subparagraph (A), the officer authorized
by the President to exercise authority under
this Act shall take into account the appropriate-
ness of the penalty with respect to—
(i) the size of financial resources and
good faith of the person charged;
(ii) the gravity of the violation;
(iii) the history of previous violations;
and
(iv) such other matters as justice may
require.
(F) HEARING.—The person against whom
any penalty is assessed under this paragraph
shall be afforded an agency hearing if such per-
son submits a request for such hearing within
20 days after the issuance of the notice of as-
sessment.
(G) COLLECTION.—
(i) REFERRAL.—If any person fails to
pay an assessment after any penalty as-
sessed under this paragraph has become
final, the officer who imposed the penalty
shall recover the amount assessed by ac-
tion in the appropriate United States dis-
trict court.
(ii) APPROPRIATENESS
OF
PENALTY
NOT
REVIEWABLE.—In any civil action
under clause (i), the validity and appro-
priateness of the penalty shall not be sub-
ject to review.
(H) DISBURSEMENT.—All penalties col-
lected under authority of this paragraph shall
be deposited into the Treasury.
(I) REGULATIONS.—Any officer authorized
by the President to exercise authority under
this Act shall prescribe regulations establishing
such procedures as may be necessary to carry
out this paragraph.
SEC. 5. CIVIL LIABILITY.
(a) LIABILITY ESTABLISHED.—Any person who vio-
lates any regulation prescribed or order issued under this
Act with respect to any other person shall be liable to such
person in an amount equal to the sum of the amounts
determined under each of the following paragraphs:
(1) ACTUAL DAMAGES.—The greater of—
(A) the amount of any actual damage sus-
tained by such person as a result of such fail-
ure; or
(B) any amount paid by the injured person
to the violator.
(2) PUNITIVE DAMAGES.—
(A) INDIVIDUAL ACTIONS.—In the case of
any action by an individual, such additional
amount as the court may allow.
(B) CLASS
ACTIONS.—In the case of a
class action, the sum of—
(i) the aggregate of the amount which
the court may allow for each named plain-
tiff; and
(ii) the aggregate of the amount
which the court may allow for each other
class member, without regard to any min-
imum individual recovery.
(3) ATTORNEYS’ FEES.—In the case of any suc-
cessful action to enforce any liability under para-
graph (1) or (2), the costs of the action, together
with reasonable attorneys’ fees.
(b) FACTORS TO BE CONSIDERED IN AWARDING PU-
NITIVE DAMAGES.—In determining the amount of any li-
ability of any person under section (a), the court shall con-
sider, among other relevant factors—
(1) the frequency and persistence of noncompli-
ance by the violator;
(2) the nature of the noncompliance;
(3) the extent to which such noncompliance was
intentional; and
(4) in the case of any class action, the number
of consumers adversely affected.
SEC. 6. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Presi-
dent for fiscal years 2002, 2003, and 2004, such sums
as may be necessary to carry out this Act.
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