I 
116TH CONGRESS 
1ST SESSION H. R. 1093 
To amend the Internal Revenue Code of 1986 to establish an excise tax 
on certain prescription drugs which have been subject to a price spike, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 7, 2019 
Mr. POCAN (for himself and Ms. KAPTUR) introduced the following bill; which 
was referred to the Committee on Energy and Commerce, and in addition 
to the Committee on Ways and Means, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to establish 
an excise tax on certain prescription drugs which have 
been subject to a price spike, 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 ‘‘Stop Price Gouging 
Act’’. 
SEC. 2. IDENTIFICATION OF PRESCRIPTION DRUG PRICE 
SPIKES. 
(a) DEFINITIONS.—In this section: 
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(1) APPLICABLE ENTITY.—The term ‘‘applica-
ble entity’’ means the holder of an application ap-
proved under subsection (c) or (j) of section 505 of 
the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355) or of a license issued under subsection 
(a) or (k) of section 351 of the Public Health Serv-
ice Act (42 U.S.C. 262) for a drug described in 
paragraph (5)(A). 
(2) AVERAGE
MANUFACTURER
PRICE.—The 
term ‘‘average manufacturer price’’— 
(A) has the same meaning given such term 
under section 1927(k)(1) of the Social Security 
Act (42 U.S.C. 1396r–8(k)(1)); or 
(B) with respect to a drug for which there 
is no average manufacturer price as so defined, 
such term shall mean the wholesale acquisition 
cost of the drug. 
(3) COMMERCE.—The term ‘‘commerce’’ has 
the meaning given such term in section 4 of the 
Federal Trade Commission Act (15 U.S.C. 44). 
(4) INSPECTOR GENERAL.—The term ‘‘Inspec-
tor General’’ means the Inspector General of the De-
partment of Health and Human Services. 
(5) PRESCRIPTION DRUG.— 
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(A) IN GENERAL.—The term ‘‘prescription 
drug’’ means any drug (as defined in section 
201(g) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 321(g))), including a com-
bination product whose primary mode of action 
is determined under section 503(g) of such Act 
(21 U.S.C. 353(g)) to be that of a drug, and 
that— 
(i) is subject to section 503(b)(1) of 
the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 353(b)(1)); and 
(ii) is covered by a Federal health 
care program (as defined in section 
1128B(f) of the Social Security Act (42 
U.S.C. 1320a–7b(f))). 
(B) 
TREATMENT
OF
REFORMULATED 
DRUGS.—For purposes of this section, a pre-
scription drug with respect to which the Sec-
retary of Health and Human Services has ap-
proved any minor reformulation that does not 
produce a meaningful therapeutic benefit, the 
drug that was approved prior to any such refor-
mulation and the drug with any such reformu-
lation shall be considered one prescription drug. 
(6) PRICE SPIKE.— 
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(A) IN GENERAL.—The term ‘‘price spike’’ 
means an increase in the average manufacturer 
price in commerce of a prescription drug for 
which the price spike percentage is equal to or 
greater than applicable price increase allowance. 
(B) 
PRICE
SPIKE
PERCENTAGE.—The 
price spike percentage is the percentage (if any) 
by which— 
(i) the average manufacturer price of 
a prescription drug in commerce for the 
calendar year; exceeds 
(ii) the average manufacturer price of 
such prescription drug in commerce for the 
calendar year preceding such year. 
(C) APPLICABLE PRICE INCREASE ALLOW-
ANCE.—The applicable price increase allowance 
for any calendar year is the percentage (round-
ed to the nearest one-tenth of 1 percent) by 
which the C–CPI–U (as defined in section 
1(f)(6) of the Internal Revenue Code of 1986) 
for that year exceeds the C–CPI–U for the pre-
ceding calendar year. 
(7) PRICE SPIKE REVENUE.— 
(A) IN GENERAL.—The price spike revenue 
for any calendar year is an amount equal to— 
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(i) the gross price spike revenue, 
minus 
(ii) the adjustment amount. 
(B) GROSS PRICE SPIKE REVENUE.—The 
gross price spike revenue for any calendar year 
is an amount equal to the product of— 
(i) an amount equal to the difference 
between clause (i) of paragraph (6)(B) and 
clause (ii) of such paragraph; and 
(ii) the total number of units of the 
prescription drug which were sold in com-
merce in such calendar year. 
(C) ADJUSTMENT AMOUNT.—The adjust-
ment amount is the amount, if any, of the gross 
price spike revenue which the Inspector General 
has determined is due solely to an increase in 
the cost of the inputs necessary to manufacture 
the prescription drug subject to the price spike. 
(b) SUBMISSION BY PHARMACEUTICAL COMPANIES 
OF INFORMATION TO INSPECTOR GENERAL.— 
(1) IN GENERAL.—For each prescription drug, 
the applicable entity shall submit to the Inspector 
General a quarterly report that includes the fol-
lowing: 
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(A) For each prescription drug of the ap-
plicable entity— 
(i) the total number of units of the 
prescription drug which were sold in com-
merce in the preceding calendar quarter; 
(ii) the average and median price per 
unit of such prescription drug in commerce 
in 
the 
preceding 
calendar 
quarter, 
disaggregated by month; and 
(iii) the gross revenues from sales of 
such prescription drug in commerce in the 
preceding calendar quarter. 
(B) Such information related to increased 
input costs or public health considerations as 
the applicable entity may wish the Inspector 
General to consider in making a determination 
under clause (ii) of subsection (c)(2)(B) or an 
assessment in clause (iii) of such subsection for 
the preceding calendar quarter. 
(C) Such information related to any antici-
pated increased input costs for the subsequent 
calendar quarter as the applicable entity may 
wish the Inspector General to consider in mak-
ing a determination under clause (ii) of sub-
section (c)(2)(B) or an assessment in clause 
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(iii) of such subsection for such calendar quar-
ter. 
(2) PENALTY FOR FAILURE TO SUBMIT.— 
(A) IN GENERAL.—An applicable entity de-
scribed in paragraph (1) that fails to submit in-
formation to the Inspector General regarding a 
prescription drug, as required by such para-
graph, before the date specified in paragraph 
(3) shall be liable for a civil penalty, as deter-
mined under subparagraph (B). 
(B) AMOUNT OF PENALTY.—The amount 
of the civil penalty shall be equal to the product 
of— 
(i) an amount, as determined appro-
priate by the Inspector General, which is— 
(I) not less than 0.5 percent of 
the gross revenues from sales of the 
prescription drug described in sub-
paragraph (A) for the preceding cal-
endar year, and 
(II) not greater than 1 percent of 
the gross revenues from sales of such 
prescription drug for the preceding 
calendar year, and 
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(ii) the number of days in the period 
between— 
(I) the applicable date specified 
in paragraph (3), and 
(II) the date on which the In-
spector General receives the informa-
tion described in paragraph (1) from 
the applicable entity. 
(3) SUBMISSION DEADLINE.—An applicable en-
tity shall submit each quarterly report described in 
paragraph (1) not later than January 17, April 18, 
June 15, and September 15 of each calendar year. 
(c) ASSESSMENT BY INSPECTOR GENERAL.— 
(1) IN GENERAL.—Not later than the last day 
in February of each year, the Inspector General, in 
consultation with other relevant Federal agencies 
(including the Federal Trade Commission), shall— 
(A) complete an assessment of the infor-
mation the Inspector General received pursuant 
to subsection (b)(1) with respect to sales of pre-
scription drugs in the preceding calendar year; 
and 
(B) in the case of any prescription drug 
which satisfies the conditions described in para-
graph (1) or (2) of subsection (d), submit a rec-
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