I 
114TH CONGRESS 
1ST SESSION H. R. 3513 
To ensure greater affordability of prescription drugs. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 16, 2015 
Mr. CUMMINGS (for himself, Mr. ELLISON, Ms. NORTON, and Mr. SARBANES) 
introduced the following bill; which was referred to the Committee on En-
ergy and Commerce, 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 with-
in the jurisdiction of the committee concerned 
A BILL 
To ensure greater affordability of prescription drugs. 
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 
‘‘Prescription Drug Affordability Act of 2015’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—DRUGS UNDER THE MEDICARE PROGRAM 
Sec. 101. Negotiation of lower covered part D drug prices on behalf of Medi-
care beneficiaries. 
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Sec. 102. Acceleration of the closing of the Medicare Part D donut hole. 
TITLE II—PRESCRIPTION DRUG IMPORTATION 
Sec. 201. Prescription drug importation. 
Sec. 202. Sense of the House of Representatives regarding trade agreements. 
TITLE III—MEDICARE AND MEDICAID REBATES 
Sec. 301. Requiring drug manufacturers to provide drug rebates for drugs dis-
pensed to low-income individuals. 
Sec. 302. Applying the Medicaid additional rebate requirement to generic 
drugs. 
TITLE IV—PAY-FOR-DELAY BLOCKING 
Sec. 401. Preserving access to affordable generics. 
TITLE V—FRAUD 
Sec. 501. Conditions on award of drug exclusivity. 
TITLE VI—TRANSPARENCY 
Sec. 601. Drug manufacturer reporting. 
TITLE I—DRUGS UNDER THE 
MEDICARE PROGRAM 
SEC. 101. NEGOTIATION OF LOWER COVERED PART D DRUG 
PRICES ON BEHALF OF MEDICARE BENE-
FICIARIES. 
(a) NEGOTIATION BY SECRETARY.—Section 1860D– 
11 of the Social Security Act (42 U.S.C. 1395w–111) is 
amended by striking subsection (i) (relating to noninter-
ference) and inserting the following: 
‘‘(i) NEGOTIATION OF LOWER DRUG PRICES.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Secretary shall negotiate with 
pharmaceutical manufacturers the prices (including 
discounts, rebates, and other price concessions) that 
may be charged to PDP sponsors and MA organiza-
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tions for covered part D drugs for part D eligible in-
dividuals who are enrolled under a prescription drug 
plan or under an MA–PD plan. 
‘‘(2) 
NO
CHANGE
IN
RULES
FOR 
FORMULARIES.— 
‘‘(A) IN GENERAL.—Nothing in paragraph 
(1) shall be construed to authorize the Sec-
retary to establish or require a particular for-
mulary. 
‘‘(B) CONSTRUCTION.—Subparagraph (A) 
shall not be construed as affecting the Sec-
retary’s authority to ensure appropriate and 
adequate access to covered part D drugs under 
prescription drug plans and under MA–PD 
plans, including compliance of such plans with 
formulary requirements under section 1860D– 
4(b)(3). 
‘‘(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as preventing the sponsor 
of a prescription drug plan, or an organization offer-
ing an MA–PD plan, from obtaining a discount or 
reduction of the price for a covered part D drug 
below the price negotiated under paragraph (1).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of the enact-
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ment of this Act and shall first apply to negotiations and 
prices for plan years beginning on January 1, 2016. 
SEC. 102. ACCELERATION OF THE CLOSING OF THE MEDI-
CARE PART D DONUT HOLE. 
(a) REDUCTION IN COINSURANCE.—Section 1860D– 
2(b)(2) of the Social Security Act (42 U.S.C. 1395w– 
102(b)(2)) is amended— 
(1) in each of subclauses (II) and (III) of sub-
paragraph (C)(ii), by striking ‘‘2020’’ and inserting 
‘‘2017’’; and 
(2) in subparagraph (D)(ii)— 
(A) in subclause (II), by inserting ‘‘and’’ 
at the end; and 
(B) by striking clauses (III) through (VI) 
and inserting the following: 
‘‘(III) 2017 is 100 percent.’’. 
(b) INCREASE IN MANUFACTURER REBATE.—Section 
1860D–14A(g)(4)(A) of the Social Security Act (42 
U.S.C. 1395w–114a(g)(4)(A)) is amended by inserting 
‘‘(or, for 2017 and subsequent years, 75 percent)’’ after 
‘‘50 percent’’. 
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TITLE II—PRESCRIPTION DRUG 
IMPORTATION 
SEC. 201. PRESCRIPTION DRUG IMPORTATION. 
(a) IMPORTATION BY PHARMACISTS AND WHOLE-
SALERS.—Section 804(b) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 384(b)) is amended by striking 
‘‘The Secretary,’’ and inserting ‘‘The Secretary, not later 
than January 1, 2016,’’. 
(b) IMPORTATION BY INDIVIDUALS.— 
(1) IN GENERAL.—Section 804 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 384) is 
amended— 
(A) in subsection (f), by striking ‘‘within 
Canada’’; 
(B) in subsection (j)— 
(i) in paragraph (1), in the matter 
preceding subparagraph (A), by inserting 
‘‘from countries other than Canada’’ after 
‘‘devices’’; and 
(ii) in paragraph (3)— 
(I) in the heading, by striking 
‘‘FROM CANADA’’ and inserting ‘‘FROM 
COUNTRIES
OTHER
THAN
CANADA’’; 
and 
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(II) in subparagraph (C), by 
striking ‘‘from Canada,’’; and 
(C) by striking subsection (l) and inserting 
the following: 
‘‘(l) IMPORTATION OF PRESCRIPTION DRUGS FROM 
CANADA.—Individuals may import from Canada any pre-
scription drug that meets the requirements of subpara-
graphs (A) through (F) of subsection (j)(3).’’. 
(2) REGULATIONS.—Not later than January 1, 
2016, the Secretary of Health and Human Services 
shall promulgate regulations with respect to sub-
section (l) of section 804 of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 384) (as amended by 
paragraph (1)(B)). 
(3) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall take effect on the effective 
date of the final regulations promulgated in accord-
ance with paragraph (2). 
(c) FDASIA AMENDMENT.—Subsection (c) of sec-
tion 708 of the Food and Drug Administration Safety and 
Innovation Act (Public Law 112–144; 126 Stat. 1068) is 
amended by striking ‘‘The amendment made by’’ and all 
that follows through the period at the end and inserting 
‘‘The amendment made by subsection (a) and the regula-
tions promulgated under subsection (b) shall apply begin-
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ning on the effective date of the regulations promulgated 
under section 804(b) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 384(b)) and the amendments made 
by section 201(b) of the Prescription Drug Affordability 
Act of 2015.’’. 
SEC. 202. SENSE OF THE HOUSE OF REPRESENTATIVES RE-
GARDING TRADE AGREEMENTS. 
It is the sense of the House of Representatives that 
the United States Trade Representative should not nego-
tiate trade agreements that would raise the prices of pre-
scription drugs in the United States, extend the periods 
of market exclusivity otherwise available for prescription 
drugs, or remove flexibility in Federal or State law regard-
ing pricing of prescription drugs. 
TITLE III—MEDICARE AND 
MEDICAID REBATES 
SEC. 301. REQUIRING DRUG MANUFACTURERS TO PROVIDE 
DRUG REBATES FOR DRUGS DISPENSED TO 
LOW-INCOME INDIVIDUALS. 
(a) IN GENERAL.—Section 1860D–2 of the Social 
Security Act (42 U.S.C. 1395w–102) is amended— 
(1) in subsection (e)(1), in the matter preceding 
subparagraph (A), by inserting ‘‘and subsection (f)’’ 
after ‘‘this subsection’’; and 
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(2) by adding at the end the following new sub-
section: 
‘‘(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR 
REBATE ELIGIBLE INDIVIDUALS.— 
‘‘(1) REQUIREMENT.— 
‘‘(A) IN GENERAL.—For plan years begin-
ning on or after January 1, 2017, in this part, 
the term ‘covered part D drug’ does not include 
any drug or biological product that is manufac-
tured by a manufacturer that has not entered 
into and have in effect a rebate agreement de-
scribed in paragraph (2). 
‘‘(B) 2016 PLAN YEAR REQUIREMENT.— 
Any drug or biological product manufactured by 
a manufacturer that declines to enter into a re-
bate agreement described in paragraph (2) for 
the period beginning on January 1, 2016, and 
ending on December 31, 2016, shall not be in-
cluded as a ‘covered part D drug’ for the subse-
quent plan year. 
‘‘(2) REBATE
AGREEMENT.—A rebate agree-
ment under this subsection shall require the manu-
facturer to provide to the Secretary a rebate for 
each rebate period (as defined in paragraph (6)(B)) 
ending after December 31, 2015, in the amount 
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specified in paragraph (3) for any covered part D 
drug of the manufacturer dispensed after December 
31, 2015, to any rebate eligible individual (as de-
fined in paragraph (6)(A)) for which payment was 
made by a PDP sponsor or MA organization under 
this part for such period, including payments passed 
through the low-income and reinsurance subsidies 
under sections 1860D–14 and 1860D–15(b), respec-
tively. Such rebate shall be paid by the manufac-
turer to the Secretary not later than 30 days after 
the date of receipt of the information described in 
section 1860D–12(b)(7), including as such section is 
applied under section 1857(f)(3), or 30 days after 
the receipt of information under subparagraph (D) 
of paragraph (3), as determined by the Secretary. 
Insofar as not inconsistent with this subsection, the 
Secretary shall establish terms and conditions of 
such agreement relating to compliance, penalties, 
and program evaluations, investigations, and audits 
that are similar to the terms and conditions for re-
bate agreements under paragraphs (3) and (4) of 
section 1927(b). 
‘‘(3) REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG PLAN ENROLLEES.— 
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‘‘(A) IN GENERAL.—The amount of the re-
bate specified under this paragraph for a manu-
facturer for a rebate period, with respect to 
each dosage form and strength of any covered 
part D drug provided by such manufacturer 
and dispensed to a rebate eligible individual, 
shall be equal to the product of— 
‘‘(i) the total number of units of such 
dosage form and strength of the drug so 
provided and dispensed for which payment 
was made by a PDP sponsor or an MA or-
ganization under this part for the rebate 
period, including payments passed through 
the low-income and reinsurance subsidies 
under sections 1860D–14 and 1860D– 
15(b), respectively; and 
‘‘(ii) the amount (if any) by which— 
‘‘(I) the Medicaid rebate amount 
(as defined in subparagraph (B)) for 
such form, strength, and period, ex-
ceeds 
‘‘(II) the average Medicare drug 
program rebate eligible rebate amount 
(as defined in subparagraph (C)) for 
such form, strength, and period. 
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‘‘(B) MEDICAID
REBATE
AMOUNT.—For 
purposes of this paragraph, the term ‘Medicaid 
rebate amount’ means, with respect to each 
dosage form and strength of a covered part D 
drug provided by the manufacturer for a rebate 
period— 
‘‘(i) in the case of a single source 
drug or an innovator multiple source drug, 
the 
amount 
specified 
in 
paragraph 
(1)(A)(ii)(II) or (2)(C) of section 1927(c) 
plus the amount, if any, specified in sub-
paragraph (A)(ii) of paragraph (2) of such 
section, for such form, strength, and pe-
riod; or 
‘‘(ii) in the case of any other covered 
outpatient drug, the amount specified in 
paragraph (3)(A)(i) of such section for 
such form, strength, and period. 
‘‘(C) AVERAGE MEDICARE DRUG PROGRAM 
REBATE ELIGIBLE REBATE AMOUNT.—For pur-
poses of this subsection, the term ‘average 
Medicare drug program rebate eligible rebate 
amount’ means, with respect to each dosage 
form and strength of a covered part D drug 
provided by a manufacturer for a rebate period, 
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the sum, for all PDP sponsors under part D 
and MA organizations administering an MA– 
PD plan under part C, of— 
‘‘(i) the product, for each such spon-
sor or organization, of— 
‘‘(I) the sum of all rebates, dis-
counts, or other price concessions (not 
taking into account any rebate pro-
vided under paragraph (2) or any dis-
counts under the program under sec-
tion 1860D–14A) for such dosage 
form and strength of the drug dis-
pensed, calculated on a per-unit basis, 
but only to the extent that any such 
rebate, discount, or other price con-
cession applies equally to drugs dis-
pensed to rebate eligible Medicare 
drug plan enrollees and drugs dis-
pensed to PDP and MA–PD enrollees 
who are not rebate eligible individuals; 
and 
‘‘(II) the number of the units of 
such dosage and strength of the drug 
dispensed during the rebate period to 
rebate eligible individuals enrolled in 
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the prescription drug plans adminis-
tered by the PDP sponsor or the MA– 
PD plans administered by the MA or-
ganization; divided by 
‘‘(ii) the total number of units of such 
dosage and strength of the drug dispensed 
during the rebate period to rebate eligible 
individuals enrolled in all prescription drug 
plans administered by PDP sponsors and 
all MA–PD plans administered by MA or-
ganizations. 
‘‘(D) USE OF ESTIMATES.—The Secretary 
may establish a methodology for estimating the 
average Medicare drug program rebate eligible 
rebate amounts for each rebate period based on 
bid and utilization information under this part 
and may use these estimates as the basis for 
determining the rebates under this section. If 
the Secretary elects to estimate the average 
Medicare drug program rebate eligible rebate 
amounts, the Secretary shall establish a rec-
onciliation process for adjusting manufacturer 
rebate payments not later than 3 months after 
the date that manufacturers receive the infor-
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mation 
collected 
under 
section 
1860D– 
12(b)(7)(B). 
‘‘(4) LENGTH OF AGREEMENT.—The provisions 
of paragraph (4) of section 1927(b) (other than 
clauses (iv) and (v) of subparagraph (B)) shall apply 
to rebate agreements under this subsection in the 
same manner as such paragraph applies to a rebate 
agreement under such section. 
‘‘(5) OTHER
TERMS
AND
CONDITIONS.—The 
Secretary shall establish other terms and conditions 
of the rebate agreement under this subsection, in-
cluding terms and conditions related to compliance, 
that are consistent with this subsection. 
‘‘(6) DEFINITIONS.—In this subsection and sec-
tion 1860D–12(b)(7): 
‘‘(A) REBATE ELIGIBLE INDIVIDUAL.—The 
term ‘rebate eligible individual’ means— 
‘‘(i) a subsidy eligible individual (as 
defined in section 1860D–14(a)(3)(A)); 
‘‘(ii) a Medicaid beneficiary treated as 
a subsidy eligible individual under clause 
(v) of section 1860D–14(a)(3)(B); and 
‘‘(iii) any part D eligible individual 
not described in clause (i) or (ii) who is de-
termined for purposes of the State plan 
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under title XIX to be eligible for medical 
assistance under clause (i), (iii), or (iv) of 
section 1902(a)(10)(E). 
‘‘(B) REBATE PERIOD.—The term ‘rebate 
period’ has the meaning given such term in sec-
tion 1927(k)(8).’’. 
(b) REPORTING REQUIREMENT
FOR
THE DETER-
MINATION AND PAYMENT OF REBATES BY MANUFACTUR-
ERS RELATED TO REBATE FOR REBATE ELIGIBLE MEDI-
CARE DRUG PLAN ENROLLEES.— 
(1) REQUIREMENTS FOR PDP SPONSORS.—Sec-
tion 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) REPORTING REQUIREMENT FOR THE DE-
TERMINATION AND PAYMENT OF REBATES BY MANU-
FACTURERS RELATED TO REBATE FOR REBATE ELI-
GIBLE MEDICARE DRUG PLAN ENROLLEES.— 
‘‘(A) IN GENERAL.—For purposes of the 
rebate under section 1860D–2(f) for contract 
years beginning on or after January 1, 2017, 
each contract entered into with a PDP sponsor 
under this part with respect to a prescription 
drug plan shall require that the sponsor comply 
with subparagraphs (B) and (C). 
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‘‘(B) REPORT FORM AND CONTENTS.—Not 
later than a date specified by the Secretary, a 
PDP sponsor of a prescription drug plan under 
this part shall report to each manufacturer— 
‘‘(i) information (by National Drug 
Code number) on the total number of units 
of each dosage, form, and strength of each 
drug of such manufacturer dispensed to re-
bate eligible Medicare drug plan enrollees 
under any prescription drug plan operated 
by the PDP sponsor during the rebate pe-
riod; 
‘‘(ii) information on the price dis-
counts, price concessions, and rebates for 
such drugs for such form, strength, and 
period; 
‘‘(iii) information on the extent to 
which such price discounts, price conces-
sions, and rebates apply equally to rebate 
eligible Medicare drug plan enrollees and 
PDP enrollees who are not rebate eligible 
Medicare drug plan enrollees; and 
‘‘(iv) any additional information that 
the Secretary determines is necessary to 
enable the Secretary to calculate the aver-
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age Medicare drug program rebate eligible 
rebate amount (as defined in paragraph 
(3)(C) of such section), and to determine 
the amount of the rebate required under 
this section, for such form, strength, and 
period. 
Such report shall be in a form consistent with 
a standard reporting format established by the 
Secretary. 
‘‘(C) SUBMISSION TO SECRETARY.—Each 
PDP sponsor shall promptly transmit a copy of 
the information reported under subparagraph 
(B) to the Secretary for the purpose of audit 
oversight and evaluation. 
‘‘(D) 
CONFIDENTIALITY
OF
INFORMA-
TION.—The provisions of subparagraph (D) of 
section 1927(b)(3), relating to confidentiality of 
information, shall apply to information reported 
by PDP sponsors under this paragraph in the 
same manner that such provisions apply to in-
formation disclosed by manufacturers or whole-
salers under such section, except— 
‘‘(i) that any reference to ‘this sec-
tion’ in clause (i) of such subparagraph 
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shall be treated as being a reference to this 
section; 
‘‘(ii) the reference to the Director of 
the Congressional Budget Office in clause 
(iii) of such subparagraph shall be treated 
as including a reference to the Medicare 
Payment Advisory Commission; and 
‘‘(iii) clause (iv) of such subparagraph 
shall not apply. 
‘‘(E) OVERSIGHT.—Information reported 
under this paragraph may be used by the In-
spector General of the Department of Health 
and Human Services for the statutorily author-
ized purposes of audit, investigation, and eval-
uations. 
‘‘(F) PENALTIES
FOR
FAILURE
TO
PRO-
VIDE TIMELY INFORMATION AND PROVISION OF 
FALSE INFORMATION.—In the case of a PDP 
sponsor— 
‘‘(i) that fails to provide information 
required under subparagraph (B) on a 
timely basis, the sponsor is subject to a 
civil money penalty in the amount of 
$10,000 for each day in which such infor-
mation has not been provided; or 
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‘‘(ii) that knowingly (as defined in 
section 1128A(i)) provides false informa-
tion under such subparagraph, the sponsor 
is subject to a civil money penalty in an 
amount not to exceed $100,000 for each 
item of false information. 
Such civil money penalties are in addition to 
other penalties as may be prescribed by law. 
The provisions of section 1128A (other than 
subsections (a) and (b)) shall apply to a civil 
money penalty under this subparagraph in the 
same manner as such provisions apply to a pen-
alty or proceeding under section 1128A(a).’’. 
(2) APPLICATION TO MA ORGANIZATIONS.—Sec-
tion 1857(f)(3) of the Social Security Act (42 
U.S.C. 1395w–27(f)(3)) is amended by adding at 
the end the following: 
‘‘(D) REPORTING REQUIREMENT RELATED 
TO REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG
PLAN
ENROLLEES.—Section 1860D– 
12(b)(7).’’. 
(c) DEPOSIT OF REBATES INTO MEDICARE PRE-
SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) of the 
Social Security Act (42 U.S.C. 1395w–116(c)) is amended 
by adding at the end the following new paragraph: 
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‘‘(6) REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG PLAN ENROLLEES.—Amounts paid under a re-
bate agreement under section 1860D–2(f) shall be 
deposited into the Account.’’. 
(d) EXCLUSION FROM DETERMINATION
OF BEST 
PRICE
AND AVERAGE MANUFACTURER PRICE UNDER 
MEDICAID.— 
(1) EXCLUSION FROM BEST PRICE DETERMINA-
TION.—Section 1927(c)(1)(C)(ii)(I) of the Social Se-
curity Act (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is 
amended by inserting ‘‘and amounts paid under a 
rebate agreement under section 1860D–2(f)’’ after 
‘‘this section’’. 
(2) EXCLUSION
FROM
AVERAGE
MANUFAC-
TURER
PRICE
DETERMINATION.—Section 
1927(k)(1)(B)(i) of the Social Security Act (42 
U.S.C. 1396r–8(k)(1)(B)(i)) is amended— 
(A) in subclause (IV), by striking ‘‘and’’ 
after the semicolon; 
(B) in subclause (V), by striking the period 
at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(VI) amounts paid under a re-
bate agreement under section 1860D– 
2(f).’’. 
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SEC. 302. APPLYING THE MEDICAID ADDITIONAL REBATE 
REQUIREMENT TO GENERIC DRUGS. 
(a) IN GENERAL.—Section 1927(c)(3) of the Social 
Security Act (42 U.S.C. 1396r–8(c)(3)) is amended— 
(1) in subparagraph (A), by striking ‘‘The 
amount’’ and inserting ‘‘Except as provided in sub-
paragraph (C), the amount’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C) ADDITIONAL REBATE.— 
‘‘(i) IN
GENERAL.—The amount of 
the rebate specified in this paragraph for 
a rebate period, with respect to each dos-
age form and strength of a covered out-
patient drug other than a single source 
drug or an innovator multiple source drug, 
shall be increased in the manner that the 
rebate for a dosage form and strength of 
a single source drug or an innovator mul-
tiple source drug is increased under sub-
paragraphs (A) and (D) of paragraph (2), 
except as provided in clause (ii). 
‘‘(ii) SPECIAL
RULES
FOR
APPLICA-
TION
OF
PROVISION.—In applying sub-
paragraphs (A) and (D) of paragraph (2) 
under clause (i)— 
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‘‘(I) the reference in subpara-
graph (A)(i) of such paragraph to 
‘1990’ shall be deemed a reference to 
‘2014’; 
‘‘(II) subject to clause (iii), the 
reference in subparagraph (A)(ii) of 
such paragraph to ‘calendar quarter 
beginning July 1, 1990’ shall be 
deemed a reference to the ‘calendar 
quarter in which the average manu-
facturer price for the drug is the low-
est during the 12-calendar quarter pe-
riod ending on September 30, 2014’; 
‘‘(III) subject to clause (iii), the 
reference in subparagraph (A)(ii) of 
such paragraph to ‘September 1990’ 
shall be deemed a reference to ‘the 
last month of such calendar quarter’; 
‘‘(IV) the references in subpara-
graph (D) of such paragraph to ‘para-
graph (1)(A)(ii)’, ‘this paragraph’, 
and ‘December 31, 2009’ shall be 
deemed references to ‘subparagraph 
(A)’, ‘this subparagraph’, and ‘De-
cember 31, 2014’, respectively; and 
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‘‘(V) any reference in such para-
graph to a ‘single source drug or an 
innovator multiple source drug’ shall 
be deemed to be a reference to a drug 
to which clause (i) applies. 
‘‘(iii) SPECIAL
RULE
FOR
CERTAIN 
NONINNOVATOR
MULTIPLE
SOURCE 
DRUGS.—In 
applying 
paragraph 
(2)(A)(ii)(II) under clause (i) with respect 
to a covered outpatient drug that is first 
sold as a drug other than a single source 
drug or an innovator multiple source drug 
after the date that is 3 years before the 
date of the enactment of this subpara-
graph, such paragraph shall be applied— 
‘‘(I) by substituting ‘the applica-
ble quarter’ for ‘the calendar quarter 
beginning July 1, 1990’; and 
‘‘(II) by substituting ‘the last 
month in such applicable quarter’ for 
‘September 1990’. 
‘‘(iv) 
APPLICABLE
QUARTER
DE-
FINED.—In this subsection, the term ‘ap-
plicable quarter’ means, with respect to a 
drug described in clause (iii), the fifth full 
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calendar quarter in which the drug is sold 
as a drug other than a single source drug 
or an innovator multiple source drug.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to rebate periods beginning after 
December 31, 2014. 
TITLE IV—PAY-FOR-DELAY 
BLOCKING 
SEC. 
401. 
PRESERVING 
ACCESS 
TO 
AFFORDABLE 
GENERICS. 
The Federal Trade Commission Act (15 U.S.C. 44 
et seq.) is amended by inserting after section 26 (15 
U.S.C. 57c–2) the following: 
‘‘SEC. 
27. 
PRESERVING 
ACCESS 
TO 
AFFORDABLE 
GENERICS. 
‘‘(a) IN GENERAL.— 
‘‘(1) ENFORCEMENT PROCEEDING.—The Com-
mission may initiate a proceeding to enforce the pro-
visions of this section against the parties to any 
agreement resolving or settling, on a final or interim 
basis, a patent infringement claim, in connection 
with the sale of a drug product. 
‘‘(2) PRESUMPTION AND VIOLATION.—In such 
a proceeding, an agreement shall be presumed to 
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have anticompetitive effects and be a violation of 
this section if— 
‘‘(A) an ANDA filer receives anything of 
value, including an exclusive license; and 
‘‘(B) the ANDA filer agrees to limit or 
forego research, development, manufacturing, 
marketing, or sales of the ANDA product for 
any period of time. 
‘‘(b) EXCLUSIONS.—Nothing in this section shall pro-
hibit a resolution or settlement of a patent infringement 
claim in which the consideration granted by the NDA 
holder to the ANDA filer as part of the resolution or set-
tlement includes only one or more of the following: 
‘‘(1) The right to market the ANDA product in 
the United States prior to the expiration of— 
‘‘(A) any patent that is the basis for the 
patent infringement claim; or 
‘‘(B) any patent right or other statutory 
exclusivity that would prevent the marketing of 
such drug. 
‘‘(2) A payment for reasonable litigation ex-
penses not to exceed $7,500,000. 
‘‘(3) A covenant not to sue on any claim that 
the ANDA product infringes a United States patent. 
‘‘(c) DEFINITIONS.—In this section: 
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‘‘(5) ANDA 
PRODUCT.—The term ‘ANDA 
product’ means the product to be manufactured 
under the ANDA that is the subject of the patent 
infringement claim. 
‘‘(6) DRUG PRODUCT.—The term ‘drug prod-
uct’ has the meaning given such term in section 
314.3(b) of title 21, Code of Federal Regulations (or 
any successor regulation). 
‘‘(7) NDA.—The term ‘NDA’ means a new 
drug application filed under section 505(b) of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355(b)). 
‘‘(8) NDA HOLDER.—The term ‘NDA holder’ 
means— 
‘‘(A) the holder of an approved NDA appli-
cation for a drug product; 
‘‘(B) a person owning or controlling en-
forcement of the patent listed in the Approved 
Drug Products With Therapeutic Equivalence 
Evaluations (commonly known as the ‘FDA Or-
ange Book’) in connection with the NDA; or 
‘‘(C) the predecessors, subsidiaries, divi-
sions, groups, and affiliates controlled by, con-
trolling, or under common control with any of 
the entities described in subparagraphs (A) and 
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(B) (such control to be presumed by direct or 
indirect share ownership of 50 percent or great-
er), as well as the licensees, licensors, succes-
sors, and assigns of each of the entities. 
‘‘(9) PARTY.—The term ‘party’ means any per-
son, partnership, corporation, or other legal entity. 
‘‘(10) 
PATENT
INFRINGEMENT.—The 
term 
‘patent infringement’ means infringement of any 
patent or of any filed patent application, extension, 
reissue, renewal, division, continuation, continuation 
in part, reexamination, patent term restoration, pat-
ents of addition, and extensions thereof. 
‘‘(11) PATENT
INFRINGEMENT
CLAIM.—The 
term ‘patent infringement claim’ means any allega-
tion made to an ANDA filer, whether or not in-
cluded in a complaint filed with a court of law, that 
its ANDA or ANDA product may infringe any pat-
ent held by, or exclusively licensed to, the NDA 
holder of the drug product. 
‘‘(12) STATUTORY
EXCLUSIVITY.—The term 
‘statutory exclusivity’ means those prohibitions on 
the approval of drug applications under clauses (ii) 
through (iv) of section 505(c)(3)(E) (5- and 3-year 
data exclusivity), section 527 (orphan drug exclu-
sivity), or section 505A (pediatric exclusivity) of the 
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Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355(c)(3)(E), 360cc, 355a).’’. 
TITLE V—FRAUD 
SEC. 501. CONDITIONS ON AWARD OF DRUG EXCLUSIVITY. 
Subchapter E of chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 360bbb et seq.) is 
amended by adding at the end the following: 
‘‘SEC. 569D. CONDITIONS ON AWARD OF DRUG EXCLU-
SIVITY. 
‘‘(a) TERMINATION
OF
EXCLUSIVITY.—Notwith-
standing any other provision of this Act, any period of 
exclusivity described in subsection (b) granted to a person 
or assigned to a person on or after the date of enactment 
of this section with respect to a drug shall be terminated 
if the person to which such exclusivity was granted or any 
person to which such exclusivity is assigned— 
‘‘(1) commits a violation described in subsection 
(c)(1) with respect to such drug; or 
‘‘(2) fails to report such a violation as required 
by subsection (e). 
‘‘(b) EXCLUSIVITIES AFFECTED.—The periods of ex-
clusivity described in this subsection are those periods of 
exclusivity granted under any of the following sections: 
‘‘(1) Clause (ii), (iii), or (iv) of section 
505(c)(3)(E). 
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‘‘(2) Clause (iv) of section 505(j)(5)(B). 
‘‘(3) Clause (ii), (iii), or (iv) of section 
505(j)(5)(F). 
‘‘(4) Section 505A. 
‘‘(5) Section 505E. 
‘‘(6) Section 527. 
‘‘(7) Section 351(k)(7) of the Public Health 
Service Act. 
‘‘(8) Any other provision of this Act that pro-
vides for market exclusivity (or extension of market 
exclusivity) with respect to a drug. 
‘‘(c) VIOLATIONS.— 
‘‘(1) IN
GENERAL.—A violation described in 
this subsection is a violation of a law described in 
paragraph (2) that results in— 
‘‘(A) a criminal conviction of a person de-
scribed in subsection (a); 
‘‘(B) a civil judgment against a person de-
scribed in subsection (a); or 
‘‘(C) a settlement agreement in which a 
person described in subsection (a) admits to 
fault. 
‘‘(2) LAWS DESCRIBED.—The laws described in 
this paragraph are the following: 
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‘‘(A) The provisions of this Act that pro-
hibit— 
‘‘(i) the adulteration or misbranding 
of a drug; 
‘‘(ii) the making of false statements to 
the Secretary or committing fraud; or 
‘‘(iii) the illegal marketing of a drug. 
‘‘(B) The provisions of subchapter III of 
chapter 37 of title 31, United States Code 
(commonly known as the ‘False Claims Act’). 
‘‘(C) Section 287 of title 18, United States 
Code. 
‘‘(D) The Medicare and Medicaid Patient 
Protection and Program Act of 1987 (com-
monly known as the ‘Antikickback Statute’). 
‘‘(E) Section 1927 of the Social Security 
Act. 
‘‘(F) A State law against fraud comparable 
to a law described in subparagraphs (A) 
through (E). 
‘‘(d) DATE
OF EXCLUSIVITY TERMINATION.—The 
date on which the exclusivity shall be terminated as de-
scribed in subsection (a) is the date on which, as applica-
ble— 
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‘‘(1) a final judgment is entered relating to a 
violation described in subparagraph (A) or (B) of 
subsection (c)(1); or 
‘‘(2)(A) a settlement agreement described in 
subsection (c)(1)(C) is approved by a court order 
that is or becomes final and nonappealable; or 
‘‘(B) if there is no court order approving a set-
tlement agreement described in subsection (c)(1)(C), 
a court order dismissing the applicable case, issued 
after the settlement agreement, is or becomes final 
and nonappealable. 
‘‘(e) REPORTING OF INFORMATION.—A person de-
scribed in subsection (a) that commits a violation de-
scribed in subsection (c)(1) shall report such violation to 
the Secretary no later than 30 days after the date that— 
‘‘(1) a final judgment is entered relating to a 
violation described in subparagraph (A) or (B) of 
subsection (c)(1); or 
‘‘(2)(A) a settlement agreement described in 
subsection (c)(1)(C) is approved by a court order 
that is or becomes final and nonappealable; or 
‘‘(B) if there is no court order approving a set-
tlement agreement described in subsection (c)(1)(C), 
a court order dismissing the applicable case, issued 
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