Affordable Pricing for Taxpayer-Funded Prescription Drugs Act of 2021
Bill: H.R.4991 | Sponsor: Rep. DeFazio, Peter A. (D-OR)
Policy area: Health

Summary:
Affordable Pricing for Taxpayer-Funded Prescription Drugs Act of 2021
This bill requires companies that receive federal funding for research (or a license of the rights to a patent or regulatory test data) for a biomedical product or service to agree to set reasonable prices for the resulting biomedical product or service.
The Department of Health and Human Services (HHS) must determine a reasonable price based on a formula that ensures the U.S. price for the product or service is not more than the median price for the product or service in Canada and six other reference countries with, based on specified criteria, large economies and high incomes.
Companies entering these agreements also must report to HHS certain financial information related to the biomedical product or service involved.

To require persons who undertake federally funded research and 
development of a biomedical product or service to enter into reasonable 
pricing agreements with the Secretary of Health and Human Services, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Pricing for Taxpayer-
Funded Prescription Drugs Act of 2021''.

SEC. 2. REASONABLE PRICE AGREEMENT.

    (a) In General.--All Federal agencies providing or receiving 
research funding, through a grant, contract, cooperative agreement, or 
other agreement, shall require in such agreement, and in any license of 
the rights to a patent or regulatory test data for a biomedical product 
or service, that the price of any biomedical product or service 
developed with the benefit of such research be reasonable (as 
determined by the Secretary) unless the Secretary waives such 
reasonable price obligation under subsection (d).
    (b) Prohibition Against Charging Prices Higher Than in Other Large 
Economies With High Incomes.--
            (1) In general.--For purposes of subsection (a), any 
        reasonable pricing formula shall ensure, without prejudice to 
        any other standards or negotiated provisions for reasonable 
        pricing, that residents of the United States are not charged 
        more for the biomedical product or service involved than the 
        reference price for countries with large economies and high 
        incomes.
            (2) Reference price.--For purposes of paragraph (1), the 
        phrase ``reference price for countries with large economies and 
        high incomes'' means--
                    (A) the median price charged for the biomedical 
                product or service involved in Canada and the 
                additional six reference countries; or
                    (B) a modification to such price that is adopted by 
                regulation after providing notice and the opportunity 
                for the public to comment, if the Secretary determines 
                such modification to be an appropriate and reasonable 
                measure to protect United States residents from paying 
                prices that are higher than prices in other countries 
                with large economies and high incomes.
    (c) Additional Requirements.--
            (1) In general.--In carrying out subsection (a), the 
        Secretary may promulgate by regulation additional requirements 
        to ensure that the price for the biomedical product or service 
        described in subsection (a) be reasonable.
            (2) Requirements.--The additional requirements under 
        paragraph (1) shall--
                    (A) address the public interest in ensuring that 
                publicly supported innovations for biomedical products 
                and services have reasonable prices; and
                    (B) take into account--
                            (i) the importance of providing robust 
                        incentives to invest in biomedical research and 
                        development; and
                            (ii) the challenges of administering 
                        agreements described in subsection (a), 
                        including in cases where third parties control 
                        relevant intellectual property, know-how, or 
                        other assets.
            (3) Possible mechanisms.--The additional requirements for 
        reasonable pricing authorized by paragraph (1) may include--
                    (A) mechanisms to--
                            (i) lower prices or shorten exclusivity 
                        periods when revenues exceed targets;
                            (ii) lower prices that exceed a standard of 
                        cost per health benefit achieved; or
                            (iii) lower prices that constitute 
                        significant barriers to access or fiscal 
                        burdens on patients; or
                    (B) a combination of mechanisms listed in 
                subparagraph (A) or other mechanisms.
    (d) Waiver.--
            (1) In general.--The Secretary may waive part or all of a 
        reasonable pricing obligation under this section upon a 
        demonstration that such a waiver is in the public interest. A 
        decision to grant such a waiver shall set out the Secretary's 
        finding that the waiver is in the public interest.
            (2) Required process.--No waiver under paragraph (1) shall 
        take effect before--
                    (A) the public is given notice of the proposed 
                waiver and provided a reasonable opportunity to comment 
                in writing and at a public hearing on the proposed 
                waiver; and
                    (B) the Secretary publishes an economic analysis to 
                justify the waiver.
    (e) Transparency.--
            (1) Reporting.--In order to evaluate additional 
        requirements promulgated under subsection (c), agreements 
        subject to subsection (a) shall include a requirement that the 
        manufacturer or other companies commercializing the biomedical 
        product or service involved report to the Secretary in formats 
        determined by the Secretary--
                    (A) the costs of each clinical trial undertaken to 
                support the Federal regulatory approval of the 
                biomedical product or service involved;
                    (B) subsidies of those costs by the Federal 
                Government; and
                    (C) the annual revenues generated by the biomedical 
                product or service involved, by county of sale.
            (2) Public availability.--The Secretary shall make all 
        reports under paragraph (1) publicly available.
    (f) No Effect on Other Requirements.--The reasonable pricing 
requirements imposed under this section are in addition to any other 
requirements to limit the price of biomedical products or services, 
including such requirements imposed--
            (1) through standards or negotiated provisions on pricing 
        in contracts; or
            (2) under chapter 18 of title 35, United States Code, to 
        make the benefits of inventions funded by the Federal 
        Government available to the public on reasonable terms.
    (g) Definitions.--In this section:
            (1) The term ``biomedical product or service'' means a 
        drug, vaccine, medical device, diagnostic test, assistive 
        technology, cell- or gene-based therapy, or other technology 
        used to provide health care.
            (2) The term ``medical device'' has the meaning given to 
        the term ``device'' in section 201 of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 321).
            (3) The term ``Secretary'' means the Secretary of Health 
        and Human Services.
            (4) The term ``six reference countries'' means the six 
        countries, excluding Canada, that over the previous three 
        calendar years--
                    (A) are member countries of the Organisation for 
                Economic Co-operation and Development;
                    (B) have the largest gross domestic products; and
                    (C) have a per capita income that is at least 50 
                percent of the average per capita income of the United 
                States.
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