End Price Gouging for Medications Act
Bill: S.1323 | Sponsor: Sen. Merkley, Jeff (D-OR)
Policy area: Health

Summary:
End Price Gouging for Medications Act
This bill requires the Department of Health and Human Services (HHS) to set maximum prices for prescription drugs under specified federal health programs. Specifically, HHS must establish reference prices based on certain factors, including drug prices in listed countries. Retail prices of covered drugs under specified federal health programs (e.g., Medicare and Medicaid) may not exceed the established reference prices. Drugs must also be available at such prices to uninsured individuals and to individuals with private health insurance.

To require the Secretary of Health and Human Services to establish 
reference prices for prescription drugs for purposes of Federal health 
                   programs, 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 ``End Price Gouging for Medications 
Act''.

SEC. 2. REFERENCE PRICES FOR PRESCRIPTION DRUGS.

    (a) Reference Prices.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), in accordance with 
subsection (b), shall establish annual reference prices for each 
prescription drug. Notwithstanding any other provision of law, with 
respect to enrollees or beneficiaries in any of the Federal health 
programs described in subsection (c), the retail list price for a drug 
shall not exceed the reference price for such drug.
    (b) Criteria.--
            (1) In general.--Each year, the Secretary shall establish 
        the reference price for each prescription drug under subsection 
        (a)--
                    (A) by determining the median retail list price for 
                the drug among the reference countries in which the 
                drug is available, if drug pricing information is 
                available for at least 3 of such countries; or
                    (B) in the case of a drug for which drug pricing 
                information or dosage equivalents are not available for 
                at least 3 of the reference countries, by determining 
                an appropriate price based on the Secretary's 
                determination of--
                            (i) the added therapeutic effect of the 
                        drug;
                            (ii) the value of the drug;
                            (iii) patient access to the drug;
                            (iv) the costs associated with researching 
                        and developing the drug; and
                            (v) other factors, as the Secretary 
                        determines appropriate.
            (2) Reference countries.--For purposes of paragraph (1), 
        the reference countries are Japan, Germany, the United Kingdom, 
        France, Italy, Canada, Australia, Spain, the Netherlands, 
        Switzerland, and Sweden.
    (c) Federal Health Programs.--The reference prices established 
under subsection (a) shall apply with respect to covered inpatient and 
outpatient drugs under--
            (1) the Medicare program under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.);
            (2) a State Medicaid plan under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.);
            (3) the State Children's Health Insurance Program under 
        title XXI of the Social Security Act (42 U.S.C. 1397aa et 
        seq.);
            (4) the TRICARE program under chapter 55 of title 10, 
        United States Code;
            (5) hospital care and medical services furnished by the 
        Department of Veterans Affairs under chapters 17 and 18 of 
        title 38, United States Code;
            (6) the Federal Employees Health Benefits Program 
        established under chapter 89 of title 5, United States Code; 
        and
            (7) any health program, service, function, activity, or 
        facility funded, in whole or part, under the Indian Health Care 
        Improvement Act (25 U.S.C. 1601 et seq.), including through 
        direct or contract care provided under such Act or through a 
        contract or compact under the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 5304 et seq.).
    (d) Applicability to Other Purchasers of Drugs.--Notwithstanding 
any other provision of law, a drug manufacturer shall offer 
prescription drugs at the reference price to all individuals, including 
individuals who are not insured and individuals who are covered under a 
group health plan or group or individual health insurance coverage. In 
the case of individuals covered by a group health plan or group or 
individual health insurance coverage, such requirement is met if the 
amount covered under such plan or coverage plus the cost-sharing amount 
does not exceed the reference price.
    (e) Enforcement.--
            (1) Civil penalty.--A drug manufacturer who does not comply 
        with the requirements of subsection (a) shall be subject to a 
        civil penalty, for each year in which the violation occurs and 
        with respect to each drug for which the violation occurs, in an 
        amount equal to 5 times the difference between--
                    (A) the total amount received by the manufacturer 
                for sales of the drug under the Federal health programs 
                under subsection (c) for the year; less
                    (B) the total amount the manufacturer would have 
                received for sales of the drug under such programs for 
                the year if the manufacturer had complied with 
                subsection (a).
            (2) Amounts collected.--Each year, the Secretary of the 
        Treasury shall transfer to the Director of the National 
        Institutes of Health an amount equal to the amount collected in 
        civil penalties under subsection (e) for the previous year. The 
        Director of the National Institutes of Health shall use amounts 
        so transferred for purposes of conducting drug research and 
        development.
    (f) Applicability to Brand and Generic Drugs.--The reference price 
established under subsection (a) shall apply to drugs approved under 
subsection (c) or (j) of section 505 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355) or under subsection (a) or (k) of section 
351 of the Public Health Service Act (42 U.S.C. 262).
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