Prescription Drug Price Relief Act of 2021
Bill: H.R.2148 | Sponsor: Rep. Khanna, Ro (D-CA)
Policy area: Health

Summary:
Prescription Drug Price Relief Act of 2021
This bill establishes a series of oversight and disclosure requirements relating to the prices of brand-name drugs.
Specifically, the bill requires the Department of Health and Human Services (HHS) to review at least annually all brand-name drugs for excessive pricing; HHS must also review prices upon petition. If any such drugs are found to be excessively priced, HHS must (1) void any government-granted exclusivity; (2) issue open, nonexclusive licenses for the drugs; and (3) expedite the review of corresponding applications for generic drugs and biosimilar biological products. HHS must also create a public database with its determinations for each drug.
Under the bill, a price is considered excessive if the domestic average manufacturing price exceeds the median price for the drug in Canada, the United Kingdom, Germany, France, and Japan. If a price does not meet this criteria, or if pricing information is unavailable in at least three of the aforementioned countries, the price is still considered excessive if it is higher than reasonable in light of specified factors, including development cost, revenue, and the size of the affected patient population.
The bill also requires drug manufacturers to report specified financial information for brand-name drugs, including research and advertising expenditures.

To significantly lower prescription drug prices for patients in the 
United States by ending government-granted monopolies for manufacturers 
who charge drug prices that are higher than the median prices at which 
              the drugs are available in other countries.

    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 ``Prescription Drug Price Relief Act 
of 2021''.

SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED DRUGS.

    (a) In General.--The Secretary, not later than 1 year after the 
date of enactment of this Act, shall establish a process to conduct a 
review of all brand name drugs, not less frequently than once per 
calendar year, under which the Secretary determines under subsection 
(b) whether the price of each such drug is excessive.
    (b) Excessive Price Determinations.--
            (1) International reference price.--
                    (A) In general.--The Secretary shall determine that 
                any brand name drug for which the domestic average 
                manufacturing price exceeds the median price charged 
                for such drug in the 5 reference countries to have an 
                excessive price. In assessing the extent to which the 
                price is excessive, the Secretary shall consider the 
                factors described in paragraph (2).
                    (B) Reference countries.--In this Act, the term 
                ``reference countries'' means Canada, the United 
                Kingdom, Germany, France, and Japan.
                    (C) Requirement with respect to drugs for which 
                certain reference country information is not 
                available.--The Secretary shall make a determination 
                under paragraph (1) for every brand name drug for which 
                pricing information is available for at least 3 of the 
                5 reference countries.
            (2) Determinations based on other factors.--With respect to 
        any brand name drug that is not determined to have an excessive 
        price by operation of paragraph (1) (including any drug for 
        which there is insufficient data to make such a determination 
        under such paragraph), the Secretary shall determine that such 
        drug has an excessive price if the price of the drug is higher 
        than reasonable taking into account the following factors:
                    (A) The size of the affected patient population.
                    (B) The value of the drug to patients, including 
                the impact of the price on access to the drug and the 
                relationship of the price of the drug to its 
                therapeutic health benefits.
                    (C) The risk adjusted value of Federal Government 
                subsidies and investments related to the drug.
                    (D) The costs associated with development of the 
                drug.
                    (E) Whether the drug provided a significant 
                improvement in health outcomes, compared to other 
                therapies available at the time of its approval.
                    (F) The cumulative global revenues generated by the 
                drug.
                    (G) Whether the domestic average manufacturer price 
                of the drug increased during any annual quarter by a 
                percentage that is more than the percentage increase in 
                the consumer price index for all urban consumers for 
                the respective annual quarter.
                    (H) Other factors the Secretary determines 
                appropriate.
    (c) Petition for Determination.--
            (1) In general.--Any person may petition the Secretary, in 
        accordance with section 553(e) of title 5, United States Code, 
        to make an excessive drug price determination for an applicable 
        drug under subsection (b)(2). Not later than 90 days after the 
        date of receipt of such a petition, subject to paragraph (2), 
        the Secretary shall--
                    (A) make a determination under subsection (b)(2) 
                regarding such drug; or
                    (B)(i) decline to make such a determination; and
                    (ii) make public the reasons why the Secretary has 
                declined to make such a determination.
            (2) Exception.--The Secretary shall not make a 
        determination under subsection (b)(2) for a drug in response to 
        a petition under this section more frequently than once per 
        calendar year.
            (3) Public availability.--The Secretary shall make any 
        petitions submitted under this subsection, together with any 
        documentation related to the petitions and the Secretary's 
        determinations on such petitions and rationale for such 
        determinations, publicly available, including by posting such 
        information on the database under section 5.

SEC. 3. ENDING GOVERNMENT-GRANTED MONOPOLIES FOR EXCESSIVELY PRICED 
              DRUGS.

    (a) Excessive Drug Price Authority.--With respect to any brand name 
drug, if the Secretary determines under section 2 that the price of the 
drug is excessive, the Secretary--
            (1) shall waive or void any government-granted 
        exclusivities with respect to such drug, effective on the date 
        that the excessive price determination under section 2 is made 
        for such drug; and
            (2) shall grant open, non-exclusive licenses allowing any 
        person to make, use, offer to sell or sell, or import into the 
        United States such drug, and to rely upon the regulatory test 
        data of such drug, in accordance with section 4.
    (b) Expedited Review.--The Secretary shall prioritize the review 
of, and act within 8 months of the date of the submission of a generic 
drug application or a biosimilar biological product application if such 
application references a drug licensed under subsection (a)(2).
    (c) Civil Actions.--If the Secretary determines that the 
manufacturer of an excessively priced drug (as determined under section 
2(a)) has increased the price of such drug during the period beginning 
on the date on which such price determination is made and ending on the 
date on which an entity begins manufacturing the drug under an open, 
non-exclusive license under subsection (a)(2), the Secretary may file a 
civil action in the United States district court for the district in 
which the manufacturer is located, or in the United States district 
court for the District of Columbia, to recover damages in an amount 
equal to not less than the total amount of revenue derived by the 
manufacturer as a result of any such price increase during such period. 
In actions brought under this subsection, the district courts shall 
have jurisdiction to grant all appropriate relief including, but not 
limited to, injunctive relief and compensatory damages.

SEC. 4. EXCESSIVE DRUG PRICE LICENSE.

    (a) Reasonable Royalty.--
            (1) In general.--An entity accepting an open, non-exclusive 
        license under section 3(a)(2) shall pay a reasonable royalty to 
        the holder of a patent that claims the drug or that claims a 
        use of the drug or to the holder of an application approved 
        under subsection 505(c) of the Federal Food, Drug, and Cosmetic 
        Act or section 351(a) of the Public Health Service Act for 
        which any government-granted exclusivity with respect to the 
        drug was terminated under section 5(a)(1).
            (2) Royalty rate.--Such royalty rate shall be--
                    (A) a percentage of sales, where the percentage 
                rate is no higher than the average royalty rate 
                estimated from the data provided by the Internal 
                Revenue Service for pharmaceutical manufacturer Federal 
                income tax returns; or
                    (B) an amount as determined by the Secretary, 
                taking into account--
                            (i) the value of the drug to patients;
                            (ii) the size of the affected patient 
                        population;
                            (iii) the risk adjusted value of the 
                        Federal Government subsidies and investments 
                        related to the drug;
                            (iv) whether the drug provided a 
                        significant improvement in health outcomes, 
                        compared to other therapies available at the 
                        time of the approval;
                            (v) the extent to which the brand name drug 
                        manufacturer has recovered risk adjusted 
                        investments related to the drug, including the 
                        investments related to the invention, 
                        regulatory test data and any other relevant 
                        research and development costs; and
                            (vi) any other information the Secretary 
                        determines appropriate.
    (b) Requirements.--
            (1) In general.--A royalty rate under subsection (a) shall 
        be consistent with making drugs available to purchasers, 
        including Federal, State, local, and nongovernmental purchasers 
        and individuals, at prices that are affordable and reasonable. 
        Under no condition shall a royalty be set at a rate that would 
        cause a product for which an open, non-exclusive license was 
        issued under section 3 to be sold at an excessive price, as 
        determined under section 2.
            (2) Multiple affected parties.--In the case that there is 
        one or more holders or investors in the patented inventions 
        related to the drug in addition to the brand name manufacturer, 
        the royalty rate shall be divided among the holders or 
        investors (including such manufacturer) in a manner agreed upon 
        by the manufacturer and other holders or investors, or, in the 
        absence of such an agreement, in a manner the Secretary 
        determines to be appropriate.
            (3) Price.--An entity accepting an open, non-exclusive 
        license under section 3(a)(2) shall sell the drug at a price 
        not higher than the excessive price determined for that drug 
        under section 2(b).

SEC. 5. PUBLIC EXCESSIVE DRUG PRICE DATABASE.

    (a) Excessive Drug Price Database.--
            (1) In general.--The Secretary shall establish and maintain 
        a comprehensive, up-to-date database of brand name drugs and 
        the excessive price determinations for such drugs under section 
        2.
            (2) Contents.--The database shall include, at a minimum, 
        for each brand name drug, for the applicable calendar year--
                    (A) the name of the drug;
                    (B) the manufacturer;
                    (C) whether the drug was determined under section 
                2(b) to have an excessive price;
                    (D) the number of petitions the Secretary received 
                under section 2(c) to make an excessive price 
                determination for the drug, together with the 
                information described in section 2(c)(3);
                    (E) the number of open, non-exclusive licenses the 
                Secretary has granted under section 3(a)(2) for generic 
                drug or biosimilar biological product versions of the 
                drug; and
                    (F) the number of applications under subsection 
                (b)(2) or (j) of section 505 of the Federal Food, Drug, 
                and Cosmetic Act or under section 351(k) of the Public 
                Health Service Act submitted to the Secretary, pursuant 
                to such a license granted under section 3(a)(2), and 
                the number of such applications that have been 
                approved.
            (3) Certain determinations.--With respect to a 
        determination made under section 2(b)(1), the Secretary shall 
        publish on the database such determination in accordance with 
        paragraph (1) within 30 days of receiving domestic and 
        international pricing information from manufacturers under 
        section 6.
    (b) Annual Reports to Congress.--Not later than 60 days after the 
first excessive price review under section 2 is complete, and annually 
thereafter, the Secretary shall submit to Congress a report describing 
the excessive drug price review for the preceding year. The report 
shall contain summary data regarding--
            (1) the total number of drugs that were reviewed;
            (2) the total number of drugs determined to be excessively 
        priced under each of paragraphs (1) and (2) of section 2(b), 
        and the name and manufacturer of each such drug;
            (3) the total number of drugs determined to be excessively 
        priced, listed by manufacturer;
            (4) the extent to which the prices of the drugs identified 
        under section 2 were higher than reasonable, on average;
            (5) the total number of drugs for which an open-non-
        exclusive license has been granted under section 3(a)(2);
            (6) the total number of generic drug or biosimilar 
        biological product applications received and approved that 
        reference a drug so licensed;
            (7) the median approval time for generic drug or biosimilar 
        biological product applications that reference a drug so 
        licensed;
            (8) the total number of petitions the Secretary received 
        under section 2(c) to make excessive price determinations for 
        drugs;
            (9) a list of any manufacturers who failed to report 
        information as required under section 6; and
            (10) other appropriate information, as the Secretary 
        determines or as Congress requests.
    (c) Public Availability.--The Secretary shall make the information 
in the database described in subsection (a) and the report in 
subsection (b) publicly available, including on the internet website of 
the Food and Drug Administration, in a manner that is easy to find and 
understand.

SEC. 6. DRUG MANUFACTURER REPORTING.

    (a) In General.--Each manufacturer shall submit to the Secretary, 
in such format as the Secretary may require, an annual report that 
includes the following information for each brand name drug of the 
manufacturer, with respect to the previous calendar year:
            (1) The average manufacturer price of the drug in the 
        United States and in the reference countries, for the entire 
        year, and broken down for each quarter of the year.
            (2) The wholesale acquisition cost of the drug in the 
        United States and in the reference countries, for the entire 
        year, and broken down for each quarter of the year.
            (3) Cumulative global revenues generated by the drug.
            (4) Annual net sales revenue generated by the drug in the 
        United States and in the reference countries, for the entire 
        year, and broken down for each quarter of the year.
            (5) Total expenditures on domestic and foreign drug 
        research and development related to the drug, itemized by--
                    (A) basic and preclinical research;
                    (B) clinical research, reported separately for each 
                clinical trial;
                    (C) development of alternative dosage forms and 
                strengths for the drug molecule or combinations, 
                including the molecule;
                    (D) other drug development activities, such as 
                nonclinical laboratory studies and record and report 
                maintenance;
                    (E) pursuing new or expanded indications for such 
                drug through supplemental applications under section 
                505 of the Federal Food, Drug, and Cosmetic Act; and
                    (F) carrying out postmarket requirements related to 
                such drug, including under section 505(o)(3) of the 
                Federal Food, Drug, and Cosmetic Act.
            (6) Total expenditures on domestic and foreign marketing 
        and advertising related to the drug.
            (7) Investments in human clinical trials related to the 
        drug, by each trial and each year, including grants, research 
        contracts, tax credits or deductions, and reimbursements from 
        public or private health plans or insurance, and any other 
        public sector subsidies or incentives, such as the fair market 
        value or priority review vouchers or other considerations.
            (8) The estimated size of the affected patient population.
            (9) Additional information the manufacturer chooses to 
        provide related to drug pricing decisions, such as information 
        related to the methodology used to set the price of the drug.
            (10) Additional information as the Secretary determines 
        necessary to carry out this Act, including information for 
        previous years.
    (b) Report Due Date.--Applicable manufacturers shall submit the 
reports described in subsection (a) not later than January 15 of the 
year following the date of enactment of this Act, and of each year 
thereafter.
    (c) Penalty for Noncompliance.--
            (1) In general.--Any manufacturer that fails to submit 
        information for a drug as required by this section on a timely 
        basis or that knowingly provides false information shall be 
        liable for a civil monetary penalty, as determined by the 
        Secretary under paragraph (2), in addition to any other penalty 
        under other applicable provisions of law.
            (2) Amount of penalty.--The amount of a civil penalty under 
        paragraph (1) shall be equal to the product of--
                    (A) an amount, as determined appropriate by the 
                Secretary, which is--
                            (i) not less than 0.5 percent of the gross 
                        revenues from sales for the previous calendar 
                        year of the drug for which the information was 
                        not submitted; and
                            (ii) not greater than 1 percent of the 
                        gross revenues from sales for the previous 
                        calendar year of such drug; and
                    (B) the number of days in the period between--
                            (i) the report due date under subsection 
                        (b); and
                            (ii) the date on which the Secretary 
                        receives the information required to be 
                        reported by the manufacturer under this 
                        section.
            (3) Use of civil penalty.--The Secretary shall collect the 
        civil penalties under this subsection and shall use such funds 
        to support competitive research grant programs of the National 
        Institutes of Health.

SEC. 7. PROHIBITION OF ANTICOMPETITIVE BEHAVIOR.

    No manufacturer may engage in anticompetitive behavior violating 
section 5(a) of the Federal Trade Commission Act (15 U.S.C. 45(a)) with 
another manufacturer that may interfere with the issuance and 
implementation of open, non-exclusive licenses under this Act or 
otherwise run contrary to the public interest in the availability of 
affordable prescription drugs.

SEC. 8. DEFINITIONS.

    For the purposes of this Act:
            (1) Average manufacturer price.--
                    (A) In general.--The term ``average manufacturer 
                price'', with respect to a drug, subject to 
                subparagraph (B), has the meaning given such term in 
                section 1927(k)(1) of the Social Security Act (42 
                U.S.C. 1396r-8(k)(1)); or with respect to a drug for 
                which there is no average manufacturer price as so 
                defined, such term shall mean the wholesale acquisition 
                cost (as defined in section 1847A(c)(6)(B) of the 
                Social Security Act (42 U.S.C. 1395w-3a(c)(6)(B)) of 
                the drug.
                    (B) Application to reference countries.--With 
                respect to reference countries, the term ``average 
                manufacturer price'', as defined in subparagraph (A), 
                shall be determined based on the price of the drug in 
                the applicable reference country.
            (2) Biosimilar biological product.--The term ``biosimilar 
        biological product'' means a biological product licensed 
        pursuant to an application under section 351(k) of the Public 
        Health Service Act (42 U.S.C. 262(k)).
            (3) Brand name drug.--The term ``brand name drug'' means a 
        drug that is--
                    (A) approved under section 505(c) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 355(c)) or a 
                biological product licensed under section 351(a) of the 
                Public Health Service Act (42 U.S.C. 262(a));
                    (B) subject to section 503(b)(1) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)); and
                    (C) claimed in a patent or the use of which is 
                claimed in a patent.
            (4) Generic drug.--The term ``generic drug'' means a drug 
        approved pursuant to an application under section (b)(2) or (j) 
        of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355).
            (5) Government-granted exclusivity.--The term ``government-
        granted exclusivity'' means prohibitions on the submission or 
        approval of drug applications granted under any of the 
        following:
                    (A) Clauses (ii) through (v) of section 
                505(c)(3)(E) of the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 355(c)(3)(E)).
                    (B) Section 505(j)(5)(B)(iv) of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(B)(iv)) or 
                clause (ii), (iii), or (iv) of section 505(j)(5)(F) of 
                such Act.
                    (C) Section 505A of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 355a).
                    (D) Section 505E of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 355f).
                    (E) Section 527 of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 360cc).
                    (F) Section 351(k)(7) of the Public Health Service 
                Act (42 U.S.C. 262(k)(7)).
                    (G) Any other provision of law that provides for 
                exclusivity (or extension of exclusivity) with respect 
                to a drug.
            (6) Manufacturer.--The term ``manufacturer'' means the 
        holder of an application approved under section 505 of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or of a 
        license issued under section 351 of the Public Health Service 
        Act (42 U.S.C. 262).
            (7) Open, non-exclusive license.--The term ``open, non-
        exclusive license'' means a license that authorizes any person 
        to use a patent held by a manufacturer that claims a brand name 
        drug or a use of a brand name drug or rely upon regulatory test 
        data for such drug, including patents held in common by the 
        manufacturer and other entities, needed to produce, 
        manufacture, import, export, distribute, offer in liquidation, 
        sell, buy, or use such brand name drug.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
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