Title: Transparent Drug Pricing Act of 2017
Policy area: Health

Summary:
Transparent Drug Pricing Act of 2017
This bill requires drug manufacturers to report specified financial and sales information, including drug pricing, tax credit, and patent information; violations are subject to civil penalties.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4116 Introduced in House (IH)]

<DOC>






115th CONGRESS
  1st Session
                                H. R. 4116

  To amend the Public Health Service Act to require reporting by drug 
 manufacturers to increase transparency in drug pricing, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 25, 2017

 Mr. Doggett (for himself, Mr. Cummings, Ms. DeLauro, Mr. Ellison, Mr. 
Pocan, Mr. Grijalva, Mr. Cicilline, Mr. Cohen, Mr. Conyers, Mr. Higgins 
  of New York, Ms. Kaptur, Mr. Nadler, and Mr. Raskin) introduced the 
   following bill; which was referred to the Committee on Energy and 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
  To amend the Public Health Service Act to require reporting by drug 
 manufacturers to increase transparency in drug pricing, 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 ``Transparent Drug Pricing Act of 
2017''.

SEC. 2. DRUG MANUFACTURER REPORTING.

    Part P of title III of the Public Health Service Act (42 U.S.C. 
280g et seq.) is amended by adding at the end the following:

``SEC. 399V-7. DRUG MANUFACTURER REPORTING.

    ``(a) Mandatory Reporting.--A drug manufacturer shall submit to the 
Secretary and to Congress an annual report specifying with respect to 
the previous calendar year (except as provided in subsection (d)(2))--
            ``(1) the total expenditures of the manufacturer on--
                    ``(A) domestic and foreign drug research and 
                development, including an itemized description of--
                            ``(i) basic and preclinical research;
                            ``(ii) clinical research, reported 
                        separately for each clinical trial;
                            ``(iii) development of alternative dosage 
                        forms and strengths for the drug molecule or 
                        combinations, including the molecule;
                            ``(iv) other drug development activities, 
                        such as nonclinical laboratory studies and 
                        record and report maintenance;
                            ``(v) pursuing new or expanded indications 
                        for such drug through supplemental applications 
                        under section 505 of the Federal Food, Drug, 
                        and Cosmetic Act;
                            ``(vi) carrying out postmarket requirements 
                        related to such drug, including under section 
                        505(o)(3) of such Act;
                            ``(vii) carrying out risk evaluation and 
                        mitigation strategies in accordance with 
                        section 505-1 of such Act; and
                            ``(viii) marketing research;
                    ``(B) the acquisition of drug components and 
                packaging, in total and per unit sold, broken out by 
                source and cost and identifying specific costs that 
                reflect internal transfers within the manufacturer's 
                company;
                    ``(C) other acquisitions relating to drugs, 
                including for the purchase of patents and licensing or 
                the acquisition of any corporate entity owning any 
                rights to a drug during or after development of the 
                drug; and
                    ``(D) marketing, advertising, and educating for the 
                promotion of a drug, including a breakdown of amounts 
                aimed at consumers, prescribers, managed care 
                organizations, and others, irrespective of whether a 
                particular drug is mentioned in the marketing, 
                advertising, or educating;
            ``(2) the gross revenue, net revenue, gross profit, and net 
        profit of the manufacturer with respect to drugs;
            ``(3) the total number of units of each type of drug that 
        were sold in interstate commerce;
            ``(4) pricing information with respect to the sale of 
        drugs, including--
                    ``(A) wholesale acquisition cost;
                    ``(B) net average price realized by prescription 
                drug benefit managers for drugs provided to individuals 
                in the United States, after accounting for any rebates 
                or other payments from the manufacturer to the pharmacy 
                benefit manager and from the pharmacy benefit manager 
                to the manufacturer; and
                    ``(C) the net price of each drug, after accounting 
                for discounts, rebates, or other financial 
                considerations, charged to purchasers in each 
                applicable country of the Organisation for Economic Co-
                operation and Development;
            ``(5) any Federal benefits received by the manufacturer 
        with respect to a drug, including the amounts and periods of 
        impact for each such benefit, including tax credits; Federal 
        grants, including from the National Institutes of Health, the 
        Department of Defense, the Department of Energy, the Centers 
        for Disease Control and Prevention, or other Federal 
        departments or agencies; patent applications that benefitted 
        from such grants; patent extensions; exclusivity periods; and 
        waivers of fees;
            ``(6) the percentage of research and development 
        expenditures described in clauses (i) through (v) of paragraph 
        (1)(A) that were derived from Federal funds;
            ``(7) executive compensation for the chief executive 
        officer, chief financial officer, and the 3 other most highly 
        compensated executive officers, including bonuses, paid by such 
        manufacturer, and stock options affiliated with the 
        manufacturer that were offered to or accrued by such officers; 
        and
            ``(8) any other information as the Secretary may require.
    ``(b) Voluntary Supplemental Reporting.--A drug manufacturer may 
supplement a report under subsection (a) with any additional 
information the manufacturer chooses to provide related to drug pricing 
decisions, such as--
            ``(1) total expenditures on drug research, drug 
        development, and clinical trials on drugs that failed to 
        receive approval by the Food and Drug Administration; and
            ``(2) a list of drugs and drug prices of other 
        manufacturers for purposes of comparison with the 
        manufacturer's own drugs and drug prices.
    ``(c) Special Rule.--A drug manufacturer shall--
            ``(1) to the extent possible, disaggregate the information 
        required to be reported by this section by the particular drug 
        involved; and
            ``(2) submit all information required to be reported by 
        this section with respect to each applicable drug in a single 
        annual report.
    ``(d) Submission of Reports.--
            ``(1) In general.--
                    ``(A) Submission by drug manufacturers.--Drug 
                manufacturers shall submit the annual reports required 
                under this section to the Secretary in a usable format, 
                as the Secretary may require.
                    ``(B) Collation by the secretary.--The Secretary 
                shall collate the reports received as described in 
                subparagraph (A) and submit such collated reports to 
                Congress, together with an analysis of the reports by 
                the Secretary that includes--
                            ``(i) a summary of data from the reports;
                            ``(ii) consideration of factors such as 
                        trends on research and development costs, 
                        Federal benefits, and manufacturer patient 
                        assistance programs; and
                            ``(iii) the relationship between the 
                        factors described in clause (ii) and 
                        prescription drug prices.
                    ``(C) Public availability.--The Secretary shall 
                make the reports submitted by manufacturers as 
                described in subparagraph (A) and the collated reports 
                together with the analysis of the Secretary described 
                in subparagraph (B) publicly available, including by 
                posting such reports to the internet website of the 
                Department of Health and Human Services, in a 
                searchable format.
            ``(2) Initial report.--
                    ``(A) In general.--A drug manufacturer shall submit 
                an initial report pursuant to this section not later 
                than one year after the date of enactment of the 
                Transparent Drug Pricing Act of 2017 (except as 
                provided in subparagraph (B)).
                    ``(B) Reporting period.--Notwithstanding the 
                requirement in subsection (a) that each report under 
                such subsection be for the previous calendar year, the 
                initial report of a drug manufacturer under subsection 
                (a) shall include, for each drug marketed by the 
                manufacturer, the information described in paragraphs 
                (1) through (6) of subsection (a) for the calendar year 
                period beginning with the later of--
                            ``(i) the calendar year in which the drug 
                        was approved under section 505 of the Federal 
                        Food, Drug, and Cosmetic Act, was licensed 
                        under section 351 of this Act, or received an 
                        exemption under section 505(i) of the Federal 
                        Food, Drug, and Cosmetic Act or section 
                        351(a)(3) of this Act; and
                            ``(ii) the calendar year in which the 
                        manufacturer acquired the drug so approved, 
                        licensed, or exempted.
                    ``(C) Small businesses.--In the case of a drug 
                manufacturer that has fewer than 500 employees, the 
                initial report required by in subparagraph (A) shall be 
                submitted by a date determined by the Secretary, which 
                shall be--
                            ``(i) not earlier than the deadline 
                        described in subparagraph (A); and
                            ``(ii) not later than the date that is 3 
                        years after the date of enactment of the 
                        Transparent Drug Pricing Act of 2017.
    ``(e) Audit by Third Party.--The Secretary shall select a 
percentage (to be determined by the Secretary) of the reports submitted 
under subsection (a) for a fiscal year to be audited by an accredited 
third-party auditor (to be selected by the Secretary).
    ``(f) Penalty for Noncompliance.--The Secretary shall report to the 
Office of the Inspector General any manufacturer's failure to submit a 
complete report as required under this section. Any manufacturer that 
fails to submit a complete report required under this section shall be 
subject to a civil penalty of up to $200,000 for each day on which the 
violation continues. The Secretary shall collect the civil penalties 
under this subsection and, without further appropriation, shall use 
such funds to support research of the National Institutes of Health.
    ``(g) Definition.--In this section, the term `drug manufacturer' 
means the manufacturer of an approved drug (including a drug approved 
under subsection (c) or (j) of section 505 of the Federal Food, Drug, 
and Cosmetic Act and a biological product licensed under subsection (a) 
or (k) of section 351 of this Act).''.
                                 <all>