Title: Insulin Price Reduction Act
Policy area: Health

Summary:
Insulin Price Reduction Act  This bill prohibits health insurance plan issuers and pharmacy benefits managers (PBMs) from receiving rebates or discounts for insulin from manufacturers who certify that its current insulin list price has been reduced to an amount no greater than what the list price was for the same insulin on July 1, 2006. This restriction does not apply to discounts provided to insurance plan holders at retail sale or to flat-rate fees for service paid to PBMs. Further, insurance plans are prohibited from applying a deductible to insulin that has received such price certification.
A manufacturer may certify insulin prices by submitting to the Department of Health and Human Services data about the list price of any insulin the manufacturer has produced since January 1, 2000, and by setting the current list price for an insulin product at the 2006 rate. To remain certified, a manufacturer may not increase the list price of insulin by more than the annual increase in the medical care consumer price index. A manufacturer may certify the price of an insulin product for which it did not have a list price in 2006 by reducing the list price of such insulin to the weighted average list price in 2006 of specified insulin categories.
This bill also applies to Medicare prescription drug benefits. The bill sets the rebate for insulin under Medicaid based on the average manufacturer price of insulin during the last fiscal quarter of 2019, increasing by the medical care consumer price index thereafter.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4906 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 4906

  To provide patient protections with respect to the cost of insulin.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 29, 2019

 Ms. DeGette (for herself and Mr. Reed) introduced the following bill; 
  which was referred to the Committee on Energy and Commerce, and in 
    addition to the Committee on Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
  To provide patient protections with respect to the cost of insulin.

    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 ``Insulin Price Reduction Act''.

SEC. 2. INSULIN PRICE PROTECTIONS.

    (a) In General.--Subpart II of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg-11 et seq.) is amended by adding at 
the end the following:

``SEC. 2729A. INSULIN PRICE PROTECTIONS.

    ``(a) Contracting Requirements.--
            ``(1) In general.--
                    ``(A) Requirement.--Except as provided in 
                subparagraph (B), a group health plan or a health 
                insurance issuer offering group or individual health 
                insurance coverage shall not, and shall ensure that any 
                entity that provides pharmacy benefits management 
                services under a contract with any such health plan or 
                health insurance coverage does not, directly or 
                indirectly, receive from a manufacturer of certified 
                insulin a rebate, reduction in price, or other 
                remuneration with respect to such insulin received by 
                an enrollee in the plan or coverage and covered by the 
                plan or coverage.
                    ``(B) Exception.--The requirement under 
                subparagraph (A) shall not apply to--
                            ``(i) any such reduction in price that is 
                        reflected at the point of sale to the enrollee; 
                        or
                            ``(ii) any remuneration that is a flat fee-
                        based service fee that a manufacturer of such 
                        insulin pays to a pharmacy benefit manager for 
                        services rendered to the manufacturer that 
                        relate to arrangements by the pharmacy benefit 
                        manager to provide pharmacy benefit management 
                        services to a health plan or health insurance 
                        issuer, if certain conditions established by 
                        the Secretary are met, including requirements 
                        that the fees are transparent to the health 
                        plan or health insurance issuer.
            ``(2) Applicability.--The restriction under paragraph (1) 
        shall apply with respect to insulin described in paragraph (1), 
        for which the manufacturer has certified the list price in 
        accordance with section 5(b) of the Insulin Price Reduction Act 
        with respect to--
                    ``(A) any plan year in which the list price for 
                insulin is certified under section 5(b)(2)(A) of the 
                Insulin Price Reduction Act; and
                    ``(B) each subsequent plan year during which the 
                manufacturer limits any increase in the list price to 
                the price that gave rise to the restriction under 
                paragraph (1), adjusted by not more than the price 
                change in the medical care component of the consumer 
                price index for all urban consumers (U.S. city 
                average), as certified under section 5(b)(2)(B) of the 
                Insulin Price Reduction Act.
    ``(b) Deductible Limitation.--A group health plan or a health 
insurance issuer offering group or individual health insurance coverage 
shall not apply any deductible amount that otherwise is applicable to 
prescription drugs with respect to coverage of certified insulin under 
such plan or coverage, during the period described in subsection 
(a)(2).
    ``(c) Hold Harmless.--During the period beginning on the date a 
certification is first made under section 5(b)(2)(A) of the Insulin 
Price Reduction Act and ending on the last day of the second plan year 
beginning on or after such date, a group health plan or a health 
insurance issuer offering group or individual health insurance coverage 
shall not, and shall ensure that any entity that provides pharmacy 
benefits management services under a contract with such health plan or 
health insurance coverage does not--
            ``(1) restrict or disadvantage such insulin from the 
        formulary applicable to the plan or coverage relative to any 
        other insulin or similar formulation;
            ``(2) impose higher cost-sharing with respect to such 
        insulin than the cost-sharing that applied with respect to the 
        insulin in the year in which the list price reduction 
        certification was provided under section 5(b)(2)(A) of the 
        Insulin Price Reduction Act;
            ``(3) impose any prior authorization requirements for 
        coverage of such insulin that were not applied during the year 
        in which the list price reduction certification was provided 
        under such section 5(b)(2)(A); or
            ``(4) establish a step therapy requirement for such insulin 
        that was not applied during the year in which the list price 
        reduction certification was provided under such section 
        5(b)(2)(A).
    ``(d) Definitions.--In this section--
            ``(1) the term `certified insulin' means, with respect to a 
        year, insulin that has been certified under section 5(b) of the 
        Insulin Price Reduction Act for the year;
            ``(2) the term `insulin' means any insulin product approved 
        by the Food and Drug Administration to improve glycemic control 
        in patients with diabetes mellitus;
            ``(3) the term `list price' has the meaning given the term 
        `wholesale acquisition cost' in section 1847A(c)(6)(B) of the 
        Social Security Act; and
            ``(4) the term `rebate' means any discount, price 
        concession, or fee, other than the fee described in section 
        (a)(1)(B), the terms of which are fixed at the time of the sale 
        and disclosed, but which is not received at the time of the 
        sale.''.
    (b) Conforming Amendment.--Paragraph (2) of section 223(d) of the 
Internal Revenue Code of 1986 is amended by redesignating subparagraph 
(D) as subparagraph (E) and by inserting after subparagraph (C) the 
following new subparagraph:
                    ``(D) Safe harbor for absence of deductible for 
                insulin.--A plan shall not fail to be treated as a high 
                deductible health plan by reason of exempting insulin 
                from any deductible pursuant to section 2729A(b) of the 
                Public Health Service Act during the period described 
                in section 2729A(a)(2) of such Act.''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall take effect with respect to plan years beginning on or after 
January 1, 2022.

SEC. 3. INSULIN PRICE PROTECTIONS UNDER MEDICARE PART D.

    Section 1860D-4 of the Social Security Act (42 U.S.C. 1395w-104) is 
amended--
            (1) by redesignating the subsection (m) as added by section 
        6063(c) of the SUPPORT for Patients and Communities Act (Public 
        Law 115-271) as subsection (n); and
            (2) by adding at the end the following new subsection:
    ``(o) Limitation on Rebates, Price Reductions, or Other 
Remuneration for Certified Insulin.--
            ``(1) Limitation.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), for plan year 2022 and subsequent plan years, a 
                PDP sponsor and a Medicare Advantage organization shall 
                ensure that each prescription drug plan or MA-PD plan 
                offered by the sponsor or organization, and any entity 
                that provides pharmacy benefits management services 
                under a contract with the prescription drug plan or MA-
                PD plan offered by the sponsor or organization, does 
                not, directly or indirectly, receive from a 
                manufacturer of certified insulin a rebate, reduction 
                in price, or other remuneration with respect to 
                certified insulin that is covered by the plan.
                    ``(B) Exception.--The requirement under 
                subparagraph (A) shall not apply to--
                            ``(i) any such reduction in price that is 
                        reflected at the point of sale to the 
                        beneficiary; or
                            ``(ii) any remuneration that is a flat fee-
                        based service fee that a manufacturer of such 
                        certified insulin pays to a pharmacy benefit 
                        manager for services rendered to the 
                        manufacturer that relate to arrangements by the 
                        pharmacy benefit manager to provide pharmacy 
                        benefit management services to a prescription 
                        drug plan or MA-PD plan, if certain conditions 
                        established by the Secretary are met, including 
                        requirements that the fees are transparent to 
                        the prescription drug plan or MA-PD plan.
                    ``(C) Hold harmless for first 2 years that an 
                insulin is certified.--In the first 2 plan years during 
                which paragraph (2) applies with respect to a certified 
                insulin, a PDP sponsor and a Medicare Advantage 
                organization shall not, and shall ensure that any 
                entity that provides pharmacy benefits management 
                services under a contract with such sponsor or 
                organization does not--
                            ``(i) remove such insulin from the 
                        formulary applicable to the prescription drug 
                        plan or MA-PD plan;
                            ``(ii) impose higher cost-sharing with 
                        respect to such insulin than the cost-sharing 
                        that applied with respect to the certified 
                        insulin in the year in which the list price 
                        reduction certification was provided under 
                        section 5(b)(2)(A) of the Insulin Price 
                        Reduction Act;
                            ``(iii) impose any prior authorization 
                        requirements for coverage of the certified 
                        insulin that were not applied during the year 
                        in which the list price reduction certification 
                        was provided under such section 5(b)(2)(A); or
                            ``(iv) establish a step therapy requirement 
                        for the certified insulin that was not applied 
                        during the year in which the list price 
                        reduction certification was provided under such 
                        section 5(b)(2)(A).
            ``(2) Definitions.--In this section:
                    ``(A) Certified insulin.--The term `certified 
                insulin' means, with respect to a year, insulin that 
                has been certified under section 5(b) of the Insulin 
                Price Reduction Act for the year.
                    ``(B) Insulin.--The term `insulin' means any 
                insulin product approved by the Food and Drug 
                Administration to improve glycemic control in patients 
                with diabetes mellitus.
                    ``(C) List price.--The term `list price' has the 
                meaning given the term `wholesale acquisition cost' in 
                section 1847A(c)(6)(B).
                    ``(D) Rebate.--The term `rebate' means any 
                discount, price concession, or fee, other than the fee 
                described in paragraph (1)(B), the terms of which are 
                fixed at the time of the sale and disclosed, but which 
                is not received at the time of the sale.''.

SEC. 4. APPLICABILITY OF PRE-LIST PRICE REDUCTION AMP TO MEDICAID 
              MINIMUM REBATE AMOUNTS.

    Section 1927(c) of the Social Security Act (42 U.S.C. 1396r-8(c)) 
is amended--
            (1) in paragraph (1)(A), in the matter preceding clause 
        (i), by inserting ``and paragraph (5)'' after ``paragraph 
        (2)'';
            (2) in paragraph (3)(A), in the matter preceding clause 
        (i), by inserting ``and paragraph (5)'' after ``subparagraph 
        (C)''; and
            (3) by adding at the end the following new paragraph:
            ``(5) Special rule for determining minimum basic rebates 
        for insulin.--
                    ``(A) In general.--In determining the amount of the 
                rebate specified in this subsection for a dosage form 
                and strength of a covered outpatient drug described in 
                subparagraph (B) for any rebate period occurring after 
                April 30, 2020, paragraph (1)(A)(ii)(II) or paragraph 
                (3)(A)(i) (as applicable) shall be applied by 
                substituting--
                            ``(i) the pre-reduction average 
                        manufacturer price (as defined in subparagraph 
                        (C)) for the dosage form and strength of the 
                        drug for the rebate period; for
                            ``(ii) the average manufacturer price for 
                        the dosage form and strength of the drug for 
                        the rebate period.
                    ``(B) Drugs described.--A covered outpatient drug 
                is described in this subparagraph for a rebate period 
                if the drug is insulin for which, throughout such 
                rebate period, the manufacturer has certified the list 
                price for each dosage form and strength of such drug in 
                accordance with section 5(b) of the Insulin Price 
                Reduction Act.
                    ``(C) Pre-reduction average manufacturer price.--
                For purposes of this paragraph, the term `pre-reduction 
                average manufacturer price' means, with respect to each 
                dosage form and strength of a covered outpatient drug 
                described in subparagraph (B) and a rebate period--
                            ``(i) the average manufacturer price for 
                        such drug for the calendar quarter beginning 
                        July 1, 2019; increased by
                            ``(ii) the percentage by which the consumer 
                        price index for all urban consumers (United 
                        States city average) for the month before the 
                        month in which the rebate period begins exceeds 
                        such index for September 2019.''.

SEC. 5. LIST PRICE DATA SUBMISSIONS.

    (a) Initial Submission.--
            (1) In general.--Not later than April 30, 2020, any 
        manufacturer of insulin wishing to receive certification under 
        this section shall submit to the Secretary--
                    (A) data on the list price of any insulin 
                manufactured by the manufacturer during the period 
                beginning on January 1, 2000 (or the first date on 
                which such manufacturer begins manufacturing such 
                insulin), through the list price applicable at the time 
                of the report; and
                    (B) a certification that such data is accurate.
            (2) Later submissions.--Any manufacturer of insulin that 
        does not submit the information described in paragraph (1) by 
        the date described in such paragraph may later submit the 
        information described in subparagraphs (A) and (B) of paragraph 
        (1) to the Secretary. Such a manufacturer who submits such 
        information pursuant to this paragraph is eligible to certify 
        its list price for the applicable insulin under subsection 
        (b)(2)(A)(ii) with respect to the first plan year that begins 
        at least 15 months after the date of submission under this 
        paragraph.
    (b) Annual Price Certification.--
            (1) In general.--Any manufacturer of insulin who submits 
        information in accordance with subsection (a) is eligible for 
        certification under this subsection.
            (2) Requirements.--
                    (A) First certification.--
                            (i) Initial eligibility for 
                        certification.--A manufacturer of insulin who 
                        submits information under subsection (a)(1) is 
                        considered certified under this subsection for 
                        plan year 2022 if such manufacturer, not later 
                        than September 30, 2020, submits to the 
                        Secretary a certification that the manufacturer 
                        reduced its list price for insulin to an amount 
                        that is no greater than the list price for the 
                        same insulin that applied as of July 1, 2006.
                            (ii) Later certification.--A manufacturer 
                        of insulin that submitted information under 
                        subsection (a)(2) not later than September 30 
                        of the calendar year that is 2 years prior to 
                        the applicable plan year, is considered 
                        certified under this subsection for the 
                        applicable plan year if such manufacturer 
                        submits to the Secretary a certification, not 
                        later than September 30 of such calendar year, 
                        that the manufacturer reduced its list price 
                        for insulin to the amount that is no greater 
                        than the list price for the same insulin that 
                        applied as of July 1, 2006, increased by not 
                        more than the rate by which the medical care 
                        component of the consumer price index for all 
                        urban consumers (U.S. city average) increased 
                        between September 30, 2020, and the date on 
                        which the certification is submitted.
                    (B) Subsequent certification.--For plan year 2023 
                and each plan year thereafter, a manufacturer of 
                insulin who previously submitted a certification under 
                clause (i) or (ii) of subparagraph (A) is considered 
                certified under this subsection for the applicable plan 
                year if such manufacturer submits, not later than 
                September 30 of the calendar year that is 2 years prior 
                to the applicable plan year, a certification that the 
                manufacturer did not increase the list price for 
                insulin previously certified under clause (i) or (ii) 
                of subparagraph (A), by more than the rate by which the 
                medical care component of the consumer price index for 
                all urban consumers (U.S. city average) increased since 
                the initial certification under such clause (i) or 
                (ii).
            (3) Special rule for certain insulin.--
                    (A) In general.--In the case of a manufacturer of 
                insulin that did not manufacture a particular insulin 
                in 2006, such manufacturer may be certified under this 
                subsection with respect to such insulin by submitting 
                information under paragraph (2)(A) certifying that the 
                list price of such insulin is no greater than the 
                weighted average list price, in 2006, of, as 
                applicable--
                            (i)(I) all short-acting insulins;
                            (II) all rapid-acting insulins; or
                            (III) all long-acting insulins; or
                            (ii) such other insulin categories, as the 
                        Secretary determines appropriate.
                    (B) Increase.--The weighted averages under 
                subparagraph (A) shall be increased in accordance with 
                paragraph (2)(A)(ii), as applicable.
            (4) Application to authorized generic insulin.--In the case 
        of an insulin that is classified as an authorized generic drug, 
        as defined in section 505(t)(3) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355(t)(3)), the manufacturer of such 
        insulin may be certified under this section by submitting 
        information under paragraph (1)(A) certifying that the list 
        price of such authorized generic insulin is no greater than the 
        list price, as of July 1, 2006, of the listed drug insulin 
        product upon which the authorized generic drug was based under 
        section 505(t) of the Federal Food, Drug, and Cosmetic Act. The 
        certification pursuant to this paragraph applies only to the 
        authorized generic drug insulin, and does not apply with 
        respect to the applicable listed drug insulin.
    (c) Audits and Penalties.--The Inspector General of the Department 
of Health and Human Services may audit the financial records and other 
relevant records of any manufacturer submitting data under subsections 
(a) and (b), and any manufacturer or officer, director, agent, or 
managing employee of such manufacturer that knowingly submits false or 
incomplete data shall be subject to a civil penalty for each insulin 
for which false or incomplete data are submitted in an amount not to 
exceed the greater of--
            (1) an amount equal to 2 times the total amount of rebates 
        paid by the manufacturer to State Medicaid plans for the 
        insulin for rebate periods occurring in calendar year 2018 
        under section 1927 of the Social Security Act (42 U.S.C. 1396r-
        8); or
            (2) an alternative amount to be determined by the 
        Secretary.
    (d) Definitions.--In this section--
            (1) the term ``insulin'' means any insulin product approved 
        by the Food and Drug Administration to improve glycemic control 
        in patients with diabetes mellitus;
            (2) the term ``list price'' has the meaning given the term 
        ``wholesale acquisition cost'' in section 1847A(c)(6)(B) of the 
        Social Security Act (42 U.S.C. 1395w-3a(c)(6)(B)); and
            (3) the term ``Secretary'' means the Secretary of Health 
        and Human Services.
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