Title: Pharmaceutical REPAI Act
Policy area: Health

Summary:
Pharmaceutical Rebates for Excessive Pricing Above Inflation Act or the Pharmaceutical REPAI Act
This bill requires drug manufacturers, subject to civil penalties, to issue rebates to the Centers for Medicare & Medicaid Services for covered drugs under the Medicare prescription drug benefit that cost $100 or more and for which the average manufacturer price increases faster than inflation.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4619 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 4619

    To amend title XVIII of the Social Security Act to require drug 
manufacturers to pay a Medicare part D rebate for certain drugs if the 
          price of such drugs increases faster than inflation.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 8, 2019

  Ms. Schakowsky (for herself, Mr. Higgins of New York, and Ms. Wild) 
 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 amend title XVIII of the Social Security Act to require drug 
manufacturers to pay a Medicare part D rebate for certain drugs if the 
          price of such drugs increases faster than inflation.

    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 ``Pharmaceutical Rebates for Excessive 
Pricing Above Inflation Act'' or the ``Pharmaceutical REPAI Act''.

SEC. 2. MEDICARE PART D PRESCRIPTION DRUG INFLATION REBATE BY 
              MANUFACTURERS.

    Part D of title XVIII of the Social Security Act is amended by 
inserting after section 1860D-14A (42 U.S.C. 1395w-114a) the following 
new section:

``SEC. 1860D-14B. MANUFACTURER REBATE FOR CERTAIN DRUGS WITH PRICES 
              INCREASING FASTER THAN INFLATION.

    ``(a) In General.--Subject to the provisions of this section, in 
order for coverage to be available under this part for a part D 
rebatable drug of a manufacturer dispensed during an applicable year, 
the manufacturer must have entered into and have in effect an agreement 
described in subsection (b). For purposes of this section the term 
`applicable year' means a year beginning with 2022.
    ``(b) Agreements.--
            ``(1) Terms of agreement.--An agreement described in this 
        subsection, with respect to a manufacturer of a part D 
        rebatable drug, is an agreement under which the following 
        applies:
                    ``(A) Secretarial provision of information.--Not 
                later than 9 months after the end of each applicable 
                year with respect to which the agreement is in effect, 
                the Secretary, for the part D rebatable drug of the 
                manufacturer, reports to the manufacturer the following 
                for such year:
                            ``(i) Information on the total units (as 
                        defined in subsection (g)(2)) dispensed for 
                        each dosage form and strength with respect to 
                        such part D rebatable drug and year.
                            ``(ii) Information on the amount (if any) 
                        of the excess average manufacturer price 
                        increase described in subsection (c)(1)(B) for 
                        each dosage form and strength with respect to 
                        such drug and year.
                            ``(iii) The rebate amount specified under 
                        subsection (c) for each dosage form and 
                        strength with respect to such drug and year.
                    ``(B) Manufacturer requirements.--For each 
                applicable year with respect to which the agreement is 
                in effect, the manufacturer of the part D rebatable 
                drug, for each dosage form and strength with respect to 
                such drug, not later than 30 days after the date of 
                receipt from the Secretary of the information described 
                in subparagraph (A) for such year, provides to the 
                Secretary a rebate that is equal to the amount 
                specified in subsection (c) for such dosage form and 
                strength with respect to such drug for such year.
            ``(2) Length of agreement.--
                    ``(A) In general.--An agreement under this section, 
                with respect to a part D rebatable drug, shall be 
                effective for an initial period of not less than one 
                year and shall be automatically renewed for a period of 
                not less than one year unless terminated under 
                subparagraph (B).
                    ``(B) Termination.--
                            ``(i) By secretary.--The Secretary may 
                        provide for termination of an agreement under 
                        this section for violation of the requirements 
                        of the agreement or other good cause shown. 
                        Such termination shall not be effective earlier 
                        than 60 days after the date of notice of such 
                        termination. The Secretary shall provide, upon 
                        request, a manufacturer with a hearing 
                        concerning such a termination, but such hearing 
                        shall not delay the effective date of the 
                        termination.
                            ``(ii) By a manufacturer.--A manufacturer 
                        may terminate an agreement under this section 
                        for any reason. Any such termination shall not 
                        be effective until the year beginning at least 
                        60 days after the date the manufacturer 
                        provides notice to the Secretary.
                    ``(C) Effectiveness of termination.--Any 
                termination under this paragraph shall not affect 
                rebates due under the agreement under this section 
                before the effective date of its termination.
                    ``(D) Delay before reentry.--In the case of any 
                agreement under this section with a manufacturer which 
                is terminated in a plan year, another such agreement 
                with the manufacturer (or a successor manufacturer) may 
                not be entered into before the subsequent plan year, 
                unless the Secretary finds good cause for an earlier 
                reinstatement of such an agreement.
            ``(3) Information.--For purposes of carrying out this 
        section, the Secretary shall use information submitted by 
        manufacturers under section 1927(b)(3).
    ``(c) Rebate Amount.--
            ``(1) In general.--For purposes of this section, the amount 
        specified in this subsection for a dosage form and strength 
        with respect to a part D rebatable drug and applicable year is, 
        subject to subparagraphs (B) and (C) of paragraph (3), the 
        amount equal to the product of--
                    ``(A) the total average number of units weighted 
                by, and dispensed for, such dosage form and strength 
                with respect to such part D rebatable drug and year; 
                and
                    ``(B) the amount (if any) by which--
                            ``(i) the average manufacturer price (as 
                        defined in subsection (g)) paid for such dosage 
                        form and strength with respect to such part D 
                        rebatable drug during the year; exceeds
                            ``(ii) the inflation-adjusted payment 
                        amount determined under paragraph (2) for such 
                        dosage form and strength with respect to such 
                        part D rebatable drug during the year.
            ``(2) Determination of inflation-adjusted payment amount.--
        The inflation-adjusted payment amount determined under this 
        paragraph for a dosage form and strength with respect to a part 
        D rebatable drug for an applicable year, subject to 
        subparagraphs (A) and (D) of paragraph (3), is--
                    ``(A) the average manufacturer price paid for such 
                dosage form and strength with respect to such drug in 
                the payment amount benchmark year (as defined in 
                subsection (g)(3)); increased by
                    ``(B) the percentage by which the rebate period 
                CPI-U (as defined in subsection (g)(5)) for the 
                applicable year exceeds the benchmark period CPI-U (as 
                defined in subsection (g)(4)).
            ``(3) Special treatment of certain drugs and exemption.--
                    ``(A) Subsequently approved drugs.--In the case of 
                a part D rebatable drug first approved by the Food and 
                Drug Administration after January 1, 2016, subparagraph 
                (A) of paragraph (2) shall be applied as if the term 
                `payment amount benchmark year' were defined under 
                subsection (g)(3) as the first year beginning after the 
                day on which the drug was first marketed and 
                subparagraph (B) of paragraph (2) shall be applied as 
                if the term `benchmark period CPI-U' were defined under 
                subsection (g)(4) as if the reference to `January 2016' 
                under such subsection were a reference to `January of 
                the first year beginning after the date on which the 
                drug was first marketed by any manufacturer'.
                    ``(B) Exemption for shortages.--The Secretary may 
                reduce or waive the rebate under paragraph (1) with 
                respect to a part D rebatable drug in the case of a 
                shortage of such drug or other exigent circumstances, 
                as determined by the Secretary.
                    ``(C) Treatment of new formulations.--
                            ``(i) In general.--In the case of a part D 
                        rebatable drug that is a line extension of a 
                        single source drug or an innovator multiple 
                        source drug that is an oral solid dosage form, 
                        the Secretary shall establish a formula for 
                        determining the amount specified in this 
                        subsection with respect to such part D 
                        rebatable drug and an applicable year with 
                        consideration of the single source drug or an 
                        innovator multiple source drug.
                            ``(ii) Line extension defined.--In this 
                        subparagraph, the term `line extension' means, 
                        with respect to a part D rebatable drug, a new 
                        formulation of the drug (as determined by the 
                        Secretary), such as an extended release 
                        formulation, but does not include an abuse-
                        deterrent formulation of the drug (as 
                        determined by the Secretary), regardless of 
                        whether such abuse-deterrent formulation is an 
                        extended release formulation.
    ``(d) Rebate Deposits.--Amounts paid as rebates under subsection 
(c) shall be deposited into the Medicare Prescription Drug Account in 
the Federal Supplementary Medical Insurance Trust Fund established 
under section 1841.
    ``(e) Civil Money Penalty.--In the case of a manufacturer of a part 
D rebatable drug with an agreement in effect under this section who has 
failed to comply with the terms of the agreement under subsection 
(b)(1)(B) with respect to such drug for an applicable year, the 
Secretary may impose a civil money penalty on such manufacturer in an 
amount equal to 125 percent of the amount specified in subsection (c) 
for such drug for such year. The provisions of section 1128A (other 
than subsections (a) (with respect to amounts of penalties or 
additional assessments) and (b)) shall apply to a civil money penalty 
under this subsection in the same manner as such provisions apply to a 
penalty or proceeding under section 1128A(a).
    ``(f) Judicial Review.--There shall be no judicial review of the 
following:
            ``(1) The determination of units under this section.
            ``(2) The determination of whether a drug is a part D 
        rebatable drug under this section.
            ``(3) The calculation of the rebate amount under this 
        section.
    ``(g) Definitions.--In this section:
            ``(1) Part d rebatable drug defined.--
                    ``(A) In general.--The term `part D rebatable drug' 
                means a drug or biological that would (without 
                application of this section) be a covered part D drug, 
                except such term shall, with respect to an applicable 
                year, not include such a drug or biological if the 
                average total cost under a prescription drug plan under 
                this part or MA-PD plan under part C for such year per 
                individual who uses such a drug or biological, as 
                determined by the Secretary, are less than, subject to 
                subparagraph (B), $100, as determined by the Secretary 
                using the most recent data available or, if data is not 
                available, as estimated by the Secretary.
                    ``(B) Increase.--The dollar amount applied under 
                subparagraph (A)--
                            ``(i) for 2023, shall be the dollar amount 
                        specified under such subparagraph for 2022, 
                        increased by the percentage increase in the 
                        consumer price index for all urban consumers 
                        (United States city average) as of January of 
                        2022; and
                            ``(ii) for a subsequent year, shall be the 
                        dollar amount specified in this subparagraph 
                        (or subparagraph (A)) for the previous year, 
                        increased by the percentage increase in the 
                        consumer price index for all urban consumers 
                        (United States city average) as of January of 
                        the previous year.
                Any dollar amount specified under this subparagraph 
                that is not a multiple of $10 shall be rounded to the 
                nearest multiple of $10.
            ``(2) Unit defined.--The term `unit' means, with respect to 
        a part D rebatable drug, the lowest identifiable quantity (such 
        as a capsule or tablet, milligram of molecules, or grams) of 
        the part D rebatable drug that is dispensed to individuals 
        enrolled under a prescription drug plan under this part or an 
        MA-PD plan under part C.
            ``(3) Payment amount benchmark year.--The term `payment 
        amount benchmark year' means the year beginning January 1, 
        2016.
            ``(4) Benchmark period cpi-u.--The term `benchmark period 
        CPI-U' means the consumer price index for all urban consumers 
        (United States city average) for January 2016.
            ``(5) Rebate period cpi-u.--The term `rebate period CPI-U' 
        means, with respect to an applicable year, the consumer price 
        index for all urban consumers (United States city average) for 
        January of such year.
            ``(6) Average manufacturer price.--The term `average 
        manufacturer price' has the meaning, with respect to a part D 
        rebatable drug of a manufacturer for an applicable year, given 
        such term in section 1927(k)(1), with respect to a covered 
        outpatient drug of a manufacturer for a rebate period under 
        section 1927. For purposes of applying the previous sentence, 
        with respect to a part D rebatable drug of a manufacturer and 
        an applicable year, the Secretary shall use the information 
        with respect to the average manufacturer price for such drug 
        reported by the manufacturer under section 1927(b)(3) with 
        respect to each of the quarters in the applicable year and 
        calculate an annual average manufacturer price for such 
        applicable year as the average of such average manufacturer 
        prices for each such quarter, weighted by units of such drug 
        sold or dispensed with respect to such applicable year.''.
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