Title: Prescription Drug Affordability and Access Act
Policy area: Health

Summary:
Prescription Drug Affordability and Access Act
This bill addresses prescription drug costs and access. For example, the bill (1) establishes within the Department of Health and Human Services the Bureau of Prescription Drug Affordability and Access to review the wholesale acquisition costs of prescription drugs, and (2) authorizes the Centers for Medicare & Medicaid Services to negotiate Medicare drug prices.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3166 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  2d Session
                                S. 3166

             To lower the cost of drugs for all Americans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 8, 2020

 Mr. Booker (for himself, Mr. Sanders, and Ms. Harris) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
             To lower the cost of drugs for all Americans.

    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 Affordability and 
Access Act''.

SEC. 2. ESTABLISHMENT OF THE BUREAU OF PRESCRIPTION DRUG AFFORDABILITY 
              AND ACCESS.

    (a) Establishment.--
            (1) In general.--There is established within the Department 
        of Health and Human Services an independent bureau, known as 
        the Bureau of Prescription Drug Affordability and Access (in 
        this Act referred to as the ``Bureau'') to carry out the duties 
        described in this section. The purposes of the Bureau are to--
                    (A) attain lower prescription drug costs for 
                patients;
                    (B) decrease government expenditures on 
                prescription drugs; and
                    (C) ensure access to prescription drugs.
            (2) Executive agency.--The Bureau shall be considered an 
        Executive agency, as defined in section 105 of title 5, United 
        States Code.
            (3) Director.--
                    (A) Appointment.--The Bureau shall be headed by a 
                Director (in this Act referred to as the ``Director'') 
                who shall be appointed by the President, by and with 
                the advice and consent of the Senate.
                    (B) Qualification.--The President shall nominate 
                the Director from among individuals who are citizens of 
                the United States.
                    (C) Term.--The Director shall serve for a term of 5 
                years. The term of the first Director to be appointed 
                shall begin on the date that is 180 days after the date 
                of enactment of this Act.
            (4) Consultation.--
                    (A) In general.--In carrying out the duties under 
                this section, the Bureau shall regularly consult with 
                relevant stakeholders, including patients, 
                representatives of relevant Federal agencies, and 
                medical and health care finance experts. The Bureau 
                shall have regular public meetings to solicit input 
                from relevant stakeholders.
                    (B) Patient engagement.--
                            (i) In general.--The Director shall ensure 
                        that patients or organizations representing 
                        patients have opportunities to meaningfully 
                        engage with the Bureau as it conducts its work, 
                        including while the Bureau makes appropriate 
                        price determinations under section 3(d). Such 
                        opportunities may include holding regular 
                        panels, forums, and other meetings for patient 
                        engagement.
                            (ii) Petition.--The Director shall 
                        establish a process by which patients can 
                        petition the entity and raise concerns about 
                        the price of their prescription drugs.
                    (C) Consumer advisory council.--
                            (i) Establishment.--The Director shall 
                        establish a Consumer Advisory Council to advise 
                        and consult with the Bureau as it conducts its 
                        work.
                            (ii) Membership.--The Council established 
                        under this subparagraph shall be composed of 
                        not fewer than 6 members appointed by the 
                        Director. In appointing members to the Council, 
                        the Director shall ensure that at least half of 
                        the members of the Council are patients or 
                        organizations representing patients, 
                        particularly those who have been significantly 
                        impacted by high priced medications. The 
                        Director shall also seek to appoint members to 
                        the Council who are experts in relevant areas, 
                        including medicine and health care finance.
                            (iii) Meetings.--The Consumer Advisory 
                        Council shall meet from time to time at the 
                        call of the Director but shall meet at least 
                        twice a year.
            (5) Employment condition.--
                    (A) In general.--An individual who has a conflict 
                of interest shall not be appointed to be a member of, 
                or employed by, the Bureau, including the Consumer 
                Advisory Council established under paragraph (4)(C).
                    (B) Disclosure.--Individuals under consideration 
                for employment by, or appointment to, the Bureau, 
                including the Consumer Advisory Council, must disclose 
                any potential conflict of interest, including the type, 
                nature, and magnitude of the interests involved.
    (b) Duties.--The Bureau shall carry out the following duties:
            (1) Carry out the provisions of section 3.
            (2) Submit the annual reports under subsection (c).
            (3) Any other duty that the Director determines 
        appropriate.
    (c) Annual Reporting.--
            (1) In general.--Not later than January 1, 2021, and 
        annually thereafter, the Director shall submit to Congress a 
        report on the activities of the Bureau.
            (2) Contents.--Each report under paragraph (1) shall 
        contain the following:
                    (A) A description of the activities of the Bureau, 
                including--
                            (i) the total estimated savings achieved by 
                        the Bureau since the most recent report;
                            (ii) the disaggregated savings achieved 
                        since the most recent report, including by each 
                        therapeutic class of prescription drugs;
                            (iii) a summary of the information 
                        submitted by prescription drug manufacturers as 
                        required under section 3; and
                            (iv) the impact of the Bureau's work on 
                        patient affordability and access to 
                        prescription drugs.
                    (B) Recommendations for such legislation and 
                administrative action as the Bureau determines 
                appropriate.
                    (C) A copy of each report submitted by drug 
                manufacturers as required under section 3.
                    (D) Other items that the Bureau determines 
                appropriate.
    (d) Funding.--There are appropriated, from amounts in the Treasury 
not otherwise appropriated, $50,000,000 for fiscal year 2020 and each 
subsequent fiscal year to carry out the activities of the Bureau. 
Amounts appropriated under the preceding sentence shall remain 
available until expended.

SEC. 3. PRESCRIPTION DRUG CONSUMER PRICE PROTECTIONS.

    (a) Review of Prices.--
            (1) In general.--The Bureau shall conduct reviews of the 
        prices of prescription drugs to ensure that the wholesale 
        acquisition cost of each such drug is appropriate.
            (2) Information on prescription drugs approved as of 
        enactment.--
                    (A) Manufacturer submission.--With respect to any 
                prescription drug that, as of the date of enactment of 
                this Act, has in effect an application approved under 
                section 505 of the Federal Food, Drug, and Cosmetic Act 
                (21 U.S.C. 355) or section 351 of the Public Health 
                Service Act (42 U.S.C. 262), each manufacturer, not 
                later than 180 days after such date of enactment, shall 
                provide to the Bureau the following information:
                            (i) The name of the prescription drug.
                            (ii) A description of the prescription drug 
                        and its approved indications.
                            (iii) The number of individuals in the 
                        United States and globally for which such 
                        prescription drug is clinically indicated.
                            (iv) A list of patents that claim the 
                        prescription drug, a use of the prescription 
                        drug, a form of the prescription drug, a method 
                        of use of the prescription drug, or a method of 
                        manufacture of the prescription drug.
                            (v) A list of government-granted 
                        exclusivities that prohibit the submission or 
                        approval of a prescription drug and the date 
                        that each such government-granted exclusivity 
                        was granted.
                            (vi) The date on which the prescription 
                        drug was approved under such section 505 or 
                        such section 351 of the Public Health Service 
                        Act.
                            (vii) The total expenditures of the 
                        manufacturer on--
                                    (I) domestic and foreign research 
                                and development, including an itemized 
                                description of--
                                            (aa) clinical research, 
                                        including the cost of each 
                                        clinical trial associated with 
                                        the prescription drug, reported 
                                        separately for each clinical 
                                        trial;
                                            (bb) the development of 
                                        alternative dosage forms and 
                                        strengths for the prescription 
                                        drug molecule or combinations, 
                                        including the molecule;
                                            (cc) other prescription 
                                        drug development activities, 
                                        such as nonclinical laboratory 
                                        studies and record and report 
                                        maintenance;
                                            (dd) pursuing new or 
                                        expanded indications for such 
                                        prescription drug through 
                                        supplemental applications under 
                                        such section 505 or such 
                                        section 351;
                                            (ee) carrying out 
                                        postmarket requirements related 
                                        to such prescription drug, 
                                        including under subsection (o) 
                                        of such section 505 or such 
                                        section 351;
                                            (ff) carrying out risk 
                                        evaluation and mitigation 
                                        strategies in accordance with 
                                        section 505-1 of the Federal 
                                        Food, Drug, and Cosmetic Act 
                                        (21 U.S.C. 355-1) or such 
                                        section 351; and
                                            (gg) marketing research;
                                    (II) the acquisition of 
                                prescription 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;
                                    (III) other acquisitions relating 
                                to the prescription drug, including for 
                                the purchase of patents and licensing 
                                or acquisition of any corporate entity 
                                owning any rights to the drug during or 
                                after development of the prescription 
                                drug;
                                    (IV) the cost of manufacturing the 
                                prescription drug;
                                    (V) marketing, advertising, and 
                                educating for the promotion of a 
                                prescription drug, including a 
                                breakdown of amounts aimed at 
                                consumers, prescribers, managed care 
                                organizations, and others, irrespective 
                                of whether a prescription drug is 
                                mentioned in marketing, advertising, or 
                                educating; and
                                    (VI) patient assistance and co-pay 
                                programs that the manufacturer sponsors 
                                or contributes to.
                            (viii) The gross revenue, net revenue, 
                        gross profit, and net profit of the 
                        manufacturer with respect to such prescription 
                        drug.
                            (ix) The total number of units of such 
                        prescription drug that were sold in interstate 
                        commerce.
                            (x) Pricing information with respect to the 
                        sale of such prescription drug, including--
                                    (I) the current wholesale 
                                acquisition cost;
                                    (II) the introductory wholesale 
                                acquisition cost;
                                    (III) the net average price 
                                realized by pharmacy benefit managers 
                                for such prescription drug 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;
                                    (IV) the list price of such 
                                prescription drug charged to purchasers 
                                in each applicable prescription drug 
                                reference country;
                                    (V) the net price of such 
                                prescription drug, after accounting for 
                                discounts, rebates, or other financial 
                                considerations, charged to purchasers 
                                in each applicable prescription drug 
                                reference country;
                                    (VI) a description of all price 
                                changes of the prescription drug since 
                                the introductory wholesale acquisition 
                                cost; and
                                    (VII) the average net price of such 
                                prescription drug for each year since 
                                first being sold in the United States.
                            (xi) Any Federal benefits and amounts and 
                        periods of impact for each such benefit 
                        received by the manufacturer with respect to 
                        the prescription drug, including tax credits, 
                        Federal grants, patent applications that 
                        benefitted from such grants, patent extensions, 
                        exclusivity periods, and waivers of fees.
                            (xii) The percentage of research and 
                        development expenditures described in this 
                        section that were derived from Federal funds.
                            (xiii) Executive compensation for the chief 
                        executive officer, chief financial officer, and 
                        the three 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.
                            (xiv) Other information as the Director may 
                        require.
                    (B) Bureau review priorities.--In reviewing 
                submissions under subparagraph (A), the Bureau shall 
                prioritize prescription drugs that meet any of the 
                following criteria:
                            (i) In the top 50th percentile of net 
                        spending on prescription drugs under any 
                        Federal program, including the Medicare program 
                        under title XVIII of the Social Security Act 
                        (42 U.S.C. 1395 et seq.) or the Medicaid 
                        program under title XIX of such Act (42 U.S.C. 
                        1396 et seq.).
                            (ii) In the top 50th percentile of 
                        utilization under any Federal program, 
                        including such Medicare program or such 
                        Medicaid program.
                            (iii) Experienced an increase in the 
                        wholesale acquisition cost of 25 percent or 
                        more over the preceding 3 years.
                            (iv) Other qualifications, as determined by 
                        the Director.
            (3) Information on prescription drugs approved after 
        enactment.--With respect to any prescription drug approved 
        under section 505 of the Federal Food, Drug, and Cosmetic Act 
        (21 U.S.C. 355) or section 351 of the Public Health Service Act 
        (42 U.S.C. 262) after the date of enactment of this Act, each 
        manufacturer, not later than 45 days prior to introducing such 
        prescription drug into interstate commerce in the United 
        States, shall provide to the Bureau the following information:
                    (A) The information described in the following 
                provisions of paragraph (2)(A):
                            (i) Clauses (i) through (vi).
                            (ii) Subclauses (I) through (IV) of clause 
                        (vii).
                            (iii) Clauses (xi) through (xiv).
                    (B) Pricing information with respect to the sale of 
                such prescription drug, including--
                            (i) the planned introductory wholesale 
                        acquisition cost;
                            (ii) the list price of such prescription 
                        drug charged or planned to be charged to 
                        purchasers in each applicable prescription drug 
                        reference country; and
                            (iii) the net price of such prescription 
                        drug, after accounting for discounts, rebates, 
                        or other financial considerations, charged or 
                        planned to be charged to purchasers in each 
                        applicable prescription drug reference country, 
                        as defined in this Act.
                    (C) The estimated annual profit and revenue that 
                will be generated by the prescription drug, both 
                domestically and globally.
                    (D) Other information as the Director may require.
    (b) Review of Certain Price Increases.--
            (1) In general.--The Bureau shall conduct a review of the 
        price of a prescription drug for which a submission is required 
        under paragraph (2).
            (2) Notification of intention to increase price.--If a 
        manufacturer intends to increase the wholesale acquisition cost 
        of a prescription drug by more than the percentage by which the 
        Consumer Price Index for All Urban Consumers for that year 
        exceeds such index for the preceding calendar year, such 
        manufacturer, not later than 60 days before the price increase 
        takes effect, shall submit to the Bureau the following 
        information:
                    (A) The information described in subsection 
                (a)(2)(A).
                    (B) The planned increase in the wholesale 
                acquisition cost and the planned date the increase will 
                go into effect.
                    (C) A justification of the planned increase in 
                wholesale acquisition cost.
                    (D) Any other information as the Secretary may 
                require.
    (c) Revenue Benchmark Review.--
            (1) In general.--The Bureau shall conduct a review of a 
        prescription drug when revenue for such prescription drug 
        surpasses the revenue benchmark in order to ensure that the 
        wholesale acquisition cost of the prescription drug remains 
        appropriate.
            (2) Required submission.--Not later than 60 days before the 
        manufacturer of a prescription drug anticipates the global 
        revenue for such drug will surpass the revenue benchmark, the 
        manufacturer shall submit to the Bureau the information 
        outlined in subsection (a)(2)(A).
            (3) Revenue benchmark.--
                    (A) In general.--Subject to subparagraph (B), for 
                purposes of this subsection, the revenue benchmark is 
                $5,000,000,000 in global revenue.
                    (B) Update.--The Bureau may update the amount of 
                the global benchmark over time.
    (d) General Authority To Review.--
            (1) In general.--The Bureau may at any time review the 
        wholesale acquisition cost of a prescription drug to determine 
        if such price is appropriate, including in response to a 
        patient petition as described in section (2)(a)(3)(B)(ii).
            (2) Procedure.--The Bureau shall notify the manufacturer of 
        a prescription drug it wishes to review pursuant to the 
        authority under this subsection, and, within 45 days of 
        receiving such a notification, the manufacturer shall submit to 
        the Bureau information the Bureau determines necessary for its 
        review.
    (e) Appropriate Price Determinations.--
            (1) Considerations.--In determining whether the wholesale 
        acquisition cost or proposed wholesale acquisition cost of a 
        prescription drug is appropriate, the Bureau shall consider the 
        following:
                    (A) The size of the affected patient population.
                    (B) The therapeutic benefits of the prescription 
                drug to patients.
                    (C) The impact of the price on access to the 
                prescription drug, including for patients who are 
                uninsured, and the associated financial burden on 
                patients that utilize such prescription drug.
                    (D) The total annual Federal Government 
                expenditures on the prescription drug and the budgetary 
                impact of Federal health programs providing coverage of 
                the prescription drug.
                    (E) The risk-adjusted value of Federal Government 
                subsidies and investments related to the prescription 
                drug.
                    (F) The costs associated with the development of 
                the prescription drug.
                    (G) The number of similarly effective prescription 
                drugs or alternative treatment regimens for each 
                approved use of such prescription drug.
                    (H) Whether the prescription drug provided a 
                significant improvement in health outcomes, compared to 
                other therapies available at the time of its approval, 
                as determined through clinical effectiveness.
                    (I) The current wholesale acquisition cost of 
                comparable prescription drugs in the United States, to 
                the extent that those prices have been deemed 
                appropriate.
                    (J) The cumulative and expected global revenue 
                generated by the prescription drug.
                    (K) The price of the drug in other countries, 
                including in the prescription drug reference countries.
                    (L) The public health benefit of the drug.
                    (M) The information that the manufacturer submits 
                to the Bureau as required under this section.
                    (N) Any other information, as the Bureau requires.
            (2) Special rules.--
                    (A) Interim appropriate price of prescription 
                drugs.--
                            (i) In general.--For each prescription drug 
                        described in clause (ii), the Bureau shall--
                                    (I) establish an interim 
                                appropriate price, which shall be the 
                                lesser of--
                                            (aa) the median list price 
                                        of the prescription drug in the 
                                        prescription drug reference 
                                        countries; or
                                            (bb) if applicable, the 
                                        appropriate price determination 
                                        made by the Bureau; and
                                    (II) direct the manufacturer to set 
                                the wholesale acquisition cost at a 
                                level that does not exceed the interim 
                                appropriate price.
                            (ii) Applicable drugs.--A prescription drug 
                        described in this clause is a prescription 
                        drug--
                                    (I) that--
                                            (aa) as of the date of the 
                                        enactment of this Act, has in 
                                        effect an application approved 
                                        under section 505(c) of the 
                                        Federal Food, Drug, and 
                                        Cosmetic Act (21 U.S.C. 355(c)) 
                                        or section 351(a) of the Public 
                                        Health Service Act (42 U.S.C. 
                                        262(a)); and
                                            (bb) is not a listed drug 
                                        or a reference product for more 
                                        than 2 prescription drugs or 
                                        biological products approved 
                                        and currently marketed under 
                                        section 505(j) of the Federal 
                                        Food, Drug, and Cosmetic Act 
                                        (21 U.S.C. 355(j)) or under 
                                        section 351(k) of the Public 
                                        Health Service Act (42 U.S.C. 
                                        262(k)); or
                                    (II) with respect to which the 
                                Secretary has authorized under 
                                subsection (g) the use of any patent, 
                                clinical trial data, or other 
                                government-granted exclusivity related 
                                to such drug by another sponsor, until 
                                the date that is 1 year after the date 
                                on which another application for such 
                                drug, for which the sponsor relies upon 
                                a such authorization under subsection 
                                (g), is approved under such section 505 
                                or such section 351.
                    (B) Spike in price.--If a manufacturer increases 
                the wholesale acquisition cost of a prescription drug 
                by more than the percentage by which the Consumer Price 
                Index for All Urban Consumers for that year exceeds 
                such index for the preceding calendar year, such 
                prescription drug shall be deemed to have a wholesale 
                acquisition cost that is not appropriate unless the 
                Bureau determines, based on the information submitted 
                under paragraphs (2) and (3) of subsection (a) and 
                under subsection (b)(2) and the considerations 
                described in paragraph (1), that the wholesale 
                acquisition cost is appropriate.
            (3) Opportunity to comment.--Prior to making a 
        determination on whether the wholesale acquisition cost of a 
        prescription drug is appropriate, the Bureau shall ensure 
        relevant stakeholders, including patients, have an opportunity 
        to comment.
    (f) Required Actions if Price Is Not Appropriate.--
            (1) Notice and requirement to remit excess.--If the Bureau 
        determines that the wholesale acquisition cost of a 
        prescription drug is not appropriate, the Bureau shall notify 
        and direct the manufacturer to lower the wholesale acquisition 
        cost to a level that would be deemed appropriate. The Bureau 
        shall also require the manufacturer to remit the excess revenue 
        earned as a result of the prescription drug having a price that 
        is not appropriate.
            (2) Patient rebate.--The Director of the Bureau shall 
        establish a process to distribute funds remitted under 
        paragraph (1) to patients who were impacted by the prescription 
        drug having a price that is not appropriate.
    (g) Enforcement.--
            (1) In general.--If, within 30 days of receiving a notice 
        that the wholesale acquisition cost of a prescription drug is 
        not appropriate, the manufacturer of such prescription drug 
        fails to lower the wholesale acquisition cost of a prescription 
        drug or fails to remit excessive revenue earned in accordance 
        with subsection (f), the Director shall notify the Secretary 
        and the Secretary shall authorize the use of any patent, 
        clinical trial data, or other government-granted exclusivity by 
        an entity for purposes of manufacturing such prescription drug 
        for sale. An entity that wishes to manufacture such 
        prescription drug for sale must agree to--
                    (A) set the wholesale acquisition cost of such 
                prescription drug at or below the level that the Bureau 
                determines is appropriate; and
                    (B) provide the prescription drug manufacturer with 
                reasonable compensation, which shall be determined by 
                the Bureau, based on the information submitted by the 
                manufacturer under this section including--
                            (i) the risk-adjusted value of any Federal 
                        Government subsidies and investments in 
                        research and development used to support the 
                        development of such drug;
                            (ii) the risk-adjusted value of any 
                        investment made by such manufacturer in the 
                        research and development of such drug;
                            (iii) the impact of the price, including 
                        license compensation payments, on meeting the 
                        medical need of all patients;
                            (iv) the relationship between the price of 
                        such drug, including compensation payments and 
                        the health benefits of such drug; and
                            (v) other relevant information determined 
                        appropriate by the Secretary, in coordination 
                        with the Director.
            (2) Post licensing.--
                    (A) In general.--Any manufacturer of a prescription 
                drug that fails to comply with the interim appropriate 
                price under subsection (e)(2)(A)(i)(I) shall be subject 
                to a civil monetary penalty of not less than an amount 
                equal to 150 percent of all revenues obtained by the 
                manufacturer that are in excess of the expected 
                revenues at the interim appropriate price.
                    (B) Procedure.--The provisions of section 1128A, 
                other than subsections (a) and (b) and the first 
                sentence of subsection (c)(1) of such section, shall 
                apply to civil monetary penalties under this paragraph 
                in the same manner as such provisions apply to a 
                penalty or proceeding under section 1128A.
                    (C) Transfer to national institutes of health.--The 
                civil monetary penalties collected under this paragraph 
                shall be transferred to the National Institutes of 
                Health to supplement activities related to 
                pharmaceutical research and development.
    (h) Definitions.--In this Act:
            (1) Conflict of interest.--The term ``conflict of 
        interest'' means an association, including a financial or 
        personal association, or past employment, that has the 
        potential to bias or have the appearance of biasing an 
        individual's decisions.
            (2) Excess revenue.--The term ``excess revenue'' means the 
        difference between a prescription drug's wholesale acquisition 
        cost at the time of the Bureau review under this section and 
        the maximum wholesale acquisition price for the prescription 
        drugs that the Bureau determines to be appropriate.
            (3) Government-granted exclusivity.--The term ``government-
        granted exclusivity'' means prohibitions on the submission or 
        effective approval of prescription 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 such 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 such Act (21 U.S.C. 355a).
                    (D) Section 505E of such Act (21 U.S.C. 355f).
                    (E) Section 527 of such Act (21 U.S.C. 360cc).
                    (F) Section 351(k)(7) of such 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.
            (4) Listed drug.--The term ``listed drug'' means a drug 
        listed under section 505(j)(7) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355(j)(7)).
            (5) Manufacturer.--The term ``manufacturer'', with respect 
        to a prescription drug, means an entity that--
                    (A) is the holder of the approved application under 
                section 505 of the Federal Food, Drug, and Cosmetic Act 
                (21 U.S.C. 355) or under section 351 of the Public 
                Health Service Act (42 U.S.C. 262); and
                    (B) is responsible for setting the price of the 
                prescription drug.
            (6) Prescription drug.--The term ``prescription drug'' 
        means any drug subject to section 505 of the Federal Food, 
        Drug, and Cosmetic Act or section 351 of the Public Health 
        Service Act and to section 503(b)(2) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 353(b)(2)).
            (7) Prescription drug reference country.--The term 
        ``prescription drug reference country'' means Japan, Germany, 
        the United Kingdom, France, Italy, Canada, Australia, Spain, 
        the Netherlands, Switzerland, and Sweden.
            (8) Reference product.--The term ``reference product'' has 
        the meaning given the term in section 351(i) of the Public 
        Health Service Act (42 U.S.C. 262(i)).
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (10) Wholesale acquisition cost.--The term ``wholesale 
        acquisition cost'' has the meaning given that term in section 
        1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
        3a(c)(6)(B)).

SEC. 4. REPEAL OF MEDICARE'S NONINTERFERENCE CLAUSE.

    Section 1860D-11 of the Social Security Act (42 U.S.C. 1395w-111) 
is amended by striking subsection (i).
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