I 115th CONGRESS 1st Session H. R. 4116 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.

1. Short title This Act may be cited as the Transparent Drug Pricing Act of 2017 . 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: 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). .