Protecting Medicare from Excessive Price Increases Act of 2018
This bill requires a drug manufacturer to pay a Medicare rebate on a single-source drug or biological in accordance with the extent to which the manufacturer's average sales price for the drug or biological increases faster than inflation.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5150 Introduced in House (IH)]
<DOC>
115th CONGRESS
2d Session
H. R. 5150
To amend title XVIII of the Social Security Act to require drug
manufacturers to pay a Medicare part B rebate for certain drugs if the
price of such drugs increases faster than inflation.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 1, 2018
Mr. Levin 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 B 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 ``Protecting Medicare from Excessive
Price Increases Act of 2018''.
SEC. 2. MEDICARE PART B REBATE BY MANUFACTURERS FOR CERTAIN DRUGS WITH
PRICES INCREASING FASTER THAN INFLATION.
(a) In General.--Section 1834 of the Social Security Act (42 U.S.C.
1395m) is amended by adding at the end the following new subsection:
``(w) No Payment Without Rebate by Manufacturers for Single Source
Drugs With Prices Increasing Faster Than Inflation.--
``(1) No payment for noncompliant manufacturers.--Subject
to the subsequent paragraphs of this subsection, no payment
shall be available under this part for a unit of a rebatable
drug of a manufacturer (as defined in section 1847A(c)(6)(A))
for each calendar quarter beginning on or after July 1, 2019,
if such manufacturer has failed to comply with the requirement
under paragraph (2)(B)(i) for the rebate period with respect to
such calendar quarter.
``(2) Requirements.--
``(A) Secretarial provision of information.--Not
later than 6 months after the end of each rebate period
with respect to a calendar quarter beginning on or
after July 1, 2019, the Secretary shall, for each
rebatable drug, report to each manufacturer of such
rebatable drug--
``(i) information on the total number of
units described in subparagraph (A)(i) of
paragraph (4) with respect to such drug and
rebate period;
``(ii) information on the amount (if any)
of the excess average sales price increase
described in subparagraph (A)(ii) of such
paragraph for such drug and period; and
``(iii) the rebate amount specified under
such paragraph for such rebatable drug and
period.
``(B) Manufacturer requirements.--The manufacturer
of a rebatable drug, for such drug, shall meet each of
the following requirements for each rebate period with
respect to a calendar quarter beginning on or after
July 1, 2019:
``(i) Rebate payment.--The manufacturer
shall, not later than 30 days after the date of
receipt of the information described in
subparagraph (A) from the Secretary, provide to
the Secretary a rebate that is equal to the
amount specified in paragraph (4) for such drug
for such rebate period.
``(ii) Report of asp.--The manufacturer
shall report to the Secretary the information
described in section 1927(b)(3)(A)(iii) in a
time and manner consistent with the reporting
under such section, unless such information is
already reported in accordance with section
1927(b)(3)(C).
``(3) Rebatable drug defined.--In this subsection, the term
`rebatable drug' means a drug or biological (as defined in
section 1847A(c)(6)(D)) paid for under this part, except such
term shall not include such a drug or biological--
``(A) to the extent the units of such drug or
biological are furnished as part of a grouping of items
and services and paid for as such a grouping in an
ambulatory payment classification under section 1833(t)
or in a single payment under section 1833(i) (instead
of separately payable under such respective section);
``(B) to the extent payment for the units of such
drug or biological is included under the single payment
system for renal dialysis services under section
1881(b)(14);
``(C) to the extent the average total allowed
charges per year per individual that uses such drug or
biological are less than $100; or
``(D) that is a vaccine described in subparagraph
(A) or (B) of section 1861(s)(10).
``(4) Rebate amount.--
``(A) In general.--For purposes of paragraph
(2)(B)(i), the amount specified in this paragraph for a
rebatable drug assigned to a billing and payment code
for a rebate period is, subject to paragraph (5), the
amount equal to the product of--
``(i) the total number of units for which
payment was made under this part for such
rebatable drug during the rebate period; and
``(ii) the amount (if any) by which--
``(I) the applicable manufacturer's
average sales price (as determined
under subparagraph (B)) for such
rebatable drug for sales that occurred
two quarters prior to the rebate
period; exceeds
``(II) the inflation-adjusted ASP
determined under subparagraph (C) for
such rebatable drug for sales that
occurred two quarters prior to the
rebate period.
``(B) Determination of applicable manufacturer's
asp.--The applicable manufacturer's average sales
price, with respect to a manufacturer, determined under
this subparagraph for a billing and payment code is the
weighted average of the average sales prices of all of
the rebatable drugs of the manufacturer identified by a
national drug code assigned to such billing and payment
code for sales that occurred two quarters prior to the
rebate period.
``(C) Determination of inflation-adjusted asp.--The
inflation-adjusted ASP determined under this
subparagraph for a rebatable drug for a rebate period
is--
``(i) the average sales price for the
billing and payment code for all units of such
drug for sales that occurred in the ASP
benchmark quarter (as defined in subparagraph
(E)); increased by
``(ii) the percentage by which the rebate
period CPI-U (as defined in subparagraph (G)
for the rebate period exceeds the benchmark
period CPI-U (as defined in subparagraph (F)).
``(D) Rebate period.--For purposes of this
subsection, subject to paragraph (5)(E), the term
`rebate period' means, with respect to a calendar
quarter, the period that is 2 calendar quarters prior
to such calendar quarter.
``(E) ASP benchmark quarter.--The term `ASP
benchmark quarter' means the calendar quarter beginning
January 1, 2016.
``(F) 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.
``(G) Rebate period cpi-u.--The term `rebate period
CPI-U' means, with respect to a rebate period, the
consumer price index for all urban consumers (United
States city average) for the first month of the
calendar quarter that is two calendar quarters prior to
the rebate period.
``(5) Special treatment of certain drugs.--
``(A) Subsequently approved drugs.--Subject to
subparagraph (B), in the case of a single source
rebatable drug first approved by the Food and Drug
Administration after January 1, 2016, clause (i) of
paragraph (4)(C) shall be applied as if the term `ASP
benchmark quarter' were defined under paragraph (4)(E)
as the third full calendar quarter after the day on
which the drug was first marketed and clause (ii) of
paragraph (4)(C) shall be applied as if the term
`benchmark period CPI-U' were defined under paragraph
(4)(F) as if the reference to `January 2016' under such
paragraph were a reference to `the first month of the
third full calendar quarter after the day on which the
drug was first marketed'.
``(B) Special rule for new drugs.--In applying this
subsection in the case of a newly approved single
source rebatable drug for which a payment and billing
code has not previously been established the first
calendar quarter to which this subsection shall apply
shall be the sixth full calendar quarter after the day
on which the drug was first marketed.
``(6) Adjustment of coinsurance.--With respect to
coinsurance under this part with respect to a rebatable drug
for which a rebate is paid under this subsection, the Secretary
shall, on an annual basis, pay the individual an amount as if
the coinsurance for a rebatable drug for which payment is made
under this part for such individual were computed as if the
payment amount incurred under this part for such drug were
ratably reduced to reflect the rebate amount under this
subsection for such drug.
``(7) Rebate deposits.--Amounts paid as rebates under
paragraph (2)(B)(i) shall be deposited into the Federal
Supplementary Medical Insurance Trust Fund established under
section 1841.
``(8) Exemptions.--
``(A) Other rebates or discounts.--The Secretary
shall waive the rebate under paragraph (2)(B)(i) with
respect to the units of a rebatable drug of a
manufacturer that is furnished to an individual, if
such manufacturer, with respect to the furnishing of
such units of such drug, provides for discounts under
section 340B of the Public Health Service Act or for
rebates under section 1927.
``(B) Shortages.--The Secretary may reduce or waive
the rebate under paragraph (2)(B)(i) with respect to a
rebatable drug in the case of a shortage of such drug
or other exigent circumstances, as determined by the
Secretary.
``(9) Verification surveys.--The Secretary may survey
wholesalers and manufacturers that directly distribute
rebatable drugs, when necessary, to verify the manufacturer's
average sales prices (including wholesale acquisition cost)
reported under paragraph (2)(B)(ii). The Secretary may impose a
civil monetary penalty in an amount not to exceed $100,000 on a
wholesaler or manufacturer that refuses a request for
information about charges or prices by the Secretary in
connection with a survey under this subparagraph or knowingly
provides false information. 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 subparagraph in the same manner
as such provisions apply to a penalty or proceeding under
section 1128A(a).
``(10) Civil monetary penalty.--In lieu of applying
paragraph (1) for a calendar quarter, in the case of a
manufacturer of a rebatable drug who has failed to comply with
the requirements under paragraph (2)(B)(i) for such drug for
the rebate period with respect to such calendar quarter, the
Secretary may, pursuant to regulations, impose a civil monetary
penalty on such manufacturer in an amount not to exceed 2
percent of the total expenditures under this part for such drug
for such failure with respect to such drug and quarter. 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
subparagraph in the same manner as such provisions apply to a
penalty or proceeding under section 1128A(a).
``(11) Study and report.--
``(A) Study.--The Secretary shall conduct a study
of the feasibility of and operational issues involved
with the following:
``(i) Including multisource drugs (as
defined in section 1847A(c)(3)(C)) in the
rebate system under this subsection.
``(ii) Including drugs and biologicals paid
for under MA plans under part C in the rebate
system under this subsection.
``(iii) Including drugs excluded under
paragraph (3) in the rebate system under this
subsection.
``(B) Report.--Not later than 3 years after the
date of the enactment of this subsection, the Secretary
shall submit to Congress a report on the study
conducted under subparagraph (A).
``(12) Application to multisource drugs.--The Secretary
may, based on the report submitted under paragraph (11) and
pursuant to rulemaking, apply the provisions of this subsection
to multisource drugs (as defined in section 1847A(c)(3)(C)).''.
(b) Providing MedPAC Access to Information.--Section 1927(b)(3)(D)
of the Social Security Act is amended--
(1) in clause (iv), by striking at the end ``and'';
(2) in clause (v), by striking at the end the period and
inserting ``, and''; and
(3) by inserting after clause (v) the following new clause:
``(vi) to permit the Medicare Payment
Advisory Commission to review the information
provided.''.
(c) Conforming Amendment to Part B ASP Calculation.--Section
1847A(c)(3) of the Social Security Act (42 U.S.C. 1395w-3a(c)(3)) is
amended by inserting ``or section 1834(w)'' after ``section 1927''.
<all>
Introduced in House
Introduced in House
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.
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.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Health.
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