Life-Sustaining Prescription Drug Price Relief Act of 2019
This bill establishes a series of oversight and disclosure requirements relating to the prices of life-sustaining prescription drugs. Specifically, the bill requires the Department of Health and Human Services (HHS) to review at least annually all life-sustaining drugs for excessive pricing; HHS must also review prices upon petition. HHS must create a public database with its determinations for each drug and report its overall findings and related activities.
Under the bill, a price is considered excessive if the domestic average manufacturing price exceeds 110% of the average price for the drug in Canada, the United Kingdom, Germany, France, and Japan. If a price does not meet this criteria, or if pricing information is unavailable in at least three of the aforementioned countries, the price is still considered excessive if it is higher than reasonable in light of specified factors, including cost, revenue, and the size of the affected patient population.
The bill also requires drug manufacturers, subject to civil penalties, to (1) report specified financial information for life-sustaining drugs, including research and advertising expenditures; and (2) negotiate the prices of excessively priced life-sustaining drugs under the Medicare prescription drug benefit with HHS.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5039 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 5039
To lower the prices of excessively costly life-sustaining prescription
drugs under part D of the Medicare program by requiring the Secretary
of Health and Human Services to negotiate their prices, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 12, 2019
Mr. Lipinski 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 lower the prices of excessively costly life-sustaining prescription
drugs under part D of the Medicare program by requiring the Secretary
of Health and Human Services to negotiate their prices, and for other
purposes.
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 ``Life-Sustaining Prescription Drug
Price Relief Act of 2019''.
SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED LIFE-SUSTAINING
PRESCRIPTION DRUGS.
(a) In General.--The Secretary, not later than 1 year after the
date of enactment of this Act, shall establish a process to conduct a
review of all life-sustaining prescription drugs, not less frequently
than once per calendar year, under which the Secretary determines under
subsection (b) whether the price of each such drug is excessive.
(b) Excessive Price Determinations.--
(1) International reference price.--
(A) In general.--The Secretary shall determine that
any life-sustaining prescription drug for which the
domestic average manufacturing price exceeds 110
percent of the average price charged for such drug in
the 5 reference countries to have an excessive price.
In assessing the extent to which the price is
excessive, the Secretary shall consider the factors
described in paragraph (2).
(B) Reference countries.--In this Act, the term
``reference countries'' means Canada, the United
Kingdom, Germany, France, and Japan.
(C) Requirement with respect to drugs for which
certain reference country information is not
available.--The Secretary shall make a determination
under paragraph (1) for every life-sustaining
prescription drug for which pricing information is
available for at least 3 of the 5 reference countries.
(2) Determinations based on other factors.--With respect to
any life-sustaining prescription drug that is not determined to
have an excessive price by operation of paragraph (1)
(including any drug for which there is insufficient data to
make such a determination under such paragraph), the Secretary
shall determine that such drug has an excessive price if the
price of the drug is higher than reasonable taking into account
the following factors:
(A) The size of the affected patient population.
(B) The risk adjusted value of Federal Government
subsidies and investments related to the drug.
(C) The costs associated with development of the
drug.
(D) Whether the drug provided a significant
improvement in health outcomes, compared to other
therapies available at the time of its approval.
(E) The cumulative global revenues generated by the
drug.
(F) Whether the domestic average manufacturer price
of the drug increased during any annual quarter by a
percentage that is more than the percentage increase in
the consumer price index for all urban consumers for
the respective annual quarter.
(G) Other factors the Secretary determines
appropriate.
(c) Petition for Determination.--
(1) In general.--Any person may petition the Secretary, in
accordance with section 553(e) of title 5, United States Code,
to make an excessive drug price determination for an applicable
drug under subsection (b)(2). Not later than 90 days after the
date of receipt of such a petition, subject to paragraph (2),
the Secretary shall--
(A) make a determination under subsection (b)(2)
regarding such drug; or
(B)(i) decline to make such a determination; and
(ii) make public the reasons why the Secretary has
declined to make such a determination.
(2) Exception.--The Secretary shall not make a
determination under subsection (b)(2) for a drug in response to
a petition under this section more frequently than once per
calendar year.
(3) Public availability.--The Secretary shall make any
petitions submitted under this subsection, together with any
documentation related to the petitions and the Secretary's
determinations on such petitions and rationale for such
determinations, publicly available, including by posting such
information on the database under section 5.
SEC. 3. ABOLISHING THE PROHIBITION ON MEDICARE NEGOTIATION OF DRUG
PRICES AND REQUIRING THE SECRETARY OF HEALTH AND HUMAN
SERVICES TO NEGOTIATE PRICES OF LIFE-SUSTAINING
PRESCRIPTION DRUGS FURNISHED UNDER PART D OF THE MEDICARE
PROGRAM.
Section 1860D-11 of the Social Security Act (42 U.S.C. 1395w-111)
is amended by striking subsection (i) and inserting the following new
subsection:
``(i) Requirement To Negotiate Prices With Respect to Certain Life-
Sustaining Prescription Drugs.--
``(1) In general.--With respect to any life-sustaining
prescription drug (as defined in section 6(4) of the Life-
Sustaining Prescription Drug Price Relief Act of 2019), if the
Secretary determines under section 2 of such Act that the price
of the drug is excessive, the Secretary shall, notwithstanding
any other provision of law, negotiate with manufacturers,
prescription drug plan sponsors, and MA organizations the total
payment (including any discounts, rebates, and other price
concessions) that may be made by such sponsors and
organizations during a negotiated price period (as specified by
the Secretary) for such drugs with respect to such drugs
furnished to individuals who are enrolled under a prescription
drug plan or under an MA-PD plan offered by such sponsor or
organization, respectively.
``(2) Price limitation.--In the case of a life-sustaining
prescription drug that is negotiated by the Secretary pursuant
to paragraph (1), the total payment described in such paragraph
may not exceed 110 percent of the average price charged for
such drug in the 5 reference countries described in section
2(b)(1)(B) of such Act (in this section referred to as the
`international reference price').
``(3) Enforcement.--
``(A) In general.--In the case of a manufacturer of
a life-sustaining prescription drug for which the
Secretary has made a determination described in
paragraph (1) that fails to enter into a negotiation
and agree on a total payment with respect to such drugs
as described in such paragraph within 9 months of such
determination--
``(i) if such drug has an international
reference price, the Secretary shall assess a
civil monetary penalty equal to 2 times the
difference between the total revenue for such
drug from all sales in the United States made
beginning after the date that is 9 months after
such determination and the total revenue for
such drug from all such sales made after such
date that would have been received if the
manufacturer charged the international
reference price for such drug; and
``(ii) if such drug has an international
reference price, the Secretary shall assess a
civil monetary penalty equal to 50 percent of
the revenue from all United States sales of the
drug in the first 90 days after the date that
is 9 months after such determination, 75
percent of the value of all revenue from such
sales during the following 90 days, and 95
percent of all revenue from such sales in
subsequent days until such time as an agreement
is reached or an international reference price
is available.
``(B) Deposit into trust fund.--Civil monetary
penalties collected pursuant to subparagraph (A) shall
be deposited into the Federal Hospital Insurance Trust
Fund.''.
SEC. 4. PUBLIC EXCESSIVE DRUG PRICE DATABASE.
(a) Excessive Drug Price Database.--
(1) In general.--The Secretary shall establish and maintain
a comprehensive, up-to-date database of life-sustaining
prescription drugs and the excessive price determinations for
such drugs under section 2.
(2) Contents.--The database shall include, at a minimum,
for each life-sustaining prescription drug, for the applicable
calendar year--
(A) the name of the drug;
(B) the manufacturer;
(C) whether the drug was determined under section
2(b) to have an excessive price; and
(D) the number of petitions the Secretary received
under section 2(c) to make an excessive price
determination for the drug, together with the
information described in section 2(c)(3).
(3) Certain determinations.--With respect to a
determination made under section 2(b)(1), the Secretary shall
publish on the database such determination in accordance with
paragraph (1) within 30 days of receiving domestic and
international pricing information from manufacturers under
section 6.
(b) Annual Reports to Congress.--Not later than 60 days after the
first excessive price review under section 2 is complete, and annually
thereafter, the Secretary shall submit to Congress a report describing
the excessive drug price review for the preceding year. The report
shall contain summary data regarding--
(1) the total number of drugs that were reviewed;
(2) the total number of drugs determined to be excessively
priced under each of paragraphs (1) and (2) of section 2(b),
and the name and manufacturer of each such drug;
(3) the total number of drugs determined to be excessively
priced, listed by manufacturer;
(4) the extent to which the prices of the drugs identified
under section 2 were higher than reasonable, on average;
(5) the total number of petitions the Secretary received
under section 2(c) to make excessive price determinations for
drugs;
(6) a list of any manufacturers who failed to report
information as required under section 6; and
(7) other appropriate information, as the Secretary
determines or as Congress requests.
(c) Public Availability.--The Secretary shall make the information
in the database described in subsection (a) and the report in
subsection (b) publicly available, including on the internet website of
the Food and Drug Administration, in a manner that is easy to find and
understand.
SEC. 5. DRUG MANUFACTURER REPORTING.
(a) In General.--Each manufacturer shall submit to the Secretary,
in such format as the Secretary may require, an annual report that
includes the following information for each life-sustaining
prescription drug of the manufacturer, with respect to the previous
calendar year:
(1) The average manufacturer price of the drug in the
United States and in the reference countries, for the entire
year, and broken down for each quarter of the year.
(2) The wholesale acquisition cost of the drug in the
United States and in the reference countries, for the entire
year, and broken down for each quarter of the year.
(3) Cumulative global revenues generated by the drug.
(4) Annual net sales revenue generated by the drug in the
United States and in the reference countries, for the entire
year, and broken down for each quarter of the year.
(5) Total expenditures on domestic and foreign drug
research and development related to the drug, itemized by--
(A) basic and preclinical research;
(B) clinical research, reported separately for each
clinical trial;
(C) development of alternative dosage forms and
strengths for the drug molecule or combinations,
including the molecule;
(D) other drug development activities, such as
nonclinical laboratory studies and record and report
maintenance;
(E) pursuing new or expanded indications for such
drug through supplemental applications under section
505 of the Federal Food, Drug, and Cosmetic Act; and
(F) carrying out postmarket requirements related to
such drug, including under section 505(o)(3) of the
Federal Food, Drug, and Cosmetic Act.
(6) Total expenditures on domestic and foreign marketing
and advertising related to the drug.
(7) Investments in human clinical trials related to the
drug, by each trial and each year, including grants, research
contracts, tax credits or deductions, and reimbursements from
public or private health plans or insurance, and any other
public sector subsidies or incentives, such as the fair market
value or priority review vouchers or other considerations.
(8) The estimated size of the affected patient population.
(9) Additional information the manufacturer chooses to
provide related to drug pricing decisions, such as information
related to the methodology used to set the price of the drug.
(10) Additional information as the Secretary determines
necessary to carry out this Act, including information for
previous years.
(b) Report Due Date.--Applicable manufacturers shall submit the
reports described in subsection (a) not later than January 15 of the
year following the date of enactment of this Act, and of each year
thereafter.
(c) Penalty for Noncompliance.--
(1) In general.--Any manufacturer that fails to submit
information for a drug as required by this section on a timely
basis or that knowingly provides false information shall be
liable for a civil monetary penalty, as determined by the
Secretary under paragraph (2), in addition to any other penalty
under other applicable provisions of law.
(2) Amount of penalty.--The amount of a civil penalty under
paragraph (1) shall be equal to the product of--
(A) an amount, as determined appropriate by the
Secretary, which is--
(i) not less than 0.5 percent of the gross
revenues from sales for the previous calendar
year of the drug for which the information was
not submitted; and
(ii) not greater than 1 percent of the
gross revenues from sales for the previous
calendar year of such drug; and
(B) the number of days in the period between--
(i) the report due date under subsection
(b); and
(ii) the date on which the Secretary
receives the information required to be
reported by the manufacturer under this
section.
(3) Use of civil penalty.--The Secretary shall collect the
civil penalties under this subsection and shall use such funds
to support competitive research grant programs of the National
Institutes of Health.
SEC. 6. DEFINITIONS.
For the purposes of this Act:
(1) Average manufacturer price.--
(A) In general.--The term ``average manufacturer
price'', with respect to a drug, subject to
subparagraph (B), has the meaning given such term in
section 1927(k)(1) of the Social Security Act (42
U.S.C. 1396r-8(k)(1)); or with respect to a drug for
which there is no average manufacturer price as so
defined, such term shall mean the wholesale acquisition
cost (as defined in section 1847A(c)(6)(B) of the
Social Security Act (42 U.S.C. 1395w-3a(c)(6)(B)) of
the drug.
(B) Application to reference countries.--With
respect to reference countries, the term ``average
manufacturer price'', as defined in subparagraph (A),
shall be determined based on the price of the drug in
the applicable reference country.
(2) Biosimilar biological product.--The term ``biosimilar
biological product'' means a biological product licensed
pursuant to an application under section 351(k) of the Public
Health Service Act (42 U.S.C. 262(k)).
(3) Generic drug.--The term ``generic drug'' means a drug
approved pursuant to an application under section (b)(2) or (j)
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355).
(4) Life-sustaining prescription drug.--The term ``life-
sustaining prescription drug'' means a drug that is--
(A) approved under subsection (c) or (j) of section
505 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355) or a biological product licensed under
subsection (a) or (k) of section 351 of the Public
Health Service Act (42 U.S.C. 262);
(B) subject to section 503(b)(1) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)); and
(C) life-sustaining (as such term is defined in
regulation pursuant to section 506C of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 356c)).
(5) Manufacturer.--The term ``manufacturer'' means the
holder of an application approved under section 505 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or of a
license issued under section 351 of the Public Health Service
Act (42 U.S.C. 262).
(6) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
<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.
Sponsor introductory remarks on measure. (CR H8836)
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