Freedom from Price Gouging Act
This bill requires drug manufacturers to issue rebates to the Centers for Medicare & Medicaid Services for covered drugs under Medicare that cost $100 or more and for which the average manufacturer price increases faster than inflation.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2706 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 2706
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
April 20, 2021
Ms. Porter (for herself, Ms. Underwood, Mr. Crow, and Mr. Blumenauer)
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 ``Freedom from Price Gouging Act''.
SEC. 2. MEDICARE PART B PRESCRIPTION DRUG INFLATION REBATE BY
MANUFACTURERS.
(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:
``(z) Rebate by Manufacturers for Single Source Drugs With Prices
Increasing Faster Than Inflation.--
``(1) Requirements.--
``(A) Secretarial provision of information.--Not
later than 6 months after the end of each calendar
quarter beginning on or after July 1, 2022, the
Secretary shall, for each part B rebatable drug, report
to each manufacturer of such part B rebatable drug the
following for such calendar quarter:
``(i) Information on the total number of
billing units described in subparagraph (A)(i)
of paragraph (3) with respect to such drug and
calendar quarter.
``(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 calendar quarter.
``(iii) The rebate amount specified under
such paragraph for such part B rebatable drug
and calendar quarter.
``(B) Manufacturer requirement.--For each calendar
quarter beginning on or after July 1, 2022, the
manufacturer of a part B rebatable drug shall, for such
drug, not later than 30 days after the date of receipt
from the Secretary of the information described in
subparagraph (A) for such calendar quarter, provide to
the Secretary a rebate that is equal to the amount
specified in paragraph (3) for such drug for such
calendar quarter.
``(2) Part b rebatable drug defined.--
``(A) In general.--In this subsection, the term
`part B rebatable drug' means a single source drug or
biological (as defined in subparagraph (D) of section
1847A(c)(6)), including a biosimilar biological product
(as defined in subparagraph (H) of such section), paid
for under this part, except such term shall not include
such a drug or biological--
``(i) if the average total allowed charges
for a year per individual that uses such a drug
or biological, as determined by the Secretary,
are less than, subject to subparagraph (B),
$100; or
``(ii) that is a vaccine described in
subparagraph (A) or (B) of section 1861(s)(10).
``(B) Increase.--The dollar amount applied under
subparagraph (A)(i)--
``(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 the first
quarter of the previous year; and
``(ii) for a subsequent year, shall be the
dollar amount specified in this clause (or
clause (i)) for the previous year, increased by
the percentage increase in the consumer price
index for all urban consumers (United States
city average) as of the first quarter 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.
``(3) Rebate amount.--
``(A) In general.--For purposes of paragraph
(1)(B), the amount specified in this paragraph for a
part B rebatable drug assigned to a billing and payment
code for a calendar quarter is, subject to paragraph
(4), the amount equal to the product of--
``(i) subject to subparagraph (B), the
total number of billing units, as described in
section 1847A(b)(6)(B), for such part B
rebatable drug furnished under this part during
the calendar quarter; and
``(ii) the amount (if any) by which--
``(I) the payment amount under
subparagraph (B) or (C) of section
1847A(b)(1), as applicable, for such
part B rebatable drug during the
calendar quarter; exceeds
``(II) the inflation-adjusted
payment amount determined under
subparagraph (C) for such part B
rebatable drug during the calendar
quarter.
``(B) Excluded units.--For purposes of subparagraph
(A)(i), the total number of billing units for part B
rebatable drugs furnished during a calendar quarter
shall not include--
``(i) units packaged into the payment for a
related procedure or service under section
1833(t) or under section 1833(i) (instead of
separately payable under such respective
section);
``(ii) units included under the single
payment system for renal dialysis services
under section 1881(b)(14); or
``(iii) units of a part B 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.
``(C) Determination of inflation-adjusted payment
amount.--The inflation-adjusted payment amount
determined under this subparagraph for a part B
rebatable drug for a calendar quarter is--
``(i) the payment amount for the billing
and payment code for such drug in the payment
amount benchmark quarter (as defined in
subparagraph (D)); increased by
``(ii) the percentage by which the rebate
period CPI-U (as defined in subparagraph (F))
for the calendar quarter exceeds the benchmark
period CPI-U (as defined in subparagraph (E)).
``(D) Payment amount benchmark quarter.--The term
`payment amount benchmark quarter' means the calendar
quarter beginning January 1, 2016.
``(E) Benchmark period cpi-u.--The term `benchmark
period CPI-U' means the consumer price index for all
urban consumers (United States city average) for July
2015.
``(F) Rebate period cpi-u.--The term `rebate period
CPI-U' means, with respect to a calendar quarter
described in subparagraph (C), the greater of the
benchmark period CPI-U and 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 such described calendar
quarter.
``(4) Special treatment of certain drugs and exemption.--
``(A) Subsequently approved drugs.--Subject to
subparagraph (B), in the case of a part B rebatable
drug first approved by the Food and Drug Administration
after July 1, 2015, clause (i) of paragraph (3)(C)
shall be applied as if the term `payment amount
benchmark quarter' were defined under paragraph (3)(D)
as the third full calendar quarter after the day on
which the drug was first marketed and clause (ii) of
paragraph (3)(C) shall be applied as if the term
`benchmark period CPI-U' were defined under paragraph
(3)(E) as if the reference to `July 2015' under such
paragraph were a reference to `the first month of the
first full calendar quarter after the day on which the
drug was first marketed'.
``(B) Timeline for provision of rebates for new
drugs.--In the case of a part B rebatable drug first
approved by the Food and Drug Administration after July
1, 2015, clause (i) of paragraph (1)(B) shall be
applied as if the reference to `July 1, 2022' under
such paragraph were a reference to the later of the 6th
full calendar quarter after the day on which the drug
was first marketed or July 1, 2022.
``(C) Exemption for shortages.--The Secretary may
reduce or waive the rebate under paragraph (1)(B) with
respect to a part B rebatable drug that appears on the
drug shortage list in effect under section 506(e) of
the Federal Food, Drug, and Cosmetic Act or in the case
of other exigent circumstances, as determined by the
Secretary.
``(5) Application to beneficiary coinsurance.--In the case
of a part B rebatable drug for which a rebate is payable under
this subsection--
``(A) in computing the amount of any coinsurance
applicable under this title to an individual with
respect to such drug, the computation of such
coinsurance shall be based on the inflation-adjusted
payment amount determined under paragraph (3)(C) for
such part B rebatable drug; and
``(B) the amount of such coinsurance is equal to 20
percent of such inflation-adjusted payment amount so
determined.
``(6) Rebate deposits.--Amounts paid as rebates under
paragraph (1)(B) shall be deposited into the Federal
Supplementary Medical Insurance Trust Fund established under
section 1841.
``(7) Civil money penalty.--If a manufacturer of a part B
rebatable drug has failed to comply with the requirements under
paragraph (1)(B) for such drug for a calendar quarter, the
manufacturer shall be subject to, in accordance with a process
established by the Secretary pursuant to regulations, a civil
money penalty in an amount equal to at least 125 percent of the
amount specified in paragraph (3) for such drug for such
calendar 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 paragraph in the same manner as such
provisions apply to a penalty or proceeding under section
1128A(a).
``(8) Study and report.--
``(A) Study.--The Secretary shall conduct a study
of the feasibility of and operational issues involved
with the following:
``(i) Including multiple source drugs (as
defined in section 1847A(c)(6)(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 (2)(A) and billing units of drugs
excluded under paragraph (3)(B) 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).
``(9) Application to multiple source drugs.--The Secretary
may, based on the report submitted under paragraph (8) and
pursuant to rulemaking, apply the provisions of this subsection
to multiple source drugs (as defined in section
1847A(c)(6)(C)), including, for purposes of determining the
rebate amount under paragraph (3), by calculating manufacturer-
specific average sales prices for the benchmark period and the
rebate period.''.
(b) Amounts Payable; Cost-Sharing.--Section 1833(a) of the Social
Security Act (42 U.S.C. 1395l(a)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (S), by striking ``with respect
to'' and inserting ``subject to subparagraph (EE), with
respect to'';
(B) by striking ``and (DD)'' and inserting
``(DD)''; and
(C) by inserting before the semicolon at the end
the following: ``, and (EE) with respect to a part B
rebatable drug (as defined in paragraph (2) of section
1834(z)) for which a rebate is payable under such
section, the amounts paid shall be the difference
between (i) the payment amount under paragraph
(3)(A)(ii)(I) of such section for such drug, and (ii)
20 percent of the inflation-adjusted payment amount
under paragraph (3)(A)(ii)(II) of such section for such
drug''; and
(2) by adding at the end of the flush left matter following
paragraph (10), the following:
``For purposes of applying paragraph (1)(EE) and section 1834(z)(5),
the Secretary shall make such estimates and use such data as the
Secretary determines appropriate.''.
(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(z)'' 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 Social Security.
Referred to the Subcommittee on Health.
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