Lowering Drug Costs for American Families Act
This bill expands the Medicare Drug Price Negotiation Program to include additional drugs and drugs that are covered under private insurance. It also extends certain rebate requirements for covered drugs under Medicare to drugs that are covered under private insurance.
Current law requires the Centers for Medicare & Medicaid Services (CMS) to negotiate maximum prices for brand-name drugs that do not have other generic equivalents and that account for the greatest Medicare spending; the CMS must eventually negotiate the prices of 20 drugs that are covered under Medicare in 2029 and each year thereafter.
The bill requires the CMS to negotiate the prices of 50 drugs beginning in 2029. It also applies the negotiated maximum prices under the program to drugs that are covered under private health insurance, unless the insurer opts out. The CMS, Department of Labor, and Department of Treasury must publish a list of insurers that choose to opt out; insurers must also publicly disclose their decision to opt out.
Current law also requires drug manufacturers to issue rebates to the CMS for brand-name drugs without generic equivalents under Medicare that cost $100 or more per year per individual and for which prices increase faster than inflation. The bill extends these requirements to drugs that are covered under private insurance.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4895 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 4895
To amend title XI of the Social Security Act to expand the drug price
negotiation program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 26, 2023
Mr. Pallone (for himself, Mr. Neal, and Mr. Scott of Virginia)
introduced the following bill; which was referred to the Committee on
Energy and Commerce, and in addition to the Committees on Ways and
Means, and Education and the Workforce, 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 XI of the Social Security Act to expand the drug price
negotiation program, 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 ``Lowering Drug Costs for American
Families Act''.
SEC. 2. EXPANDING THE DRUG PRICE NEGOTIATION PROGRAM.
(a) Increasing the Number of Drugs Subject to Negotiation.--Section
1192(a)(4) of the Social Security Act (42 U.S.C. 1320f-1(a)(4)) is
amended by striking ``20'' each place it appears and inserting ``50''
in each such place.
(b) Expansion of Definition of Maximum Fair Price Eligible
Individual.--Section 1191(c)(2) of the Social Security Act (42 U.S.C.
1320f-1(c)(2)) is amended--
(1) in subparagraph (A), by inserting ``, or a participant,
beneficiary, or enrollee who is enrolled under a group health
plan or health insurance coverage offered in the group or
individual market (as such terms are defined in section 2791 of
the Public Health Service Act) with respect to which there is
in effect an agreement with the Secretary under section 1197
with respect to such selected drug as so furnished or
dispensed'' after ``such selected drug''; and
(2) in subparagraph (B), by inserting ``, or a participant,
beneficiary, or enrollee who is enrolled under a group health
plan or health insurance coverage offered in the group or
individual market (as such terms are defined in section 2791 of
the Public Health Service Act) with respect to which there is
in effect an agreement with the Secretary under section 1197
with respect to such selected drug as so furnished or
administered'' after ``such selected drug''.
(c) Application of Administrative Procedures to New Maximum Fair
Price Eligible Individuals.--Section 1196(a)(3) of the Social Security
Act (42 U.S.C. 1320f-5(a)(3)) is amended--
(1) in subparagraph (A), by striking ``and'' at the end;
(2) in subparagraph (B), by striking the period and
inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(C) maximum fair price eligible individuals not
described in subparagraph (A) or (B).''.
(d) Health Insurer Agreements.--Part E of title XI of the Social
Security Act (42 U.S.C. 1320f et seq.) is amended--
(1) by redesignating sections 1197 and 1198 as sections
1198 and 1199, respectively; and
(2) by inserting after section 1196 the following new
section:
``SEC. 1197. VOLUNTARY PARTICIPATION BY OTHER HEALTH PLANS.
``(a) Agreement To Participate Under Program.--
``(1) In general.--Subject to paragraph (2), under the
program under this part the Secretary shall be treated as
having in effect an agreement with a group health plan or
health insurance issuer offering group or individual health
insurance coverage (as such terms are defined in section 2791
of the Public Health Service Act), with respect to a price
applicability period and a selected drug with respect to such
period--
``(A) in the case such selected drug furnished or
dispensed at a pharmacy or by mail order service if
coverage is provided under such plan or coverage during
such period for such selected drug as so furnished or
dispensed; and
``(B) in the case such selected drug furnished or
administered by a hospital, physician, or other
provider of services or supplier if coverage is
provided under such plan or coverage during such period
for such selected drug as so furnished or administered.
``(2) Opting out of agreement.--The Secretary shall not be
treated as having in effect an agreement under the program
under this part with a group health plan or health insurance
issuer offering group or individual health insurance coverage
with respect to a price applicability period and a selected
drug with respect to such period if such a plan or issuer
affirmatively elects, through a process specified by the
Secretary, not to participate under the program with respect to
such period and drug.
``(b) Publication of Election.--With respect to each price
applicability period and each selected drug with respect to such
period, the Secretary and the Secretary of Labor and the Secretary of
the Treasury, as applicable, shall make public a list of each group
health plan and each health insurance issuer offering group or
individual health insurance coverage, with respect to which coverage is
provided under such plan or coverage for such drug, that has elected
under subsection (a) not to participate under the program with respect
to such period and drug.''.
(e) Application to Group Health Plans and Health Insurance
Coverage.--
(1) PHSA.--Part D of title XXVII of the Public Health
Service Act (42 U.S.C. 300gg-111 et seq.) is amended by adding
at the end the following new section:
``SEC. 2799A-11. DRUG PRICE NEGOTIATION PROGRAM AND APPLICATION OF
MAXIMUM FAIR PRICES.
``(a) In General.--In the case of a group health plan or health
insurance issuer offering group or individual health insurance coverage
that is treated under section 1197 of the Social Security Act as having
in effect an agreement with the Secretary under the Drug Price
Negotiation Program under part E of title XI of such Act, with respect
to a price applicability period (as defined in section 1191(b) of such
Act) and a selected drug (as defined in section 1192(c) of such Act)
with respect to such period for which coverage is provided under such
plan or coverage--
``(1) the provisions of such part shall apply--
``(A) in the case the drug is furnished or
dispensed at a pharmacy or by a mail order service, to
such plan or coverage, and to the participants,
beneficiaries, and enrollees enrolled under such plan
or coverage, during such period, with respect to such
selected drug, in the same manner as such provisions
apply to prescription drug plans and MA-PD plans, and
to participants, beneficiaries, and enrollees enrolled
under such prescription drug plans and MA-PD plans
during such period; and
``(B) in the case the drug is furnished or
administered by a hospital, physician, or other
provider of services or supplier, to such plan or
coverage, and to the participants, beneficiaries, and
enrollees enrolled under such plan or coverage, and to
hospitals, physicians, and other providers of services
and suppliers during such period, with respect to such
drug in the same manner as such provisions apply to the
Secretary, to participants, beneficiaries, and
enrollees entitled to benefits under part A of title
XVIII or enrolled under part B of such title, and to
hospitals, physicians, and other providers and
suppliers participating under title XVIII during such
period;
``(2) the plan or issuer shall apply any cost-sharing
responsibilities under such plan or coverage, with respect to
such selected drug, by substituting an amount not more than the
maximum fair price negotiated under such part E of title XI for
such drug in lieu of the drug price upon which the cost-sharing
would have otherwise applied, and such cost-sharing
responsibilities with respect to such selected drug may not
exceed such maximum fair price; and
``(3) the Secretary shall apply the provisions of such part
E to such plan, issuer, and coverage, such participants,
beneficiaries, and enrollees so enrolled in such plans and
coverage, and such hospitals, physicians, and other providers
and suppliers participating in such plans and coverage.
``(b) Notification Regarding Nonparticipation in Drug Price
Negotiation Program.--A group health plan or a health insurance issuer
offering group or individual health insurance coverage shall publicly
disclose, in a manner and in accordance with a process specified by the
Secretary, any election made under section 1197 of the Social Security
Act by such plan or issuer to not participate in the Drug Price
Negotiation Program under part E of title XI of such Act with respect
to a selected drug (as defined in section 1192(c) of such Act) for
which coverage is provided under such plan or coverage before the
beginning of the plan year for which such election was made.''.
(2) ERISA.--
(A) In general.--Subpart B of part 7 of subtitle B
of title I of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1181 et seq.) is amended by
adding at the end the following new section:
``SEC. 726. DRUG PRICE NEGOTIATION PROGRAM AND APPLICATION OF MAXIMUM
FAIR PRICES.
``(a) In General.--In the case of a group health plan or health
insurance issuer offering group health insurance coverage that is
treated under section 1197 of the Social Security Act as having in
effect an agreement with the Secretary of Health and Human Services
under the Drug Price Negotiation Program under part E of title XI of
such Act, with respect to a price applicability period (as defined in
section 1191(b) of such Act) and a selected drug (as defined in section
1192(c) of such Act) with respect to such period for which coverage is
provided under such plan or coverage--
``(1) the provisions of such part shall apply, as
applicable--
``(A) in the case the drug is furnished or
dispensed at a pharmacy or by a mail order service, to
such plan or coverage, and to the participants and
beneficiaries enrolled under such plan or coverage,
during such period, with respect to such selected drug,
in the same manner as such provisions apply to
prescription drug plans and MA-PD plans, and to
participants and beneficiaries enrolled under such
prescription drug plans and MA-PD plans during such
period; and
``(B) in the case the drug is furnished or
administered by a hospital, physician, or other
provider of services or supplier, to the group health
plan or coverage offered by an issuer, to the
participants and beneficiaries enrolled under such
plans or coverage, and to hospitals, physicians, and
other providers of services and suppliers during such
period, with respect to such drug in the same manner as
such provisions apply to the Secretary of Health and
Human Services, to participants and beneficiaries
entitled to benefits under part A of title XVIII or
enrolled under part B of such title, and to hospitals,
physicians, and other providers and suppliers
participating under title XVIII during such period;
``(2) the plan or issuer shall apply any cost-sharing
responsibilities under such plan or coverage, with respect to
such selected drug, by substituting an amount not more than the
maximum fair price negotiated under such part E of title XI for
such drug in lieu of the drug price upon which the cost-sharing
would have otherwise applied, and such cost-sharing
responsibilities with respect to such selected drug may not
exceed such maximum fair price; and
``(3) the Secretary shall apply the provisions of such part
E to such plan, issuer, and coverage, and such participants and
beneficiaries so enrolled in such plans.
``(b) Notification Regarding Nonparticipation in Drug Price
Negotiation Program.--A group health plan or a health insurance issuer
offering group health insurance coverage shall publicly disclose in a
manner and in accordance with a process specified by the Secretary any
election made under section 1197 of the Social Security Act by the plan
or issuer to not participate in the Drug Price Negotiation Program
under part E of title XI of such Act with respect to a selected drug
(as defined in section 1192(c) of such Act) for which coverage is
provided under such plan or coverage before the beginning of the plan
year for which such election was made.''.
(B) Application to retiree and certain small group
health plans.--Section 732(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1191a(a)) is amended by striking ``section 711'' and
inserting ``sections 711 and 726''.
(C) Clerical amendment.--The table of sections for
subpart B of part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 is
amended by adding at the end the following:
``Sec. 726. Drug Price Negotiation Program and application of maximum
fair prices.''.
(3) IRC.--
(A) In general.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 is amended by adding at
the end the following new section:
``SEC. 9826. DRUG PRICE NEGOTIATION PROGRAM AND APPLICATION OF MAXIMUM
FAIR PRICES.
``(a) In General.--In the case of a group health plan that is
treated under section 1197 of the Social Security Act as having in
effect an agreement with the Secretary of Health and Human Services
under the Drug Price Negotiation Program under part E of title XI of
such Act, with respect to a price applicability period (as defined in
section 1191(b) of such Act) and a selected drug (as defined in section
1192(c) of such Act) with respect to such period for which coverage is
provided under such plan--
``(1) the provisions of such part shall apply, as
applicable--
``(A) if coverage of such selected drug is provided
under such plan if the drug is furnished or dispensed
at a pharmacy or by a mail order service, to the plan,
and to the participants and beneficiaries enrolled
under such plan during such period, with respect to
such selected drug, in the same manner as such
provisions apply to prescription drug plans and MA-PD
plans, and to participants and beneficiaries enrolled
under such prescription drug plans and MA-PD plans
during such period; and
``(B) if coverage of such selected drug is provided
under such plan if the drug is furnished or
administered by a hospital, physician, or other
provider of services or supplier, to the plan, to the
participants and beneficiaries enrolled under such
plan, and to hospitals, physicians, and other providers
of services and suppliers during such period, with
respect to such drug in the same manner as such
provisions apply to the Secretary of Health and Human
Services, to participants and beneficiaries entitled to
benefits under part A of title XVIII or enrolled under
part B of such title, and to hospitals, physicians, and
other providers and suppliers participating under title
XVIII during such period;
``(2) the plan shall apply any cost-sharing
responsibilities under such plan, with respect to such selected
drug, by substituting an amount not more than the maximum fair
price negotiated under such part E of title XI for such drug in
lieu of the drug price upon which the cost-sharing would have
otherwise applied, and such cost-sharing responsibilities with
respect to such selected drug may not exceed such maximum fair
price; and
``(3) the Secretary shall apply the provisions of such part
E to such plan and such participants and beneficiaries so
enrolled in such plan.
``(b) Notification Regarding Nonparticipation in Drug Price
Negotiation Program.--A group health plan shall publicly disclose in a
manner and in accordance with a process specified by the Secretary any
election made under section 1197 of the Social Security Act by the plan
to not participate in the Drug Price Negotiation Program under part E
of title XI of such Act with respect to a selected drug (as defined in
section 1192(c) of such Act) for which coverage is provided under such
plan before the beginning of the plan year for which such election was
made.''.
(B) Application to retiree and certain small group
health plans.--Section 9831(a)(2) of the Internal
Revenue Code of 1986 is amended by inserting ``other
than with respect to section 9826,'' before ``any group
health plan''.
(C) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of such Code is amended by
adding at the end the following new item:
``Sec. 9826. Drug Price Negotiation Program and application of maximum
fair prices.''.
SEC. 3. APPLICATION OF PRESCRIPTION DRUG INFLATION REBATES TO DRUGS
FURNISHED IN THE COMMERCIAL MARKET.
(a) Part B Drugs.--
(1) Application of prescription drug inflation rebates to
drugs furnished in the commercial market.--Section 1847A(i) of
the Social Security Act (42 U.S.C. 1395w-3a(i)) is amended--
(A) in paragraph (1)(A)(i), by striking ``units''
and inserting ``billing units'';
(B) in paragraph (2)(A), by striking ``for which
payment is made under this part'' and inserting ``that
would be payable under this part if such drug were
furnished to an individual enrolled under this part'';
and
(C) in paragraph (3)--
(i) in subparagraph (A)(i), by striking
``units'' and inserting ``billing units''; and
(ii) by striking subparagraph (B) and
inserting the following:
``(B) Total number of billing units.--For purposes
of subparagraph (A)(i), the total number of billing
units with respect to a part B rebatable drug is
determined as follows:
``(i) Determine the total number of units
equal to--
``(I) the total number of units, as
reported under subsection (c)(1)(B) for
each National Drug Code of such drug
during the calendar quarter that is two
calendar quarters prior to the calendar
quarter as described in subparagraph
(A), minus
``(II) the total number of units
with respect to each National Drug Code
of such drug for which payment was made
under a State plan under title XIX (or
waiver of such plan), as reported by
States under section 1927(b)(2)(A) for
the rebate period that is the same
calendar quarter as described in
subclause (I).
``(ii) Convert the units determined under
clause (i) to billing units for the billing and
payment code of such drug, using a methodology
similar to the methodology used under this
section, by dividing the units determined under
clause (i) for each National Drug Code of such
drug by the billing unit for the billing and
payment code of such drug.
``(iii) Compute the sum of the billing
units for each National Drug Code of such drug
in clause (ii).''.
(2) Effective date.--The amendments made by this subsection
shall apply with respect to calendar quarters beginning after
the date of the enactment of this Act.
(b) Covered Part D Drugs.--
(1) Application of prescription drug inflation rebates to
drugs furnished in the commercial market.--Section 1860D-14B of
the Social Security Act (42 U.S.C. 1395w-114b) is amended--
(A) in subsection (b)--
(i) in paragraph (1)--
(I) in subparagraph (A)(i), by
striking ``the total number of units''
and all that follows through the
semicolon and inserting the following:
``the total number of units that are
used to calculate the average
manufacturer price of such dosage form
and strength with respect to such part
D rebatable drug, as reported by the
manufacturer of such drug under section
1927 for each month, with respect to
such period;''; and
(II) by striking subparagraph (B)
and inserting the following:
``(B) Excluded units.--For purposes of subparagraph
(A)(i), the Secretary shall exclude from the total
number of units for a dosage form and strength with
respect to a part D rebatable drug, with respect to an
applicable period, the following:
``(i) Units of each dosage form and
strength of such part D rebatable drug for
which payment was made under a State plan under
title XIX (or waiver of such plan), as reported
by States under section 1927(b)(2)(A).
``(ii) Units of each dosage form and
strength of such part D rebatable drug for
which a rebate is paid under section 1847A(i).
``(iii) Beginning with plan year 2026,
units of each dosage form and strength of such
part D rebatable drug for which the
manufacturer provides a discount under the
program under section 340B of the Public Health
Service Act.''; and
(ii) in paragraph (6), by striking
``information.--The Secretary'' and all that
follows through ``rebatable covered part D drug
dispensed'' and inserting the following: ``AMP
reports.--The Secretary shall provide for a
method and process under which, in the case of
a manufacturer of a part D rebatable drug that
submits revisions to information submitted
under section 1927 by the manufacturer with
respect to such drug''; and
(B) by striking subsection (d) and inserting the
following:
``(d) Information.--For purposes of carrying out this section, the
Secretary shall use information submitted by manufacturers under
section 1927(b)(3) and information submitted by States under section
1927(b)(2)(A).''.
(2) Effective date.--The amendments made by this subsection
shall apply with respect to applicable periods (as defined in
section 1860D-14B(g)(7) of the Social Security Act (42 U.S.C.
1395w-114b(g)(7))) beginning after the date of the enactment of
this Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and Education and the Workforce, 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 Committees on Ways and Means, and Education and the Workforce, 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 Committees on Ways and Means, and Education and the Workforce, 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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