Elijah E. Cummings Lower Drug Costs Now Act

I 117TH CONGRESS 1ST SESSION H. R. 3 To establish a fair price negotiation program, protect the Medicare program from excessive price increases, and establish an out-of-pocket maximum for Medicare part D enrollees, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 22, 2021 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, Edu- cation and Labor, Oversight and Reform, and Veterans’ Affairs, for a pe- riod to be subsequently determined by the Speaker, in each case for con- sideration of such provisions as fall within the jurisdiction of the com- mittee concerned A BILL To establish a fair price negotiation program, protect the Medicare program from excessive price increases, and establish an out-of-pocket maximum for Medicare part D enrollees, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Elijah E. Cummings Lower Drug Costs Now Act’’. 5 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 3 IH (b) TABLE OF CONTENTS.—The table of contents is 1 as follows: 2 Sec. 1. Short title; table of contents. TITLE I—LOWERING PRICES THROUGH FAIR DRUG PRICE NEGOTIATION Sec. 101. Providing for lower prices for certain high-priced single source drugs. Sec. 102. Selected drug manufacturer excise tax imposed during noncompliance periods. Sec. 103. Fair Price Negotiation Implementation Fund. TITLE II—PRESCRIPTION DRUG INFLATION REBATES Sec. 201. Medicare part B rebate by manufacturers. Sec. 202. Medicare part D rebate by manufacturers. Sec. 203. Provision regarding inflation rebates for group health plans and group health insurance coverage. Sec. 204. Annual report on drug costs in group health plans and group health insurance coverage. Sec. 205. Collection of data. TITLE III—PART D IMPROVEMENTS AND MAXIMUM OUT-OF- POCKET CAP FOR MEDICARE BENEFICIARIES Sec. 301. Medicare part D benefit redesign. Sec. 302. Allowing certain enrollees of prescription drug plans and MA–PD plans under Medicare program to spread out cost-sharing under certain circumstances. Sec. 303. Establishment of pharmacy quality measures under Medicare part D. TITLE IV—DRUG PRICE TRANSPARENCY Sec. 401. Drug price transparency. TITLE V—NIH, FDA, AND OVERDOSE EPIDEMIC FUNDING Subtitle A—Biomedical Innovation Expansion Sec. 501. NIH Innovation Initiatives. Sec. 502. NIH clinical trial. Sec. 503. Innovation Network. Subtitle B—Investing in Safety and Innovation Sec. 511. Food and Drug Administration. Sec. 512. Study on high-risk, high-reward drugs. Subtitle C—Overdose Epidemic Response Sec. 521. Overdose Epidemic Response Fund. Sec. 522. Substance Abuse and Mental Health Services Administration. Sec. 523. Centers for Disease Control and Prevention. Sec. 524. Food and Drug Administration. Sec. 525. National Institutes of Health. VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 3 IH Sec. 526. Health Resources and Services Administration. Sec. 527. Administration for Children and Families. TITLE I—LOWERING PRICES 1 THROUGH FAIR DRUG PRICE 2 NEGOTIATION 3 SEC. 101. PROVIDING FOR LOWER PRICES FOR CERTAIN 4 HIGH-PRICED SINGLE SOURCE DRUGS. 5 (a) PROGRAM TO LOWER PRICES FOR CERTAIN 6 HIGH-PRICED SINGLE SOURCE DRUGS.—Title XI of the 7 Social Security Act (42 U.S.C. 1301 et seq.) is amended 8 by adding at the end the following new part: 9 ‘‘PART E—FAIR PRICE NEGOTIATION PROGRAM 10 TO LOWER PRICES FOR CERTAIN HIGH- 11 PRICED SINGLE SOURCE DRUGS 12 ‘‘SEC. 1191. ESTABLISHMENT OF PROGRAM. 13 ‘‘(a) IN GENERAL.—The Secretary shall establish a 14 Fair Price Negotiation Program (in this part referred to 15 as the ‘program’). Under the program, with respect to 16 each price applicability period, the Secretary shall— 17 ‘‘(1) publish a list of selected drugs in accord- 18 ance with section 1192; 19 ‘‘(2) enter into agreements with manufacturers 20 of selected drugs with respect to such period, in ac- 21 cordance with section 1193; 22 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 3 IH ‘‘(3) negotiate and, if applicable, renegotiate 1 maximum fair prices for such selected drugs, in ac- 2 cordance with section 1194; and 3 ‘‘(4) carry out the administrative duties de- 4 scribed in section 1196. 5 ‘‘(b) DEFINITIONS RELATING TO TIMING.—For pur- 6 poses of this part: 7 ‘‘(1) INITIAL PRICE APPLICABILITY YEAR.—The 8 term ‘initial price applicability year’ means a plan 9 year (beginning with plan year 2024) or, if agreed 10 to in an agreement under section 1193 by the Sec- 11 retary and manufacturer involved, a period of more 12 than one plan year (beginning on or after January 13 1, 2024). 14 ‘‘(2) PRICE APPLICABILITY PERIOD.—The term 15 ‘price applicability period’ means, with respect to a 16 drug, the period beginning with the initial price ap- 17 plicability year with respect to which such drug is a 18 selected drug and ending with the last plan year 19 during which the drug is a selected drug. 20 ‘‘(3) SELECTED DRUG PUBLICATION DATE.— 21 The term ‘selected drug publication date’ means, 22 with respect to each initial price applicability year, 23 April 15 of the plan year that begins 2 years prior 24 to such year. 25 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 3 IH ‘‘(4) VOLUNTARY NEGOTIATION PERIOD.—The 1 term ‘voluntary negotiation period’ means, with re- 2 spect to an initial price applicability year with re- 3 spect to a selected drug, the period— 4 ‘‘(A) beginning on the sooner of— 5 ‘‘(i) the date on which the manufac- 6 turer of the drug and the Secretary enter 7 into an agreement under section 1193 with 8 respect to such drug; or 9 ‘‘(ii) June 15 following the selected 10 drug publication date with respect to such 11 selected drug; and 12 ‘‘(B) ending on March 31 of the year that 13 begins one year prior to the initial price appli- 14 cability year. 15 ‘‘(c) OTHER DEFINITIONS.—For purposes of this 16 part: 17 ‘‘(1) FAIR PRICE ELIGIBLE INDIVIDUAL.—The 18 term ‘fair price eligible individual’ means, with re- 19 spect to a selected drug— 20 ‘‘(A) in the case such drug is furnished or 21 dispensed to the individual at a pharmacy or by 22 a mail order service— 23 ‘‘(i) an individual who is enrolled 24 under a prescription drug plan under part 25 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 3 IH D of title XVIII or an MA–PD plan under 1 part C of such title if coverage is provided 2 under such plan for such selected drug; 3 and 4 ‘‘(ii) an individual who is enrolled 5 under a group health plan or health insur- 6 ance coverage offered in the group or indi- 7 vidual market (as such terms are defined 8 in section 2791 of the Public Health Serv- 9 ice Act) with respect to which there is in 10 effect an agreement with the Secretary 11 under section 1197 with respect to such se- 12 lected drug as so furnished or dispensed; 13 and 14 ‘‘(B) in the case such drug is furnished or 15 administered to the individual by a hospital, 16 physician, or other provider of services or sup- 17 plier— 18 ‘‘(i) an individual who is entitled to 19 benefits under part A of title XVIII or en- 20 rolled under part B of such title if such se- 21 lected drug is covered under the respective 22 part; and 23 ‘‘(ii) an individual who is enrolled 24 under a group health plan or health insur- 25 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 3 IH ance coverage offered in the group or indi- 1 vidual market (as such terms are defined 2 in section 2791 of the Public Health Serv- 3 ice Act) with respect to which there is in 4 effect an agreement with the Secretary 5 under section 1197 with respect to such se- 6 lected drug as so furnished or adminis- 7 tered. 8 ‘‘(2) MAXIMUM FAIR PRICE.—The term ‘max- 9 imum fair price’ means, with respect to a plan year 10 during a price applicability period and with respect 11 to a selected drug (as defined in section 1192(c)) 12 with respect to such period, the price published pur- 13 suant to section 1195 in the Federal Register for 14 such drug and year. 15 ‘‘(3) AVERAGE INTERNATIONAL MARKET PRICE 16 DEFINED.— 17 ‘‘(A) IN GENERAL.—The terms ‘average 18 international market price’ and ‘AIM price’ 19 mean, with respect to a drug, the average price 20 (which shall be the net average price, if prac- 21 ticable, and volume-weighted, if practicable) for 22 a unit (as defined in paragraph (4)) of the drug 23 for sales of such drug (calculated across dif- 24 ferent dosage forms and strengths of the drug 25 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 3 IH and not based on the specific formulation or 1 package size or package type), as computed (as 2 of the date of publication of such drug as a se- 3 lected drug under section 1192(a)) in all coun- 4 tries described in clause (ii) of subparagraph 5 (B) that are applicable countries (as described 6 in clause (i) of such subparagraph) with respect 7 to such drug. 8 ‘‘(B) APPLICABLE COUNTRIES.— 9 ‘‘(i) IN GENERAL.—For purposes of 10 subparagraph (A), a country described in 11 clause (ii) is an applicable country de- 12 scribed in this clause with respect to a 13 drug if there is available an average price 14 for any unit for the drug for sales of such 15 drug in such country. 16 ‘‘(ii) COUNTRIES DESCRIBED.—For 17 purposes of this paragraph, the following 18 are countries described in this clause: 19 ‘‘(I) Australia. 20 ‘‘(II) Canada. 21 ‘‘(III) France. 22 ‘‘(IV) Germany. 23 ‘‘(V) Japan. 24 ‘‘(VI) The United Kingdom. 25 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 3 IH ‘‘(4) UNIT.—The term ‘unit’ means, with re- 1 spect to a drug, the lowest identifiable quantity 2 (such as a capsule or tablet, milligram of molecules, 3 or grams) of the drug that is dispensed. 4 ‘‘SEC. 1192. SELECTION OF NEGOTIATION-ELIGIBLE DRUGS 5 AS SELECTED DRUGS. 6 ‘‘(a) IN GENERAL.—Not later than the selected drug 7 publication date with respect to an initial price applica- 8 bility year, subject to subsection (h), the Secretary shall 9 select and publish in the Federal Register a list of— 10 ‘‘(1)(A) with respect to an initial price applica- 11 bility year during 2024, at least 25 negotiation-eligi- 12 ble drugs described in subparagraphs (A) and (B), 13 but not subparagraph (C), of subsection (d)(1) (or, 14 with respect to an initial price applicability year dur- 15 ing such period beginning after 2024, the maximum 16 number (if such number is less than 25) of such ne- 17 gotiation-eligible drugs for the year) with respect to 18 such year; and 19 ‘‘(B) with respect to an initial price applica- 20 bility year during 2025 or a subsequent year, at 21 least 50 negotiation-eligible drugs described in sub- 22 paragraphs (A) and (B), but not subparagraph (C), 23 of subsection (d)(1) (or, with respect to an initial 24 price applicability year during such period, the max- 25 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 3 IH imum number (if such number is less than 50) of 1 such negotiation-eligible drugs for the year) with re- 2 spect to such year; 3 ‘‘(2) all negotiation-eligible drugs described in 4 subparagraph (C) of such subsection with respect to 5 such year; and 6 ‘‘(3) all new-entrant negotiation-eligible drugs 7 (as defined in subsection (g)(1)) with respect to such 8 year. 9 Each drug published on the list pursuant to the previous 10 sentence shall be subject to the negotiation process under 11 section 1194 for the voluntary negotiation period with re- 12 spect to such initial price applicability year (and the re- 13 negotiation process under such section as applicable for 14 any subsequent year during the applicable price applica- 15 bility period). In applying this subsection, any negotiation- 16 eligible drug that is selected under this subsection for an 17 initial price applicability year shall not count toward the 18 required minimum amount of drugs to be selected under 19 paragraph (1) for any subsequent year, including such a 20 drug so selected that is subject to renegotiation under sec- 21 tion 1194. 22 ‘‘(b) SELECTION OF DRUGS.—In carrying out sub- 23 section (a)(1) the Secretary shall select for inclusion on 24 the published list described in subsection (a) with respect 25 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3.IH H3 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 3 IH to a price applicability period, the negotiation-eligible 1 drugs that the Secretary projects will result in the greatest 2 savings to the Federal Government or fair price eligible 3 individuals during the price applicability period. In making 4 this projection of savings for drugs for which there is an 5 AIM price for a price applicability period, the savings shall 6 be projected across different dosage forms and strengths 7 of the drugs and not based on the specific formulation or 8 package size or package type of the drugs, taking into con- 9 sideration both the volume of drugs for which payment 10 is made, to the extent such data is available, and the 11 amount by which the net price for the drugs exceeds the 12 AIM price for the drugs. 13 ‘‘(c) SELECTED DRUG.—For purposes of this part, 14 each drug included on the list published under subsection 15 (a) with respect to an initial price applicability year shall 16 be referred to as a ‘selected drug’ with respect to such 17 year and each subsequent plan year beginning before the 18 first plan year beginning after the date on which the Sec- 19 retary determines two or more drug products— 20 ‘‘(1) are approved or licensed (as applicable)— 21 ‘‘(A) under section 505(j) of the Federal 22 Food, Drug, and Cosmetic Act using such drug 23 as the listed drug; or 24 VerDate Sep 11 2014 04:12 Apr 27, 2021 Jkt [Text truncated for display. 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