Elijah E. Cummings Lower Drug Costs Now Act

II Calendar No. 521 116TH CONGRESS 2D SESSION H. R. 3 IN THE SENATE OF THE UNITED STATES DECEMBER 16, 2019 Received AUGUST 13, 2020 Read the first time SEPTEMBER 8, 2020 Read the second time and placed on the calendar AN ACT 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 (b) TABLE OF CONTENTS.—The table of contents is 6 as follows: 7 VerDate Sep 11 2014 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 2 HR 3 PCS 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—MEDICARE PARTS B AND D 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 drugs 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—PROGRAM IMPROVEMENTS FOR MEDICARE LOW- INCOME BENEFICIARIES Sec. 501. Dissemination to Medicare part D subsidy eligible individuals of in- formation comparing premiums of certain prescription drug plans. Sec. 502. Providing for intelligent assignment of certain subsidy eligible individ- uals auto-enrolled under Medicare prescription drug plans and MA–PD plans. Sec. 503. Expanding eligibility for low-income subsidies under part D of the Medicare program. Sec. 504. Automatic eligibility of certain low-income territorial residents for premium and cost-sharing subsidies under the Medicare pro- gram; Sunset of enhanced allotment program. Sec. 505. Automatic qualification of certain Medicaid beneficiaries for premium and cost-sharing subsidies under part D of the Medicare pro- gram. Sec. 506. Providing for certain rules regarding the treatment of eligible retire- ment plans in determining the eligibility of individuals for pre- mium and cost-sharing subsidies under part D of the Medicare program. Sec. 507. Reducing cost-sharing and other program improvements for low-in- come beneficiaries. VerDate Sep 11 2014 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 3 HR 3 PCS TITLE VI—PROVIDING FOR DENTAL, VISION, AND HEARING COVERAGE UNDER THE MEDICARE PROGRAM Sec. 601. Dental and oral health care. Sec. 602. Providing coverage for hearing care under the Medicare program. Sec. 603. Providing coverage for vision care under the Medicare program. TITLE VII—NIH, FDA, AND OPIOIDS FUNDING Subtitle A—Biomedical Innovation Expansion Sec. 701. NIH Innovation Initiatives. Sec. 702. NIH clinical trial. Sec. 703. Innovation Network. Subtitle B—Investing in Safety and Innovation Sec. 711. Food and Drug Administration. Sec. 712. Study on high-risk, high-reward drugs. Subtitle C—Opioid Epidemic Response Sec. 721. Opioid Epidemic Response Fund. Sec. 722. Substance Abuse and Mental Health Services Administration. Sec. 723. Centers for Disease Control and Prevention. Sec. 724. Food and Drug Administration. Sec. 725. National Institutes of Health. Sec. 726. Health Resources and Services Administration. Sec. 727. Administration for Children and Families. Subtitle D—Reducing Administrative Costs and Burdens in Health Care Sec. 731. Reducing administrative costs and burdens in health care. TITLE VIII—MISCELLANEOUS Sec. 801. Guaranteed issue of certain Medigap policies. Sec. 802. Reporting requirements for PDP sponsors regarding point-of-sale re- jections under Medicare part D. Sec. 803. Providing access to annual Medicare notifications in multiple lan- guages. Sec. 804. Temporary increase in Medicare part B payment for certain bio- similar biological products. Sec. 805. Waiving medicare coinsurance for colorectal cancer screening tests. Sec. 806. Medicare coverage of certain lymphedema compression treatment items. Sec. 807. Physician fee update. Sec. 808. Additional community health center funding. Sec. 809. Grants to improve trauma support services and mental health care for children and youth in educational settings. Sec. 810. Pathway to Health Careers Act. Sec. 811. Home Visiting to Reduce Maternal Mortality and Morbidity Act. Sec. 812. Addition of new measures based on access to biosimilar biological products to the 5-star rating system under medicare advan- tage. Sec. 813. Sense of Congress regarding the impact of the high cost of prescrip- tion drugs on communities of color and persons living in rural or sparsely populated areas of the United States. VerDate Sep 11 2014 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6211 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 4 HR 3 PCS Sec. 814. Regulations requiring direct-to-consumer advertisements for prescrip- tion drugs and biological products to include truthful and not misleading pricing information. Sec. 815. Improving transparency and preventing the use of abusive spread pricing and related practices in Medicaid. Sec. 816. Graduate medical education improvements in rural and underserved communities. 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 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 5 HR 3 PCS ‘‘(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 2023) 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, 2023). 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 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 6 HR 3 PCS ‘‘(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 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 7 HR 3 PCS 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 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 8 HR 3 PCS 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 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 9 HR 3 PCS 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 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 10 HR 3 PCS ‘‘(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 2023, 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 2023, 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 2024 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 23:08 Sep 08, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3.PCS H3 pamtmann on DSKBC07HB2PROD with BILLS 11 HR 3 PCS imum number (if such number is less than 50) of [Text truncated for display. 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