Prescription Drug Price Relief Act of 2019

II 116TH CONGRESS 1ST SESSION S. 102 To significantly lower prescription drug prices for patients in the United States by ending government-granted monopolies for manufacturers who charge drug prices that are higher than the median prices at which the drugs are available in other countries. IN THE SENATE OF THE UNITED STATES JANUARY 10, 2019 Mr. SANDERS (for himself, Mr. BOOKER, Mr. BLUMENTHAL, Mrs. GILLI- BRAND, Ms. HARRIS, and Ms. WARREN) introduced the following bill; which was read twice and referred to the Committee on Health, Edu- cation, Labor, and Pensions A BILL To significantly lower prescription drug prices for patients in the United States by ending government-granted mo- nopolies for manufacturers who charge drug prices that are higher than the median prices at which the drugs are available in other countries. 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. 3 This Act may be cited as the ‘‘Prescription Drug 4 Price Relief Act of 2019’’. 5 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 2 •S 102 IS SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED DRUGS. 1 (a) IN GENERAL.—The Secretary, not later than 1 2 year after the date of enactment of this Act, shall establish 3 a process to conduct a review of all brand name drugs, 4 not less frequently than once per calendar year, under 5 which the Secretary determines under subsection (b) 6 whether the price of each such drug is excessive. 7 (b) EXCESSIVE PRICE DETERMINATIONS.— 8 (1) INTERNATIONAL REFERENCE PRICE.— 9 (A) IN GENERAL.—The Secretary shall de- 10 termine that any brand name drug for which 11 the domestic average manufacturing price ex- 12 ceeds the median price charged for such drug in 13 the 5 reference countries to have an excessive 14 price. In assessing the extent to which the price 15 is excessive, the Secretary shall consider the 16 factors described in paragraph (2). 17 (B) REFERENCE COUNTRIES.—In this Act, 18 the term ‘‘reference countries’’ means Canada, 19 the United Kingdom, Germany, France, and 20 Japan. 21 (C) REQUIREMENT WITH RESPECT TO 22 DRUGS FOR WHICH CERTAIN REFERENCE COUN- 23 TRY INFORMATION IS NOT AVAILABLE.—The 24 Secretary shall make a determination under 25 paragraph (1) for every brand name drug for 26 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 3 •S 102 IS which pricing information is available for at 1 least 3 of the 5 reference countries. 2 (2) DETERMINATIONS BASED ON OTHER FAC- 3 TORS.—With respect to any brand name drug that 4 is not determined to have an excessive price by oper- 5 ation of paragraph (1) (including any drug for which 6 there is insufficient data to make such a determina- 7 tion under such paragraph), the Secretary shall de- 8 termine that such drug has an excessive price if the 9 price of the drug is higher than reasonable taking 10 into account the following factors: 11 (A) The size of the affected patient popu- 12 lation. 13 (B) The value of the drug to patients, in- 14 cluding the impact of the price on access to the 15 drug and the relationship of the price of the 16 drug to its therapeutic health benefits. 17 (C) The risk adjusted value of Federal 18 Government subsidies and investments related 19 to the drug. 20 (D) The costs associated with development 21 of the drug. 22 (E) Whether the drug provided a signifi- 23 cant improvement in health outcomes, com- 24 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 4 •S 102 IS pared to other therapies available at the time of 1 its approval. 2 (F) The cumulative global revenues gen- 3 erated by the drug. 4 (G) Whether the domestic average manu- 5 facturer price of the drug increased during any 6 annual quarter by a percentage that is more 7 than the percentage increase in the consumer 8 price index for all urban consumers for the re- 9 spective annual quarter. 10 (H) Other factors the Secretary determines 11 appropriate. 12 (c) PETITION FOR DETERMINATION.— 13 (1) IN GENERAL.—Any person may petition the 14 Secretary, in accordance with section 553(e) of title 15 5, United States Code, to make an excessive drug 16 price determination for an applicable drug under 17 subsection (b)(2). Not later than 90 days after the 18 date of receipt of such a petition, subject to para- 19 graph (2), the Secretary shall— 20 (A) make a determination under subsection 21 (b)(2) regarding such drug; or 22 (B)(i) decline to make such a determina- 23 tion; and 24 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 5 •S 102 IS (ii) make public the reasons why the Sec- 1 retary has declined to make such a determina- 2 tion. 3 (2) EXCEPTION.—The Secretary shall not make 4 a determination under subsection (b)(2) for a drug 5 in response to a petition under this section more fre- 6 quently than once per calendar year. 7 (3) PUBLIC AVAILABILITY.—The Secretary 8 shall make any petitions submitted under this sub- 9 section, together with any documentation related to 10 the petitions and the Secretary’s determinations on 11 such petitions and rationale for such determinations, 12 publicly available, including by posting such informa- 13 tion on the database under section 5. 14 SEC. 3. ENDING GOVERNMENT-GRANTED MONOPOLIES FOR 15 EXCESSIVELY PRICED DRUGS. 16 (a) EXCESSIVE DRUG PRICE AUTHORITY.—With re- 17 spect to any brand name drug, if the Secretary determines 18 under section 2 that the price of the drug is excessive, 19 the Secretary— 20 (1) shall waive or void any government-granted 21 exclusivities with respect to such drug, effective on 22 the date that the excessive price determination under 23 section 2 is made for such drug; and 24 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 6 •S 102 IS (2) shall grant open, non-exclusive licenses al- 1 lowing any person to make, use, offer to sell or sell, 2 or import into the United States such drug, and to 3 rely upon the regulatory test data of such drug, in 4 accordance with section 4. 5 (b) EXPEDITED REVIEW.—The Secretary shall 6 prioritize the review of, and act within 8 months of the 7 date of the submission of a generic drug application or 8 a biosimilar biological product application if such applica- 9 tion references a drug licensed under subsection (a)(2). 10 (c) CIVIL ACTIONS.—If the Secretary determines that 11 the manufacturer of an excessively priced drug (as deter- 12 mined under section 2(a)) has increased the price of such 13 drug during the period beginning on the date on which 14 such price determination is made and ending on the date 15 on which an entity begins manufacturing the drug under 16 an open, non-exclusive license under subsection (a)(2), the 17 Secretary may file a civil action in the United States dis- 18 trict court for the district in which the manufacturer is 19 located, or in the United States district court for the Dis- 20 trict of Columbia, to recover damages in an amount equal 21 to not less than the total amount of revenue derived by 22 the manufacturer as a result of any such price increase 23 during such period. In actions brought under this sub- 24 section, the district courts shall have jurisdiction to grant 25 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 7 •S 102 IS all appropriate relief including, but not limited to, injunc- 1 tive relief and compensatory damages. 2 SEC. 4. EXCESSIVE DRUG PRICE LICENSE. 3 (a) REASONABLE ROYALTY.— 4 (1) IN GENERAL.—An entity accepting an open, 5 non-exclusive license under section 3(a)(2) shall pay 6 a reasonable royalty to the holder of a patent that 7 claims the drug or that claims a use of the drug or 8 to the holder of an application approved under sub- 9 section 505(c) of the Federal Food, Drug, and Cos- 10 metic Act or section 351(a) of the Public Health 11 Service Act for which any government-granted exclu- 12 sivity with respect to the drug was terminated under 13 section 5(a)(1). 14 (2) ROYALTY RATE.—Such royalty rate shall 15 be— 16 (A) a percentage of sales, where the per- 17 centage rate is no higher than the average roy- 18 alty rate estimated from the data provided by 19 the Internal Revenue Service for pharma- 20 ceutical manufacturer Federal income tax re- 21 turns; or 22 (B) an amount as determined by the Sec- 23 retary, taking into account— 24 (i) the value of the drug to patients; 25 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 8 •S 102 IS (ii) the size of the affected patient 1 population; 2 (iii) the risk adjusted value of the 3 Federal Government subsidies and invest- 4 ments related to the drug; 5 (iv) whether the drug provided a sig- 6 nificant improvement in health outcomes, 7 compared to other therapies available at 8 the time of the approval; 9 (v) the extent to which the brand 10 name drug manufacturer has recovered 11 risk adjusted investments related to the 12 drug, including the investments related to 13 the invention, regulatory test data and any 14 other relevant research and development 15 costs; and 16 (vi) any other information the Sec- 17 retary determines appropriate. 18 (b) REQUIREMENTS.— 19 (1) IN GENERAL.—A royalty rate under sub- 20 section (a) shall be consistent with making drugs 21 available to purchasers, including Federal, State, 22 local, and nongovernmental purchasers and individ- 23 uals, at prices that are affordable and reasonable. 24 Under no condition shall a royalty be set at a rate 25 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 9 •S 102 IS that would cause a product for which an open, non- 1 exclusive license was issued under section 3 to be 2 sold at an excessive price, as determined under sec- 3 tion 2. 4 (2) MULTIPLE AFFECTED PARTIES.—In the 5 case that there is one or more holders or investors 6 in the patented inventions related to the drug in ad- 7 dition to the brand name manufacturer, the royalty 8 rate shall be divided among the holders or investors 9 (including such manufacturer) in a manner agreed 10 upon by the manufacturer and other holders or in- 11 vestors, or, in the absence of such an agreement, in 12 a manner the Secretary determines to be appro- 13 priate. 14 (3) PRICE.—An entity accepting an open, non- 15 exclusive license under section 3(a)(2) shall sell the 16 drug at a price not higher than the excessive price 17 determined for that drug under section 2(b). 18 SEC. 5. PUBLIC EXCESSIVE DRUG PRICE DATABASE. 19 (a) EXCESSIVE DRUG PRICE DATABASE.— 20 (1) IN GENERAL.—The Secretary shall establish 21 and maintain a comprehensive, up-to-date database 22 of brand name drugs and the excessive price deter- 23 minations for such drugs under section 2. 24 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 10 •S 102 IS (2) CONTENTS.—The database shall include, at 1 a minimum, for each brand name drug, for the ap- 2 plicable calendar year— 3 (A) the name of the drug; 4 (B) the manufacturer; 5 (C) whether the drug was determined 6 under section 2(b) to have an excessive price; 7 (D) the number of petitions the Secretary 8 received under section 2(c) to make an exces- 9 sive price determination for the drug, together 10 with the information described in section 11 2(c)(3); 12 (E) the number of open, non-exclusive li- 13 censes the Secretary has granted under section 14 3(a)(2) for generic drug or biosimilar biological 15 product versions of the drug; and 16 (F) the number of applications under sub- 17 section (b)(2) or (j) of section 505 of the Fed- 18 eral Food, Drug, and Cosmetic Act or under 19 section 351(k) of the Public Health Service Act 20 submitted to the Secretary, pursuant to such a 21 license granted under section 3(a)(2), and the 22 number of such applications that have been ap- 23 proved. 24 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 11 •S 102 IS (3) CERTAIN DETERMINATIONS.—With respect 1 to a determination made under section 2(b)(1), the 2 Secretary shall publish on the database such deter- 3 mination in accordance with paragraph (1) within 4 30 days of receiving domestic and international pric- 5 ing information from manufacturers under section 6. 6 (b) ANNUAL REPORTS TO CONGRESS.—Not later 7 than 60 days after the first excessive price review under 8 section 2 is complete, and annually thereafter, the Sec- 9 retary shall submit to Congress a report describing the 10 excessive drug price review for the preceding year. The 11 report shall contain summary data regarding— 12 (1) the total number of drugs that were re- 13 viewed; 14 (2) the total number of drugs determined to be 15 excessively priced under each of paragraphs (1) and 16 (2) of section 2(b), and the name and manufacturer 17 of each such drug; 18 (3) the total number of drugs determined to be 19 excessively priced, listed by manufacturer; 20 (4) the extent to which the prices of the drugs 21 identified under section 2 were higher than reason- 22 able, on average; 23 VerDate Sep 11 2014 02:57 Jan 17, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S102.IS S102 kjohnson on DSK79L0C42 with BILLS 12 •S 102 IS (5) the total number of drugs for which an 1 open-non-exclusive license has been granted under 2 section 3(a)(2); 3 (6) the total number of generic drug or bio- 4 similar biological product applications received and 5 approved that reference a drug so licensed; 6 (7) the median approval time for generic drug 7 or biosimilar biological product applications that ref- 8 erence a drug so licensed; 9 (8) the total number of petitions the Secretary 10 received under section 2(c) to make excessive price 11 determinations for drugs; 12 (9) a list of any manufacturers who failed to re- 13 port information as required under section 6; and 14 (10) other appropriate information, as the Sec- 15 retary determines or as Congress requests. 16 (c) PUBLIC AVAILABILITY.—The Secretary shall 17 make the information in the database described in su [Text truncated for display. 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