Prescription Drug Price Relief Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 465 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 HOUSE OF REPRESENTATIVES JANUARY 10, 2019 Mr. KHANNA (for himself, Mr. WELCH, Mr. CUMMINGS, Ms. OCASIO-CORTEZ, Ms. SCHAKOWSKY, Mr. POCAN, Ms. OMAR, Ms. DELAURO, Mr. NEGUSE, Ms. LEE of California, Ms. TLAIB, Ms. PRESSLEY, Ms. GABBARD, Mr. DEFAZIO, and Ms. JAYAPAL) introduced the following bill; which was re- ferred to the Committee on Energy and Commerce, and in addition to the Committee on the Judiciary, for a period to be subsequently deter- mined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 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 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 465 IH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Prescription Drug 2 Price Relief Act of 2019’’. 3 SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED DRUGS. 4 (a) IN GENERAL.—The Secretary, not later than 1 5 year after the date of enactment of this Act, shall establish 6 a process to conduct a review of all brand name drugs, 7 not less frequently than once per calendar year, under 8 which the Secretary determines under subsection (b) 9 whether the price of each such drug is excessive. 10 (b) EXCESSIVE PRICE DETERMINATIONS.— 11 (1) INTERNATIONAL REFERENCE PRICE.— 12 (A) IN GENERAL.—The Secretary shall de- 13 termine that any brand name drug for which 14 the domestic average manufacturing price ex- 15 ceeds the median price charged for such drug in 16 the 5 reference countries to have an excessive 17 price. In assessing the extent to which the price 18 is excessive, the Secretary shall consider the 19 factors described in paragraph (2). 20 (B) REFERENCE COUNTRIES.—In this Act, 21 the term ‘‘reference countries’’ means Canada, 22 the United Kingdom, Germany, France, and 23 Japan. 24 (C) REQUIREMENT WITH RESPECT TO 25 DRUGS FOR WHICH CERTAIN REFERENCE COUN- 26 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 465 IH TRY INFORMATION IS NOT AVAILABLE.—The 1 Secretary shall make a determination under 2 paragraph (1) for every brand name drug for 3 which pricing information is available for at 4 least 3 of the 5 reference countries. 5 (2) DETERMINATIONS BASED ON OTHER FAC- 6 TORS.—With respect to any brand name drug that 7 is not determined to have an excessive price by oper- 8 ation of paragraph (1) (including any drug for which 9 there is insufficient data to make such a determina- 10 tion under such paragraph), the Secretary shall de- 11 termine that such drug has an excessive price if the 12 price of the drug is higher than reasonable taking 13 into account the following factors: 14 (A) The size of the affected patient popu- 15 lation. 16 (B) The value of the drug to patients, in- 17 cluding the impact of the price on access to the 18 drug and the relationship of the price of the 19 drug to its therapeutic health benefits. 20 (C) The risk adjusted value of Federal 21 Government subsidies and investments related 22 to the drug. 23 (D) The costs associated with development 24 of the drug. 25 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 465 IH (E) Whether the drug provided a signifi- 1 cant improvement in health outcomes, com- 2 pared to other therapies available at the time of 3 its approval. 4 (F) The cumulative global revenues gen- 5 erated by the drug. 6 (G) Whether the domestic average manu- 7 facturer price of the drug increased during any 8 annual quarter by a percentage that is more 9 than the percentage increase in the consumer 10 price index for all urban consumers for the re- 11 spective annual quarter. 12 (H) Other factors the Secretary determines 13 appropriate. 14 (c) PETITION FOR DETERMINATION.— 15 (1) IN GENERAL.—Any person may petition the 16 Secretary, in accordance with section 553(e) of title 17 5, United States Code, to make an excessive drug 18 price determination for an applicable drug under 19 subsection (b)(2). Not later than 90 days after the 20 date of receipt of such a petition, subject to para- 21 graph (2), the Secretary shall— 22 (A) make a determination under subsection 23 (b)(2) regarding such drug; or 24 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 465 IH (B)(i) decline to make such a determina- 1 tion; and 2 (ii) make public the reasons why the Sec- 3 retary has declined to make such a determina- 4 tion. 5 (2) EXCEPTION.—The Secretary shall not make 6 a determination under subsection (b)(2) for a drug 7 in response to a petition under this section more fre- 8 quently than once per calendar year. 9 (3) PUBLIC AVAILABILITY.—The Secretary 10 shall make any petitions submitted under this sub- 11 section, together with any documentation related to 12 the petitions and the Secretary’s determinations on 13 such petitions and rationale for such determinations, 14 publicly available, including by posting such informa- 15 tion on the database under section 5. 16 SEC. 3. ENDING GOVERNMENT-GRANTED MONOPOLIES FOR 17 EXCESSIVELY PRICED DRUGS. 18 (a) EXCESSIVE DRUG PRICE AUTHORITY.—With re- 19 spect to any brand name drug, if the Secretary determines 20 under section 2 that the price of the drug is excessive, 21 the Secretary— 22 (1) shall waive or void any government-granted 23 exclusivities with respect to such drug, effective on 24 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 465 IH the date that the excessive price determination under 1 section 2 is made for such drug; and 2 (2) shall grant open, non-exclusive licenses al- 3 lowing any person to make, use, offer to sell or sell, 4 or import into the United States such drug, and to 5 rely upon the regulatory test data of such drug, in 6 accordance with section 4. 7 (b) EXPEDITED REVIEW.—The Secretary shall 8 prioritize the review of, and act within 8 months of the 9 date of the submission of a generic drug application or 10 a biosimilar biological product application if such applica- 11 tion references a drug licensed under subsection (a)(2). 12 (c) CIVIL ACTIONS.—If the Secretary determines that 13 the manufacturer of an excessively priced drug (as deter- 14 mined under section 2(a)) has increased the price of such 15 drug during the period beginning on the date on which 16 such price determination is made and ending on the date 17 on which an entity begins manufacturing the drug under 18 an open, non-exclusive license under subsection (a)(2), the 19 Secretary may file a civil action in the United States dis- 20 trict court for the district in which the manufacturer is 21 located, or in the United States district court for the Dis- 22 trict of Columbia, to recover damages in an amount equal 23 to not less than the total amount of revenue derived by 24 the manufacturer as a result of any such price increase 25 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 465 IH during such period. In actions brought under this sub- 1 section, the district courts shall have jurisdiction to grant 2 all appropriate relief including, but not limited to, injunc- 3 tive relief and compensatory damages. 4 SEC. 4. EXCESSIVE DRUG PRICE LICENSE. 5 (a) REASONABLE ROYALTY.— 6 (1) IN GENERAL.—An entity accepting an open, 7 non-exclusive license under section 3(a)(2) shall pay 8 a reasonable royalty to the holder of a patent that 9 claims the drug or that claims a use of the drug or 10 to the holder of an application approved under sub- 11 section 505(c) of the Federal Food, Drug, and Cos- 12 metic Act or section 351(a) of the Public Health 13 Service Act for which any government-granted exclu- 14 sivity with respect to the drug was terminated under 15 section 5(a)(1). 16 (2) ROYALTY RATE.—Such royalty rate shall 17 be— 18 (A) a percentage of sales, where the per- 19 centage rate is no higher than the average roy- 20 alty rate estimated from the data provided by 21 the Internal Revenue Service for pharma- 22 ceutical manufacturer Federal income tax re- 23 turns; or 24 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 465 IH (B) an amount as determined by the Sec- 1 retary, taking into account— 2 (i) the value of the drug to patients; 3 (ii) the size of the affected patient 4 population; 5 (iii) the risk adjusted value of the 6 Federal Government subsidies and invest- 7 ments related to the drug; 8 (iv) whether the drug provided a sig- 9 nificant improvement in health outcomes, 10 compared to other therapies available at 11 the time of the approval; 12 (v) the extent to which the brand 13 name drug manufacturer has recovered 14 risk adjusted investments related to the 15 drug, including the investments related to 16 the invention, regulatory test data and any 17 other relevant research and development 18 costs; and 19 (vi) any other information the Sec- 20 retary determines appropriate. 21 (b) REQUIREMENTS.— 22 (1) IN GENERAL.—A royalty rate under sub- 23 section (a) shall be consistent with making drugs 24 available to purchasers, including Federal, State, 25 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 465 IH local, and nongovernmental purchasers and individ- 1 uals, at prices that are affordable and reasonable. 2 Under no condition shall a royalty be set at a rate 3 that would cause a product for which an open, non- 4 exclusive license was issued under section 3 to be 5 sold at an excessive price, as determined under sec- 6 tion 2. 7 (2) MULTIPLE AFFECTED PARTIES.—In the 8 case that there is one or more holders or investors 9 in the patented inventions related to the drug in ad- 10 dition to the brand name manufacturer, the royalty 11 rate shall be divided among the holders or investors 12 (including such manufacturer) in a manner agreed 13 upon by the manufacturer and other holders or in- 14 vestors, or, in the absence of such an agreement, in 15 a manner the Secretary determines to be appro- 16 priate. 17 (3) PRICE.—An entity accepting an open, non- 18 exclusive license under section 3(a)(2) shall sell the 19 drug at a price not higher than the excessive price 20 determined for that drug under section 2(b). 21 SEC. 5. PUBLIC EXCESSIVE DRUG PRICE DATABASE. 22 (a) EXCESSIVE DRUG PRICE DATABASE.— 23 (1) IN GENERAL.—The Secretary shall establish 24 and maintain a comprehensive, up-to-date database 25 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 465 IH of brand name drugs and the excessive price deter- 1 minations for such drugs under section 2. 2 (2) CONTENTS.—The database shall include, at 3 a minimum, for each brand name drug, for the ap- 4 plicable calendar year— 5 (A) the name of the drug; 6 (B) the manufacturer; 7 (C) whether the drug was determined 8 under section 2(b) to have an excessive price; 9 (D) the number of petitions the Secretary 10 received under section 2(c) to make an exces- 11 sive price determination for the drug, together 12 with the information described in section 13 2(c)(3); 14 (E) the number of open, non-exclusive li- 15 censes the Secretary has granted under section 16 3(a)(2) for generic drug or biosimilar biological 17 product versions of the drug; and 18 (F) the number of applications under sub- 19 section (b)(2) or (j) of section 505 of the Fed- 20 eral Food, Drug, and Cosmetic Act or under 21 section 351(k) of the Public Health Service Act 22 submitted to the Secretary, pursuant to such a 23 license granted under section 3(a)(2), and the 24 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 465 IH number of such applications that have been ap- 1 proved. 2 (3) CERTAIN DETERMINATIONS.—With respect 3 to a determination made under section 2(b)(1), the 4 Secretary shall publish on the database such deter- 5 mination in accordance with paragraph (1) within 6 30 days of receiving domestic and international pric- 7 ing information from manufacturers under section 6. 8 (b) ANNUAL REPORTS TO CONGRESS.—Not later 9 than 60 days after the first excessive price review under 10 section 2 is complete, and annually thereafter, the Sec- 11 retary shall submit to Congress a report describing the 12 excessive drug price review for the preceding year. The 13 report shall contain summary data regarding— 14 (1) the total number of drugs that were re- 15 viewed; 16 (2) the total number of drugs determined to be 17 excessively priced under each of paragraphs (1) and 18 (2) of section 2(b), and the name and manufacturer 19 of each such drug; 20 (3) the total number of drugs determined to be 21 excessively priced, listed by manufacturer; 22 (4) the extent to which the prices of the drugs 23 identified under section 2 were higher than reason- 24 able, on average; 25 VerDate Sep 11 2014 00:36 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H465.IH H465 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 465 IH (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 [Text truncated for display. 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