Prescription Drug STAR Act

IB Union Calendar No. 571 116TH CONGRESS 2D SESSION H. R. 2113 [Report No. 116–688, Part I] To amend titles XI and XVIII of the Social Security Act to provide for drug manufacturer price transparency, to require certain manufacturers to report on product samples provided to certain health care providers, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 8, 2019 Mr. NEAL (for himself and Mr. BRADY) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provi- sions as fall within the jurisdiction of the committee concerned DECEMBER 24, 2020 Additional sponsors: Mr. VAN DREW, Ms. FINKENAUER, Ms. HOULAHAN, Mr. RASKIN, Mr. MCADAMS, Ms. UNDERWOOD, Ms. SLOTKIN, Mr. LIPINSKI, Ms. LOFGREN, and Mr. AMODEI DECEMBER 24, 2020 Reported from the Committee on Ways and Means with an amendment [Strike out all after the enacting clause and insert the part printed in italic] DECEMBER 24, 2020 Committee on Energy and Commerce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed [For text of introduced bill, see copy of bill as introduced on April 8, 2019] VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2113 RH A BILL To amend titles XI and XVIII of the Social Security Act to provide for drug manufacturer price transparency, to require certain manufacturers to report on product samples provided to certain health care providers, and for other purposes. VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2113 RH 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 Sun- 4 shine, Transparency, Accountability and Reporting Act’’ or 5 the ‘‘Prescription Drug STAR Act’’. 6 SEC. 2. DRUG MANUFACTURER PRICE TRANSPARENCY. 7 (a) IN GENERAL.—Title XI of the Social Security Act 8 (42 U.S.C. 1301 et seq.) is amended by inserting after sec- 9 tion 1128K the following new section: 10 ‘‘SEC. 1128L. DRUG MANUFACTURER PRICE TRANSPARENCY. 11 ‘‘(a) IN GENERAL.—With respect to each year, begin- 12 ning with 2021, the Secretary shall, at least once during 13 such year, determine if there is a triggered SPIKE increase 14 (in accordance with subsection (b)) with respect to an ap- 15 plicable drug (as defined in subsection (f)(1)). If the Sec- 16 retary determines, with respect to a year, there is such an 17 increase with respect to an applicable drug, the manufac- 18 turer of the applicable drug shall submit to the Secretary 19 the justification described in subsection (c), subject to sub- 20 section (b)(4), for each such triggered SPIKE increase in 21 accordance with the timing described in subsection (d)). 22 ‘‘(b) TRIGGERED SPIKE INCREASE.— 23 ‘‘(1) IN GENERAL.—A triggered SPIKE increase 24 occurs, with respect an applicable drug and year (be- 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2113 RH ginning with 2021 and referred to in this paragraph 1 as the ‘applicable year’), in any of the following cases: 2 ‘‘(A) If there is at least a 10 percent (or 3 $10,000) cumulative increase with respect to the 4 wholesale acquisition cost (or alternative cost 5 measure specified by the Secretary under para- 6 graph (3)) of such drug during a calendar-year 7 period beginning and ending within the lookback 8 period that is the 5-year period preceding such 9 applicable year. 10 ‘‘(B) If there is at least a 25 percent (or 11 $25,000) cumulative increase with respect to the 12 wholesale acquisition cost (or such alternative 13 cost measure) of such drug during any three-cal- 14 endar-year period beginning and ending within 15 such lookback period. 16 ‘‘(C) In the case of such a drug that is first 17 covered under title XVIII with respect to such 18 applicable year, if the estimated cost or spending 19 under such title per individual or per user of 20 such drug (as estimated by the Secretary) for 21 such applicable year (or per course of treatment 22 in such applicable year, as defined by the Sec- 23 retary) is at least $26,000. 24 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 2113 RH ‘‘(2) INDEXING DOLLAR AMOUNTS.—The dollar 1 amounts applied under paragraph (1) for 2022 and 2 each subsequent year shall be the dollar amounts spec- 3 ified in such paragraph for the previous year in- 4 creased by the annual percentage increase in the con- 5 sumer price index (all items; U.S. city average) as of 6 September of such previous year. If any amount es- 7 tablished under paragraph (1), after application of 8 this paragraph, for a year is not a multiple of $10, 9 it shall be rounded to the nearest multiple of $10. 10 ‘‘(3) ALTERNATIVE TO WAC.—The Secretary 11 may, for purposes of making determinations under 12 paragraph (1), in addition to using the wholesale ac- 13 quisition cost for an applicable drug, use alternative 14 cost measures of such drug, or use such alternative 15 cost measure if the wholesale acquisition cost is not 16 available. 17 ‘‘(4) EXCEPTION.—A justification under sub- 18 section (c) shall not be required for a triggered 19 SPIKE increase described in paragraph (1) of an ap- 20 plicable drug of a manufacturer if— 21 ‘‘(A) there is any portion of the lookback pe- 22 riod described in the respective subparagraph of 23 such paragraph for such increase that is in- 24 cluded within the lookback period for another 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 2113 RH triggered SPIKE increase (or combination of 1 such increases) for which a justification is made 2 under this section for such drug by such manu- 3 facturer; or 4 ‘‘(B) such increase is less than the wholesale 5 acquisition cost (or alternative cost measure 6 specified by the Secretary under paragraph (3)) 7 of such drug during the calendar-year period de- 8 scribed in paragraph (1)(A) or the three-cal- 9 endar-year period described in paragraph 10 (1)(B), as applicable, for such increase, increased 11 by the percentage increase in the consumer price 12 index for all urban consumers (all items; United 13 States city average) for the 12-month period end- 14 ing six months prior to the calendar-year period 15 so described and for the 36-month period ending 16 six months prior to the three-calendar-year pe- 17 riod so described, respectively. 18 ‘‘(5) UNIT DETERMINATION.—For purposes of de- 19 termining the wholesale acquisition cost in carrying 20 out this section, the Secretary shall determine a unit 21 (such as a unit size) to apply. 22 ‘‘(6) PUBLIC POSTING.—Beginning with respect 23 to 2021, the Secretary shall publicly post on the 24 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 2113 RH Internet website of the Department of Health and 1 Human Services— 2 ‘‘(A) alternative percentages, dollar 3 amounts, and lookback periods that, if applied 4 under paragraph (1), would be projected to in- 5 crease the number of applicable drugs for which 6 a triggered SPIKE increase would occur for such 7 year; and 8 ‘‘(B) the number of applicable drugs for 9 which a triggered SPIKE increase would occur 10 for such year if such an alternative percentage, 11 dollar amount, or period were applied for such 12 year. 13 ‘‘(c) JUSTIFICATION DESCRIBED.— 14 ‘‘(1) IN GENERAL.—The justification described in 15 this subsection, with respect to a triggered SPIKE in- 16 crease described in subsection (b)(1) of an applicable 17 drug of a manufacturer, is— 18 ‘‘(A) all of the information described in 19 paragraph (2); 20 ‘‘(B) all of the information and supporting 21 documentation described in paragraph (3), as 22 applicable to the increase and drug; and 23 ‘‘(C) a certification described in paragraph 24 (4). 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 2113 RH ‘‘(2) REQUIRED INFORMATION.—For purposes of 1 paragraph (1), the information described in this 2 paragraph is the following: 3 ‘‘(A) The individual factors that have con- 4 tributed to the increase in the wholesale acquisi- 5 tion cost. 6 ‘‘(B) An explanation of the role of each fac- 7 tor in contributing to such increase. 8 ‘‘(3) INFORMATION AS APPLICABLE.—For pur- 9 poses of paragraph (1), the information and sup- 10 porting documentation described in this paragraph is 11 the following, as applicable to the increase of the 12 drug: 13 ‘‘(A) Total expenditures of the manufacturer 14 on— 15 ‘‘(i) materials and manufacturing for 16 such drug; 17 ‘‘(ii) acquiring patents and licensing 18 for each drug of the manufacturer; and 19 ‘‘(iii) costs to purchase or acquire the 20 drug from another company, if applicable. 21 ‘‘(B) The percentage of total expenditures of 22 the manufacturer on research and development 23 for such drug that was derived from Federal 24 funds. 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 2113 RH ‘‘(C) The total expenditures of the manufac- 1 turer on research and development for such drug. 2 ‘‘(D) The total revenue and net profit gen- 3 erated from the applicable drug for each calendar 4 year since drug approval. 5 ‘‘(E) The total costs associated with mar- 6 keting and advertising for the applicable drug. 7 ‘‘(F) Additional information specific to the 8 manufacturer of the applicable drug, such as— 9 ‘‘(i) the total revenue and net profit of 10 the manufacturer for the period of such in- 11 crease, as determined by the Secretary; 12 ‘‘(ii) metrics used to determine execu- 13 tive compensation; 14 ‘‘(iii) total expenditures on— 15 ‘‘(I) drug research and develop- 16 ment; or 17 ‘‘(II) clinical trials on drugs that 18 failed to receive approval by the Food 19 and Drug Administration; and 20 ‘‘(iv) any additional information re- 21 lated to drug pricing decisions of the manu- 22 facturer. 23 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 2113 RH ‘‘(G) Any other relevant information and 1 supporting documentation necessary to justify 2 the triggering SPIKE increase. 3 ‘‘(H) Any other relevant information and 4 supporting documentation, as specified by the 5 Secretary. 6 ‘‘(4) CERTIFICATION.—For purposes of para- 7 graph (1), the certification described in this para- 8 graph is a certification, that all such information and 9 documentation is accurate and complete, by one of the 10 following: 11 ‘‘(A) The chief executive officer of the manu- 12 facturer. 13 ‘‘(B) The chief financial officer of the man- 14 ufacturer. 15 ‘‘(C) An individual who has delegated au- 16 thority to sign for, and who reports directly to, 17 such chief executive officer or chief financial offi- 18 cer. 19 ‘‘(d) TIMING.— 20 ‘‘(1) NOTIFICATION.—Not later than 60 days 21 after the date on which the Secretary makes the deter- 22 mination that there is a triggering SPIKE increase 23 with respect to an applicable drug, the Secretary shall 24 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 2113 RH notify the manufacturer of the applicable drug of such 1 determination. 2 ‘‘(2) SUBMISSION OF JUSTIFICATION.—Not later 3 than 90 days after the date on which a manufacturer 4 receives a notification under paragraph (1), subject to 5 subsection (b)(4), the manufacturer shall submit to 6 the Secretary the justification required under sub- 7 section (a), including a summary of such justifica- 8 tion, in a form and manner specified by the Sec- 9 retary. In specifying such form, with respect to the 10 summary required under the previous sentence, the 11 Secretary shall provide that such summary shall be in 12 an easily understandable format, as specified by the 13 Secretary, and shall permit the manufacturer to ex- 14 clude proprietary information from such summary. 15 ‘‘(3) POSTING ON INTERNET WEBSITE.—Not later 16 than 30 days after receiving the complete justification 17 under paragraph (2), the Secretary shall post on the 18 Internet website of the Centers for Medicare & Med- 19 icaid Services the summary included for such jus- 20 tification. 21 ‘‘(e) PENALTIES.— 22 ‘‘(1) FAILURE TO SUBMIT TIMELY JUSTIFICA- 23 TION.—If the Secretary determines that a manufac- 24 turer has failed to submit a justification as required 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 2113 RH under this section, including in accordance with the 1 timing and form required, with respect to an applica- 2 ble drug, the Secretary shall apply a civil monetary 3 penalty in an amount of $10,000 for each day the 4 manufacturer has failed to submit such justification 5 as so required. 6 ‘‘(2) FALSE INFORMATION.—Any manufacturer 7 that submits a justification under this section that 8 knowingly provides false information in such jus- 9 tification is subject to a civil monetary penalty in an 10 amount not to exceed $100,000 for each item of false 11 information. 12 ‘‘(3) APPLICATION OF PROCEDURES.—The provi- 13 sions of section 1128A (other than subsections (a) and 14 (b)) shall apply to a civil monetary penalty under 15 this subsection in the same manner as such provisions 16 apply to a penalty or proceeding under section 17 1128A(a). Civil monetary penalties imposed under 18 this subsection are in addition to other penalties as 19 may be prescribed by law. 20 ‘‘(f) DEFINITIONS.—In this section: 21 ‘‘(1) APPLICABLE DRUG.— 22 ‘‘(A) IN GENERAL.—Subject to subpara- 23 graph (B), the term ‘applicable drug’ means, 24 with respect to a lookback period described in 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6203 E:\BILLS\H2113.RH H2113 pbinns on DSKJLVW7X2PROD with BILLS 13 •HR 2113 RH subsection [Text truncated for display. Full text available on Congress.gov.]