Strengthening Average Sales Price Reporting Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2051 To amend XVIII of the Social Security Act to require certain manufacturers to report drug pricing information with respect to drugs under the Medicare program. IN THE SENATE OF THE UNITED STATES JUNE 28 (legislative day, JUNE 27), 2019 Mr. MENENDEZ (for himself and Mr. YOUNG) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend XVIII of the Social Security Act to require certain manufacturers to report drug pricing information with respect to drugs under the Medicare program. 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 ‘‘Strengthening Average 4 Sales Price Reporting Act of 2019’’. 5 VerDate Sep 11 2014 03:25 Jul 04, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2051.IS S2051 kjohnson on DSK79L0C42 with BILLS 2 •S 2051 IS SEC. 2. REQUIRING CERTAIN MANUFACTURERS TO REPORT 1 DRUG PRICING INFORMATION WITH RE- 2 SPECT TO DRUGS UNDER THE MEDICARE 3 PROGRAM. 4 (a) IN GENERAL.—Section 1847A of the Social Secu- 5 rity Act (42 U.S.C. 1395w–3a) is amended— 6 (1) in subsection (b)— 7 (A) in paragraph (2)(A), by inserting ‘‘or 8 subsection (f)(2), as applicable’’ before the pe- 9 riod at the end; 10 (B) in paragraph (3), in the matter pre- 11 ceding subparagraph (A), by inserting ‘‘or sub- 12 section (f)(2), as applicable,’’ before ‘‘deter- 13 mined by’’; and 14 (C) in paragraph (6)(A), in the matter 15 preceding clause (i), by inserting ‘‘or subsection 16 (f)(2), as applicable,’’ before ‘‘determined by’’; 17 and 18 (2) in subsection (f)— 19 (A) by striking ‘‘For requirements’’ and 20 inserting the following: 21 ‘‘(1) IN GENERAL.—For requirements’’; and 22 (B) by adding at the end the following new 23 paragraph: 24 ‘‘(2) MANUFACTURERS WITHOUT A REBATE 25 AGREEMENT UNDER TITLE XIX.— 26 VerDate Sep 11 2014 03:25 Jul 04, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2051.IS S2051 kjohnson on DSK79L0C42 with BILLS 3 •S 2051 IS ‘‘(A) IN GENERAL.—In the case of a man- 1 ufacturer of an applicable drug or biological 2 that does not have a rebate agreement in effect 3 under section 1927, for calendar quarters be- 4 ginning on or after January 1, 2020, such man- 5 ufacturer shall report to the Secretary the in- 6 formation described in subsection (b)(3)(A)(iii) 7 of such section 1927 with respect to such appli- 8 cable drug or biological in a time and manner 9 specified by the Secretary. 10 ‘‘(B) DEFINITION OF APPLICABLE DRUG 11 OR BIOLOGICAL.—In this paragraph, the term 12 ‘applicable drug or biological’ means— 13 ‘‘(i) a drug or biological described 14 in— 15 ‘‘(I) subparagraph (C), (E), or 16 (G) of section 1842(o)(1); or 17 ‘‘(II) clause (ii) or (iii) of section 18 1881(b)(14)(B); and 19 ‘‘(ii) an item for which payment is es- 20 tablished under this section. 21 ‘‘(C) AUDIT.—Information reported under 22 subparagraph (A) is subject to audit by the In- 23 spector General of the Department of Health 24 and Human Services. 25 VerDate Sep 11 2014 03:25 Jul 04, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2051.IS S2051 kjohnson on DSK79L0C42 with BILLS 4 •S 2051 IS ‘‘(D) VERIFICATION.—The Secretary may 1 survey wholesalers and manufacturers that di- 2 rectly distribute an applicable drug or biologi- 3 cal, when necessary, to verify manufacturer 4 prices and manufacturer’s average sales prices 5 (including wholesale acquisition cost) if required 6 to make payment reported under subparagraph 7 (A). The Secretary may impose a civil monetary 8 penalty in an amount not to exceed $100,000 9 on a wholesaler, manufacturer, or direct seller, 10 if the wholesaler, manufacturer, or direct seller 11 of such a drug refuses a request for information 12 about charges or prices by the Secretary in con- 13 nection with a survey under this subparagraph 14 or knowingly provides false information. The 15 provisions of section 1128A (other than sub- 16 sections (a) (with respect to amounts of pen- 17 alties or additional assessments) and (b)) shall 18 apply to a civil money penalty under this sub- 19 paragraph in the same manner as such provi- 20 sions apply to a penalty or proceeding under 21 section 1128A(a). 22 ‘‘(E) CONFIDENTIALITY.—Notwith- 23 standing any other provision of law, information 24 disclosed by manufacturers or wholesalers 25 VerDate Sep 11 2014 03:25 Jul 04, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2051.IS S2051 kjohnson on DSK79L0C42 with BILLS 5 •S 2051 IS under this paragraph (other than the wholesale 1 acquisition cost for purposes of carrying out 2 this section) is confidential and shall not be dis- 3 closed by the Secretary in a form which dis- 4 closes the identity of a specific manufacturer or 5 wholesaler or prices charged for an applicable 6 drug or biological by such manufacturer or 7 wholesaler, except— 8 ‘‘(i) as the Secretary determines to be 9 necessary to carry out this section (includ- 10 ing the determination and implementation 11 of the payment amount), or to carry out 12 section 1847B; 13 ‘‘(ii) to permit the Comptroller Gen- 14 eral to review the information provided; 15 and 16 ‘‘(iii) to permit the Director of the 17 Congressional Budget Office to review the 18 information provided.’’. 19 (b) ENFORCEMENT.—Section 1847A such Act (42 20 U.S.C. 1395w–3a) is further amended— 21 (1) in subsection (d)(4)— 22 (A) in subparagraph (A), by striking ‘‘IN 23 GENERAL’’ and inserting ‘‘MISREPRESENTA- 24 TION’’; 25 VerDate Sep 11 2014 03:25 Jul 04, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2051.IS S2051 kjohnson on DSK79L0C42 with BILLS 6 •S 2051 IS (B) in subparagraph (B), by striking ‘‘sub- 1 paragraph (B)’’ and inserting ‘‘subparagraph 2 (A), (B), or (C)’’; 3 (C) by redesignating subparagraph (B) as 4 subparagraph (D); and 5 (D) by inserting after subparagraph (A) 6 the following new subparagraphs: 7 ‘‘(B) FAILURE TO PROVIDE TIMELY INFOR- 8 MATION.—If the Secretary determines that a 9 manufacturer described in subsection (f)(2) has 10 failed to report on information described in sec- 11 tion 1927(b)(3)(A)(iii) with respect to an appli- 12 cable drug or biological in accordance with such 13 subsection, the Secretary shall apply a civil 14 money penalty in an amount of $10,000 for 15 each day the manufacturer has failed to report 16 such information and such amount shall be paid 17 to the Treasury. 18 ‘‘(C) FALSE INFORMATION.—Any manu- 19 facturer required to submit information under 20 subsection (f)(2) that knowingly provides false 21 information is subject to a civil money penalty 22 in an amount not to exceed $100,000 for each 23 item of false information. Such civil money pen- 24 VerDate Sep 11 2014 03:25 Jul 04, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2051.IS S2051 kjohnson on DSK79L0C42 with BILLS 7 •S 2051 IS alties are in addition to other penalties as may 1 be prescribed by law.’’; and 2 (2) in subsection (c)(6)(A), by striking the pe- 3 riod at the end and inserting ‘‘, except that, for pur- 4 poses of subsection (f)(2), the Secretary may, if the 5 Secretary determines appropriate, exclude repack- 6 agers of an applicable drug or biological from such 7 term.’’. 8 (c) REPORT.—Not later than January 1, 2021, the 9 Inspector General of the Department of Health and 10 Human Services shall assess and submit to Congress a 11 report on the accuracy of average sales price information 12 submitted by manufacturers under section 1847A of the 13 Social Security Act (42 U.S.C. 1395w–3a). Such report 14 shall include any recommendations on how to improve the 15 accuracy of such information. 16 Æ VerDate Sep 11 2014 03:25 Jul 04, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S2051.IS S2051 kjohnson on DSK79L0C42 with BILLS