Insulin Price Reduction Act

II 116TH CONGRESS 1ST SESSION S. 2199 To provide patient protections with respect to the cost of insulin. IN THE SENATE OF THE UNITED STATES JULY 22, 2019 Mrs. SHAHEEN (for herself, Ms. COLLINS, Mr. CARPER, and Mr. CRAMER) in- troduced the following bill; which was read twice and referred to the Com- mittee on Finance A BILL To provide patient protections with respect to the cost of insulin. 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 ‘‘Insulin Price Reduc- 4 tion Act’’. 5 SEC. 2. INSULIN PRICE PROTECTIONS. 6 (a) IN GENERAL.—Subpart II of part A of title 7 XXVII of the Public Health Service Act (42 U.S.C. 8 300gg–11 et seq.) is amended by adding at the end the 9 following: 10 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 2 •S 2199 IS ‘‘SEC. 2729A. INSULIN PRICE PROTECTIONS. 1 ‘‘(a) CONTRACTING REQUIREMENTS.— 2 ‘‘(1) IN GENERAL.— 3 ‘‘(A) REQUIREMENT.—Except as provided 4 in subparagraph (B), a group health plan or a 5 health insurance issuer offering group or indi- 6 vidual health insurance coverage shall not, and 7 shall ensure that any entity that provides phar- 8 macy benefits management services under a 9 contract with any such health plan or health in- 10 surance coverage does not, directly or indirectly, 11 receive from a manufacturer of certified insulin 12 a rebate, reduction in price, or other remunera- 13 tion with respect to such insulin received by an 14 enrollee in the plan or coverage and covered by 15 the plan or coverage. 16 ‘‘(B) EXCEPTION.—The requirement under 17 subparagraph (A) shall not apply to— 18 ‘‘(i) any such reduction in price that 19 is reflected at the point of sale to the en- 20 rollee; or 21 ‘‘(ii) any remuneration that is a flat 22 fee-based service fee that a manufacturer 23 of such insulin pays to a pharmacy benefit 24 manager for services rendered to the man- 25 ufacturer that relate to arrangements by 26 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 3 •S 2199 IS the pharmacy benefit manager to provide 1 pharmacy benefit management services to 2 a health plan or health insurance issuer, if 3 certain conditions established by the Sec- 4 retary are met, including requirements 5 that the fees are transparent to the health 6 plan or health insurance issuer. 7 ‘‘(2) APPLICABILITY.—The restriction under 8 paragraph (1) shall apply with respect to insulin de- 9 scribed in paragraph (1), for which the manufac- 10 turer has certified the list price in accordance with 11 section 5(b) of the Insulin Price Reduction Act with 12 respect to— 13 ‘‘(A) any plan year in which the list price 14 for insulin is certified under section 5(b)(2)(A) 15 of the Insulin Price Reduction Act; and 16 ‘‘(B) each subsequent plan year during 17 which the manufacturer limits any increase in 18 the list price to the price that gave rise to the 19 restriction under paragraph (1), adjusted by 20 not more than the price change in the medical 21 care component of the consumer price index for 22 all urban consumers (U.S. city average), as cer- 23 tified under section 5(b)(2)(B) of the Insulin 24 Price Reduction Act. 25 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 4 •S 2199 IS ‘‘(b) DEDUCTIBLE LIMITATION.—A group health 1 plan or a health insurance issuer offering group or indi- 2 vidual health insurance coverage shall not apply any de- 3 ductible amount that otherwise is applicable to prescrip- 4 tion drugs with respect to coverage of certified insulin 5 under such plan or coverage, during the period described 6 in subsection (a)(2). 7 ‘‘(c) HOLD HARMLESS.—In the first 2 plan years 8 during which paragraph (1) applies with respect to an in- 9 sulin certified under section 5(b) of the Insulin Price Re- 10 duction Act, a group health plan or a health insurance 11 issuer offering group or individual health insurance cov- 12 erage shall not, and shall ensure that any entity that pro- 13 vides pharmacy benefits management services under a 14 contract with such health plan or health insurance cov- 15 erage does not— 16 ‘‘(1) remove such insulin from the formulary 17 applicable to the plan or coverage; 18 ‘‘(2) impose higher cost-sharing with respect to 19 such insulin than the cost-sharing that applied with 20 respect to the insulin in the year in which the list 21 price reduction certification was provided under sec- 22 tion 5(b)(2)(A) of the Insulin Price Reduction Act; 23 ‘‘(3) impose any prior authorization require- 24 ments for coverage of such insulin that were not ap- 25 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 5 •S 2199 IS plied during the year in which the list price reduc- 1 tion certification was provided under such section 2 5(b)(2)(A); or 3 ‘‘(4) establish a step therapy requirement for 4 such insulin that was not applied during the year in 5 which the list price reduction certification was pro- 6 vided under such section 5(b)(2)(A). 7 ‘‘(d) DEFINITIONS.—In this section— 8 ‘‘(1) the term ‘certified insulin’ means, with re- 9 spect to a year, insulin that has been certified under 10 section 5(b) of the Insulin Price Reduction Act for 11 the year; 12 ‘‘(2) the term ‘insulin’ means any insulin prod- 13 uct approved by the Food and Drug Administration 14 to improve glycemic control in patients with diabetes 15 mellitus; 16 ‘‘(3) the term ‘list price’ has the meaning given 17 the term ‘wholesale acquisition cost’ in section 18 1847A(c)(6)(B) of the Social Security Act; and 19 ‘‘(4) the term ‘rebate’ means any discount, 20 price concession, or fee, other than the fee described 21 in section (a)(1)(B), the terms of which are fixed at 22 the time of the sale and disclosed, but which is not 23 received at the time of the sale.’’. 24 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 6 •S 2199 IS (b) CONFORMING AMENDMENT.—Paragraph (2) of 1 section 223(d) of the Internal Revenue Code of 1986 is 2 amended by redesignating subparagraph (D) as subpara- 3 graph (E) and by inserting after subparagraph (C) the 4 following new subparagraph: 5 ‘‘(D) SAFE HARBOR FOR ABSENCE OF DE- 6 DUCTIBLE FOR INSULIN.—A plan shall not fail 7 to be treated as a high deductible health plan 8 by reason of exempting insulin from any de- 9 ductible pursuant to section 2729A(b) of the 10 Public Health Service Act during the period de- 11 scribed in section 2729A(a)(2) of such Act.’’. 12 (c) EFFECTIVE DATE.—The amendments made by 13 subsections (a) and (b) shall take effect with respect to 14 plan years beginning on or after January 1, 2022. 15 SEC. 3. INSULIN PRICE PROTECTIONS UNDER MEDICARE 16 PART D. 17 Section 1860D–4 of the Social Security Act (42 18 U.S.C. 1395w–104) is amended— 19 (1) by redesignating the subsection (m) as 20 added by section 6063(c) of the SUPPORT for Pa- 21 tients and Communities Act (Public Law 115–271) 22 as subsection (n); and 23 (2) by adding at the end the following new sub- 24 section: 25 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 7 •S 2199 IS ‘‘(o) LIMITATION ON REBATES, PRICE REDUCTIONS, 1 OR OTHER REMUNERATION FOR CERTIFIED INSULIN.— 2 ‘‘(1) LIMITATION.— 3 ‘‘(A) IN GENERAL.—Subject to subpara- 4 graphs (B) and (C), for plan year 2022 and 5 subsequent plan years, a PDP sponsor and a 6 Medicare Advantage organization shall ensure 7 that each prescription drug plan or MA–PD 8 plan offered by the sponsor or organization, and 9 any entity that provides pharmacy benefits 10 management services under a contract with the 11 prescription drug plan or MA–PD plan offered 12 by the sponsor or organization, does not, di- 13 rectly or indirectly, receive from a manufacturer 14 of certified insulin a rebate, reduction in price, 15 or other remuneration with respect to certified 16 insulin that is covered by the plan. 17 ‘‘(B) EXCEPTION.—The requirement under 18 subparagraph (A) shall not apply to— 19 ‘‘(i) any such reduction in price that 20 is reflected at the point of sale to the bene- 21 ficiary; or 22 ‘‘(ii) any remuneration that is a flat 23 fee-based service fee that a manufacturer 24 of such certified insulin pays to a phar- 25 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 8 •S 2199 IS macy benefit manager for services rendered 1 to the manufacturer that relate to arrange- 2 ments by the pharmacy benefit manager to 3 provide pharmacy benefit management 4 services to a prescription drug plan or 5 MA–PD plan, if certain conditions estab- 6 lished by the Secretary are met, including 7 requirements that the fees are transparent 8 to the prescription drug plan or MA–PD 9 plan. 10 ‘‘(C) HOLD HARMLESS FOR FIRST 2 YEARS 11 THAT AN INSULIN IS CERTIFIED.—In the first 12 2 plan years during which paragraph (2) ap- 13 plies with respect to a certified insulin, a PDP 14 sponsor and a Medicare Advantage organization 15 shall not, and shall ensure that any entity that 16 provides pharmacy benefits management serv- 17 ices under a contract with such sponsor or or- 18 ganization does not— 19 ‘‘(i) remove such insulin from the for- 20 mulary applicable to the prescription drug 21 plan or MA–PD plan; 22 ‘‘(ii) impose higher cost-sharing with 23 respect to such insulin than the cost-shar- 24 ing that applied with respect to the cer- 25 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 9 •S 2199 IS tified insulin in the year in which the list 1 price reduction certification was provided 2 under section 5(b)(2)(A) of the Insulin 3 Price Reduction Act; 4 ‘‘(iii) impose any prior authorization 5 requirements for coverage of the certified 6 insulin that were not applied during the 7 year in which the list price reduction cer- 8 tification was provided under such section 9 5(b)(2)(A); or 10 ‘‘(iv) establish a step therapy require- 11 ment for the certified insulin that was not 12 applied during the year in which the list 13 price reduction certification was provided 14 under such section 5(b)(2)(A). 15 ‘‘(2) DEFINITIONS.—In this section: 16 ‘‘(A) CERTIFIED INSULIN.—The term ‘cer- 17 tified insulin’ means, with respect to a year, in- 18 sulin that has been certified under section 5(b) 19 of the Insulin Price Reduction Act for the year. 20 ‘‘(B) INSULIN.—The term ‘insulin’ means 21 any insulin product approved by the Food and 22 Drug Administration to improve glycemic con- 23 trol in patients with diabetes mellitus. 24 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 10 •S 2199 IS ‘‘(C) LIST PRICE.—The term ‘list price’ 1 has the meaning given the term ‘wholesale ac- 2 quisition cost’ in section 1847A(c)(6)(B). 3 ‘‘(D) REBATE.—The term ‘rebate’ means 4 any discount, price concession, or fee, other 5 than the fee described in paragraph (1)(B), the 6 terms of which are fixed at the time of the sale 7 and disclosed, but which is not received at the 8 time of the sale.’’. 9 SEC. 4. APPLICABILITY OF PRE-LIST PRICE REDUCTION 10 AMP TO MEDICAID MINIMUM REBATE 11 AMOUNTS. 12 Section 1927(c) of the Social Security Act (42 U.S.C. 13 1396r–8(c)) is amended— 14 (1) in paragraph (1)(A), in the matter pre- 15 ceding clause (i), by inserting ‘‘and paragraph (5)’’ 16 after ‘‘paragraph (2)’’; 17 (2) in paragraph (3)(A), in the matter pre- 18 ceding clause (i), by inserting ‘‘and paragraph (5)’’ 19 after ‘‘subparagraph (C)’’; and 20 (3) by adding at the end the following new 21 paragraph: 22 ‘‘(5) SPECIAL RULE FOR DETERMINING MIN- 23 IMUM BASIC REBATES FOR INSULIN.— 24 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 11 •S 2199 IS ‘‘(A) IN GENERAL.—In determining the 1 amount of the rebate specified in this sub- 2 section for a dosage form and strength of a cov- 3 ered outpatient drug described in subparagraph 4 (B) for any rebate period occurring after April 5 30, 2020, paragraph (1)(A)(ii)(II) or paragraph 6 (3)(A)(i) (as applicable) shall be applied by sub- 7 stituting— 8 ‘‘(i) the pre-reduction average manu- 9 facturer price (as defined in subparagraph 10 (C)) for the dosage form and strength of 11 the drug for the rebate period; for 12 ‘‘(ii) the average manufacturer price 13 for the dosage form and strength of the 14 drug for the rebate period. 15 ‘‘(B) DRUGS DESCRIBED.—A covered out- 16 patient drug is described in this subparagraph 17 for a rebate period if the drug is insulin for 18 which, throughout such rebate period, the man- 19 ufacturer has certified the list price for each 20 dosage form and strength of such drug in ac- 21 cordance with section 5(b) of the Insulin Price 22 Reduction Act. 23 ‘‘(C) PRE-REDUCTION AVERAGE MANUFAC- 24 TURER PRICE.—For purposes of this para- 25 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS S2199 kjohnson on DSK79L0C42 with BILLS 12 •S 2199 IS graph, the term ‘pre-reduction average manu- 1 facturer price’ means, with respect to each dos- 2 age form and strength of a covered outpatient 3 drug described in subparagraph (B) and a re- 4 bate period— 5 ‘‘(i) the average manufacturer price 6 for such drug for the calendar quarter be- 7 ginning July 1, 2019; increased by 8 ‘‘(ii) the percentage by which the con- 9 sumer price index for all urban consumers 10 (United States city average) for the month 11 before the month in which the rebate pe- 12 riod begins exceeds such index for Sep- 13 tember 2019.’’. 14 SEC. 5. LIST PRICE DATA SUBMISSIONS. 15 (a) INITIAL SUBMISSION.— 16 (1) IN GENERAL.—Not later than April 30, 17 2020, any manufacturer of insulin wishing to receive 18 certification under this section shall submit to the 19 Secretary— 20 (A) data on the list price of any insulin 21 manufactured by the manufacturer during the 22 period beginning on January 1, 2000 (or the 23 first date on which such manufacturer begins 24 VerDate Sep 11 2014 05:59 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2199.IS [Text truncated for display. Full text available on Congress.gov.]