Competition Prescription Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3947 To lower the cost of prescription drugs, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 24, 2019 Mr. MEADOWS introduced the following bill; which was referred to the Com- mittee on Energy and Commerce, and in addition to the Committees on Ways and Means, the Judiciary, Armed Services, and Oversight and Re- form, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To lower the cost of prescription drugs, and for other purposes. 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; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Competition Prescription Act of 2019’’. 5 (b) TABLE OF CONTENTS.—The table of contents for 6 this Act is as follows: 7 Sec. 1. Short title; table of contents. TITLE I—ELIMINATING DELAYS OF GENERIC DRUGS AND BIOSIMILAR PRODUCTS VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 2 •HR 3947 IH Sec. 101. Actions for delays of generic drugs and biosimilar biological products. Sec. 102. REMS approval process for subsequent filers. TITLE II—INCREASING ACCESS TO DRUGS AND BIOSIMILAR PRODUCTS Sec. 201. Expedited development and priority review for generic complex drug products. Sec. 202. Increasing pharmaceutical options to treat an unmet medical need. Sec. 203. Preemption of State barriers to the substitution of biosimilar prod- ucts. Sec. 204. Expedited process for biological products authorized for marketing in European Union. TITLE III—PRESCRIPTION DRUG PRICING AND COMPETITION Sec. 301. Medicare drug coverage. Sec. 302. Fee transparency between pharmacies and PBMs. Sec. 303. Sunset of limit on maximum rebate amount for single source drugs and innovator multiple source drugs. Sec. 304. Regulation of manufacturer-sponsored copay contributions. TITLE IV—PATENT DISCLOSURE REQUIREMENTS Sec. 401. Patent disclosure and transparency requirements. Sec. 402. Antitrust exemption for health insurance issuers to negotiate whole- sale acquisition prices of prescription drugs purchased from drug manufacturers. Sec. 403. Fair treatment of Medicare part B billing codes for the prescribing of biosimilars. TITLE V—FIXING GLOBAL FREELOADING Sec. 501. Chief Pharmaceutical Negotiator in the Office of the United States Trade Representative. TITLE I—ELIMINATING DELAYS 1 OF GENERIC DRUGS AND BIO- 2 SIMILAR PRODUCTS 3 SEC. 101. ACTIONS FOR DELAYS OF GENERIC DRUGS AND 4 BIOSIMILAR BIOLOGICAL PRODUCTS. 5 (a) DEFINITIONS.—In this section— 6 (1) the term ‘‘commercially reasonable, market- 7 based terms’’ means— 8 (A) a nondiscriminatory price for the sale 9 of the covered product at or below, but not 10 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 3 •HR 3947 IH greater than, the most recent wholesale acquisi- 1 tion cost for the drug, as defined in section 2 1847A(c)(6)(B) of the Social Security Act (42 3 U.S.C. 1395w–3a(c)(6)(B)); 4 (B) a schedule for delivery that results in 5 the transfer of the covered product to the eligi- 6 ble product developer consistent with the timing 7 under subsection (b)(2)(A)(iv); and 8 (C) no additional conditions are imposed 9 on the sale of the covered product; 10 (2) the term ‘‘covered product’’— 11 (A) means— 12 (i) any drug approved under sub- 13 section (c) or (j) of section 505 of the Fed- 14 eral Food, Drug, and Cosmetic Act (21 15 U.S.C. 355) or biological product licensed 16 under subsection (a) or (k) of section 351 17 of the Public Health Service Act (42 18 U.S.C. 262); 19 (ii) any combination of a drug or bio- 20 logical product described in clause (i); or 21 (iii) when reasonably necessary to 22 support approval of an application under 23 section 505 of the Federal Food, Drug, 24 and Cosmetic Act (21 U.S.C. 355), or sec- 25 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 4 •HR 3947 IH tion 351 of the Public Health Service Act 1 (42 U.S.C. 262), as applicable, or other- 2 wise meet the requirements for approval 3 under either such section, any product, in- 4 cluding any device, that is marketed or in- 5 tended for use with such a drug or biologi- 6 cal product; and 7 (B) does not include any drug or biological 8 product that appears on the drug shortage list 9 in effect under section 506E of the Federal 10 Food, Drug, and Cosmetic Act (21 U.S.C. 11 356e), unless— 12 (i) the drug or biological product has 13 been on the drug shortage list in effect 14 under such section 506E continuously for 15 more than 6 months; or 16 (ii) the Secretary determines that in- 17 clusion of the drug or biological product as 18 a covered product is likely to contribute to 19 alleviating or preventing a shortage; 20 (3) the term ‘‘device’’ has the meaning given 21 the term in section 201 of the Federal Food, Drug, 22 and Cosmetic Act (21 U.S.C. 321); 23 (4) the term ‘‘eligible product developer’’ means 24 a person that seeks to develop a product for ap- 25 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 5 •HR 3947 IH proval pursuant to an application for approval under 1 subsection (b)(2) or (j) of section 505 of the Federal 2 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or 3 for licensing pursuant to an application under sec- 4 tion 351(k) of the Public Health Service Act (42 5 U.S.C. 262(k)); 6 (5) the term ‘‘license holder’’ means the holder 7 of an application approved under subsection (c) or 8 (j) of section 505 of the Federal Food, Drug, and 9 Cosmetic Act (21 U.S.C. 355) or the holder of a li- 10 cense under subsection (a) or (k) of section 351 of 11 the Public Health Service Act (42 U.S.C. 262) for 12 a covered product; 13 (6) the term ‘‘REMS’’ means a risk evaluation 14 and mitigation strategy under section 505–1 of the 15 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 16 355–1); 17 (7) the term ‘‘REMS with ETASU’’ means a 18 REMS that contains elements to assure safe use 19 under section 505–1(f) of the Federal Food, Drug, 20 and Cosmetic Act (21 U.S.C. 355–1(f)); 21 (8) the term ‘‘Secretary’’ means the Secretary 22 of Health and Human Services; 23 (9) the term ‘‘single, shared system of elements 24 to assure safe use’’ means a single, shared system 25 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 6 •HR 3947 IH of elements to assure safe use under section 505– 1 1(f) of the Federal Food, Drug, and Cosmetic Act 2 (21 U.S.C. 355–1(f)); and 3 (10) the term ‘‘sufficient quantities’’ means an 4 amount of a covered product that the eligible prod- 5 uct developer determines allows it to— 6 (A) conduct testing to support an applica- 7 tion under— 8 (i) subsection (b)(2) or (j) of section 9 505 of the Federal Food, Drug, and Cos- 10 metic Act (21 U.S.C. 355); or 11 (ii) section 351(k) of the Public 12 Health Service Act (42 U.S.C. 262(k)); 13 and 14 (B) fulfill any regulatory requirements re- 15 lating to approval of such an application. 16 (b) CIVIL ACTION FOR FAILURE TO PROVIDE SUFFI- 17 CIENT QUANTITIES OF A COVERED PRODUCT.— 18 (1) IN GENERAL.—An eligible product developer 19 may bring a civil action against the license holder 20 for a covered product seeking relief under this sub- 21 section in an appropriate district court of the United 22 States alleging that the license holder has declined 23 to provide sufficient quantities of the covered prod- 24 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 7 •HR 3947 IH uct to the eligible product developer on commercially 1 reasonable, market-based terms. 2 (2) ELEMENTS.— 3 (A) IN GENERAL.—To prevail in a civil ac- 4 tion brought under paragraph (1), an eligible 5 product developer shall prove, by a preponder- 6 ance of the evidence— 7 (i) that— 8 (I) the covered product is not 9 subject to a REMS with ETASU; or 10 (II) if the covered product is sub- 11 ject to a REMS with ETASU— 12 (aa) the eligible product de- 13 veloper has obtained a covered 14 product authorization from the 15 Secretary in accordance with sub- 16 paragraph (B); and 17 (bb) the eligible product de- 18 veloper has provided a copy of 19 the covered product authorization 20 to the license holder; 21 (ii) that, as of the date on which the 22 civil action is filed, the product developer 23 has not obtained sufficient quantities of 24 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 8 •HR 3947 IH the covered product on commercially rea- 1 sonable, market-based terms; 2 (iii) that the eligible product developer 3 has requested to purchase sufficient quan- 4 tities of the covered product from the li- 5 cense holder; and 6 (iv) that the license holder has not de- 7 livered to the eligible product developer 8 sufficient quantities of the covered product 9 on commercially reasonable, market-based 10 terms— 11 (I) for a covered product that is 12 not subject to a REMS with ETASU, 13 by the date that is 31 days after the 14 date on which the license holder re- 15 ceived the request for the covered 16 product; and 17 (II) for a covered product that is 18 subject to a REMS with ETASU, by 19 31 days after the later of— 20 (aa) the date on which the 21 license holder received the re- 22 quest for the covered product; or 23 (bb) the date on which the 24 license holder received a copy of 25 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 9 •HR 3947 IH the covered product authorization 1 issued by the Secretary in ac- 2 cordance with subparagraph (B). 3 (B) AUTHORIZATION FOR COVERED PROD- 4 UCT SUBJECT TO A REMS WITH ETASU.— 5 (i) REQUEST.—An eligible product de- 6 veloper may submit to the Secretary a 7 written request for the eligible product de- 8 veloper to be authorized to obtain suffi- 9 cient quantities of an individual covered 10 product subject to a REMS with ETASU. 11 (ii) AUTHORIZATION.—Not later than 12 120 days after the date on which a request 13 under clause (i) is received, the Secretary 14 shall, by written notice, authorize the eligi- 15 ble product developer to obtain sufficient 16 quantities of an individual covered product 17 subject to a REMS with ETASU for pur- 18 poses of— 19 (I) development and testing that 20 does not involve human clinical trials, 21 if the eligible product developer has 22 agreed to comply with any conditions 23 the Secretary determines necessary; or 24 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 10 •HR 3947 IH (II) development and testing that 1 involves human clinical trials, if the 2 eligible product developer has— 3 (aa)(AA) submitted proto- 4 cols, informed consent docu- 5 ments, and informational mate- 6 rials for testing that include pro- 7 tections that provide safety pro- 8 tections comparable to those pro- 9 vided by the REMS for the cov- 10 ered product; or 11 (BB) otherwise satisfied the 12 Secretary that such protections 13 will be provided; and 14 (bb) met any other require- 15 ments the Secretary may estab- 16 lish. 17 (iii) NOTICE.—A covered product au- 18 thorization issued under this subparagraph 19 shall state that the provision of the covered 20 product by the license holder under the 21 terms of the authorization will not be a 22 violation of the REMS for the covered 23 product. 24 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 11 •HR 3947 IH (3) AFFIRMATIVE DEFENSE.—In a civil action 1 brought under paragraph (1), it shall be an affirma- 2 tive defense, on which the defendant has the burden 3 of persuasion by a preponderance of the evidence— 4 (A) that, on the date on which the eligible 5 product developer requested to purchase suffi- 6 cient quantities of the covered product from the 7 license holder— 8 (i) neither the license holder nor any 9 of its agents, wholesalers, or distributors 10 was engaged in the manufacturing or com- 11 mercial marketing of the covered product; 12 and 13 (ii) neither the license holder nor any 14 of its agents, wholesalers, or distributors 15 otherwise had access to inventory of the 16 covered product to supply to the eligible 17 product developer on commercially reason- 18 able, market-based terms; 19 (B) that— 20 (i) the license holder sells the covered 21 product through agents, distributors, or 22 wholesalers; 23 (ii) the license holder has placed no 24 restrictions, explicit or implicit, on its 25 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 12 •HR 3947 IH agents, distributors, or wholesalers to sell 1 covered products to eligible product devel- 2 opers; and 3 (iii) the covered product can be pur- 4 chased by the eligible product developer in 5 sufficient quantities on commercially rea- 6 sonable, market-based terms from the 7 agents, distributors, or wholesalers of the 8 license holder; or 9 (C) that the license holder made an offer 10 to sell sufficient quantities of the covered prod- 11 uct to the eligible product developer at commer- 12 cially reasonable market-based terms— 13 (i) for a covered product that is not 14 subject to a REMS with ETASU, by the 15 date that is 14 days after the date on 16 which the license holder received the re- 17 quest for the covered product, and the eli- 18 gible product developer did not accept such 19 offer by the date that is 7 days after the 20 date on which the eligible product devel- 21 oper received such offer from the license 22 holder; or 23 (ii) for a covered product that is sub- 24 ject to a REMS with ETASU, by the date 25 VerDate Sep 11 2014 02:33 Aug 09, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3947.IH H3947 kjohnson on DSK79L0C42 with BILLS 13 •HR 3947 IH that is 20 days after the date on which the 1 license holder received the request for the 2 covered product, and the eligible product 3 developer did not accept su [Text truncated for display. 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