Pharmaceutical REPAI Act

I 116TH CONGRESS 1ST SESSION H. R. 4619 To amend title XVIII of the Social Security Act to require drug manufactur- ers to pay a Medicare part D rebate for certain drugs if the price of such drugs increases faster than inflation. IN THE HOUSE OF REPRESENTATIVES OCTOBER 8, 2019 Ms. SCHAKOWSKY (for herself, Mr. HIGGINS of New York, and Ms. WILD) in- troduced the following bill; which was referred to the Committee on En- ergy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdic- tion of the committee concerned A BILL To amend title XVIII of the Social Security Act to require drug manufacturers to pay a Medicare part D rebate for certain drugs if the price of such drugs increases faster than inflation. 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 ‘‘Pharmaceutical Re- 4 bates for Excessive Pricing Above Inflation Act’’ or the 5 ‘‘Pharmaceutical REPAI Act’’. 6 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 4619 IH SEC. 2. MEDICARE PART D PRESCRIPTION DRUG INFLA- 1 TION REBATE BY MANUFACTURERS. 2 Part D of title XVIII of the Social Security Act is 3 amended by inserting after section 1860D–14A (42 4 U.S.C. 1395w–114a) the following new section: 5 ‘‘SEC. 1860D–14B. MANUFACTURER REBATE FOR CERTAIN 6 DRUGS WITH PRICES INCREASING FASTER 7 THAN INFLATION. 8 ‘‘(a) IN GENERAL.—Subject to the provisions of this 9 section, in order for coverage to be available under this 10 part for a part D rebatable drug of a manufacturer dis- 11 pensed during an applicable year, the manufacturer must 12 have entered into and have in effect an agreement de- 13 scribed in subsection (b). For purposes of this section the 14 term ‘applicable year’ means a year beginning with 2022. 15 ‘‘(b) AGREEMENTS.— 16 ‘‘(1) TERMS OF AGREEMENT.—An agreement 17 described in this subsection, with respect to a manu- 18 facturer of a part D rebatable drug, is an agreement 19 under which the following applies: 20 ‘‘(A) SECRETARIAL PROVISION OF INFOR- 21 MATION.—Not later than 9 months after the 22 end of each applicable year with respect to 23 which the agreement is in effect, the Secretary, 24 for the part D rebatable drug of the manufac- 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 4619 IH turer, reports to the manufacturer the following 1 for such year: 2 ‘‘(i) Information on the total units (as 3 defined in subsection (g)(2)) dispensed for 4 each dosage form and strength with re- 5 spect to such part D rebatable drug and 6 year. 7 ‘‘(ii) Information on the amount (if 8 any) of the excess average manufacturer 9 price increase described in subsection 10 (c)(1)(B) for each dosage form and 11 strength with respect to such drug and 12 year. 13 ‘‘(iii) The rebate amount specified 14 under subsection (c) for each dosage form 15 and strength with respect to such drug and 16 year. 17 ‘‘(B) MANUFACTURER REQUIREMENTS.— 18 For each applicable year with respect to which 19 the agreement is in effect, the manufacturer of 20 the part D rebatable drug, for each dosage 21 form and strength with respect to such drug, 22 not later than 30 days after the date of receipt 23 from the Secretary of the information described 24 in subparagraph (A) for such year, provides to 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 4619 IH the Secretary a rebate that is equal to the 1 amount specified in subsection (c) for such dos- 2 age form and strength with respect to such 3 drug for such year. 4 ‘‘(2) LENGTH OF AGREEMENT.— 5 ‘‘(A) IN GENERAL.—An agreement under 6 this section, with respect to a part D rebatable 7 drug, shall be effective for an initial period of 8 not less than one year and shall be automati- 9 cally renewed for a period of not less than one 10 year unless terminated under subparagraph 11 (B). 12 ‘‘(B) TERMINATION.— 13 ‘‘(i) BY SECRETARY.—The Secretary 14 may provide for termination of an agree- 15 ment under this section for violation of the 16 requirements of the agreement or other 17 good cause shown. Such termination shall 18 not be effective earlier than 60 days after 19 the date of notice of such termination. The 20 Secretary shall provide, upon request, a 21 manufacturer with a hearing concerning 22 such a termination, but such hearing shall 23 not delay the effective date of the termi- 24 nation. 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 4619 IH ‘‘(ii) BY A MANUFACTURER.—A man- 1 ufacturer may terminate an agreement 2 under this section for any reason. Any 3 such termination shall not be effective 4 until the year beginning at least 60 days 5 after the date the manufacturer provides 6 notice to the Secretary. 7 ‘‘(C) EFFECTIVENESS OF TERMINATION.— 8 Any termination under this paragraph shall not 9 affect rebates due under the agreement under 10 this section before the effective date of its ter- 11 mination. 12 ‘‘(D) DELAY BEFORE REENTRY.—In the 13 case of any agreement under this section with 14 a manufacturer which is terminated in a plan 15 year, another such agreement with the manu- 16 facturer (or a successor manufacturer) may not 17 be entered into before the subsequent plan year, 18 unless the Secretary finds good cause for an 19 earlier reinstatement of such an agreement. 20 ‘‘(3) INFORMATION.—For purposes of carrying 21 out this section, the Secretary shall use information 22 submitted by manufacturers under section 23 1927(b)(3). 24 ‘‘(c) REBATE AMOUNT.— 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 4619 IH ‘‘(1) IN GENERAL.—For purposes of this sec- 1 tion, the amount specified in this subsection for a 2 dosage form and strength with respect to a part D 3 rebatable drug and applicable year is, subject to sub- 4 paragraphs (B) and (C) of paragraph (3), the 5 amount equal to the product of— 6 ‘‘(A) the total average number of units 7 weighted by, and dispensed for, such dosage 8 form and strength with respect to such part D 9 rebatable drug and year; and 10 ‘‘(B) the amount (if any) by which— 11 ‘‘(i) the average manufacturer price 12 (as defined in subsection (g)) paid for such 13 dosage form and strength with respect to 14 such part D rebatable drug during the 15 year; exceeds 16 ‘‘(ii) the inflation-adjusted payment 17 amount determined under paragraph (2) 18 for such dosage form and strength with re- 19 spect to such part D rebatable drug during 20 the year. 21 ‘‘(2) DETERMINATION OF INFLATION-ADJUSTED 22 PAYMENT AMOUNT.—The inflation-adjusted payment 23 amount determined under this paragraph for a dos- 24 age form and strength with respect to a part D 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 4619 IH rebatable drug for an applicable year, subject to sub- 1 paragraphs (A) and (D) of paragraph (3), is— 2 ‘‘(A) the average manufacturer price paid 3 for such dosage form and strength with respect 4 to such drug in the payment amount bench- 5 mark year (as defined in subsection (g)(3)); in- 6 creased by 7 ‘‘(B) the percentage by which the rebate 8 period CPI–U (as defined in subsection (g)(5)) 9 for the applicable year exceeds the benchmark 10 period CPI–U (as defined in subsection (g)(4)). 11 ‘‘(3) SPECIAL TREATMENT OF CERTAIN DRUGS 12 AND EXEMPTION.— 13 ‘‘(A) SUBSEQUENTLY APPROVED DRUGS.— 14 In the case of a part D rebatable drug first ap- 15 proved by the Food and Drug Administration 16 after January 1, 2016, subparagraph (A) of 17 paragraph (2) shall be applied as if the term 18 ‘payment amount benchmark year’ were defined 19 under subsection (g)(3) as the first year begin- 20 ning after the day on which the drug was first 21 marketed and subparagraph (B) of paragraph 22 (2) shall be applied as if the term ‘benchmark 23 period CPI–U’ were defined under subsection 24 (g)(4) as if the reference to ‘January 2016’ 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 4619 IH under such subsection were a reference to ‘Jan- 1 uary of the first year beginning after the date 2 on which the drug was first marketed by any 3 manufacturer’. 4 ‘‘(B) EXEMPTION FOR SHORTAGES.—The 5 Secretary may reduce or waive the rebate under 6 paragraph (1) with respect to a part D rebata- 7 ble drug in the case of a shortage of such drug 8 or other exigent circumstances, as determined 9 by the Secretary. 10 ‘‘(C) TREATMENT OF NEW FORMULA- 11 TIONS.— 12 ‘‘(i) IN GENERAL.—In the case of a 13 part D rebatable drug that is a line exten- 14 sion of a single source drug or an inno- 15 vator multiple source drug that is an oral 16 solid dosage form, the Secretary shall es- 17 tablish a formula for determining the 18 amount specified in this subsection with 19 respect to such part D rebatable drug and 20 an applicable year with consideration of 21 the single source drug or an innovator 22 multiple source drug. 23 ‘‘(ii) LINE EXTENSION DEFINED.—In 24 this subparagraph, the term ‘line exten- 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 4619 IH sion’ means, with respect to a part D reba- 1 table drug, a new formulation of the drug 2 (as determined by the Secretary), such as 3 an extended release formulation, but does 4 not include an abuse-deterrent formulation 5 of the drug (as determined by the Sec- 6 retary), regardless of whether such abuse- 7 deterrent formulation is an extended re- 8 lease formulation. 9 ‘‘(d) REBATE DEPOSITS.—Amounts paid as rebates 10 under subsection (c) shall be deposited into the Medicare 11 Prescription Drug Account in the Federal Supplementary 12 Medical Insurance Trust Fund established under section 13 1841. 14 ‘‘(e) CIVIL MONEY PENALTY.—In the case of a man- 15 ufacturer of a part D rebatable drug with an agreement 16 in effect under this section who has failed to comply with 17 the terms of the agreement under subsection (b)(1)(B) 18 with respect to such drug for an applicable year, the Sec- 19 retary may impose a civil money penalty on such manufac- 20 turer in an amount equal to 125 percent of the amount 21 specified in subsection (c) for such drug for such year. 22 The provisions of section 1128A (other than subsections 23 (a) (with respect to amounts of penalties or additional as- 24 sessments) and (b)) shall apply to a civil money penalty 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 4619 IH under this subsection in the same manner as such provi- 1 sions apply to a penalty or proceeding under section 2 1128A(a). 3 ‘‘(f) JUDICIAL REVIEW.—There shall be no judicial 4 review of the following: 5 ‘‘(1) The determination of units under this sec- 6 tion. 7 ‘‘(2) The determination of whether a drug is a 8 part D rebatable drug under this section. 9 ‘‘(3) The calculation of the rebate amount 10 under this section. 11 ‘‘(g) DEFINITIONS.—In this section: 12 ‘‘(1) PART D REBATABLE DRUG DEFINED.— 13 ‘‘(A) IN GENERAL.—The term ‘part D 14 rebatable drug’ means a drug or biological that 15 would (without application of this section) be a 16 covered part D drug, except such term shall, 17 with respect to an applicable year, not include 18 such a drug or biological if the average total 19 cost under a prescription drug plan under this 20 part or MA–PD plan under part C for such 21 year per individual who uses such a drug or bi- 22 ological, as determined by the Secretary, are 23 less than, subject to subparagraph (B), $100, 24 as determined by the Secretary using the most 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 4619 IH recent data available or, if data is not available, 1 as estimated by the Secretary. 2 ‘‘(B) INCREASE.—The dollar amount ap- 3 plied under subparagraph (A)— 4 ‘‘(i) for 2023, shall be the dollar 5 amount specified under such subparagraph 6 for 2022, increased by the percentage in- 7 crease in the consumer price index for all 8 urban consumers (United States city aver- 9 age) as of January of 2022; and 10 ‘‘(ii) for a subsequent year, shall be 11 the dollar amount specified in this sub- 12 paragraph (or subparagraph (A)) for the 13 previous year, increased by the percentage 14 increase in the consumer price index for all 15 urban consumers (United States city aver- 16 age) as of January of the previous year. 17 Any dollar amount specified under this sub- 18 paragraph that is not a multiple of $10 shall be 19 rounded to the nearest multiple of $10. 20 ‘‘(2) UNIT DEFINED.—The term ‘unit’ means, 21 with respect to a part D rebatable drug, the lowest 22 identifiable quantity (such as a capsule or tablet, 23 milligram of molecules, or grams) of the part D 24 rebatable drug that is dispensed to individuals en- 25 VerDate Sep 11 2014 22:21 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4619.IH H4619 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 4619 IH rolled under a prescription drug plan under this part 1 or an MA–PD plan under part C. 2 ‘‘(3) PAYMENT AMOUNT BENCHMARK YEAR.— 3 The term ‘payment amount benchmark year’ means 4 the year beginning January 1, 2016. 5 ‘‘(4) BENCHMARK PERIOD CPI–U.—The term 6 ‘benchmark period CPI–U’ means the consumer 7 price index for all urban consumers (United States 8 city average) for January 2016. 9 ‘‘(5) REBATE PERIOD CPI–U.—The term ‘rebate 10 period CPI–U’ means, with respect to an applicable 11 year, the consumer price index for all urban con- 12 sumers (United States city average) for January of 13 such year. 14 ‘‘(6) AVERAGE MANUFACTURER PRICE.—The 15 term ‘average manufacturer price’ has the meaning, 16 with respect to a part D rebatable drug of a manu- 17 facturer for an applicable year, given such term in 18 section 1927(k)(1), with respect to a covered o [Text truncated for display. 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