Capping Drug Costs for Seniors Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4649 To amend title XVIII of the Social Security Act to provide for a cap on beneficiary liability under part D of the Medicare program, and for other purposes. IN THE HOUSE OF REPRESENTATIVES OCTOBER 11, 2019 Mr. HORSFORD (for himself and Ms. KENDRA S. HORN of Oklahoma) intro- duced the following bill; which was referred to the Committee on Energy 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 jurisdiction of the committee concerned A BILL To amend title XVIII of the Social Security Act to provide for a cap on beneficiary liability under part D of the Medicare program, 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. 3 This Act may be cited as the ‘‘Capping Drug Costs 4 for Seniors Act of 2019’’. 5 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 2 •HR 4649 IH SEC. 2. MEDICARE PART D BENEFIT REDESIGN. 1 (a) BENEFIT STRUCTURE REDESIGN.—Section 2 1860D–2(b) of the Social Security Act (42 U.S.C. 1395w– 3 102(b)) is amended— 4 (1) in paragraph (2)— 5 (A) in subparagraph (A), in the matter 6 preceding clause (i), by inserting ‘‘for a year 7 preceding 2022 and for costs above the annual 8 deductible specified in paragraph (1) and up to 9 the annual out-of-pocket threshold specified in 10 paragraph (4)(B) for 2022 and each subsequent 11 year’’ after ‘‘paragraph (3)’’; 12 (B) in subparagraph (C)— 13 (i) in clause (i), in the matter pre- 14 ceding subclause (I), by inserting ‘‘for a 15 year preceding 2022,’’ after ‘‘paragraph 16 (4),’’; and 17 (ii) in clause (ii)(III), by striking 18 ‘‘and each subsequent year’’ and inserting 19 ‘‘and 2021’’; and 20 (C) in subparagraph (D)— 21 (i) in clause (i)— 22 (I) in the matter preceding sub- 23 clause (I), by inserting ‘‘for a year 24 preceding 2022,’’ after ‘‘paragraph 25 (4),’’; and 26 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 3 •HR 4649 IH (II) in subclause (I)(bb), by 1 striking ‘‘a year after 2018’’ and in- 2 serting ‘‘each of years 2018 through 3 2021’’; and 4 (ii) in clause (ii)(V), by striking 5 ‘‘2019 and each subsequent year’’ and in- 6 serting ‘‘each of years 2019 through 7 2021’’; 8 (2) in paragraph (3)(A)— 9 (A) in the matter preceding clause (i), by 10 inserting ‘‘for a year preceding 2022,’’ after 11 ‘‘and (4),’’; and 12 (B) in clause (ii), by striking ‘‘for a subse- 13 quent year’’ and inserting ‘‘for each of years 14 2007 through 2021’’; and 15 (3) in paragraph (4)— 16 (A) in subparagraph (A)— 17 (i) in clause (i)— 18 (I) by redesignating subclauses 19 (I) and (II) as items (aa) and (bb), 20 respectively, and moving the margin 21 of each such redesignated item 2 ems 22 to the right; 23 (II) in the matter preceding item 24 (aa), as redesignated by subclause (I), 25 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 4 •HR 4649 IH by striking ‘‘is equal to the greater 1 of—’’ and inserting ‘‘is equal to— 2 ‘‘(I) for a year preceding 2022, 3 the greater of—’’; 4 (III) by striking the period at the 5 end of item (bb), as redesignated by 6 subclause (I), and inserting ‘‘; and’’; 7 and 8 (IV) by adding at the end the fol- 9 lowing: 10 ‘‘(II) for 2022 and each suc- 11 ceeding year, $0.’’; and 12 (ii) in clause (ii)— 13 (I) by striking ‘‘clause (i)(I)’’ and 14 inserting ‘‘clause (i)(I)(aa)’’; and 15 (II) by adding at the end the fol- 16 lowing new sentence: ‘‘The Secretary 17 shall continue to calculate the dollar 18 amounts specified in clause (i)(I)(aa), 19 including with the adjustment under 20 this clause, after 2021 for purposes of 21 section 1860D–14(a)(1)(D)(iii).’’; 22 (B) in subparagraph (B)— 23 (i) in clause (i)— 24 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 5 •HR 4649 IH (I) in subclause (V), by striking 1 ‘‘or’’ at the end; 2 (II) in subclause (VI)— 3 (aa) by striking ‘‘for a sub- 4 sequent year’’ and inserting ‘‘for 5 2021’’; and 6 (bb) by striking the period 7 at the end and inserting a semi- 8 colon; and 9 (III) by adding at the end the 10 following new subclauses: 11 ‘‘(VII) for 2022, is equal to 12 $2,000; or 13 ‘‘(VIII) for a subsequent year, is 14 equal to the amount specified in this 15 subparagraph for the previous year, 16 increased by the annual percentage in- 17 crease described in paragraph (6) for 18 the year involved.’’; and 19 (ii) in clause (ii), by striking ‘‘clause 20 (i)(II)’’ and inserting ‘‘clause (i)’’; 21 (C) in subparagraph (C)(i), by striking 22 ‘‘and for amounts’’ and inserting ‘‘and, for a 23 year preceding 2022, for amounts’’; and 24 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 6 •HR 4649 IH (D) in subparagraph (E), by striking ‘‘In 1 applying’’ and inserting ‘‘For each of years 2 2011 through 2021, in applying’’. 3 (b) DECREASING REINSURANCE PAYMENT 4 AMOUNT.—Section 1860D–15(b)(1) of the Social Security 5 Act (42 U.S.C. 1395w–115(b)(1)) is amended by inserting 6 after ‘‘80 percent’’ the following: ‘‘(or, with respect to a 7 coverage year after 2021, 20 percent)’’. 8 (c) MANUFACTURER DISCOUNT PROGRAM.— 9 (1) IN GENERAL.—Part D of title XVIII of the 10 Social Security Act (42 U.S.C. 1395w–101 et seq.) 11 is amended by inserting after section 1860D–14A 12 the following new section: 13 ‘‘SEC. 1860D–14B. MANUFACTURER DISCOUNT PROGRAM. 14 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab- 15 lish a manufacturer discount program (in this section re- 16 ferred to as the ‘program’). Under the program, the Sec- 17 retary shall enter into agreements described in subsection 18 (b) with manufacturers and provide for the performance 19 of the duties described in subsection (c). The Secretary 20 shall establish a model agreement for use under the pro- 21 gram by not later than January 1, 2021, in consultation 22 with manufacturers, and allow for comment on such model 23 agreement. 24 ‘‘(b) TERMS OF AGREEMENT.— 25 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 7 •HR 4649 IH ‘‘(1) IN GENERAL.— 1 ‘‘(A) AGREEMENT.—An agreement under 2 this section shall require the manufacturer to 3 provide applicable beneficiaries access to dis- 4 counted prices for applicable drugs of the man- 5 ufacturer that are dispensed on or after Janu- 6 ary 1, 2022. 7 ‘‘(B) PROVISION OF DISCOUNTED PRICES 8 AT THE POINT-OF-SALE.—The discounted prices 9 described in subparagraph (A) shall be provided 10 to the applicable beneficiary at the pharmacy or 11 by the mail order service at the point-of-sale of 12 an applicable drug. 13 ‘‘(C) TIMING OF AGREEMENT.— 14 ‘‘(i) SPECIAL RULE FOR 2022.—In 15 order for an agreement with a manufac- 16 turer to be in effect under this section with 17 respect to the period beginning on January 18 1, 2022, and ending on December 31, 19 2022, the manufacturer shall enter into 20 such agreement not later than 30 days 21 after the date of the establishment of a 22 model agreement under subsection (a). 23 ‘‘(ii) 2023 AND SUBSEQUENT 24 YEARS.—In order for an agreement with a 25 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 8 •HR 4649 IH manufacturer to be in effect under this 1 section with respect to plan year 2023 or 2 a subsequent plan year, the manufacturer 3 shall enter into such agreement (or such 4 agreement shall be renewed under para- 5 graph (4)(A)) not later than January 30 of 6 the preceding year. 7 ‘‘(2) PROVISION OF APPROPRIATE DATA.—Each 8 manufacturer with an agreement in effect under this 9 section shall collect and have available appropriate 10 data, as determined by the Secretary, to ensure that 11 it can demonstrate to the Secretary compliance with 12 the requirements under the program. 13 ‘‘(3) COMPLIANCE WITH REQUIREMENTS FOR 14 ADMINISTRATION OF PROGRAM.—Each manufac- 15 turer with an agreement in effect under this section 16 shall comply with requirements imposed by the Sec- 17 retary or a third party with a contract under sub- 18 section (d)(3), as applicable, for purposes of admin- 19 istering the program, including any determination 20 under subparagraph (A) of subsection (c)(1) or pro- 21 cedures established under such subsection (c)(1). 22 ‘‘(4) LENGTH OF AGREEMENT.— 23 ‘‘(A) IN GENERAL.—An agreement under 24 this section shall be effective for an initial pe- 25 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 9 •HR 4649 IH riod of not less than 12 months and shall be 1 automatically renewed for a period of not less 2 than 1 year unless terminated under subpara- 3 graph (B). 4 ‘‘(B) TERMINATION.— 5 ‘‘(i) BY THE SECRETARY.—The Sec- 6 retary may provide for termination of an 7 agreement under this section for a knowing 8 and willful violation of the requirements of 9 the agreement or other good cause shown. 10 Such termination shall not be effective ear- 11 lier than 30 days after the date of notice 12 to the manufacturer of such termination. 13 The Secretary shall provide, upon request, 14 a manufacturer with a hearing concerning 15 such a termination, and such hearing shall 16 take place prior to the effective date of the 17 termination with sufficient time for such 18 effective date to be repealed if the Sec- 19 retary determines appropriate. 20 ‘‘(ii) BY A MANUFACTURER.—A man- 21 ufacturer may terminate an agreement 22 under this section for any reason. Any 23 such termination shall be effective, with re- 24 spect to a plan year— 25 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 10 •HR 4649 IH ‘‘(I) if the termination occurs be- 1 fore January 30 of a plan year, as of 2 the day after the end of the plan year; 3 and 4 ‘‘(II) if the termination occurs on 5 or after January 30 of a plan year, as 6 of the day after the end of the suc- 7 ceeding plan year. 8 ‘‘(iii) EFFECTIVENESS OF TERMI- 9 NATION.—Any termination under this sub- 10 paragraph shall not affect discounts for 11 applicable drugs of the manufacturer that 12 are due under the agreement before the ef- 13 fective date of its termination. 14 ‘‘(iv) NOTICE TO THIRD PARTY.—The 15 Secretary shall provide notice of such ter- 16 mination to a third party with a contract 17 under subsection (d)(3) within not less 18 than 30 days before the effective date of 19 such termination. 20 ‘‘(c) DUTIES DESCRIBED.—The duties described in 21 this subsection are the following: 22 ‘‘(1) ADMINISTRATION OF PROGRAM.—Admin- 23 istering the program, including— 24 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 11 •HR 4649 IH ‘‘(A) the determination of the amount of 1 the discounted price of an applicable drug of a 2 manufacturer; 3 ‘‘(B) the establishment of procedures 4 under which discounted prices are provided to 5 applicable beneficiaries at pharmacies or by 6 mail order service at the point-of-sale of an ap- 7 plicable drug; 8 ‘‘(C) the establishment of procedures to 9 ensure that, not later than the applicable num- 10 ber of calendar days after the dispensing of an 11 applicable drug by a pharmacy or mail order 12 service, the pharmacy or mail order service is 13 reimbursed for an amount equal to the dif- 14 ference between— 15 ‘‘(i) the negotiated price of the appli- 16 cable drug; and 17 ‘‘(ii) the discounted price of the appli- 18 cable drug; 19 ‘‘(D) the establishment of procedures to 20 ensure that the discounted price for an applica- 21 ble drug under this section is applied before any 22 coverage or financial assistance under other 23 health benefit plans or programs that provide 24 coverage or financial assistance for the pur- 25 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 12 •HR 4649 IH chase or provision of prescription drug coverage 1 on behalf of applicable beneficiaries as the Sec- 2 retary may specify; and 3 ‘‘(E) providing a reasonable dispute resolu- 4 tion mechanism to resolve disagreements be- 5 tween manufacturers, applicable beneficiaries, 6 and the third party with a contract under sub- 7 section (d)(3). 8 ‘‘(2) MONITORING COMPLIANCE.— 9 ‘‘(A) IN GENERAL.—The Secretary shall 10 monitor compliance by a manufacturer with the 11 terms of an agreement under this section. 12 ‘‘(B) NOTIFICATION.—If a third party 13 with a contract under subsection (d)(3) deter- 14 mines that the manufacturer is not in compli- 15 ance with such agreement, the third party shall 16 notify the Secretary of such noncompliance for 17 appropriate enforcement under subsection (e). 18 ‘‘(3) COLLECTION OF DATA FROM PRESCRIP- 19 TION DRUG PLANS AND MA–PD PLANS.—The Sec- 20 retary may collect appropriate data from prescrip- 21 tion drug plans and MA–PD plans in a timeframe 22 that allows for discounted prices to be provided for 23 applicable drugs under this section. 24 ‘‘(d) ADMINISTRATION.— 25 VerDate Sep 11 2014 23:59 Oct 11, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H4649.IH H4649 kjohnson on DSK79L0C42 with BILLS 13 •HR 4649 IH ‘‘(1) IN GENERAL.—Subject to paragraph (2), 1 the Secretary shall provide for the implementation of 2 this section, including the performance of the duties 3 described in subsection (c). 4 ‘‘(2) LIMITATION.—In providing for the imple- 5 mentation of this section, the Secretary shall not re- 6 ceive or distribute any funds of a manufacturer 7 under the program. 8 ‘‘(3) CONTRACT WITH THIRD PARTIES.—The 9 Secretary shall enter into a contract with one or 10 more third parties to administer the requirements 11 established by the Secretary in order to carry out 12 this section. At a minimum, the contract with a 13 third party under the preceding sentence shall re- 14 quire that the third party— 15 ‘‘(A) receive and transmit information be- 16 tween the Secretary, manufacturers, and other 17 individuals or entitie [Text truncated for display. Full text available on Congress.gov.]