Insulin Price Reduction Act

I 116TH CONGRESS 1ST SESSION H. R. 4906 To provide patient protections with respect to the cost of insulin. IN THE HOUSE OF REPRESENTATIVES OCTOBER 29, 2019 Ms. DEGETTE (for herself and Mr. REED) introduced 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 provi- sions as fall within the jurisdiction of the committee concerned 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 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 4906 IH 300gg–11 et seq.) is amended by adding at the end the 1 following: 2 ‘‘SEC. 2729A. INSULIN PRICE PROTECTIONS. 3 ‘‘(a) CONTRACTING REQUIREMENTS.— 4 ‘‘(1) IN GENERAL.— 5 ‘‘(A) REQUIREMENT.—Except as provided 6 in subparagraph (B), a group health plan or a 7 health insurance issuer offering group or indi- 8 vidual health insurance coverage shall not, and 9 shall ensure that any entity that provides phar- 10 macy benefits management services under a 11 contract with any such health plan or health in- 12 surance coverage does not, directly or indirectly, 13 receive from a manufacturer of certified insulin 14 a rebate, reduction in price, or other remunera- 15 tion with respect to such insulin received by an 16 enrollee in the plan or coverage and covered by 17 the plan or coverage. 18 ‘‘(B) EXCEPTION.—The requirement under 19 subparagraph (A) shall not apply to— 20 ‘‘(i) any such reduction in price that 21 is reflected at the point of sale to the en- 22 rollee; or 23 ‘‘(ii) any remuneration that is a flat 24 fee-based service fee that a manufacturer 25 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 4906 IH of such insulin pays to a pharmacy benefit 1 manager for services rendered to the man- 2 ufacturer that relate to arrangements by 3 the pharmacy benefit manager to provide 4 pharmacy benefit management services to 5 a health plan or health insurance issuer, if 6 certain conditions established by the Sec- 7 retary are met, including requirements 8 that the fees are transparent to the health 9 plan or health insurance issuer. 10 ‘‘(2) APPLICABILITY.—The restriction under 11 paragraph (1) shall apply with respect to insulin de- 12 scribed in paragraph (1), for which the manufac- 13 turer has certified the list price in accordance with 14 section 5(b) of the Insulin Price Reduction Act with 15 respect to— 16 ‘‘(A) any plan year in which the list price 17 for insulin is certified under section 5(b)(2)(A) 18 of the Insulin Price Reduction Act; and 19 ‘‘(B) each subsequent plan year during 20 which the manufacturer limits any increase in 21 the list price to the price that gave rise to the 22 restriction under paragraph (1), adjusted by 23 not more than the price change in the medical 24 care component of the consumer price index for 25 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 4906 IH all urban consumers (U.S. city average), as cer- 1 tified under section 5(b)(2)(B) of the Insulin 2 Price Reduction Act. 3 ‘‘(b) DEDUCTIBLE LIMITATION.—A group health 4 plan or a health insurance issuer offering group or indi- 5 vidual health insurance coverage shall not apply any de- 6 ductible amount that otherwise is applicable to prescrip- 7 tion drugs with respect to coverage of certified insulin 8 under such plan or coverage, during the period described 9 in subsection (a)(2). 10 ‘‘(c) HOLD HARMLESS.—During the period begin- 11 ning on the date a certification is first made under section 12 5(b)(2)(A) of the Insulin Price Reduction Act and ending 13 on the last day of the second plan year beginning on or 14 after such date, a group health plan or a health insurance 15 issuer offering group or individual health insurance cov- 16 erage shall not, and shall ensure that any entity that pro- 17 vides pharmacy benefits management services under a 18 contract with such health plan or health insurance cov- 19 erage does not— 20 ‘‘(1) restrict or disadvantage such insulin from 21 the formulary applicable to the plan or coverage rel- 22 ative to any other insulin or similar formulation; 23 ‘‘(2) impose higher cost-sharing with respect to 24 such insulin than the cost-sharing that applied with 25 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 4906 IH respect to the insulin in the year in which the list 1 price reduction certification was provided under sec- 2 tion 5(b)(2)(A) of the Insulin Price Reduction Act; 3 ‘‘(3) impose any prior authorization require- 4 ments for coverage of such insulin that were not ap- 5 plied during the year in which the list price reduc- 6 tion certification was provided under such section 7 5(b)(2)(A); or 8 ‘‘(4) establish a step therapy requirement for 9 such insulin that was not applied during the year in 10 which the list price reduction certification was pro- 11 vided under such section 5(b)(2)(A). 12 ‘‘(d) DEFINITIONS.—In this section— 13 ‘‘(1) the term ‘certified insulin’ means, with re- 14 spect to a year, insulin that has been certified under 15 section 5(b) of the Insulin Price Reduction Act for 16 the year; 17 ‘‘(2) the term ‘insulin’ means any insulin prod- 18 uct approved by the Food and Drug Administration 19 to improve glycemic control in patients with diabetes 20 mellitus; 21 ‘‘(3) the term ‘list price’ has the meaning given 22 the term ‘wholesale acquisition cost’ in section 23 1847A(c)(6)(B) of the Social Security Act; and 24 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 4906 IH ‘‘(4) the term ‘rebate’ means any discount, 1 price concession, or fee, other than the fee described 2 in section (a)(1)(B), the terms of which are fixed at 3 the time of the sale and disclosed, but which is not 4 received at the time of the sale.’’. 5 (b) CONFORMING AMENDMENT.—Paragraph (2) of 6 section 223(d) of the Internal Revenue Code of 1986 is 7 amended by redesignating subparagraph (D) as subpara- 8 graph (E) and by inserting after subparagraph (C) the 9 following new subparagraph: 10 ‘‘(D) SAFE HARBOR FOR ABSENCE OF DE- 11 DUCTIBLE FOR INSULIN.—A plan shall not fail 12 to be treated as a high deductible health plan 13 by reason of exempting insulin from any de- 14 ductible pursuant to section 2729A(b) of the 15 Public Health Service Act during the period de- 16 scribed in section 2729A(a)(2) of such Act.’’. 17 (c) EFFECTIVE DATE.—The amendments made by 18 subsections (a) and (b) shall take effect with respect to 19 plan years beginning on or after January 1, 2022. 20 SEC. 3. INSULIN PRICE PROTECTIONS UNDER MEDICARE 21 PART D. 22 Section 1860D–4 of the Social Security Act (42 23 U.S.C. 1395w–104) is amended— 24 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 4906 IH (1) by redesignating the subsection (m) as 1 added by section 6063(c) of the SUPPORT for Pa- 2 tients and Communities Act (Public Law 115–271) 3 as subsection (n); and 4 (2) by adding at the end the following new sub- 5 section: 6 ‘‘(o) LIMITATION ON REBATES, PRICE REDUCTIONS, 7 OR OTHER REMUNERATION FOR CERTIFIED INSULIN.— 8 ‘‘(1) LIMITATION.— 9 ‘‘(A) IN GENERAL.—Subject to subpara- 10 graphs (B) and (C), for plan year 2022 and 11 subsequent plan years, a PDP sponsor and a 12 Medicare Advantage organization shall ensure 13 that each prescription drug plan or MA–PD 14 plan offered by the sponsor or organization, and 15 any entity that provides pharmacy benefits 16 management services under a contract with the 17 prescription drug plan or MA–PD plan offered 18 by the sponsor or organization, does not, di- 19 rectly or indirectly, receive from a manufacturer 20 of certified insulin a rebate, reduction in price, 21 or other remuneration with respect to certified 22 insulin that is covered by the plan. 23 ‘‘(B) EXCEPTION.—The requirement under 24 subparagraph (A) shall not apply to— 25 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 4906 IH ‘‘(i) any such reduction in price that 1 is reflected at the point of sale to the bene- 2 ficiary; or 3 ‘‘(ii) any remuneration that is a flat 4 fee-based service fee that a manufacturer 5 of such certified insulin pays to a phar- 6 macy benefit manager for services rendered 7 to the manufacturer that relate to arrange- 8 ments by the pharmacy benefit manager to 9 provide pharmacy benefit management 10 services to a prescription drug plan or 11 MA–PD plan, if certain conditions estab- 12 lished by the Secretary are met, including 13 requirements that the fees are transparent 14 to the prescription drug plan or MA–PD 15 plan. 16 ‘‘(C) HOLD HARMLESS FOR FIRST 2 YEARS 17 THAT AN INSULIN IS CERTIFIED.—In the first 18 2 plan years during which paragraph (2) ap- 19 plies with respect to a certified insulin, a PDP 20 sponsor and a Medicare Advantage organization 21 shall not, and shall ensure that any entity that 22 provides pharmacy benefits management serv- 23 ices under a contract with such sponsor or or- 24 ganization does not— 25 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 4906 IH ‘‘(i) remove such insulin from the for- 1 mulary applicable to the prescription drug 2 plan or MA–PD plan; 3 ‘‘(ii) impose higher cost-sharing with 4 respect to such insulin than the cost-shar- 5 ing that applied with respect to the cer- 6 tified insulin in the year in which the list 7 price reduction certification was provided 8 under section 5(b)(2)(A) of the Insulin 9 Price Reduction Act; 10 ‘‘(iii) impose any prior authorization 11 requirements for coverage of the certified 12 insulin that were not applied during the 13 year in which the list price reduction cer- 14 tification was provided under such section 15 5(b)(2)(A); or 16 ‘‘(iv) establish a step therapy require- 17 ment for the certified insulin that was not 18 applied during the year in which the list 19 price reduction certification was provided 20 under such section 5(b)(2)(A). 21 ‘‘(2) DEFINITIONS.—In this section: 22 ‘‘(A) CERTIFIED INSULIN.—The term ‘cer- 23 tified insulin’ means, with respect to a year, in- 24 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 4906 IH sulin that has been certified under section 5(b) 1 of the Insulin Price Reduction Act for the year. 2 ‘‘(B) INSULIN.—The term ‘insulin’ means 3 any insulin product approved by the Food and 4 Drug Administration to improve glycemic con- 5 trol in patients with diabetes mellitus. 6 ‘‘(C) LIST PRICE.—The term ‘list price’ 7 has the meaning given the term ‘wholesale ac- 8 quisition cost’ in section 1847A(c)(6)(B). 9 ‘‘(D) REBATE.—The term ‘rebate’ means 10 any discount, price concession, or fee, other 11 than the fee described in paragraph (1)(B), the 12 terms of which are fixed at the time of the sale 13 and disclosed, but which is not received at the 14 time of the sale.’’. 15 SEC. 4. APPLICABILITY OF PRE-LIST PRICE REDUCTION 16 AMP TO MEDICAID MINIMUM REBATE 17 AMOUNTS. 18 Section 1927(c) of the Social Security Act (42 U.S.C. 19 1396r–8(c)) is amended— 20 (1) in paragraph (1)(A), in the matter pre- 21 ceding clause (i), by inserting ‘‘and paragraph (5)’’ 22 after ‘‘paragraph (2)’’; 23 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 4906 IH (2) in paragraph (3)(A), in the matter pre- 1 ceding clause (i), by inserting ‘‘and paragraph (5)’’ 2 after ‘‘subparagraph (C)’’; and 3 (3) by adding at the end the following new 4 paragraph: 5 ‘‘(5) SPECIAL RULE FOR DETERMINING MIN- 6 IMUM BASIC REBATES FOR INSULIN.— 7 ‘‘(A) IN GENERAL.—In determining the 8 amount of the rebate specified in this sub- 9 section for a dosage form and strength of a cov- 10 ered outpatient drug described in subparagraph 11 (B) for any rebate period occurring after April 12 30, 2020, paragraph (1)(A)(ii)(II) or paragraph 13 (3)(A)(i) (as applicable) shall be applied by sub- 14 stituting— 15 ‘‘(i) the pre-reduction average manu- 16 facturer price (as defined in subparagraph 17 (C)) for the dosage form and strength of 18 the drug for the rebate period; for 19 ‘‘(ii) the average manufacturer price 20 for the dosage form and strength of the 21 drug for the rebate period. 22 ‘‘(B) DRUGS DESCRIBED.—A covered out- 23 patient drug is described in this subparagraph 24 for a rebate period if the drug is insulin for 25 VerDate Sep 11 2014 15:51 Nov 02, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4906.IH H4906 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 4906 IH which, throughout such rebate period, the man- 1 ufacturer has certified the list price for each 2 dosage form and strength of such drug in ac- 3 cordance with section 5(b) of the Insulin Price 4 Reduction Act. 5 ‘‘(C) PRE-REDUCTION AVERAGE MANUFAC- 6 TURER PRICE.—For purposes of this para- 7 graph, the term ‘pre-reduction average manu- 8 facturer price’ means, with respect to each dos- 9 age form and strength of a covered outpatient 10 drug described in subparagraph (B) and a re- 11 bate period— 12 ‘‘(i) the average manufacturer price 13 for such drug for the calendar quarter be- 14 ginning July 1, 2019; increased by 15 ‘‘(ii) the percentage by which the con- 16 sumer price index for all urban consumers 17 (United States city average) for the month 18 before the month in which the rebate pe- 19 riod begins exceeds such index for Sep- 20 tember 2019.’’. 21 SEC. 5. LIST PRICE DATA SUBMISSIONS. 22 (a) INITIAL SUBMISSION.— 23 (1) IN GENERAL.—Not later than April 30, 24 2020, any manufacturer of insulin wishi [Text truncated for display. Full text available on Congress.gov.]