End Price Gouging for Insulin Act

II 116TH CONGRESS 1ST SESSION S. 2817 To require the Secretary of Health and Human Services to establish an annual reference price for insulin products for purposes of Federal health programs, and for other purposes. IN THE SENATE OF THE UNITED STATES NOVEMBER 7, 2019 Mr. MERKLEY (for himself and Mr. DURBIN) introduced the following bill; which was read twice and referred to the Committee on Health, Edu- cation, Labor, and Pensions A BILL To require the Secretary of Health and Human Services to establish an annual reference price for insulin prod- ucts for purposes of Federal health programs, 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 ‘‘End Price Gouging 4 for Insulin Act’’. 5 SEC. 2. REFERENCE PRICE FOR INSULIN PRODUCTS. 6 (a) REFERENCE PRICE.—The Secretary of Health 7 and Human Services (referred to in this section as the 8 VerDate Sep 11 2014 03:28 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2817.IS S2817 kjohnson on DSK79L0C42 with BILLS 2 •S 2817 IS ‘‘Secretary’’), in accordance with subsection (b), shall es- 1 tablish an annual reference price for insulin products. 2 Notwithstanding any other provision of law, including sec- 3 tion 1860D–11(i) of the Social Security Act (42 U.S.C. 4 1395w–111(i)), with respect to enrollees or beneficiaries 5 in any of the Federal health programs described in sub- 6 section (c), the wholesale acquisition cost for insulin prod- 7 ucts, including the cost-sharing amount, shall not exceed 8 the reference price for the applicable year. 9 (b) CRITERIA.— 10 (1) IN GENERAL.—Not later than 6 months 11 after the date of enactment of this Act and every 6 12 months thereafter, the Secretary shall establish the 13 reference price for insulin products— 14 (A) by determining the median wholesale 15 acquisition cost or the commensurate list price 16 in the reference countries for insulin products 17 among the reference countries in which such 18 products are available, if insulin product pricing 19 information is available for at least three of 20 such countries; or 21 (B) in the case that insulin product pricing 22 information or dosage equivalents are not avail- 23 able for at least three of the reference coun- 24 VerDate Sep 11 2014 03:28 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2817.IS S2817 kjohnson on DSK79L0C42 with BILLS 3 •S 2817 IS tries, by determining an appropriate price based 1 on— 2 (i) the clinical and therapeutic effect 3 and value of the product; 4 (ii) patient access to the product; 5 (iii) the costs associated with manu- 6 facturing, marketing, researching, and de- 7 veloping the product; 8 (iv) total revenues, net profit, and ex- 9 ecutive compensation associated with the 10 manufacturer of the product; and 11 (v) other factors, as the Secretary de- 12 termines appropriate. 13 (2) REFERENCE COUNTRIES.—For purposes of 14 paragraph (1), the reference countries are Japan, 15 Germany, the United Kingdom, France, Italy, Can- 16 ada, Australia, Spain, the Netherlands, Switzerland, 17 and Sweden. 18 (c) FEDERAL HEALTH PROGRAMS.—The reference 19 price established under subsection (a) shall apply with re- 20 spect to covered insulin products under— 21 (1) the Medicare program under title XVIII of 22 the Social Security Act (42 U.S.C. 1395 et seq.); 23 (2) a State Medicaid plan under title XIX of 24 the Social Security Act (42 U.S.C. 1396 et seq.); 25 VerDate Sep 11 2014 03:28 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2817.IS S2817 kjohnson on DSK79L0C42 with BILLS 4 •S 2817 IS (3) the State Children’s Health Insurance Pro- 1 gram under title XXI of the Social Security Act (42 2 U.S.C. 1397aa et seq.); 3 (4) the TRICARE program under chapter 55 of 4 title 10, United States Code; 5 (5) hospital care and medical services furnished 6 by the Department of Veterans Affairs under chap- 7 ters 17 and 18 of title 38, United States Code; 8 (6) the Federal Employees Health Benefits 9 Program established under chapter 89 of title 5, 10 United States Code; and 11 (7) any health program, service, function, activ- 12 ity, or facility funded, in whole or part, under the 13 Indian Health Care Improvement Act (25 U.S.C. 14 1601 et seq.), including through direct or contract 15 care provided under such Act or through a contract 16 or compact under the Indian Self-Determination and 17 Education Assistance Act (25 U.S.C. 5304 et seq.). 18 (d) APPLICABILITY TO OTHER PURCHASERS OF IN- 19 SULIN PRODUCTS.—Notwithstanding any other provision 20 of law, an insulin product manufacturer shall offer such 21 product at the reference price to all individuals, including 22 individuals who are not insured and individuals who are 23 covered under a group health plan or group or individual 24 health insurance coverage. 25 VerDate Sep 11 2014 03:28 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2817.IS S2817 kjohnson on DSK79L0C42 with BILLS 5 •S 2817 IS (e) CIVIL PENALTY.—The Secretary shall enforce 1 this section by imposing a civil penalty upon any insulin 2 product manufacturer who does not comply with the re- 3 quirements of subsection (a), for each year in which the 4 violation occurs, in an amount equal to 10 times the dif- 5 ference between— 6 (1) the total amount received by the manufac- 7 turer for sales of insulin products under the Federal 8 health programs under subsection (c) for the year; 9 less 10 (2) the total amount the manufacturer would 11 have received for sales of insulin products under 12 such programs for the year if the manufacturer had 13 complied with subsection (a). 14 (f) USE OF AMOUNTS COLLECTED.—Each year, the 15 Secretary of the Treasury shall allocate the amount col- 16 lected under subsection (e) for the previous year as fol- 17 lows: 18 (1) Half of such amount shall be deposited in 19 the Federal Hospital Insurance Trust Fund and the 20 Federal Supplementary Medical Insurance Trust 21 Fund (including the Medicare Prescription Drug Ac- 22 count within such Trust Fund) in such proportion 23 as the Secretary of Health and Human Services de- 24 termines appropriate. 25 VerDate Sep 11 2014 03:28 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2817.IS S2817 kjohnson on DSK79L0C42 with BILLS 6 •S 2817 IS (2) Half of such amount shall be transferred to 1 the National Institutes of Health, for purposes of 2 carrying out drug research and development. 3 (g) APPLICABILITY TO BRAND AND GENERIC INSU- 4 LIN PRODUCTS.—The reference price established under 5 subsection (a) shall apply to insulin products approved 6 under subsection (c) or (j) of section 505 of the Federal 7 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or under 8 subsection (a) or (k) of section 351 of the Public Health 9 Service Act (42 U.S.C. 262). 10 Æ VerDate Sep 11 2014 03:28 Nov 14, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S2817.IS S2817 kjohnson on DSK79L0C42 with BILLS