Life-Sustaining Prescription Drug Price Relief Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 5039 To lower the prices of excessively costly life-sustaining prescription drugs under part D of the Medicare program by requiring the Secretary of Health and Human Services to negotiate their prices, and for other purposes. IN THE HOUSE OF REPRESENTATIVES NOVEMBER 12, 2019 Mr. LIPINSKI introduced the following bill; which was referred to the Com- mittee 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 lower the prices of excessively costly life-sustaining pre- scription drugs under part D of the Medicare program by requiring the Secretary of Health and Human Serv- ices to negotiate their prices, 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 ‘‘Life-Sustaining Pre- 4 scription Drug Price Relief Act of 2019’’. 5 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 2 •HR 5039 IH SEC. 2. IDENTIFICATION OF EXCESSIVELY PRICED LIFE- 1 SUSTAINING PRESCRIPTION DRUGS. 2 (a) IN GENERAL.—The Secretary, not later than 1 3 year after the date of enactment of this Act, shall establish 4 a process to conduct a review of all life-sustaining pre- 5 scription drugs, not less frequently than once per calendar 6 year, under which the Secretary determines under sub- 7 section (b) whether the price of each such drug is exces- 8 sive. 9 (b) EXCESSIVE PRICE DETERMINATIONS.— 10 (1) INTERNATIONAL REFERENCE PRICE.— 11 (A) IN GENERAL.—The Secretary shall de- 12 termine that any life-sustaining prescription 13 drug for which the domestic average manufac- 14 turing price exceeds 110 percent of the average 15 price charged for such drug in the 5 reference 16 countries to have an excessive price. In assess- 17 ing the extent to which the price is excessive, 18 the Secretary shall consider the factors de- 19 scribed in paragraph (2). 20 (B) REFERENCE COUNTRIES.—In this Act, 21 the term ‘‘reference countries’’ means Canada, 22 the United Kingdom, Germany, France, and 23 Japan. 24 (C) REQUIREMENT WITH RESPECT TO 25 DRUGS FOR WHICH CERTAIN REFERENCE COUN- 26 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 3 •HR 5039 IH TRY INFORMATION IS NOT AVAILABLE.—The 1 Secretary shall make a determination under 2 paragraph (1) for every life-sustaining prescrip- 3 tion drug for which pricing information is avail- 4 able for at least 3 of the 5 reference countries. 5 (2) DETERMINATIONS BASED ON OTHER FAC- 6 TORS.—With respect to any life-sustaining prescrip- 7 tion drug that is not determined to have an excessive 8 price by operation of paragraph (1) (including any 9 drug for which there is insufficient data to make 10 such a determination under such paragraph), the 11 Secretary shall determine that such drug has an ex- 12 cessive price if the price of the drug is higher than 13 reasonable taking into account the following factors: 14 (A) The size of the affected patient popu- 15 lation. 16 (B) The risk adjusted value of Federal 17 Government subsidies and investments related 18 to the drug. 19 (C) The costs associated with development 20 of the drug. 21 (D) Whether the drug provided a signifi- 22 cant improvement in health outcomes, com- 23 pared to other therapies available at the time of 24 its approval. 25 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 4 •HR 5039 IH (E) The cumulative global revenues gen- 1 erated by the drug. 2 (F) Whether the domestic average manu- 3 facturer price of the drug increased during any 4 annual quarter by a percentage that is more 5 than the percentage increase in the consumer 6 price index for all urban consumers for the re- 7 spective annual quarter. 8 (G) Other factors the Secretary determines 9 appropriate. 10 (c) PETITION FOR DETERMINATION.— 11 (1) IN GENERAL.—Any person may petition the 12 Secretary, in accordance with section 553(e) of title 13 5, United States Code, to make an excessive drug 14 price determination for an applicable drug under 15 subsection (b)(2). Not later than 90 days after the 16 date of receipt of such a petition, subject to para- 17 graph (2), the Secretary shall— 18 (A) make a determination under subsection 19 (b)(2) regarding such drug; or 20 (B)(i) decline to make such a determina- 21 tion; and 22 (ii) make public the reasons why the Sec- 23 retary has declined to make such a determina- 24 tion. 25 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 5 •HR 5039 IH (2) EXCEPTION.—The Secretary shall not make 1 a determination under subsection (b)(2) for a drug 2 in response to a petition under this section more fre- 3 quently than once per calendar year. 4 (3) PUBLIC AVAILABILITY.—The Secretary 5 shall make any petitions submitted under this sub- 6 section, together with any documentation related to 7 the petitions and the Secretary’s determinations on 8 such petitions and rationale for such determinations, 9 publicly available, including by posting such informa- 10 tion on the database under section 5. 11 SEC. 3. ABOLISHING THE PROHIBITION ON MEDICARE NE- 12 GOTIATION OF DRUG PRICES AND REQUIR- 13 ING THE SECRETARY OF HEALTH AND 14 HUMAN SERVICES TO NEGOTIATE PRICES OF 15 LIFE-SUSTAINING PRESCRIPTION DRUGS 16 FURNISHED UNDER PART D OF THE MEDI- 17 CARE PROGRAM. 18 Section 1860D–11 of the Social Security Act (42 19 U.S.C. 1395w–111) is amended by striking subsection (i) 20 and inserting the following new subsection: 21 ‘‘(i) REQUIREMENT TO NEGOTIATE PRICES WITH 22 RESPECT TO CERTAIN LIFE-SUSTAINING PRESCRIPTION 23 DRUGS.— 24 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 6 •HR 5039 IH ‘‘(1) IN GENERAL.—With respect to any life- 1 sustaining prescription drug (as defined in section 2 6(4) of the Life-Sustaining Prescription Drug Price 3 Relief Act of 2019), if the Secretary determines 4 under section 2 of such Act that the price of the 5 drug is excessive, the Secretary shall, notwith- 6 standing any other provision of law, negotiate with 7 manufacturers, prescription drug plan sponsors, and 8 MA organizations the total payment (including any 9 discounts, rebates, and other price concessions) that 10 may be made by such sponsors and organizations 11 during a negotiated price period (as specified by the 12 Secretary) for such drugs with respect to such drugs 13 furnished to individuals who are enrolled under a 14 prescription drug plan or under an MA–PD plan of- 15 fered by such sponsor or organization, respectively. 16 ‘‘(2) PRICE LIMITATION.—In the case of a life- 17 sustaining prescription drug that is negotiated by 18 the Secretary pursuant to paragraph (1), the total 19 payment described in such paragraph may not ex- 20 ceed 110 percent of the average price charged for 21 such drug in the 5 reference countries described in 22 section 2(b)(1)(B) of such Act (in this section re- 23 ferred to as the ‘international reference price’). 24 ‘‘(3) ENFORCEMENT.— 25 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 7 •HR 5039 IH ‘‘(A) IN GENERAL.—In the case of a man- 1 ufacturer of a life-sustaining prescription drug 2 for which the Secretary has made a determina- 3 tion described in paragraph (1) that fails to 4 enter into a negotiation and agree on a total 5 payment with respect to such drugs as de- 6 scribed in such paragraph within 9 months of 7 such determination— 8 ‘‘(i) if such drug has an international 9 reference price, the Secretary shall assess 10 a civil monetary penalty equal to 2 times 11 the difference between the total revenue for 12 such drug from all sales in the United 13 States made beginning after the date that 14 is 9 months after such determination and 15 the total revenue for such drug from all 16 such sales made after such date that would 17 have been received if the manufacturer 18 charged the international reference price 19 for such drug; and 20 ‘‘(ii) if such drug has an international 21 reference price, the Secretary shall assess 22 a civil monetary penalty equal to 50 per- 23 cent of the revenue from all United States 24 sales of the drug in the first 90 days after 25 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 8 •HR 5039 IH the date that is 9 months after such deter- 1 mination, 75 percent of the value of all 2 revenue from such sales during the fol- 3 lowing 90 days, and 95 percent of all rev- 4 enue from such sales in subsequent days 5 until such time as an agreement is reached 6 or an international reference price is avail- 7 able. 8 ‘‘(B) DEPOSIT INTO TRUST FUND.—Civil 9 monetary penalties collected pursuant to sub- 10 paragraph (A) shall be deposited into the Fed- 11 eral Hospital Insurance Trust Fund.’’. 12 SEC. 4. PUBLIC EXCESSIVE DRUG PRICE DATABASE. 13 (a) EXCESSIVE DRUG PRICE DATABASE.— 14 (1) IN GENERAL.—The Secretary shall establish 15 and maintain a comprehensive, up-to-date database 16 of life-sustaining prescription drugs and the exces- 17 sive price determinations for such drugs under sec- 18 tion 2. 19 (2) CONTENTS.—The database shall include, at 20 a minimum, for each life-sustaining prescription 21 drug, for the applicable calendar year— 22 (A) the name of the drug; 23 (B) the manufacturer; 24 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 9 •HR 5039 IH (C) whether the drug was determined 1 under section 2(b) to have an excessive price; 2 and 3 (D) the number of petitions the Secretary 4 received under section 2(c) to make an exces- 5 sive price determination for the drug, together 6 with the information described in section 7 2(c)(3). 8 (3) CERTAIN DETERMINATIONS.—With respect 9 to a determination made under section 2(b)(1), the 10 Secretary shall publish on the database such deter- 11 mination in accordance with paragraph (1) within 12 30 days of receiving domestic and international pric- 13 ing information from manufacturers under section 6. 14 (b) ANNUAL REPORTS TO CONGRESS.—Not later 15 than 60 days after the first excessive price review under 16 section 2 is complete, and annually thereafter, the Sec- 17 retary shall submit to Congress a report describing the 18 excessive drug price review for the preceding year. The 19 report shall contain summary data regarding— 20 (1) the total number of drugs that were re- 21 viewed; 22 (2) the total number of drugs determined to be 23 excessively priced under each of paragraphs (1) and 24 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 10 •HR 5039 IH (2) of section 2(b), and the name and manufacturer 1 of each such drug; 2 (3) the total number of drugs determined to be 3 excessively priced, listed by manufacturer; 4 (4) the extent to which the prices of the drugs 5 identified under section 2 were higher than reason- 6 able, on average; 7 (5) the total number of petitions the Secretary 8 received under section 2(c) to make excessive price 9 determinations for drugs; 10 (6) a list of any manufacturers who failed to re- 11 port information as required under section 6; and 12 (7) other appropriate information, as the Sec- 13 retary determines or as Congress requests. 14 (c) PUBLIC AVAILABILITY.—The Secretary shall 15 make the information in the database described in sub- 16 section (a) and the report in subsection (b) publicly avail- 17 able, including on the internet website of the Food and 18 Drug Administration, in a manner that is easy to find and 19 understand. 20 SEC. 5. DRUG MANUFACTURER REPORTING. 21 (a) IN GENERAL.—Each manufacturer shall submit 22 to the Secretary, in such format as the Secretary may re- 23 quire, an annual report that includes the following infor- 24 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 11 •HR 5039 IH mation for each life-sustaining prescription drug of the 1 manufacturer, with respect to the previous calendar year: 2 (1) The average manufacturer price of the drug 3 in the United States and in the reference countries, 4 for the entire year, and broken down for each quar- 5 ter of the year. 6 (2) The wholesale acquisition cost of the drug 7 in the United States and in the reference countries, 8 for the entire year, and broken down for each quar- 9 ter of the year. 10 (3) Cumulative global revenues generated by 11 the drug. 12 (4) Annual net sales revenue generated by the 13 drug in the United States and in the reference coun- 14 tries, for the entire year, and broken down for each 15 quarter of the year. 16 (5) Total expenditures on domestic and foreign 17 drug research and development related to the drug, 18 itemized by— 19 (A) basic and preclinical research; 20 (B) clinical research, reported separately 21 for each clinical trial; 22 (C) development of alternative dosage 23 forms and strengths for the drug molecule or 24 combinations, including the molecule; 25 VerDate Sep 11 2014 04:35 Nov 21, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5039.IH H5039 kjohnson on DSK79L0C42 with BILLS 12 •HR 5039 IH (D) other drug development activities, such 1 as nonclinical laboratory studies and record and 2 report maintenance; 3 (E) pursuing new or expanded indications 4 for such drug through supplemental applica- 5 tions under section 505 of the Federal Food, 6 Drug, and Cosmetic Act; and 7 (F) carrying out postmarket requirements 8 related to such drug, including under section 9 505(o)(3) of the Federal Food, Drug, and Cos- 10 metic Act. 11 (6) Total expenditures on domestic and foreign 12 marketing and advertising related to the drug. 13 (7) Investments in human clinical trials related 14 to the drug, by each trial and each year, including 15 grants, research contracts, tax credits or deductions, 16 and reimbursements from public or private health 17 plans or insurance, and [Text truncated for display. 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