I 116TH CONGRESS 2D SESSION H. R. 5882 To amend title XIX of the Social Security Act to provide States with the option under the Medicaid program to pay for covered outpatient drugs through risk-sharing value-based agreements, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 12, 2020 Mr. SCHRADER (for himself, Mr. MARSHALL, Mr. CROW, Mr. MULLIN, Mr. BERA, Mr. KELLY of Pennsylvania, and Mr. SCHWEIKERT) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To amend title XIX of the Social Security Act to provide States with the option under the Medicaid program to pay for covered outpatient drugs through risk-sharing value-based agreements, 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 ‘‘Generating Effective 4 and Novel Evidence for Therapy Payment Act’’ or 5 ‘‘GENE Therapy Payment Act’’. 6 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 5882 IH SEC. 2. RISK-SHARING VALUE-BASED PAYMENT AGREE- 1 MENTS FOR COVERED OUTPATIENT DRUGS 2 UNDER MEDICAID. 3 (a) IN GENERAL.—Section 1927 of the Social Secu- 4 rity Act (42 U.S.C. 1396r–8) is amended by adding at 5 the end the following new subsection: 6 ‘‘(l) STATE OPTION TO PAY FOR COVERED OUT- 7 PATIENT DRUGS THROUGH RISK-SHARING VALUE-BASED 8 AGREEMENTS.— 9 ‘‘(1) IN GENERAL.—Beginning January 1, 10 2022, a State shall have the option to pay (whether 11 on a fee-for-service or managed care basis) for cov- 12 ered outpatient drugs that are potentially curative 13 treatments intended for one-time use that are ad- 14 ministered to individuals under this title by entering 15 into a risk-sharing value-based payment agreement 16 with the manufacturer of the drug in accordance 17 with the requirements of this subsection. 18 ‘‘(2) SECRETARIAL APPROVAL.— 19 ‘‘(A) IN GENERAL.—A State shall submit a 20 request to the Secretary to enter into a risk- 21 sharing value-based payment agreement, and 22 the Secretary shall not approve a proposed risk- 23 sharing value-based payment agreement be- 24 tween a State and a manufacturer for payment 25 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 5882 IH for a covered outpatient drug of the manufac- 1 turer unless the following requirements are met: 2 ‘‘(i) MANUFACTURER HAS IN EFFECT 3 A REBATE AGREEMENT AND IS IN COMPLI- 4 ANCE WITH ALL APPLICABLE REQUIRE- 5 MENTS.—The manufacturer has a rebate 6 agreement in effect as required under sub- 7 sections (a) and (b) of this section and is 8 in compliance with all applicable require- 9 ments under this title. 10 ‘‘(ii) NO INCREASE TO PROJECTED 11 NET FEDERAL SPENDING.— 12 ‘‘(I) IN GENERAL.—The Chief 13 Actuary certifies that the projected 14 payments for each covered outpatient 15 drug under a proposed risk-sharing 16 value-based payment agreement is not 17 expected to result in greater estimated 18 Federal spending under this title than 19 the net Federal spending that would 20 result in the absence of such agree- 21 ment. 22 ‘‘(II) NET FEDERAL SPENDING 23 DEFINED.—For purposes of this sub- 24 section, the term ‘net Federal spend- 25 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 5882 IH ing’ means the amount of Federal 1 payments the Chief Actuary estimates 2 would be made under this title for ad- 3 ministering a covered outpatient drug 4 to an individual eligible for medical 5 assistance under a State plan or a 6 waiver of such plan, reduced by the 7 amount of all rebates the Chief Actu- 8 ary estimates would be paid with re- 9 spect to the administering of such 10 drug, including all rebates under this 11 title and any supplemental or other 12 additional rebates, in the absence of 13 such an agreement. 14 ‘‘(III) INFORMATION.—The Chief 15 Actuary shall make the certifications 16 required under this clause based on 17 the most recently available and reli- 18 able drug pricing and product infor- 19 mation. The State and manufacturer 20 shall provide the Secretary and the 21 Chief Actuary with all necessary infor- 22 mation required to make the estimates 23 needed for such certifications. 24 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 5882 IH ‘‘(iii) LAUNCH AND LIST PRICE JUS- 1 TIFICATIONS.—The manufacturer submits 2 all relevant information and supporting 3 documentation necessary for pricing deci- 4 sions as deemed appropriate by the Sec- 5 retary, which shall be truthful and non- 6 misleading, including manufacturer infor- 7 mation and supporting documentation for 8 launch price or list price increases, and 9 any applicable justification required under 10 section 1128L. 11 ‘‘(iv) CONFIDENTIALITY OF INFORMA- 12 TION; PENALTIES.—The provisions of sub- 13 paragraphs (C) and (D) of subsection 14 (b)(3) shall apply to a manufacturer that 15 fails to submit the information and docu- 16 mentation required under clauses (ii) and 17 (iii) on a timely basis, or that knowingly 18 provides false or misleading information, in 19 the same manner as such provisions apply 20 to a manufacturer with a rebate agreement 21 under this section. 22 ‘‘(B) CONSIDERATION OF STATE REQUEST 23 FOR APPROVAL.— 24 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 5882 IH ‘‘(i) IN GENERAL.—The Secretary 1 shall treat a State request for approval of 2 a risk-sharing value-based payment agree- 3 ment in the same manner that the Sec- 4 retary treats a State plan amendment, and 5 subpart B of part 430 of title 42, Code of 6 Federal Regulations, including, subject to 7 clause (ii), the timing requirements of sec- 8 tion 430.16 of such title (as in effect on 9 the date of enactment of this subsection), 10 shall apply to a request for approval of a 11 risk-sharing value-based payment agree- 12 ment in the same manner as such subpart 13 applies to a State plan amendment. 14 ‘‘(ii) TIMING.—The Secretary shall 15 consult with the Commissioner of Food 16 and Drugs as required under subpara- 17 graph (C) and make a determination on 18 whether to approve a request from a State 19 for approval of a proposed risk-sharing 20 value-based payment agreement (or request 21 additional information necessary to allow 22 the Secretary to make a determination 23 with respect to such request for approval) 24 within the time period, to the extent prac- 25 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 5882 IH ticable, specified in section 430.16 of title 1 42, Code of Federal Regulations (as in ef- 2 fect on the date of enactment of this sub- 3 section), but in no case shall the Secretary 4 take more than 180 days after the receipt 5 of such request for approval or response to 6 such request for additional information to 7 make such a determination (or request ad- 8 ditional information). 9 ‘‘(C) CONSULTATION WITH THE COMMIS- 10 SIONER OF FOOD AND DRUGS.—In considering 11 whether to approve a risk-sharing value-based 12 payment agreement, the Secretary, to the ex- 13 tent necessary, shall consult with the Commis- 14 sioner of Food and Drugs to determine whether 15 the relevant clinical parameters specified in 16 such agreement are appropriate. 17 ‘‘(3) INSTALLMENT-BASED PAYMENT STRUC- 18 TURE.— 19 ‘‘(A) IN GENERAL.—A risk-sharing value- 20 based payment agreement shall provide for a 21 payment structure under which, for every in- 22 stallment year of the agreement (subject to sub- 23 paragraph (B)), the State shall pay the total in- 24 stallment year amount in equal installments to 25 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 5882 IH be paid at regular intervals over a period of 1 time that shall be specified in the agreement. 2 ‘‘(B) REQUIREMENTS FOR INSTALLMENT 3 PAYMENTS.— 4 ‘‘(i) TIMING OF FIRST PAYMENT.— 5 The State shall make the first of the in- 6 stallment payments described in subpara- 7 graph (A) for an installment year not later 8 than 30 days after the end of such year. 9 ‘‘(ii) LENGTH OF INSTALLMENT PE- 10 RIOD.—The period of time over which the 11 State shall make the installment payments 12 described in subparagraph (A) for an in- 13 stallment year shall not be longer than 5 14 years. 15 ‘‘(iii) NONPAYMENT OR REDUCED 16 PAYMENT OF INSTALLMENTS FOLLOWING 17 A FAILURE TO MEET CLINICAL PARAM- 18 ETER.—If, prior to the payment date (as 19 specified in the agreement) of any install- 20 ment payment described in subparagraph 21 (A) or any other alternative date or time 22 frame (as otherwise specified in the agree- 23 ment), the covered outpatient drug which 24 is subject to the agreement fails to meet a 25 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 5882 IH relevant clinical parameter of the agree- 1 ment, the agreement shall provide that— 2 ‘‘(I) the installment payment 3 shall not be made; or 4 ‘‘(II) the installment payment 5 shall be reduced by a percentage spec- 6 ified in the agreement that is based 7 on the outcome achieved by the drug 8 relative to the relevant clinical param- 9 eter. 10 ‘‘(4) NOTICE OF INTENT.— 11 ‘‘(A) IN GENERAL.—Subject to subpara- 12 graph (B), a manufacturer of a covered out- 13 patient drug shall not be eligible to enter into 14 a risk-sharing value-based payment agreement 15 under this subsection with respect to such drug 16 unless the manufacturer notifies the Secretary 17 that the manufacturer is interested in entering 18 into such an agreement with respect to such 19 drug. The decision to submit and timing of a 20 request to enter into a proposed risk-sharing 21 value-based payment agreement shall remain 22 solely within the discretion of the State and 23 shall only be effective upon Secretarial approval 24 as required under this subsection. 25 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 5882 IH ‘‘(B) TREATMENT OF SUBSEQUENTLY AP- 1 PROVED DRUGS.— 2 ‘‘(i) IN GENERAL.—In the case of a 3 manufacturer of a covered outpatient drug 4 approved under section 505 of the Federal 5 Food, Drug, and Cosmetic Act or licensed 6 under section 351 of the Public Health 7 Service Act after the date of enactment of 8 this subsection, not more than 90 days 9 after meeting with the Food and Drug Ad- 10 ministration following phase II clinical 11 trials for such drug (or, in the case of a 12 drug described in clause (ii), not later than 13 March 31, 2022), the manufacturer must 14 notify the Secretary of the manufacturer’s 15 intent to enter into a risk-sharing value- 16 based payment agreement under this sub- 17 section with respect to such drug. If no 18 such meeting has occurred, the Secretary 19 may use discretion as to whether a poten- 20 tially curative treatment intended for one- 21 time use may qualify for a risk-sharing 22 value-based payment agreement under this 23 section. A manufacturer notification of in- 24 terest shall not have any influence on a de- 25 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 5882 IH cision for drug approval by the Food and 1 Drug Administration. 2 ‘‘(ii) APPLICATION TO CERTAIN SUB- 3 SEQUENTLY APPROVED DRUGS.—A drug 4 described in this clause is a covered out- 5 patient drug of a manufacturer— 6 ‘‘(I) that is approved under sec- 7 tion 505 of the Federal Food, Drug, 8 and Cosmetic Act or licensed under 9 section 351 of the Public Health Serv- 10 ice Act after the date of enactment of 11 this subsection; and 12 ‘‘(II) with respect to which, as of 13 January 1, 2022, more than 90 days 14 have passed after the manufacturer’s 15 meeting with the Food and Drug Ad- 16 ministration following phase II clinical 17 trials for such drug. 18 ‘‘(iii) PARALLEL APPROVAL.—The 19 Secretary, in coordination with the Admin- 20 istrator of the Centers for Medicare & 21 Medicaid Services and the Commissioner of 22 Food and Drugs, shall, to the extent prac- 23 ticable, approve a State’s request to enter 24 into a proposed risk-sharing value-based 25 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 5882 IH payment agreement that otherwise meets 1 the requirements of this subsection at the 2 time that such a drug is approved by the 3 Food and Drug Administration to help 4 provide that no State that wishes to enter 5 into such an agreement is required to pay 6 for the drug in full at one time if the State 7 is seeking to pay over a period of time as 8 outlined in the proposed agreement. 9 ‘‘(iv) RULE OF CONSTRUCTION.— 10 Nothing in this paragraph shall be applied 11 or construed to modify or affect the time- 12 frames or factors involved in the Sec- 13 retary’s determination of whether to ap- 14 prove or license a drug under section 505 15 of the Federal Food, Drug, and Cosmetic 16 Act or section 351 of the Public Health 17 Service Act. 18 ‘‘(5) SPECIAL PAYMENT RULES.— 19 ‘‘(A) IN GENERAL.—Except as otherwise 20 provided in this paragraph, with respect to an 21 individual who is administered a unit of a cov- 22 ered outpatient drug that is reimbursed under 23 a State plan by a State Medicaid agency under 24 a risk-sharing value-based payment agreement 25 VerDate Sep 11 2014 20:55 Feb 21, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5882.IH H5882 pamtmann on DSKBC07HB2PROD with BILLS 13 •HR 5882 IH in an installment year, the State shall remain 1 liable to the manufacturer of such drug for pay- 2 ment for such unit without regard to whether 3 the individual remains enrolled in the State 4 plan under this title (or a waiver of such plan) 5 for each installment year for which the State is 6 to make installment payments for covered out- 7 patient drugs purchased under the agreement 8 in such year. 9 ‘‘(B) DEATH.—In the case of an individual 10 described in [Text truncated for display. 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