Lowering Prescription Drug Prices for America’s Seniors and Families Act of 2020

II 116TH CONGRESS 2D SESSION S. 3384 To allow for negotiation of prices for certain covered Medicare part D drugs, to allow for importation by individuals of prescription drugs from Can- ada, to preserve access to affordable generics and biosimilars, to increase the use of real-time benefit tools to lower beneficiary costs, to establish a manufacturer discount program, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 3, 2020 Ms. MCSALLY introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To allow for negotiation of prices for certain covered Medi- care part D drugs, to allow for importation by individuals of prescription drugs from Canada, to preserve access to affordable generics and biosimilars, to increase the use of real-time benefit tools to lower beneficiary costs, to establish a manufacturer discount 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 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 3384 IS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Lowering Prescription 2 Drug Prices for America’s Seniors and Families Act of 3 2020’’. 4 SEC. 2. NEGOTIATION OF PRICES FOR CERTAIN COVERED 5 PART D DRUGS FOLLOWING PERIOD OF EX- 6 CLUSIVITY. 7 (a) IN GENERAL.—Section 1860D–11 of the Social 8 Security Act (42 U.S.C. 1395w–111) is amended— 9 (1) in subsection (i), by striking ‘‘In order’’ and 10 inserting ‘‘Except as provided in subsection (k), in 11 order’’; and 12 (2) by adding at the end the following new sub- 13 section: 14 ‘‘(k) NEGOTIATION OF PRICES FOR CERTAIN COV- 15 ERED PART D DRUGS FOLLOWING PERIOD OF EXCLU- 16 SIVITY.— 17 ‘‘(1) IN GENERAL.—Notwithstanding any other 18 provision of law, subject to paragraph (2), the Sec- 19 retary shall, for plan years beginning on or after the 20 date on which the applicable period with respect to 21 an applicable covered part D drug (as those terms 22 are defined in paragraph (3)) expires— 23 ‘‘(A) negotiate directly with pharma- 24 ceutical manufacturers the prices that may be 25 charged to PDP sponsors and MA organiza- 26 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 3384 IS tions for such applicable covered part D drug; 1 and 2 ‘‘(B) complete such negotiations not later 3 than 3 months prior to the beginning of each 4 such plan year. 5 ‘‘(2) USE OF MEDICAID BEST PRICE IF NEGO- 6 TIATIONS FAIL.—In the case where the Secretary is 7 not able to reach an agreement under paragraph (1) 8 with respect to an applicable covered part D drug 9 for a plan year by the date specified in paragraph 10 (1)(B), the price that a pharmaceutical manufac- 11 turer may charge to PDP sponsors and MA organi- 12 zations for such applicable covered part D drug for 13 the plan year shall be determined using the method- 14 ology used to determine the best price of a covered 15 outpatient drug under section 1927(c)(1)(C). 16 ‘‘(3) DEFINITIONS.—In this subsection: 17 ‘‘(A) APPLICABLE COVERED PART D 18 DRUG.—The term ‘applicable covered part D 19 drug’ means a covered part D drug for which 20 there is in effect— 21 ‘‘(i) in the case of a drug approved 22 under section 505 of the Federal Food, 23 Drug, and Cosmetic Act, a patent on an 24 active ingredient of the drug; or 25 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 3384 IS ‘‘(ii) in the case of a biological prod- 1 uct, a patent on the structure of the bio- 2 logical product. 3 A patent shall be considered to be in effect for 4 purposes of this subparagraph during any ex- 5 tension of the patent term under section 156 of 6 title 35, United States Code. 7 ‘‘(B) APPLICABLE PERIOD.—The term ‘ap- 8 plicable period’ means, with respect to an appli- 9 cable covered part D drug, any applicable pat- 10 ent described in subparagraph (A). 11 ‘‘(4) CONDITION OF COVERAGE.— 12 ‘‘(A) IN GENERAL.—Subject to subpara- 13 graph (B), in order for coverage to be available 14 under this part for an applicable covered part 15 D drug (as defined in section 1860D–2(e)) of 16 a manufacturer with respect to a plan year be- 17 ginning on or after the date on which the appli- 18 cable period with respect to such covered part 19 D drug expires, the manufacturer must provide 20 such applicable covered part D drug to PDP 21 sponsors and MA organizations at the price ne- 22 gotiated under paragraph (1) or the price deter- 23 mined under paragraph (2), if applicable, for 24 the plan year. 25 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 3384 IS ‘‘(B) AUTHORIZING COVERAGE IN CERTAIN 1 CIRCUMSTANCES.—Subparagraph (A) shall not 2 apply to the dispensing of a covered part D 3 drug if the Secretary has made a determination 4 that the availability of the drug is essential to 5 the health of beneficiaries under this part.’’. 6 (b) EFFECTIVE DATE.—The amendments made by 7 this section shall apply to covered part D drugs dispensed 8 on or after January 1, 2021. 9 SEC. 3. DRUG IMPORTATION. 10 Chapter VIII of the Federal Food, Drug, and Cos- 11 metic Act (21 U.S.C. 381 et seq.) is amended by adding 12 at the end the following: 13 ‘‘SEC. 810. IMPORTATION BY INDIVIDUALS OF PRESCRIP- 14 TION DRUGS FROM CANADA. 15 ‘‘(a) IN GENERAL.—Notwithstanding any other pro- 16 vision of this Act, not later than 180 days after the date 17 of enactment of this section, the Secretary shall promul- 18 gate regulations permitting individuals to safely import 19 into the United States a prescription drug described in 20 subsection (b). 21 ‘‘(b) PRESCRIPTION DRUG.—A prescription drug de- 22 scribed in this subsection— 23 ‘‘(1) is a prescription drug that— 24 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 3384 IS ‘‘(A) is purchased from an approved Cana- 1 dian pharmacy; 2 ‘‘(B) is dispensed by a pharmacist licensed 3 to practice pharmacy and dispense prescription 4 drugs in Canada; 5 ‘‘(C) is purchased for personal use by the 6 individual, not for resale, in quantities that do 7 not exceed a 90-day supply; 8 ‘‘(D) is filled using a valid prescription 9 issued by a physician licensed to practice in a 10 State in the United States; and 11 ‘‘(E) has the same active ingredient or in- 12 gredients, route of administration, dosage form, 13 and strength as a prescription drug approved 14 by the Secretary under chapter V; and 15 ‘‘(2) does not include— 16 ‘‘(A) a controlled substance (as defined in 17 section 102 of the Controlled Substances Act); 18 ‘‘(B) a biological product (as defined in 19 section 351 of the Public Health Service Act); 20 ‘‘(C) an infused drug (including a peri- 21 toneal dialysis solution); 22 ‘‘(D) an intravenously injected drug; 23 ‘‘(E) a drug that is inhaled during surgery; 24 ‘‘(F) a parenteral drug; 25 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 3384 IS ‘‘(G) a drug manufactured through one or 1 more biotechnology processes, including— 2 ‘‘(i) a therapeutic DNA plasmid prod- 3 uct; 4 ‘‘(ii) a therapeutic synthetic peptide 5 product of not more than 40 amino acids; 6 ‘‘(iii) a monoclonal antibody product 7 for in vivo use; and 8 ‘‘(iv) a therapeutic recombinant DNA- 9 derived product; 10 ‘‘(H) a drug required to be refrigerated at 11 any time during manufacturing, packing, proc- 12 essing, or holding; or 13 ‘‘(I) a photoreactive drug. 14 ‘‘(c) APPROVED CANADIAN PHARMACY.— 15 ‘‘(1) IN GENERAL.—In this section, an ap- 16 proved Canadian pharmacy is a pharmacy that— 17 ‘‘(A) is located in Canada; and 18 ‘‘(B) the Secretary certifies— 19 ‘‘(i) is licensed to operate and dis- 20 pense prescription drugs to individuals in 21 Canada; and 22 ‘‘(ii) meets the criteria under para- 23 graph (3). 24 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 3384 IS ‘‘(2) PUBLICATION OF APPROVED CANADIAN 1 PHARMACIES.—The Secretary shall publish on the 2 internet website of the Food and Drug Administra- 3 tion a list of approved Canadian pharmacies, includ- 4 ing the internet website address of each such ap- 5 proved Canadian pharmacy, from which individuals 6 may purchase prescription drugs in accordance with 7 subsection (a). 8 ‘‘(3) ADDITIONAL CRITERIA.—To be an ap- 9 proved Canadian pharmacy, the Secretary shall cer- 10 tify that the pharmacy— 11 ‘‘(A) has been in existence for a period of 12 at least 5 years preceding the date of such cer- 13 tification and has a purpose other than to par- 14 ticipate in the program established under this 15 section; 16 ‘‘(B) operates in accordance with phar- 17 macy standards set forth by the provincial 18 pharmacy rules and regulations enacted in Can- 19 ada; 20 ‘‘(C) has processes established by the phar- 21 macy, or participates in another established 22 process, to certify that the physical premises 23 and data reporting procedures and licenses are 24 in compliance with all applicable laws and regu- 25 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 3384 IS lations, and has implemented policies designed 1 to monitor ongoing compliance with such laws 2 and regulations; 3 ‘‘(D) conducts or commits to participate in 4 ongoing and comprehensive quality assurance 5 programs and implements such quality assur- 6 ance measures, including blind testing, to en- 7 sure the veracity and reliability of the findings 8 of the quality assurance program; 9 ‘‘(E) agrees that laboratories approved by 10 the Secretary shall be used to conduct product 11 testing to determine the safety and efficacy of 12 sample pharmaceutical products; 13 ‘‘(F) has established, or will establish or 14 participate in, a process for resolving grievances 15 and will be held accountable for violations of es- 16 tablished guidelines and rules; 17 ‘‘(G) does not resell products from online 18 pharmacies located outside Canada to cus- 19 tomers in the United States; and 20 ‘‘(H) meets any other criteria established 21 by the Secretary.’’. 22 SEC. 4. PRESERVING ACCESS THROUGH FTC ACTIONS. 23 (a) PRESERVE ACCESS TO AFFORDABLE GENERICS 24 AND BIOSIMILARS.— 25 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 3384 IS (1) UNLAWFUL COMPENSATION FOR DELAY.— 1 (A) IN GENERAL.—The Federal Trade 2 Commission Act (15 U.S.C. 41 et seq.) is 3 amended by inserting after section 26 (15 4 U.S.C. 57c–2) the following: 5 ‘‘SEC. 27. PRESERVING ACCESS TO AFFORDABLE GENERICS 6 AND BIOSIMILARS. 7 ‘‘(a) IN GENERAL.— 8 ‘‘(1) ENFORCEMENT PROCEEDING.—The Com- 9 mission may initiate a proceeding to enforce the pro- 10 visions of this section against the parties to any 11 agreement resolving or settling, on a final or interim 12 basis, a patent infringement claim, in connection 13 with the sale of a drug product or biological product. 14 ‘‘(2) PRESUMPTION AND VIOLATION.— 15 ‘‘(A) IN GENERAL.—Subject to subpara- 16 graph (B), in such a proceeding, an agreement 17 shall be presumed to have anticompetitive ef- 18 fects and shall be a violation of this section if— 19 ‘‘(i) an ANDA filer or a biosimilar bi- 20 ological product application filer receives 21 anything of value, including an exclusive li- 22 cense; and 23 ‘‘(ii) the ANDA filer or biosimilar bio- 24 logical product application filer agrees to 25 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 3384 IS limit or forego research, development, 1 manufacturing, marketing, or sales of the 2 ANDA product or biosimilar biological 3 product, as applicable, for any period of 4 time. 5 ‘‘(B) EXCEPTION.—Subparagraph (A) 6 shall not apply if the parties to such agreement 7 demonstrate by clear and convincing evidence 8 that— 9 ‘‘(i) the value described in subpara- 10 graph (A)(i) is compensation solely for 11 other goods or services that the ANDA 12 filer or biosimilar biological product appli- 13 cation filer has promised to provide; or 14 ‘‘(ii) the procompetitive benefits of the 15 agreement outweigh the anticompetitive ef- 16 fects of the agreement. 17 ‘‘(b) LIMITATIONS.—In determining whether the set- 18 tling parties have met their burden under subsection 19 (a)(2)(B), the fact finder shall not presume— 20 ‘‘(1) that entry would not have occurred until 21 the expiration of the relevant patent or statutory ex- 22 clusivity; or 23 ‘‘(2) that the agreement’s provision for entry of 24 the ANDA product or biosimilar biological product 25 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 12 •S 3384 IS prior to the expiration of the relevant patent or stat- 1 utory exclusivity means that the agreement is pro- 2 competitive. 3 ‘‘(c) EXCLUSIONS.—Nothing in this section shall pro- 4 hibit a resolution or settlement of a patent infringement 5 claim in which the consideration granted by the NDA 6 holder or biological product license holder to the ANDA 7 filer or biosimilar biological product application filer, re- 8 spectively, as part of the resolution or settlement includes 9 only one or more of the following: 10 ‘‘(1) The right to market the ANDA product or 11 biosimilar biological product in the United States 12 prior to the expiration of— 13 ‘‘(A) any patent that is the basis for the 14 patent infringement claim; or 15 ‘‘(B) any patent right or other statutory 16 exclusivity that would prevent the marketing of 17 such ANDA product or biosimilar biological 18 product. 19 ‘‘(2) A payment for reasonable litigation ex- 20 penses not to exceed $7,500,000. 21 ‘‘(3) A covenant not to sue on any claim that 22 the ANDA product or biosimilar biological product 23 infringes a United States patent. 24 ‘‘(d) ENFORCEMENT.— 25 VerDate Sep 11 2014 20:43 Mar 05, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S3384.IS S3384 pamtmann on DSKBC07HB2PROD with BILLS 13 •S 3384 IS ‘‘(1) ENFORCEMENT.—A violation of this sec- [Text truncated for display. 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