End Price Gouging for Medications Act

II 118TH CONGRESS 1ST SESSION S. 2044 To require the Secretary of Health and Human Services to establish reference prices for prescription drugs for purposes of Federal health programs, and for other purposes. IN THE SENATE OF THE UNITED STATES JUNE 20, 2023 Mr. MERKLEY (for himself and Mr. WELCH) 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 reference prices for prescription drugs for purposes of Federal health programs, and for other pur- poses. 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 Medications Act’’. 5 SEC. 2. REFERENCE PRICES FOR PRESCRIPTION DRUGS. 6 (a) REFERENCE PRICES.—The Secretary of Health 7 and Human Services (referred to in this section as the 8 VerDate Sep 11 2014 20:37 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2044.IS S2044 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •S 2044 IS ‘‘Secretary’’), in accordance with subsection (b), shall es- 1 tablish annual reference prices for each prescription drug. 2 Notwithstanding any other provision of law, with respect 3 to enrollees or beneficiaries in any of the Federal health 4 programs described in subsection (c), the retail list price 5 for a drug shall not exceed the reference price for such 6 drug. 7 (b) CRITERIA.— 8 (1) IN GENERAL.—Each year, the Secretary 9 shall establish the reference price for each prescrip- 10 tion drug under subsection (a)— 11 (A) by determining the lowest retail list 12 price for the drug among the reference coun- 13 tries in which the drug is available, if drug pric- 14 ing information is available for at least 3 of 15 such countries; or 16 (B) in the case of a drug for which drug 17 pricing information or dosage equivalents are 18 not available for at least 3 of the reference 19 countries, by determining an appropriate price 20 based on the Secretary’s determination of— 21 (i) the added therapeutic effect of the 22 drug; 23 (ii) the value of the drug; 24 (iii) patient access to the drug; 25 VerDate Sep 11 2014 20:37 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2044.IS S2044 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •S 2044 IS (iv) the costs associated with re- 1 searching and developing the drug; and 2 (v) other factors, as the Secretary de- 3 termines appropriate. 4 (2) REFERENCE COUNTRIES.—For purposes of 5 paragraph (1), the reference countries are Japan, 6 Germany, the United Kingdom, France, Italy, Can- 7 ada, Australia, Spain, the Netherlands, Switzerland, 8 and Sweden. 9 (c) FEDERAL HEALTH PROGRAMS.—The reference 10 prices established under subsection (a) shall apply with re- 11 spect to covered inpatient and outpatient drugs under— 12 (1) the Medicare program under title XVIII of 13 the Social Security Act (42 U.S.C. 1395 et seq.); 14 (2) a State Medicaid plan under title XIX of 15 the Social Security Act (42 U.S.C. 1396 et seq.); 16 (3) the State Children’s Health Insurance Pro- 17 gram under title XXI of the Social Security Act (42 18 U.S.C. 1397aa et seq.); 19 (4) the TRICARE program under chapter 55 of 20 title 10, United States Code; 21 (5) hospital care and medical services furnished 22 by the Department of Veterans Affairs under chap- 23 ters 17 and 18 of title 38, United States Code; 24 VerDate Sep 11 2014 20:37 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2044.IS S2044 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •S 2044 IS (6) the Federal Employees Health Benefits 1 Program established under chapter 89 of title 5, 2 United States Code; and 3 (7) any health program, service, function, activ- 4 ity, or facility funded, in whole or part, under the 5 Indian Health Care Improvement Act (25 U.S.C. 6 1601 et seq.), including through direct or contract 7 care provided under such Act or through a contract 8 or compact under the Indian Self-Determination and 9 Education Assistance Act (25 U.S.C. 5304 et seq.). 10 (d) APPLICABILITY TO OTHER PURCHASERS OF 11 DRUGS.—Notwithstanding any other provision of law, a 12 drug manufacturer shall offer prescription drugs at the 13 reference price to all individuals, including individuals who 14 are not insured and individuals who are covered under a 15 group health plan or group or individual health insurance 16 coverage. In the case of individuals covered by a group 17 health plan or group or individual health insurance cov- 18 erage, such requirement is met if the amount covered 19 under such plan or coverage plus the cost-sharing amount 20 does not exceed the reference price. 21 (e) ENFORCEMENT.— 22 (1) CIVIL PENALTY.—A drug manufacturer who 23 does not comply with the requirements of subsection 24 (a) shall be subject to a civil penalty, for each year 25 VerDate Sep 11 2014 20:37 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2044.IS S2044 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •S 2044 IS in which the violation occurs and with respect to 1 each drug for which the violation occurs, in an 2 amount equal to 5 times the difference between— 3 (A) the total amount received by the man- 4 ufacturer for sales of the drug under the Fed- 5 eral health programs under subsection (c) for 6 the year; less 7 (B) the total amount the manufacturer 8 would have received for sales of the drug under 9 such programs for the year if the manufacturer 10 had complied with subsection (a). 11 (2) AMOUNTS COLLECTED.—Each year, the 12 Secretary of the Treasury shall transfer to the Di- 13 rector of the National Institutes of Health an 14 amount equal to the amount collected in civil pen- 15 alties under subsection (e) for the previous year. The 16 Director of the National Institutes of Health shall 17 use amounts so transferred for purposes of con- 18 ducting drug research and development. 19 (f) APPLICABILITY TO BRAND AND GENERIC 20 DRUGS.—The reference price established under subsection 21 (a) shall apply to drugs approved under subsection (c) or 22 (j) of section 505 of the Federal Food, Drug, and Cos- 23 metic Act (21 U.S.C. 355) or under subsection (a) or (k) 24 VerDate Sep 11 2014 20:37 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2044.IS S2044 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •S 2044 IS of section 351 of the Public Health Service Act (42 U.S.C. 1 262). 2 Æ VerDate Sep 11 2014 20:37 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S2044.IS S2044 pbinns on DSKJLVW7X2PROD with $$_JOB