[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5739 Introduced in House (IH)]
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115th CONGRESS
2d Session
H. R. 5739
To establish within the Department of Health and Human Services the
Prescription Drug and Medical Device Price Review Board to regulate the
prices of certain prescription drugs and medical devices, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 9, 2018
Ms. DeLauro (for herself, Mr. Doggett, and Ms. Moore) introduced the
following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committees on Ways and Means, and the
Judiciary, 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 establish within the Department of Health and Human Services the
Prescription Drug and Medical Device Price Review Board to regulate the
prices of certain prescription drugs and medical devices, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prescription Drug and Medical Device
Price Review Board Act of 2018''.
SEC. 2. ESTABLISHMENT.
There is established in the Department of Health and Human Services
a board to be known as the Prescription Drug and Medical Device Price
Review Board (in this Act referred to as the ``Board'').
SEC. 3. MEMBERSHIP; STAFF.
(a) Members.--The Board shall be composed of 5 members as follows:
(1) The Assistant Secretary for Planning and Evaluation of
the Department of Health and Human Services (or the Assistant
Secretary's designee).
(2) The Administrator of the Centers for Medicare &
Medicaid Services (or the Administrator's designee).
(3) The Assistant Director for the Health Services Division
of the Federal Bureau of Prisons (or the Assistant Director's
designee).
(4) The Secretary of Defense (or the Secretary's designee).
(5) The Secretary of Veterans Affairs (or the Secretary's
designee).
(6) The Commissioner of Food and Drugs (or the
Commissioner's designee).
(b) Chairperson.--The Board shall designate 1 member of the Board
to serve as the chairperson.
(c) Director and Staff.--
(1) Director.--The Board shall have a director who shall be
appointed by the chairperson of the Board, subject to rules
prescribed by the Board.
(2) Staff.--The director may appoint and fix the pay of
such additional personnel as the chairperson considers
appropriate, subject to rules prescribed by the Board.
(3) Applicability of certain civil service laws.--The
director and staff of the Board shall be appointed subject to
the provisions of title 5, United States Code, governing
appointments in the competitive service, and shall be paid in
accordance with the requirements of chapter 51 and subchapter
III of chapter 53 of such title relating to classification and
General Schedule pay rates; except that an individual so
appointed may not receive pay in excess of the maximum annual
rate of basic pay payable for grade GS-15 of the General
Schedule.
(d) Assistance for the Board.--Subject to section 7(g), in carrying
out this Act, the Board--
(1) may seek assistance from outside experts in the fields
of consumer advocacy, medicine, pharmacology, pharmacy, and
prescription drug reimbursement; and
(2) shall establish and maintain an advisory group and a
stakeholder group for purposes of seeking such assistance.
(e) Initial Meeting.--The Board shall hold its initial meeting not
later than 90 days after the date of the enactment of this Act.
SEC. 4. REPORTING REQUIREMENTS.
(a) Reporting by Manufacturers.--The Board shall require each
manufacturer of a prescription drug or medical device that is sold in
the United States to submit to the Board on a periodic basis, at a
level of specificity determined by the Board to be necessary to make a
determination under section 5, the following information with respect
to the reporting period:
(1) Each type of prescription drug and medical device that
is sold by the manufacturer or an affiliate of the
manufacturer--
(A) in the United States; or
(B) in a country that is a member of the
Organization for Economic Co-operation and Development.
(2) The price charged by the manufacturer and the affiliate
for the prescription drug or medical device in the United
States and in any such country, as applicable.
(3) The costs of the manufacturer and the affiliate to
produce and market the prescription drug or medical device for
sale in the United States and in any such country, as
applicable.
(b) Reporting by CBO.--The Director of the Congressional Budget
Office shall submit an annual report to the Board on trends in the
prices charged for prescription drugs and medical devices.
SEC. 5. PROHIBITION AGAINST EXCESSIVE PRICE.
(a) Prohibition.--Beginning on the effective date of the regulation
required by subsection (b), the manufacturer of a prescription drug or
medical device shall not charge an excessive price, as determined
pursuant to such regulation, for such drug or device.
(b) Formula.--The Board shall by regulation prescribe a formula for
determining whether the average manufacturer price of such drug or
device over an annual quarter is an excessive price.
(c) Determination of Excessive Price.--If the Board determines, on
its own initiative or in response to a petition submitted under
subsection (d), that the manufacturer of a prescription drug or medical
device charges an excessive price for such drug or device in violation
of subsection (a)--
(1) the Board shall give the manufacturer--
(A) notice of such violation; and
(B) subject to subsection (d), a period to correct
such violation; and
(2) if the manufacturer fails to correct the violation by
the end of such period, the manufacturer shall be subject to
section 6 of this Act, section 1927(c)(2)(E) of the Social
Security Act, as added by subsection (c) of such section 6, and
section 4192 of the Internal Revenue Code of 1986, as added by
subsection (d) of such section 6.
(d) Petitions.--Any person may petition the Board to make a
determination under subsection (c) regarding the pricing of a
prescription drug or medical device. Not later than 90 days after the
date of receipt of such a petition, the Board shall--
(1) make a determination under subsection (c) regarding
such pricing; or
(2) decline to make such a determination.
(e) Continuing Violation.--The Board shall not be required to give
a manufacturer an opportunity to correct a violation, as described in
subsection (c)(1)(B), before the manufacturer becomes subject to the
provisions described in subsection (c)(2) for such violation, if--
(1) the Board has already provided such an opportunity to
correct to the manufacturer; and
(2) the Board finds that the violation of subsection (a) is
a continuation of an earlier violation with respect to which
such an opportunity was provided.
(f) Considerations.--The formula required by subsection (a) shall
at a minimum take into consideration--
(1) the average manufacturer price of the prescription drug
or medical device over the respective annual quarter or
quarters;
(2) the average manufacturer price of other prescription
drugs or medical devices in the same therapeutic class over the
same quarter or quarters;
(3) the average price at which the prescription drug or
medical device and other prescription drugs and medical devices
in the same therapeutic class have been sold by manufacturers
in countries other than the United States;
(4) the costs associated with producing and marketing the
prescription drug or medical device, the value of the drug or
device to patients where sufficient data is available to
determine such value, the total Federal investment in the
development of the drug or device, the size of the patient
population receiving the drug or device, and other factors
determinative as to the true cost of production; and
(5) whether the price of the prescription drug or medical
device increased during any annual quarter by a percentage that
is more than 2 percent greater than the CPI increase percentage
(as defined in section 215(i) of the Social Security Act (42
U.S.C. 415)) for the respective annual quarter.
SEC. 6. ENFORCEMENT PROVISIONS.
(a) Reduced Patent Term.--If the Board finds that the manufacturer
of a prescription drug or medical device, who is also an owner of a
patent for such drug or device, charged an excessive price for such
drug or device in violation of section 5(a), the Board may--
(1) reduce the term, by not more than 5 years, of any
patent issued under title 35, United States Code, relating to
such drug or device; or
(2) if the term of each patent for such drug or device has
expired, reduce the term, by not more than 5 years, of another
patent owned by the patent owner relating to a prescription
drug or medical device.
(b) Civil Penalties.--If the Board determines under section 5(c)
that a manufacturer of a prescription drug or medical device charged an
excessive price for a prescription drug or medical device in violation
of section 5(a), the Board may impose a civil penalty on the
manufacturer of not more than 10 percent of the manufacturer's gross
sales of the drug or device during the period beginning on the date on
which an excessive price is first charged and ending on the date on
which the manufacturer ceases to charge an excessive price.
(c) Enforcement Through Increased Medicaid Rebates.--
(1) In general.--Section 1927(c)(2) of the Social Security
Act (42 U.S.C. 1396r-8(c)(2)) is amended--
(A) in subparagraph (A), by inserting ``, subject
to subparagraph (E),'' after ``increased by''; and
(B) by adding at the end the following new
subparagraph:
``(E) Discouraging excessive prices.--
``(i) In general.--In the case of a
manufacturer of a single source drug or an
innovator multiple source drug with a rebate
agreement under this section, if the
Prescription Drug and Medical Device Price
Review Board established under section 2 of the
Prescription Drug and Medical Device Price
Review Board Act of 2018 determines under
section 5(a) of such Act that such manufacturer
charged, with respect to a 30-day period, an
excessive price for such drug, and the Board
determines under clause (ii) to apply an
increased amount described in such clause with
respect to such manufacturer and drug, the
amount of the rebate determined under
subparagraph (A) for such manufacturer and drug
shall be, subject to subparagraph (D),
increased by such amount for the 4 rebate
periods following such 30-day period.
``(ii) Increased amount determination.--For
purposes of clause (i), if the Board described
in such clause makes such a determination under
such section 5(a), with respect to a
manufacturer and drug described in such clause,
the Board may determine an increased amount to
apply with respect to such manufacturer and
drug and rebate period described in such
clause. Such increased amount may not exceed
the rebate amount that would otherwise be
applied to such manufacturer and drug under
this section for such rebate period, without
regard to this subparagraph.''.
(2) Effective date.--This subsection and the amendments
made by this subsection shall apply with respect to rebate
agreements entered into after the date that is 60 days after
the date of the enactment of this Act.
(d) Tax on Excess Prescription Drug and Medical Device Profits.--
(1) Determination of amount.--If the Board determines under
section 5(a) that a manufacturer, producer, or importer of a
prescription drug or medical device charged an excessive price
for such prescription drug or medical device during a taxable
year, the Board may determine under this paragraph a reasonable
price for such drug or device for such taxable year.
(2) Imposition of tax.--
(A) In general.--The Internal Revenue Code of 1986
is amended by inserting after section 4191 the
following new section:
``SEC. 4192. EXCESSIVE PRESCRIPTION DRUG AND MEDICAL DEVICE PRICE.
``(a) In General.--There is hereby imposed on the sale of any
prescription drug or medical device by the manufacturer, producer, or
importer a tax equal to the difference between the price at which such
drug or device is so sold and the reasonable price determined by the
Prescription Drug and Medical Device Price Review Board under section
6(d)(1) of the Prescription Drug and Medical Device Price Review Board
Act of 2018 for such drug or device for the taxable year for sales
after the determination.
``(b) Prescription Drug or Medical Device.--For purposes of this
section, the term `prescription drug or medical device' means any
prescription drug (as defined in section 9008 of the Patient Protection
and Affordable Care Act) or device (as defined in section 201(h) of the
Federal Food, Drug, and Cosmetic Act) intended for humans.''.
(B) Clerical amendment.--The table of parts for
chapter 32 of such Code is amended--
(i) in the item relating to subchapter E,
by striking ``Medical'' and inserting ``Drugs
and medical'', and
(ii) by inserting after the item relating
to section 4191 the following new item:
``Sec. 4192. Excessive prescription drug and medical device price.''.
(3) Effective date.--This subsection and the amendments
made by this subsection shall apply with respect to sales after
December 31, 2018.
(e) Safe and Affordable Drugs From Approved Countries.--Chapter
VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381 et
seq.) is amended by adding at the end the following:
``SEC. 810. IMPORTATION BY INDIVIDUALS OF PRESCRIPTION DRUGS, AND
DEVICES, FROM AN APPROVED COUNTRY IF MANUFACTURERS ARE
CHARGING AN EXCESSIVE PRICE FOR COMPARABLE PRODUCTS IN
THE UNITED STATES.
``(a) In General.--Notwithstanding any other provision of this Act,
not later than 180 days after the date of enactment of this section,
the Prescription Drug and Medical Device Price Review Board (in this
section referred to as the `Board') shall promulgate regulations
permitting individuals to safely import from an approved country into
the United States prescription drugs, and devices, that are comparable
to prescription drugs, and devices, for which the Board makes a final
determination that the manufacturer is charging or has charged an
excessive price in violation of section 5(a) of the Prescription Drug
and Medical Device Price Review Board Act of 2018.
``(b) Comparable Defined.--For purposes of this section, the term
`comparable' means--
``(1) with respect to a drug, having the same active
ingredient or ingredients, route of administration, dosage
form, and strength; and
``(2) with respect to a device, being substantially
equivalent.
``(c) Assurance of Safety.--For purposes of this section, the term
`approved country' means a country that is determined by the Secretary
to have in effect standards to ensure the safety of prescription drugs,
and of devices, that are at least as protective as the standards
applicable under Federal law in the United States.''.
SEC. 7. AUTHORITY.
(a) Obtaining Official Data.--The chairperson of the Board may
secure directly from any Federal agency information necessary to enable
the Board to carry out its duties. Upon request of the chairperson, the
head of the agency shall furnish such information to the Board to the
extent such information is not prohibited from disclosure by law.
(b) Mails.--The Board may use the United States mails in the same
manner and under the same conditions as other Federal agencies.
(c) Administrative Support Services.--Upon the request of the
chairperson of the Board, the Administrator of General Services shall
provide to the Board, on a reimbursable basis, the administrative
support services necessary for the Board to carry out its duties.
(d) Contract Authority.--The Board may contract with and compensate
government and private agencies or persons for the purpose of
conducting research, surveys, and other services necessary to enable
the Board to carry out its duties.
(e) Investigations.--The Board may make such investigations as it
considers necessary to determine whether there is or may be a violation
of any regulation promulgated under this Act and may require or permit
any person to file with it a statement in writing, under oath or
otherwise as the Board shall determine, as to all the facts and
circumstances concerning the matter to be investigated.
(f) Subpoena Power.--
(1) In general.--The Board may issue subpoenas requiring
the attendance and testimony of witnesses and the production of
any evidence relating to any matter under investigation by the
Board. The attendance of witnesses and the production of
evidence may be required from any place within the United
States at any designated place of hearing within the United
States.
(2) Failure to obey a subpoena.--If a person refuses to
obey a subpoena issued under paragraph (1), the Board may apply
to a United States district court for an order requiring that
person to appear before the Board to give testimony, produce
evidence, or both, relating to the matter under investigation.
The application may be made within the judicial district where
the hearing is conducted or where that person is found,
resides, or transacts business. Any failure to obey the order
of the court may be punished by the court as civil contempt.
(3) Service of subpoenas.--The subpoenas of the Board shall
be served in the manner provided for subpoenas issued by a
United States district court under the Federal Rules of Civil
Procedure for the United States district courts.
(4) Service of process.--All process of any court to which
application is made under paragraph (2) may be served in the
judicial district in which the person required to be served
resides or may be found.
(5) Notice.--Upon issuing any subpoena under this
subsection, the Board shall give notice of such issuance to the
appropriate committees of Congress, including the Committee on
Appropriations of the House of Representatives and the
Committee on Appropriations of the Senate.
(g) Confidentiality.--Nothing in this Act shall be construed as
authorizing the Board to disclose any information that is a trade
secret or confidential information subject to section 552(b)(4) of
title 5, United States Code, or section 1905 of title 18, United States
Code.
SEC. 8. REGULATIONS.
(a) In General.--Not later than 1 year after the date of the
initial meeting held under section 3(e), the Board shall issue final
regulations to carry out this Act.
(b) Notice and Comment Requirement.--The regulations developed
under subsection (a) shall be issued in accordance with the notice and
comment procedures established under section 553 of title 5, United
States Code.
SEC. 9. REPORT TO FEDERAL AGENCIES.
Not later than 1 year after the effective date of the regulations
under section 8 and annually thereafter, the Board shall submit to each
Federal agency that dispenses or makes payments for the dispensing of
prescription drugs or medical devices a report containing--
(1) a list of each prescription drug and medical device for
which an excessive price was charged during the preceding
calendar year, as determined by the Board under section 5;
(2) recommendations to the Federal agency against
dispensing or making payments for the dispensing of the
prescription drug or medical device; and
(3) recommendations to the Federal agency to substitute, in
place of any drug or device listed pursuant to paragraph (1), a
similar prescription drug or medical device that is not sold at
an excessive price.
SEC. 10. REPORT TO CONGRESS.
Not later than 1 year after the initial meeting of the Board under
section 3(e), and annually thereafter, the Board shall submit to the
Congress a report describing the activities of the Board for the
preceding year.
SEC. 11. DEFINITIONS.
In this Act:
(1) The term ``affiliate'' means, with respect to a
manufacturer, any entity that controls, is controlled by, or is
under common control with such manufacturer.
(2) The term ``average manufacturer price'' means the
average price charged by the manufacturer of a prescription
drug or medical device, as applicable, for sales of the drug or
device by the manufacturer in the United States over the
respective annual quarter.
(3) The term ``medical device'' means a device (as defined
in section 201 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 321)).
(4) The term ``prescription drug'' means a drug (as defined
in section 201 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 321)) that is subject to section 503(b)(1) of such Act
(21 U.S.C. 353(b)(1)).
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