[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2113 Reported in House (RH)]
<DOC>
Union Calendar No. 571
116th CONGRESS
2d Session
H. R. 2113
[Report No. 116-688, Part I]
To amend titles XI and XVIII of the Social Security Act to provide for
drug manufacturer price transparency, to require certain manufacturers
to report on product samples provided to certain health care providers,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 8, 2019
Mr. Neal (for himself and Mr. Brady) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addition
to the Committee on Energy and Commerce, 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
December 24, 2020
Additional sponsors: Mr. Van Drew, Ms. Finkenauer, Ms. Houlahan, Mr.
Raskin, Mr. McAdams, Ms. Underwood, Ms. Slotkin, Mr. Lipinski, Ms.
Lofgren, and Mr. Amodei
December 24, 2020
Reported from the Committee on Ways and Means with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
December 24, 2020
Committee on Energy and Commerce discharged; committed to the Committee
of the Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on April
8, 2019]
_______________________________________________________________________
A BILL
To amend titles XI and XVIII of the Social Security Act to provide for
drug manufacturer price transparency, to require certain manufacturers
to report on product samples provided to certain health care providers,
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 Sunshine,
Transparency, Accountability and Reporting Act'' or the ``Prescription
Drug STAR Act''.
SEC. 2. DRUG MANUFACTURER PRICE TRANSPARENCY.
(a) In General.--Title XI of the Social Security Act (42 U.S.C.
1301 et seq.) is amended by inserting after section 1128K the following
new section:
``SEC. 1128L. DRUG MANUFACTURER PRICE TRANSPARENCY.
``(a) In General.--With respect to each year, beginning with 2021,
the Secretary shall, at least once during such year, determine if there
is a triggered SPIKE increase (in accordance with subsection (b)) with
respect to an applicable drug (as defined in subsection (f)(1)). If the
Secretary determines, with respect to a year, there is such an increase
with respect to an applicable drug, the manufacturer of the applicable
drug shall submit to the Secretary the justification described in
subsection (c), subject to subsection (b)(4), for each such triggered
SPIKE increase in accordance with the timing described in subsection
(d)).
``(b) Triggered SPIKE Increase.--
``(1) In general.--A triggered SPIKE increase occurs, with
respect an applicable drug and year (beginning with 2021 and
referred to in this paragraph as the `applicable year'), in any
of the following cases:
``(A) If there is at least a 10 percent (or
$10,000) cumulative increase with respect to the
wholesale acquisition cost (or alternative cost measure
specified by the Secretary under paragraph (3)) of such
drug during a calendar-year period beginning and ending
within the lookback period that is the 5-year period
preceding such applicable year.
``(B) If there is at least a 25 percent (or
$25,000) cumulative increase with respect to the
wholesale acquisition cost (or such alternative cost
measure) of such drug during any three-calendar-year
period beginning and ending within such lookback
period.
``(C) In the case of such a drug that is first
covered under title XVIII with respect to such
applicable year, if the estimated cost or spending
under such title per individual or per user of such
drug (as estimated by the Secretary) for such
applicable year (or per course of treatment in such
applicable year, as defined by the Secretary) is at
least $26,000.
``(2) Indexing dollar amounts.--The dollar amounts applied
under paragraph (1) for 2022 and each subsequent year shall be
the dollar amounts specified in such paragraph for the previous
year increased by the annual percentage increase in the
consumer price index (all items; U.S. city average) as of
September of such previous year. If any amount established
under paragraph (1), after application of this paragraph, for a
year is not a multiple of $10, it shall be rounded to the
nearest multiple of $10.
``(3) Alternative to wac.--The Secretary may, for purposes
of making determinations under paragraph (1), in addition to
using the wholesale acquisition cost for an applicable drug,
use alternative cost measures of such drug, or use such
alternative cost measure if the wholesale acquisition cost is
not available.
``(4) Exception.--A justification under subsection (c)
shall not be required for a triggered SPIKE increase described
in paragraph (1) of an applicable drug of a manufacturer if--
``(A) there is any portion of the lookback period
described in the respective subparagraph of such
paragraph for such increase that is included within the
lookback period for another triggered SPIKE increase
(or combination of such increases) for which a
justification is made under this section for such drug
by such manufacturer; or
``(B) such increase is less than the wholesale
acquisition cost (or alternative cost measure specified
by the Secretary under paragraph (3)) of such drug
during the calendar-year period described in paragraph
(1)(A) or the three-calendar-year period described in
paragraph (1)(B), as applicable, for such increase,
increased by the percentage increase in the consumer
price index for all urban consumers (all items; United
States city average) for the 12-month period ending six
months prior to the calendar-year period so described
and for the 36-month period ending six months prior to
the three-calendar-year period so described,
respectively.
``(5) Unit determination.--For purposes of determining the
wholesale acquisition cost in carrying out this section, the
Secretary shall determine a unit (such as a unit size) to
apply.
``(6) Public posting.--Beginning with respect to 2021, the
Secretary shall publicly post on the Internet website of the
Department of Health and Human Services--
``(A) alternative percentages, dollar amounts, and
lookback periods that, if applied under paragraph (1),
would be projected to increase the number of applicable
drugs for which a triggered SPIKE increase would occur
for such year; and
``(B) the number of applicable drugs for which a
triggered SPIKE increase would occur for such year if
such an alternative percentage, dollar amount, or
period were applied for such year.
``(c) Justification Described.--
``(1) In general.--The justification described in this
subsection, with respect to a triggered SPIKE increase
described in subsection (b)(1) of an applicable drug of a
manufacturer, is--
``(A) all of the information described in paragraph
(2);
``(B) all of the information and supporting
documentation described in paragraph (3), as applicable
to the increase and drug; and
``(C) a certification described in paragraph (4).
``(2) Required information.--For purposes of paragraph (1),
the information described in this paragraph is the following:
``(A) The individual factors that have contributed
to the increase in the wholesale acquisition cost.
``(B) An explanation of the role of each factor in
contributing to such increase.
``(3) Information as applicable.--For purposes of paragraph
(1), the information and supporting documentation described in
this paragraph is the following, as applicable to the increase
of the drug:
``(A) Total expenditures of the manufacturer on--
``(i) materials and manufacturing for such
drug;
``(ii) acquiring patents and licensing for
each drug of the manufacturer; and
``(iii) costs to purchase or acquire the
drug from another company, if applicable.
``(B) The percentage of total expenditures of the
manufacturer on research and development for such drug
that was derived from Federal funds.
``(C) The total expenditures of the manufacturer on
research and development for such drug.
``(D) The total revenue and net profit generated
from the applicable drug for each calendar year since
drug approval.
``(E) The total costs associated with marketing and
advertising for the applicable drug.
``(F) Additional information specific to the
manufacturer of the applicable drug, such as--
``(i) the total revenue and net profit of
the manufacturer for the period of such
increase, as determined by the Secretary;
``(ii) metrics used to determine executive
compensation;
``(iii) total expenditures on--
``(I) drug research and
development; or
``(II) clinical trials on drugs
that failed to receive approval by the
Food and Drug Administration; and
``(iv) any additional information related
to drug pricing decisions of the manufacturer.
``(G) Any other relevant information and supporting
documentation necessary to justify the triggering SPIKE
increase.
``(H) Any other relevant information and supporting
documentation, as specified by the Secretary.
``(4) Certification.--For purposes of paragraph (1), the
certification described in this paragraph is a certification,
that all such information and documentation is accurate and
complete, by one of the following:
``(A) The chief executive officer of the
manufacturer.
``(B) The chief financial officer of the
manufacturer.
``(C) An individual who has delegated authority to
sign for, and who reports directly to, such chief
executive officer or chief financial officer.
``(d) Timing.--
``(1) Notification.--Not later than 60 days after the date
on which the Secretary makes the determination that there is a
triggering SPIKE increase with respect to an applicable drug,
the Secretary shall notify the manufacturer of the applicable
drug of such determination.
``(2) Submission of justification.--Not later than 90 days
after the date on which a manufacturer receives a notification
under paragraph (1), subject to subsection (b)(4), the
manufacturer shall submit to the Secretary the justification
required under subsection (a), including a summary of such
justification, in a form and manner specified by the Secretary.
In specifying such form, with respect to the summary required
under the previous sentence, the Secretary shall provide that
such summary shall be in an easily understandable format, as
specified by the Secretary, and shall permit the manufacturer
to exclude proprietary information from such summary.
``(3) Posting on internet website.--Not later than 30 days
after receiving the complete justification under paragraph (2),
the Secretary shall post on the Internet website of the Centers
for Medicare & Medicaid Services the summary included for such
justification.
``(e) Penalties.--
``(1) Failure to submit timely justification.--If the
Secretary determines that a manufacturer has failed to submit a
justification as required under this section, including in
accordance with the timing and form required, with respect to
an applicable drug, the Secretary shall apply a civil monetary
penalty in an amount of $10,000 for each day the manufacturer
has failed to submit such justification as so required.
``(2) False information.--Any manufacturer that submits a
justification under this section that knowingly provides false
information in such justification is subject to a civil
monetary penalty in an amount not to exceed $100,000 for each
item of false information.
``(3) Application of procedures.--The provisions of section
1128A (other than subsections (a) and (b)) shall apply to a
civil monetary penalty under this subsection in the same manner
as such provisions apply to a penalty or proceeding under
section 1128A(a). Civil monetary penalties imposed under this
subsection are in addition to other penalties as may be
prescribed by law.
``(f) Definitions.--In this section:
``(1) Applicable drug.--
``(A) In general.--Subject to subparagraph (B), the
term `applicable drug' means, with respect to a
lookback period described in subsection (b)(1), a
covered outpatient drug (as defined in paragraph (2) of
section 1927(k), without application of paragraph (3)
of such section) that is covered under title XVIII and
is not a low cost drug.
``(B) Exclusion of low cost drugs.--For purposes of
subparagraph (A), not later than January 1, 2021, the
Secretary shall specify a threshold (such as a cost or
spending threshold) for identifying (and shall
identify) low cost drugs to be excluded from the
definition of the term `applicable drug', such as a
drug that has a wholesale acquisition cost of less than
$10 per unit or less than $100 in average estimated
expenditures under title XVIII per individual per year
or per user of such drug per year. For purposes of this
section, a drug shall not be considered specified as a
low cost drug for a lookback period described in
subsection (b)(1) with respect to a year unless such
drug is identified as being below the specified
threshold for the entirety of the lookback period.
``(2) Manufacturer.--The term `manufacturer' has the
meaning given that term in section 1847A(c)(6)(A).
``(3) Wholesale acquisition cost.--The term `wholesale
acquisition cost' has the meaning given that term in section
1847A(c)(6)(B).''.
(b) Reporting to the Secretary of the Treasury.--
(1) In general.--Subpart A of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986 is amended by
inserting after section 6039J the following new section:
``SEC. 6039K. DRUG PRICE SPIKE INCREASE REPORTING.
``Each manufacturer (within the meaning of section 1128L of the
Social Security Act) shall file a return (at such time and in such form
and manner as the Secretary may provide) showing for such year with
respect to which such section applies all information and supporting
documentation and the certification included within a justification
reported by the manufacturer under subsection (c)(1) of such
section.''.
(2) Clerical amendment.--The table of sections for subpart
A of part III of subchapter A of chapter 61 of such Code is
amended by inserting after the item relating to section 6039J
the following new item:
``Sec. 6039K. Drug price SPIKE increase reporting.''.
SEC. 3. REQUIREMENT FOR MANUFACTURERS OF CERTAIN DRUGS, DEVICES,
BIOLOGICALS, AND MEDICAL SUPPLIES TO REPORT ON PRODUCT
SAMPLES PROVIDED TO CERTAIN HEALTH CARE PROVIDERS.
(a) In General.--Section 1128G(a) of the Social Security Act (42
U.S.C. 1320a-7h(a)) is amended by adding at the end the following new
paragraph:
``(3) Certain product samples.--
``(A) In general.--In addition to the requirements
under paragraphs (1)(A) and (2), on the 90th day of
each calendar year (beginning with 2023), any
applicable manufacturer that provides a payment or
other transfer of value that is a product sample
described in subparagraph (B) to any covered recipient
(or to an entity or individual at the request of, or
designated on behalf of, such a covered recipient)
shall submit to the Secretary, in such electronic form
as the Secretary shall require, the following
information (aggregated per each drug, device,
biological, or medical supply, as applicable) with
respect to the preceding calendar year:
``(i) The total quantity of all such
payments or other transfers of value provided
to all covered recipients.
``(ii) The total value of all such payments
or other transfers of value provided to all
covered recipients.
``(iii) If applicable, information
described in clauses (vii) and (viii) of
paragraph (1)(A) with respect to such a payment
or other transfer of value.
``(B) Product sample described.--For purposes of
subparagraph (A), a product sample described in this
subparagraph is a product sample that is not intended
to be sold and is intended for patient use.''.
(b) Public Availability of Information.--Section 1128G(c)(1)(C)(ii)
of the Social Security Act (42 U.S.C. 1320a-7h(c)(1)(C)(ii)) is
amended--
(1) by striking ``(ii) contains'' and inserting ``(ii)(I)
with respect to information that is not information submitted
under paragraph (3) of subsection (a), contains'';
(2) by striking ``, as applicable;'' and inserting ``, as
applicable; and''; and
(3) by adding at the end the following new subclause:
``(II) with respect to information
submitted under paragraph (3) of subsection
(a), contains information that is presented by
the name of the applicable manufacturer, the
total amount of all payments or other transfers
of value described in such paragraph provided
to all covered recipients, the total value of
all such payments or other transfers of value
provided to all covered recipients, and the
name of the covered drug, device, biological,
or medical supply, as applicable;''.
(c) Conforming Amendment.--Section 1128G(e)(10)(B)(ii) of the
Social Security Act (42 U.S.C. 1320a-7h(e)(10)(B)(ii)) is amended by
striking ``Product samples'' and inserting ``Except for purposes of
paragraph (3) of subsection (a), product samples''.
(d) Reporting to the Secretary of the Treasury.--
(1) In general.--Subpart A of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986, as amended by
section 2, is further amended by inserting after section 6039K
the following new section:
``SEC. 6039L. PRODUCT SAMPLES OF APPLICABLE MANUFACTURERS.
``Each applicable manufacturer (within the meaning of section
1128G(a)(3) of the Social Security Act) shall file a return (at such
time and in such form and manner as the Secretary may provide) showing
for such year to which such section applies--
``(1) the amount described in section 1128G(a)(3)(A)(ii) of
such Act with respect to such year, and
``(2) the portion of such amount for which a deduction was
claimed under section 162.''.
(2) Clerical amendment.--The table of sections for subpart
A of part III of subchapter A of chapter 61 of such Code, as
amended by section 2, is further amended by inserting after the
item relating to section 6039K the following new item:
``Sec. 6039L. Product samples of applicable manufacturers.''.
SEC. 4. ANALYSIS AND REPORT ON INPATIENT HOSPITAL DRUG COSTS.
(a) Analysis.--The Secretary of Health and Human Services shall
conduct an analysis that, to the extent practicable--
(1) focuses on drugs that are furnished in the inpatient
setting;
(2) includes data on inpatient hospital drug costs,
Medicare spending, volume, and spending per admission;
(3) considers trends in inpatient hospital drug costs, such
as trends by hospital size, classification of urban or rural,
whether the hospital is a teaching hospital, or other
categorization; and
(4) examines the impact of drug shortages on services that
are furnished in an inpatient hospital setting.
In conducting such analysis, the Secretary may conduct hospital
surveys, use data from hospital cost reports, or use other data as
determined by the Secretary.
(b) Report.--Not later than January 1, 2021, the Secretary shall
submit to the Committee on Ways and Means of the House of
Representatives and the Finance Committee of the Senate a report on
drug costs in the inpatient hospital setting, including the analyses
described in paragraphs (1) through (4) of subsection (a).
(c) Funding.--For purposes of carrying out this section, there
shall be transferred to the Secretary $3,000,000 from the Federal
Hospital Insurance Trust Fund under section 1817 of the Social Security
Act (42 U.S.C. 1395i).
SEC. 5. PUBLIC DISCLOSURE OF DRUG DISCOUNTS.
Section 1150A of the Social Security Act (42 U.S.C. 1320b-23) is
amended--
(1) in subsection (c), in the matter preceding paragraph
(1), by inserting ``(other than as permitted under subsection
(e))'' after ``disclosed by the Secretary''; and
(2) by adding at the end the following new subsection:
``(e) Public Availability of Certain Information.--
``(1) In general.--In order to allow the comparison of
PBMs' ability to negotiate rebates, discounts, and price
concessions and the amount of such rebates, discounts, and
price concessions that are passed through to plan sponsors,
beginning January 1, 2020, the Secretary shall make available
on the Internet website of the Department of Health and Human
Services the information with respect to the second preceding
calendar year provided to the Secretary on generic dispensing
rates (as described in paragraph (1) of subsection (b) and
information provided to the Secretary under paragraphs (2) and
(3) of such subsection that, as determined by the Secretary, is
with respect to each PBM.
``(2) Availability of data.--In carrying out paragraph (1),
the Secretary shall ensure the following:
``(A) Confidentiality.--The information described
in such paragraph is displayed in a manner that
prevents the disclosure of information on rebates,
discounts, and price concessions, with respect to an
individual drug or an individual plan.
``(B) Class of drug.--The information described in
such paragraph is made available by class of drug,
using an existing classification system, but only if
the class contains such number of drugs, as specified
by the Secretary, to ensure confidentiality of
proprietary information or other information that is
prevented to be disclosed under subparagraph (A).''.
SEC. 6. REQUIRING CERTAIN MANUFACTURERS TO REPORT DRUG PRICING
INFORMATION WITH RESPECT TO DRUGS UNDER THE MEDICARE
PROGRAM.
(a) In General.--Section 1847A of the Social Security Act (42
U.S.C. 1395w-3a) is amended--
(1) in subsection (b)--
(A) in paragraph (2)(A), by inserting ``or
subsection (f)(2), as applicable'' before the period at
the end;
(B) in paragraph (3), in the matter preceding
subparagraph (A), by inserting ``or subsection (f)(2),
as applicable,'' before ``determined by''; and
(C) in paragraph (6)(A), in the matter preceding
clause (i), by inserting ``or subsection (f)(2), as
applicable,'' before ``determined by''; and
(2) in subsection (f)--
(A) by striking ``For requirements'' and inserting
the following:
``(1) In general.--For requirements''; and
(B) by adding at the end the following new
paragraph:
``(2) Manufacturers without a rebate agreement under title
xix.--
``(A) In general.--In the case of a manufacturer of
a drug or biological described in subparagraph (C),
(E), or (G) of section 1842(o)(1) or in clause (ii) or
(iii) of section 1881(b)(14)(B) that does not have a
rebate agreement in effect under section 1927, for
calendar quarters beginning on or after January 1,
2020, such manufacturer shall report to the Secretary
the information described in subsection (b)(3)(A)(iii)
of such section 1927 with respect to such drug or
biological in a time and manner specified by the
Secretary.
``(B) Audit.--Information reported under
subparagraph (A) is subject to audit by the Inspector
General of the Department of Health and Human Services.
``(C) Verification.--The Secretary may survey
wholesalers and manufacturers that directly distribute
drugs described in subparagraph (A), when necessary, to
verify manufacturer prices and manufacturer's average
sales prices (including wholesale acquisition cost) if
required to make payment reported under subparagraph
(A). The Secretary may impose a civil monetary penalty
in an amount not to exceed $100,000 on a wholesaler,
manufacturer, or direct seller, if the wholesaler,
manufacturer, or direct seller of such a drug refuses a
request for information about charges or prices by the
Secretary in connection with a survey under this
subparagraph or knowingly provides false information.
The provisions of section 1128A (other than subsections
(a) (with respect to amounts of penalties or additional
assessments) and (b)) shall apply to a civil money
penalty under this subparagraph in the same manner as
such provisions apply to a penalty or proceeding under
section 1128A(a).
``(D) Confidentiality.--Notwithstanding any other
provision of law, information disclosed by
manufacturers or wholesalers under this paragraph
(other than the wholesale acquisition cost for purposes
of carrying out this section) is confidential and shall
not be disclosed by the Secretary in a form which
discloses the identity of a specific manufacturer or
wholesaler or prices charged for drugs by such
manufacturer or wholesaler, except--
``(i) as the Secretary determines to be
necessary to carry out this section (including
the determination and implementation of the
payment amount), or to carry out section 1847B;
``(ii) to permit the Comptroller General to
review the information provided; and
``(iii) to permit the Director of the
Congressional Budget Office to review the
information provided.''.
(b) Enforcement.--Section 1847A such Act (42 U.S.C. 1395w-3a) is
further amended--
(1) in subsection (d)(4)--
(A) in subparagraph (A), by striking ``In general''
and inserting ``Misrepresentation'';
(B) in subparagraph (B), by striking ``subparagraph
(B)'' and inserting ``subparagraph (A), (B), or (C)'';
(C) by redesignating subparagraph (B) as
subparagraph (D); and
(D) by inserting after subparagraph (A) the
following new subparagraphs:
``(B) Failure to provide timely information.--If
the Secretary determines that a manufacturer described
in subsection (f)(2) has failed to report on
information described in section 1927(b)(3)(A)(iii)
with respect to a drug or biological in accordance with
such subsection, the Secretary shall apply a civil
money penalty in an amount of $10,000 for each day the
manufacturer has failed to report such information and
such amount shall be paid to the Treasury.
``(C) False information.--Any manufacturer required
to submit information under subsection (f)(2) that
knowingly provides false information is subject to a
civil money penalty in an amount not to exceed $100,000
for each item of false information. Such civil money
penalties are in addition to other penalties as may be
prescribed by law.''; and
(2) in subsection (c)(6)(A), by striking the period at the
end and inserting ``, except that, for purposes of subsection
(f)(2), the Secretary may, if the Secretary determines
appropriate, exclude repackagers of a drug or biological from
such term.''.
(c) Report.--Not later than January 1, 2021, the Inspector General
of the Department of Health and Human Services shall assess and submit
to Congress a report on the accuracy of average sales price information
submitted by manufacturers under section 1847A of the Social Security
Act (42 U.S.C. 1395w-3a). Such report shall include any recommendations
on how to improve the accuracy of such information.
Union Calendar No. 571
116th CONGRESS
2d Session
H. R. 2113
[Report No. 116-688, Part I]
_______________________________________________________________________
A BILL
To amend titles XI and XVIII of the Social Security Act to provide for
drug manufacturer price transparency, to require certain manufacturers
to report on product samples provided to certain health care providers,
and for other purposes.
_______________________________________________________________________
December 24, 2020
Reported from the Committee on Ways and Means with an amendment
December 24, 2020
Committee on Energy and Commerce discharged; committed to the Committee
of the Whole House on the State of the Union and ordered to be printed