[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3166 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
2d Session
S. 3166
To lower the cost of drugs for all Americans.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 8, 2020
Mr. Booker (for himself, Mr. Sanders, and Ms. Harris) introduced the
following bill; which was read twice and referred to the Committee on
Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To lower the cost of drugs for all Americans.
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 Affordability and
Access Act''.
SEC. 2. ESTABLISHMENT OF THE BUREAU OF PRESCRIPTION DRUG AFFORDABILITY
AND ACCESS.
(a) Establishment.--
(1) In general.--There is established within the Department
of Health and Human Services an independent bureau, known as
the Bureau of Prescription Drug Affordability and Access (in
this Act referred to as the ``Bureau'') to carry out the duties
described in this section. The purposes of the Bureau are to--
(A) attain lower prescription drug costs for
patients;
(B) decrease government expenditures on
prescription drugs; and
(C) ensure access to prescription drugs.
(2) Executive agency.--The Bureau shall be considered an
Executive agency, as defined in section 105 of title 5, United
States Code.
(3) Director.--
(A) Appointment.--The Bureau shall be headed by a
Director (in this Act referred to as the ``Director'')
who shall be appointed by the President, by and with
the advice and consent of the Senate.
(B) Qualification.--The President shall nominate
the Director from among individuals who are citizens of
the United States.
(C) Term.--The Director shall serve for a term of 5
years. The term of the first Director to be appointed
shall begin on the date that is 180 days after the date
of enactment of this Act.
(4) Consultation.--
(A) In general.--In carrying out the duties under
this section, the Bureau shall regularly consult with
relevant stakeholders, including patients,
representatives of relevant Federal agencies, and
medical and health care finance experts. The Bureau
shall have regular public meetings to solicit input
from relevant stakeholders.
(B) Patient engagement.--
(i) In general.--The Director shall ensure
that patients or organizations representing
patients have opportunities to meaningfully
engage with the Bureau as it conducts its work,
including while the Bureau makes appropriate
price determinations under section 3(d). Such
opportunities may include holding regular
panels, forums, and other meetings for patient
engagement.
(ii) Petition.--The Director shall
establish a process by which patients can
petition the entity and raise concerns about
the price of their prescription drugs.
(C) Consumer advisory council.--
(i) Establishment.--The Director shall
establish a Consumer Advisory Council to advise
and consult with the Bureau as it conducts its
work.
(ii) Membership.--The Council established
under this subparagraph shall be composed of
not fewer than 6 members appointed by the
Director. In appointing members to the Council,
the Director shall ensure that at least half of
the members of the Council are patients or
organizations representing patients,
particularly those who have been significantly
impacted by high priced medications. The
Director shall also seek to appoint members to
the Council who are experts in relevant areas,
including medicine and health care finance.
(iii) Meetings.--The Consumer Advisory
Council shall meet from time to time at the
call of the Director but shall meet at least
twice a year.
(5) Employment condition.--
(A) In general.--An individual who has a conflict
of interest shall not be appointed to be a member of,
or employed by, the Bureau, including the Consumer
Advisory Council established under paragraph (4)(C).
(B) Disclosure.--Individuals under consideration
for employment by, or appointment to, the Bureau,
including the Consumer Advisory Council, must disclose
any potential conflict of interest, including the type,
nature, and magnitude of the interests involved.
(b) Duties.--The Bureau shall carry out the following duties:
(1) Carry out the provisions of section 3.
(2) Submit the annual reports under subsection (c).
(3) Any other duty that the Director determines
appropriate.
(c) Annual Reporting.--
(1) In general.--Not later than January 1, 2021, and
annually thereafter, the Director shall submit to Congress a
report on the activities of the Bureau.
(2) Contents.--Each report under paragraph (1) shall
contain the following:
(A) A description of the activities of the Bureau,
including--
(i) the total estimated savings achieved by
the Bureau since the most recent report;
(ii) the disaggregated savings achieved
since the most recent report, including by each
therapeutic class of prescription drugs;
(iii) a summary of the information
submitted by prescription drug manufacturers as
required under section 3; and
(iv) the impact of the Bureau's work on
patient affordability and access to
prescription drugs.
(B) Recommendations for such legislation and
administrative action as the Bureau determines
appropriate.
(C) A copy of each report submitted by drug
manufacturers as required under section 3.
(D) Other items that the Bureau determines
appropriate.
(d) Funding.--There are appropriated, from amounts in the Treasury
not otherwise appropriated, $50,000,000 for fiscal year 2020 and each
subsequent fiscal year to carry out the activities of the Bureau.
Amounts appropriated under the preceding sentence shall remain
available until expended.
SEC. 3. PRESCRIPTION DRUG CONSUMER PRICE PROTECTIONS.
(a) Review of Prices.--
(1) In general.--The Bureau shall conduct reviews of the
prices of prescription drugs to ensure that the wholesale
acquisition cost of each such drug is appropriate.
(2) Information on prescription drugs approved as of
enactment.--
(A) Manufacturer submission.--With respect to any
prescription drug that, as of the date of enactment of
this Act, has in effect an application approved under
section 505 of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355) or section 351 of the Public Health
Service Act (42 U.S.C. 262), each manufacturer, not
later than 180 days after such date of enactment, shall
provide to the Bureau the following information:
(i) The name of the prescription drug.
(ii) A description of the prescription drug
and its approved indications.
(iii) The number of individuals in the
United States and globally for which such
prescription drug is clinically indicated.
(iv) A list of patents that claim the
prescription drug, a use of the prescription
drug, a form of the prescription drug, a method
of use of the prescription drug, or a method of
manufacture of the prescription drug.
(v) A list of government-granted
exclusivities that prohibit the submission or
approval of a prescription drug and the date
that each such government-granted exclusivity
was granted.
(vi) The date on which the prescription
drug was approved under such section 505 or
such section 351 of the Public Health Service
Act.
(vii) The total expenditures of the
manufacturer on--
(I) domestic and foreign research
and development, including an itemized
description of--
(aa) clinical research,
including the cost of each
clinical trial associated with
the prescription drug, reported
separately for each clinical
trial;
(bb) the development of
alternative dosage forms and
strengths for the prescription
drug molecule or combinations,
including the molecule;
(cc) other prescription
drug development activities,
such as nonclinical laboratory
studies and record and report
maintenance;
(dd) pursuing new or
expanded indications for such
prescription drug through
supplemental applications under
such section 505 or such
section 351;
(ee) carrying out
postmarket requirements related
to such prescription drug,
including under subsection (o)
of such section 505 or such
section 351;
(ff) carrying out risk
evaluation and mitigation
strategies in accordance with
section 505-1 of the Federal
Food, Drug, and Cosmetic Act
(21 U.S.C. 355-1) or such
section 351; and
(gg) marketing research;
(II) the acquisition of
prescription drug components and
packaging, in total and per unit sold,
broken out by source and cost and
identifying specific costs that reflect
internal transfers within the
manufacturer's company;
(III) other acquisitions relating
to the prescription drug, including for
the purchase of patents and licensing
or acquisition of any corporate entity
owning any rights to the drug during or
after development of the prescription
drug;
(IV) the cost of manufacturing the
prescription drug;
(V) marketing, advertising, and
educating for the promotion of a
prescription drug, including a
breakdown of amounts aimed at
consumers, prescribers, managed care
organizations, and others, irrespective
of whether a prescription drug is
mentioned in marketing, advertising, or
educating; and
(VI) patient assistance and co-pay
programs that the manufacturer sponsors
or contributes to.
(viii) The gross revenue, net revenue,
gross profit, and net profit of the
manufacturer with respect to such prescription
drug.
(ix) The total number of units of such
prescription drug that were sold in interstate
commerce.
(x) Pricing information with respect to the
sale of such prescription drug, including--
(I) the current wholesale
acquisition cost;
(II) the introductory wholesale
acquisition cost;
(III) the net average price
realized by pharmacy benefit managers
for such prescription drug provided to
individuals in the United States, after
accounting for any rebates or other
payments from the manufacturer to the
pharmacy benefit manager and from the
pharmacy benefit manager to the
manufacturer;
(IV) the list price of such
prescription drug charged to purchasers
in each applicable prescription drug
reference country;
(V) the net price of such
prescription drug, after accounting for
discounts, rebates, or other financial
considerations, charged to purchasers
in each applicable prescription drug
reference country;
(VI) a description of all price
changes of the prescription drug since
the introductory wholesale acquisition
cost; and
(VII) the average net price of such
prescription drug for each year since
first being sold in the United States.
(xi) Any Federal benefits and amounts and
periods of impact for each such benefit
received by the manufacturer with respect to
the prescription drug, including tax credits,
Federal grants, patent applications that
benefitted from such grants, patent extensions,
exclusivity periods, and waivers of fees.
(xii) The percentage of research and
development expenditures described in this
section that were derived from Federal funds.
(xiii) Executive compensation for the chief
executive officer, chief financial officer, and
the three other most highly compensated
executive officers, including bonuses, paid by
such manufacturer, and stock options affiliated
with the manufacturer that were offered to or
accrued by such officers.
(xiv) Other information as the Director may
require.
(B) Bureau review priorities.--In reviewing
submissions under subparagraph (A), the Bureau shall
prioritize prescription drugs that meet any of the
following criteria:
(i) In the top 50th percentile of net
spending on prescription drugs under any
Federal program, including the Medicare program
under title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.) or the Medicaid
program under title XIX of such Act (42 U.S.C.
1396 et seq.).
(ii) In the top 50th percentile of
utilization under any Federal program,
including such Medicare program or such
Medicaid program.
(iii) Experienced an increase in the
wholesale acquisition cost of 25 percent or
more over the preceding 3 years.
(iv) Other qualifications, as determined by
the Director.
(3) Information on prescription drugs approved after
enactment.--With respect to any prescription drug approved
under section 505 of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355) or section 351 of the Public Health Service Act
(42 U.S.C. 262) after the date of enactment of this Act, each
manufacturer, not later than 45 days prior to introducing such
prescription drug into interstate commerce in the United
States, shall provide to the Bureau the following information:
(A) The information described in the following
provisions of paragraph (2)(A):
(i) Clauses (i) through (vi).
(ii) Subclauses (I) through (IV) of clause
(vii).
(iii) Clauses (xi) through (xiv).
(B) Pricing information with respect to the sale of
such prescription drug, including--
(i) the planned introductory wholesale
acquisition cost;
(ii) the list price of such prescription
drug charged or planned to be charged to
purchasers in each applicable prescription drug
reference country; and
(iii) the net price of such prescription
drug, after accounting for discounts, rebates,
or other financial considerations, charged or
planned to be charged to purchasers in each
applicable prescription drug reference country,
as defined in this Act.
(C) The estimated annual profit and revenue that
will be generated by the prescription drug, both
domestically and globally.
(D) Other information as the Director may require.
(b) Review of Certain Price Increases.--
(1) In general.--The Bureau shall conduct a review of the
price of a prescription drug for which a submission is required
under paragraph (2).
(2) Notification of intention to increase price.--If a
manufacturer intends to increase the wholesale acquisition cost
of a prescription drug by more than the percentage by which the
Consumer Price Index for All Urban Consumers for that year
exceeds such index for the preceding calendar year, such
manufacturer, not later than 60 days before the price increase
takes effect, shall submit to the Bureau the following
information:
(A) The information described in subsection
(a)(2)(A).
(B) The planned increase in the wholesale
acquisition cost and the planned date the increase will
go into effect.
(C) A justification of the planned increase in
wholesale acquisition cost.
(D) Any other information as the Secretary may
require.
(c) Revenue Benchmark Review.--
(1) In general.--The Bureau shall conduct a review of a
prescription drug when revenue for such prescription drug
surpasses the revenue benchmark in order to ensure that the
wholesale acquisition cost of the prescription drug remains
appropriate.
(2) Required submission.--Not later than 60 days before the
manufacturer of a prescription drug anticipates the global
revenue for such drug will surpass the revenue benchmark, the
manufacturer shall submit to the Bureau the information
outlined in subsection (a)(2)(A).
(3) Revenue benchmark.--
(A) In general.--Subject to subparagraph (B), for
purposes of this subsection, the revenue benchmark is
$5,000,000,000 in global revenue.
(B) Update.--The Bureau may update the amount of
the global benchmark over time.
(d) General Authority To Review.--
(1) In general.--The Bureau may at any time review the
wholesale acquisition cost of a prescription drug to determine
if such price is appropriate, including in response to a
patient petition as described in section (2)(a)(3)(B)(ii).
(2) Procedure.--The Bureau shall notify the manufacturer of
a prescription drug it wishes to review pursuant to the
authority under this subsection, and, within 45 days of
receiving such a notification, the manufacturer shall submit to
the Bureau information the Bureau determines necessary for its
review.
(e) Appropriate Price Determinations.--
(1) Considerations.--In determining whether the wholesale
acquisition cost or proposed wholesale acquisition cost of a
prescription drug is appropriate, the Bureau shall consider the
following:
(A) The size of the affected patient population.
(B) The therapeutic benefits of the prescription
drug to patients.
(C) The impact of the price on access to the
prescription drug, including for patients who are
uninsured, and the associated financial burden on
patients that utilize such prescription drug.
(D) The total annual Federal Government
expenditures on the prescription drug and the budgetary
impact of Federal health programs providing coverage of
the prescription drug.
(E) The risk-adjusted value of Federal Government
subsidies and investments related to the prescription
drug.
(F) The costs associated with the development of
the prescription drug.
(G) The number of similarly effective prescription
drugs or alternative treatment regimens for each
approved use of such prescription drug.
(H) Whether the prescription drug provided a
significant improvement in health outcomes, compared to
other therapies available at the time of its approval,
as determined through clinical effectiveness.
(I) The current wholesale acquisition cost of
comparable prescription drugs in the United States, to
the extent that those prices have been deemed
appropriate.
(J) The cumulative and expected global revenue
generated by the prescription drug.
(K) The price of the drug in other countries,
including in the prescription drug reference countries.
(L) The public health benefit of the drug.
(M) The information that the manufacturer submits
to the Bureau as required under this section.
(N) Any other information, as the Bureau requires.
(2) Special rules.--
(A) Interim appropriate price of prescription
drugs.--
(i) In general.--For each prescription drug
described in clause (ii), the Bureau shall--
(I) establish an interim
appropriate price, which shall be the
lesser of--
(aa) the median list price
of the prescription drug in the
prescription drug reference
countries; or
(bb) if applicable, the
appropriate price determination
made by the Bureau; and
(II) direct the manufacturer to set
the wholesale acquisition cost at a
level that does not exceed the interim
appropriate price.
(ii) Applicable drugs.--A prescription drug
described in this clause is a prescription
drug--
(I) that--
(aa) as of the date of the
enactment of this Act, has in
effect an application approved
under section 505(c) of the
Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(c))
or section 351(a) of the Public
Health Service Act (42 U.S.C.
262(a)); and
(bb) is not a listed drug
or a reference product for more
than 2 prescription drugs or
biological products approved
and currently marketed under
section 505(j) of the Federal
Food, Drug, and Cosmetic Act
(21 U.S.C. 355(j)) or under
section 351(k) of the Public
Health Service Act (42 U.S.C.
262(k)); or
(II) with respect to which the
Secretary has authorized under
subsection (g) the use of any patent,
clinical trial data, or other
government-granted exclusivity related
to such drug by another sponsor, until
the date that is 1 year after the date
on which another application for such
drug, for which the sponsor relies upon
a such authorization under subsection
(g), is approved under such section 505
or such section 351.
(B) Spike in price.--If a manufacturer increases
the wholesale acquisition cost of a prescription drug
by more than the percentage by which the Consumer Price
Index for All Urban Consumers for that year exceeds
such index for the preceding calendar year, such
prescription drug shall be deemed to have a wholesale
acquisition cost that is not appropriate unless the
Bureau determines, based on the information submitted
under paragraphs (2) and (3) of subsection (a) and
under subsection (b)(2) and the considerations
described in paragraph (1), that the wholesale
acquisition cost is appropriate.
(3) Opportunity to comment.--Prior to making a
determination on whether the wholesale acquisition cost of a
prescription drug is appropriate, the Bureau shall ensure
relevant stakeholders, including patients, have an opportunity
to comment.
(f) Required Actions if Price Is Not Appropriate.--
(1) Notice and requirement to remit excess.--If the Bureau
determines that the wholesale acquisition cost of a
prescription drug is not appropriate, the Bureau shall notify
and direct the manufacturer to lower the wholesale acquisition
cost to a level that would be deemed appropriate. The Bureau
shall also require the manufacturer to remit the excess revenue
earned as a result of the prescription drug having a price that
is not appropriate.
(2) Patient rebate.--The Director of the Bureau shall
establish a process to distribute funds remitted under
paragraph (1) to patients who were impacted by the prescription
drug having a price that is not appropriate.
(g) Enforcement.--
(1) In general.--If, within 30 days of receiving a notice
that the wholesale acquisition cost of a prescription drug is
not appropriate, the manufacturer of such prescription drug
fails to lower the wholesale acquisition cost of a prescription
drug or fails to remit excessive revenue earned in accordance
with subsection (f), the Director shall notify the Secretary
and the Secretary shall authorize the use of any patent,
clinical trial data, or other government-granted exclusivity by
an entity for purposes of manufacturing such prescription drug
for sale. An entity that wishes to manufacture such
prescription drug for sale must agree to--
(A) set the wholesale acquisition cost of such
prescription drug at or below the level that the Bureau
determines is appropriate; and
(B) provide the prescription drug manufacturer with
reasonable compensation, which shall be determined by
the Bureau, based on the information submitted by the
manufacturer under this section including--
(i) the risk-adjusted value of any Federal
Government subsidies and investments in
research and development used to support the
development of such drug;
(ii) the risk-adjusted value of any
investment made by such manufacturer in the
research and development of such drug;
(iii) the impact of the price, including
license compensation payments, on meeting the
medical need of all patients;
(iv) the relationship between the price of
such drug, including compensation payments and
the health benefits of such drug; and
(v) other relevant information determined
appropriate by the Secretary, in coordination
with the Director.
(2) Post licensing.--
(A) In general.--Any manufacturer of a prescription
drug that fails to comply with the interim appropriate
price under subsection (e)(2)(A)(i)(I) shall be subject
to a civil monetary penalty of not less than an amount
equal to 150 percent of all revenues obtained by the
manufacturer that are in excess of the expected
revenues at the interim appropriate price.
(B) Procedure.--The provisions of section 1128A,
other than subsections (a) and (b) and the first
sentence of subsection (c)(1) of such section, shall
apply to civil monetary penalties under this paragraph
in the same manner as such provisions apply to a
penalty or proceeding under section 1128A.
(C) Transfer to national institutes of health.--The
civil monetary penalties collected under this paragraph
shall be transferred to the National Institutes of
Health to supplement activities related to
pharmaceutical research and development.
(h) Definitions.--In this Act:
(1) Conflict of interest.--The term ``conflict of
interest'' means an association, including a financial or
personal association, or past employment, that has the
potential to bias or have the appearance of biasing an
individual's decisions.
(2) Excess revenue.--The term ``excess revenue'' means the
difference between a prescription drug's wholesale acquisition
cost at the time of the Bureau review under this section and
the maximum wholesale acquisition price for the prescription
drugs that the Bureau determines to be appropriate.
(3) Government-granted exclusivity.--The term ``government-
granted exclusivity'' means prohibitions on the submission or
effective approval of prescription drug applications granted
under any of the following:
(A) Clauses (ii) through (v) of section
505(c)(3)(E) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355(c)(3)(E)).
(B) Section 505(j)(5)(B)(iv) of such Act (21 U.S.C.
355(j)(5)(B)(iv)) or clause (ii), (iii), or (iv) of
section 505(j)(5)(F) of such Act.
(C) Section 505A of such Act (21 U.S.C. 355a).
(D) Section 505E of such Act (21 U.S.C. 355f).
(E) Section 527 of such Act (21 U.S.C. 360cc).
(F) Section 351(k)(7) of such Act (42 U.S.C.
262(k)(7)).
(G) Any other provision of law that provides for
exclusivity (or extension of exclusivity) with respect
to a drug.
(4) Listed drug.--The term ``listed drug'' means a drug
listed under section 505(j)(7) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(7)).
(5) Manufacturer.--The term ``manufacturer'', with respect
to a prescription drug, means an entity that--
(A) is the holder of the approved application under
section 505 of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355) or under section 351 of the Public
Health Service Act (42 U.S.C. 262); and
(B) is responsible for setting the price of the
prescription drug.
(6) Prescription drug.--The term ``prescription drug''
means any drug subject to section 505 of the Federal Food,
Drug, and Cosmetic Act or section 351 of the Public Health
Service Act and to section 503(b)(2) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 353(b)(2)).
(7) Prescription drug reference country.--The term
``prescription drug reference country'' means Japan, Germany,
the United Kingdom, France, Italy, Canada, Australia, Spain,
the Netherlands, Switzerland, and Sweden.
(8) Reference product.--The term ``reference product'' has
the meaning given the term in section 351(i) of the Public
Health Service Act (42 U.S.C. 262(i)).
(9) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(10) Wholesale acquisition cost.--The term ``wholesale
acquisition cost'' has the meaning given that term in section
1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
3a(c)(6)(B)).
SEC. 4. REPEAL OF MEDICARE'S NONINTERFERENCE CLAUSE.
Section 1860D-11 of the Social Security Act (42 U.S.C. 1395w-111)
is amended by striking subsection (i).
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