[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1497 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 1497
To amend the Public Health Service Act to establish insulin assistance
programs, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 9, 2023
Ms. Smith introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Public Health Service Act to establish insulin assistance
programs, 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 ``Emergency Access to Insulin Act of
2023''.
SEC. 2. INSULIN ASSISTANCE PROGRAMS.
(a) In General.--Part B of title III of the Public Health Service
Act (42 U.S.C. 243 et seq.) is amended by adding at the end the
following:
``SEC. 320C. INSULIN ASSISTANCE PROGRAMS.
``(a) Establishment of Program of Grants to States, Indian Tribes,
and Tribal Organizations.--
``(1) In general.--The Secretary shall, not later than 1
year after the date of enactment of this section, make grants
to States, Indian tribes, and tribal organizations for the
purpose of carrying out programs to assist eligible individuals
in obtaining insulin in accordance with paragraph (4).
``(2) Grant and contract authority for states, indian
tribes, and tribal organizations.--
``(A) In general.--A State, Indian tribe, or tribal
organization receiving a grant under paragraph (1) may,
subject to subparagraph (B), expend the grant to carry
out the purpose described in such paragraph through
grants or contracts to public or private entities,
including local governments.
``(B) Certain applications.--If a nonprofit private
entity and a private entity that is not a nonprofit
entity both submit applications to a State, Indian
tribe, or tribal organization to receive an award of a
grant or contract under subparagraph (A), the State,
Indian tribe, or tribal organization shall give
priority to the application submitted by the nonprofit
private entity in any case in which the State, Indian
tribe, or tribal organization determines that the
quality of such application is equivalent to the
quality of the application submitted by the other
private entity.
``(3) Allotment.--Each State, Indian tribe, or tribal
organization that applies for a grant in accordance with
subsection (e) shall receive a grant under this section in an
amount that is equal to the sum of--
``(A) a minimum amount determined by the Secretary;
and
``(B) an additional amount based on criteria
established by the Secretary, which may include the
ability of the State, Indian tribe, or tribal
organization to successfully assist individuals in
seeking eligibility for Federal or State-funded
programs as described in paragraph (4)(A)(ii)(II).
``(4) Program components.--
``(A) In general.--A State, Indian tribe, or tribal
organization carrying out a program supported by a
grant under this subsection--
``(i) shall use the grant funds to--
``(I) issue insulin cards to
eligible individuals in accordance with
subparagraph (B); and
``(II) enter into agreements with
pharmacies--
``(aa) for such pharmacies
to fill prescriptions for
individuals displaying valid
insulin cards that are issued
in accordance with subparagraph
(B) at no cost to such
individuals; and
``(bb) for the State,
Indian tribe, or tribal
organization to pay such
pharmacies for insulin filled
for a prescription described in
item (aa); and
``(ii) may use the grant funds to--
``(I) purchase insulin; or
``(II) assist individuals in
seeking eligibility for Federal or
State-funded programs which may provide
coverage for insulin or otherwise
assist such individuals in obtaining
insulin.
``(B) Insulin cards.--
``(i) Application.--An eligible individual
seeking an insulin card through a program
supported by a grant under this subsection
shall submit an application to the State,
Indian tribe, or tribal organization receiving
the grant, at such time, in such manner, and
containing such information as the State,
Indian tribe, or tribal organization may
reasonably require for purposes of this
subsection, including--
``(I) documentation indicating
proof of--
``(aa) in the case of a
grant awarded to a State,
residency in the State;
``(bb) in the case of a
grant awarded to an Indian
tribe, membership in the Indian
tribe; or
``(cc) in the case of a
grant awarded to a tribal
organization, membership in the
Indian tribe or Indian
community served by the tribal
organization;
``(II) a prescription for insulin
that is prescribed to the individual;
``(III) a statement that, to the
best of the individual's knowledge, the
individual is an uninsured individual
or an underinsured individual; and
``(IV) if the individual is an
underinsured individual, the name of
the high-deductible health plan in
which the individual is enrolled and
any unique identifier of the plan, such
as a policy number.
``(ii) Initial card.--
``(I) In general.--A State, Indian
tribe, or tribal organization carrying
out a program supported by a grant
under this subsection shall issue an
initial insulin card to each individual
that submits an application to the
State, Indian tribe, or tribal
organization meeting the requirements
under clause (i).
``(II) Timing.--A State, Indian
tribe, or tribal organization that
receives an application under clause
(i) from an individual shall issue an
initial insulin card to such individual
not later than 5 business days after
receiving such application.
``(III) Supply.--An initial insulin
card issued to an individual under this
clause shall be valid for an
approximate 7-day supply of insulin
that is appropriate for the individual
based on the prescription for the
individual provided in the application
under clause (i) and packaging and
processing practices for insulin.
``(iii) 3-month cards.--Not later than 12
business days after an individual submits an
application under clause (i) to a State, Indian
tribe, or tribal organization, the State,
Indian tribe, or tribal organization shall--
``(I) determine whether the
individual is an eligible individual;
and
``(II) if the individual is an
eligible individual, issue the
individual an insulin card that is
valid for an approximate 90-day supply
of insulin that is appropriate for the
individual based on the prescription
provided in the application under
clause (i) and packaging and processing
practices for insulin.
``(iv) Renewal of cards.--
``(I) 3-month cards.--An eligible
individual that is issued an insulin
card under clause (iii) may apply to
renew such card in accordance with a
process established by the State,
Indian tribe, or tribal organization.
``(II) Limitation.--An individual
that submits an application under
clause (i) and is denied an insulin
card under clause (ii) or (iii) may not
submit another application under clause
(i) for the 1-year period beginning on
the date on which the individual is
denied such card.
``(b) Requirement of Matching Funds.--
``(1) In general.--The Secretary may not make a grant under
subsection (a) unless the State, Indian tribe, or tribal
organization involved agrees, with respect to the costs to be
incurred by the State, Indian tribe, or tribal organization in
carrying out the purpose described in subsection (a)(1), to
make available non-Federal contributions (in cash or in kind
under paragraph (2)) toward such costs in an amount equal to
not less than $1 for each $3 of Federal funds provided in the
grant. Such contributions may be made directly or through
donations from public or private entities.
``(2) Determination of amount of non-federal
contribution.--
``(A) In general.--Non-Federal contributions
required in paragraph (1) may be in cash or in kind,
fairly evaluated, including equipment or services (and
excluding indirect or overhead costs). Amounts provided
by the Federal Government, or services assisted or
subsidized to any significant extent by the Federal
Government, may not be included in determining the
amount of such non-Federal contributions.
``(B) Maintenance of effort.--In making a
determination of the amount of non-Federal
contributions for purposes of paragraph (1), the
Secretary may include only non-Federal contributions in
excess of the average amount of non-Federal
contributions made by the State, Indian tribe, or
tribal organization involved toward the purpose
described in subsection (a)(1) for the 2-year period
preceding the first fiscal year for which the State,
Indian tribe, or tribal organization is applying to
receive a grant under subsection (a).
``(C) Inclusion of relevant non-federal
contributions for medicaid.--In making a determination
of the amount of non-Federal contributions for purposes
of paragraph (1), the Secretary shall, subject to
subparagraphs (A) and (B) of this paragraph, include
any non-Federal amounts expended pursuant to title XIX
of the Social Security Act by the State, Indian tribe,
or tribal organization related to insulin dispensed to
individuals eligible for medical assistance under such
title.
``(c) Additional Required Agreements.--
``(1) Statewide provision of services.--
``(A) In general.--The Secretary may not make a
grant under subsection (a) unless the State, Indian
tribe, or tribal organization involved agrees that
services and activities under the grant will be made
available throughout the State (including availability
to members of any Indian tribe or tribal organization
in the State), Indian tribe, or tribal organization.
``(B) Waiver.--
``(i) In general.--The Secretary may waive
the requirement established in subparagraph (A)
for a State, Indian tribe, or tribal
organization if the Secretary determines that
compliance by the State, Indian tribe, or
tribal organization with the requirement would
result in an inefficient allocation of
resources with respect to carrying out the
purpose described in subsection (a)(1).
``(ii) Indian tribes and tribal
organizations.--If an Indian tribe or tribal
organization is receiving a grant under
subsection (a) and the State in which the tribe
or organization is located is receiving a grant
under subsection (a), the requirement under
subparagraph (A) for the State regarding
availability to the tribe or organization is
deemed to have been waived under this
subparagraph.
``(2) Relationship to items and services under other
programs.--
``(A) In general.--The Secretary may not make a
grant under subsection (a) unless the State, Indian
tribe, or tribal organization involved agrees that the
grant will not be expended to make payment for any item
or service to the extent that payment has been made, or
can reasonably be expected to be made, with respect to
such item or service--
``(i) except as provided in subparagraph
(B), under any State compensation program,
under an insurance policy, or under any Federal
or State health benefits program; or
``(ii) by an entity that provides health
services on a prepaid basis.
``(B) Exception.--The requirement under
subparagraph (A)(i) shall not apply with respect to
coverage under a high-deductible health plan.
``(3) Limitation on administrative expenses.--The Secretary
may not make a grant under subsection (a) unless the State,
Indian tribe, or tribal organization involved agrees that not
more than 10 percent of the grant will be expended for
administrative expenses with respect to the grant.
``(4) Records and audits.--The Secretary may not make a
grant under subsection (a) unless the State, Indian tribe, or
tribal organization involved agrees that--
``(A) the State, Indian tribe, or tribal
organization will establish such fiscal control and
fund accounting procedures as may be necessary to
ensure the proper disbursal of, and accounting for,
amounts received by the State, Indian tribe, or tribal
organization under such subsection;
``(B) the State, Indian tribe, or tribal
organization will keep such records as the Secretary
shall prescribe, including--
``(i) records that fully disclose--
``(I) the amount and disposition by
the State, Indian tribe, or tribal
organization of the proceeds of such
grant;
``(II) the total cost of the
project or undertaking intended to be
carried out through the grant; and
``(III) the amount of that portion
of the cost of the project or
undertaking supplied by sources other
than the grant; and
``(ii) such other records as the Secretary
determines appropriate for facilitating an
effective audit of grants awarded under this
section; and
``(C) upon request, the State, Indian tribe, or
tribal organization will provide records maintained
pursuant to subparagraphs (A) and (B) to the Secretary
or the Comptroller General of the United States for
purposes of auditing the expenditures by the State,
Indian tribe, or tribal organization of the grant.
``(5) Reports.--
``(A) Reports to the secretary.--The Secretary may
not make a grant under subsection (a) unless the State,
Indian tribe, or tribal organization involved agrees to
submit to the Secretary such reports as the Secretary
may require with respect to the grant, including a
report on--
``(i) the types of problems and inquiries
encountered by individuals applying for or
receiving insulin through a program supported
by such grant;
``(ii) the number of insulin products
dispensed through such program and the unit
costs for those products during the period
covered by the report;
``(iii) the number of pharmacies
participating in the program during the period
covered by the report;
``(iv) summary data on the individuals
applying for or receiving insulin through the
program; and
``(v) any other information the Secretary
shall determine necessary to provide oversight
of the grants made under this section.
``(B) High-deductible health plans.--The Secretary
may not make a grant under subsection (a) unless the
State, Indian tribe, or tribal organization involved
agrees to, as soon as practicable after each time the
State, Indian tribe, or tribal organization provides
payment to a pharmacy for insulin for an underinsured
individual, submit to the high-deductible health plan
in which the individual is enrolled information on the
amount of such payment in order for such plan to comply
with the requirements under section 2710.
``(d) Description of Intended Uses of Grant.--The Secretary may not
make a grant under subsection (a) unless--
``(1) the State, Indian tribe, or tribal organization
involved submits to the Secretary a description of the purposes
for which the State, Indian tribe, or tribal organization
intends to expend the grant;
``(2) the description identifies the populations, areas,
and localities in the State, or under the jurisdiction of the
Indian tribe or tribal organization, with a need for a program
to assist individuals in obtaining insulin in accordance with
subsection (a);
``(3) the description provides information relating to the
services and activities to be provided, including a description
of the manner in which the services and activities will be
coordinated with any similar services or activities of public
or private entities; and
``(4) the description provides assurances that the grant
funds will be used in the most cost-effective manner.
``(e) Requirement of Submission of Application.--The Secretary may
not make a grant under subsection (a) unless an application for the
grant is submitted to the Secretary, the application contains the
description of intended uses required under subsection (d), and the
application is in such form, is made in such manner, and contains such
agreements, assurances, and information as the Secretary determines to
be necessary to carry out this section.
``(f) Technical Assistance and Provision of Supplies and Services
in Lieu of Grant Funds.--
``(1) Technical assistance.--The Secretary may provide
training and technical assistance with respect to the planning,
development, and operation of any program or service carried
out pursuant to subsection (a). The Secretary may provide such
technical assistance directly or through grants to, or
contracts with, public or private entities.
``(2) Provision of supplies and services in lieu of grant
funds.--
``(A) In general.--Upon the request of a State,
Indian tribe, or tribal organization receiving a grant
under subsection (a), the Secretary may, subject to
subparagraph (B), provide supplies, equipment, and
services for the purpose of aiding the State, Indian
tribe, or tribal organization in carrying out such
subsection and, for such purpose, may detail to the
State, Indian tribe, or tribal organization any officer
or employee of the Department of Health and Human
Services.
``(B) Corresponding reduction in payments.--With
respect to a request described in subparagraph (A), the
Secretary shall reduce the amount of payments under the
grant under subsection (a) to the State, Indian tribe,
or tribal organization involved by an amount equal to
the costs of detailing personnel (including pay,
allowances, and travel expenses) and the fair market
value of any supplies, equipment, or services provided
by the Secretary. The Secretary shall, for the payment
of expenses incurred in complying with such request,
expend the amounts withheld.
``(g) Evaluations and Reports.--
``(1) Evaluations.--The Secretary shall, directly or
through contracts with public or private entities, provide for
annual evaluations of programs carried out pursuant to
subsection (a). Such evaluations shall include evaluations of--
``(A) the extent to which States, Indian tribes,
and tribal organizations carrying out such programs are
in compliance with subsection (a) and with subsection
(c)(1); and
``(B) the extent to which each State, Indian tribe,
or tribal organization receiving a grant under this
section is in compliance with subsection (b), including
identification of--
``(i) the amount of the non-Federal
contributions by the State, Indian tribe, or
tribal organization for the preceding fiscal
year, disaggregated according to the source of
the contributions; and
``(ii) the proportion of such amount of
non-Federal contributions relative to the
amount of Federal funds provided through the
grant to the State, Indian tribe, or tribal
organization for the preceding fiscal year.
``(2) Reports to congress.--The Secretary shall, not later
than 1 year after the date of enactment of the Emergency Access
to Insulin Act of 2023, and annually thereafter, submit to the
Committee on Health, Education, Labor, and Pensions of the
Senate and the Committee on Energy and Commerce of the House of
Representatives a report summarizing evaluations carried out
under paragraph (1) during the preceding fiscal year and making
such recommendations for administrative and legislative
initiatives with respect to this section as the Secretary
determines to be appropriate, including recommendations
regarding compliance by the States, Indian tribes, and tribal
organizations with subsection (a) and with subsection (c)(1).
``(h) Funding for General Program.--
``(1) Authorization of appropriations.--For the purpose of
carrying out this section, there are authorized to be
appropriated such sums as may be necessary.
``(2) Set-aside for technical assistance and provision of
supplies and services.--Of the amounts appropriated under
paragraph (1) for a fiscal year, the Secretary shall reserve
not more than 20 percent for carrying out subsection (f).
``(i) Sunset.--The authority to award grants under subsection (a)
shall be effective beginning on the date of enactment of the Emergency
Access to Insulin Act of 2023 and ending on the date that is 5 years
after such date.
``(j) Definitions.--For purposes of this section:
``(1) Eligible individual.--The term `eligible individual',
with respect to a program supported by a State, Indian tribe,
or tribal organization receiving a grant under this section,
means an uninsured individual or an underinsured individual--
``(A)(i) in the case of a grant to a State, who is
a resident of the State;
``(ii) in the case of a grant to an Indian tribe,
who is a member of such tribe; or
``(iii) in the case of a grant to a tribal
organization, who is a member of the Indian tribe or
Indian community served by the tribal organization; and
``(B) who has a valid prescription for insulin that
is prescribed to such individual.
``(2) Group health insurance coverage; group health plan;
health insurance issuer.--The terms `group health insurance
coverage', `group health plan', and `health insurance issuer'
have the meanings given such terms in section 2791.
``(3) High-deductible health plan.--The term `high-
deductible health plan' means a group health plan or group or
individual health insurance coverage (offered by a health
insurance issuer) that meets criteria established by the
Secretary.
``(4) Indian tribe.--The term `Indian tribe' has the
meaning given such term in section 4 of the Indian Health Care
Improvement Act (25 U.S.C. 1603).
``(5) Individual health insurance coverage.--The term
`individual health insurance coverage' has the meaning given
such term in section 2791.
``(6) Tribal organization.--The term `tribal organization'
has the meaning given such term in section 4 of the Indian
Health Care Improvement Act (25 U.S.C. 1603).
``(7) Underinsured individual.--The term `underinsured
individual' means an individual who is enrolled in a high-
deductible health plan.
``(8) Uninsured individual.--The term `uninsured
individual' means an individual who does not have minimum
essential coverage as defined in section 5000A(f)(1) of the
Internal Revenue Code of 1986 or coverage under a medical care
program of the Indian Health Service or of a tribal
organization or urban Indian organization.
``(9) Urban indian organization.--The term `urban Indian
organization' has the meaning given such term in section 4 of
the Indian Health Care Improvement Act.''.
(b) Exempting Prices Used Under an Insulin Assistance Program From
Best Price and Average Manufacturer Price Under the Medicaid Drug
Rebate Program.--Section 1927 of the Social Security Act (42 U.S.C.
1396r-8) is amended--
(1) in subsection (c)(1)(C)(i)(III), by inserting ``or
under an insulin assistance program supported under section
320C of the Public Health Service Act'' after ``State
pharmaceutical assistance program''; and
(2) in subsection (k)(1)(B)(i)--
(A) in subclause (IV), by inserting a semicolon at
the end;
(B) in subclause (VII), by striking ``; and'' and
inserting a semicolon;
(C) in subclause (VIII), by striking the period at
the end and inserting ``; and''; and
(D) by adding at the end the following new
subclause:
``(IX) any prices used under an
insulin assistance program supported
under section 320C of the Public Health
Service Act.''.
(c) Deductibles for Underinsured Individuals Participating in
Insulin Assistance Programs.--Subpart I of part A of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg et seq.) is amended by
adding at the end the following:
``SEC. 2710. DEDUCTIBLES AND OTHER OUT-OF-POCKET EXPENSES FOR
UNDERINSURED INDIVIDUALS PARTICIPATING IN INSULIN
ASSISTANCE PROGRAMS.
``(a) In General.--A group health plan that is a high-deductible
health plan and a health insurance issuer offering a high-deductible
health plan shall, with respect to any individual who is enrolled in
such plan and obtains insulin during a plan year through an insulin
card issued to the individual by a State, Indian tribe, or tribal
organization carrying out an insulin assistance program under section
320C, count the amount the State, Indian tribe, or tribal organization
pays a pharmacy for insulin for such individual for such plan year
towards any deductible or other out-of-pocket expenses required to be
paid under the plan.
``(b) High-Deductible Health Plan.--For purposes of this section,
the term `high-deductible health plan' has the meaning given such term
in section 320C(j).''.
SEC. 3. ANNUAL FEES APPLICABLE TO INSULIN MANUFACTURERS.
(a) Definitions.--For purposes of this section:
(1) Annual payment date.--The term ``annual payment date''
means, with respect to a calendar year, the date determined by
the Secretary, but in no event later than September 30 of such
calendar year.
(2) Covered entity.--The term ``covered entity'', with
respect to a calendar year, means an entity that--
(A) is the holder of an application approved under
subsection (c) of section 505 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355), or of a license
issued under subsection (a) of section 351 of the
Public Health Service Act (42 U.S.C. 262), for an
insulin product; and
(B) during the preceding calendar year,
manufactured any insulin product that was sold in
commerce and covered by a Federal health program at
least once during such preceding calendar year.
(3) Inspector general.--The term ``Inspector General''
means the Inspector General of the Department of Health and
Human Services.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(b) Imposition of Fee.--Each covered entity for a calendar year,
beginning in 2024 and ending in 2028, shall pay to the Secretary not
later than the annual payment date of such calendar year a fee in an
amount determined under subsection (c).
(c) Amount of Fees.--
(1) Total amount.--The Secretary shall ensure that the
total amount in fees assessed under subsection (b)--
(A) for calendar year 2024, equals the total amount
the Secretary estimates as the total expenditures for
carrying out section 320C of the Public Health Service
Act for such calendar year; and
(B) for each of calendar years 2025 through 2028,
equals the total amount of expenditures the Secretary
determines for carrying out such section for the
preceding calendar year.
(2) Determination of fees for each manufacturer.--
(A) Formula.--With respect to each covered entity,
the fee under this section for a calendar year shall be
equal to an amount that bears the same ratio to the
total amount assessed under subsection (b) for such
year as the covered entity's sales of insulin products
taken into account during the preceding calendar year
bears to the aggregate sales of insulin products of all
covered entities taken into account during such
preceding calendar year.
(B) Sales of insulin products.--
(i) In general.--For purposes of this
paragraph, the sales of insulin products taken
into account during any calendar year with
respect to any covered entity shall be
determined based on the total number of units
of the insulin product which were sold in
commerce in the preceding calendar year based
on--
(I) for a fee assessed for calendar
year 2024, information obtained by the
Secretary under clause (ii); and
(II) for a fee assessed for each of
calendar years 2025 through 2028, the
information provided in the annual
reports issued by the Inspector General
and made public under section 4(e)(1).
(ii) Fees assessed for calendar year
2024.--For purposes of clause (i)(I), the
Secretary shall require each covered entity to
submit to the Secretary information on the
total number of units of the insulin product
manufactured by the entity that were sold in
commerce in calendar year 2023.
(d) Deposit.--The Secretary shall deposit amounts received through
fees assessed under subsection (b) into the general fund of the
Treasury.
(e) Enforcement.--The Secretary may bring an action in any court of
competent jurisdiction to recover the amount of any fee that is
assessed under subsection (b) for a calendar year and not paid by the
annual payment date.
SEC. 4. IDENTIFICATION OF INSULIN PRICE SPIKES; APPLICATION OF EXCISE
TAX.
(a) Definitions.--In this section:
(1) Applicable entity.--The term ``applicable entity''
means the holder of an application approved under subsection
(c) or (j) of section 505 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355), or of a license issued under
subsection (a) or (k) of section 351 of the Public Health
Service Act (42 U.S.C. 262), for an insulin product.
(2) Commerce.--The term ``commerce'' has the meaning given
such term in section 4 of the Federal Trade Commission Act (15
U.S.C. 44).
(3) Inspector general.--The term ``Inspector General''
means the Inspector General of the Department of Health and
Human Services.
(4) Price spike.--
(A) In general.--The term ``price spike'' means an
increase in the wholesale acquisition cost in commerce
of an insulin product for which the price spike
percentage is equal to or greater than the applicable
price increase allowance.
(B) Price spike percentage.--The term ``price spike
percentage'' means the percentage (if any) by which--
(i) the wholesale acquisition cost of an
insulin product in commerce for the calendar
year; exceeds
(ii) the wholesale acquisition cost of such
insulin product in commerce for the calendar
year preceding such year.
(C) Applicable price increase allowance.--The term
``applicable price increase allowance'', with respect
to a calendar year, means the percentage (rounded to
the nearest one-tenth of 1 percent) by which the C-CPI-
U (as defined in section 1(f)(6) of the Internal
Revenue Code of 1986) for that year exceeds the C-CPI-U
(as so defined) for the preceding calendar year.
(5) Price spike revenue.--
(A) In general.--The term ``price spike revenue'',
with respect to a calendar year, means an amount equal
to--
(i) the gross price spike revenue, minus
(ii) the adjustment amount.
(B) Gross price spike revenue.--The term ``gross
price spike revenue'', with respect to a calendar year,
means an amount equal to the product of--
(i) an amount equal to the difference
between clause (i) of paragraph (4)(B) and
clause (ii) of such paragraph; and
(ii) the total number of units of the
insulin product which were sold in commerce in
such calendar year.
(C) Adjustment amount.--The term ``adjustment
amount'' means the amount, if any, of the gross price
spike revenue which the Inspector General has
determined is due solely to an increase in the cost of
the inputs necessary to manufacture the insulin product
subject to the price spike.
(b) Submission by Pharmaceutical Companies of Information to
Inspector General.--
(1) In general.--For each insulin product, the applicable
entity shall submit to the Inspector General a quarterly report
that includes each of the following:
(A) For each insulin product of the applicable
entity--
(i) the total number of units of the
insulin product which were sold in commerce in
the preceding calendar quarter;
(ii) the average and median wholesale
acquisition cost per unit of such insulin
product in commerce in the preceding calendar
quarter, disaggregated by month; and
(iii) the gross revenues from sales of such
insulin product in commerce in the preceding
calendar quarter.
(B) Such information related to increased input
costs or public health considerations as the applicable
entity may wish the Inspector General to consider in
making a determination under clause (ii) of subsection
(c)(2)(B) or an assessment in clause (iii) of such
subsection for the preceding calendar quarter.
(C) Such information related to any anticipated
increased input costs for the subsequent calendar
quarter as the applicable entity may wish the Inspector
General to consider in making a determination under
clause (ii) of subsection (c)(2)(B) or an assessment in
clause (iii) of such subsection for such calendar
quarter.
(2) Penalty for failure to submit.--
(A) In general.--An applicable entity described in
paragraph (1) that fails to submit information to the
Inspector General regarding an insulin product, as
required by such paragraph, before the date specified
in paragraph (3) shall be liable for a civil penalty,
as determined under subparagraph (B).
(B) Amount of penalty.--The amount of the civil
penalty shall be equal to the product of--
(i) an amount, as determined appropriate by
the Inspector General, which is--
(I) not less than 0.5 percent of
the gross revenues from sales of the
insulin product described in
subparagraph (A) for the preceding
calendar year; and
(II) not greater than 1 percent of
the gross revenues from sales of such
insulin product for the preceding
calendar year; and
(ii) the number of days in the period
between--
(I) the applicable date specified
in paragraph (3); and
(II) the date on which the
Inspector General receives the
information described in paragraph (1)
from the applicable entity.
(3) Submission deadline.--An applicable entity shall submit
each quarterly report described in paragraph (1) not later than
January 17, April 18, June 15, and September 15 of each
calendar year.
(c) Assessment by Inspector General.--
(1) In general.--Not later than the last day in February of
each year, the Inspector General, in consultation with other
relevant Federal agencies (including the Federal Trade
Commission), shall--
(A) complete an assessment of the information the
Inspector General received pursuant to subsection
(b)(1) with respect to sales of insulin products in the
preceding calendar year; and
(B) in the case of any insulin product which
satisfies the conditions described in paragraph (1) or
(2) of subsection (d), submit a recommendation to the
Secretary of Health and Human Services that such
insulin product be exempted from application of the tax
imposed under section 4191 of the Internal Revenue Code
of 1986 (as added by subsection (g)) for such year.
(2) Elements.--The assessment required by paragraph (1)(A)
shall include each of the following:
(A) Identification of each price spike relating to
an insulin product in the preceding calendar year.
(B) For each price spike identified under
subparagraph (A)--
(i) a determination of the price spike
revenue;
(ii) a determination regarding the accuracy
of the information submitted by the applicable
entity regarding increased input costs; and
(iii) an assessment of the rationale of the
applicable entity for the price spike.
(d) Exemption of Certain Insulin Products.--
(1) In general.--The Secretary of Health and Human
Services, upon recommendation of the Inspector General pursuant
to subsection (c)(1)(B), may exempt any insulin product which
has been subject to a price spike during the preceding calendar
year from application of the tax imposed under section 4191 of
the Internal Revenue Code of 1986 for such year, if the
Secretary determines that, based on information submitted
pursuant to subsection (b)(1)(B), a for-cause price increase
exemption should apply.
(2) Clarification.--In considering, under paragraph (1),
information submitted pursuant to subsection (b)(1)(B), the
Secretary--
(A) has the discretion to determine that such
information does not warrant a for-cause price increase
exemption; and
(B) shall exclude from such consideration any
information submitted by the applicable entity
threatening to curtail or limit production of the
insulin product if the Secretary does not grant an
exemption from the application of the tax under section
4191 of the Internal Revenue Code of 1986.
(e) Reports by Inspector General.--
(1) Public report.--
(A) In general.--Not later than the last day in
February of each year, subject to subparagraph (C), the
Inspector General shall issue a report containing the
information described in subparagraph (B) to be made
available to the public, including on the internet
website of the Inspector General.
(B) Contents.--The report issued under subparagraph
(A) shall include each of the following:
(i) The information received under
subsection (b)(1) with respect to the preceding
calendar year.
(ii) The price spikes identified under
subparagraph (A) of subsection (c)(2).
(iii) The price spike revenue
determinations made under subparagraph (B)(i)
of such subsection.
(iv) The determinations and assessments
made under clauses (ii) and (iii) of
subparagraph (B) of such subsection.
(C) Proprietary information.--The Inspector General
shall ensure that any information made public in
accordance with subparagraph (A) excludes trade secrets
and confidential commercial information.
(2) Report to internal revenue service.--
(A) In general.--Subject to subparagraph (C), not
later than the last day in February of each year, the
Inspector General shall transmit to the Internal
Revenue Service a report on the findings of the
Inspector General with respect to the information the
Inspector General received under subsection (b)(1) with
respect to the preceding calendar year and the
assessment carried out by the Inspector General under
subsection (c)(1)(A) with respect to such information.
(B) Contents.--The report transmitted under
subparagraph (A) shall include the information
described in paragraph (1)(B).
(C) Notice and opportunity for hearing.--
(i) In general.--No report shall be
transmitted to the Internal Revenue Service
under subparagraph (A) with respect to an
insulin product unless the Inspector General
has provided the applicable entity with--
(I) the assessment of such insulin
product under subsection (c)(1)(A); and
(II) notice of their right to a
hearing in regards to such assessment.
(ii) Notice.--The notice required under
clause (i) shall be provided to the applicable
entity not later than 30 days after completion
of the assessment under subsection (c)(1)(A).
(iii) Request for hearing.--Subject to
clause (v), an applicable entity may request a
hearing before the Secretary of Health and
Human Services not later than 30 days after the
date on which the notice under clause (ii) is
received.
(iv) Completion of hearing.--In the case of
an applicable entity which requests a hearing
pursuant to clause (iii), the Secretary of
Health and Human Services shall, not later than
12 months after the date on which the
assessment under subsection (c)(1)(A) was
completed by the Inspector General--
(I) make a final determination in
regards to the accuracy of such
assessment; and
(II) provide the report described
in subparagraph (B) to the Internal
Revenue Service.
(v) Limitation.--An applicable entity may
request a hearing under clause (iii) with
respect to a particular insulin product only
once within a 5-year period.
(f) Notification.--The Secretary of the Treasury shall notify, at
such time and in such manner as the Secretary of the Treasury shall
provide, each applicable entity in regard to any insulin product which
has been determined to have been subject to a price spike during the
preceding calendar year and the amount of the tax imposed on such
applicable entity pursuant to section 4191 of the Internal Revenue Code
of 1986.
(g) Excise Tax on Insulin Products Subject to Price Spikes.--
(1) In general.--Chapter 32 of the Internal Revenue Code of
1986 is amended by inserting after subchapter D the following
new subchapter:
``Subchapter E--Certain Insulin Products
``Sec. 4191. Insulin products subject to price spikes.
``SEC. 4191. INSULIN PRODUCTS SUBJECT TO PRICE SPIKES.
``(a) Imposition of Tax.--
``(1) In general.--Subject to paragraph (3), for each
taxable insulin product sold by an applicable entity during the
calendar year, there is hereby imposed on such entity a tax
equal to the greater of--
``(A) the annual price spike tax for such insulin
product, or
``(B) subject to paragraph (2), the cumulative
price spike tax for such insulin product.
``(2) Limitation.--In the case of a taxable insulin product
for which the applicable period (as determined under subsection
(c)(2)(E)(i)) is less than 2 calendar years, the cumulative
price spike tax shall not apply.
``(3) Exemption.--For any calendar year in which the
Secretary of Health and Human Services has provided an
exemption for a taxable insulin product pursuant to section
4(d) of the Emergency Access to Insulin Act of 2023, the amount
of the tax determined under paragraph (1) for such insulin
product for such calendar year shall be reduced to zero.
``(b) Annual Price Spike Tax.--
``(1) In general.--The amount of the annual price spike tax
shall be equal to the applicable percentage of the price spike
revenue received by the applicable entity on the sale of the
taxable insulin product during the calendar year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage shall be equal to--
``(A) in the case of a taxable insulin product
which has been subject to a price spike percentage
greater than the applicable price increase allowance
(as defined in section 4(a)(4)(C) of the Emergency
Access to Insulin Act of 2023) but less than 15
percent, 50 percent,
``(B) in the case of a taxable insulin product
which has been subject to a price spike percentage
equal to or greater than 15 percent but less than 20
percent, 75 percent, and
``(C) in the case of a taxable insulin product
which has been subject to a price spike percentage
equal to or greater than 20 percent, 100 percent.
``(c) Cumulative Price Spike Tax.--
``(1) In general.--The amount of the cumulative price spike
tax shall be equal to the applicable percentage of the
cumulative price spike revenue received by the applicable
entity on the sale of the taxable insulin product during the
calendar year.
``(2) Applicable percentage.--
``(A) In general.--For purposes of paragraph (1),
the applicable percentage shall be equal to--
``(i) in the case of a taxable insulin
product which has been subject to a cumulative
price spike percentage greater than the
cumulative price increase allowance but less
than the first multi-year percentage, 50
percent,
``(ii) in the case of a taxable insulin
product which has been subject to a cumulative
price spike percentage equal to or greater than
the first multi-year percentage but less than
the second multi-year percentage, 75 percent,
and
``(iii) in the case of a taxable insulin
product which has been subject to a cumulative
price spike percentage equal to or greater than
the second multi-year percentage, 100 percent.
``(B) Cumulative price spike percentage.--The
cumulative price spike percentage is the percentage (if
any) by which--
``(i) the wholesale acquisition cost of the
taxable insulin product in commerce for the
preceding calendar year, exceeds
``(ii) the wholesale acquisition cost of
such insulin product in commerce for the base
year.
``(C) Cumulative price increase allowance.--For
purposes of clause (i) of subparagraph (A), the
cumulative price increase allowance for any calendar
year is the percentage (rounded to the nearest one-
tenth of 1 percent) by which the C-CPI-U (as defined in
section 1(f)(6)) for that year exceeds the C-CPI-U for
the base year.
``(D) Multi-year percentages.--For purposes of
subparagraph (A), the first multi-year percentage and
second multi-year percentage shall be determined in
accordance with the following table:
------------------------------------------------------------------------
First Second
``Number of years in applicable period multi-year multi-year
percentage percentage
------------------------------------------------------------------------
2 years....................................... 17.5 22.5
3 years....................................... 20.0 25.0
4 years....................................... 22.5 27.5
5 years....................................... 25.0 30.0.
------------------------------------------------------------------------
``(E) Applicable period and base year.--
``(i) Applicable period.--The applicable
period shall be the lesser of--
``(I) the 5 preceding calendar
years,
``(II) all calendar years beginning
after the date of enactment of this
section, or
``(III) all calendar years in which
the taxable insulin product was sold in
commerce.
``(ii) Base year.--The base year shall be
the calendar year immediately preceding the
applicable period.
``(3) Cumulative price spike revenue.--For purposes of
paragraph (1), the cumulative price spike revenue for any
taxable insulin product shall be an amount equal to--
``(A) an amount equal to the product of--
``(i) an amount (not less than zero) equal
to--
``(I) the wholesale acquisition
cost of such insulin product in
commerce for the preceding calendar
year, minus
``(II) the wholesale acquisition
cost of such insulin product in
commerce for the base year, and
``(ii) the total number of units of such
insulin product which were sold in commerce in
the preceding calendar year, minus
``(B) an amount equal to the sum of the adjustment
amounts, if any, determined under section 4(a)(5)(C) of
the Emergency Access to Insulin Act of 2023 for each
calendar year during the applicable period.
``(d) Definitions.--For purposes of this section--
``(1) Taxable insulin product.--The term `taxable insulin
product' means an insulin product which has been identified by
the Inspector General of the Department of Health and Human
Services, under section 4(c)(2)(A) of the Emergency Access to
Insulin Act of 2023, as being subject to a price spike.
``(2) Other terms.--The terms `applicable entity', `price
spike', `price spike percentage', and `price spike revenue'
have the same meaning given such terms under section 4(a) of
the Emergency Access to Insulin Act of 2023.''.
(2) Clerical amendment.--The table of subchapters for
chapter 32 of the Internal Revenue Code of 1986 is amended by
inserting after the item relating to subchapter D the following
new item:
``subchapter e--certain insulin products''.
(3) Effective date.--The amendments made by this subsection
shall apply to sales after the date of the enactment of this
Act.
SEC. 5. BIOLOGICAL PRODUCT EXCLUSIVITY.
(a) In General.--Section 351(k)(7)(A) of the Public Health Service
Act (42 U.S.C. 262(k)(7)(A)) is amended by striking ``12 years'' and
inserting ``7 years''.
(b) Conforming Amendments.--Paragraphs (2)(A) and (3)(A) of section
351(m) of the Public Health Service Act (42 U.S.C. 262(m)) is amended
by striking ``12 years'' each place it appears and inserting ``7
years''.
<all>