Sec. 305. Enforcement provisions

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If the Board finds that the manufacturer of a prescription drug or medical device, who is also an owner of a patent for such drug or device, charged an excessive price for such drug or device in violation of section 304(a), the Board may— reduce the term, by not more than 5 years, of any patent issued under title 35, United States Code, relating to such drug or device; or if the term of each patent for such drug or device has expired, reduce the term, by not more than 5 years, of another patent owned by the patent owner relating to a prescription drug or medical device.

If the Board determines under section 304(c) that a manufacturer of a prescription drug or medical device charged an excessive price for a prescription drug or medical device in violation of section 304(a), the Board may impose a civil penalty on the manufacturer of not more than 10 percent of the manufacturer’s gross sales of the drug or device during the period beginning on the date on which an excessive price is first charged and ending on the date on which the manufacturer ceases to charge an excessive price.

Section 1927(c)(2) of the Social Security Act ( 42 U.S.C. 1396r–8(c)(2) ) is amended— in subparagraph (A), by inserting , subject to subparagraph (E), after increased by ; and by adding at the end the following new subparagraph: In the case of a manufacturer of a single source drug or an innovator multiple source drug with a rebate agreement under this section, if the Prescription Drug and Medical Device Price Review Board established under section 301 of the Medicare for America Act determines under section 304(a) of such Act that such manufacturer charged, with respect to a 30-day period, an excessive price for such drug, and the Board determines under clause

(ii)to apply an increased amount described in such clause with respect to such manufacturer and drug, the amount of the rebate determined under subparagraph

(A)for such manufacturer and drug shall be, subject to subparagraph (D), increased by such amount for the 4 rebate periods following such 30-day period. For purposes of clause (i), if the Board described in such clause makes such a determination under such section 304(a), with respect to a manufacturer and drug described in such clause, the Board may determine an increased amount to apply with respect to such manufacturer and drug and rebate period described in such clause. Such increased amount may not exceed the rebate amount that would otherwise be applied to such manufacturer and drug under this section for such rebate period, without regard to this subparagraph. . This subsection and the amendments made by this subsection shall apply with respect to rebate agreements entered into after the date that is 60 days after the date of the enactment of this Act. If the Board determines under section 304(a) that a manufacturer, producer, or importer of a prescription drug or medical device charged an excessive price for such prescription drug or medical device during a taxable year, the Board may determine under this paragraph a reasonable price for such drug or device for such taxable year. The Internal Revenue Code of 1986 is amended by inserting after section 4191 the following new section: There is hereby imposed on the sale of any prescription drug or medical device by the manufacturer, producer, or importer a tax equal to the difference between the price at which such drug or device is so sold and the reasonable price determined by the Prescription Drug and Medical Device Price Review Board under section 305(d)(1) of the Medicare for America Act for such drug or device for the taxable year for sales after the determination. For purposes of this section, the term prescription drug or medical device means any prescription drug (as defined in section 9008 of the Patient Protection and Affordable Care Act) or device (as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act) intended for humans. . The table of parts for chapter 32 of such Code is amended— in the item relating to subchapter E, by striking Medical and inserting Drugs and medical , and by inserting after the item relating to section 4191 the following new item: . This subsection and the amendments made by this subsection shall apply with respect to sales after December 31, 2018.

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42 USC 1396r–8(c)(2)

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Sec. 305

Enforcement provisions

Cite42 USC 1396r–8(c)(2)

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