Sec. 141. Drug manufacturer price transparency
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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: Beginning July 1, 2022, the Secretary shall make determinations as to whether a drug is an applicable drug as described in subsection (b). If the Secretary determines under paragraph
(1)that an applicable drug is described in subsection (b), the manufacturer of the applicable drug shall submit to the Secretary the justification described in subsection
(c)in accordance with the timing described in subsection (d). An applicable drug is described in this subsection if it meets any of the following at the time of the determination: The drug (per dose)— has a wholesale acquisition cost of at least $10; and had an increase in the wholesale acquisition cost, with respect to determinations made— during 2020, of at least 100 percent since the date of the enactment of this section; during 2021, of at least 100 percent in the preceding 12 months or of at least 150 percent in the preceding 24 months; during 2022, of at least 100 percent in the preceding 12 months or of at least 200 percent in the preceding 36 months; during 2023, of at least 100 percent in the preceding 12 months or of at least 250 percent in the preceding 48 months; or on or after January 1, 2024, of at least 100 percent in the preceding 12 months or of at least 300 percent in the preceding 60 months. The drug— was in the top 50th percentile of net spending under title XVIII or XIX (to the extent data is available) during any 12-month period in the preceding 60 months; and per dose, had an increase in the wholesale acquisition cost, with respect to determinations made— during 2020, of at least 15 percent since the date of the enactment of this section; during 2021, of at least 15 percent in the preceding 12 months or of at least 20 percent in the preceding 24 months; during 2022, of at least 15 percent in the preceding 12 months or of at least 30 percent in the preceding 36 months; during 2023, of at least 15 percent in the preceding 12 months or of at least 40 percent in the preceding 48 months; or on or after January 1, 2024, of at least 15 percent in the preceding 12 months or of at least 50 percent in the preceding 60 months. In the case of a drug that is marketed for the first time on or after January 1, 2020, and for which the manufacturer has established the first wholesale acquisition cost on or after such date, such wholesale acquisition cost for a year's supply or a course of treatment for such drug exceeds the gross spending for covered part D drugs at which the annual out-of-pocket threshold under section 1860D–2(b)(4)(B) would be met for the year. For purposes of applying paragraph (1), the Secretary may substitute for each percentage described in subparagraph
(A)or
(B)of such paragraph (other than the percentile described subparagraph (B)(i) of such paragraph) a percentage within a de minimis range specified by the Secretary below the percentage so described. In the case of a drug that the Secretary determines is an applicable drug described in subparagraph
(C)of paragraph (1), such drug shall remain described in such subparagraph
(C)(and the manufacturer of such drug shall annually report the justification under subsection (c)(2)) until the Secretary determines that there is a therapeutic equivalent (as defined in section 314.3 of title 21, Code of Federal Regulations, or any successor regulation) for such drug. For purposes of applying paragraph (1), the Secretary shall establish a definition of the term dose . In the case of a drug that the Secretary determines is an applicable drug described in subparagraph
(A)or
(B)of subsection (b)(1), the justification described in this subsection is all relevant, truthful, and nonmisleading information and supporting documentation necessary to justify the increase in the wholesale acquisition cost of the applicable drug of the manufacturer, as determined appropriate by the Secretary and which may include the following: The individual factors that have contributed to the increase in the wholesale acquisition cost. An explanation of the role of each factor in contributing to such increase. Total expenditures of the manufacturer on— materials and manufacturing for such drug; acquiring patents and licensing for each drug of the manufacturer; and costs to purchase or acquire the drug from another company, if applicable. The percentage of total expenditures of the manufacturer on research and development for such drug that was derived from Federal funds. The total expenditures of the manufacturer on research and development for such drug. The total revenue and net profit generated from the applicable drug for each calendar year since drug approval. The total expenditures of the manufacturer that are associated with marketing and advertising for the applicable drug. Additional information specific to the manufacturer of the applicable drug, such as— the total revenue and net profit of the manufacturer for the period of such increase, as determined by the Secretary; metrics used to determine executive compensation; any additional information related to drug pricing decisions of the manufacturer, such as total expenditures on— drug research and development; or clinical trials on drugs that failed to receive approval by the Food and Drug Administration. In the case of a drug that the Secretary determines is an applicable drug described in subparagraph
(C)of subsection (b)(1), the justification described in this subsection is all relevant, truthful, and nonmisleading information and supporting documentation necessary to justify the wholesale acquisition cost of the applicable drug of the manufacturer, as determined by the Secretary and which may include the items described in subparagraph
(C)through
(H)of paragraph (1). Not later than 60 days after the date on which the Secretary makes the determination that a drug is an applicable drug under subsection (b), the Secretary shall notify the manufacturer of the applicable drug of such determination. Not later than 180 days after the date on which a manufacturer receives a notification under paragraph (1), the manufacturer shall submit to the Secretary the justification required under subsection (a). Subject to subparagraph (B), not later than 30 days after receiving the justification under paragraph (2), the Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services the justification, together with a summary of such justification that is written and formatted using language that is easily understandable by beneficiaries under titles XVIII and XIX. The Secretary shall exclude proprietary information, such as trade secrets and intellectual property, submitted by the manufacturer in the justification under paragraph
(2)from the posting described in subparagraph (A). In the case of a drug that the Secretary determines is an applicable drug described in subparagraph
(A)or
(B)of subsection (b)(1), the requirement to submit a justification under subsection
(a)shall not apply where the manufacturer, after receiving the notification under subsection (d)(1) with respect to the applicable drug of the manufacturer, reduces the wholesale acquisition cost of a drug so that it no longer is described in such subparagraph
(A)or
(B)for at least a 4-month period, as determined by the Secretary. 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. Any manufacturer that submits a justification under this section and 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. 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. In this section: The term drug means a drug, as defined in section 201(g) of the Federal Food, Drug, and Cosmetic Act, that is intended for human use and subject to section 503(b)(1) of such Act, including a product licensed under section 351 of the Public health Service Act. The term manufacturer has the meaning given that term in section 1847A(c)(6)(A). The term wholesale acquisition cost has the meaning given that term in section 1847A(c)(6)(B). .
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Sec. 141
Drug manufacturer price transparency
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