Sec. 3. Prescription drug consumer price protections

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The Bureau shall conduct reviews of the prices of prescription drugs to ensure that the wholesale acquisition cost of each such drug is appropriate. 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:

The name of the prescription drug. A description of the prescription drug and its approved indications. The number of individuals in the United States and globally for which such prescription drug is clinically indicated. 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. 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.

The date on which the prescription drug was approved under such section 505 or such section 351 of the Public Health Service Act. The total expenditures of the manufacturer on— domestic and foreign research and development, including an itemized description of— clinical research, including the cost of each clinical trial associated with the prescription drug, reported separately for each clinical trial; the development of alternative dosage forms and strengths for the prescription drug molecule or combinations, including the molecule; other prescription drug development activities, such as nonclinical laboratory studies and record and report maintenance; pursuing new or expanded indications for such prescription drug through supplemental applications under such section 505 or such section 351; carrying out postmarket requirements related to such prescription drug, including under subsection

(o)of such section 505 or such section 351; 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 marketing research; 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; 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; the cost of manufacturing the prescription drug; 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 patient assistance and co-pay programs that the manufacturer sponsors or contributes to. The gross revenue, net revenue, gross profit, and net profit of the manufacturer with respect to such prescription drug. The total number of units of such prescription drug that were sold in interstate commerce. Pricing information with respect to the sale of such prescription drug, including— the current wholesale acquisition cost; the introductory wholesale acquisition cost; 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; the list price of such prescription drug charged to purchasers in each applicable prescription drug reference country; 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; a description of all price changes of the prescription drug since the introductory wholesale acquisition cost; and the average net price of such prescription drug for each year since first being sold in the United States. 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. The percentage of research and development expenditures described in this section that were derived from Federal funds. 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. Other information as the Director may require. In reviewing submissions under subparagraph (A), the Bureau shall prioritize prescription drugs that meet any of the following criteria: 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.). In the top 50th percentile of utilization under any Federal program, including such Medicare program or such Medicaid program. Experienced an increase in the wholesale acquisition cost of 25 percent or more over the preceding 3 years. Other qualifications, as determined by the Director. 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: The information described in the following provisions of paragraph (2)(A): Clauses

(i)through (vi). Subclauses

(I)through

(IV)of clause (vii). Clauses

(xi)through (xiv). Pricing information with respect to the sale of such prescription drug, including— the planned introductory wholesale acquisition cost; the list price of such prescription drug charged or planned to be charged to purchasers in each applicable prescription drug reference country; and 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. The estimated annual profit and revenue that will be generated by the prescription drug, both domestically and globally. Other information as the Director may require. The Bureau shall conduct a review of the price of a prescription drug for which a submission is required under paragraph (2). 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: The information described in subsection (a)(2)(A). The planned increase in the wholesale acquisition cost and the planned date the increase will go into effect. A justification of the planned increase in wholesale acquisition cost. Any other information as the Secretary may require. 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. 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). Subject to subparagraph (B), for purposes of this subsection, the revenue benchmark is $5,000,000,000 in global revenue. The Bureau may update the amount of the global benchmark over time. 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). 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. In determining whether the wholesale acquisition cost or proposed wholesale acquisition cost of a prescription drug is appropriate, the Bureau shall consider the following: The size of the affected patient population. The therapeutic benefits of the prescription drug to patients. 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. The total annual Federal Government expenditures on the prescription drug and the budgetary impact of Federal health programs providing coverage of the prescription drug. The risk-adjusted value of Federal Government subsidies and investments related to the prescription drug. The costs associated with the development of the prescription drug. The number of similarly effective prescription drugs or alternative treatment regimens for each approved use of such prescription drug. 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. The current wholesale acquisition cost of comparable prescription drugs in the United States, to the extent that those prices have been deemed appropriate. The cumulative and expected global revenue generated by the prescription drug. The price of the drug in other countries, including in the prescription drug reference countries. The public health benefit of the drug. The information that the manufacturer submits to the Bureau as required under this section. Any other information, as the Bureau requires. For each prescription drug described in clause (ii), the Bureau shall— establish an interim appropriate price, which shall be the lesser of— the median list price of the prescription drug in the prescription drug reference countries; or if applicable, the appropriate price determination made by the Bureau; and direct the manufacturer to set the wholesale acquisition cost at a level that does not exceed the interim appropriate price. A prescription drug described in this clause is a prescription drug— that— 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 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 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. 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. 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. 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. 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. 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— set the wholesale acquisition cost of such prescription drug at or below the level that the Bureau determines is appropriate; and 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— the risk-adjusted value of any Federal Government subsidies and investments in research and development used to support the development of such drug; the risk-adjusted value of any investment made by such manufacturer in the research and development of such drug; the impact of the price, including license compensation payments, on meeting the medical need of all patients; the relationship between the price of such drug, including compensation payments and the health benefits of such drug; and other relevant information determined appropriate by the Secretary, in coordination with the Director. 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. 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. 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. In this Act: 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. 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. The term government-granted exclusivity means prohibitions on the submission or effective approval of prescription drug applications granted under any of the following: 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) ). 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. Section 505A of such Act ( 21 U.S.C. 355a ). Section 505E of such Act ( 21 U.S.C. 355f ). Section 527 of such Act ( 21 U.S.C. 360cc ). Section 351(k)(7) of such Act ( 42 U.S.C. 262(k)(7) ). Any other provision of law that provides for exclusivity (or extension of exclusivity) with respect to a 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) ). The term manufacturer , with respect to a prescription drug, means an entity that— 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 is responsible for setting the price of the 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) ). The term prescription drug reference country means Japan, Germany, the United Kingdom, France, Italy, Canada, Australia, Spain, the Netherlands, Switzerland, and Sweden. 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) ). The term Secretary means the Secretary of Health and Human Services. 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)).

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