[House Report 116-334]
[From the U.S. Government Publishing Office]
116th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 116-334
======================================================================
PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 3) TO ESTABLISH A FAIR
PRICE NEGOTIATION PROGRAM, PROTECT THE MEDICARE PROGRAM FROM EXCESSIVE
PRICE INCREASES, AND ESTABLISH AN OUT-OF-POCKET MAXIMUM FOR MEDICARE
PART D ENROLLEES, AND FOR OTHER PURPOSES; PROVIDING FOR CONSIDERATION
OF THE BILL (H.R. 5038) TO AMEND THE IMMIGRATION AND NATIONALITY ACT TO
PROVIDE FOR TERMS AND CONDITIONS FOR NONIMMIGRANT WORKERS PERFORMING
AGRICULTURAL LABOR OR SERVICES, AND FOR OTHER PURPOSES; AND PROVIDING
FOR CONSIDERATION OF THE CONFERENCE REPORT TO ACCOMPANY THE BILL (S.
1790) TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2020 FOR MILITARY
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
PURPOSES
_______
December 10, 2019.--Referred to the House Calendar and ordered to be
printed
_______
Ms. Shalala, from the Committee on Rules,
submitted the following
R E P O R T
[To accompany H. Res. 758]
The Committee on Rules, having had under consideration
House Resolution 758, by a record vote of 8 to 3, report the
same to the House with the recommendation that the resolution
be adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of H.R. 3, the
Elijah E. Cummings Lower Drug Costs Now Act, under a structured
rule. The resolution provides four hours of general debate,
with three hours equally divided among and controlled by the
respective chairs and ranking minority members of the
Committees on Education and Labor, Energy and Commerce, and
Ways and Means, and one hour equally divided and controlled by
the Majority Leader and the Minority Leader or their respective
designees. The resolution waives all points of order against
consideration of the bill. The resolution provides that an
amendment in the nature of a substitute consisting of the text
of Rules Committee Print 116-41, modified by the amendment
printed in Part A of this report, shall be considered as
adopted and the bill, as amended, shall be considered as read.
The resolution waives all points of order against provisions in
the bill, as amended. The resolution makes in order only those
further amendments printed in Part B of this report. Each such
further amendment may be offered only in the order printed in
this report, may be offered only by a Member designated in this
report, shall be considered as read, shall be debatable for the
time specified in this report equally divided and controlled by
the proponent and an opponent, shall not be subject to
amendment, and shall not be subject to a demand for division of
the question. The resolution waives all points of order against
the amendments printed in Part B of this report. The resolution
provides one motion to recommit with or without instructions.
The resolution provides for consideration of H.R. 5038, the
Farm Workforce Modernization Act of 2019, under a closed rule.
The resolution provides one hour of general debate equally
divided and controlled by the chair and ranking minority member
of the Committee on the Judiciary. The resolution waives all
points of order against consideration of the bill. The
resolution provides that an amendment in the nature of a
substitute consisting of the text of Rules Committee Print 116-
42, modified by the amendment printed in part C of this report,
shall be considered as adopted and the bill, as amended, shall
be considered as read. The resolution waives all points of
order against provisions in the bill, as amended. The
resolution provides one motion to recommit with or without
instructions. The resolution provides for consideration of the
conference report to accompany S. 1790, the National Defense
Authorization Act for Fiscal Year 2020. The resolution waives
all points of order against the conference report and against
its consideration. The resolution provides that the conference
report shall be considered as read. The resolution provides one
hour of debate on the conference report, divided pursuant to
clause 8(d) of rule XXII. The resolution provides one motion to
recommit if applicable. The resolution provides that the chair
of the Permanent Select Committee on Intelligence may insert in
the Congressional Record not later than December 13, 2019, such
material as he may deem explanatory of intelligence
authorization measures for the fiscal years 2018, 2019, and
2020. The resolution provides that it shall be in order at any
time through the legislative day of December 20, 2019, for the
Speaker to entertain motions that the House suspend the rules
and that the Speaker or her designee shall consult with the
Minority Leader or his designee on the designation of any
matter for consideration pursuant to this section. The
resolution waives clause 6(a) of rule XIII (requiring a two-
thirds vote to consider a rule on the same day it is reported
from the Rules Committee) against any resolution reported from
the Rules Committee through the legislative day of December 20,
2019. Section 7 of the resolution provides that on any
legislative day of the first session of the One Hundred and
Sixteenth Congress after December 12, 2019: the Journal of the
proceedings of the previous day shall be considered as
approved; and the Chair may at any time declare the House
adjourned to meet at a date and time, within the limits of
clause 4, section 5, article I of the Constitution, to be
announced by the Chair in declaring the adjournment. Section 8
of the resolution provides that on any legislative day of the
second session of the One Hundred Sixteenth Congress before
January 7, 2020: the Speaker may dispense with organizational
and legislative business; the Journal of the proceedings of the
previous day shall be considered as approved if applicable; and
the Chair may at any time declare the House adjourned to meet
at a date and time, within the limits of clause 4, section 5,
article I of the Constitution, to be announced by the Chair in
declaring the adjournment. The resolution provides that the
Speaker may appoint Members to perform the duties of the Chair
for the duration of the periods addressed by sections 7 and 8
of the resolution as though under clause 8(a) of rule I. The
resolution provides that each day during the periods addressed
by sections 7 and 8 shall not constitute calendar days for the
purposes of section 7 of the War Powers Resolution (50 U.S.C.
1546). The resolution provides that each day during the periods
addressed by sections 7 and 8 shall not constitute a
legislative day for purposes of clause 7 of rule XIII. The
resolution provides that each day during the periods addressed
by sections 7 and 8 shall not constitute a legislative day for
purposes of clause 7 of rule XV.
EXPLANATION OF WAIVERS
The waiver of all points of order against consideration of
H.R. 3 includes waivers of the following:
Clause 3(c)(4) of rule XIII, which requires
committee reports to include a statement of general performance
goals and objectives, including outcome-related goals and
objectives for which the measure authorizes funding.
Clause 3(d) of rule XIII, which requires the
inclusion of a committee cost estimate in the committee report.
Clause 10 of rule XXI, which prohibits
consideration of a measure that has a net effect of increasing
the deficit or reducing the surplus over the five- or 10-year
period; however, the budgetary effects of the bill are fully
offset over the 10-year period.
Clause 12(a)(1) of rule XXI, which prohibits
consideration of a bill unless there is a searchable electronic
comparative print that shows how the bill proposes to change
current law.
Clause 12(b) of rule XXI, which prohibits
consideration of a bill unless there is a searchable electronic
comparative print that shows how the text of the bill as
proposed to be considered differs from the text of the bill as
reported.
Section 302(f) of the Congressional Budget Act,
which prohibits consideration of legislation providing new
budget authority in excess of a 302(a) or 302(b) allocation of
such authority.
The waiver of all points of order against provisions in
H.R. 3, as amended, includes a waiver of clause 4 of rule XXI,
which prohibits reporting a bill carrying an appropriation from
a committee not having jurisdiction to report an appropriation.
The waiver of all points of order against the amendments
printed in Part B of this report includes a waiver of clause
12(a)(2) of rule XXI, which prohibits consideration of an
amendment in the nature of a substitute unless there is a
searchable electronic comparative print that shows how the
amendment proposes to change current law. The waiver is
necessary for the amendment in the nature of substitute #1,
offered by Rep. Walden.
The waiver of all points of order against consideration of
H.R. 5038 includes waivers of the following:
Clause 3(d)(1) of rule XIII, which requires the
inclusion of committee cost estimate in a committee report.
Clause 12(a)(1) of rule XXI, which prohibits
consideration of a bill unless there is a searchable electronic
comparative print that shows how the bill proposes to change
current law.
Clause 12(b) of rule XXI, which prohibits
consideration of a bill unless there is a searchable electronic
comparative print that shows how the text of the bill as
proposed to be considered differs from the text of the bill as
reported.
The waiver of all points of order against provisions in
H.R. 5038, as amended, includes waivers of the following:
Clause 4 of rule XXI, which prohibits reporting a
bill carrying an appropriation from a committee not having
jurisdiction to report an appropriation.
Clause 5(a) of rule XXI, which prohibits a bill or
joint resolution carrying a tax or tariff measure from being
reported by a committee not having jurisdiction to report tax
or tariff measures.
The waiver of all points of order against the conference
report to accompany S. 1790 and its consideration includes
waivers of the following:
Section 302(f)(1) of the Congressional Budget Act,
which prohibits consideration of legislation providing new
budget authority in excess of a 302(a) or 302(b) allocation of
such authority.
Clause 10 of rule XXI, which prohibits
consideration of a measure that has a net effect of increasing
the deficit or reducing the surplus over the five- or 10-year
period.
Clause 8(a)(1)(A) of rule XXII, which prohibits
the consideration of a conference report and the accompanying
joint explanatory statement which has not been available for 72
hours.
Clause 9 of rule XXII, which prohibits the
inclusion of matter in a conference report not committed to the
conference by either House.
COMMITTEE VOTES
The results of each record vote on an amendment or motion
to report, together with the names of those voting for and
against, are printed below:
Rules Committee record vote No. 217
Motion by Mr. Cole to report an open rule for H.R. 5038.
Defeated: 3-8
----------------------------------------------------------------------------------------------------------------
Majority Members Vote Minority Members Vote
----------------------------------------------------------------------------------------------------------------
Mr. Hastings.................................... Nay Mr. Cole.......................... Yea
Mrs. Torres..................................... ............ Mr. Woodall....................... ............
Mr. Perlmutter.................................. Nay Mr. Burgess....................... Yea
Mr. Raskin...................................... Nay Mrs. Lesko........................ Yea
Ms. Scanlon..................................... Nay
Mr. Morelle..................................... Nay
Ms. Shalala..................................... Nay
Mr. DeSaulnier.................................. Nay
Mr. McGovern, Chairman.......................... Nay
----------------------------------------------------------------------------------------------------------------
Rules Committee record vote No. 218
Motion by Ms. Shalala to report the rule. Adopted: 8-3
----------------------------------------------------------------------------------------------------------------
Majority Members Vote Minority Members Vote
----------------------------------------------------------------------------------------------------------------
Mr. Hastings.................................... Yea Mr. Cole.......................... Nay
Mrs. Torres..................................... ............ Mr. Woodall....................... ............
Mr. Perlmutter.................................. Yea Mr. Burgess....................... Nay
Mr. Raskin...................................... Yea Mrs. Lesko........................ Nay
Ms. Scanlon..................................... Yea
Mr. Morelle..................................... Yea
Ms. Shalala..................................... Yea
Mr. DeSaulnier.................................. Yea
Mr. McGovern, Chairman.......................... Yea
----------------------------------------------------------------------------------------------------------------
SUMMARY OF THE AMENDMENT TO H.R. 3 IN PART A CONSIDERED AS ADOPTED
1. Pallone (NJ), Neal (MA), Scott, Bobby (VA): Makes
technical change to the underlying bill, adjusts effective
dates of certain provisions and makes changes to the Fair Drug
Price Negotiation program.
SUMMARY OF THE AMENDMENTS TO H.R. 3 IN PART B MADE IN ORDER
1. Walden (OR), Brady (TX), Collins, Doug (GA), Foxx (NC):
An amendment in the nature of a substitute, which include bi-
partisan provisions related to (1) Medicare Parts B & D, (2)
drug price transparency, (3) Medicare Part D benefit redesign
and other Part D provisions, (4) MedPAC, (5) Medicaid, (6) FDA
(including CREATES Act; Pay-for-delay; BLOCKING Act; Purple
Book; Orange Book; Advancing education on biosimilars;
Streamlining transition of biological products; OTC monograph
safety, innovation, and reform; and other provisions), (7)
revenue provisions, and (8) other bi-partisan provisions. (10
minutes)
2. Tonko (NY): Requires CMS to create and implement a
measure in the Star Ratings program evaluating Medicare
Advantage and Part D plans on how well they provide access to
biosimilar drugs. (10 minutes)
3. Peters (CA), Cisneros (CA): To amend the Public Health
Service Act to authorize a pilot program to develop, expand,
and enhance the commercialization of biomedical products, and
for other purposes. (10 minutes)
4. Kennedy (MA): Requires another Senate confirmed officer
with HHS to carry out the negotiation duties should the
Secretary of HHS have a conflict of interest. The General
Counsel of HHS would be responsible for identifying these
conflicts. (10 minutes)
5. O'Halleran (AZ), Axne (IA), Brindisi (NY), Bustos (IL),
Cuellar (TX), Cunningham (SC), Davids (KS), Finkenauer (IA),
Horn (OK), Lee, Susie (NV), Loebsack (IA), Peterson (MN),
Schrader (OR), Spanberger (VA), Torres Small, Xochitl (NM), Van
Drew (NJ), Kuster (NH), Correa (CA), Costa (CA), Blunt
Rochester (DE): Creates a grant program within HHS for
hospitals located in rural and medically underserved areas,
including Critical Access Hospitals, to cover the start-up
costs for establishing a Graduate Medical Education (GME)
program or a partnership with a hospital that has an existing
program. It includes a reporting requirement for GAO to analyze
whether residents continue to practice in a rural or medically
underserved area after completing their training. (10 minutes)
6. Jackson Lee (TX): Expresses the Sense of Congress
regarding the impact of the high cost of prescription drugs on
communities of color and persons living in rural or sparsely
populated areas of the United States. (10 minutes)
7. Gottheimer (NJ): Requires an HHS study to identify
conditions without an FDA-approved treatment where the
development of a treatment would fill an unmet medical need for
a serious or life-threatening condition or rare disease.
Requires HHS to identify appropriate incentives that would lead
to the development of such treatments. (10 minutes)
8. Axne (IA): Establishes a grant program for states to
reduce the burdens associated with health care administrative
work and reduces HHS administrative costs by 50% over 10 years.
(10 minutes)
9. Finkenauer (IA): Requires drug companies to disclose
truthful and non-misleading pricing information about
prescription drugs and biological products when they advertise
these products directly to consumers. (10 minutes)
10. Luria (VA): Makes clear that federal employee health
plans are covered by the price reduction provisions of the
bill. (10 minutes)
11. Cunningham (SC): Allows the Veteran's Administration to
benefit from Maximum Fair Pricing guidelines. (10 minutes)
12. Scanlon (PA): Increases funding for clinical trials at
NIH and bans the use of spread pricing by PBMs as it relates to
Medicaid. (10 minutes)
SUMMARY OF THE AMENDMENT TO H.R. 5038 IN PART C CONSIDERED AS ADOPTED
1. Nadler (NY): Sets the year-round visas for sheep and
goat herding to 500.
PART A--TEXT OF AMENDMENT TO H.R. 3 CONSIDERED AS ADOPTED
Page 9, beginning on line 23, strike ``the period beginning
with 2023 and ending with 2027'' and insert ``2023''.
Page 10, line 6, add ``and'' after the semicolon.
Page 10, beginning on line 8, strike ``the period beginning
with 2028 and ending with 2032'' and insert ``2024 or a
subsequent year''.
Page 10, line 9, strike ``30'' and insert ``50''.
Page 10, line 14, strike ``30'' and insert ``50''.
Page 10, line 15, strike ``and'' at the end.
Page 10, strike lines 16 through 23.
Page 53, line 11, strike ``Drug'' after ``Fair''.
Page 53, line 17, strike ``Drug'' after ``Fair''.
Page 56, line 11, strike ``Drug'' after ``Fair''.
Page 56, line 17, strike ``Drug'' after ``Fair''.
Page 59, line 18, strike ``Drug'' after ``Fair''.
Page 59, line 22, strike ``Drug'' after ``Fair''.
Page 66, line 16, strike ``drug'' after ``fair'' (and conform
the table of contents accordingly).
Page 66, line 19, strike ``Drug''.
Page 83, after line 17, insert the following:
(3) Coordination with medicaid rebate information
disclosure.--Section 1927(b)(3)(D)(i) of the Social
Security Act (42 U.S.C. 1396r-8(b)(3)(D)(i)) is amended
by striking ``or to carry out section 1847B'' and
inserting ``to carry out section 1847B or section
1834(x)''.
Page 90, line 25 through page 91, line 1, strike ``each
calendar quarter'' and insert ``each of the calendar
quarters''.
Page 91, line 6, insert ``each'' before ``such''.
Page 91, line 6, strike ``the payment'' and inert ``such
payment''.
Page 91, line 10, strike ``the payment'' and insert ``such
payment''.
Page 98, after line 18, insert the following:
(3) Coordination with medicaid rebate information
disclosure.--Section 1927(b)(3)(D)(i) of the Social
Security Act (42 U.S.C. 1396r-8(b)(3)(D)(i)), as
amended by section 201(c)(3), is further amended by
striking ``or section 1834(x)'' and inserting ``,
section 1834(x), or section 1860D-14B''.
Page 98, line 22, strike ``Not later than'' and insert the
following:
(a) In General.--Not later than
Page 99, line 14, strike the semicolon and insert ``; and''.
Page 99, line 22, strike ``; and'' and insert a period.
Page 99, strike lines 22 through 25.
In section 203, add at the end the following new subsection:
(b) Regulations.--Not later than December 31, 2022, the
Secretary of Labor shall, in consultation with the Secretary of
Health and Human Services and the Secretary of the Treasury,
promulgate regulations to implement a model described in
subsection (a)(1) and a model described in subsection (a)(2),
if the Secretary determines that--
(1) the prices of a sufficient number (as determined
by the Secretary) of drugs described in subsection
(a)(1) have increased over a period of time (as
determined by the Secretary) at a percentage that
exceeds the percentage by which the consumer price
index for all urban consumers (United States city
average) has increased over such period; and
(2) such model described in subsection (a)(1) and
such model described in subsection (a)(2) are feasible.
Page 116, lines 21 through 22, strike ``are equal to or''.
Page 118, line 17, strike ``furnished'' and insert
``dispensed''.
Page 119, line 19, strike ``at or''.
Page 120, line 1, strike ``at or''.
Page 148, line 16, strike ``2024'' and insert ``2022''.
Page 148, line 25, strike ``2024'' and insert ``2022''.
Page 154, line 16, strike ``2024'' and insert ``2022''.
Page 155, line 1, strike ``2024'' and insert ``2022''.
Page 155, line 12, insert ``, as described in section
1612(a)(2)(A),'' after ``in kind''.
Page 155, line 20, strike ``2024'' and insert ``2022''.
Page 155, line 24, strike ``2024'' and insert ``2022''.
Page 156, line 9, strike ``2023'' and insert ``2021''.
Page 156, line 21, strike ``2024'' and insert ``2022''.
Page 169, line 7, strike ``2024'' and insert ``2023''.
Page 169, line 14, strike ``2024'' and insert ``2023''.
Page 169, line 25, strike ``2024'' and insert ``2023''.
Page 172, line 8, strike ``2024'' and insert ``2023''.
Page 176, line 11, strike ``2024'' and insert ``2023''.
Page 177, line 17, strike ``2024'' and insert ``2023''.
Page 178, line 7, strike ``2024'' and insert ``2023''.
Page 178, line 22, strike ``2024'' and insert ``2023''.
Page 204, line 14, strike ``section 732'' and insert
``section 722''.
Page 204, line 19, strike ``section 733'' and insert
``section 723''.
Page 204, line 23, strike ``section 734'' and insert
``section 724''.
Page 205, line 3, strike ``section 735'' and insert ``section
725''.
Page 205, line 7, strike ``section 736'' and insert ``section
726''.
Page 205, line 11, strike ``section 737'' and insert
``section 727''.
Page 207, line 15, strike ``section 731(c)(1)'' and insert
``section 721(c)(1)''.
Page 209, line 1, strike ``section 731(c)(2)'' and insert
``section 721(c)(2)''.
Page 210, line 13, strike ``section 731(c)(2)'' and insert
``section 721(c)(2)''.
Page 210, line 18, strike ``section 731(c)(3)'' and insert
``section 721(c)(3)''.
Page 212, line 9, strike ``section 731(c)(4)'' and insert
``section 721(c)(4)''.
Page 213, line 6, strike ``section 731(c)(5)'' and insert
``section 721(c)(5)''.
Page 213, line 16, strike ``section 731(c)(6)'' and insert
``section 721(c)(6)''.
Page 232, line 15, strike ``2020 and 2021'' and insert ``each
of 2020 through 2022''.
Page 232, lines 17 through 18, strike ``2022 and each
subsequent year through 2025'' and insert ``each of 2023
through 2025''.
PART B--TEXT OF AMENDMENTS TO H.R. 3 MADE IN ORDER
1. An Amendment To Be Offered by Representative Walden of Oregon or His
Designee, Debatable for 10 Minutes
Strike all after the enactment clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Lower Costs, More Cures Act of
2019''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--MEDICARE PARTS B AND D
Subtitle A--Medicare Part B Provisions
Sec. 101. Improvements to Medicare site-of-service transparency.
Sec. 102. Requiring manufacturers of certain single-dose container or
single-use package drugs payable under part
B of the Medicare program to provide
refunds with respect to discarded amounts
of such drugs.
Sec. 103. Providing for variation in payment for certain drugs covered
under part B of the Medicare program.
Sec. 104. Establishment of maximum add-on payment for drugs and
biologicals.
Sec. 105. Treatment of drug administration services furnished by
certain excepted off-campus outpatient
departments of a provider.
Subtitle B--Drug Price Transparency
Sec. 111. Reporting on explanation for drug price increases.
Sec. 112. Public disclosure of drug discounts.
Sec. 113. Study of pharmaceutical supply chain intermediaries and
merger activity.
Sec. 114. Requiring certain manufacturers to report drug pricing
information with respect to drugs under the
Medicare program.
Sec. 115. Making prescription drug marketing sample information
reported by manufacturers available to
certain individuals and entities.
Sec. 116. Requiring prescription drug plan sponsors to include real-
time benefit information as part of such
sponsor's electronic prescription program
under the Medicare program.
Sec. 117. Sense of Congress regarding the need to expand commercially
available drug pricing comparison
platforms.
Sec. 118. Technical corrections.
Subtitle C--Medicare Part D Benefit Redesign
Sec. 121. Medicare Part D Benefit Redesign.
Subtitle D--Other Medicare Part D Provisions
Sec. 131. Transitional coverage and retroactive Medicare Part D
coverage for certain low-income
beneficiaries.
Sec. 132. Allowing the offering of additional prescription drug plans
under Medicare part D.
Sec. 133. Allowing certain enrollees of prescription drugs plans and
MA-PD plans under Medicare program to
spread out cost-sharing under certain
circumstances.
Sec. 134. Establishing a monthly cap on beneficiary incurred costs for
insulin products and supplies under a
prescription drug plan or MA-PD plan.
Sec. 135. Growth rate of Medicare part D out-of-pocket cost threshold.
Subtitle E--MedPAC
Sec. 141. Providing the Medicare Payment Advisory Commission and
Medicaid and CHIP Payment and Access
Commission with access to certain drug
payment information, including certain
rebate information.
TITLE II--MEDICAID
Sec. 201. Sunset of limit on maximum rebate amount for single source
drugs and innovator multiple source drugs.
Sec. 202. Medicaid pharmacy and therapeutics committee improvements.
Sec. 203. GAO report on conflicts of interest in State Medicaid program
drug use review boards and pharmacy and
therapeutics (P&T) committees.
Sec. 204. Ensuring the accuracy of manufacturer price and drug product
information under the Medicaid drug rebate
program.
Sec. 205. Improving transparency and preventing the use of abusive
spread pricing and related practices in
Medicaid.
Sec. 206. T-MSIS drug data analytics reports.
Sec. 207. Risk-sharing value-based payment agreements for covered
outpatient drugs under Medicaid.
Sec. 208. Applying Medicaid drug rebate requirement to drugs provided
as part of outpatient hospital services.
TITLE III--FOOD AND DRUG ADMINISTRATION
Subtitle A--CREATES Act
Sec. 301. Actions for delays of generic drugs and biosimilar biological
products.
Sec. 302. Rems approval process for subsequent filers.
Sec. 303. Rule of construction.
Subtitle B--Pay-for-Delay
Sec. 311. Unlawful agreements.
Sec. 312. Notice and certification of agreements.
Sec. 313. Forfeiture of 180-day exclusivity period.
Sec. 314. Commission litigation authority.
Sec. 315. Statute of limitations.
Subtitle C--BLOCKING Act
Sec. 321. Change conditions of first generic exclusivity to spur access
and competition.
Subtitle D--Purple Book
Sec. 331. Public Listing.
Sec. 332. Review and report on types of Information To be listed.
Subtitle E--Orange Book
Sec. 341. Orange Book.
Sec. 342. GAO report to Congress.
Subtitle F--Advancing Education on Biosimilars
Sec. 351. Education on biological products.
Subtitle G--Streamlining Transition of Biological Products
Sec. 361. Streamlining the transition of biological products.
Subtitle H--Over-the-Counter Monograph Safety, Innovation, and Reform
Sec. 370. Short title; references in subtitle.
Part 1--OTC Drug Review
Sec. 371. Regulation of certain nonprescription drugs that are marketed
without an approved drug application.
Sec. 372. Misbranding.
Sec. 373. Drugs excluded from the over-the-counter drug review.
Sec. 374. Treatment of Sunscreen Innovation Act.
Sec. 375. Annual update to Congress on appropriate pediatric indication
for certain OTC cough and cold drugs.
Sec. 376. Technical corrections.
Part 2--User Fees
Sec. 381. Short title; finding.
Sec. 382. Fees relating to over-the-counter drugs.
Subtitle I--Other Provisions
Sec. 391. Protecting access to biological products.
Sec. 392. Orphan drug clarification.
Sec. 393. Conditions of use for biosimilar biological products.
Sec. 394. Clarifying the meaning of new chemical entity.
TITLE IV--REVENUE PROVISIONS
Sec. 401. Permanent extension of reduction in medical expense deduction
floor.
Sec. 402. Safe harbor for high deductible health plans without
deductible for insulin.
Sec. 403. Inclusion of certain over-the-counter medical products as
qualified medical expenses.
TITLE V--MISCELLANEOUS
Sec. 501. Payment for biosimilar biological products during initial
period.
Sec. 502. GAO study and report on average sales price.
Sec. 503. Requiring prescription drug plans and MA-PD plans to report
potential fraud, waste, and abuse to the
Secretary of HHS.
Sec. 504. Establishment of pharmacy quality measures under Medicare
part D.
Sec. 505. Improving coordination between the Food and Drug
Administration and the Centers for Medicare
& Medicaid Services.
Sec. 506. Patient consultation in Medicare national and local coverage
determinations in order to mitigate
barriers to inclusion of such perspectives.
Sec. 507. MedPAC report on shifting coverage of certain Medicare part B
drugs to Medicare part D.
Sec. 508. Requirement that direct-to-consumer advertisements for
prescription drugs and biological products
include truthful and non-misleading pricing
information.
Sec. 509. Chief Pharmaceutical Negotiator at the Office of the United
States Trade Representative.
Sec. 510. Waiving Medicare coinsurance for colorectal cancer screening
tests.
TITLE I--MEDICARE PARTS B AND D
Subtitle A--Medicare Part B Provisions
SEC. 101. IMPROVEMENTS TO MEDICARE SITE-OF-SERVICE TRANSPARENCY.
Section 1834(t) of the Social Security Act (42 U.S.C.
1395m(t)) is amended--
(1) in paragraph (1)--
(A) in the heading, by striking ``In
general'' and inserting ``Site payment'';
(B) in the matter preceding subparagraph
(A)--
(i) by striking ``or to'' and
inserting ``, to'';
(ii) by inserting ``, or to a
physician for services furnished in a
physician's office'' and ``surgical
center''; and
(iii) by inserting ``(or 2021 with
respect to a physician for services
furnished in a physician's office)''
after ``2018''; and
(C) in subparagraph (A)--
(i) by striking ``and the'' and
inserting ``, the''; and
(ii) by inserting ``, and the
physician fee schedule under section
1848 (with respect to the practice
expense component of such payment
amount)'' after ``such section'';
(2) by redesignating paragraphs (2) through (4) as
paragraphs (3) through (5), respectively; and
(3) by inserting after paragraph (1) the following
new paragraph:
``(2) Physician payment.--Beginning in 2021, the
Secretary shall expand the information included on the
Internet website described in paragraph (1) to
include--
``(A) the amount paid to a physician under
section 1848 for an item or service for the
settings described in paragraph (1); and
``(B) the estimated amount of beneficiary
liability applicable to the item or service.''.
SEC. 102. REQUIRING MANUFACTURERS OF CERTAIN SINGLE-DOSE CONTAINER OR
SINGLE-USE PACKAGE DRUGS PAYABLE UNDER PART B OF
THE MEDICARE PROGRAM TO PROVIDE REFUNDS WITH
RESPECT TO DISCARDED AMOUNTS OF SUCH DRUGS.
Section 1847A of the Social Security Act (42 U.S.C. 1395-3a)
is amended by adding at the end the following new subsection:
``(h) Refund for Certain Discarded Single-dose Container or
Single-use Package Drugs.--
``(1) Secretarial provision of information.--
``(A) In general.--For each calendar quarter
beginning on or after July 1, 2021, the
Secretary shall, with respect to a refundable
single-dose container or single-use package
drug (as defined in paragraph (8)), report to
each manufacturer (as defined in subsection
(c)(6)(A)) of such refundable single-dose
container or single-use package drug the
following for the calendar quarter:
``(i) Subject to subparagraph (C),
information on the total number of
units of the billing and payment code
of such drug, if any, that were
discarded during such quarter, as
determined using a mechanism such as
the JW modifier used as of the date of
enactment of this subsection (or any
such successor modifier that includes
such data as determined appropriate by
the Secretary).
``(ii) The refund amount that the
manufacturer is liable for pursuant to
paragraph (3).
``(B) Determination of discarded amounts.--
For purposes of subparagraph (A)(i), with
respect to a refundable single-dose container
or single-use package drug furnished during a
quarter, the amount of such drug that was
discarded shall be determined based on the
amount of such drug that was unused and
discarded for each drug on the date of service.
``(C) Exclusion of units of packaged drugs.--
The total number of units of the billing and
payment code of a refundable single-dose
container or single-use package drug of a
manufacturer furnished during a calendar
quarter for purposes of subparagraph (A)(i),
and the determination of the estimated total
allowed charges for the drug in the quarter for
purposes of paragraph (3)(A)(ii), shall not
include such units that are packaged into the
payment amount for an item or service and are
not separately payable.
``(2) Manufacturer requirement.--For each calendar
quarter beginning on or after July 1, 2021, the
manufacturer of a refundable single-dose container or
single-use package drug shall, for such drug, provide
to the Secretary a refund that is equal to the amount
specified in paragraph (3) for such drug for such
quarter.
``(3) Refund amount.--
``(A) In general.--The amount of the refund
specified in this paragraph is, with respect to
a refundable single-dose container or single-
use package drug of a manufacturer assigned to
a billing and payment code for a calendar
quarter beginning on or after July 1, 2021, an
amount equal to the estimated amount (if any)
by which--
``(i) the product of--
``(I) the total number of
units of the billing and
payment code for such drug that
were discarded during such
quarter (as determined under
paragraph (1)); and
``(II)(aa) in the case of a
refundable single-dose
container or single-use package
drug that is a single source
drug or biological, the amount
determined for such drug under
subsection (b)(4); or
``(bb) in the case of a
refundable single-dose
container or single-use package
drug that is a biosimilar
biological product, the average
sales price determined under
subsection (b)(8)(A); exceeds
``(ii) an amount equal to the
applicable percentage (as defined in
subparagraph (B)) of the estimated
total allowed charges for such drug
during the quarter.
``(B) Applicable percentage defined.--
``(i) In general.--For purposes of
subparagraph (A)(ii), the term
`applicable percentage' means--
``(I) subject to subclause
(II), 10 percent; and
``(II) if applicable, in the
case of a refundable single-
dose container or single-use
package drug described in
clause (ii), a percentage
specified by the Secretary
pursuant to such clause.
``(ii) Treatment of drugs that have
unique circumstances.--In the case of a
refundable single-dose container or
single-use package drug that has unique
circumstances involving similar loss of
product as that described in paragraph
(8)(B), the Secretary, through notice
and comment rulemaking, may increase
the applicable percentage otherwise
applicable under clause (i)(I) as
determined appropriate by the
Secretary.
``(4) Frequency.--Amounts required to be refunded
pursuant to paragraph (2) shall be paid in regular
intervals (as determined appropriate by the Secretary).
``(5) Refund deposits.--Amounts paid as refunds
pursuant to paragraph (2) shall be deposited into the
Federal Supplementary Medical Insurance Trust Fund
established under section 1841.
``(6) Enforcement.--
``(A) Audits.--
``(i) Manufacturer audits.--Each
manufacturer of a refundable single-
dose container or single-use package
drug that is required to provide a
refund under this subsection shall be
subject to periodic audit with respect
to such drug and such refunds by the
Secretary.
``(ii) Provider audits.--The
Secretary shall conduct periodic audits
of claims submitted under this part
with respect to refundable single-dose
container or single-use package drugs
in accordance with the authority under
section 1833(e) to ensure compliance
with the requirements applicable under
this subsection.
``(B) Civil money penalty.--
``(i) In general.--The Secretary
shall impose a civil money penalty on a
manufacturer of a refundable single-
dose container or single-use package
drug who has failed to comply with the
requirement under paragraph (2) for
such drug for a calendar quarter in an
amount equal to the sum of--
``(I) the amount that the
manufacturer would have paid
under such paragraph with
respect to such drug for such
quarter; and
``(II) 25 percent of such
amount.
``(ii) Application.--The provisions
of section 1128A (other than
subsections (a) and (b)) shall apply to
a civil money penalty under this
subparagraph in the same manner as such
provisions apply to a penalty or
proceeding under section 1128A(a).
``(7) Implementation.--The Secretary shall implement
this subsection through notice and comment rulemaking.
``(8) Definition of refundable single-dose container
or single-use package drug.--
``(A) In general.--Except as provided in
subparagraph (B), in this subsection, the term
`refundable single-dose container or single-use
package drug' means a single source drug or
biological (as defined in section
1847A(c)(6)(D)) or a biosimilar biological
product (as defined in section 1847A(c)(6)(H))
for which payment is established under this
part and that is furnished from a single-dose
container or single-use package.
``(B) Exclusions.--The term `refundable
single-dose container or single-use package
drug' does not include--
``(i) a drug or biological that is
either a radiopharmaceutical or an
imaging agent;
``(ii) a drug or biological for which
dosage and administration instructions
approved by the Commissioner of Food
and Drugs require filtration during the
drug preparation process, prior to
dilution and administration, and
require that any unused portion of such
drug after the filtration process be
discarded after the completion of such
filtration process; or
``(iii) a drug or biological approved
by the Food and Drug Administration on
or after the date of enactment of this
subsection and with respect to which
payment has been made under this part
for less than 18 months.''.
SEC. 103. PROVIDING FOR VARIATION IN PAYMENT FOR CERTAIN DRUGS COVERED
UNDER PART B OF THE MEDICARE PROGRAM.
(a) In General.--Section 1847A(b) of the Social Security Act
(42 U.S.C. 1395w-3a(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A), by inserting after
``or 106 percent'' the following: ``(or, for a
multiple source drug (other than autologous
cellular immunotherapy) furnished on or after
January 1, 2021, the applicable percent
specified in paragraph (9)(A) for the drug and
quarter involved)''; and
(B) in subparagraph (B) of paragraph (1), by
inserting after ``106 percent'' the following:
``(or, for a single source drug or biological
(other than autologous cellular immunotherapy)
furnished on or after January 1, 2021, the
applicable percent specified in paragraph
(9)(A) for the drug or biological and quarter
involved)''; and
(2) by adding at the end the following new paragraph:
``(9) Application of variable percentages based on
percentile ranking of per beneficiary allowed
charges.--
``(A) Applicable percent to be applied.--
``(i) In general.--Subject to clauses
(ii), with respect to a drug or
biological furnished in a calendar
quarter beginning on or after January
1, 2021, if the Secretary determines
that the percentile rank of a drug or
biological under subparagraph
(B)(i)(III), with respect to per
beneficiary allowed charges for all
such drugs or biologicals, is--
``(I) at least equal to the
85th percentile, the applicable
percent for the drug for such
quarter under this subparagraph
is 104 percent;
``(II) at least equal to the
70th percentile, but less than
the 85th percentile, such
applicable percent is 106
percent;
``(III) at least equal to the
50th percentile, but less than
the 70th percentile, such
applicable percent is 108
percent; or
``(IV) less than the 50th
percentile, such applicable
percent is 110 percent.
``(ii) Cases where data not
sufficiently available to compute per
beneficiary allowed charges.--Subject
to clause (iii), in the case of a drug
or biological furnished for which the
amount of payment is determined under
subparagraph (A) or (B) of paragraph
(1) and not under subsection (c)(4),
for calendar quarters during a period
in which data are not sufficiently
available to compute a per beneficiary
allowed charges for the drug or
biological, the applicable percent is
106 percent.
``(B) Determination of percentile rank of per
beneficiary allowed charges of drugs.--
``(i) In general.--With respect to a
calendar quarter beginning on or after
January 1, 2021, for drugs and
biologicals for which the amount of
payment is determined under
subparagraph (A) or (B) of paragraph
(1), except for drugs or biologicals
for which data are not sufficiently
available, the Secretary shall--
``(I) compute the per
beneficiary allowed charges (as
defined in subparagraph (C))
for each such drug or
biological;
``(II) adjust such per
beneficiary allowed charges for
the quarter, to the extent
provided under subparagraph
(D); and
``(III) array such adjusted
per beneficiary allowed charges
for all such drugs or
biologicals from high to low
and rank such drugs or
biologicals by percentile of
such arrayed per beneficiary
allowed charges.
``(ii) Frequency.--The Secretary
shall make the computations under
clause (i)(I) every 6 months (or, if
necessary, as determined by the
Secretary, every 9 or 12 months) and
such computations shall apply to
succeeding calendar quarters until a
new computation has been made.
``(iii) Applicable data period.--For
purposes of this paragraph, the term
`applicable data period' means the most
recent period for which the data
necessary for making the computations
under clause (i) are available, as
determined by the Secretary.
``(C) Per beneficiary allowed charges
defined.--In this paragraph, the term `per
beneficiary allowed charges' means, with
respect to a drug or biological for which the
amount of payment is determined under
subparagraph (A) or (B) of paragraph (1)--
``(i) the allowed charges for the
drug or biological for which payment is
so made for the applicable data period,
as estimated by the Secretary; divided
by
``(ii) the number of individuals for
whom any payment for the drug or
biological was made under paragraph (1)
for the applicable data period, as
estimated by the Secretary.
``(D) Adjustment to reflect changes in
average sales price.--In applying this
paragraph for a particular calendar quarter,
the Secretary shall adjust the per beneficiary
allowed charges for a drug or biological by
multiplying such per beneficiary allowed
charges under subparagraph (C) for the
applicable data period by the ratio of--
``(i) the average sales price for the
drug or biological for the most recent
calendar quarter used under subsection
(c)(5)(B); to
``(ii) the average sales price for
the drug or biological for the calendar
quarter (or the weighted average for
the quarters involved) included in the
applicable data period.''.
(b) Application of Judicial Review Provisions.--Section
1847A(g) of the Social Security Act is amended--
(1) by striking ``and'' at the end of paragraph (4);
(2) by striking the period at the end of paragraph
(5) and inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(6) the determination of per beneficiary allowed
charges of drugs or biologicals and ranking of such
charges under subsection (b)(9).''.
SEC. 104. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT FOR DRUGS AND
BIOLOGICALS.
(a) In General.--Section 1847A of the Social Security Act (42
U.S.C. 1395w-3a), as amended by section 103, is further
amended--
(1) in subsection (b)--
(A) in paragraph (1), in the matter preceding
subparagraph (A), by striking ``paragraph (7)''
and inserting ``paragraphs (7) and (10)''; and
(B) by adding at the end the following new
paragraph:
``(10) Maximum add-on payment amount.--
``(A) In general.--In determining the payment
amount under the provisions of subparagraph
(A), (B), or (C) of paragraph (1) of this
subsection, subsection (c)(4)(A)(ii), or
subsection (d)(3)(C) for a drug or biological
furnished on or after January 1, 2021, if the
applicable add-on payment (as defined in
subparagraph (B)) for each drug or biological
on a claim for a date of service exceeds the
maximum add-on payment amount specified under
subparagraph (C) for the drug or biological,
then the payment amount otherwise determined
for the drug or biological under those
provisions, as applicable, shall be reduced by
the amount of such excess.
``(B) Applicable add-on payment defined.--In
this paragraph, the term `applicable add-on
payment' means the following amounts,
determined without regard to the application of
subparagraph (A):
``(i) In the case of a multiple
source drug, an amount equal to the
difference between--
``(I) the amount that would
otherwise be applied under
paragraph (1)(A); and
``(II) the amount that would
be applied under such paragraph
if `100 percent' were
substituted for the applicable
percent (as defined in
paragraph (9)) for such drug.
``(ii) In the case of a single source
drug or biological, an amount equal to
the difference between--
``(I) the amount that would
otherwise be applied under
paragraph (1)(B); and
``(II) the amount that would
be applied under such paragraph
if `100 percent' were
substituted for the applicable
percent (as defined in
paragraph (9)) for such drug or
biological.
``(iii) In the case of a biosimilar
biological product, the amount
otherwise determined under paragraph
(8)(B).
``(iv) In the case of a drug or
biological during the initial period
described in subsection (c)(4)(A), an
amount equal to the difference
between--
``(I) the amount that would
otherwise be applied under
subsection (c)(4)(A)(ii); and
``(II) the amount that would
be applied under such
subsection if `100 percent'
were substituted, as
applicable, for--
``(aa) `103 percent'
in subclause (I) of
such subsection; or
``(bb) any percent in
excess of 100 percent
applied under subclause
(II) of such
subsection.
``(v) In the case of a drug or
biological to which subsection
(d)(3)(C) applies, an amount equal to
the difference between--
``(I) the amount that would
otherwise be applied under such
subsection; and
``(II) the amount that would
be applied under such
subsection if `100 percent'
were substituted, as
applicable, for--
``(aa) any percent in
excess of 100 percent
applied under clause
(i) of such subsection;
or
``(bb) `103 percent'
in clause (ii) of such
subsection.
``(C) Maximum add-on payment amount
specified.--For purposes of subparagraph (A),
the maximum add-on payment amount specified in
this subparagraph is--
``(i) with respect to a drug or
biological (other than autologous
cellular immunotherapy)--
``(I) for each of 2021
through 2028, $1,000; and
``(II) for a subsequent year,
the amount specified in this
subparagraph for the preceding
year increased by the
percentage increase in the
consumer price index for all
urban consumers (all items;
United States city average) for
the 12-month period ending with
June of the previous year; or
``(ii) with respect to a drug or
biological consisting of autologous
cellular immunotherapy--
``(I) for each of 2021
through 2028, $2,000; and
``(II) for a subsequent year,
the amount specified in this
subparagraph for the preceding
year increased by the
percentage increase in the
consumer price index for all
urban consumers (all items;
United States city average) for
the 12-month period ending with
June of the previous year.
Any amount determined under this subparagraph
that is not a multiple of $10 shall be rounded
to the nearest multiple of $10.''
(2) in subsection (c)(4)(A)(ii), by striking ``in the
case'' and inserting ``subject to subsection (b)(10),
in the case''.
(b) Conforming Amendments Relating to Separately Payable
Drugs.--
(1) Opps.--Section 1833(t)(14) of the Social Security
Act (42 U.S.C. 1395l(t)(14)) is amended--
(A) in subparagraph (A)(iii)(II), by
inserting ``, subject to subparagraph (I)''
after ``are not available''; and
(B) by adding at the end the following new
subparagraph:
``(I) Application of maximum add-on payment
for separately payable drugs and biologicals.--
In establishing the amount of payment under
subparagraph (A) for a specified covered
outpatient drug that is furnished as part of a
covered OPD service (or group of services) on
or after January 1, 2021, if such payment is
determined based on the average price for the
year established under section 1847A pursuant
to clause (iii)(II) of such subparagraph, the
provisions of subsection (b)(10) of section
1847A shall apply to the amount of payment so
established in the same manner as such
provisions apply to the amount of payment under
section 1847A.''.
(2) Asc.--Section 1833(i)(2)(D) of the Social
Security Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
(A) by moving clause (v) 6 ems to the left;
(B) by redesignating clause (vi) as clause
(vii); and
(C) by inserting after clause (v) the
following new clause:
``(vi) If there is a separate payment
under the system described in clause
(i) for a drug or biological furnished
on or after January 1, 2021, the
provisions of subsection (t)(14)(I)
shall apply to the establishment of the
amount of payment for the drug or
biological under such system in the
same manner in which such provisions
apply to the establishment of the
amount of payment under subsection
(t)(14)(A).''.
SEC. 105. TREATMENT OF DRUG ADMINISTRATION SERVICES FURNISHED BY
CERTAIN EXCEPTED OFF-CAMPUS OUTPATIENT DEPARTMENTS
OF A PROVIDER.
Section 1833(t)(16) of the Social Security Act (42 12 U.S.C.
1395l(t)(16)) is amended by adding at the end the following new
subparagraph:
``(G) Special payment rule for drug
administration services furnished by an
excepted department of a provider.--
``(i) In general.--In the case of a
covered OPD service that is a drug
administration service (as defined by
the Secretary) furnished by a
department of a provider described in
clause (ii) or (iv) of paragraph
(21)(B), the payment amount for such
service furnished on or after January
1, 2021, shall be the same payment
amount (as determined in paragraph
(21)(C)) that would apply if the drug
administration service was furnished by
an off-campus outpatient department of
a provider (as defined in paragraph
(21)(B)).
``(ii) Application without regard to
budget neutrality.--The reductions made
under this subparagraph--
``(I) shall not be considered
an adjustment under paragraph
(2)(E); and
``(II) shall not be
implemented in a budget neutral
manner.''.
Subtitle B--Drug Price Transparency
SEC. 111. REPORTING ON EXPLANATION FOR DRUG PRICE INCREASES.
(a) In General.--Title III of the Public Health Service Act
(42 U.S.C. 241 et seq.) is amended by adding at the end the
following:
``PART W--DRUG PRICE REPORTING; DRUG VALUE FUND
``SEC. 399OO. REPORTING ON EXPLANATION FOR DRUG PRICE INCREASES.
``(a) Definitions.--In this section:
``(1) Manufacturer.--The term `manufacturer' means
the person--
``(A) that holds the application for a drug
approved under section 505 of the Federal Food,
Drug, and Cosmetic Act or licensed under
section 351 of this Act; or
``(B) who is responsible for setting the
wholesale acquisition cost for the drug.
``(2) Qualifying drug.--The term `qualifying drug'
means any drug that is approved under subsection (c) or
(j) of section 505 of the Federal Food, Drug, and
Cosmetic Act or licensed under subsection (a) or (k) of
section 351 of this Act--
``(A) that has a wholesale acquisition cost
of $100 or more, adjusted for inflation
occurring after the date of enactment of this
section, for a month's supply or a typical
course of treatment that lasts less than a
month, and is--
``(i) subject to section 503(b)(1) of
the Federal Food, Drug, and Cosmetic
Act;
``(ii) administered or otherwise
dispensed to treat a disease or
condition affecting more than 200,000
persons in the United States; and
``(iii) not a vaccine; and
``(B) for which, during the previous calendar
year, at least 1 dollar of the total amount of
sales were for individuals enrolled under the
Medicare program under title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.) or
under a State Medicaid plan under title XIX of
such Act (42 U.S.C. 1396 et seq.) or under a
waiver of such plan.
``(3) 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)).
``(b) Report.--
``(1) Report required.--The manufacturer of a
qualifying drug shall submit a report to the
Secretary--
``(A) for each increase in the price of a
qualifying drug that results in an increase in
the wholesale acquisition cost of that drug
that is equal to--
``(i) 10 percent or more within a
single calendar year beginning on or
after January 1, 2019; or
``(ii) 25 percent or more within
three consecutive calendar years for
which the first such calendar year
begins on or after January 1, 2019; and
``(B) in the case that the qualifying drug is
first covered under title XVIII with respect to
an applicable year, if the estimated cost or
spending under such title per individual or per
user of such drug (as estimated by the
Secretary) for such applicable year (or per
course of treatment in such applicable year, as
defined by the Secretary) is at least $26,000.
``(2) Report deadline.--Each report described in
paragraph (1) shall be submitted to the Secretary--
``(A) in the case of a report with respect to
an increase in the price of a qualifying drug
that occurs during the period beginning on
January 1, 2019, and ending on the day that is
60 days after the date of enactment of this
section, not later than 90 days after such date
of enactment;
``(B) in the case of a report with respect to
an increase in the price of a qualifying drug
that occurs after the period described in
subparagraph (A), not later than 30 days prior
to the planned effective date of such price
increase for such qualifying drug; and
``(C) in the case of a report with respect to
a qualifying drug that meets the criteria
described in paragraph (1)(B), not later than
30 days after such drug meets such criteria.
``(c) Contents.--A report under subsection (b), consistent
with the standard for disclosures described in section 213.3(d)
of title 12, Code of Federal Regulations (as in effect on the
date of enactment of this section), shall, at a minimum,
include--
``(1) with respect to the qualifying drug--
``(A) the percentage by which the
manufacturer will raise the wholesale
acquisition cost of the drug within the
calendar year or three consecutive calendar
years as described in subsection (b)(1)(A) or
(b)(1)(B), if applicable, and the effective
date of such price increase;
``(B) an explanation for, and description of,
each price increase for such drug that will
occur during the calendar year period described
in subsection (b)(1)(A) or the three
consecutive calendar year period described in
subsection (b)(1)(B), as applicable;
``(C) if known and different from the
manufacturer of the qualifying drug, the
identity of--
``(i) the sponsor or sponsors of any
investigational new drug applications
under section 505(i) of the Federal
Food, Drug, and Cosmetic Act for
clinical investigations with respect to
such drug, for which the full reports
are submitted as part of the
application--
``(I) for approval of the
drug under section 505 of such
Act; or
``(II) for licensure of the
drug under section 351 of this
Act; and
``(ii) the sponsor of an application
for the drug approved under such
section 505 of the Federal Food, Drug,
and Cosmetic Act or licensed under
section 351 of this Act;
``(D) a description of the history of the
manufacturer's price increases for the drug
since the approval of the application for the
drug under section 505 of the Federal Food,
Drug, and Cosmetic Act or the issuance of the
license for the drug under section 351 of this
Act, or since the manufacturer acquired such
approved application or license, if applicable;
``(E) the current wholesale acquisition cost
of the drug;
``(F) the total expenditures of the
manufacturer on--
``(i) materials and manufacturing for
such drug; and
``(ii) acquiring patents and
licensing for such drug;
``(G) the percentage of total expenditures of
the manufacturer on research and development
for such drug that was derived from Federal
funds;
``(H) the total expenditures of the
manufacturer on research and development for
such drug that is necessary to demonstrate that
it meets applicable statutory standards for
approval under section 505 of the Federal Food,
Drug, and Cosmetic Act or licensure under
section 351 of this Act, as applicable;
``(I) the total expenditures of the
manufacturer on pursuing new or expanded
indications or dosage changes for such drug
under section 505 of the Federal Food, Drug,
and Cosmetic Act or section 351 of this Act;
``(J) the total expenditures of the
manufacturer on carrying out postmarket
requirements related to such drug, including
under section 505(o)(3) of the Federal Food,
Drug, and Cosmetic Act;
``(K) the total revenue and the net profit
generated from the qualifying drug for each
calendar year since the approval of the
application for the drug under section 505 of
the Federal Food, Drug, and Cosmetic Act or the
issuance of the license for the drug under
section 351, or since the manufacturer acquired
such approved application or license; and
``(L) the total costs associated with
marketing and advertising for the qualifying
drug;
``(2) with respect to the manufacturer--
``(A) the total revenue and the net profit of
the manufacturer for each of the 1-year period
described in subsection (b)(1)(A) or the 3-year
period described in subsection (b)(1)(B), as
applicable;
``(B) all stock-based performance metrics
used by the manufacturer to determine executive
compensation for each of the 1-year period
described in subsection (b)(1)(A) or the 3-year
period described in subsection (b)(1)(B), as
applicable; and
``(C) any additional information the
manufacturer chooses to provide related to drug
pricing decisions, such as total expenditures
on--
``(i) drug research and development;
or
``(ii) clinical trials, including on
drugs that failed to receive approval
by the Food and Drug Administration;
and
``(3) such other related information as the Secretary
considers appropriate and as specified by the Secretary
through notice-and-comment rulemaking.
``(d) Information Provided.--The manufacturer of a qualifying
drug that is required to submit a report under subsection (b),
shall ensure that such report and any explanation for, and
description of, each price increase described in subsection
(c)(1)(B) shall be truthful, not misleading, and accurate.
``(e) Civil Monetary Penalty.--Any manufacturer of a
qualifying drug that fails to submit a report for the drug as
required by this section, following notification by the
Secretary to the manufacturer that the manufacturer is not in
compliance with this section, shall be subject to a civil
monetary penalty of $75,000 for each day on which the violation
continues.
``(f) False Information.--Any manufacturer that submits a
report for a drug as required by this section that knowingly
provides false information in such report is subject to a civil
monetary penalty in an amount not to exceed $75,000 for each
item of false information.
``(g) Public Posting.--
``(1) In general.--Subject to paragraph (3), the
Secretary shall post each report submitted under
subsection (b) on the public website of the Department
of Health and Human Services the day the price increase
of a qualifying drug is scheduled to go into effect.
``(2) Format.--In developing the format in which
reports will be publicly posted under paragraph (1),
the Secretary shall consult with stakeholders,
including beneficiary groups, and shall seek feedback
from consumer advocates and readability experts on the
format and presentation of the content of such reports
to ensure that such reports are--
``(A) user-friendly to the public; and
``(B) written in plain language that
consumers can readily understand.
``(3) Protected information.--Nothing in this section
shall be construed to authorize the public disclosure
of information submitted by a manufacturer that is
prohibited from disclosure by applicable laws
concerning the protection of trade secrets, commercial
information, and other information covered under such
laws.
``SEC. 399OO-1. ANNUAL REPORT TO CONGRESS.
``(a) In General.--Subject to subsection (b), the Secretary
shall submit to Congress, and post on the public website of the
Department of Health and Human Services in a way that is user-
friendly to the public and written in plain language that
consumers can readily understand, an annual report--
``(1) summarizing the information reported pursuant
to section 399OO;
``(2) including copies of the reports and supporting
detailed economic analyses submitted pursuant to such
section;
``(3) detailing the costs and expenditures incurred
by the Department of Health and Human Services in
carrying out section 399OO; and
``(4) explaining how the Department of Health and
Human Services is improving consumer and provider
information about drug value and drug price
transparency.
``(b) Protected Information.--Nothing in this section shall
be construed to authorize the public disclosure of information
submitted by a manufacturer that is prohibited from disclosure
by applicable laws concerning the protection of trade secrets,
commercial information, and other information covered under
such laws.''.
(b) Effective Date.--The amendment made by subsection (a)
takes effect on the date of enactment of this Act.
SEC. 112. PUBLIC DISCLOSURE OF DRUG DISCOUNTS.
Section 1150A of the Social Security Act (42 U.S.C. 1320b-23)
is amended--
(1) in subsection (c), in the matter preceding
paragraph (1), by inserting ``(other than as permitted
under subsection (e))'' after ``disclosed by the
Secretary''; and
(2) by adding at the end the following new
subsection:
``(e) Public Availability of Certain Information.--
``(1) In general.--In order to allow the comparison
of PBMs' ability to negotiate rebates, discounts,
direct and indirect remuneration fees, administrative
fees, and price concessions and the amount of such
rebates, discounts, direct and indirect remuneration
fees, administrative fees, and price concessions that
are passed through to plan sponsors, beginning January
1, 2020, the Secretary shall make available on the
Internet website of the Department of Health and Human
Services the information with respect to the second
preceding calendar year provided to the Secretary on
generic dispensing rates (as described in paragraph (1)
of subsection (b)) and information provided to the
Secretary under paragraphs (2) and (3) of such
subsection that, as determined by the Secretary, is
with respect to each PBM.
``(2) Availability of data.--In carrying out
paragraph (1), the Secretary shall ensure the
following:
``(A) Confidentiality.--The information
described in such paragraph is displayed in a
manner that prevents the disclosure of
information, with respect to an individual drug
or an individual plan, on rebates, discounts,
direct and indirect remuneration fees,
administrative fees, and price concessions.
``(B) Class of drug.--The information
described in such paragraph is made available
by class of drug, using an existing
classification system, but only if the class
contains such number of drugs, as specified by
the Secretary (but not fewer than three drugs),
to ensure confidentiality of proprietary
information or other information that is
prevented to be disclosed under subparagraph
(A).''.
SEC. 113. STUDY OF PHARMACEUTICAL SUPPLY CHAIN INTERMEDIARIES AND
MERGER ACTIVITY.
(a) Initial Report.--Not later than 1 year after the date of
enactment of this Act, the Commission shall submit to the
appropriate committees of Congress a report that--
(1) addresses at minimum--
(A) whether pharmacy benefit managers--
(i) charge payers a higher price than
the reimbursement rate at which the
pharmacy benefit managers reimburse
competing pharmacies;
(ii) steer patients for
anticompetitive purposes to any
pharmacies, including retail, mail-
order, or any other type of pharmacy,
in which the pharmacy benefit manager
has an ownership interest;
(iii) audit or review proprietary
data, including acquisition costs,
patient information, or dispensing
information, of competing pharmacies
that can be used for anticompetitive
purposes; or
(iv) use formulary designs to
increase the market share of higher
cost prescription drugs and depress the
market share of lower cost prescription
drugs (each net of rebates and
discounts);
(B) how companies and payers assess the
benefits, costs, and risks of contracting with
intermediaries, including pharmacy services
administrative organizations, and whether more
information about the roles of intermediaries
should be available to consumers and payers;
and
(C) whether there are any specific legal or
regulatory obstacles the Commission currently
faces in ensuring a competitive and transparent
marketplace in the pharmaceutical supply chain,
including the pharmacy benefit manager
marketplace and pharmacy services
administrative organizations; and
(2) provides--
(A) observations or conclusions drawn from
the November 2017 roundtable entitled
``Understanding Competition in Prescription
Drug Markets: Entry and Supply Chain
Dynamics'', and any similar efforts;
(B) specific actions the Commission intends
to take as a result of the November 2017
roundtable, and any similar efforts, including
a detailed description of relevant forthcoming
actions, additional research or roundtable
discussions, consumer education efforts, or
enforcement actions; and
(C) policy or legislative recommendations
to--
(i) improve transparency and
competition in the pharmaceutical
supply chain;
(ii) prevent and deter
anticompetitive behavior in the
pharmaceutical supply chain; and
(iii) best ensure that consumers
benefit from any cost savings or
efficiencies that may result from
mergers and consolidations.
(b) Interim Report.--Not later than 180 days after the date
of enactment of this Act, the Commission shall submit to the
appropriate committees of Congress an interim report on the
progress of the report required by subsection (a), along with
preliminary findings and conclusions based on information
collected to that date.
(c) Definitions.--In this section:
(1) Appropriate committees of congress.--The term
``appropriate committees of Congress'' means--
(A) the Committee on Energy and Commerce of
the House of Representatives;
(B) the Committee on the Judiciary of the
Senate; and
(C) the Committee on the Judiciary of the
House of Representatives.
(2) Commission.--The term ``Commission'' means the
Federal Trade Commission.
SEC. 114. REQUIRING CERTAIN MANUFACTURERS TO REPORT DRUG PRICING
INFORMATION WITH RESPECT TO DRUGS UNDER THE
MEDICARE PROGRAM.
(a) In General.--Section 1847A of the Social Security Act (42
U.S.C. 1395w-3a) is amended--
(1) in subsection (b)--
(A) in paragraph (2)(A), by inserting ``or
subsection (f)(2), as applicable'' before the
period at the end;
(B) in paragraph (3), in the matter preceding
subparagraph (A), by inserting ``or subsection
(f)(2), as applicable,'' before ``determined
by''; and
(C) in paragraph (6)(A), in the matter
preceding clause (i), by inserting ``or
subsection (f)(2), as applicable,'' before
``determined by''; and
(2) in subsection (f)--
(A) by striking ``For requirements'' and
inserting the following:
``(1) In general.--For requirements''; and
(B) by adding at the end the following new
paragraph:
``(2) Manufacturers without a rebate agreement under
title xix.--
``(A) In general.--If the manufacturer of a
drug or biological described in subparagraph
(C), (E), or (G) of section 1842(o)(1) or in
section 1881(b)(14)(B) that is payable under
this part has not entered into and does not
have in effect a rebate agreement described in
subsection (b) of section 1927, for calendar
quarters beginning on or after January 1, 2020,
such manufacturer shall report to the Secretary
the information described in subsection
(b)(3)(A)(iii) of such section 1927 with
respect to such drug or biological in a time
and manner specified by the Secretary. For
purposes of applying this paragraph, a drug or
biological described in the previous sentence
includes items, services, supplies, and
products that are payable under this part as a
drug or biological.
``(B) Audit.--Information reported under
subparagraph (A) is subject to audit by the
Inspector General of the Department of Health
and Human Services.
``(C) Verification.--The Secretary may survey
wholesalers and manufacturers that directly
distribute drugs described in subparagraph (A),
when necessary, to verify manufacturer prices
and manufacturer's average sales prices
(including wholesale acquisition cost) if
required to make payment reported under
subparagraph (A). The Secretary may impose a
civil monetary penalty in an amount not to
exceed $100,000 on a wholesaler, manufacturer,
or direct seller, if the wholesaler,
manufacturer, or direct seller of such a drug
refuses a request for information about charges
or prices by the Secretary in connection with a
survey under this subparagraph or knowingly
provides false information. The provisions of
section 1128A (other than subsections (a) (with
respect to amounts of penalties or additional
assessments) and (b)) shall apply to a civil
money penalty under this subparagraph in the
same manner as such provisions apply to a
penalty or proceeding under section 1128A(a).
``(D) Confidentiality.--Notwithstanding any
other provision of law, information disclosed
by manufacturers or wholesalers under this
paragraph (other than the wholesale acquisition
cost for purposes of carrying out this section)
is confidential and shall not be disclosed by
the Secretary in a form which discloses the
identity of a specific manufacturer or
wholesaler or prices charged for drugs by such
manufacturer or wholesaler, except--
``(i) as the Secretary determines to
be necessary to carry out this section
(including the determination and
implementation of the payment amount),
or to carry out section 1847B;
``(ii) to permit the Comptroller
General of the United States to review
the information provided; and
``(iii) to permit the Director of the
Congressional Budget Office to review
the information provided.''.
(b) Enforcement.--Section 1847A of such Act (42 U.S.C. 1395w-
3a) is further amended--
(1) in subsection (d)(4)--
(A) in subparagraph (A), by striking ``In
general'' and inserting ``Misrepresentation'';
(B) in subparagraph (B), by striking
``subparagraph (B)'' and inserting
``subparagraph (A), (B), or (C)'';
(C) by redesignating subparagraph (B) as
subparagraph (D); and
(D) by inserting after subparagraph (A) the
following new subparagraphs:
``(B) Failure to provide timely
information.--If the Secretary determines that
a manufacturer described in subsection (f)(2)
has failed to report on information described
in section 1927(b)(3)(A)(iii) with respect to a
drug or biological in accordance with such
subsection, the Secretary shall apply a civil
money penalty in an amount of $10,000 for each
day the manufacturer has failed to report such
information and such amount shall be paid to
the Treasury.
``(C) False information.--Any manufacturer
required to submit information under subsection
(f)(2) that knowingly provides false
information is subject to a civil money penalty
in an amount not to exceed $100,000 for each
item of false information. Such civil money
penalties are in addition to other penalties as
may be prescribed by law.''; and
(2) in subsection (c)(6)(A), by striking the period
at the end and inserting ``, except that, for purposes
of subsection (f)(2), the Secretary may, if the
Secretary determines appropriate, exclude repackagers
of a drug or biological from such term.''.
(c) Manufacturers With a Rebate Agreement.--
(1) In general.--Section 1927(b)(3)(A) of the Social
Security Act (42 U.S.C. 1396r-8(b)(3)(A)) is amended by
adding at the end the following new sentence: ``For
purposes of applying clause (iii), a drug or biological
described in the flush matter following such clause
includes items, services, supplies, and products that
are payable under this part as a drug or biological.''.
(2) Technical amendment.--Section 1927(b)(3)(A)(iii)
of the Social Security Act (42 U.S.C. 1396r-
8(b)(3)(A)(iii)) is amended by striking ``section
1881(b)(13)(A)(ii)'' and inserting ``section
1881(b)(14)(B)''.
(d) Report.--Not later than January 1, 2021, the Inspector
General of the Department of Health and Human Services shall
assess and submit to Congress a report on the accuracy of
average sales price information submitted by manufacturers
under section 1847A of the Social Security Act (42 U.S.C.
1395w-3a). Such report shall include any recommendations on how
to improve the accuracy of such information.
SEC. 115. MAKING PRESCRIPTION DRUG MARKETING SAMPLE INFORMATION
REPORTED BY MANUFACTURERS AVAILABLE TO CERTAIN
INDIVIDUALS AND ENTITIES.
(a) In General.--Section 1128H of the Social Security Act (42
U.S.C. 1320a-7i) is amended--
(1) by redesignating subsection (b) as subsection
(e); and
(2) by inserting after subsection (a) the following
new subsections:
``(b) Data Sharing Agreements.--
``(1) In general.--The Secretary shall enter into
agreements with the specified data sharing individuals
and entities described in paragraph (2) under which--
``(A) upon request of such an individual or
entity, as applicable, the Secretary makes
available to such individual or entity the
information submitted under subsection (a) by
manufacturers and authorized distributors of
record; and
``(B) such individual or entity agrees to not
disclose publicly or to another individual or
entity any information that identifies a
particular practitioner or health care
facility.
``(2) Specified data sharing individuals and
entities.--For purposes of paragraph (1), the specified
data sharing individuals and entities described in this
paragraph are the following:
``(A) Oversight agencies.--Health oversight
agencies (as defined in section 164.501 of
title 45, Code of Federal Regulations),
including the Centers for Medicare & Medicaid
Services, the Office of the Inspector General
of the Department of Health and Human Services,
the Government Accountability Office, the
Congressional Budget Office, the Medicare
Payment Advisory Commission, and the Medicaid
and CHIP Payment and Access Commission.
``(B) Researchers.--Individuals who conduct
scientific research (as defined in section
164.501 of title 45, Code of Federal
Regulations) in relevant areas as determined by
the Secretary.
``(C) Payers.--Private and public health care
payers, including group health plans, health
insurance coverage offered by health insurance
issuers, Federal health programs, and State
health programs.
``(3) Exemption from freedom of information act.--
Except as described in paragraph (1), the Secretary may
not be compelled to disclose the information submitted
under subsection (a) to any individual or entity. For
purposes of section 552 of title 5, United States Code
(commonly referred to as the Freedom of Information
Act), this paragraph shall be considered a statute
described in subsection (b)(3)(B) of such section.
``(c) Penalties.--
``(1) Data sharing agreements.--Subject to paragraph
(3), any specified data sharing individual or entity
described in subsection (b)(2) that violates the terms
of a data sharing agreement the individual or entity
has with the Secretary under subsection (b)(1) shall be
subject to a civil money penalty of not less than
$1,000, but not more than $10,000, for each such
violation. Such penalty shall be imposed and collected
in the same manner as civil money penalties under
subsection (a) of section 1128A are imposed and
collected under that section.
``(2) Failure to report.--Subject to paragraph (3),
any manufacturer or authorized distributor of record of
an applicable drug under subsection (a) that fails to
submit information required under such subsection in a
timely manner in accordance with rules or regulations
promulgated to carry out such subsection shall be
subject to a civil money penalty of not less than
$1,000, but not more than $10,000, for each such
failure. Such penalty shall be imposed and collected in
the same manner as civil money penalties under
subsection (a) of section 1128A are imposed and
collected under that section.
``(3) Limitation.--The total amount of civil money
penalties imposed under paragraph (1) or (2) with
respect to a year and an individual or entity described
in paragraph (1) or a manufacturer or distributor
described in paragraph (2), respectively, shall not
exceed $150,000.
``(d) Drug Sample Distribution Information.--
``(1) In general.--Not later than January 1 of each
year (beginning with 2021), the Secretary shall
maintain a list containing information related to the
distribution of samples of applicable drugs. Such list
shall provide the following information with respect to
the preceding year:
``(A) The name of the manufacturer or
authorized distributor of record of an
applicable drug for which samples were
requested or distributed under this section.
``(B) The quantity and class of drug samples
requested.
``(C) The quantity and class of drug samples
distributed.
``(2) Public availability.--The Secretary shall make
the information in such list available to the public on
the Internet website of the Food and Drug
Administration.''.
(b) FDA Maintenance of Information.--The Food and Drug
Administration shall maintain information available to affected
reporting companies to ensure their ability to fully comply
with the requirements of section 1128H of the Social Security
Act.
(c) Prohibition on Distribution of Samples of Opioids.--
Section 503(d) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 353(d)) is amended--
(1) by moving the margin of paragraph (4) 2 ems to
the left; and
(2) by adding at the end the following:
``(5) No person may distribute a drug sample of a drug that
is--
``(A) an applicable drug (as defined in section
1128H(e) of the Social Security Act);
``(B) a controlled substance (as defined in section
102 of the Controlled Substances Act) for which the
findings required under section 202(b)(2) of such Act
have been made; and
``(C) approved under section 505 for use in the
management or treatment of pain (other than for the
management or treatment of a substance use
disorder).''.
(d) MedPAC Report.--Not later than 3 years after the date of
the enactment of this Act, the Medicare Payment Advisory
Commission shall conduct a study on the impact of drug samples
on provider prescribing practices and health care costs and
may, as the Commission deems appropriate, make recommendations
on such study.
SEC. 116. REQUIRING PRESCRIPTION DRUG PLAN SPONSORS TO INCLUDE REAL-
TIME BENEFIT INFORMATION AS PART OF SUCH SPONSOR'S
ELECTRONIC PRESCRIPTION PROGRAM UNDER THE MEDICARE
PROGRAM.
Section 1860D-4(e)(2) of the Social Security Act (42 U.S.C.
1395w-104(e)(2)) is amended--
(1) in subparagraph (D), by striking ``To the
extent'' and inserting ``Except as provided in
subparagraph (F), to the extent''; and
(2) by adding at the end the following new
subparagraph:
``(F) Real-time benefit information.--
``(i) In general.--Not later than
January 1, 2021, the program shall
implement real-time benefit tools that
are capable of integrating with a
prescribing health care professional's
electronic prescribing or electronic
health record system for the
transmission of formulary and benefit
information in real time to prescribing
health care professionals. With respect
to a covered part D drug, such tools
shall be capable of transmitting such
information specific to an individual
enrolled in a prescription drug plan.
Such information shall include the
following:
``(I) A list of any
clinically-appropriate
alternatives to such drug
included in the formulary of
such plan.
``(II) Cost-sharing
information for such drug and
such alternatives, including a
description of any variance in
cost-sharing based on the
pharmacy dispensing such drug
or such alternatives.
``(III) Information relating
to whether such drug is
included in the formulary of
such plan and any prior
authorization or other
utilization management
requirements applicable to such
drug and such alternatives so
included.
``(ii) Electronic transmission.--The
provisions of subclauses (I) and (II)
of clause (ii) of subparagraph (E)
shall apply to an electronic
transmission described in clause (i) in
the same manner as such provisions
apply with respect to an electronic
transmission described in clause (i) of
such subparagraph.
``(iii) Special rule for 2021.--The
program shall be deemed to be in
compliance with clause (i) for 2021 if
the program complies with the
provisions of section 423.160(b)(7) of
title 42, Code of Federal Regulations
(or a successor regulation), for such
year.
``(iv) Rule of construction.--Nothing
in this subparagraph shall be construed
as to allow a real-time benefits tool
to steer an individual, without the
consent of the individual, to a
particular pharmacy or pharmacy setting
over their preferred pharmacy setting
nor prohibit the designation of a
preferred pharmacy under such tool.''.
SEC. 117. SENSE OF CONGRESS REGARDING THE NEED TO EXPAND COMMERCIALLY
AVAILABLE DRUG PRICING COMPARISON PLATFORMS.
It is the sense of Congress that--
(1) commercially available drug pricing comparison
platforms can, at no cost, help patients find the
lowest price for their medications at their local
pharmacy;
(2) such platforms should be integrated, to the
maximum extent possible, in the health care delivery
ecosystem; and
(3) pharmacy benefit managers should work to disclose
generic and brand name drug prices to such platforms to
ensure that--
(A) patients can benefit from the lowest
possible price available to them; and
(B) overall drug prices can be reduced as
more educated purchasing decisions are made
based on price transparency.
SEC. 118. TECHNICAL CORRECTIONS.
(a) In General.--Section 3022(b) of the Public Health Service
Act (42 U.S.C. 300jj-52(b)) is amended by adding at the end the
following new paragraph:
``(4) Application of authorities under inspector
general act of 1978.--In carrying out this subsection,
the Inspector General shall have the same authorities
as provided under section 6 of the Inspector General
Act of 1978 (5 U.S.C. App.).''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if included in the enactment of the 21st
Century Cures Act (Public Law 114-255).
Subtitle C--Medicare Part D Benefit Redesign
SEC. 121. MEDICARE PART D BENEFIT REDESIGN.
(a) Benefit Structure Redesign.--Section 1860D-2(b) of the
Social Security Act (42 U.S.C. 1395w- 102(b)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A)--
(i) in the matter preceding clause
(i), by inserting ``for a year
preceding 2022 and for costs above the
annual deductible specified in
paragraph (1) and up to the annual out-
of-pocket threshold specified in
paragraph (4)(B) for 2022 and each
subsequent year'' after ``paragraph
(3)''; and
(ii) in clause (i), by inserting
after ``25 percent'' the following:
``(or, for 2022 and each subsequent
year, 15 percent)'';
(B) in subparagraph (C)--
(i) in clause (i), in the matter
preceding subclause (I), by inserting
``for a year preceding 2022,'' after
``paragraph (4),''; and
(ii) in clause (ii)(III), by striking
``and each subsequent year'' and
inserting ``and 2021''; and
(C) in subparagraph (D)--
(i) in clause (i)--
(I) in the matter preceding
subclause (I), by inserting
``for a year preceding 2022,''
after ``paragraph (4),''; and
(II) in subclause (I)(bb), by
striking ``a year after 2018''
and inserting ``each of years
2018 through 2021''; and
(ii) in clause (ii)(V), by striking
``2019 and each subsequent year'' and
inserting ``each of years 2019 through
2021'';
(2) in paragraph (3)(A)--
(A) in the matter preceding clause (i), by
inserting ``for a year preceding 2022,'' after
``and (4),''; and
(B) in clause (ii), by striking ``for a
subsequent year'' and inserting ``for each of
years 2007 through 2021'';
(3) in paragraph (4)--
(A) in subparagraph (A)--
(i) in clause (i)--
(I) by redesignating
subclauses (I) and (II) as
items (aa) and (bb),
respectively, and indenting
appropriately;
(II) in the matter preceding
item (aa), as redesignated by
subclause (I), by striking ``is
equal to the greater of--'' and
inserting ``is equal to--
``(I) for a year preceding
2022, the greater of--''.
(III) by striking the period
at the end of item (bb), as
redesignated by subclause (I),
and inserting ``; and''; and
(IV) by adding at the end the
following:
``(II) for 2022 and each
succeeding year, $0.''; and
(ii) in clause (ii)--
(I) by striking ``clause
(i)(I)'' and inserting ``clause
(i)(I)(aa)''; and
(II) by adding at the end the
following new sentence: ``The
Secretary shall continue to
calculate the dollar amounts
specified in clause (i)(I)(aa),
including with the adjustment
under this clause, after 2021
for purposes of section 1860D-
14(a)(1)(D)(iii).'';
(B) in subparagraph (B)--
(i) in clause (i)--
(I) in subclause (V), by
striking ``or'' at the end;
(II) in subclause (VI)--
(aa) by striking
``for a subsequent
year'' and inserting
``for 2021''; and
(bb) by striking the
period at the end and
inserting a semicolon;
and
(III) by adding at the end
the following new subclauses:
``(VII) for 2022, is equal to
$3,100; or
``(VIII) for a subsequent
year, is equal to the amount
specified in this subparagraph
for the previous year,
increased by the annual
percentage increase described
in paragraph (6) for the year
involved.''; and
(ii) in clause (ii), by striking
``clause (i)(II)'' and inserting
``clause (i)'';
(C) in subparagraph (C)(i), by striking ``and
for amounts'' and inserting ``and for a year
preceding 2022 for amounts''; and
(D) in subparagraph (E), by striking ``In
applying'' and inserting ``For each of 2011
through 2021, in applying''.
(b) Decreasing Reinsurance Payment Amount.--Section 1860D-
15(b)(1) of the Social Security Act (42 U.S.C. 1395w-115(b)(1))
is amended--
(1) by striking ``equal to 80 percent'' and inserting
``equal to-
``(A) for a year preceding 2022, 80
percent'';
(2) in subparagraph (A), as added by paragraph (1),
by striking the period at the end and inserting ``;
and''; and
(3) by adding at the end the following new
subparagraph:
``(B) for 2022 and each subsequent year, the
sum of--
``(i) an amount equal to 20 percent
of the allowable reinsurance costs (as
specified in paragraph (2))
attributable to that portion of gross
covered prescription drug costs as
specified in paragraph (3) incurred in
the coverage year after such individual
has incurred costs that exceed the
annual out-of-pocket threshold
specified in section 1860D-2(b)(4)(B)
with respect to applicable drugs (as
defined in section 1860D-14B(g)(2));
and
``(ii) an amount equal to 30 percent
of the allowable reinsurance costs (as
specified in paragraph (2))
attributable to that portion of gross
covered prescription drug costs as
specified in paragraph (3) incurred in
the coverage year after such individual
has incurred costs that exceed the
annual out-of-pocket threshold
specified in section 1860D-2(b)(4)(B)
with respect to covered part D drugs
that are not applicable drugs (as so
defined).''.
(c) Manufacturer Discount Program.--
(1) In general.--Part D of title XVIII of the Social
Security Act is amended by inserting after section
1860D-14A (42 U.S.C. 1495w-114) the following new
section:
``SEC. 1860D-14B. MANUFACTURER DISCOUNT PROGRAM.
``(a) Establishment.--The Secretary shall establish a
manufacturer discount program (in this section referred to as
the `program'). Under the program, the Secretary shall enter
into agreements described in subsection (b) with manufacturers
and provide for the performance of the duties described in
subsection (c). The Secretary shall establish a model agreement
for use under the program by not later than January 1, 2021, in
consultation with manufacturers, and allow for comment on such
model agreement.
``(b) Terms of Agreement.--
``(1) In general.--
``(A) Agreement.--An agreement under this
section shall require the manufacturer to
provide applicable beneficiaries access to
discounted prices for applicable drugs of the
manufacturer that are dispensed on or after
January 1, 2022.
``(B) Provision of discounted prices at the
point-of-sale.--The discounted prices described
in subparagraph (A) shall be provided to the
applicable beneficiary at the pharmacy or by
the mail order service at the point-of-sale of
an applicable drug.
``(2) Provision of appropriate data.--Each
manufacturer with an agreement in effect under this
section shall collect and have available appropriate
data, as determined by the Secretary, to ensure that it
can demonstrate to the Secretary compliance with the
requirements under the program.
``(3) Compliance with requirements for administration
of program.--Each manufacturer with an agreement in
effect under this section shall comply with
requirements imposed by the Secretary or a third party
with a contract under subsection (d)(3), as applicable,
for purposes of administering the program, including
any determination under subparagraph (A) of subsection
(c)(1) or procedures established under such subsection
(c)(1).
``(4) Length of agreement.--
``(A) In general.--An agreement under this
section shall be effective for an initial
period of not less than 12 months and shall be
automatically renewed for a period of not less
than 1 year unless terminated under
subparagraph (B).
``(B) Termination.--
``(i) By the secretary.--The
Secretary may provide for termination
of an agreement under this section for
a knowing and willful violation of the
requirements of the agreement or other
good cause shown. Such termination
shall not be effective earlier than 30
days after the date of notice to the
manufacturer of such termination. The
Secretary shall provide, upon request,
a manufacturer with a hearing
concerning such a termination, and such
hearing shall take place prior to the
effective date of the termination with
sufficient time for such effective date
to be repealed if the Secretary
determines appropriate.
``(ii) By a manufacturer.--A
manufacturer may terminate an agreement
under this section for any reason. Any
such termination shall be effective,
with respect to a plan year--
``(I) if the termination
occurs before January 30 of a
plan year, as of the day after
the end of the plan year; and
``(II) if the termination
occurs on or after January 30
of a plan year, as of the day
after the end of the succeeding
plan year.
``(iii) Effectiveness of
termination.--Any termination under
this subparagraph shall not affect
discounts for applicable drugs of the
manufacturer that are due under the
agreement before the effective date of
its termination.
``(iv) Notice to third party.--The
Secretary shall provide notice of such
termination to a third party with a
contract under subsection (d)(3) within
not less than 30 days before the
effective date of such termination.
``(5) Effective date of agreement.--An agreement
under this section shall take effect on a date
determined appropriate by the Secretary, which may be
at the start of a calendar quarter.
``(c) Duties Described.--The duties described in this
subsection are the following:
``(1) Administration of program.--Administering the
program, including--
``(A) the determination of the amount of the
discounted price of an applicable drug of a
manufacturer;
``(B) the establishment of procedures under
which discounted prices are provided to
applicable beneficiaries at pharmacies or by
mail order service at the point-of-sale of an
applicable drug;
``(C) the establishment of procedures to
ensure that, not later than the applicable
number of calendar days after the dispensing of
an applicable drug by a pharmacy or mail order
service, the pharmacy or mail order service is
reimbursed for an amount equal to the
difference between--
``(i) the negotiated price of the
applicable drug; and
``(ii) the discounted price of the
applicable drug;
``(D) the establishment of procedures to
ensure that the discounted price for an
applicable drug under this section is applied
before any coverage or financial assistance
under other health benefit plans or programs
that provide coverage or financial assistance
for the purchase or provision of prescription
drug coverage on behalf of applicable
beneficiaries as the Secretary may specify; and
``(E) providing a reasonable dispute
resolution mechanism to resolve disagreements
between manufacturers, applicable
beneficiaries, and the third party with a
contract under subsection (d)(3).
``(2) Monitoring compliance.--
``(A) In general.--The Secretary shall
monitor compliance by a manufacturer with the
terms of an agreement under this section.
``(B) Notification.--If a third party with a
contract under subsection (d)(3) determines
that the manufacturer is not in compliance with
such agreement, the third party shall notify
the Secretary of such noncompliance for
appropriate enforcement under subsection (e).
``(3) Collection of data from prescription drug plans
and ma-pd plans.--The Secretary may collect appropriate
data from prescription drug plans and MA-PD plans in a
timeframe that allows for discounted prices to be
provided for applicable drugs under this section.
``(d) Administration.--
``(1) In general.--Subject to paragraph (2), the
Secretary shall provide for the implementation of this
section, including the performance of the duties
described in subsection (c).
``(2) Limitation.--In providing for the
implementation of this section, the Secretary shall not
receive or distribute any funds of a manufacturer under
the program.
``(3) Contract with third parties.--The Secretary
shall enter into a contract with 1 or more third
parties to administer the requirements established by
the Secretary in order to carry out this section. At a
minimum, the contract with a third party under the
preceding sentence shall require that the third party--
``(A) receive and transmit information
between the Secretary, manufacturers, and other
individuals or entities the Secretary
determines appropriate;
``(B) receive, distribute, or facilitate the
distribution of funds of manufacturers to
appropriate individuals or entities in order to
meet the obligations of manufacturers under
agreements under this section;
``(C) provide adequate and timely information
to manufacturers, consistent with the agreement
with the manufacturer under this section, as
necessary for the manufacturer to fulfill its
obligations under this section; and
``(D) permit manufacturers to conduct
periodic audits, directly or through contracts,
of the data and information used by the third
party to determine discounts for applicable
drugs of the manufacturer under the program.
``(4) Performance requirements.--The Secretary shall
establish performance requirements for a third party
with a contract under paragraph (3) and safeguards to
protect the independence and integrity of the
activities carried out by the third party under the
program under this section.
``(5) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to the program under this
section.
``(e) Enforcement.--
``(1) Audits.--Each manufacturer with an agreement in
effect under this section shall be subject to periodic
audit by the Secretary.
``(2) Civil money penalty.--
``(A) In general.--The Secretary shall impose
a civil money penalty on a manufacturer that
fails to provide applicable beneficiaries
discounts for applicable drugs of the
manufacturer in accordance with such agreement
for each such failure in an amount the
Secretary determines is commensurate with the
sum of--
``(i) the amount that the
manufacturer would have paid with
respect to such discounts under the
agreement, which will then be used to
pay the discounts which the
manufacturer had failed to provide; and
``(ii) 25 percent of such amount.
``(B) Application.--The provisions of section
1128A (other than subsections (a) and (b))
shall apply to a civil money penalty under this
paragraph in the same manner as such provisions
apply to a penalty or proceeding under section
1128A(a).
``(f) Clarification Regarding Availability of Other Covered
Part D Drugs.--Nothing in this section shall prevent an
applicable beneficiary from purchasing a covered part D drug
that is not on the formulary of the prescription drug plan or
MA-PD plan that the applicable beneficiary is enrolled in.
``(g) Definitions.--In this section:
``(1) Applicable beneficiary.--The term `applicable
beneficiary' means an individual who, on the date of
dispensing a covered part D drug--
``(A) is enrolled in a prescription drug plan
or an MA-PD plan;
``(B) is not enrolled in a qualified retiree
prescription drug plan; and
``(C) has incurred costs for covered part D
drugs in the year that are equal to or exceed
the annual deductible specified in section
1860D-2(b)(1) for such year.
``(2) Applicable drug.--The term `applicable drug'
means, with respect to an applicable beneficiary, a
covered part D drug--
``(A) approved under a new drug application
under section 505(c) of the Federal Food, Drug,
and Cosmetic Act or, in the case of a biologic
product, licensed under section 351 of the
Public Health Service Act (including a product
licensed under subsection (k) of such section);
and
``(B)(i) if the PDP sponsor of the
prescription drug plan or the MA organization
offering the MA-PD plan uses a formulary, which
is on the formulary of the prescription drug
plan or MA-PD plan that the applicable
beneficiary is enrolled in;
``(ii) if the PDP sponsor of the prescription
drug plan or the MA organization offering the
MA-PD plan does not use a formulary, for which
benefits are available under the prescription
drug plan or MA-PD plan that the applicable
beneficiary is enrolled in; or
``(iii) is provided through an exception or
appeal.
``(3) Applicable number of calendar days.--The term
`applicable number of calendar days' means--
``(A) with respect to claims for
reimbursement submitted electronically, 14
days; and
``(B) with respect to claims for
reimbursement submitted otherwise, 30 days.
``(4) Discounted price.--
``(A) In general.--The term `discounted
price' means, with respect to an applicable
drug of a manufacturer furnished during a year
to an applicable beneficiary, 90 percent of the
negotiated price of such drug.
``(B) Clarification.--Nothing in this section
shall be construed as affecting the
responsibility of an applicable beneficiary for
payment of a dispensing fee for an applicable
drug.
``(C) Special case for claims spanning
deductible.--In the case where the entire
amount of the negotiated price of an individual
claim for an applicable drug with respect to an
applicable beneficiary does not fall at or
above the annual deductible specified in
section 1860D-2(b)(1) for the year, the
manufacturer of the applicable drug shall
provide the discounted price under this section
on only the portion of the negotiated price of
the applicable drug that falls at or above such
annual deductible.
``(5) Manufacturer.--The term `manufacturer' means
any entity which is engaged in the production,
preparation, propagation, compounding, conversion, or
processing of prescription drug products, either
directly or indirectly by extraction from substances of
natural origin, or independently by means of chemical
synthesis, or by a combination of extraction and
chemical synthesis. Such term does not include a
wholesale distributor of drugs or a retail pharmacy
licensed under State law.
``(6) Negotiated price.--The term `negotiated price'
has the meaning given such term in section 1860D-
2(d)(1)(B), except that such negotiated price shall not
include any dispensing fee for an applicable drug.
``(7) Qualified retiree prescription drug plan.--The
term `qualified retiree prescription drug plan' has the
meaning given such term in section 11860D-22(a)(2).''.
(2) Sunset of medicare coverage gap discount
program.--Section 1860D-14A of the Social Security Act
(42 U.S.C. 1395-114a) is amended--
(A) in subsection (a), in the first sentence,
by striking ``The Secretary'' and inserting
``Subject to subsection (h), the Secretary'';
and
(B) by adding at the end the following new
subsection:
``(h) Sunset of Program.--
``(1) In general.--The program shall not apply to
applicable drugs dispensed on or after January 1, 2022,
and, subject to paragraph (2), agreements under this
section shall be terminated as of such date.
``(2) Continued application for applicable drugs
dispensed prior to sunset.--The provisions of this
section (including all responsibilities and duties)
shall continue to apply after January 1, 2022, with
respect to applicable drugs dispensed prior to such
date.''.
(3) Inclusion of actuarial value of manufacturer
discounts in bids.--Section 1860D-11 of the Social
Security Act (42 U.S.C. 1395w-111) is amended--
(A) in subsection (b)(2)(C)(iii)--
(i) by striking ``assumptions
regarding the reinsurance'' and
inserting ``assumptions regarding--
``(I) the reinsurance''; and
(ii) by adding at the end the
following:
``(II) for 2022 and each
subsequent year, the
manufacturer discounts provided
under section 1860D- 14B
subtracted from the actuarial
value to produce such bid;
and''; and
(B) in subsection (c)(1)(C)--
(i) by striking ``an actuarial
valuation of the reinsurance'' and
inserting ``an actuarial valuation of--
``(i) the reinsurance'';
(ii) in clause (i), as added by
clause (i) of this subparagraph, by
adding ``and'' at the end; and
(iii) by adding at the end the
following:
``(ii) for 2022 and each subsequent
year, the manufacturer discounts
provided under section 1860D-14B;''.
(d) Determination of Allowable Reinsurance Costs.--Section
1860D-15(b) of the Social Security Act (42 U.S.C. 1395w-115(b))
is amended--
(1) in paragraph (2)--
(A) by striking ``Costs.--For purposes'' and
inserting ``Costs.--
``(A) In general.--Subject to subparagraph
(B), for purposes''.
(B) by adding at the end the following new
subparagraph:
``(B) Inclusion of manufacturer discounts on
applicable drugs.--For purposes of applying
subparagraph (A), the term `allowable
reinsurance costs' shall include the portion of
the negotiated price (as defined in section
1860D-14B(g)(6)) of an applicable drug (as
defined in section 1860D-14(g)(2)) that was
paid by a manufacturer under the manufacturer
discount program under section 1860D-14B.'';
and
(2) in paragraph (3)--
(A) in the first sentence, by striking ``For
purposes'' and inserting ``Subject to paragraph
(2)(B), for purposes''; and
(B) in the second sentence, by inserting
``or, in the case of an applicable drug, by a
manufacturer'' after ``by the individual or
under the plan''.
(e) Updating Risk Adjustment Methodologies to Account for
Part D Modernization Redesign.--Section 1860D-15(c) of the
Social Security Act (42 U.S.C. 1395w-115(c)) is amended by
adding at the end the following new paragraph:
``(3) Updating risk adjustment methodologies to
account for part d modernization redesign.--The
Secretary shall update the risk adjustment model used
to adjust bid amounts pursuant to this subsection as
appropriate to take into account changes in benefits
under this part pursuant to the amendments made by
section 121 of the Lower Costs, More Cures Act of
2019.''.
(f) Conditions for Coverage of Drugs Under This Part.--
Section 1860D-43 of the Social Security Act (42 U.S.C. 1395w-
153) is amended--
(1) in subsection (a)--
(A) in paragraph (2), by striking ``and'' at
the end;
(B) in paragraph (3), by striking the period
at the end and inserting a semicolon; and
(C) by adding at the end the following new
paragraphs:
``(4) participate in the manufacturer discount
program under section 1860D-14B;
``(5) have entered into and have in effect an
agreement described in subsection (b) of such section
1860D-14B with the Secretary; and
``(6) have entered into and have in effect, under
terms and conditions specified by the Secretary, a
contract with a third party that the Secretary has
entered into a contract with under subsection (d)(3) of
such section 1860D-14B.'';
(2) by striking subsection (b) and inserting the
following:
``(b) Effective Date.--Paragraphs (1) through (3) of
subsection (a) shall apply to covered part D drugs dispensed
under this part on or after January 1, 2011, and before January
1, 2022, and paragraphs (4) through (6) of such subsection
shall apply to covered part D drugs dispensed on or after
January 1, 2022.''; and
(3) in subsection (c), by striking paragraph (2) and
inserting the following:
``(2) the Secretary determines that in the period
beginning on January 1, 2011, and ending on December
31, 2011 (with respect to paragraphs (1) through (3) of
subsection (a)) or the period beginning on January 1,
2022, and ending December 31, 2022 (with respect to
paragraphs (4) through (6) of such subsection), there
were extenuating circumstances.''.
(g) Conforming Amendments.--
(1) Section 1860D-2 of the Social Security Act (42
U.S.C. 1395w-102) is amended--
(A) in subsection (a)(2)(A)(i)(I), by
striking ``, or an increase in the initial''
and inserting ``or for a year preceding 2022 an
increase in the initial'';
(B) in subsection (c)(1)(C)--
(i) in the subparagraph heading, by
striking ``at initial coverage limit'';
and
(ii) by inserting ``for a year
preceding 2022 or the annual out-of-
pocket threshold specified in
subsection (b)(4)(B) for the year for
2022 and each subsequent year'' after
``subsection (b)(3) for the year'' each
place it appears; and
(C) in subsection (d)(1)(A), by striking ``or
an initial'' and inserting ``or for a year
preceding 2022, an initial''.
(2) Section 1860D-4(a)(4)(B)(i) of the Social
Security Act (42 U.S.C. 1395w-104(a)(4)(B)(i)) is
amended by striking ``the initial'' and inserting ``for
a year preceding 2022, the initial''.
(3) Section 1860D-14(a) of the Social Security Act
(42 U.S.C. 1395w-114(a)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (C), by striking
``The continuation'' and inserting
``For a year preceding 2022, the
continuation'';
(ii) in subparagraph (D)(iii), by
striking ``1860D-2(b)(4)(A)(i)(I)'' and
inserting ``1860D-
2(b)(4)(A)(i)(I)(aa)''; and
(iii) in subparagraph (E), by
striking ``The elimination'' and
inserting ``For a year preceding 2022,
the elimination''; and
(B) in paragraph (2)--
(i) in subparagraph (C), by striking
``The continuation'' and inserting
``For a year preceding 2022, the
continuation''; and
(ii) in subparagraph (E)--
(I) by inserting ``for a year
preceding 2022,'' after
``subsection (c)''; and
(II) by striking ``1860D-
2(b)(4)(A)(i)(I)'' and
inserting ``1860D-
2(b)(4)(A)(i)(I)(aa)''.
(4) Section 1860D-21(d)(7) of the Social Security Act
(42 U.S.C. 1395w-131(d)(7)) is amended by striking
``section 1860D-2(b)(4)(B)(i)'' and inserting ``section
1860D-2(b)(4)(C)(i)''.
(5) Section 1860D-22(a)(2)(A) of the Social Security
Act (42 U.S.C. 1395w-132(a)(2)(A)) is amended--
(A) by striking ``the value of any discount''
and inserting the following: ``the value of--
``(i) for years prior to 2022, any
discount'';
(B) in clause (i), as inserted by
subparagraph (A) of this paragraph, by striking
the period at the end and inserting ``; and'';
and
(C) by adding at the end the following new
clause:
``(ii) for 2022 and each subsequent
year, any discount provided pursuant to
section 1860D-14B.''.
(6) Section 1860D-41(a)(6) of the Social Security Act
(42 U.S.C. 1395w-151(a)(6)) is amended--
(A) by inserting ``for a year before 2022''
after ``1860D-2(b)(3)''; and
(B) by inserting ``for such year'' before the
period.
(h) Effective Date.--The amendments made by this section
shall apply to plan year 2022 and subsequent plan years.
Subtitle D--Other Medicare Part D Provisions
SEC. 131. TRANSITIONAL COVERAGE AND RETROACTIVE MEDICARE PART D
COVERAGE FOR CERTAIN LOW-INCOME BENEFICIARIES.
Section 1860D-14 of the Social Security Act (42 U.S.C.
1395w-114) is amended--
(1) by redesignating subsection (e) as subsection
(f); and
(2) by adding after subsection (d) the following new
subsection:
``(e) Limited Income Newly Eligible Transition Program.--
``(1) In general.--Beginning not later than January
1, 2021, the Secretary shall carry out a program to
provide transitional coverage for covered part D drugs
for LI NET eligible individuals in accordance with this
subsection.
``(2) Li net eligible individual defined.--For
purposes of this subsection, the term `LI NET eligible
individual' means a part D eligible individual who--
``(A) meets the requirements of clauses (ii)
and (iii) of subsection (a)(3)(A); and
``(B) has not yet enrolled in a prescription
drug plan or an MA-PD plan, or, who has so
enrolled, but with respect to whom coverage
under such plan has not yet taken effect.
``(3) Transitional coverage.--For purposes of this
subsection, the term `transitional coverage' means,
with respect to an LI NET eligible individual--
``(A) immediate access to covered part D
drugs at the point-of-sale during the period
that begins on the first day of the month such
individual is determined to meet the
requirements of clauses (ii) and (iii) of
subsection (a)(3)(A) and ends on the date that
coverage under a prescription drug plan or MA-
PD plan takes effect with respect to such
individual; and
``(B) in the case of an LI NET eligible
individual who is a full-benefit dual eligible
individual (as defined in section 1935(c)(6))
or a recipient of supplemental security income
benefits under title XVI, retroactive coverage
(in the form of reimbursement of the amounts
that would have been paid under this part had
such individual been enrolled in a prescription
drug plan or MA-PD plan) of covered part D
drugs purchased by such individual during the
period that begins on the date that is the
later of--
``(i) the date that such individual
was first eligible for a low-income
subsidy under this part; or
``(ii) the date that is 36 months
prior to the date such individual
enrolls in a prescription drug plan or
MA-PD plan, and ends on the date that
coverage under such plan takes effect.
``(4) Program administration.--
``(A) Single point of contact.--The Secretary
shall, to the extent feasible, administer the
program under this subsection through a
contract with a single program administrator.
``(B) Benefit design.--The Secretary shall
ensure that the transitional coverage provided
to LI NET eligible individuals under this
subsection--
``(i) provides access to all covered
part D drugs under an open formulary;
``(ii) permits all pharmacies
determined by the Secretary to be in
good standing to process claims under
the program;
``(iii) is consistent with such
requirements as the Secretary considers
necessary to improve patient safety and
ensure appropriate dispensing of
medication; and
``(iv) meets such other requirements
as the Secretary may establish.
``(5) Relationship to other provisions of this title;
waiver authority.--
``(A) In general.--The following provisions
shall not apply with respect to the program
under this subsection:
``(i) Paragraphs (1) and (3)(B) of
section 1860D-4(a) (relating to
dissemination of general information;
availability of information on changes
in formulary through the internet).
``(ii) Subparagraphs (A) and (B) of
section 1860D-4(b)(3) (relating to
requirements on development and
application of formularies; formulary
development).
``(iii) Paragraphs (1)(C) and (2) of
section 1860D-4(c) (relating to
medication therapy management program).
``(B) Waiver authority.--The Secretary may
waive such other requirements of title XI and
this title as may be necessary to carry out the
purposes of the program established under this
subsection.''.
SEC. 132. ALLOWING THE OFFERING OF ADDITIONAL PRESCRIPTION DRUG PLANS
UNDER MEDICARE PART D.
(a) Rescinding and Issuance of New Guidance.--Not later than
one year after the date of the enactment of this Act, the
Secretary of Health and Human Services (in this section
referred to as the ``Secretary'') shall--
(1) rescind sections of any sub-regulatory guidance
that limit the number of prescription drug plans in
each PDP region that may be offered by a PDP sponsor
under part D of title XVIII of the Social Security Act
(42 U.S.C. 1395w-101 et seq.); and
(2) issue new guidance specifying that a PDP sponsor
may offer up to 4 (or a greater number if determined
appropriate by the Secretary) prescription drug plans
in each PDP region, except in cases where the PDP
sponsor may offer up to 2 additional plans in a PDP
region pursuant to section 1860D-11(d)(4) of the Social
Security Act (42 U.S.C. 1395w-111(d)(4)), as added by
subsection (b).
(b) Offering of Additional Plans.--Section 1860D-11(d) of the
Social Security Act (42 U.S.C. 1395w-111(d)) is amended by
adding at the end the following new paragraph:
``(4) Offering of additional plans.--
``(A) In general.--For plan year 2022 and
each subsequent plan year, a PDP sponsor may
offer up to 2 additional prescription drug
plans in a PDP region (in addition to any limit
established by the Secretary under this part)
provided that the PDP sponsor complies with
subparagraph (B) with respect to at least one
such prescription drug plan.
``(B) Requirements.--In order to be eligible
to offer up to 2 additional plans in a PDP
region pursuant to subparagraph (A), a PDP
sponsor must ensure that, with respect to at
least one such prescription drug plan, the
sponsor or any entity that provides pharmacy
benefits management services under a contract
with any such sponsor or plan does not receive
direct or indirect remuneration, as defined in
section 423.308 of title 42, Code of Federal
Regulations (or any successor regulation),
unless at least 25 percent of the aggregate
reductions in price or other remuneration
received by the PDP sponsor or entity from drug
manufacturers with respect to the plan and plan
year--
``(i) are reflected at the point-of-
sale to the enrollee; or
``(ii) are used to reduce total
beneficiary cost-sharing estimated by
the PDP sponsor for prescription drug
coverage under the plan in the annual
bid submitted by the PDP sponsor under
section 1860D-11(b).
``(C) Definition of reductions in price.--For
purposes of subparagraph (B), the term
`reductions in price' refers only to
collectible amounts, as determined by the
Secretary, which excludes amounts which after
adjudication and reconciliation with pharmacies
and manufacturers are duplicate in nature,
contrary to other contractual clauses, or
otherwise ineligible (such as due to
beneficiary disenrollment or coordination of
benefits).''.
(c) Rule of Construction.--Nothing in the provisions of, or
amendments made by, this section shall be construed as limiting
the ability of the Secretary to increase any limit otherwise
applicable on the number of prescription drug plans that a PDP
sponsor may offer, at the discretion of the PDP sponsor, in a
PDP region under part D of title XVIII of the Social Security
Act (42 U.S.C. 1395w-101 et seq.).
SEC. 133. ALLOWING CERTAIN ENROLLEES OF PRESCRIPTION DRUGS PLANS AND
MA-PD PLANS UNDER MEDICARE PROGRAM TO SPREAD OUT
COST-SHARING UNDER CERTAIN CIRCUMSTANCES.
(a) Standard Prescription Drug Coverage.--Section 1860D-
2(b)(2) of the Social Security Act (42 U.S.C. 1395w-102(b)(2)),
as amended by section 121, is further amended--
(1) in subparagraph (A), by striking ``Subject to
subparagraphs (C) and (D)'' and inserting ``Subject to
subparagraphs (C), (D), and (E)''; and
(2) by adding at the end the following new
subparagraph:
``(E) Enrollee option regarding spreading
cost-sharing.--
``(i) In general.--The Secretary
shall establish by regulation a process
under which, with respect to plan year
2022 and subsequent plan years, a
prescription drug plan or an MA-PD plan
shall, in the case of a part D eligible
individual enrolled with such plan for
such plan year with respect to whom the
plan projects that the dispensing of a
covered part D drug to such individual
will result in the individual incurring
costs within a 30-day period that are
equal to a significant percentage (as
specified by the Secretary pursuant to
such regulation) of the annual out-of-
pocket threshold specified in paragraph
(4)(B) for such plan year, provide such
individual with the option to make the
coinsurance payment required under
subparagraph (A) for such costs in the
form of equal monthly installments over
the remainder of such plan year.
``(ii) Significant percentage
limitations.--In specifying a
significant percentage pursuant to the
regulation established by the Secretary
under clause (i), the Secretary may not
specify a percentage that is less than
30 percent or greater than 100
percent.''.
(b) Alternative Prescription Drug Coverage.--Section 1860D-
2(c) of the Social Security Act (42 U.S.C. 1395w-102(c)) is
amended by adding at the end the following new paragraph:
``(4) Same enrollee option regarding spreading cost-
sharing.--For plan year 2022 and subsequent plan years,
the coverage provides the enrollee option regarding
spreading cost-sharing described in and required under
subsection (b)(2)(E).''.
SEC. 134. ESTABLISHING A MONTHLY CAP ON BENEFICIARY INCURRED COSTS FOR
INSULIN PRODUCTS AND SUPPLIES UNDER A PRESCRIPTION
DRUG PLAN OR MA-PD PLAN.
(a) In General.--Section 1860D-2 of the Social Security Act
(42 U.S.C. 1395w-102), as amended by sections 121 and 133, is
further amended--
(1) in subsection (b)(2)--
(A) in subparagraph (A), by striking ``and
(E)'' and inserting ``(E), and (F)'';
(B) in subparagraph (B), by striking ``and
(D)'' and inserting ``(D), and (F)''; and
(C) by adding at the end the following new
subparagraph:
``(F) Cap on incurred costs for insulin
products and supplies.--
``(i) In general.--The coverage
provides benefits, for costs above the
annual deductible specified in
paragraph (1) and up to the annual out-
of-pocket threshold described in
paragraph (4)(B) and with respect to a
month (beginning with January of 2022),
with cost sharing that is equal to $0
for a specified covered part D drug (as
defined in clause (iii)) furnished to
an individual who has incurred costs
during such month with respect to
specified covered part D drugs equal
to--
``(I) for months occurring in
2022, $50; or
``(II) for months occurring
in a subsequent year, the
amount applicable under this
clause for months occurring in
the year preceding such
subsequent year, increased by
the annual percentage increase
specified in paragraph (6) for
such subsequent year and
rounded to the nearest dollar.
``(ii) Application.--The provisions
of clauses (i) through (iii) of
paragraph (4)(C) shall apply with
respect to the determination of the
incurred costs for specified covered
part D drugs for purposes of clause (i)
in the same manner as such provisions
apply with respect to the determination
of incurred costs for covered part D
drugs for purposes of paragraph (4)(A).
``(iii) Specified covered part d
drug.--For purposes of this
subparagraph, the term `specified
covered part D drug' means a covered
part D drug that is--
``(I) insulin; or
``(II) a medical supply
associated with the injection
of insulin (as defined in
regulations of the Secretary
promulgated pursuant to
subsection (e)(1)(B)).''; and
(2) in subsection (c), by adding at the end the
following new paragraph:
``(5) Same protection with respect to expenditures
for insulin and certain medical supplies.--The coverage
provides the coverage required under subsection
(b)(2)(F).''.
(b) Conforming Amendments.--
(1) In general.--Section 1860D-14(a)(1)(D) of the
Social Security Act (42 U.S.C. 1395w-114(a)(1)(D)), as
amended by section 121, is further amended--
(A) in clause (ii), by striking ``section
1860D-2(b)(2)'' and inserting ``section 1860D-
2(b)(2)(A)''; and
(B) in clause (iii), by striking ``section
1860D-2(b)(2)'' and inserting ``section 1860D-
2(b)(2)(A)''.
(2) Effective date.--The amendments made by paragraph
(1) shall apply with respect to plan year 2022 and each
subsequent plan year.
SEC. 135. GROWTH RATE OF MEDICARE PART D OUT-OF-POCKET COST THRESHOLD.
(a) Providing Medicare Part D Beneficiaries With Certain 2020
Offset Payments.--Section 1860D-2(b)(4) of the Social Security
Act (42 U.S.C. 1395w-102(b)(4)) is amended by adding at the end
the following new subparagraph:
``(F) 2020 offset payments.--
``(i) In general.--Subject to clause
(iv), the Secretary shall provide for
payment from the Medicare Prescription
Drug Account as follows:
``(I) In the case of a
specified individual (as
defined in clause (ii)(I)) who
as of the last day of a
calendar quarter in 2020 has
incurred costs for covered part
D drugs so that the individual
has exceeded the annual out-of-
pocket threshold applied under
subparagraph (B)(i)(V) for
2020, payment to the individual
by not later than 15th day of
the third month following the
end of such quarter of the
amount by which such threshold
so applied exceeded the target
threshold for 2020.
``(II) In the case of a
specified individual who is not
described in subclause (I) and
who as of the last day of 2020
has incurred costs for covered
part D drugs so that the
individual has exceeded the
target threshold for 2020,
payment to the individual by
not later than December 31,
2021 of the amount by which
such incurred costs exceeded
the target threshold for 2020.
``(ii) Definitions.--For purposes of
this subparagraph:
``(I) Specified individual.--
The term `specified individual'
means an individual who--
``(aa) is enrolled in
a prescription drug
plan or an MA- PD plan;
``(bb) is not
enrolled in a qualified
retiree prescription
drug plan; and
``(cc) is not
entitled to an income-
related subsidy under
section 1860D-14(a).
``(II) Target threshold for
2020.--the term `target
threshold for 2020' means the
annual out-of-pocket threshold
that would have been applied
under subparagraph (B)(i) for
2020 if such threshold had been
determined in accordance with
subclause (IV) of such
subparagraph instead of
subclause (V) of such
subparagraph.
``(iii) Notification.--In the case of
any specified individual who during
2020 has incurred costs for covered
part D drugs so that the individual has
exceeded the target threshold for 2020,
the Secretary shall, not later than
September 30, 2021, provide to such
individual a notification informing
such individual of such individual's
right to a payment described in clause
(i) and the estimated timing of such
payment.
``(iv) Clarification.--The Secretary
shall provide only 1 payment under this
subparagraph with respect to any
individual.
``(v) Implementation.--The Secretary
may implement this subparagraph by
program instruction or otherwise.''.
(b) Reduced Growth Rate for 2021 of Medicare Part D Out-of-
pocket Cost Threshold.--Section 1860D-2(b)(4)(B)(i) of the
Social Security Act (42 U.S.C. 1395w-102(b)(4)(B)(i)) is
amended--
(1) in subclause (V), by striking at the end ``or'';
(2) by redesignating subclause (VI) as subclause
(VIII); and
(3) by inserting after subclause (V) the following
new subclauses:
``(VI) for 2021, is equal to
the amount that would have been
applied under this subparagraph
for 2020 if such amount had
been determined in accordance
with subclause (IV) instead of
subclause (V), increased by the
lesser of--
``(aa) the annual
percentage increase
described in paragraph
(7) for 2021, plus 2
percentage points; or
``(bb) the annual
percentage increase
described in paragraph
(6) for 2021;
``(VII) for 2022, is equal to
the amount that would have been
applied under this subparagraph
for 2022 if the amendments made
by section 1101(d)(1) of the
Health Care and Education
Reconciliation Act of 2010 and
by section 135 of the Lower
Costs, More Cures Act of 2019
had not been enacted; or''.
Subtitle E--MedPAC
SEC. 141. PROVIDING THE MEDICARE PAYMENT ADVISORY COMMISSION AND
MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION
WITH ACCESS TO CERTAIN DRUG PAYMENT INFORMATION,
INCLUDING CERTAIN REBATE INFORMATION.
(a) Access to Certain Part D Payment Data.--Section 1860D-
15(f) of the Social Security Act (42 U.S.C. 1395w-115(f)) is
amended--
(1) in paragraph (2)--
(A) in subparagraph (A)(ii), by striking
``and'' at the end;
(B) in subparagraph (B), by striking the
period at the end and inserting ``; and''; and
(C) by inserting at the end the following new
subparagraph:
``(C) by the Executive Director of the
Medicare Payment Advisory Commission for
purposes of monitoring, making recommendations,
and analysis of the program under this title
and by the Executive Director of the Medicaid
and CHIP Payment and Access Commission for
purposes of monitoring, making recommendations,
and analysis of the Medicaid program
established under title XIX and the Children's
Health Insurance Program under title XXI.'';
and
(2) by adding at the end the following new paragraph:
``(3) Additional restrictions on disclosure of
information.--The Executive Directors described in
paragraph (2)(C) shall not disclose any of the
following information disclosed to such Executive
Directors or obtained by such Executive Directors
pursuant to such paragraph, with respect to a
prescription drug plan offered by a PDP sponsor:
``(A) The specific amounts or the identity of
the source of any rebates, price concessions,
or other forms of direct or indirect
remuneration under such prescription drug plan.
``(B) Information submitted with the bid
submitted under section 1860D-11 by such PDP
sponsor.
``(C) In the case of such information from
prescription drug event records, in a form that
would not be permitted under section 423.505(m)
of title 42, Code of Federal Regulations, or
any successor regulation, if made by the
Centers for Medicare & Medicaid Services.''.
(b) Access to Certain Rebate and Payment Data Under Medicare
and Medicaid.--Section 1927(b)(3)(D) of the Social Security Act
(42 U.S.C. 1396r-8(b)(3)(D)) is amended--
(1) in the matter before clause (i), by striking
``subsection (a)(6)(A)(ii)'' and inserting ``subsection
(a)(6)(A)'';
(2) in clause (v), by striking ``and'' at the end;
(3) in clause (vi), by striking the period at the end
and inserting ``, and'';
(4) by inserting after clause (vi) the following new
clause:
``(vii) to permit the Executive
Director of the Medicare Payment
Advisory Commission and the Executive
Director of the Medicaid and CHIP
Payment and Access Commission to review
the information provided.'';
(5) in the matter at the end, by striking ``1860D-
4(c)(2)(E)'' and inserting ``1860D-4(c)(2)(G)''; and
(6) by adding at the end the following new sentence:
``Any information disclosed to the Executive Director
of the Medicare Payment Advisory Commission or the
Executive Director of the Medicaid and CHIP Payment and
Access Commission pursuant to this subparagraph shall
not be disclosed by either such Executive Director in a
form which discloses the identity of a specific
manufacturer or wholesaler or prices charged for drugs
by such manufacturer or wholesaler.''.
TITLE II--MEDICAID
SEC. 201. SUNSET OF LIMIT ON MAXIMUM REBATE AMOUNT FOR SINGLE SOURCE
DRUGS AND INNOVATOR MULTIPLE SOURCE DRUGS.
Section 1927(c)(2)(D) of the Social Security Act (42 U.S.C.
1396r-8(c)(2)(D)) is amended by inserting after ``December 31,
2009,'' the following: ``and before January 1, 2023,''.
SEC. 202. MEDICAID PHARMACY AND THERAPEUTICS COMMITTEE IMPROVEMENTS.
(a) In General.--Subparagraph (A) of section 1927(d)(4) of
the Social Security Act (42 U.S.C. 1396r-8(d)(4)) is amended to
read as follows:
``(A)(i) The formulary is developed and
reviewed by a pharmacy and therapeutics
committee consisting of physicians,
pharmacists, and other appropriate individuals
appointed by the Governor of the State.
``(ii) Subject to clause (vi), the State
establishes and implements a conflict of
interest policy for the pharmacy and
therapeutics committee that--
``(I) is publicly accessible;
``(II) requires all committee members
to complete, on at least an annual
basis, a disclosure of relationships,
associations, and financial dealings
that may affect their independence of
judgement in committee matters; and
``(III) contains clear processes,
such as recusal from voting or
discussion, for those members who
report a conflict of interest, along
with appropriate processes to address
any instance where a member fails to
report a conflict of interest.
``(iii) The membership of the pharmacy and
therapeutics committee--
``(I) includes at least 1 actively
practicing physician and at least 1
actively practicing pharmacist, each of
whom--
``(aa) is independent and
free of conflict with respect
to manufacturers and Medicaid
participating plans or
subcontractors, including
pharmacy benefit managers; and
``(bb) has expertise in the
care of 1 or more Medicaid-
specific populations such as
elderly or disabled
individuals, children with
complex medical needs, or low-
income individuals with chronic
illnesses; and
``(II) is made publicly available.
``(iv) At the option of the State, the
State's drug use review board established under
subsection (g)(3) may serve as the pharmacy and
therapeutics committee provided the State
ensures that such board meets the requirements
of clauses (ii) and (iii).
``(v) The State reviews and has final
approval of the formulary established by the
pharmacy and therapeutics committee.
``(vi) If the Secretary determines it
appropriate or necessary based on the findings
and recommendations of the Comptroller General
of the United States in the report submitted to
Congress under section 203 of the Lower Costs,
More Cures Act of 2019, the Secretary shall
issue guidance that States must follow for
establishing conflict of interest policies for
the pharmacy and therapeutics committee in
accordance with the requirements of clause
(ii), including appropriate standards and
requirements for identifying, addressing, and
reporting on conflicts of interest.''.
(b) Application to Medicaid Managed Care Organizations.--
Clause (xiii) of section 1903(m)(2)(A) of the Social Security
Act (42 U.S.C. 1396b(m)(2)(A)) is amended--
(1) by striking ``and (III)'' and inserting
``(III)'';
(2) by striking the period at the end and inserting
``, and (IV) any formulary used by the entity for
covered outpatient drugs dispensed to individuals
eligible for medical assistance who are enrolled with
the entity is developed and reviewed by a pharmacy and
therapeutics committee that meets the requirements of
clauses (ii) and (iii) of section 1927(d)(4)(A).''; and
(3) by moving the left margin 2 ems to the left.
(c) Effective Date.--The amendments made by this section
shall take effect on the date that is 1 year after the date of
enactment of this Act.
SEC. 203. GAO REPORT ON CONFLICTS OF INTEREST IN STATE MEDICAID PROGRAM
DRUG USE REVIEW BOARDS AND PHARMACY AND
THERAPEUTICS (P&T) COMMITTEES.
(a) Investigation.--The Comptroller General of the United
States shall conduct an investigation of potential or existing
conflicts of interest among members of State Medicaid program
State drug use review boards (in this section referred to as
``DUR Boards'') and pharmacy and therapeutics committees (in
this section referred to as ``P&T Committees'').
(b) Report.--Not later than 24 months after the date of
enactment of this Act, the Comptroller General shall submit to
Congress a report on the investigation conducted under
subsection (a) that includes the following:
(1) A description outlining how DUR Boards and P&T
Committees operate in States, including details with
respect to--
(A) the structure and operation of DUR Boards
and statewide P&T Committees;
(B) States that operate separate P&T
Committees for their fee-for-service Medicaid
program and their Medicaid managed care
organizations or other Medicaid managed care
arrangements (collectively referred to in this
section as ``Medicaid MCOs)''; and
(C) States that allow Medicaid MCOs to have
their own P&T Committees and the extent to
which pharmacy benefit managers administer or
participate in such P&T Committees.
(2) A description outlining the differences between
DUR Boards established in accordance with section
1927(g)(3) of the Social Security Act (42 U.S.C.
1396r(g)(3)) and P&T Committees.
(3) A description outlining the tools P&T Committees
may use to determine Medicaid drug coverage and
utilization management policies.
(4) An analysis of whether and how States or P&T
Committees establish participation and independence
requirements for DUR Boards and P&T Committees,
including with respect to entities with connections
with drug manufacturers, State Medicaid programs,
managed care organizations, and other entities or
individuals in the pharmaceutical industry.
(5) A description outlining how States, DUR Boards,
or P&T Committees define conflicts of interest.
(6) A description of how DUR Boards and P&T
Committees address conflicts of interest, including who
is responsible for implementing such policies.
(7) A description of the tools, if any, States use to
ensure that there are no conflicts of interest on DUR
Boards and P&T Committees.
(8) An analysis of the effectiveness of tools States
use to ensure that there are no conflicts of interest
on DUR Boards and P&T Committees and, if applicable,
recommendations as to how such tools could be improved.
(9) A review of strategies States may use to guard
against conflicts of interest on DUR Boards and P&T
Committees and to ensure compliance with the
requirements of titles XI and XIX of the Social
Security Act (42 U.S.C. 1301 et seq., 1396 et seq.) and
access to effective, clinically appropriate, and
medically necessary drug treatments for Medicaid
beneficiaries, including recommendations for such
legislative and administrative actions as the
Comptroller General determines appropriate.
SEC. 204. ENSURING THE ACCURACY OF MANUFACTURER PRICE AND DRUG PRODUCT
INFORMATION UNDER THE MEDICAID DRUG REBATE PROGRAM.
(a) Audit of Manufacturer Price and Drug Product
Information.--
(1) In general.--Subparagraph (B) of section
1927(b)(3) of the Social Security Act (42 U.S.C. 1396r-
8(b)(3)) is amended to read as follows:
``(B) Audits and surveys of manufacturer
price and drug product information.--
``(i) Audits.--The Secretary shall
conduct ongoing audits of the price and
drug product information reported by
manufacturers under subparagraph (A)
for the most recently ended rebate
period to ensure the accuracy and
timeliness of such information. In
conducting such audits, the Secretary
may employ evaluations, surveys,
statistical sampling, predictive
analytics and other relevant tools and
methods.
``(ii) Verifications surveys of
average manufacturer price and
manufacturer's average sales price.--In
addition to the audits required under
clause (i), the Secretary may survey
wholesalers and manufacturers
(including manufacturers that directly
distribute their covered outpatient
drugs (in this subparagraph referred to
as `direct sellers')), when necessary,
to verify manufacturer prices and
manufacturer's average sales prices
(including wholesale acquisition cost)
to make payment reported under
subparagraph (A).
``(iii) Penalties.--In addition to
other penalties as may be prescribed by
law, including under subparagraph (C)
of this paragraph, the Secretary may
impose a civil monetary penalty in an
amount not to exceed $185,000 on an
annual basis on a wholesaler,
manufacturer, or direct seller, if the
wholesaler, manufacturer, or direct
seller of a covered outpatient drug
refuses a request for information about
charges or prices by the Secretary in
connection with an audit or survey
under this subparagraph or knowingly
provides false information. The
provisions of section 1128A (other than
subsections (a) (with respect to
amounts of penalties or additional
assessments) and (b)) shall apply to a
civil money penalty under this clause
in the same manner as such provisions
apply to a penalty or proceeding under
section 1128A(a).
``(iv) Reports.--
``(I) Report to congress.--
The Secretary shall, not later
than 18 months after date of
enactment of this subparagraph,
submit a report to the
Committee on Energy and
Commerce of the House of
Representatives and the
Committee on Finance of the
Senate regarding additional
regulatory or statutory changes
that may be required in order
to ensure accurate and timely
reporting and oversight of
manufacturer price and drug
product information, including
whether changes should be made
to reasonable assumption
requirements to ensure such
assumptions are reasonable and
accurate or whether another
methodology for ensuring
accurate and timely reporting
of price and drug product
information should be
considered to ensure the
integrity of the drug rebate
program under this section.
``(II) Annual reports.--The
Secretary shall, on at least an
annual basis, submit a report
to the Committee on Energy and
Commerce of the House of
Representatives and the
Committee on Finance of the
Senate summarizing the results
of the audits and surveys
conducted under this
subparagraph during the period
that is the subject of the
report.
``(III) Content.--Each report
submitted under subclause (II)
shall, with respect to the
period that is the subject of
the report, include summaries
of--
``(aa) error rates in
the price, drug
product, and other
relevant information
supplied by
manufacturers under
subparagraph (A);
``(bb) the timeliness
with which
manufacturers,
wholesalers, and direct
sellers provide
information required
under subparagraph (A)
or under clause (i) or
(ii) of this
subparagraph;
``(cc) the number of
manufacturers,
wholesalers, and direct
sellers and drug
products audited under
this subparagraph;
``(dd) the types of
price and drug product
information reviewed
under the audits
conducted under this
subparagraph;
``(ee) the tools and
methodologies employed
in such audits;
``(ff) the findings
of such audits,
including which
manufacturers, if any,
were penalized under
this subparagraph; and
``(gg) such other
relevant information as
the Secretary shall
deem appropriate.
``(IV) Protection of
information.--In preparing a
report required under subclause
(II), the Secretary shall
redact such proprietary
information as the Secretary
determines appropriate to
prevent disclosure of, and to
safeguard, such information.
``(v) Authorization of
appropriations.--For purposes of
carrying out this subparagraph, there
is authorized to be appropriated
$2,000,000 for fiscal year 2020 and
each fiscal year thereafter.''.
(2) Effective date.--The amendments made by this
subsection shall take effect on the first day of the
first fiscal quarter that begins after the date of
enactment of this Act.
(b) Increased Penalties for Noncompliance With Reporting
Requirements.--
(1) Increased penalty for late reporting of
information.--Section 1927(b)(3)(C)(i) of the Social
Security Act (42 U.S.C. 1396r-8(b)(3)(C)(i)) is amended
by striking ``increased by $10,000 for each day in
which such information has not been provided and such
amount shall be paid to the Treasury'' and inserting
``, for each covered outpatient drug with respect to
which such information is not provided, $50,000 for the
first day that such information is not provided on a
timely basis and $19,000 for each subsequent day that
such information is not provided''.
(2) Increased penalty for knowingly reporting false
information.--Section 1927(b)(3)(C)(ii) of the Social
Security Act (42 U.S.C. 1396r-8(b)(3)(C)(ii)) is
amended by striking ``$100,000'' and inserting
``$500,000''.
(3) Effective date.--The amendments made by this
subsection shall take effect on the first day of the
first fiscal quarter that begins after the date of
enactment of this Act.
SEC. 205. IMPROVING TRANSPARENCY AND PREVENTING THE USE OF ABUSIVE
SPREAD PRICING AND RELATED PRACTICES IN MEDICAID.
(a) Pass-through Pricing Required.--
(1) In general.--Section 1927(e) of the Social
Security Act (42 U.S.C. 1396r-8(e)) is amended by
adding at the end the following:
``(6) Pass-through pricing required.--A contract
between the State and a pharmacy benefit manager
(referred to in this paragraph as a `PBM'), or a
contract between the State and a managed care entity or
other specified entity (as such terms are defined in
section 1903(m)(9)(D)) that includes provisions making
the entity responsible for coverage of covered
outpatient drugs dispensed to individuals enrolled with
the entity, shall require that payment for such drugs
and related administrative services (as applicable),
including payments made by a PBM on behalf of the State
or entity, is based on a pass-through pricing model
under which--
``(A) any payment made by the entity of the
PBM (as applicable) for such a drug--
``(i) is limited to--
``(I) ingredient cost; and
``(II) a professional
dispensing fee that is not less
than the professional
dispensing fee that the State
plan or waiver would pay if the
plan or waiver was making the
payment directly;
``(ii) is passed through in its
entirety by the entity or PBM to the
pharmacy that dispenses the drug; and
``(iii) is made in a manner that is
consistent with section 1902(a)(30)(A)
and sections 447.512, 447.514, and
447.518 of title 42, Code of Federal
Regulations (or any successor
regulation) as if such requirements
applied directly to the entity or the
PBM;
``(B) payment to the entity or the PBM (as
applicable) for administrative services
performed by the entity or PBM is limited to a
reasonable administrative fee that covers the
reasonable cost of providing such services;
``(C) the entity or the PBM (as applicable)
shall make available to the State, and the
Secretary upon request, all costs and payments
related to covered outpatient drugs and
accompanying administrative services incurred,
received, or made by the entity or the PBM,
including ingredient costs, professional
dispensing fees, administrative fees, post-sale
and post-in-voice fees. Discounts, or related
adjustments such as direct and indirect
remuneration fees, and any and all
remuneration; and
``(D) any form of spread pricing whereby any
amount charged or claimed by the entity or the
PBM (as applicable) is in excess of the amount
paid to the pharmacies on behalf of the entity,
including any post-sale or post-invoice fees,
discounts, or related adjustments such as
direct and indirect remuneration fees or
assessments (after allowing for a reasonable
administrative fee as described in subparagraph
(B)) is not allowable for purposes of claiming
Federal matching payments under this title.''.
(2) Conforming amendment.--Clause (xiii) of section
1903(m)(2)(A) of such Act (42 U.S.C. 1396b(m)(2)(A)),
as amended by section 202, is further amended--
(A) by striking ``and (IV)'' and inserting
``(IV)''; and
(B) by inserting before the period at the end
the following: ``, and (V) pharmacy benefit
management services provided by the entity, or
provided by a pharmacy benefit manager on
behalf of the entity under a contract or other
arrangement between the entity and the pharmacy
benefit manager, shall comply with the
requirements of section 1927(e)(6)''.
(3) Effective date.--The amendments made by this
subsection apply to contracts between States and
managed care entities, other specified entities, or
pharmacy benefits managers that are entered into or
renewed on or after the date that is 18 months after
the date of enactment of this Act.
(b) Survey of Retail Prices.--
(1) In general.--Section 1927(f) of the Social
Security Act (42 U.S.C. 1396r-8(f)) is amended--
(A) by striking ``and'' after the semicolon
at the end of paragraph (1)(A)(i) and all that
precedes it through ``(1)'' and inserting the
following:
``(1) Survey of retail prices.--The Secretary shall
conduct a survey of retail community drug prices, to
include at least the national average drug acquisition
cost, as follows:
``(A) Use of vendor.--The Secretary may
contract services for--
``(i) with respect to retail
community pharmacies, the determination
on a monthly basis of retail survey
prices of the national average drug
acquisition cost for covered outpatient
drugs for such pharmacies, net of all
discounts and rebates (to the extent
any information with respect to such
discounts and rebates is available),
the average reimbursement received for
such drugs by such pharmacies from all
sources of payment, including third
parties, and, to the extent available,
the usual and customary charges to
consumers for such drugs; and'';
(B) by adding at the end of paragraph (1) the
following:
``(F) Survey reporting.--In order to meet the
requirement of section 1902(a)(54), a State
shall require that any retail community
pharmacy in the State that receives any
payment, administrative fee, discount, or
rebate related to the dispensing of covered
outpatient drugs to individuals receiving
benefits under this title, regardless of
whether such payment, fee, discount, or rebate
is received from the State or a managed care
entity directly or from a pharmacy benefit
manager or another entity that has a contract
with the State or a managed care entity, shall
respond to surveys of retail prices conducted
under this subsection.
``(G) Survey information.--Information on
retail community prices obtained under this
paragraph shall be made publicly available and
shall include at least the following:
``(i) The monthly response rate of
the survey including a list of
pharmacies not in compliance with
subparagraph (F).
``(ii) The sampling frame and number
of pharmacies sampled monthly.
``(iii) Characteristics of reporting
pharmacies, including type (such as
independent or chain), geographic or
regional location, and dispensing
volume.
``(iv) Reporting of a separate
national average drug acquisition cost
for each drug for independent retail
pharmacies and chain operated
pharmacies.
``(v) Information on price
concessions including on and off
invoice discounts, rebates, and other
price concessions.
``(vi) Information on average
professional dispensing fees paid.
``(H) Penalties.--
``(i) Failure to provide timely
information.--A retail community
pharmacy that fails to respond to a
survey conducted under this subsection
on a timely basis may be subject to a
civil monetary penalty in the amount of
$10,000 for each day in which such
information has not been provided.
``(ii) False information.--A retail
community pharmacy that knowingly
provides false information in response
to a survey conducted under this
subsection may be subject to a civil
money penalty in an amount not to
exceed $100,000 for each item of false
information.
``(iii) Other penalties.--Any civil
money penalties imposed under this
subparagraph shall be in addition to
other penalties as may be prescribed by
law. The provisions of section 1128A
(other than subsections (a) and (b))
shall apply to a civil money penalty
under this subparagraph in the same
manner as such provisions apply to a
penalty or proceedings under section
1128A(a).
``(I) Report on specialty pharmacies.--
``(i) In general.--Not later than 1
year after the effective date of this
subparagraph, the Secretary shall
submit a report to Congress examining
specialty drug coverage and
reimbursement under this title.
``(ii) Content of report.--Such
report shall include a description of
how State Medicaid programs define
specialty drugs, how much State
Medicaid programs pay for specialty
drugs, how States and managed care
plans determine payment for specialty
drugs, the settings in which specialty
drugs are dispensed (such as retail
community pharmacies or specialty
pharmacies), whether acquisition costs
for specialty drugs are captured in the
national average drug acquisition cost
survey, and recommendations as to
whether specialty pharmacies should be
included in the survey of retail prices
to ensure national average drug
acquisition costs capture drugs sold at
specialty pharmacies and how such
specialty pharmacies should be
defined.'';
(C) in paragraph (2)--
(i) in subparagraph (A), by inserting
``, including payments rates under
Medicaid managed care plans,'' after
``under this title''; and
(ii) in subparagraph (B), by
inserting ``and the basis for such
dispensing fees'' before the semicolon;
and
(D) in paragraph (4), by inserting ``, and
$5,000,000 for fiscal year 2020 and each fiscal
year thereafter,'' after ``2010''.
(2) Effective date.--The amendments made by this
subsection take effect on the 1st day of the 1st
quarter that begins on or after the date that is 18
months after the date of enactment of this Act.
(c) Manufacturer Reporting of Wholesale Acquisition Cost.--
Section 1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)), as
amended by section 141, is further amended--
(1) in subparagraph (A)(i)--
(A) in subclause (I), by striking ``and''
after the semicolon;
(B) in subclause (II), by adding ``and''
after the semicolon;
(C) by moving the left margins of subclause
(I) and (II) 2 ems to the right; and
(D) by adding at the end the following:
``(III) in the case of rebate
periods that begin on or after
the date of enactment of this
subclause, on the wholesale
acquisition cost (as defined in
section 1847A(c)(6)(B)) for
covered outpatient drugs for
the rebate period under the
agreement (including for all
such drugs that are sold under
a new drug application approved
under section 505(c) of the
Federal Food, Drug, and
Cosmetic Act);''; and
(2) in subparagraph (D)--
(A) in the matter preceding clause (i), by
inserting ``and clause (vii) of this
subparagraph'' after ``1847A'';
(B) in clause (vi), by striking ``and'' after
the comma;
(C) in clause (vii), by striking the period
and inserting ``, and''; and
(D) by inserting after clause (vii) the
following:
``(viii) to the Secretary to disclose
(through a website accessible to the
public) the most recently reported
wholesale acquisition cost (as defined
in section 1847A(c)(6)(B)) for each
covered outpatient drug (including for
all such drugs that are sold under a
new drug application approved under
section 505(c) of the Federal Food,
Drug, and Cosmetic Act), as reported
under subparagraph (A)(i)(III).''.
SEC. 206. T-MSIS DRUG DATA ANALYTICS REPORTS.
(a) In General.--Not later than May 1 of each calendar year
beginning with calendar year 2021, the Secretary of Health and
Human Services (in this section referred to as the
``Secretary'') shall publish on a website of the Centers for
Medicare & Medicaid Services that is accessible to the public a
report of the most recently available data on provider
prescribing patterns under the Medicaid program.
(b) Content of Report.--
(1) Required content.--Each report required under
subsection (a) for a calendar year shall include the
following information with respect to each State (and,
to the extent available, with respect to Puerto Rico,
the United States Virgin Islands, Guam, the Northern
Mariana Islands, and American Samoa):
(A) A comparison of covered outpatient drug
(as defined in section 1927(k)(2) of the Social
Security Act (42 U.S.C. 1396r-8(k)(2)))
prescribing patterns under the State Medicaid
plan or waiver of such plan (including drugs
prescribed on a fee-for-service basis and drugs
prescribed under managed care arrangements
under such plan or waiver)--
(i) across all forms or models of
reimbursement used under the plan or
waiver;
(ii) within specialties and
subspecialties, as defined by the
Secretary;
(iii) by episodes of care for--
(I) each chronic disease
category, as defined by the
Secretary, that is represented
in the 10 conditions that
accounted for the greatest
share of total spending under
the plan or waiver during the
year that is the subject of the
report;
(II) procedural groupings;
and
(III) rare disease diagnosis
codes;
(iv) by patient demographic
characteristics, including race (to the
extent that the Secretary determines
that there is sufficient data available
with respect to such characteristic in
a majority of States), gender, and age;
(v) by patient high-utilizer or risk
status; and
(vi) by high and low resource
settings by facility and place of
service categories, as determined by
the Secretary.
(B) In the case of medical assistance for
covered outpatient drugs (as so defined)
provided under a State Medicaid plan or waiver
of such plan in a managed care setting, an
analysis of the differences in managed care
prescribing patterns when a covered outpatient
drug is prescribed in a managed care setting as
compared to when the drug is prescribed in a
fee-for-service setting.
(2) Additional content.--A report required under
subsection (a) for a calendar year may include State-
specific information about prescription utilization
management tools under State Medicaid plans or waivers
of such plans, including--
(A) a description of prescription utilization
management tools under State programs to
provide long-term services and supports under a
State Medicaid plan or a waiver of such plan;
(B) a comparison of prescription utilization
management tools applicable to populations
covered under a State Medicaid plan waiver
under section 1115 of the Social Security Act
(42 U.S.C. 1315) and the models applicable to
populations that are not covered under the
waiver;
(C) a comparison of the prescription
utilization management tools employed by
different Medicaid managed care organizations,
pharmacy benefit managers, and related entities
within the State;
(D) a comparison of the prescription
utilization management tools applicable to each
enrollment category under a State Medicaid plan
or waiver; and
(E) a comparison of the prescription
utilization management tools applicable under
the State Medicaid plan or waiver by patient
high-utilizer or risk status.
(3) Additional analysis.--To the extent practicable,
the Secretary shall include in each report published
under subsection (a)--
(A) analyses of national, State, and local
patterns of Medicaid population-based
prescribing behaviors; and
(B) recommendations for administrative or
legislative action to improve the effectiveness
of, and reduce costs for, covered outpatient
drugs under Medicaid while ensuring timely
beneficiary access to medically necessary
covered outpatient drugs.
(c) Use of T-MSIS Data.--Each report required under
subsection (a) shall--
(1) be prepared using data and definitions from the
Transformed Medicaid Statistical Information System (T-
MSIS) data set (or a successor data set) that is not
more than 24 months old on the date that the report is
published; and
(2) as appropriate, include a description with
respect to each State of the quality and completeness
of the data, as well as any necessary caveats
describing the limitations of the data reported to the
Secretary by the State that are sufficient to
communicate the appropriate uses for the information.
(d) Preparation of Report.--Each report required under
subsection (a) shall be prepared by the Administrator for the
Centers for Medicare & Medicaid Services.
(e) Authorization of Appropriations.--For purposes of
carrying out this section, there is authorized to be
appropriated $2,000,000 for fiscal year 2020 and each fiscal
year thereafter.
SEC. 207. RISK-SHARING VALUE-BASED PAYMENT AGREEMENTS FOR COVERED
OUTPATIENT DRUGS UNDER MEDICAID.
(a) In General.--Section 1927 of the Social Security Act (42
U.S.C. 1396r-8) is amended by adding at the end the following
new subsection:
``(l) State Option to Pay for Covered Outpatient Drugs
Through Risk-sharing Value-based Agreements.--
``(1) In general.--Beginning January 1, 2022, a State
shall have the option to pay (whether on a fee-for-
service or managed care basis) for covered outpatient
drugs that are potentially curative treatments intended
for one-time use that are administered to individuals
under this title by entering into a risk-sharing value-
based payment agreement with the manufacturer of the
drug in accordance with the requirements of this
subsection.
``(2) Secretarial approval.--
``(A) In general.--A State shall submit a
request to the Secretary to enter into a risk-
sharing value based payment agreement, and the
Secretary shall not approve a proposed risk-
sharing value-based payment agreement between a
State and a manufacturer for payment for a
covered outpatient drug of the manufacturer
unless the following requirements are met:
``(i) Manufacturer is party to rebate
agreement and in compliance with
requirements.--The manufacturer has a
rebate agreement in effect as required
under subsection (a) and (b) of this
section and is in compliance with all
applicable requirements under this
title.
``(ii) No increase to projected net
federal spending.--
``(I) In general.--The Chief
Actuary certifies that the
projected payments for each
covered outpatient drug under
such proposed agreement would
not result in greater estimated
Federal spending under this
title than the net Federal
spending that would result in
the absence of the agreement.
``(II) Net federal spending
defined.--For purposes of this
subsection, the term `net
Federal spending' means the
amount of Federal payments the
Chief Actuary estimates would
be made under this title for
administering a covered
outpatient drug to an
individual eligible for medical
assistance under a State plan
or a waiver of such plan,
reduced by the amount of all
rebates the Chief Actuary
estimates would be paid with
respect to the administering of
such drug, including all
rebates under this title and
any supplemental or other
additional rebates, in the
absence of such an agreement.
``(III) Information.--The
Chief Actuary shall make the
certifications required under
this clause based on the most
recently available and reliable
drug pricing and product
information. The State and
manufacturer shall provide the
Secretary and the Chief Actuary
with all necessary information
required to make the estimates
needed for such certifications.
``(iii) Launch and list price
justifications.--The manufacturer
submits all relevant information and
supporting documentation necessary for
pricing decisions as deemed appropriate
by the Secretary, which shall be
truthful and non-misleading, including
manufacturer information and supporting
documentation for launch price or list
price increases, and any applicable
justification required under section
1128L.
``(iv) Confidentiality of
information; penalties.--The provisions
of subparagraphs (C) and (D) of
subsection (b)(3) shall apply to a
manufacturer that fails to submit the
information and documentation required
under clauses (ii) and (iii) on a
timely basis, or that knowingly
provides false or misleading
information, in the same manner as such
provisions apply to a manufacturer with
a rebate agreement under this section.
``(B) Consideration of state request for
approval.--
``(i) In general.--The Secretary
shall treat a State request for
approval of a risk-sharing value-based
payment agreement in the same manner
that the Secretary treats a State plan
amendment, and subpart B of part 430 of
title 42, Code of Federal Regulations,
including, subject to clause (ii), the
timing requirements of section 430.16
of such title (as in effect on the date
of enactment of this subsection), shall
apply to a request for approval of a
risk-sharing value-based payment
agreement in the same manner as such
subpart applies to a State plan
amendment.
``(ii) Timing.--The Secretary shall
consult with the Commissioner of Food
and Drugs as required under
subparagraph (C) and make a
determination on whether to approve a
request from a State for approval of a
proposed risk-sharing value-based
payment agreement (or request
additional information necessary to
allow the Secretary to make a
determination with respect to such
request for approval) within the time
period, to the extent practicable,
specified in section 430.16 of title
42, Code of Federal Regulations (as in
effect on the date of enactment of this
subsection), but in no case shall the
Secretary take more than 180 days after
the receipt of such request for
approval or response to such request
for additional information to make such
a determination (or request additional
information).
``(C) Consultation with the commissioner of
food and drugs.--In considering whether to
approve a risk-sharing value-based payment
agreement, the Secretary, to the extent
necessary, shall consult with the Commissioner
of Food and Drugs to determine whether the
relevant clinical parameters specified in such
agreement are appropriate.
``(3) Installment-based payment structure.--
``(A) In general.--A risk-sharing value-based
payment agreement shall provide for a payment
structure under which, for every installment
year of the agreement (subject to subparagraph
(B)), the State shall pay the total installment
year amount in equal installments to be paid at
regular intervals over a period of time that
shall be specified in the agreement.
``(B) Requirements for installment
payments.--
``(i) Timing of first payment.--The
State shall make the first of the
installment payments described in
subparagraph (A) for an installment
year not later than 30 days after the
end of such year.
``(ii) Length of installment
period.--The period of time over which
the State shall make the installment
payments described in subparagraph (A)
for an installment year shall not be
longer than 5 years.
``(iii) Nonpayment or reduced payment
of installments following a failure to
meet clinical parameter.--If, prior to
the payment date (as specified in the
agreement) of any installment payment
described in subparagraph (A) or any
other alternative date or time frame
(as otherwise specified in the
agreement), the covered outpatient drug
which is subject to the agreement fails
to meet a relevant clinical parameter
of the agreement, the agreement shall
provide that--
``(I) the installment payment
shall not be made; or
``(II) the installment
payment shall be reduced by a
percentage specified in the
agreement that is based on the
outcome achieved by the drug
relative to the relevant
clinical parameter.
``(4) Notice of intent.--
``(A) In general.--Subject to subparagraph
(B), a manufacturer of a covered outpatient
drug shall not be eligible to enter into a
risk-sharing value-based payment agreement
under this subsection with respect to such drug
unless the manufacturer notifies the Secretary
that the manufacturer is interested in entering
into such an agreement with respect to such
drug. The decision to submit and timing of a
request to enter into a proposed risk-sharing
value-based payment agreement shall remain
solely within the discretion of the State and
shall only be effective upon Secretarial
approval as required under this subsection.
``(B) Treatment of subsequently approved
drugs.--
``(i) In general.--In the case of a
manufacturer of a covered outpatient
drug approved under section 505 of the
Federal Food, Drug, and Cosmetic Act or
licensed under section 351 of the
Public Health Service Act after the
date of enactment of this subsection,
not more than 90 days after meeting
with the Food and Drug Administration
following phase II clinical trials for
such drug (or, in the case of a drug
described in clause (ii), not later
than March 31, 2022), the manufacturer
must notify the Secretary of the
manufacturer's intent to enter into a
risk-sharing value-based payment
agreement under this subsection with
respect to such drug. If no such
meeting has occurred, the Secretary may
use discretion as to whether a
potentially curative treatment intended
for one-time use may qualify for a
risk-sharing value-based payment
agreement under this section. A
manufacturer notification of interest
shall not have any influence on a
decision for approval by the Food and
Drug Administration.
``(ii) Application to certain
subsequently approved drugs.--A drug
described in this clause is a covered
outpatient drug of a manufacturer--
``(I) that is approved under
section 505 of the Federal
Food, Drug, and Cosmetic Act or
licensed under section 351 of
the Public Health Service Act
after the date of enactment of
this subsection; and
``(II) with respect to which,
as of January 1, 2022, more
than 90 days have passed after
the manufacturer's meeting with
the Food and Drug
Administration following phase
II clinical trials for such
drug.
``(iii) Parallel approval.--The
Secretary, in coordination with the
Administrator of the Centers for
Medicare & Medicaid Services and the
Commissioner of Food and Drugs, shall,
to the extent practicable, approve a
State's request to enter into a
proposed risk-sharing value-based
payment agreement that otherwise meets
the requirements of this subsection at
the time that such a drug is approved
by the Food and Drug Administration to
help provide that no State that wishes
to enter into such an agreement is
required to pay for the drug in full at
one time if the State is seeking to pay
over a period of time as outlined in
the proposed agreement.
``(iv) Rule of construction.--Nothing
in this paragraph shall be applied or
construed to modify or affect the
timeframes or factors involved in the
Secretary's determination of whether to
approve or license a drug under section
505 of the Federal Food, Drug, and
Cosmetic Act or section 351 of the
Public Health Service Act.
``(5) Special payment rules.--
``(A) In general.--Except as otherwise
provided in this paragraph, with respect to an
individual who is administered a unit of a
covered outpatient drug that is purchased under
a State plan by a State Medicaid agency under a
risk-sharing value-based payment agreement in
an installment year, the State shall remain
liable to the manufacturer of such drug for
payment for such unit without regard to whether
the individual remains enrolled in the State
plan under this title (or a waiver of such
plan) for each installment year for which the
State is to make installment payments for
covered outpatient drugs purchased under the
agreement in such year.
``(B) Death.--In the case of an individual
described in subparagraph (A) who dies during
the period described in such subparagraph, the
State plan shall not be liable for any
remaining payment for the unit of the covered
outpatient drug administered to the individual
which is owed under the agreement described in
such subparagraph.
``(C) Withdrawal of approval.--In the case of
a covered outpatient drug that is the subject
of a risk-sharing value-based agreement between
a State and a manufacturer under this
subsection, including a drug approved in
accordance with section 506(c) of the Federal
Food, Drug, and Cosmetic Act, and such drug is
the subject of an application that has been
withdrawn by the Secretary, the State plan
shall not be liable for any remaining payment
that is owed under the agreement.
``(D) Alternative arrangement under
agreement.--Subject to approval by the
Secretary, the terms of a proposed risk-sharing
value-based payment agreement submitted for
approval by a State may provide that
subparagraph (A) shall not apply.
``(E) Guidance.--Not later than January 1,
2022, the Secretary shall issue guidance to
States establishing a process for States to
notify the Secretary when an individual who is
administered a unit of a covered outpatient
drug that is purchased by a State plan under a
risk-sharing value-based payment agreement
ceases to be enrolled under the State plan
under this title (or a waiver of such plan) or
dies before the end of the installment period
applicable to such unit under the agreement.
``(6) Treatment of payments under risk-sharing value-
based agreements for purposes of average manufacturer
price; best price.--The Secretary shall treat any
payments made to the manufacturer of a covered
outpatient drug under a risk-sharing value-based
payment agreement under this subsection during a rebate
period in the same manner that the Secretary treats
payments made under a State supplemental rebate
agreement under sections 447.504(c)(19) and
447.505(c)(7) of title 42, Code of Federal Regulations
(or any successor regulations) for purposes of
determining average manufacturer price and best price
under this section with respect to the covered
outpatient drug and a rebate period and for purposes of
offsets required under subsection (b)(1)(B).
``(7) Assessments and report to congress.--
``(A) Assessments.--
``(i) In general.--Not later than 180
days after the end of each assessment
period of any risk-sharing value-based
payment agreement for a State approved
under this subsection, the Secretary
shall conduct an evaluation of such
agreement which shall include an
evaluation by the Chief Actuary to
determine whether program spending
under the risk-sharing value-based
payment agreement aligned with the
projections for the agreement made
under paragraph (2)(A)(ii), including
an assessment of whether actual Federal
spending under this title under the
agreement was less or more than net
Federal spending would have been in the
absence of the agreement.
``(ii) Assessment period.--For
purposes of clause (i)--
``(I) the first assessment
period for a risk-sharing
value-based payment agreement
shall be the period of time
over which payments are
scheduled to be made under the
agreement for the first 10
individuals who are
administered covered outpatient
drugs under the agreement
except that such period shall
not exceed the 5-year period
after the date on which the
Secretary approves the
agreement; and
``(II) each subsequent
assessment period for a risk-
sharing value-based payment
agreement shall be the 5-year
period following the end of the
previous assessment period.
``(B) Results of assessments.--
``(i) Termination option.--If the
Secretary determines as a result of the
assessment by the Chief Actuary under
subparagraph (A) that the actual
Federal spending under this title for
any covered outpatient drug that was
the subject of the State's risk-sharing
value-based payment agreement was
greater than the net Federal spending
that would have resulted in the absence
of the agreement, the Secretary may
terminate approval of such agreement
and shall immediately conduct an
assessment under this paragraph of any
other ongoing risk-sharing value-based
payment agreement to which the same
manufacturer is a party.
``(ii) Repayment required.--
``(I) In general.--If the
Secretary determines as a
result of the assessment by the
Chief Actuary under
subparagraph (A) that the
Federal spending under the
risk-sharing value-based
agreement for a covered
outpatient drug that was
subject to such agreement was
greater than the net Federal
spending that would have
resulted in the absence of the
agreement, the manufacturer
shall repay the difference to
the State and Federal
governments in a timely manner
as determined by the Secretary.
``(II) Termination for
failure to pay.--The failure of
a manufacturer to make
repayments required under
subclause (I) in a timely
manner shall result in
immediate termination of all
risk-sharing value-based
agreements to which the
manufacturer is a party.
``(III) Additional
penalties.--In the case of a
manufacturer that fails to make
repayments required under
subclause (I), the Secretary
may treat such manufacturer in
the same manner as a
manufacturer that fails to pay
required rebates under this
section, and the Secretary
may--
``(aa) suspend or
terminate the
manufacturer's rebate
agreement under this
section; and
``(bb) pursue any
other remedy that would
be available if the
manufacturer had failed
to pay required rebates
under this section.
``(C) Report to congress.--Not later than 5
years after the first risk-sharing value-based
payment agreement is approved under this
subsection, the Secretary shall submit to
Congress and make available to the public a
report that includes--
``(i) an assessment of the impact of
risk-sharing value-based payment
agreements on access for individuals
who are eligible for benefits under a
State plan or waiver under this title
to medically necessary covered
outpatient drugs and related
treatments;
``(ii) an analysis of the impact of
such agreements on overall State and
Federal spending under this title;
``(iii) an assessment of the impact
of such agreements on drug prices,
including launch price and price
increases; and
``(iv) such recommendations to
Congress as the Secretary deems
appropriate.
``(8) Guidance and regulations.--
``(A) In general.--Not later than January 1,
2022, the Secretary shall issue guidance to
States seeking to enter into risk-sharing
value-based payment agreements under this
subsection that includes a model template for
such agreements. The Secretary may issue any
additional guidance or promulgate regulations
as necessary to implement and enforce the
provisions of this subsection.
``(B) Model agreements.--
``(i) In general.--If a State
expresses an interest in pursuing a
risk-sharing value-based payment
agreement under this subsection with a
manufacturer for the purchase of a
covered outpatient drug, the Secretary
may share with such State any risk-
sharing value-based agreement between a
State and the manufacturer for the
purchase of such drug that has been
approved under this subsection. While
such shared agreement may serve as a
template for a State that wishes to
propose, the use of a previously
approved agreement shall not affect the
submission and approval process for
approval of a proposed risk-sharing
value-based payment agreement under
this subsection, including the
requirements under paragraph (2)(A).
``(ii) Confidentiality.--In the case
of a risk-sharing value-based payment
agreement that is disclosed to a State
by the Secretary under this
subparagraph and that is only in effect
with respect to a single State, the
confidentiality of information
provisions described in subsection
(b)(3)(D) shall apply to such
information.
``(C) OIG consultation.--
``(i) In general.--The Secretary
shall consult with the Office of the
Inspector General of the Department of
Health and Human Services to determine
whether there are potential program
integrity concerns with agreement
approvals or templates and address
accordingly.
``(ii) OIG policy updates as
necessary.--The Inspector General of
the Department of Health and Human
Services shall review and update, as
necessary, any policies or guidelines
of the Office of the Inspector General
of the Department of Human Services
(including policies related to the
enforcement of section 1128B) to
accommodate the use of risk-sharing
value-based payment agreements in
accordance with this section.
``(9) Rules of construction.--
``(A) Modifications.--Nothing in this
subsection or any regulations promulgated under
this subsection shall prohibit a State from
requesting a modification from the Secretary to
the terms of a risk-sharing value-based payment
agreement. A modification that is expected to
result in any increase to projected net State
or Federal spending under the agreement shall
be subject to recertification by the Chief
Actuary as described in paragraph (2)(A)(ii)
before the modification may be approved.
``(B) Rebate agreements.--Nothing in this
subsection shall be construed as requiring a
State to enter into a risk-sharing value-based
payment agreement or as limiting or superseding
the ability of a State to enter into a
supplemental rebate agreement for a covered
outpatient drug.
``(C) FFP for payments under risk-sharing
value-based payment agreements.--Federal
financial participation shall be available
under this title for any payment made by a
State to a manufacturer for a covered
outpatient drug under a risk-sharing value-
based payment agreement in accordance with this
subsection, except that no Federal financial
participation shall be available for any
payment made by a State to a manufacturer under
such an agreement on and after the effective
date of a disapproval of such agreement by the
Secretary.
``(D) Continued application of other
provisions.--Except as expressly provided in
this subsection, nothing in this subsection or
in any regulations promulgated under this
subsection shall affect the application of any
other provision of this Act.
``(10) Authorization of appropriations.--For purposes
of carrying out this subsection, there is authorized to
be appropriated $5,000,000 for fiscal year 2020 and
each fiscal year thereafter.
``(11) Definitions.--In this subsection:
``(A) Chief actuary.--The term `Chief
Actuary' means the Chief Actuary of the Centers
for Medicare & Medicaid Services.
``(B) Installment year.--The term
`installment year' means, with respect to a
risk-sharing value-based payment agreement, a
12-month period during which a covered
outpatient drug is administered under the
agreement.
``(C) Potentially curative treatment intended
for one-time use.--The term `potentially
curative treatment intended for one-time use'
means a treatment that consists of the
administration of a covered outpatient drug
that--
``(i) is a form of gene therapy for a
rare disease, as defined by the
Commissioner of Food and Drugs,
designated under section 526 of the
Federal Food, Drug, and Cosmetics Act,
and approved under section 505 of such
Act or licensed under subsection (a) or
(k) of section 351 of the Public Health
Service Act to treat a serious or life-
threatening disease or condition;
``(ii) if administered in accordance
with the labeling of such drug, is
expected to result in either--
``(I) the cure of such
disease or condition; or
``(II) a reduction in the
symptoms of such disease or
condition to the extent that
such disease or condition is
not expected to lead to early
mortality; and
``(iii) is expected to achieve a
result described in clause (ii), which
may be achieved over an extended period
of time, after not more than 3
administrations.
``(D) Relevant clinical parameter.--The term
`relevant clinical parameter' means, with
respect to a covered outpatient drug that is
the subject of a risk-sharing value-based
payment agreement--
``(i) a clinical endpoint specified
in the drug's labeling or supported by
one or more of the compendia described
in section 1861(t)(2)(B)(ii)(I) that--
``(I) is able to be measured
or evaluated on an annual basis
for each year of the agreement
on an independent basis by a
provider or other entity; and
``(II) is required to be
achieved (based on observed
metrics in patient populations)
under the terms of the
agreement; or
``(ii) a surrogate endpoint (as
defined in section 507(e)(9) of the
Federal Food, Drug, and Cosmetic Act),
including those developed by patient-
focused drug development tools, that--
``(I) is able to be measured
or evaluated on an annual basis
for each year of the agreement
on an independent basis by a
provider or other entity; and
``(II) has been qualified by
the Food and Drug
Administration.
``(E) Risk-sharing value-based payment
agreement.--The term `risk-sharing value-based
payment agreement' means an agreement between a
State plan and a manufacturer--
``(i) for the purchase of a covered
outpatient drug of the manufacturer
that is a potentially curative
treatment intended for one-time use;
``(ii) under which payment for such
drug shall be made pursuant to an
installment-based payment structure
that meets the requirements of
paragraph (3);
``(iii) which conditions payment on
the achievement of at least 2 relevant
clinical parameters (as defined in
subparagraph (C));
``(iv) which provides that--
``(I) the State plan will
directly reimburse the
manufacturer for the drug; or
``(II) a third party will
reimburse the manufacture in a
manner approved by the
Secretary; and
``(v) is approved by the Secretary in
accordance with paragraph (2).
``(F) Total installment year amount.--The
term `total installment year amount' means,
with respect to a risk-sharing value-based
payment agreement for the purchase of a covered
outpatient drug and an installment year, an
amount equal to the product of--
``(i) the unit price of the drug
charged under the agreement; and
``(ii) the number of units of such
drug administered under the agreement
during such installment year.''.
(b) Conforming Amendments.--
(1) Section 1903(i)(10)(A) of the Social Security Act
(42 U.S.C. 1396b(i)(10)(A)) is amended by striking ``or
unless section 1927(a)(3) applies'' and inserting ``,
section 1927(a)(3) applies with respect to such drugs,
or such drugs are the subject of a risk-sharing value-
based payment agreement under section 1927(l)''.
(2) Section 1927(b) of the Social Security Act (42
U.S.C. 1396r-8(b)) is amended--
(A) in paragraph (1)(A), by inserting
``(except for drugs for which payment is made
by a State under a risk-sharing value-based
payment agreement under subsection (l))'' after
``under the State plan for such period''; and
(B) in paragraph (3)--
(i) in subparagraph (C)(i), by
inserting ``or subsection (l)(2)(A)''
after ``subparagraph (A)''; and
(ii) in subparagraph (D), in the
matter preceding clause (i), by
inserting ``, under subsection
(l)(2)(A),'' after ``under this
paragraph''.
SEC. 208. APPLYING MEDICAID DRUG REBATE REQUIREMENT TO DRUGS PROVIDED
AS PART OF OUTPATIENT HOSPITAL SERVICES.
(a) In General.--Section 1927(k)(3) of the Social Security
Act (42 U.S.C. 1396r-8(k)(3)) is amended to read as follows:
``(3) Limiting definition.--
``(A) In general.--The term `covered
outpatient drug' does not include any drug,
biological product, or insulin provided as part
of, or as incident to and in the same setting
as, any of the following (and for which payment
may be made under this title as part of payment
for the following and not as direct
reimbursement for the drug):
``(i) Inpatient hospital services.
``(ii) Hospice services.
``(iii) Dental services, except that
drugs for which the State plan
authorizes direct reimbursement to the
dispensing dentist are covered
outpatient drugs.
``(iv) Physicians' services.
``(v) Outpatient hospital services.
``(vi) Nursing facility services and
services provided by an intermediate
care facility for the mentally
retarded.
``(vii) Other laboratory and x-ray
services.
``(viii) Renal dialysis.
``(B) Other exclusions.--Such term also does
not include any such drug or product for which
a National Drug Code number is not required by
the Food and Drug Administration or a drug or
biological used for a medical indication which
is not a medically accepted indication.
``(C) State option.--At the option of a
State, such term may include any drug,
biological product, or insulin for which the
State is the primary payer under this title or
a demonstration project concerning this title,
and that is provided on an outpatient basis as
part of, or as incident to and in the same
setting as, described in clause (iv) or (v) of
subparagraph (A) and for which payment is made
as part of payment for such services.
``(D) No effect on best price.--Any drug,
biological product, or insulin excluded from
the definition of such term as a result of this
paragraph shall be treated as a covered
outpatient drug for purposes of determining the
best price (as defined in subsection (c)(1)(C))
for such drug, biological product, or
insulin.''.
(b) Effective Date; Implementation Guidance.--
(1) In general.--The amendment made by subsection (a)
shall take effect on the date that is 1 year after the
date of enactment of this Act.
(2) Implementation and guidance.--Not later than 1
year after the date of enactment of this Act, the
Secretary of Health and Human Services shall issue
guidance and relevant informational bulletins for
States, manufacturers (as defined in section 1927(k)(5)
of the Social Security Act (42 U.S.C. 1396r-8(k)(5)),
and other relevant stakeholders, including health care
providers, regarding implementation of the amendment
made by subsection (a).
TITLE III--FOOD AND DRUG ADMINISTRATION
Subtitle A--CREATES Act
SEC. 301. ACTIONS FOR DELAYS OF GENERIC DRUGS AND BIOSIMILAR BIOLOGICAL
PRODUCTS.
(a) Definitions.--In this section--
(1) the term ``commercially reasonable, market-based
terms'' means--
(A) a nondiscriminatory price for the sale of
the covered product at or below, but not
greater than, the most recent wholesale
acquisition cost for the drug, as defined in
section 1847A(c)(6)(B) of the Social Security
Act (42 U.S.C. 1395w-3a(c)(6)(B));
(B) a schedule for delivery that results in
the transfer of the covered product to the
eligible product developer consistent with the
timing under subsection (b)(2)(A)(iv); and
(C) no additional conditions are imposed on
the sale of the covered product;
(2) the term ``covered product''--
(A) means--
(i) any drug approved under
subsection (c) or (j) of section 505 of
the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355) or biological
product licensed under subsection (a)
or (k) of section 351 of the Public
Health Service Act (42 U.S.C. 262);
(ii) any combination of a drug or
biological product described in clause
(i); or
(iii) when reasonably necessary to
support approval of an application
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), as
applicable, or otherwise meet the
requirements for approval under either
such section, any product, including
any device, that is marketed or
intended for use with such a drug or
biological product; and
(B) does not include any drug or biological
product that appears on the drug shortage list
in effect under section 506E of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 356e),
unless--
(i) the drug or biological product
has been on the drug shortage list in
effect under such section 506E
continuously for more than 6 months; or
(ii) the Secretary determines that
inclusion of the drug or biological
product as a covered product is likely
to contribute to alleviating or
preventing a shortage;
(3) the term ``device'' has the meaning given the
term in section 201 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321);
(4) the term ``eligible product developer'' means a
person that seeks to develop a product for approval
pursuant to an application for approval under
subsection (b)(2) or (j) of section 505 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355) or for
licensing pursuant to an application under section
351(k) of the Public Health Service Act (42 U.S.C.
262(k));
(5) the term ``license holder'' 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 the holder of a license under
subsection (a) or (k) of section 351 of the Public
Health Service Act (42 U.S.C. 262) for a covered
product;
(6) the term ``REMS'' means a risk evaluation and
mitigation strategy under section 505-1 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355-1);
(7) the term ``REMS with ETASU'' means a REMS that
contains elements to assure safe use under section 505-
1(f) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355-1(f));
(8) the term ``Secretary'' means the Secretary of
Health and Human Services;
(9) the term ``single, shared system of elements to
assure safe use'' means a single, shared system of
elements to assure safe use under section 505-1(f) of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355-1(f)); and
(10) the term ``sufficient quantities'' means an
amount of a covered product that the eligible product
developer determines allows it to--
(A) conduct testing to support an application
under--
(i) subsection (b)(2) or (j) of
section 505 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355); or
(ii) section 351(k) of the Public
Health Service Act (42 U.S.C. 262(k));
and
(B) fulfill any regulatory requirements
relating to approval of such an application.
(b) Civil Action for Failure to Provide Sufficient Quantities
of a Covered Product.--
(1) In general.--An eligible product developer may
bring a civil action against the license holder for a
covered product seeking relief under this subsection in
an appropriate district court of the United States
alleging that the license holder has declined to
provide sufficient quantities of the covered product to
the eligible product developer on commercially
reasonable, market-based terms.
(2) Elements.--
(A) In general.--To prevail in a civil action
brought under paragraph (1), an eligible
product developer shall prove, by a
preponderance of the evidence--
(i) that--
(I) the covered product is
not subject to a REMS with
ETASU; or
(II) if the covered product
is subject to a REMS with
ETASU--
(aa) the eligible
product developer has
obtained a covered
product authorization
from the Secretary in
accordance with
subparagraph (B); and
(bb) the eligible
product developer has
provided a copy of the
covered product
authorization to the
license holder;
(ii) that, as of the date on which
the civil action is filed, the product
developer has not obtained sufficient
quantities of the covered product on
commercially reasonable, market-based
terms;
(iii) that the eligible product
developer has submitted a written
request to purchase sufficient
quantities of the covered product to
the license holder and such request--
(I) was sent to a named
corporate officer of the
license holder;
(II) was made by certified or
registered mail with return
receipt requested;
(III) specified an individual
as the point of contact for the
license holder to direct
communications related to the
sale of the covered product to
the eligible product developer
and a means for electronic and
written communications with
that individual; and
(IV) specified an address to
which the covered product was
to be shipped upon reaching an
agreement to transfer the
covered product; and
(iv) that the license holder has not
delivered to the eligible product
developer sufficient quantities of the
covered product on commercially
reasonable, market-based terms--
(I) for a covered product
that is not subject to a REMS
with ETASU, by the date that is
31 days after the date on which
the license holder received the
request for the covered
product; and
(II) for a covered product
that is subject to a REMS with
ETASU, by 31 days after the
later of--
(aa) the date on
which the license
holder received the
request for the covered
product; or
(bb) the date on
which the license
holder received a copy
of the covered product
authorization issued by
the Secretary in
accordance with
subparagraph (B).
(B) Authorization for covered product subject
to a rems with etasu.--
(i) Request.--An eligible product
developer may submit to the Secretary a
written request for the eligible
product developer to be authorized to
obtain sufficient quantities of an
individual covered product subject to a
REMS with ETASU.
(ii) Authorization.--Not later than
120 days after the date on which a
request under clause (i) is received,
the Secretary shall, by written notice,
authorize the eligible product
developer to obtain sufficient
quantities of an individual covered
product subject to a REMS with ETASU
for purposes of--
(I) development and testing
that does not involve human
clinical trials, if the
eligible product developer has
agreed to comply with any
conditions the Secretary
determines necessary; or
(II) development and testing
that involves human clinical
trials, if the eligible product
developer has--
(aa)(AA) submitted
protocols, informed
consent documents, and
informational materials
for testing that
include protections
that provide safety
protections comparable
to those provided by
the REMS for the
covered product; or
(BB) otherwise
satisfied the Secretary
that such protections
will be provided; and
(bb) met any other
requirements the
Secretary may
establish.
(iii) Notice.--A covered product
authorization issued under this
subparagraph shall state that the
provision of the covered product by the
license holder under the terms of the
authorization will not be a violation
of the REMS for the covered product.
(3) Affirmative defense.--In a civil action brought
under paragraph (1), it shall be an affirmative
defense, on which the defendant has the burden of
persuasion by a preponderance of the evidence--
(A) that, on the date on which the eligible
product developer requested to purchase
sufficient quantities of the covered product
from the license holder--
(i) neither the license holder nor
any of its agents, wholesalers, or
distributors was engaged in the
manufacturing or commercial marketing
of the covered product; and
(ii) neither the license holder nor
any of its agents, wholesalers, or
distributors otherwise had access to
inventory of the covered product to
supply to the eligible product
developer on commercially reasonable,
market-based terms;
(B) that--
(i) the license holder sells the
covered product through agents,
distributors, or wholesalers;
(ii) the license holder has placed no
restrictions, explicit or implicit, on
its agents, distributors, or
wholesalers to sell covered products to
eligible product developers; and
(iii) the covered product can be
purchased by the eligible product
developer in sufficient quantities on
commercially reasonable, market-based
terms from the agents, distributors, or
wholesalers of the license holder; or
(C) that the license holder made an offer to
the individual specified pursuant to paragraph
(2)(A)(iii)(III), by a means of communication
(electronic, written, or both) specified
pursuant to such paragraph, to sell sufficient
quantities of the covered product to the
eligible product developer at commercially
reasonable market-based terms--
(i) for a covered product that is not
subject to a REMS with ETASU, by the
date that is 14 days after the date on
which the license holder received the
request for the covered product, and
the eligible product developer did not
accept such offer by the date that is 7
days after the date on which the
eligible product developer received
such offer from the license holder; or
(ii) for a covered product that is
subject to a REMS with ETASU, by the
date that is 20 days after the date on
which the license holder received the
request for the covered product, and
the eligible product developer did not
accept such offer by the date that is
10 days after the date on which the
eligible product developer received
such offer from the license holder.
(4) Remedies.--
(A) In general.--If an eligible product
developer prevails in a civil action brought
under paragraph (1), the court shall--
(i) order the license holder to
provide to the eligible product
developer without delay sufficient
quantities of the covered product on
commercially reasonable, market-based
terms;
(ii) award to the eligible product
developer reasonable attorney's fees
and costs of the civil action; and
(iii) award to the eligible product
developer a monetary amount sufficient
to deter the license holder from
failing to provide eligible product
developers with sufficient quantities
of a covered product on commercially
reasonable, market-based terms, if the
court finds, by a preponderance of the
evidence--
(I) that the license holder
delayed providing sufficient
quantities of the covered
product to the eligible product
developer without a legitimate
business justification; or
(II) that the license holder
failed to comply with an order
issued under clause (i).
(B) Maximum monetary amount.--A monetary
amount awarded under subparagraph (A)(iii)
shall not be greater than the revenue that the
license holder earned on the covered product
during the period--
(i) beginning on--
(I) for a covered product
that is not subject to a REMS
with ETASU, the date that is 31
days after the date on which
the license holder received the
request; or
(II) for a covered product
that is subject to a REMS with
ETASU, the date that is 31 days
after the later of--
(aa) the date on
which the license
holder received the
request; or
(bb) the date on
which the license
holder received a copy
of the covered product
authorization issued by
the Secretary in
accordance with
paragraph (2)(B); and
(ii) ending on the date on which the
eligible product developer received
sufficient quantities of the covered
product.
(C) Avoidance of delay.--The court may issue
an order under subparagraph (A)(i) before
conducting further proceedings that may be
necessary to determine whether the eligible
product developer is entitled to an award under
clause (ii) or (iii) of subparagraph (A), or
the amount of any such award.
(c) Limitation of Liability.--A license holder for a covered
product shall not be liable for any claim under Federal, State,
or local law arising out of the failure of an eligible product
developer to follow adequate safeguards to assure safe use of
the covered product during development or testing activities
described in this section, including transportation, handling,
use, or disposal of the covered product by the eligible product
developer.
(d) No Violation of Rems.--Section 505-1 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355-1) is amended by adding
at the end the following new subsection:
``(l) Provision of Samples Not a Violation of Strategy.--The
provision of samples of a covered product to an eligible
product developer (as those terms are defined in section 301(a)
of the Lower Costs, More Cures Act of 2019) shall not be
considered a violation of the requirements of any risk
evaluation and mitigation strategy that may be in place under
this section for such drug.''.
(e) Rule of Construction.--
(1) Definition.--In this subsection, the term
``antitrust laws''--
(A) has the meaning given the term in
subsection (a) of the first section of the
Clayton Act (15 U.S.C. 12); and
(B) includes section 5 of the Federal Trade
Commission Act (15 U.S.C. 45) to the extent
that such section applies to unfair methods of
competition.
(2) Antitrust laws.--Nothing in this section shall be
construed to limit the operation of any provision of
the antitrust laws.
SEC. 302. REMS APPROVAL PROCESS FOR SUBSEQUENT FILERS.
Section 505-1 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355-1), as amended by section 301, is further amended--
(1) in subsection (g)(4)(B)--
(A) in clause (i) by striking ``or'' after
the semicolon;
(B) in clause (ii) by striking the period at
the end and inserting ``; or''; and
(C) by adding at the end the following:
``(iii) accommodate different,
comparable aspects of the elements to
assure safe use for a drug that is the
subject of an application under section
505(j), and the applicable listed
drug.'';
(2) in subsection (i)(1), by striking subparagraph
(C) and inserting the following:
``(C)(i) Elements to assure safe use, if
required under subsection (f) for the listed
drug, which, subject to clause (ii), for a drug
that is the subject of an application under
section 505(j) may use--
``(I) a single, shared system
with the listed drug under
subsection (f); or
``(II) a different,
comparable aspect of the
elements to assure safe use
under subsection (f).
``(ii) The Secretary may require a
drug that is the subject of an
application under section 505(j) and
the listed drug to use a single, shared
system under subsection (f), if the
Secretary determines that no different,
comparable aspect of the elements to
assure safe use could satisfy the
requirements of subsection (f).'';
(3) in subsection (i), by adding at the end the
following:
``(3) Shared rems.--If the Secretary approves, in
accordance with paragraph (1)(C)(i)(II), a different,
comparable aspect of the elements to assure safe use
under subsection (f) for a drug that is the subject of
an abbreviated new drug application under section
505(j), the Secretary may require that such different
comparable aspect of the elements to assure safe use
can be used with respect to any other drug that is the
subject of an application under section 505(j) or
505(b) that references the same listed drug.''; and
(4) by adding at the end the following:
``(m) Separate Rems.--When used in this section, the terms
`different, comparable aspect of the elements to assure safe
use' or `different, comparable approved risk evaluation and
mitigation strategies' means a risk evaluation and mitigation
strategy for a drug that is the subject of an application under
section 505(j) that uses different methods or operational means
than the strategy required under subsection (a) for the
applicable listed drug, or other application under section
505(j) with the same such listed drug, but achieves the same
level of safety as such strategy.''.
SEC. 303. RULE OF CONSTRUCTION.
(a) In General.--Nothing in this subtitle, the amendments
made by this subtitle, or in section 505-1 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355-1), shall be construed
as--
(1) prohibiting a license holder from providing an
eligible product developer access to a covered product
in the absence of an authorization under this subtitle;
or
(2) in any way negating the applicability of a REMS
with ETASU, as otherwise required under such section
505-1, with respect to such covered product.
(b) Definitions.--In this section, the terms ``covered
product'', ``eligible product developer'', ``license holder'',
and ``REMS with ETASU'' have the meanings given such terms in
section 301(a).
Subtitle B--Pay-for-Delay
SEC. 311. UNLAWFUL AGREEMENTS.
(a) Agreements Prohibited.--Subject to subsections (b) and
(c), it shall be unlawful for an NDA or BLA holder and a
subsequent filer (or for two subsequent filers) to enter into,
or carry out, an agreement resolving or settling a covered
patent infringement claim on a final or interim basis if under
such agreement--
(1) a subsequent filer directly or indirectly
receives from such holder (or in the case of such an
agreement between two subsequent filers, the other
subsequent filer) anything of value, including a
license; and
(2) the subsequent filer agrees to limit or forego
research on, or development, manufacturing, marketing,
or sales, for any period of time, of the covered
product that is the subject of the application
described in subparagraph (A) or (B) of subsection
(g)(8).
(b) Exclusion.--It shall not be unlawful under subsection (a)
if a party to an agreement described in such subsection
demonstrates by clear and convincing evidence that the value
described in subsection (a)(1) is compensation solely for other
goods or services that the subsequent filer has promised to
provide.
(c) Limitation.--Nothing in this section shall prohibit an
agreement resolving or settling a covered patent infringement
claim in which the consideration granted by the NDA or BLA
holder to the subsequent filer (or from one subsequent filer to
another) as part of the resolution or settlement includes only
one or more of the following:
(1) The right to market the covered product that is
the subject of the application described in
subparagraph (A) or (B) of subsection (g)(8) in the
United States before the expiration of--
(A) any patent that is the basis of the
covered patent infringement claim; or
(B) any patent right or other statutory
exclusivity that would prevent the marketing of
such covered product.
(2) A payment for reasonable litigation expenses not
to exceed $7,500,000 in the aggregate.
(3) A covenant not to sue on any claim that such
covered product infringes a patent.
(d) Enforcement by Federal Trade Commission.--
(1) General application.--The requirements of this
section apply, according to their terms, to an NDA or
BLA holder or subsequent filer that is--
(A) a person, partnership, or corporation
over which the Commission has authority
pursuant to section 5(a)(2) of the Federal
Trade Commission Act (15 U.S.C. 45(a)(2)); or
(B) a person, partnership, or corporation
over which the Commission would have authority
pursuant to such section but for the fact that
such person, partnership, or corporation is not
organized to carry on business for its own
profit or that of its members.
(2) Unfair or deceptive acts or practices enforcement
authority.--
(A) In general.--A violation of this section
shall be treated as an unfair or deceptive act
or practice in violation of section 5(a)(1) of
the Federal Trade Commission Act (15 U.S.C.
45(a)(1)).
(B) Powers of commission.--Except as provided
in subparagraph (C) and paragraphs (1)(B) and
(3)--
(i) the Commission shall enforce this
section in the same manner, by the same
means, and with the same jurisdiction,
powers, and duties as though all
applicable terms and provisions of the
Federal Trade Commission Act (15 U.S.C.
41 et seq.) were incorporated into and
made a part of this section; and
(ii) any NDA or BLA holder or
subsequent filer that violates this
section shall be subject to the
penalties and entitled to the
privileges and immunities provided in
the Federal Trade Commission Act.
(C) Judicial review.--In the case of a cease
and desist order issued by the Commission under
section 5 of the Federal Trade Commission Act
(15 U.S.C. 45) for violation of this section, a
party to such order may obtain judicial review
of such order as provided in such section 5,
except that--
(i) such review may only be obtained
in--
(I) the United States Court
of Appeals for the District of
Columbia Circuit;
(II) the United States Court
of Appeals for the circuit in
which the ultimate parent
entity, as defined in section
801.1(a)(3) of title 16, Code
of Federal Regulations, or any
successor thereto, of the NDA
or BLA holder (if any such
holder is a party to such
order) is incorporated as of
the date that the application
described in subparagraph (A)
or (B) of subsection (g)(8) or
an approved application that is
deemed to be a license for a
biological product under
section 351(k) of the Public
Health Service Act (42 U.S.C.
262(k)) pursuant to section
7002(e)(4) of the Biologics
Price Competition and
Innovation Act of 2009 (Public
Law 111-148; 124 Stat. 817) is
submitted to the Commissioner
of Food and Drugs; or
(III) the United States Court
of Appeals for the circuit in
which the ultimate parent
entity, as so defined, of any
subsequent filer that is a
party to such order is
incorporated as of the date
that the application described
in subparagraph (A) or (B) of
subsection (g)(8) is submitted
to the Commissioner of Food and
Drugs; and
(ii) the petition for review shall be
filed in the court not later than 30
days after such order is served on the
party seeking review.
(3) Additional enforcement authority.--
(A) Civil penalty.--The Commission may
commence a civil action to recover a civil
penalty in a district court of the United
States against any NDA or BLA holder or
subsequent filer that violates this section.
(B) Special rule for recovery of penalty if
cease and desist order issued.--
(i) In general.--If the Commission
has issued a cease and desist order in
a proceeding under section 5 of the
Federal Trade Commission Act (15 U.S.C.
45) for violation of this section--
(I) the Commission may
commence a civil action under
subparagraph (A) to recover a
civil penalty against any party
to such order at any time
before the expiration of the 1-
year period beginning on the
date on which such order
becomes final under section
5(g) of such Act (15 U.S.C.
45(g)); and
(II) in such civil action,
the findings of the Commission
as to the material facts in
such proceeding shall be
conclusive, unless--
(aa) the terms of
such order expressly
provide that the
Commission's findings
shall not be
conclusive; or
(bb) such order
became final by reason
of section 5(g)(1) of
such Act (15 U.S.C.
45(g)(1)), in which
case such findings
shall be conclusive if
supported by evidence.
(ii) Relationship to penalty for
violation of an order.--The penalty
provided in clause (i) for violation of
this section is separate from and in
addition to any penalty that may be
incurred for violation of an order of
the Commission under section 5(l) of
the Federal Trade Commission Act (15
U.S.C. 45(l)).
(C) Amount of penalty.--
(i) In general.--The amount of a
civil penalty imposed in a civil action
under subparagraph (A) on a party to an
agreement described in subsection (a)
shall be sufficient to deter violations
of this section, but in no event
greater than--
(I) if such party is the NDA
or BLA holder (or, in the case
of an agreement between two
subsequent filers, the
subsequent filer who gave the
value described in subsection
(a)(1)), the greater of--
(aa) 3 times the
value received by such
NDA or BLA holder (or
by such subsequent
filer) that is
reasonably attributable
to the violation of
this section; or
(bb) 3 times the
value given to the
subsequent filer (or to
the other subsequent
filer) reasonably
attributable to the
violation of this
section; and
(II) if such party is the
subsequent filer (or, in the
case of an agreement between
two subsequent filers, the
subsequent filer who received
the value described in
subsection (a)(1)), 3 times the
value received by such
subsequent filer that is
reasonably attributable to the
violation of this section.
(ii) Factors for consideration.--In
determining such amount, the court
shall take into account--
(I) the nature,
circumstances, extent, and
gravity of the violation;
(II) with respect to the
violator, the degree of
culpability, any history of
violations, the ability to pay,
any effect on the ability to
continue doing business,
profits earned by the NDA or
BLA holder (or, in the case of
an agreement between two
subsequent filers, the
subsequent filer who gave the
value described in subsection
(a)(1)), compensation received
by the subsequent filer (or, in
the case of an agreement
between two subsequent filers,
the subsequent filer who
received the value described in
subsection (a)(1)), and the
amount of commerce affected;
and
(III) other matters that
justice requires.
(D) Injunctions and other equitable relief.--
In a civil action under subparagraph (A), the
United States district courts are empowered to
grant mandatory injunctions and such other and
further equitable relief as they deem
appropriate.
(4) Remedies in addition.--Remedies provided in this
subsection are in addition to, and not in lieu of, any
other remedy provided by Federal law.
(5) Preservation of authority of commission.--Nothing
in this section shall be construed to affect any
authority of the Commission under any other provision
of law.
(e) Federal Trade Commission Rulemaking.--The Commission may,
in its discretion, by rule promulgated under section 553 of
title 5, United States Code, exempt from this section certain
agreements described in subsection (a) if the Commission finds
such agreements to be in furtherance of market competition and
for the benefit of consumers.
(f) Antitrust Laws.--Nothing in this section shall modify,
impair, limit, or supersede the applicability of the antitrust
laws as defined in subsection (a) of the first section of the
Clayton Act (15 U.S.C. 12(a)), and of section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent that such
section 5 applies to unfair methods of competition. Nothing in
this section shall modify, impair, limit, or supersede the
right of a subsequent filer to assert claims or counterclaims
against any person, under the antitrust laws or other laws
relating to unfair competition.
(g) Definitions.--In this section:
(1) Agreement resolving or settling a covered patent
infringement claim.--The term ``agreement resolving or
settling a covered patent infringement claim'' means
any agreement that--
(A) resolves or settles a covered patent
infringement claim; or
(B) is contingent upon, provides for a
contingent condition for, or is otherwise
related to the resolution or settlement of a
covered patent infringement claim.
(2) Commission.--The term ``Commission'' means the
Federal Trade Commission.
(3) Covered patent infringement claim.--The term
``covered patent infringement claim'' means an
allegation made by the NDA or BLA holder to a
subsequent filer (or, in the case of an agreement
between two subsequent filers, by one subsequent filer
to another), whether or not included in a complaint
filed with a court of law, that--
(A) the submission of the application
described in subparagraph (A) or (B) of
paragraph (9), or the manufacture, use,
offering for sale, sale, or importation into
the United States of a covered product that is
the subject of such an application--
(i) in the case of an agreement
between an NDA or BLA holder and a
subsequent filer, infringes any patent
owned by, or exclusively licensed to,
the NDA or BLA holder of the covered
product; or
(ii) in the case of an agreement
between two subsequent filers,
infringes any patent owned by the
subsequent filer; or
(B) in the case of an agreement between an
NDA or BLA holder and a subsequent filer, the
covered product to be manufactured under such
application uses a covered product as claimed
in a published patent application.
(4) Covered product.--The term ``covered product''
means a drug (as defined in section 201(g) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C.
321(g))), including a biological product (as defined in
section 351(i) of the Public Health Service Act (42
U.S.C. 262(i)).
(5) NDA or bla holder.--The term ``NDA or BLA
holder'' means--
(A) the holder of--
(i) an approved new drug application
filed under section 505(b)(1) of the
Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355(b)(1)) for a covered
product; or
(ii) a biologics license application
filed under section 351(a) of the
Public Health Service Act (42 U.S.C.
262(a)) with respect to a biological
product;
(B) a person owning or controlling
enforcement of the patent on--
(i) the list published under section
505(j)(7) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355(j)(7))
in connection with the application
described in subparagraph (A)(i); or
(ii) any list published under section
351 of the Public Health Service Act
(42 U.S.C. 262) comprised of patents
associated with biologics license
applications filed under section 351(a)
of such Act (42 U.S.C. 262(a)); or
(C) the predecessors, subsidiaries,
divisions, groups, and affiliates controlled
by, controlling, or under common control with
any entity described in subparagraph (A) or (B)
(such control to be presumed by direct or
indirect share ownership of 50 percent or
greater), as well as the licensees, licensors,
successors, and assigns of each of the
entities.
(6) Patent.--The term ``patent'' means a patent
issued by the United States Patent and Trademark
Office.
(7) Statutory exclusivity.--The term ``statutory
exclusivity'' means those prohibitions on the
submission or approval of drug applications under
clauses (ii) through (iv) of section 505(c)(3)(E) (5-
and 3-year exclusivity), clauses (ii) through (iv) of
section 505(j)(5)(F) (5-year and 3-year exclusivity),
section 505(j)(5)(B)(iv) (180-day exclusivity), section
527 (orphan drug exclusivity), section 505A (pediatric
exclusivity), or section 505E (qualified infectious
disease product exclusivity) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355(c)(3)(E),
355(j)(5)(B)(iv), 355(j)(5)(F), 360cc, 355a, 355f), or
prohibitions on the submission or licensing of
biologics license applications under section 351(k)(6)
(interchangeable biological product exclusivity) or
section 351(k)(7) (biological product reference product
exclusivity) of the Public Health Service Act (42
U.S.C. 262(k)(6), (7)).
(8) Subsequent filer.--The term ``subsequent filer''
means--
(A) in the case of a drug, a party that owns
or controls an abbreviated new drug application
submitted pursuant to section 505(j) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355(j)) or a new drug application submitted
pursuant to section 505(b)(2) of the Federal
Food, Drug, and Cosmetic Act (21U.S.C.
355(b)(2)) and filed under section 505(b)(1) of
such Act (21 U.S.C. 355(b)(1)) or has the
exclusive rights to distribute the covered
product that is the subject of such
application; or
(B) in the case of a biological product, a
party that owns or controls an application
filed with the Food and Drug Administration
under section 351(k) of the Public Health
Service Act (42 U.S.C. 262(k)) or has the
exclusive rights to distribute the biological
product that is the subject of such
application.
(h) Effective Date.--This section applies with respect to
agreements described in subsection (a) entered into on or after
the date of the enactment of this Act.
SEC. 312. NOTICE AND CERTIFICATION OF AGREEMENTS.
(a) Notice of All Agreements.--Section 1111(7) of the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (21 U.S.C. 355 note) is amended by inserting ``or the
owner of a patent for which a claim of infringement could
reasonably be asserted against any person for making, using,
offering to sell, selling, or importing into the United States
a biological product that is the subject of a biosimilar
biological product application'' before the period at the end.
(b) Certification of Agreements.--Section 1112 of such Act
(21 U.S.C. 355 note) is amended by adding at the end the
following:
``(d) Certification.--The Chief Executive Officer or the
company official responsible for negotiating any agreement
under subsection (a) or (b) that is required to be filed under
subsection (c) shall, within 30 days of such filing, execute
and file with the Assistant Attorney General and the Commission
a certification as follows: `I declare that the following is
true, correct, and complete to the best of my knowledge: The
materials filed with the Federal Trade Commission and the
Department of Justice under section 1112 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003,
with respect to the agreement referenced in this
certification--
```(1) represent the complete, final, and exclusive
agreement between the parties;
```(2) include any ancillary agreements that are
contingent upon, provide a contingent condition for,
were entered into within 30 days of, or are otherwise
related to, the referenced agreement; and
```(3) include written descriptions of any oral
agreements, representations, commitments, or promises
between the parties that are responsive to subsection
(a) or (b) of such section 1112 and have not been
reduced to writing.'.''.
SEC. 313. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD.
Section 505(j)(5)(D)(i)(V) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by
inserting ``section 311 of the Lower Costs, More Cures Act of
2019 or'' after ``that the agreement has violated''.
SEC. 314. COMMISSION LITIGATION AUTHORITY.
Section 16(a)(2) of the Federal Trade Commission Act (15
U.S.C. 56(a)(2)) is amended--
(1) in subparagraph (D), by striking ``or'' after the
semicolon;
(2) in subparagraph (E), by inserting ``or'' after
the semicolon; and
(3) by inserting after subparagraph (E) the
following:
``(F) under section 311(d)(3)(A) of the Lower
Costs, More Cures Act of 2019;''.
SEC. 315. STATUTE OF LIMITATIONS.
(a) In General.--Except as provided in subsection (b), the
Commission shall commence any administrative proceeding or
civil action to enforce section 311 of this Act not later than
6 years after the date on which the parties to the agreement
file the Notice of Agreement as provided by section 1112(c)(2)
and (d) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (21 U.S.C. 355 note).
(b) Civil Action After Issuance of Cease and Desist Order.--
If the Commission has issued a cease and desist order under
section 5 of the Federal Trade Commission Act (15 U.S.C. 45)
for violation of section 311 of this Act and the proceeding for
the issuance of such order was commenced within the period
required by subsection (a) of this section, such subsection
does not prohibit the commencement, after such period, of a
civil action under section 311(d)(3)(A) against a party to such
order or a civil action under subsection (l) of such section 5
for violation of such order.
Subtitle C--BLOCKING Act
SEC. 321. CHANGE CONDITIONS OF FIRST GENERIC EXCLUSIVITY TO SPUR ACCESS
AND COMPETITION.
(a) In General.--Section 505(j)(5)(B)(iv) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(B)(iv)) is
amended--
(1) in subclause (I), by striking ``180 days after''
and all that follows through the period at the end and
inserting the following: ``180 days after the earlier
of--
``(aa) the date of the first
commercial marketing of the
drug (including the commercial
marketing of the listed drug)
by any first applicant; or
``(bb) the applicable date
specified in subclause
(III).''; and
(2) by adding at the end the following new subclause:
``(III) Applicable date.--The
applicable date specified in this
subclause, with respect to an
application for a drug described in
subclause (I), is the date on which
each of the following conditions is
first met:
``(aa) The approval of such
an application could be made
effective, but for the
eligibility of a first
applicant for 180-day
exclusivity under this clause.
``(bb) At least 30 months
have passed since the date of
submission of an application
for the drug by at least one
first applicant.
``(cc) Approval of an
application for the drug
submitted by at least one first
applicant is not precluded
under clause (iii).
``(dd) No application for the
drug submitted by any first
applicant is approved at the
time the conditions under items
(aa), (bb), and (cc) are all
met, regardless of whether such
an application is subsequently
approved.''.
(b) Information.--The Secretary of Health and Human Services
shall--
(1) not later than 120 days after the date of
enactment of this Act, publish, as appropriate and
available, information sufficient to allow applicants
to assess whether the conditions described in section
505(j)(5)(B)(iv)(III) of the Federal Food, Drug, and
Cosmetic Act (as added by subsection (a)) are satisfied
for all applications where the exclusivity period under
clause (iv)(I) of section 505(j)(5)(B) of the Federal
Food, Drug, and Cosmetic Act (as amended by such
subsection) has not expired; and
(2) publish updates to such information to reflect
the most recent information available to the Secretary.
Subtitle D--Purple Book
SEC. 331. PUBLIC LISTING.
Section 351(k) of the Public Health Service Act (42 U.S.C.
262(k)) is amended by adding at the end the following:
``(9) Public listing.--
``(A) In general.--
``(i) Initial publication.--Not later
than 180 days after the date of
enactment of the Lower Costs, More
Cures Act of 2019, the Secretary shall
publish and make available to the
public in a searchable, electronic
format--
``(I) a list in alphabetical
order of the nonproprietary or
proper name of each biological
product for which a biologics
license under subsection (a) or
this subsection is in effect,
or that has been deemed to be
licensed under this section
pursuant to section 7002(e)(4)
of the Biologics Price
Competition and Innovation Act
of 2009, as of such date of
enactment;
``(II) the date of approval
of the marketing application
and the application number; and
``(III) the marketing or
licensure status of the
biological product for which a
biologics license under
subsection (a) or this
subsection is in effect or that
has been deemed to be licensed
under this section pursuant to
section 7002(e)(4) of the
Biologics Price Competition and
Innovation Act of 2009.
``(ii) Revisions.--Every 30 days
after the publication of the first list
under clause (i), the Secretary shall
revise the list to include each
biological product which has been
licensed under subsection (a) or this
subsection during the 30-day period.
``(iii) Patent information.--Not
later than 30 days after a list of
patents under subsection (l)(3)(A), or
a supplement to such list under
subsection (l)(7), has been provided by
the reference product sponsor to the
subsection (k) applicant respecting a
biological product included on the list
published under this subparagraph, the
reference product sponsor shall provide
such list of patents (or supplement
thereto) and their corresponding expiry
dates to the Secretary, and the
Secretary shall, in revisions made
under clause (ii), include such
information for such biological
product. Within 30 days of providing
any subsequent or supplemental list of
patents to any subsequent subsection
(k) applicant under subsection
(l)(3)(A) or (l)(7), the reference
product sponsor shall update the
information provided to the Secretary
under this clause with any additional
patents from such subsequent or
supplemental list and their
corresponding expiry dates.
``(iv) Listing of exclusivities.--For
each biological product included on the
list published under this subparagraph,
the Secretary shall specify each
exclusivity period that is applicable
and has not concluded under paragraph
(6) or paragraph (7).
``(B) Withdrawal or suspension of
licensure.--If the licensing of a biological
product was withdrawn or suspended for safety,
purity, or potency reasons, it may not be
published in the list under subparagraph (A).
If the withdrawal or suspension occurred after
its publication in such list, the reference
product sponsor shall notify the Secretary
that--
``(i) the biological product shall be
immediately removed from such list--
``(I) for the same period as
the withdrawal or suspension;
or
``(II) if the biological
product has been withdrawn from
sale, for the period of
withdrawal from sale or, if
earlier, the period ending on
the date the Secretary
determines that the withdrawal
from sale is not for safety,
purity, or potency reasons; and
``(ii) a notice of the removal shall
be published in the Federal
Register.''.
SEC. 332. REVIEW AND REPORT ON TYPES OF INFORMATION TO BE LISTED.
Not later than 3 years after the date of enactment of this
Act, the Secretary of Health and Human Services shall--
(1) solicit public comment regarding the type of
information, if any, that should be added to or removed
from the list required by paragraph (9) of section
351(k) of the Public Health Service Act (42 U.S.C.
262(k)), as added by section 331; and
(2) transmit to Congress an evaluation of such
comments, including any recommendations about the types
of information that should be added to or removed from
the list.
Subtitle E--Orange Book
SEC. 341. ORANGE BOOK.
(a) Submission of Patent Information for Brand Name Drugs.--
Paragraph (1) of section 505(b) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(b)) is amended to read as follows:
``(b)(1) Any person may file with the Secretary an
application with respect to any drug subject to the provisions
of subsection (a). Such persons shall submit to the Secretary
as part of the application--
``(A) full reports of investigations which have been
made to show whether or not such drug is safe for use
and whether such drug is effective in use;
``(B) a full list of the articles used as components
of such drug;
``(C) a full statement of the composition of such
drug;
``(D) a full description of the methods used in, and
the facilities and controls used for, the manufacture,
processing, and packing of such drug;
``(E) such samples of such drug and of the articles
used as components thereof as the Secretary may
require;
``(F) specimens of the labeling proposed to be used
for such drug;
``(G) any assessments required under section 505B;
and
``(H) patent information, with respect to each patent
for which a claim of patent infringement could
reasonably be asserted if a person not licensed by the
owner engaged in the manufacture, use, or sale of the
drug, and consistent with the following requirements:
``(i) The applicant shall file with the
application the patent number and the
expiration date of--
``(I) any patent which claims the
drug for which the applicant submitted
the application and is a drug substance
(including active ingredient) patent or
a drug product (including formulation
and composition) patent; and
``(II) any patent which claims the
method of using such drug.
``(ii) If an application is filed under this
subsection for a drug and a patent of the type
described in clause (i) which claims such drug
or a method of using such drug is issued after
the filing date but before approval of the
application, the applicant shall amend the
application to include such patent information.
Upon approval of the application, the Secretary shall publish
the information submitted under subparagraph (H). The Secretary
shall, in consultation with the Director of the National
Institutes of Health and with representatives of the drug
manufacturing industry, review and develop guidance, as
appropriate, on the inclusion of women and minorities in
clinical trials required by subparagraph (A).''.
(b) Conforming Changes to Requirements for Subsequent
Submission of Patent Information.--Section 505(c)(2) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(7)) is
amended--
(1) by inserting after ``the patent number and the
expiration date of any patent which'' the following:
``fulfills the criteria in subsection (b) and'';
(2) by inserting after the first sentence the
following: ``Patent information that is not the type of
patent information required by subsection (b) shall not
be submitted.''; and
(3) by inserting after ``could not file patent
information under subsection (b) because no patent''
the following: ``of the type required to be submitted
in subsection (b)''.
(c) Listing of Exclusivities.--Subparagraph (A) of section
505(j)(7) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355(j)(7)) is amended by adding at the end the
following:
``(iv) For each drug included on the list, the Secretary
shall specify each exclusivity period that is applicable and
has not concluded under--
``(I) clause (ii), (iii), or (iv) of subsection
(c)(3)(E) of this section;
``(II) clause (iv) or (v) of paragraph (5)(B) of this
subsection;
``(III) clause (ii), (iii), or (iv) of paragraph
(5)(F) of this subsection;
``(IV) section 505A;
``(V) section 505E; or
``(VI) section 527(a).''.
(d) Removal of Invalid Patents.--
(1) In general.--Section 505(j)(7) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(7)) is
amended by adding at the end the following:
``(D)(i) The holder of an application approved under
subsection (c) for a drug on the list shall notify within 14
days the Secretary in writing if either of the following
occurs:
``(I) The Patent Trial and Appeals Board issues a
decision from which no appeal has been or can be taken
that a patent for such drug is invalid.
``(II) A court issues a decision from which no appeal
has been or can be taken that a patent for such drug is
invalid.
``(ii) The holder of an approved application shall include in
any notification under clause (i) a copy of the decision
described in subclause (I) or (II) of clause (i).
``(iii) The Secretary shall remove from the list any patent
that is determined to be invalid in a decision described in
subclause (I) or (II) of clause (i)--
``(I) promptly; but
``(II) not before the expiration of any 180-day
exclusivity period under paragraph (5)(B)(iv) that
relies on a certification described in paragraph
(2)(A)(vii)(IV) that such patent was invalid.''.
(2) Applicability.--Subparagraph (D) of section
505(j)(7) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355(j)(7)), as added by paragraph (1),
applies only with respect to a decision described in
such subparagraph that is issued on or after the date
of enactment of this Act.
(e) Review and Report.--Not later than one year after the
date of enactment of this Act, the Secretary of Health and
Human Services, acting through the Commissioner of Food and
Drugs, shall--
(1) solicit public comment regarding the types of
patent information that should be included on the list
under section 507(j)(7) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(7)); and
(2) transmit to the Congress an evaluation of such
comments, including any recommendations about the types
of patent information that should be included on or
removed from such list.
SEC. 342. GAO REPORT TO CONGRESS.
(a) In General.--Not later than one year after the date of
enactment of this Act, the Comptroller General of the United
States (referred to in this section as the ``Comptroller
General'') shall submit to the Committee on Energy and Commerce
of the House of Representatives a report on the patents
included in the list published under section 505(j)(7) of the
Federal Food, Drug and Cosmetic Act (21 U.S.C. 355(j)(7)),
including an analysis and evaluation of the types of patents
included in such list and the claims such patents make about
the products they claim.
(b) Contents.--The Comptroller General shall include in the
report under subsection (a)--
(1) data on the number of--
(A) patents included in the list published
under paragraph (7) of section 505(j) of the
Federal Food, Drug and Cosmetic Act (21 U.S.C.
355(j)), that claim the active ingredient or
formulation of a drug in combination with a
device that is used for delivery of the drug,
together comprising the finished dosage form of
the drug; and
(B) claims in each patent that claim a device
that is used for the delivery of the drug, but
do not claim such device in combination with an
active ingredient or formulation of a drug;
(2) data on the date of inclusion in the list under
paragraph (7) of such section 505(j) for all patents
under such list, as compared to patents that claim a
method of using the drug in combination with a device;
(3) an analysis regarding the impact of including on
the list under paragraph (7) of such section 505(j)
certain types of patent information for drug product
applicants and approved application holders, including
an analysis of whether--
(A) the listing of the patents described in
paragraph (1)(A) delayed the market entry of
one or more drugs approved under such section
505(j); and
(B) not listing the patents described in
paragraph (1)(A) would delay the market entry
of one or more such drugs; and
(4) recommendations about which kinds of patents
relating to devices described in paragraph (1)(A)
should be submitted to the Secretary of Health and
Human Services for inclusion on the list under
paragraph (7) of such section 505(j) and which patents
should not be required to be so submitted.
Subtitle F--Advancing Education on Biosimilars
SEC. 351. EDUCATION ON BIOLOGICAL PRODUCTS.
(a) Website; Continuing Education.--Subpart 1 of part F of
title III of the Public Health Service Act (42 U.S.C. 262 et
seq.) is amended by adding at the end the following:
``SEC. 352A. EDUCATION ON BIOLOGICAL PRODUCTS.
``(a) Internet Website.--
``(1) In general.--The Secretary shall maintain and
operate an internet website to provide educational
materials for health care providers, patients, and
caregivers, regarding the meaning of the terms, and the
standards for review and licensing of, biological
products, including biosimilar biological products and
interchangeable biosimilar biological products.
``(2) Content.--Educational materials provided under
paragraph (1) may include--
``(A) explanations of key statutory and
regulatory terms, including `biosimilar' and
`interchangeable', and clarification regarding
the use of interchangeable biosimilar
biological products;
``(B) information related to development
programs for biological products, including
biosimilar biological products and
interchangeable biosimilar biological products
and relevant clinical considerations for
prescribers, which may include, as appropriate
and applicable, information related to the
comparability of such biological products;
``(C) an explanation of the process for
reporting adverse events for biological
products, including biosimilar biological
products and interchangeable biosimilar
biological products; and
``(D) an explanation of the relationship
between biosimilar biological products and
interchangeable biosimilar biological products
licensed under section 351(k) and reference
products (as defined in section 351(i)),
including the standards for review and
licensing of each such type of biological
product.
``(3) Format.--The educational materials provided
under paragraph (1) may be--
``(A) in formats such as webinars, continuing
medical education modules, videos, fact sheets,
infographics, stakeholder toolkits, or other
formats as appropriate and applicable; and
``(B) tailored for the unique needs of health
care providers, patients, caregivers, and other
audiences, as the Secretary determines
appropriate.
``(4) Other information.--In addition to the
information described in paragraph (2), the Secretary
shall continue to publish the following information:
``(A) The action package of each biological
product licensed under subsection (a) or (k).
``(B) The summary review of each biological
product licensed under subsection (a) or (k).
``(5) Confidential and trade secret information.--
This subsection does not authorize the disclosure of
any trade secret, confidential commercial or financial
information, or other matter described in section
552(b) of title 5.
``(b) Continuing Education.--The Secretary shall advance
education and awareness among health care providers regarding
biological products, including biosimilar biological products
and interchangeable biosimilar biological products, as
appropriate, including by developing or improving continuing
education programs that advance the education of such providers
on the prescribing of, and relevant clinical considerations
with respect to, biological products, including biosimilar
biological products and interchangeable biosimilar biological
products.''.
(b) Application Under the Medicare Merit-Based Incentive
Payment System.--Section 1848(q)(5)(C) of the Social Security
Act (42 U.S.C. 1395w-4(q)(5)(C)) is amended by adding at the
end the following new clause:
``(iv) Clinical medical education
program on biosimilar biological
products.--Completion of a clinical
medical education program developed or
improved under section 352A(b) of the
Public Health Service Act by a MIPS
eligible professional during a
performance period shall earn such
eligible professional one-half of the
highest potential score for the
performance category described in
paragraph (2)(A)(iii) for such
performance period. A MIPS eligible
professional may only count the
completion of such a program for
purposes of such category one time
during the eligible professional's
lifetime.''.
Subtitle G--Streamlining Transition of Biological Products
SEC. 361. STREAMLINING THE TRANSITION OF BIOLOGICAL PRODUCTS.
Section 7002(e)(4) of the Biologics Price Competition and
Innovation Act of 2009 (Public Law 111-148) is amended--
(1) by striking ``An approved application'' and
inserting the following:
``(A) In general.--An approved application'';
(2) by adding at the end the following:
``(B) Treatment of certain applications.--
``(i) In general.--With respect to an
application for a biological product
submitted under subsection (b) or (j)
of section 505 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355)
that is filed not later than March 23,
2019, the Secretary shall continue to
review such application under such
section 505, even if such review
continues after March 23, 2020.
``(ii) Effect on listed drugs.--Only
for purposes of carrying out clause
(i), with respect to any applicable
listed drug with respect to such
application, the following shall apply:
``(I) Any drug that is a
biological product that has
been deemed licensed under
section 351 of the Public
Health Service Act (42 U.S.C.
262) pursuant to subparagraph
(A) and that is referenced in
an application described in
clause (i), shall continue to
be identified as a listed drug
on the list published pursuant
to section 505(j)(7) of the
Federal Food, Drug, and
Cosmetic Act, and the
information for such drug on
such list shall not be revised
after March 20, 2020, until--
``(aa) such drug is
removed from such list
in accordance with
subclause (III) or
subparagraph (C) of
such section 505(j)(7);
or
``(bb) this
subparagraph no longer
has force or effect.
``(II) Any drug that is a
biological product that has
been deemed licensed under
section 351 of the Public
Health Service Act (42 U.S.C.
262) pursuant to subparagraph
(A) and that is referenced in
an application described in
clause (i) shall be subject
only to requirements applicable
to biological products licensed
under such section.
``(III) Upon approval under
subsection (c) or (j) of
section 505 of the Federal
Food, Drug, and Cosmetic Act of
an application described in
clause (i), the Secretary shall
remove from the list published
pursuant to section 505(j)(7)
of the Federal Food, Drug, and
Cosmetic Act any listed drug
that is a biological product
that has been deemed licensed
under section 351 of the Public
Health Service Act pursuant to
subparagraph (A) and that is
referenced in such approved
application, unless such listed
drug is referenced in one or
more additional applications
described in clause (i).
``(iii) Deemed licensure.--Upon
approval of an application described in
clause (i), such approved application
shall be deemed to be a license for the
biological product under section 351 of
the Public Health Service Act, pursuant
to subparagraph (A), and any period of
exclusivity, as applicable, shall be
determined in accordance with such
section.
``(iv) Rule of construction.--
``(I) Application of certain
provisions.--
``(aa) Patent
certification or
statement.--An
application described
in clause (i) shall
contain a patent
certification or
statement described in,
as applicable, section
505(b)(2) of the
Federal Food, Drug, and
Cosmetic Act or clauses
(vii) and (viii) of
section 505(j)(2)(A) of
such Act and, with
respect to any listed
drug referenced in such
application, comply
with related
requirements concerning
any timely filed patent
information listed
pursuant to section
505(j)(7).
``(bb) Date of
approval.--The earliest
possible date on which
any pending application
described in clause (i)
may be approved shall
be determined based
on--
``(AA) the last
expiration date of any
applicable period of
exclusivity that would
prevent such approval
and that is described
in section
505(c)(3)(E),
505(j)(5)(B)(iv),
505(j)(5)(F), 505A,
505E, or 527 of the
Federal Food, Drug, and
Cosmetic Act; and
``(BB) if the
application was
submitted under section
505(b)(2) of the
Federal Food, Drug, and
Cosmetic Act and
references any listed
drug, the last
applicable date
determined under
subparagraph (A), (B),
or (C) of section
505(c)(3) of such Act,
or, if the application
was submitted under
section 505(j) of such
Act, the last
applicable date
determined under clause
(i), (ii), or (iii) of
section 505(j)(5)(B).
``(II) Rule of
construction with
respect to
exclusivity.--Nothing
in this subparagraph
shall be construed to
affect section
351(k)(7)(D) of the
Public Health Service
Act.
``(v) Authorized disclosure.--The
Secretary may continue to review an
application after March 23, 2020,
pursuant to clause (i), and continue to
identify any applicable listed drug
pursuant to clause (ii) on the list
published pursuant to section 505(j)(7)
of the Federal Food, Drug, and Cosmetic
Act, even if such review or listing may
reveal the existence of such
application and the identity of any
listed drug for which the
investigations described in section
505(b)(1)(A) of the Federal Food, Drug,
and Cosmetic Act are relied upon by the
applicant for approval of the pending
application. Nothing in this
subparagraph shall be construed as
authorizing the Secretary to disclose
any other information that is a trade
secret or confidential information
described in section 552(b)(4) of title
5, United States Code.
``(vi) Sunset.--Beginning on October
1, 2022, this subparagraph shall have
no force or effect and any applications
described in clause (i) that have not
been approved shall be deemed
withdrawn.''.
Subtitle H--Over-the-Counter Monograph Safety, Innovation, and Reform
SEC. 370. SHORT TITLE; REFERENCES IN SUBTITLE.
(a) Short Title.--This subtitle may be cited as the ``Over-
the-Counter Monograph Safety, Innovation, and Reform Act of
2019''.
(b) References.--Except as otherwise specified, any reference
to ``this Act'' contained in this subtitle shall be treated as
referring only to the provisions of this subtitle.
PART 1--OTC DRUG REVIEW
SEC. 371. REGULATION OF CERTAIN NONPRESCRIPTION DRUGS THAT ARE MARKETED
WITHOUT AN APPROVED DRUG APPLICATION.
(a) In General.--Chapter V of the Federal Food, Drug, and
Cosmetic Act is amended by inserting after section 505F of such
Act (21 U.S.C. 355g) the following:
``SEC. 505G. REGULATION OF CERTAIN NONPRESCRIPTION DRUGS THAT ARE
MARKETED WITHOUT AN APPROVED DRUG APPLICATION.
``(a) Nonprescription Drugs Marketed Without an Approved
Application.--Nonprescription drugs marketed without an
approved drug application under section 505, as of the date of
the enactment of this section, shall be treated in accordance
with this subsection.
``(1) Drugs subject to a final monograph; category i
drugs subject to a tentative final monograph.--A drug
is deemed to be generally recognized as safe and
effective under section 201(p)(1), not a new drug under
section 201(p), and not subject to section 503(b)(1),
if--
``(A) the drug is--
``(i) in conformity with the
requirements for nonprescription use of
a final monograph issued under part 330
of title 21, Code of Federal
Regulations (except as provided in
paragraph (2)), the general
requirements for nonprescription drugs,
and conditions or requirements under
subsections (b), (c), and (k); and
``(ii) except as permitted by an
order issued under subsection (b) or,
in the case of a minor change in the
drug, in conformity with an order
issued under subsection (c), in a
dosage form that, immediately prior to
the date of the enactment of this
section, has been used to a material
extent and for a material time under
section 201(p)(2); or
``(B) the drug is--
``(i) classified in category I for
safety and effectiveness under a
tentative final monograph that is the
most recently applicable proposal or
determination issued under part 330 of
title 21, Code of Federal Regulations;
``(ii) in conformity with the
proposed requirements for
nonprescription use of such tentative
final monograph, any applicable
subsequent determination by the
Secretary, the general requirements for
nonprescription drugs, and conditions
or requirements under subsections (b),
(c), and (k); and
``(iii) except as permitted by an
order issued under subsection (b) or,
in the case of a minor change in the
drug, in conformity with an order
issued under subsection (c), in a
dosage form that, immediately prior to
the date of the enactment of this
section, has been used to a material
extent and for a material time under
section 201(p)(2).
``(2) Treatment of sunscreen drugs.--With respect to
sunscreen drugs subject to this section, the applicable
requirements in terms of conformity with a final
monograph, for purposes of paragraph (1)(A)(i), shall
be the requirements specified in part 352 of title 21,
Code of Federal Regulations, as published on May 21,
1999, beginning on page 27687 of volume 64 of the
Federal Register, except that the applicable
requirements governing effectiveness and labeling shall
be those specified in section 201.327 of title 21, Code
of Federal Regulations.
``(3) Category iii drugs subject to a tentative final
monograph; category i drugs subject to proposed
monograph or advance notice of proposed rulemaking.--A
drug that is not described in paragraph (1), (2), or
(4) is not required to be the subject of an application
approved under section 505, and is not subject to
section 503(b)(1), if--
``(A) the drug is--
``(i) classified in category III for
safety or effectiveness in the preamble
of a proposed rule establishing a
tentative final monograph that is the
most recently applicable proposal or
determination for such drug issued
under part 330 of title 21, Code of
Federal Regulations;
``(ii) in conformity with--
``(I) the conditions of use,
including indication and dosage
strength, if any, described for
such category III drug in such
preamble or in an applicable
subsequent proposed rule;
``(II) the proposed
requirements for drugs
classified in such tentative
final monograph in category I
in the most recently proposed
rule establishing requirements
related to such tentative final
monograph and in any final rule
establishing requirements that
are applicable to the drug; and
``(III) the general
requirements for
nonprescription drugs and
conditions or requirements
under subsection (b) or (k);
and
``(iii) in a dosage form that,
immediately prior to the date of the
enactment of this section, had been
used to a material extent and for a
material time under section 201(p)(2);
or
``(B) the drug is--
``(i) classified in category I for
safety and effectiveness under a
proposed monograph or advance notice of
proposed rulemaking that is the most
recently applicable proposal or
determination for such drug issued
under part 330 of title 21, Code of
Federal Regulations;
``(ii) in conformity with the
requirements for nonprescription use of
such proposed monograph or advance
notice of proposed rulemaking, any
applicable subsequent determination by
the Secretary, the general requirements
for nonprescription drugs, and
conditions or requirements under
subsection (b) or (k); and
``(iii) in a dosage form that,
immediately prior to the date of the
enactment of this section, has been
used to a material extent and for a
material time under section 201(p)(2).
``(4) Category ii drugs deemed new drugs.--A drug
that is classified in category II for safety or
effectiveness under a tentative final monograph or that
is subject to a determination to be not generally
recognized as safe and effective in a proposed rule
that is the most recently applicable proposal issued
under part 330 of title 21, Code of Federal
Regulations, shall be deemed to be a new drug under
section 201(p), misbranded under section 502(ee), and
subject to the requirement for an approved new drug
application under section 505 beginning on the day that
is 180 calendar days after the date of the enactment of
this section, unless, before such day, the Secretary
determines that it is in the interest of public health
to extend the period during which the drug may be
marketed without such an approved new drug application.
``(5) Drugs not grase deemed new drugs.--A drug that
the Secretary has determined not to be generally
recognized as safe and effective under section
201(p)(1) under a final determination issued under part
330 of title 21, Code of Federal Regulations, shall be
deemed to be a new drug under section 201(p),
misbranded under section 502(ee), and subject to the
requirement for an approved new drug application under
section 505.
``(6) Other drugs deemed new drugs.--Except as
provided in subsection (m), a drug is deemed to be a
new drug under section 201(p) and misbranded under
section 502(ee) if the drug--
``(A) is not subject to section 503(b)(1);
and
``(B) is not described in paragraph (1), (2),
(3), (4), or (5), or subsection (b)(1)(B).
``(b) Administrative Orders.--
``(1) In general.--
``(A) Determination.--The Secretary may, on
the initiative of the Secretary or at the
request of one or more requestors, issue an
administrative order determining whether there
are conditions under which a specific drug, a
class of drugs, or a combination of drugs, is
determined to be--
``(i) not subject to section
503(b)(1); and
``(ii) generally recognized as safe
and effective under section 201(p)(1).
``(B) Effect.--A drug or combination of drugs
shall be deemed to not require approval under
section 505 if such drug or combination of
drugs--
``(i) is determined by the Secretary
to meet the conditions specified in
clauses (i) and (ii) of subparagraph
(A);
``(ii) is marketed in conformity with
an administrative order under this
subsection;
``(iii) meets the general
requirements for nonprescription drugs;
and
``(iv) meets the requirements under
subsections (c) and (k).
``(C) Standard.--The Secretary shall find
that a drug is not generally recognized as safe
and effective under section 201(p)(1) if--
``(i) the evidence shows that the
drug is not generally recognized as
safe and effective under section
201(p)(1); or
``(ii) the evidence is inadequate to
show that the drug is generally
recognized as safe and effective under
section 201(p)(1).
``(2) Administrative orders initiated by the
secretary.--
``(A) In general.--In issuing an
administrative order under paragraph (1) upon
the Secretary's initiative, the Secretary
shall--
``(i) make reasonable efforts to
notify informally, not later than 2
business days before the issuance of
the proposed order, the sponsors of
drugs who have a listing in effect
under section 510(j) for the drugs or
combination of drugs that will be
subject to the administrative order;
``(ii) after any such reasonable
efforts of notification--
``(I) issue a proposed
administrative order by
publishing it on the website of
the Food and Drug
Administration and include in
such order the reasons for the
issuance of such order; and
``(II) publish a notice of
availability of such proposed
order in the Federal Register;
``(iii) except as provided in
subparagraph (B), provide for a public
comment period with respect to such
proposed order of not less than 45
calendar days; and
``(iv) if, after completion of the
proceedings specified in clauses (i)
through (iii), the Secretary determines
that it is appropriate to issue a final
administrative order--
``(I) issue the final
administrative order, together
with a detailed statement of
reasons, which order shall not
take effect until the time for
requesting judicial review
under paragraph (3)(D)(ii) has
expired;
``(II) publish a notice of
such final administrative order
in the Federal Register;
``(III) afford requestors of
drugs that will be subject to
such order the opportunity for
formal dispute resolution up to
the level of the Director of
the Center for Drug Evaluation
and Research, which initially
must be requested within 45
calendar days of the issuance
of the order, and, for
subsequent levels of appeal,
within 30 calendar days of the
prior decision; and
``(IV) except with respect to
drugs described in paragraph
(3)(B), upon completion of the
formal dispute resolution
procedure, inform the persons
which sought such dispute
resolution of their right to
request a hearing.
``(B) Exceptions.--When issuing an
administrative order under paragraph (1) on the
Secretary's initiative proposing to determine
that a drug described in subsection (a)(3) is
not generally recognized as safe and effective
under section 201(p)(1), the Secretary shall
follow the procedures in subparagraph (A),
except that--
``(i) the proposed order shall
include notice of--
``(I) the general categories
of data the Secretary has
determined necessary to
establish that the drug is
generally recognized as safe
and effective under section
201(p)(1); and
``(II) the format for
submissions by interested
persons;
``(ii) the Secretary shall provide
for a public comment period of no less
than 180 calendar days with respect to
such proposed order, except when the
Secretary determines, for good cause,
that a shorter period is in the
interest of public health; and
``(iii) any person who submits data
in such comment period shall include a
certification that the person has
submitted all evidence created,
obtained, or received by that person
that is both within the categories of
data identified in the proposed order
and relevant to a determination as to
whether the drug is generally
recognized as safe and effective under
section 201(p)(1).
``(3) Hearings; judicial review.--
``(A) In general.--Only a person who
participated in each stage of formal dispute
resolution under subclause (III) of paragraph
(2)(A)(iv) of an administrative order with
respect to a drug may request a hearing
concerning a final administrative order issued
under such paragraph with respect to such drug.
If a hearing is sought, such person must submit
a request for a hearing, which shall be based
solely on information in the administrative
record, to the Secretary not later than 30
calendar days after receiving notice of the
final decision of the formal dispute resolution
procedure.
``(B) No hearing required with respect to
orders relating to certain drugs.--
``(i) In general.--The Secretary
shall not be required to provide notice
and an opportunity for a hearing
pursuant to paragraph (2)(A)(iv) if the
final administrative order involved
relates to a drug--
``(I) that is described in
subsection (a)(3)(A); and
``(II) with respect to which
no human or non-human data
studies relevant to the safety
or effectiveness of such drug
have been submitted to the
administrative record since the
issuance of the most recent
tentative final monograph
relating to such drug.
``(ii) Human data studies and non-
human data defined.--In this
subparagraph:
``(I) The term `human data
studies' means clinical trials
of safety or effectiveness
(including actual use studies),
pharmacokinetics studies, or
bioavailability studies.
``(II) The term `non-human
data' means data from testing
other than with human subjects
which provides information
concerning safety or
effectiveness.
``(C) Hearing procedures.--
``(i) Denial of request for
hearing.--If the Secretary determines
that information submitted in a request
for a hearing under subparagraph (A)
with respect to a final administrative
order issued under paragraph (2)(A)(iv)
does not identify the existence of a
genuine and substantial question of
material fact, the Secretary may deny
such request. In making such a
determination, the Secretary may
consider only information and data that
are based on relevant and reliable
scientific principles and
methodologies.
``(ii) Single hearing for multiple
related requests.--If more than one
request for a hearing is submitted with
respect to the same administrative
order under subparagraph (A), the
Secretary may direct that a single
hearing be conducted in which all
persons whose hearing requests were
granted may participate.
``(iii) Presiding officer.--The
presiding officer of a hearing
requested under subparagraph (A)
shall--
``(I) be designated by the
Secretary;
``(II) not be an employee of
the Center for Drug Evaluation
and Research; and
``(III) not have been
previously involved in the
development of the
administrative order involved
or proceedings relating to that
administrative order.
``(iv) Rights of parties to
hearing.--The parties to a hearing
requested under subparagraph (A) shall
have the right to present testimony,
including testimony of expert
witnesses, and to cross-examine
witnesses presented by other parties.
Where appropriate, the presiding
officer may require that cross-
examination by parties representing
substantially the same interests be
consolidated to promote efficiency and
avoid duplication.
``(v) Final decision.--
``(I) At the conclusion of a
hearing requested under
subparagraph (A), the presiding
officer of the hearing shall
issue a decision containing
findings of fact and
conclusions of law. The
decision of the presiding
officer shall be final.
``(II) The final decision may
not take effect until the
period under subparagraph
(D)(ii) for submitting a
request for judicial review of
such decision expires.
``(D) Judicial review of final administrative
order.--
``(i) In general.--The procedures
described in section 505(h) shall apply
with respect to judicial review of
final administrative orders issued
under this subsection in the same
manner and to the same extent as such
section applies to an order described
in such section except that the
judicial review shall be taken by
filing in an appropriate district court
of the United States in lieu of the
appellate courts specified in such
section.
``(ii) Period to submit a request for
judicial review.--A person eligible to
request a hearing under this paragraph
and seeking judicial review of a final
administrative order issued under this
subsection shall file such request for
judicial review not later than 60
calendar days after the latest of--
``(I) the date on which
notice of such order is
published;
``(II) the date on which a
hearing with respect to such
order is denied under
subparagraph (B) or (C)(i);
``(III) the date on which a
final decision is made
following a hearing under
subparagraph (C)(v); or
``(IV) if no hearing is
requested, the date on which
the time for requesting a
hearing expires.
``(4) Expedited procedure with respect to
administrative orders initiated by the secretary.--
``(A) Imminent hazard to the public health.--
``(i) In general.--In the case of a
determination by the Secretary that a
drug, class of drugs, or combination of
drugs subject to this section poses an
imminent hazard to the public health,
the Secretary, after first making
reasonable efforts to notify, not later
than 48 hours before issuance of such
order under this subparagraph, sponsors
who have a listing in effect under
section 510(j) for such drug or
combination of drugs--
``(I) may issue an interim
final administrative order for
such drug, class of drugs, or
combination of drugs under
paragraph (1), together with a
detailed statement of the
reasons for such order;
``(II) shall publish in the
Federal Register a notice of
availability of any such order;
and
``(III) shall provide for a
public comment period of at
least 45 calendar days with
respect to such interim final
order.
``(ii) Nondelegation.--The Secretary
may not delegate the authority to issue
an interim final administrative order
under this subparagraph.
``(B) Safety labeling changes.--
``(i) In general.--In the case of a
determination by the Secretary that a
change in the labeling of a drug, class
of drugs, or combination of drugs
subject to this section is reasonably
expected to mitigate a significant or
unreasonable risk of a serious adverse
event associated with use of the drug,
the Secretary may--
``(I) make reasonable efforts
to notify informally, not later
than 48 hours before the
issuance of the interim final
order, the sponsors of drugs
who have a listing in effect
under section 510(j) for such
drug or combination of drugs;
``(II) after reasonable
efforts of notification, issue
an interim final administrative
order in accordance with
paragraph (1) to require such
change, together with a
detailed statement of the
reasons for such order;
``(III) publish in the
Federal Register a notice of
availability of such order; and
``(IV) provide for a public
comment period of at least 45
calendar days with respect to
such interim final order.
``(ii) Content of order.--An interim
final order issued under this
subparagraph with respect to the
labeling of a drug may provide for new
warnings and other information required
for safe use of the drug.
``(C) Effective date.--An order under
subparagraph (A) or (B) shall take effect on a
date specified by the Secretary.
``(D) Final order.--After the completion of
the proceedings in subparagraph (A) or (B), the
Secretary shall--
``(i) issue a final order in
accordance with paragraph (1);
``(ii) publish a notice of
availability of such final
administrative order in the Federal
Register; and
``(iii) afford sponsors of such drugs
that will be subject to such an order
the opportunity for formal dispute
resolution up to the level of the
Director of the Center for Drug
Evaluation and Research, which must
initially be within 45 calendar days of
the issuance of the order, and for
subsequent levels of appeal, within 30
calendar days of the prior decision.
``(E) Hearings.--A sponsor of a drug subject
to a final order issued under subparagraph (D)
and that participated in each stage of formal
dispute resolution under clause (iii) of such
subparagraph may request a hearing on such
order. The provisions of subparagraphs (A),
(B), and (C) of paragraph (3), other than
paragraph (3)(C)(v)(II), shall apply with
respect to a hearing on such order in the same
manner and to the same extent as such
provisions apply with respect to a hearing on
an administrative order issued under paragraph
(2)(A)(iv).
``(F) Timing.--
``(i) Final order and hearing.--The
Secretary shall--
``(I) not later than 6 months
after the date on which the
comment period closes under
subparagraph (A) or (B), issue
a final order in accordance
with paragraph (1); and
``(II) not later than 12
months after the date on which
such final order is issued,
complete any hearing under
subparagraph (E).
``(ii) Dispute resolution request.--
The Secretary shall specify in an
interim final order issued under
subparagraph (A) or (B) such shorter
periods for requesting dispute
resolution under subparagraph (D)(iii)
as are necessary to meet the
requirements of this subparagraph.
``(G) Judicial review.--A final order issued
pursuant to subparagraph (F) shall be subject
to judicial review in accordance with paragraph
(3)(D).
``(5) Administrative order initiated at the request
of a requestor.--
``(A) In general.--In issuing an
administrative order under paragraph (1) at the
request of a requestor with respect to certain
drugs, classes of drugs, or combinations of
drugs--
``(i) the Secretary shall, after
receiving a request under this
subparagraph, determine whether the
request is sufficiently complete and
formatted to permit a substantive
review;
``(ii) if the Secretary determines
that the request is sufficiently
complete and formatted to permit a
substantive review, the Secretary
shall--
``(I) file the request; and
``(II) initiate proceedings
with respect to issuing an
administrative order in
accordance with paragraphs (2)
and (3); and
``(iii) except as provided in
paragraph (6), if the Secretary
determines that a request does not meet
the requirements for filing or is not
sufficiently complete and formatted to
permit a substantive review, the
requestor may demand that the request
be filed over protest, and the
Secretary shall initiate proceedings to
review the request in accordance with
paragraph (2)(A).
``(B) Request to initiate proceedings.--
``(i) In general.--A requestor
seeking an administrative order under
paragraph (1) with respect to certain
drugs, classes of drugs, or
combinations of drugs, shall submit to
the Secretary a request to initiate
proceedings for such order in the form
and manner as specified by the
Secretary. Such requestor may submit a
request under this subparagraph for the
issuance of an administrative order--
``(I) determining whether a
drug is generally recognized as
safe and effective under
section 201(p)(1), exempt from
section 503(b)(1), and not
required to be the subject of
an approved application under
section 505; or
``(II) determining whether a
change to a condition of use of
a drug is generally recognized
as safe and effective under
section 201(p)(1), exempt from
section 503(b)(1), and not
required to be the subject of
an approved application under
section 505, if, absent such a
changed condition of use, such
drug is--
``(aa) generally
recognized as safe and
effective under section
201(p)(1) in accordance
with subsection (a)(1),
(a)(2), or an order
under this subsection;
or
``(bb) subject to
subsection (a)(3), but
only if such requestor
initiates such request
in conjunction with a
request for the
Secretary to determine
whether such drug is
generally recognized as
safe and effective
under section
201(p)(1), which is
filed by the Secretary
under subparagraph
(A)(ii).
``(ii) Exception.--The Secretary is
not required to complete review of a
request for a change described in
clause (i)(II) if the Secretary
determines that there is an inadequate
basis to find the drug is generally
recognized as safe and effective under
section 201(p)(1) under paragraph (1)
and issues a final order announcing
that determination.
``(iii) Withdrawal.--The requestor
may withdraw a request under this
paragraph, according to the procedures
set forth pursuant to subsection
(d)(2)(B). Notwithstanding any other
provision of this section, if such
request is withdrawn, the Secretary may
cease proceedings under this
subparagraph.
``(C) Exclusivity.--
``(i) In general.--A final
administrative order issued in response
to a request under this section shall
have the effect of authorizing solely
the order requestor (or the licensees,
assignees, or successors in interest of
such requestor with respect to the
subject of such order), for a period of
18 months following the effective date
of such final order and beginning on
the date the requestor may lawfully
market such drugs pursuant to the
order, to market drugs--
``(I) incorporating changes
described in clause (ii); and
``(II) subject to the
limitations under clause (iv).
``(ii) Changes described.--A change
described in this clause is a change
subject to an order specified in clause
(i), which--
``(I) provides for a drug to
contain an active ingredient
(including any ester or salt of
the active ingredient) not
previously incorporated in a
drug described in clause (iii);
or
``(II) provides for a change
in the conditions of use of a
drug, for which new human data
studies conducted or sponsored
by the requestor (or for which
the requestor has an exclusive
right of reference) were
essential to the issuance of
such order.
``(iii) Drugs described.--The drugs
described in this clause are drugs--
``(I) specified in subsection
(a)(1), (a)(2), or (a)(3);
``(II) subject to a final
order issued under this
section;
``(III) subject to a final
sunscreen order (as defined in
section 586(2)(A)); or
``(IV) described in
subsection (m)(1), other than
drugs subject to an active
enforcement action under
chapter III of this Act.
``(iv) Limitations on exclusivity.--
``(I) In general.--Only one
18-month period under this
subparagraph shall be granted,
under each order described in
clause (i), with respect to
changes (to the drug subject to
such order) which are either--
``(aa) changes
described in clause
(ii)(I), relating to
active ingredients; or
``(bb) changes
described in clause
(ii)(II), relating to
conditions of use.
``(II) No exclusivity
allowed.--No exclusivity shall
apply to changes to a drug
which are--
``(aa) the subject of
a Tier 2 OTC monograph
order request (as
defined in section
744L);
``(bb) safety-related
changes, as defined by
the Secretary, or any
other changes the
Secretary considers
necessary to assure
safe use; or
``(cc) changes
related to methods of
testing safety or
efficacy.
``(v) New human data studies
defined.--In this subparagraph, the
term `new human data studies' means
clinical trials of safety or
effectiveness (including actual use
studies), pharmacokinetics studies, or
bioavailability studies, the results of
which--
``(I) have not been relied on
by the Secretary to support--
``(aa) a proposed or
final determination
that a drug described
in subclause (I), (II),
or (III) of clause
(iii) is generally
recognized as safe and
effective under section
201(p)(1); or
``(bb) approval of a
drug that was approved
under section 505; and
``(II) do not duplicate the
results of another study that
was relied on by the Secretary
to support--
``(aa) a proposed or
final determination
that a drug described
in subclause (I), (II),
or (III) of clause
(iii) is generally
recognized as safe and
effective under section
201(p)(1); or
``(bb) approval of a
drug that was approved
under section 505.
``(6) Information regarding safe nonprescription
marketing and use as condition for filing a generally
recognized as safe and effective request.--
``(A) In general.--In response to a request
under this section that a drug described in
subparagraph (B) be generally recognized as
safe and effective, the Secretary--
``(i) may file such request, if the
request includes information specified
under subparagraph (C) with respect to
safe nonprescription marketing and use
of such drug; or
``(ii) if the request fails to
include information specified under
subparagraph (C), shall refuse to file
such request and require that
nonprescription marketing of the drug
be pursuant to a new drug application
as described in subparagraph (D).
``(B) Drug described.--A drug described in
this subparagraph is a nonprescription drug
which contains an active ingredient not
previously incorporated in a drug--
``(i) specified in subsection (a)(1),
(a)(2), or (a)(3);
``(ii) subject to a final order under
this section; or
``(iii) subject to a final sunscreen
order (as defined in section
586(2)(A)).
``(C) Information demonstrating prima facie
safe nonprescription marketing and use.--
Information specified in this subparagraph,
with respect to a request described in
subparagraph (A)(i), is--
``(i) information sufficient for a
prima facie demonstration that the drug
subject to such request has a
verifiable history of being marketed
and safely used by consumers in the
United States as a nonprescription drug
under comparable conditions of use;
``(ii) if the drug has not been
previously marketed in the United
States as a nonprescription drug,
information sufficient for a prima
facie demonstration that the drug was
marketed and safely used under
comparable conditions of marketing and
use in a country listed in section
802(b)(1)(A) or designated by the
Secretary in accordance with section
802(b)(1)(B)--
``(I) for such period as
needed to provide reasonable
assurances concerning the safe
nonprescription use of the
drug; and
``(II) during such time was
subject to sufficient
monitoring by a regulatory body
considered acceptable by the
Secretary for such monitoring
purposes, including for adverse
events associated with
nonprescription use of the
drug; or
``(iii) if the Secretary determines
that information described in clause
(i) or (ii) is not needed to provide a
prima facie demonstration that the drug
can be safely marketed and used as a
nonprescription drug, such other
information the Secretary determines is
sufficient for such purposes.
``(D) Marketing pursuant to new drug
application.--In the case of a request
described in subparagraph (A)(ii), the drug
subject to such request may be resubmitted for
filing only if--
``(i) the drug is marketed as a
nonprescription drug, under conditions
of use comparable to the conditions
specified in the request, for such
period as the Secretary determines
appropriate (not to exceed 5
consecutive years) pursuant to an
application approved under section 505;
and
``(ii) during such period, 1,000,000
retail packages of the drug, or an
equivalent quantity as determined by
the Secretary, were distributed for
retail sale, as determined in such
manner as the Secretary finds
appropriate.
``(E) Rule of application.--Except in the
case of a request involving a drug described in
section 586(9), as in effect on January 1,
2017, if the Secretary refuses to file a
request under this paragraph, the requestor may
not file such request over protest under
paragraph (5)(A)(iii).
``(7) Packaging.--An administrative order issued
under paragraph (2), (4)(A), or (5) may include
requirements for the packaging of a drug to encourage
use in accordance with labeling. Such requirements may
include unit dose packaging, requirements for products
intended for use by pediatric populations, requirements
to reduce risk of harm from unsupervised ingestion, and
other appropriate requirements. This paragraph does not
authorize the Food and Drug Administration to require
standards or testing procedures as described in part
1700 of title 16, Code of Federal Regulations.
``(8) Final and tentative final monographs for
category i drugs deemed final administrative orders.--
``(A) In general.--A final monograph or
tentative final monograph described in
subparagraph (B) shall be deemed to be a final
administrative order under this subsection and
may be amended, revoked, or otherwise modified
in accordance with the procedures of this
subsection.
``(B) Monographs described.--For purposes of
subparagraph (A), a final monograph or
tentative final monograph is described in this
subparagraph if it--
``(i) establishes conditions of use
for a drug described in paragraph (1)
or (2) of subsection (a); and
``(ii) represents the most recently
promulgated version of such conditions,
including as modified, in whole or in
part, by any proposed or final rule.
``(C) Deemed orders include harmonizing
technical amendments.--The deemed establishment
of a final administrative order under
subparagraph (A) shall be construed to include
any technical amendments to such order as the
Secretary determines necessary to ensure that
such order is appropriately harmonized, in
terms of terminology or cross-references, with
the applicable provisions of this Act (and
regulations thereunder) and any other orders
issued under this section.
``(c) Procedure for Minor Changes.--
``(1) In general.--Minor changes in the dosage form
of a drug that is described in paragraph (1) or (2) of
subsection (a) or the subject of an order issued under
subsection (b) may be made by a requestor without the
issuance of an order under subsection (b) if--
``(A) the requestor maintains such
information as is necessary to demonstrate that
the change--
``(i) will not affect the safety or
effectiveness of the drug; and
``(ii) will not materially affect the
extent of absorption or other exposure
to the active ingredient in comparison
to a suitable reference product; and
``(B) the change is in conformity with the
requirements of an applicable administrative
order issued by the Secretary under paragraph
(3).
``(2) Additional information.--
``(A) Access to records.--A sponsor shall
submit records requested by the Secretary
relating to such a minor change under section
704(a)(4), within 15 business days of receiving
such a request, or such longer period as the
Secretary may provide.
``(B) Insufficient information.--If the
Secretary determines that the information
contained in such records is not sufficient to
demonstrate that the change does not affect the
safety or effectiveness of the drug or
materially affect the extent of absorption or
other exposure to the active ingredient, the
Secretary--
``(i) may so inform the sponsor of
the drug in writing; and
``(ii) if the Secretary so informs
the sponsor, shall provide the sponsor
of the drug with a reasonable
opportunity to provide additional
information.
``(C) Failure to submit sufficient
information.--If the sponsor fails to provide
such additional information within a time
prescribed by the Secretary, or if the
Secretary determines that such additional
information does not demonstrate that the
change does not--
``(i) affect the safety or
effectiveness of the drug; or
``(ii) materially affect the extent
of absorption or other exposure to the
active ingredient in comparison to a
suitable reference product,
the drug as modified is a new drug under
section 201(p) and shall be deemed to be
misbranded under section 502(ee).
``(3) Determining whether a change will affect safety
or effectiveness.--
``(A) In general.--The Secretary shall issue
one or more administrative orders specifying
requirements for determining whether a minor
change made by a sponsor pursuant to this
subsection will affect the safety or
effectiveness of a drug or materially affect
the extent of absorption or other exposure to
an active ingredient in the drug in comparison
to a suitable reference product, together with
guidance for applying those orders to specific
dosage forms.
``(B) Standard practices.--The orders and
guidance issued by the Secretary under
subparagraph (A) shall take into account
relevant public standards and standard
practices for evaluating the quality of drugs,
and may take into account the special needs of
populations, including children.
``(d) Confidentiality of Information Submitted to the
Secretary.--
``(1) In general.--Subject to paragraph (2), any
information, including reports of testing conducted on
the drug or drugs involved, that is submitted by a
requestor in connection with proceedings on an order
under this section (including any minor change under
subsection (c)) and is a trade secret or confidential
information subject to section 552(b)(4) of title 5,
United States Code, or section 1905 of title 18, United
States Code, shall not be disclosed to the public
unless the requestor consents to that disclosure.
``(2) Public availability.--
``(A) In general.--Except as provided in
subparagraph (B), the Secretary shall--
``(i) make any information submitted
by a requestor in support of a request
under subsection (b)(5)(A) available to
the public not later than the date on
which the proposed order is issued; and
``(ii) make any information submitted
by any other person with respect to an
order requested (or initiated by the
Secretary) under subsection (b),
available to the public upon such
submission.
``(B) Limitations on public availability.--
Information described in subparagraph (A) shall
not be made public if--
``(i) the information pertains to
pharmaceutical quality information,
unless such information is necessary to
establish standards under which a drug
is generally recognized as safe and
effective under section 201(p)(1);
``(ii) the information is submitted
in a requestor-initiated request, but
the requestor withdraws such request,
in accordance with withdrawal
procedures established by the
Secretary, before the Secretary issues
the proposed order;
``(iii) the Secretary requests and
obtains the information under
subsection (c) and such information is
not submitted in relation to an order
under subsection (b); or
``(iv) the information is of the type
contained in raw datasets.
``(e) Updates to Drug Listing Information.--A sponsor who
makes a change to a drug subject to this section shall submit
updated drug listing information for the drug in accordance
with section 510(j) within 30 calendar days of the date when
the drug is first commercially marketed, except that a sponsor
who was the order requestor with respect to an order subject to
subsection (b)(5)(C) (or a licensee, assignee, or successor in
interest of such requestor) shall submit updated drug listing
information on or before the date when the drug is first
commercially marketed.
``(f) Approvals Under Section 505.--The provisions of this
section shall not be construed to preclude a person from
seeking or maintaining the approval of an application for a
drug under sections 505(b)(1), 505(b)(2), and 505(j). A
determination under this section that a drug is not subject to
section 503(b)(1), is generally recognized as safe and
effective under section 201(p)(1), and is not a new drug under
section 201(p) shall constitute a finding that the drug is safe
and effective that may be relied upon for purposes of an
application under section 505(b)(2), so that the applicant
shall be required to submit for purposes of such application
only information needed to support any modification of the drug
that is not covered by such determination under this section.
``(g) Public Availability of Administrative Orders.--The
Secretary shall establish, maintain, update (as determined
necessary by the Secretary but no less frequently than
annually), and make publicly available, with respect to orders
issued under this section--
``(1) a repository of each final order and interim
final order in effect, including the complete text of
the order; and
``(2) a listing of all orders proposed and under
development under subsection (b)(2), including--
``(A) a brief description of each such order;
and
``(B) the Secretary's expectations, if
resources permit, for issuance of proposed
orders over a 3-year period.
``(h) Development Advice to Sponsors or Requestors.--The
Secretary shall establish procedures under which sponsors or
requestors may meet with appropriate officials of the Food and
Drug Administration to obtain advice on the studies and other
information necessary to support submissions under this section
and other matters relevant to the regulation of nonprescription
drugs and the development of new nonprescription drugs under
this section.
``(i) Participation of Multiple Sponsors or Requestors.--The
Secretary shall establish procedures to facilitate efficient
participation by multiple sponsors or requestors in proceedings
under this section, including provision for joint meetings with
multiple sponsors or requestors or with organizations nominated
by sponsors or requestors to represent their interests in a
proceeding.
``(j) Electronic Format.--All submissions under this section
shall be in electronic format.
``(k) Effect on Existing Regulations Governing
Nonprescription Drugs.--
``(1) Regulations of general applicability to
nonprescription drugs.--Except as provided in this
subsection, nothing in this section supersedes
regulations establishing general requirements for
nonprescription drugs, including regulations of general
applicability contained in parts 201, 250, and 330 of
title 21, Code of Federal Regulations, or any successor
regulations. The Secretary shall establish or modify
such regulations by means of rulemaking in accordance
with section 553 of title 5, United States Code.
``(2) Regulations establishing requirements for
specific nonprescription drugs.--
``(A) The provisions of section 310.545 of
title 21, Code of Federal Regulations, as in
effect on the day before the date of the
enactment of this section, shall be deemed to
be a final order under subsection (b).
``(B) Regulations in effect on the day before
the date of the enactment of this section,
establishing requirements for specific
nonprescription drugs marketed pursuant to this
section (including such requirements in parts
201 and 250 of title 21, Code of Federal
Regulations), shall be deemed to be final
orders under subsection (b), only as they apply
to drugs--
``(i) subject to paragraph (1), (2),
(3), or (4) of subsection (a); or
``(ii) otherwise subject to an order
under this section.
``(3) Withdrawal of regulations.--The Secretary shall
withdraw regulations establishing final monographs and
the procedures governing the over-the-counter drug
review under part 330 and other relevant parts of title
21, Code of Federal Regulations (as in effect on the
day before the date of the enactment of this section),
or make technical changes to such regulations to ensure
conformity with appropriate terminology and cross
references. Notwithstanding subchapter II of chapter 5
of title 5, United States Code, any such withdrawal or
technical changes shall be made without public notice
and comment and shall be effective upon publication
through notice in the Federal Register (or upon such
date as specified in such notice).
``(l) Guidance.--The Secretary shall issue guidance that
specifies--
``(1) the procedures and principles for formal
meetings between the Secretary and sponsors or
requestors for drugs subject to this section;
``(2) the format and content of data submissions to
the Secretary under this section;
``(3) the format of electronic submissions to the
Secretary under this section;
``(4) consolidated proceedings for appeal and the
procedures for such proceedings where appropriate; and
``(5) for minor changes in drugs, recommendations on
how to comply with the requirements in orders issued
under subsection (c)(3).
``(m) Rule of Construction.--
``(1) In general.--This section shall not affect the
treatment or status of a nonprescription drug--
``(A) that is marketed without an application
approved under section 505 as of the date of
the enactment of this section;
``(B) that is not subject to an order issued
under this section; and
``(C) to which paragraphs (1), (2), (3), (4),
or (5) of subsection (a) do not apply.
``(2) Treatment of products previously found to be
subject to time and extent requirements.--
``(A) Notwithstanding subsection (a), a drug
described in subparagraph (B) may only be
lawfully marketed, without an application
approved under section 505, pursuant to an
order issued under this section.
``(B) A drug described in this subparagraph
is a drug which, prior to the date of the
enactment of this section, the Secretary
determined in a proposed or final rule to be
ineligible for review under the OTC drug review
(as such phrase `OTC drug review' was used in
section 330.14 of title 21, Code of Federal
Regulations, as in effect on the day before the
date of the enactment of this section).
``(3) Preservation of authority.--
``(A) Nothing in paragraph (1) shall be
construed to preclude or limit the
applicability of any provision of this Act
other than this section.
``(B) Nothing in subsection (a) shall be
construed to prohibit the Secretary from
issuing an order under this section finding a
drug to be not generally recognized as safe and
effective under section 201(p)(1), as the
Secretary determines appropriate.
``(n) Investigational New Drugs.--A drug is not subject to
this section if an exemption for investigational use under
section 505(i) is in effect for such drug.
``(o) Inapplicability of Paperwork Reduction Act.--Chapter 35
of title 44, United States Code, shall not apply to collections
of information made under this section.
``(p) Inapplicability of Notice and Comment Rulemaking and
Other Requirements.--The requirements of subsection (b) shall
apply with respect to orders issued under this section instead
of the requirements of subchapter II of chapter 5 of title 5,
United States Code.
``(q) Definitions.--In this section:
``(1) The term `nonprescription drug' refers to a
drug not subject to the requirements of section
503(b)(1).
``(2) The term `sponsor' refers to any person
marketing, manufacturing, or processing a drug that--
``(A) is listed pursuant to section 510(j);
and
``(B) is or will be subject to an
administrative order under this section of the
Food and Drug Administration.
``(3) The term `requestor' refers to any person or
group of persons marketing, manufacturing, processing,
or developing a drug.''.
(b) GAO Study.--Not later than 4 years after the date of
enactment of this Act, the Comptroller General of the United
States shall submit a study to the Committee on Energy and
Commerce of the House of Representatives and the Committee on
Health, Education, Labor, and Pensions of the Senate addressing
the effectiveness and overall impact of exclusivity under
section 505G of the Federal Food, Drug, and Cosmetic Act, as
added by subsection (a), and section 586C of such Act (21
U.S.C. 360fff-3), including the impact of such exclusivity on
consumer access. Such study shall include--
(1) an analysis of the impact of exclusivity under
such section 505G for nonprescription drug products,
including--
(A) the number of nonprescription drug
products that were granted exclusivity and the
indication for which the nonprescription drug
products were determined to be generally
recognized as safe and effective;
(B) whether the exclusivity for such drug
products was granted for--
(i) a new active ingredient
(including any ester or salt of the
active ingredient); or
(ii) changes in the conditions of use
of a drug, for which new human data
studies conducted or sponsored by the
requestor were essential;
(C) whether, and to what extent, the
exclusivity impacted the requestor's or
sponsor's decision to develop the drug product;
(D) an analysis of the implementation of the
exclusivity provision in such section 505G,
including--
(i) the resources used by the Food
and Drug Administration;
(ii) the impact of such provision on
innovation, as well as research and
development in the nonprescription drug
market;
(iii) the impact of such provision on
competition in the nonprescription drug
market;
(iv) the impact of such provision on
consumer access to nonprescription drug
products;
(v) the impact of such provision on
the prices of nonprescription drug
products; and
(vi) whether the administrative
orders initiated by requestors under
such section 505G have been sufficient
to encourage the development of
nonprescription drug products that
would likely not be otherwise
developed, or developed in as timely a
manner; and
(E) whether the administrative orders
initiated by requestors under such section 505G
have been sufficient incentive to encourage
innovation in the nonprescription drug market;
and
(2) an analysis of the impact of exclusivity under
such section 586C for sunscreen ingredients,
including--
(A) the number of sunscreen ingredients that
were granted exclusivity and the specific
ingredient that was determined to be generally
recognized as safe and effective;
(B) whether, and to what extent, the
exclusivity impacted the requestor's or
sponsor's decision to develop the sunscreen
ingredient;
(C) whether, and to what extent, the
sunscreen ingredient granted exclusivity had
previously been available outside of the United
States;
(D) an analysis of the implementation of the
exclusivity provision in such section 586C,
including--
(i) the resources used by the Food
and Drug Administration;
(ii) the impact of such provision on
innovation, as well as research and
development in the sunscreen market;
(iii) the impact of such provision on
competition in the sunscreen market;
(iv) the impact of such provision on
consumer access to sunscreen products;
(v) the impact of such provision on
the prices of sunscreen products; and
(vi) whether the administrative
orders initiated by requestors under
such section 505G have been utilized by
sunscreen ingredient sponsors and
whether such process has been
sufficient to encourage the development
of sunscreen ingredients that would
likely not be otherwise developed, or
developed in as timely a manner; and
(E) whether the administrative orders
initiated by requestors under such section 586C
have been sufficient incentive to encourage
innovation in the sunscreen market.
(c) Conforming Amendment.--Section 751(d)(1) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 379r(d)(1)) is
amended--
(1) in the matter preceding subparagraph (A)--
(A) by striking ``final regulation
promulgated'' and inserting ``final order under
section 505G''; and
(B) by striking ``and not misbranded''; and
(2) in subparagraph (A), by striking ``regulation in
effect'' and inserting ``regulation or order in
effect''.
SEC. 372. MISBRANDING.
Section 502 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 352) is amended by adding at the end the following:
``(ee) If it is a nonprescription drug that is subject to
section 505G, is not the subject of an application approved
under section 505, and does not comply with the requirements
under section 505G.
``(ff) If it is a drug and it was manufactured, prepared,
propagated, compounded, or processed in a facility for which
fees have not been paid as required by section 744M.''.
SEC. 373. DRUGS EXCLUDED FROM THE OVER-THE-COUNTER DRUG REVIEW.
(a) In General.--Nothing in this Act (or the amendments made
by this Act) shall apply to any nonprescription drug (as
defined in section 505G(q) of the Federal Food, Drug, and
Cosmetic Act, as added by section 1001 of this Act) which was
excluded by the Food and Drug Administration from the Over-the-
Counter Drug Review in accordance with the paragraph numbered
25 on page 9466 of volume 37 of the Federal Register, published
on May 11, 1972.
(b) Rule of Construction.--Nothing in this section shall be
construed to preclude or limit the applicability of any other
provision of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 301 et seq.).
SEC. 374. TREATMENT OF SUNSCREEN INNOVATION ACT.
(a) Review of Nonprescription Sunscreen Active Ingredients.--
(1) Applicability of section 505g for pending
submissions.--
(A) In general.--A sponsor of a
nonprescription sunscreen active ingredient or
combination of nonprescription sunscreen active
ingredients that, as of the date of enactment
of this Act, is subject to a proposed sunscreen
order under section 586C of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 360fff-3) may
elect, by means of giving written notification
to the Secretary of Health and Human Services
within 180 calendar days of the enactment of
this Act, to transition into the review of such
ingredient or combination of ingredients
pursuant to the process set out in section 505G
of the Federal Food, Drug, and Cosmetic Act, as
added by section 1001 of this Act.
(B) Election exercised.--Upon receipt by the
Secretary of Health and Human Services of a
timely notification under subparagraph (A)--
(i) the proposed sunscreen order
involved is deemed to be a request for
an order under subsection (b) of
section 505G of the Federal Food, Drug,
and Cosmetic Act, as added by section
1001 of this Act; and
(ii) such order is deemed to have
been accepted for filing under
subsection (b)(6)(A)(i) of such section
505G.
(C) Election not exercised.--If a
notification under subparagraph (A) is not
received by the Secretary of Health and Human
Services within 180 calendar days of the date
of enactment of this Act, the review of the
proposed sunscreen order described in
subparagraph (A)--
(i) shall continue under section 586C
of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360fff-3); and
(ii) shall not be eligible for review
under section 505G, added by section
1001 of this Act.
(2) Definitions.--In this subsection, the terms
``sponsor'', ``nonprescription'', ``sunscreen active
ingredient'', and ``proposed sunscreen order'' have the
meanings given to those terms in section 586 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C.
360fff).
(b) Amendments to Sunscreen Provisions.--
(1) Final sunscreen orders.--Paragraph (3) of section
586C(e) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360fff-3(e)) is amended to read as follows:
``(3) Relationship to orders under section 505g.--A
final sunscreen order shall be deemed to be a final
order under section 505G.''.
(2) Meetings.--Paragraph (7) of section 586C(b) of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
360fff-3(b)) is amended--
(A) by striking ``A sponsor may request'' and
inserting the following:
``(A) In general.--A sponsor may request'';
and
(B) by adding at the end the following:
``(B) Confidential meetings.--A sponsor may
request one or more confidential meetings with
respect to a proposed sunscreen order,
including a letter deemed to be a proposed
sunscreen order under paragraph (3), to discuss
matters relating to data requirements to
support a general recognition of safety and
effectiveness involving confidential
information and public information related to
such proposed sunscreen order, as appropriate.
The Secretary shall convene a confidential
meeting with such sponsor in a reasonable time
period. If a sponsor requests more than one
confidential meeting for the same proposed
sunscreen order, the Secretary may refuse to
grant an additional confidential meeting
request if the Secretary determines that such
additional confidential meeting is not
reasonably necessary for the sponsor to advance
its proposed sunscreen order, or if the request
for a confidential meeting fails to include
sufficient information upon which to base a
substantive discussion. The Secretary shall
publish a post-meeting summary of each
confidential meeting under this subparagraph
that does not disclose confidential commercial
information or trade secrets. This subparagraph
does not authorize the disclosure of
confidential commercial information or trade
secrets subject to 552(b)(4) of title 5, United
States Code, or section 1905 of title 18,
United States Code.''.
(3) Exclusivity.--Section 586C of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 360fff-3) is amended
by adding at the end the following:
``(f) Exclusivity.--
``(1) In general.--A final sunscreen order shall have
the effect of authorizing solely the order requestor
(or the licensees, assignees, or successors in interest
of such requestor with respect to the subject of such
request and listed under paragraph (5)) for a period of
18 months, to market a sunscreen ingredient under this
section incorporating changes described in paragraph
(2) subject to the limitations under paragraph (4),
beginning on the date the requestor (or any licensees,
assignees, or successors in interest of such requestor
with respect to the subject of such request and listed
under paragraph (5)) may lawfully market such sunscreen
ingredient pursuant to the order.
``(2) Changes described.--A change described in this
paragraph is a change subject to an order specified in
paragraph (1) that permits a sunscreen to contain an
active sunscreen ingredient not previously incorporated
in a marketed sunscreen listed in paragraph (3).
``(3) Marketed sunscreen.--The marketed sunscreen
ingredients described in this paragraph are sunscreen
ingredients--
``(A) marketed in accordance with a final
monograph for sunscreen drug products set forth
at part 352 of title 21, Code of Federal
Regulations (as published at 64 Fed. Reg.
27687); or
``(B) marketed in accordance with a final
order issued under this section.
``(4) Limitations on exclusivity.--Only one 18-month
period may be granted per ingredient under paragraph
(1).
``(5) Listing of licensees, assignees, or successors
in interest.--Requestors shall submit to the Secretary
at the time when a drug subject to such request is
introduced or delivered for introduction into
interstate commerce, a list of licensees, assignees, or
successors in interest under paragraph (1).''.
(4) Sunset provision.--Subchapter I of chapter V of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
360fff et seq.) is amended by adding at the end the
following:
``SEC. 586H. SUNSET.
``This subchapter shall cease to be effective at the end of
fiscal year 2022.''.
(5) Treatment of final sunscreen order.--The Federal
Food, Drug, and Cosmetic Act is amended by striking
section 586E of such Act (21 U.S.C. 360fff-5).
(c) Treatment of Authority Regarding Finalization of
Sunscreen Monograph.--
(1) In general.--
(A) Revision of final sunscreen order.--Not
later than November 26, 2019, the Secretary of
Health and Human Services (referred to in this
subsection as the ``Secretary'') shall amend
and revise the final administrative order
concerning nonprescription sunscreen (referred
to in this subsection as the ``sunscreen
order'') for which the content, prior to the
date of enactment of this Act, was represented
by the final monograph for sunscreen drug
products set forth in part 352 of title 21,
Code of Federal Regulations (as in effect on
May 21, 1999).
(B) Issuance of revised sunscreen order;
effective date.--A revised sunscreen order
described in subparagraph (A) shall be--
(i) issued in accordance with the
procedures described in section
505G(c)(2) of the Federal Food, Drug,
and Cosmetic Act;
(ii) issued in proposed form not
later than May 28, 2019;
(iii) effective not later than
November 26, 2020; and
(iv) issued by the Secretary at least
1 year prior to the effective date of
the revised order.
(2) Reports.--If a revised sunscreen order issued
under paragraph (1) does not include provisions related
to the effectiveness of various sun protection factor
levels, and does not address all dosage forms known to
the Secretary to be used in sunscreens marketed in the
United States without a new drug application approved
under section 505 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355), the Secretary shall
submit a report to the Committee on Energy and Commerce
of the House of Representatives and the Committee on
Health, Education, Labor, and Pensions of the Senate on
the rationale for omission of such provisions from such
order, and a plan and timeline to compile any
information necessary to address such provisions
through such order.
(d) Treatment of Non-sunscreen Time and Extent
Applications.--
(1) In general.--Any application described in section
586F of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360fff-6) that was submitted to the Secretary
pursuant to section 330.14 of title 21, Code of Federal
Regulations, as such provisions were in effect
immediately prior to the date of enactment date of this
Act, shall be extinguished as of such date of
enactment, subject to paragraph (2).
(2) Order request.--Nothing in paragraph (1)
precludes the submission of an order request under
section 505G(b) of the Federal Food, Drug, and Cosmetic
Act, as added by section 1001 of this Act, with respect
to a drug that was the subject of an application
extinguished under paragraph (1).
SEC. 375. ANNUAL UPDATE TO CONGRESS ON APPROPRIATE PEDIATRIC INDICATION
FOR CERTAIN OTC COUGH AND COLD DRUGS.
(a) In General.--Subject to subsection (c), the Secretary of
Health and Human Services shall, beginning not later than 1
year after the date of enactment of this Act, annually submit
to the Committee on Energy and Commerce of the House of
Representatives and the Committee on Health, Education, Labor,
and Pensions of the Senate a letter describing the progress of
the Food and Drug Administration--
(1) in evaluating the cough and cold monograph
described in subsection (b) with respect to children
under age 6; and
(2) as appropriate, revising such cough and cold
monograph to address such children through the order
process under section 505G(b) of the Federal Food,
Drug, and Cosmetic Act, as added by section 1001 of
this Act.
(b) Cough and Cold Monograph Described.--The cough and cold
monograph described in this subsection consists of the
conditions under which nonprescription drugs containing
antitussive, expectorant, nasal decongestant, or antihistamine
active ingredients (or combinations thereof) are generally
recognized as safe and effective, as specified in part 341 of
title 21, Code of Federal Regulations (as in effect immediately
prior to the date of enactment of this Act), and included in an
order deemed to be established under section 505G(b) of the
Federal Food, Drug, and Cosmetic Act, as added by section 1001
of this Act.
(c) Duration of Authority.--The requirement under subsection
(a) shall terminate as of the date of a letter submitted by the
Secretary of Health and Human Services pursuant to such
subsection in which the Secretary indicates that the Food and
Drug Administration has completed its evaluation and revised,
in a final order, as applicable, the cough and cold monograph
as described in subsection (a)(2).
SEC. 376. TECHNICAL CORRECTIONS.
(a) Imports and Exports.--Section 801(e)(4)(E)(iii) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C.
381(e)(4)(E)(iii)) is amended by striking ``subparagraph'' each
place such term appears and inserting ``paragraph''.
(b) FDA Reauthorization Act of 2017.--
(1) In general.--Section 905(b)(4) of the FDA
Reauthorization Act of 2017 (Public Law115-52) is
amended by striking ``Section 744H(e)(2)(B)'' and
inserting ``Section 744H(f)(2)(B)''.
(2) Effective date.--The amendment made by paragraph
(1) shall take effect as of the enactment of the FDA
Reauthorization Act of 2017 (Public Law 115-52).
PART 2--USER FEES
SEC. 381. SHORT TITLE; FINDING.
(a) Short Title.--This part may be cited as the ``Over-the-
Counter Monograph User Fee Act of 2019''.
(b) Finding.--The Congress finds that the fees authorized by
the amendments made in this part will be dedicated to OTC
monograph drug activities, as set forth in the goals identified
for purposes of part 10 of subchapter C of chapter VII of the
Federal Food, Drug, and Cosmetic Act, in the letters from the
Secretary of Health and Human Services to the Chairman of the
Committee on Health, Education, Labor, and Pensions of the
Senate and the Chairman of the Committee on Energy and Commerce
of the House of Representatives, as set forth in the
Congressional Record.
SEC. 382. FEES RELATING TO OVER-THE-COUNTER DRUGS.
Subchapter C of chapter VII of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 379f et seq.) is amended by inserting
after part 9 the following:
``PART 10--FEES RELATING TO OVER-THE-COUNTER DRUGS
``SEC. 744L. DEFINITIONS.
``In this part:
``(1) The term `affiliate' means a business entity
that has a relationship with a second business entity
if, directly or indirectly--
``(A) one business entity controls, or has
the power to control, the other business
entity; or
``(B) a third party controls, or has power to
control, both of the business entities.
``(2) The term `contract manufacturing organization
facility' means an OTC monograph drug facility where
neither the owner of such manufacturing facility nor
any affiliate of such owner or facility sells the OTC
monograph drug produced at such facility directly to
wholesalers, retailers, or consumers in the United
States.
``(3) The term `costs of resources allocated for OTC
monograph drug activities' means the expenses in
connection with OTC monograph drug activities for--
``(A) officers and employees of the Food and
Drug Administration, contractors of the Food
and Drug Administration, advisory committees,
and costs related to such officers, employees,
and committees and costs related to contracts
with such contractors;
``(B) management of information, and the
acquisition, maintenance, and repair of
computer resources;
``(C) leasing, maintenance, renovation, and
repair of facilities and acquisition,
maintenance, and repair of fixtures, furniture,
scientific equipment, and other necessary
materials and supplies; and
``(D) collecting fees under section 744M and
accounting for resources allocated for OTC
monograph drug activities.
``(4) The term `FDA establishment identifier' is the
unique number automatically generated by Food and Drug
Administration's Field Accomplishments and Compliance
Tracking System (FACTS) (or any successor system).
``(5) The term `OTC monograph drug' means a
nonprescription drug without an approved new drug
application which is governed by the provisions of
section 505G.
``(6) The term `OTC monograph drug activities' means
activities of the Secretary associated with OTC
monograph drugs and inspection of facilities associated
with such products, including the following activities:
``(A) The activities necessary for review and
evaluation of OTC monographs and OTC monograph
order requests, including--
``(i) orders proposing or finalizing
applicable conditions of use for OTC
monograph drugs;
``(ii) orders affecting status
regarding general recognition of safety
and effectiveness of an OTC monograph
ingredient or combination of
ingredients under specified conditions
of use;
``(iii) all OTC monograph drug
development and review activities,
including intra-agency collaboration;
``(iv) regulation and policy
development activities related to OTC
monograph drugs;
``(v) development of product
standards for products subject to
review and evaluation;
``(vi) meetings referred to in
section 505G(i);
``(vii) review of labeling prior to
issuance of orders related to OTC
monograph drugs or conditions of use;
and
``(viii) regulatory science
activities related to OTC monograph
drugs.
``(B) Inspections related to OTC monograph
drugs.
``(C) Monitoring of clinical and other
research conducted in connection with OTC
monograph drugs.
``(D) Safety activities with respect to OTC
monograph drugs, including--
``(i) collecting, developing, and
reviewing safety information on OTC
monograph drugs, including adverse
event reports;
``(ii) developing and using improved
adverse event data-collection systems,
including information technology
systems; and
``(iii) developing and using improved
analytical tools to assess potential
safety risks, including access to
external databases.
``(E) Other activities necessary for
implementation of section 505G.
``(7) The term `OTC monograph order request' means a
request for an order submitted under section
505G(b)(5).
``(8) The term `Tier 1 OTC monograph order request'
means any OTC monograph order request not determined to
be a Tier 2 OTC monograph order request.
``(9)(A) The term `Tier 2 OTC monograph order
request' means, subject to subparagraph (B), an OTC
monograph order request for--
``(i) the reordering of existing information
in the drug facts label of an OTC monograph
drug;
``(ii) the addition of information to the
other information section of the drug facts
label of an OTC monograph drug, as limited by
section 201.66(c)(7) of title 21, Code of
Federal Regulations (or any successor
regulations);
``(iii) modification to the directions for
use section of the drug facts label of an OTC
monograph drug, if such changes conform to
changes made pursuant to section 505G(c)(3)(A);
``(iv) the standardization of the
concentration or dose of a specific finalized
ingredient within a particular finalized
monograph;
``(v) a change to ingredient nomenclature to
align with nomenclature of a standards-setting
organization; or
``(vi) addition of an interchangeable term in
accordance with section 330.1 of title 21, Code
of Federal Regulations (or any successor
regulations).
``(B) The Secretary may, based on program
implementation experience or other factors found
appropriate by the Secretary, characterize any OTC
monograph order request as a Tier 2 OTC monograph order
request (including recharacterizing a request from Tier
1 to Tier 2) and publish such determination in a
proposed order issued pursuant to section 505G.
``(10)(A) The term `OTC monograph drug facility'
means a foreign or domestic business or other entity
that--
``(i) is--
``(I) under one management, either
direct or indirect; and
``(II) at one geographic location or
address engaged in manufacturing or
processing the finished dosage form of
an OTC monograph drug;
``(ii) includes a finished dosage form
manufacturer facility in a contractual
relationship with the sponsor of one or more
OTC monograph drugs to manufacture or process
such drugs; and
``(iii) does not include a business or other
entity whose only manufacturing or processing
activities are one or more of the following:
production of clinical research supplies,
testing, or placement of outer packaging on
packages containing multiple products, for such
purposes as creating multipacks, when each
monograph drug product contained within the
overpackaging is already in a final packaged
form prior to placement in the outer
overpackaging.
``(B) For purposes of subparagraph (A)(i)(II),
separate buildings or locations within close proximity
are considered to be at one geographic location or
address if the activities conducted in such buildings
or locations are--
``(i) closely related to the same business
enterprise;
``(ii) under the supervision of the same
local management; and
``(iii) under a single FDA establishment
identifier and capable of being inspected by
the Food and Drug Administration during a
single inspection.
``(C) If a business or other entity would meet
criteria specified in subparagraph (A), but for being
under multiple management, the business or other entity
is deemed to constitute multiple facilities, one per
management entity, for purposes of this paragraph.
``(11) The term `OTC monograph drug meeting' means
any meeting regarding the content of a proposed OTC
monograph order request.
``(12) The term `person' includes an affiliate of a
person.
``(13) The terms `requestor' and `sponsor' have the
meanings given such terms in section 505G.
``SEC. 744M. AUTHORITY TO ASSESS AND USE OTC MONOGRAPH FEES.
``(a) Types of Fees.--Beginning with fiscal year 2019, the
Secretary shall assess and collect fees in accordance with this
section as follows:
``(1) Facility fee.--
``(A) In general.--Each person that owns a
facility identified as an OTC monograph drug
facility on December 31 of the fiscal year or
at any time during the preceding 12-month
period shall be assessed an annual fee for each
such facility as determined under subsection
(c).
``(B) Exceptions.--
``(i) A fee shall not be assessed
under subparagraph (A) if the
identified OTC monograph drug
facility--
``(I) has ceased all
activities related to OTC
monograph drugs prior to
January 31, 2019, for the first
program year, and December 31
of the fiscal year for
subsequent fiscal years; and
``(II) has updated its
registration to reflect such
change under the requirements
for drug establishment
registration set forth in
section 510.
``(ii) The amount of the fee for a
contract manufacturing organization
facility shall be equal to two-thirds
of the amount of the fee for an OTC
monograph drug facility that is not a
contract manufacturing organization
facility.
``(C) Amount.--The amount of fees established
under subparagraph (A) shall be established
under subsection (c).
``(D) Due date.--
``(i) For first program year.--For
fiscal year 2019, the facility fees
required under subparagraph (A) shall
be due 45 calendar days after
publication of the Federal Register
notice provided for under subsection
(c)(4)(A).
``(ii) Subsequent fiscal years.--For
each fiscal year after fiscal year
2019, the facility fees required under
subparagraph (A) shall be due on the
later of--
``(I) the first business day
of June of such year; or
``(II) the first business day
after the enactment of an
appropriations Act providing
for the collection and
obligation of fees under this
section for such year.
``(2) OTC monograph order request fee.--
``(A) In general.--Each person that submits
an OTC monograph order request shall be subject
to a fee for an OTC monograph order request.
The amount of such fee shall be--
``(i) for a Tier 1 OTC monograph
order request, $500,000, adjusted for
inflation for the fiscal year (as
determined under subsection (c)(1)(B));
and
``(ii) for a Tier 2 OTC monograph
order request, $100,000 adjusted for
inflation for the fiscal year (as
determined under subsection (c)(1)(B)).
``(B) Due date.--The OTC monograph order
request fees required under subparagraph (A)
shall be due on the date of submission of the
OTC monograph order request.
``(C) Exception for certain safety changes.--
A person who is named as the requestor in an
OTC monograph order shall not be subject to a
fee under subparagraph (A) if the Secretary
finds that the OTC monograph order request
seeks to change the drug facts labeling of an
OTC monograph drug in a way that would add to
or strengthen--
``(i) a contraindication, warning, or
precaution;
``(ii) a statement about risk
associated with misuse or abuse; or
``(iii) an instruction about dosage
and administration that is intended to
increase the safe use of the OTC
monograph drug.
``(D) Refund of fee if order request is
recategorized as a tier 2 otc monograph order
request.--If the Secretary determines that an
OTC monograph request initially characterized
as Tier 1 shall be re-characterized as a Tier 2
OTC monograph order request, and the requestor
has paid a Tier 1 fee in accordance with
subparagraph (A)(i), the Secretary shall refund
the requestor the difference between the Tier 1
and Tier 2 fees determined under subparagraphs
(A)(i) and (A)(ii), respectively.
``(E) Refund of fee if order request refused
for filing or withdrawn before filing.--The
Secretary shall refund 75 percent of the fee
paid under subparagraph (B) for any order
request which is refused for filing or was
withdrawn before being accepted or refused for
filing.
``(F) Fees for order requests previously
refused for filing or withdrawn before
filing.--An OTC monograph order request that
was submitted but was refused for filing, or
was withdrawn before being accepted or refused
for filing, shall be subject to the full fee
under subparagraph (A) upon being resubmitted
or filed over protest.
``(G) Refund of fee if order request
withdrawn.--If an order request is withdrawn
after the order request was filed, the
Secretary may refund the fee or a portion of
the fee if no substantial work was performed on
the order request after the application was
filed. The Secretary shall have the sole
discretion to refund a fee or a portion of the
fee under this subparagraph. A determination by
the Secretary concerning a refund under this
subparagraph shall not be reviewable.
``(3) Refunds.--
``(A) In general.--Other than refunds
provided pursuant to any of subparagraphs (D)
through (G) of paragraph (2), the Secretary
shall not refund any fee paid under paragraph
(1) except as provided in subparagraph (B).
``(B) Disputes concerning fees.--To qualify
for the return of a fee claimed to have been
paid in error under paragraph (1) or (2), a
person shall submit to the Secretary a written
request justifying such return within 180
calendar days after such fee was paid.
``(4) Notice.--Within the timeframe specified in
subsection (c), the Secretary shall publish in the
Federal Register the amount of the fees under paragraph
(1) for such fiscal year.
``(b) Fee Revenue Amounts.--
``(1) Fiscal year 2019.--For fiscal year 2019, fees
under subsection (a)(1) shall be established to
generate a total facility fee revenue amount equal to
the sum of--
``(A) the annual base revenue for fiscal year
2019 (as determined under paragraph (3));
``(B) the dollar amount equal to the
operating reserve adjustment for the fiscal
year, if applicable (as determined under
subsection (c)(2)); and
``(C) additional direct cost adjustments (as
determined under subsection (c)(3)).
``(2) Subsequent fiscal years.--For each of the
fiscal years 2020 through 2023, fees under subsection
(a)(1) shall be established to generate a total
facility fee revenue amount equal to the sum of--
``(A) the annual base revenue for the fiscal
year (as determined under paragraph (3));
``(B) the dollar amount equal to the
inflation adjustment for the fiscal year (as
determined under subsection (c)(1));
``(C) the dollar amount equal to the
operating reserve adjustment for the fiscal
year, if applicable (as determined under
subsection (c)(2));
``(D) additional direct cost adjustments (as
determined under subsection (c)(3)); and
``(E) additional dollar amounts for each
fiscal year as follows:
``(i) $7,000,000 for fiscal year
2020.
``(ii) $6,000,000 for fiscal year
2021.
``(iii) $7,000,000 for fiscal year
2022.
``(iv) $3,000,000 for fiscal year
2023.
``(3) Annual base revenue.--For purposes of
paragraphs (1)(A) and (2)(A), the dollar amount of the
annual base revenue for a fiscal year shall be--
``(A) for fiscal year 2019, $8,000,000; and
``(B) for fiscal years 2020 through 2023, the
dollar amount of the total revenue amount
established under this subsection for the
previous fiscal year, not including any
adjustments made under subsection (c)(2) or
(c)(3).
``(c) Adjustments; Annual Fee Setting.--
``(1) Inflation adjustment.--
``(A) In general.--For purposes of subsection
(b)(2)(B), the dollar amount of the inflation
adjustment to the annual base revenue for
fiscal year 2020 and each subsequent fiscal
year shall be equal to the product of--
``(i) such annual base revenue for
the fiscal year under subsection
(b)(2); and
``(ii) the inflation adjustment
percentage under subparagraph (C).
``(B) OTC monograph order request fees.--For
purposes of subsection (a)(2), the dollar
amount of the inflation adjustment to the fee
for OTC monograph order requests for fiscal
year 2020 and each subsequent fiscal year shall
be equal to the product of--
``(i) the applicable fee under
subsection (a)(2) for the preceding
fiscal year; and
``(ii) the inflation adjustment
percentage under subparagraph (C).
``(C) Inflation adjustment percentage.--The
inflation adjustment percentage under this
subparagraph for a fiscal year is equal to--
``(i) for each of fiscal years 2020
and 2021, the average annual percent
change that occurred in the Consumer
Price Index for urban consumers
(Washington-Baltimore, DC-MD-VA-WV; Not
Seasonally Adjusted; All items; Annual
Index) for the first 3 years of the
preceding 4 years of available data;
and
``(ii) for each of fiscal years 2022
and 2023, the sum of--
``(I) the average annual
percent change in the cost, per
full-time equivalent position
of the Food and Drug
Administration, of all
personnel compensation and
benefits paid with respect to
such positions for the first 3
years of the preceding 4 fiscal
years, multiplied by the
proportion of personnel
compensation and benefits costs
to total costs of OTC monograph
drug activities for the first 3
years of the preceding 4 fiscal
years; and
``(II) the average annual
percent change that occurred in
the Consumer Price Index for
urban consumers (Washington-
Baltimore, DC-MD-VA-WV; Not
Seasonally Adjusted; All items;
Annual Index) for the first 3
years of the preceding 4 years
of available data multiplied by
the proportion of all costs
other than personnel
compensation and benefits costs
to total costs of OTC monograph
drug activities for the first 3
years of the preceding 4 fiscal
years.
``(2) Operating reserve adjustment.--
``(A) In general.--For fiscal year 2019 and
subsequent fiscal years, for purposes of
subsections (b)(1)(B) and (b)(2)(C), the
Secretary may, in addition to adjustments under
paragraph (1), further increase the fee revenue
and fees if such an adjustment is necessary to
provide operating reserves of carryover user
fees for OTC monograph drug activities for not
more than the number of weeks specified in
subparagraph (B).
``(B) Number of weeks.--The number of weeks
specified in this subparagraph is--
``(i) 3 weeks for fiscal year 2019;
``(ii) 7 weeks for fiscal year 2020;
``(iii) 10 weeks for fiscal year
2021;
``(iv) 10 weeks for fiscal year 2022;
and
``(v) 10 weeks for fiscal year 2023.
``(C) Decrease.--If the Secretary has
carryover balances for such process in excess
of 10 weeks of the operating reserves referred
to in subparagraph (A), the Secretary shall
decrease the fee revenue and fees referred to
in such subparagraph to provide for not more
than 10 weeks of such operating reserves.
``(D) Rationale for adjustment.--If an
adjustment under this paragraph is made, the
rationale for the amount of the increase or
decrease (as applicable) in fee revenue and
fees shall be contained in the annual Federal
Register notice under paragraph (4)
establishing fee revenue and fees for the
fiscal year involved.
``(3) Additional direct cost adjustment.--The
Secretary shall, in addition to adjustments under
paragraphs (1) and (2), further increase the fee
revenue and fees for purposes of subsection (b)(2)(D)
by an amount equal to--
``(A) $14,000,000 for fiscal year 2019;
``(B) $7,000,000 for fiscal year 2020;
``(C) $4,000,000 for fiscal year 2021;
``(D) $3,000,000 for fiscal year 2022; and
``(E) $3,000,000 for fiscal year 2023.
``(4) Annual fee setting.--
``(A) Fiscal year 2019.--The Secretary shall,
not later than the second Monday in March of
2019--
``(i) establish OTC monograph drug
facility fees for fiscal year 2019
under subsection (a), based on the
revenue amount for such year under
subsection (b) and the adjustments
provided under this subsection; and
``(ii) publish fee revenue, facility
fees, and OTC monograph order requests
in the Federal Register.
``(B) Subsequent fiscal years.--The Secretary
shall, not later than the second Monday in
March of each fiscal year that begins after
September 30, 2019--
``(i) establish for each such fiscal
year, based on the revenue amounts
under subsection (b) and the
adjustments provided under this
subsection--
``(I) OTC monograph drug
facility fees under subsection
(a)(1); and
``(II) OTC monograph order
request fees under subsection
(a)(2); and
``(ii) publish such fee revenue
amounts, facility fees, and OTC
monograph order request fees in the
Federal Register.
``(d) Identification of Facilities.--Each person that owns an
OTC monograph drug facility shall submit to the Secretary the
information required under this subsection each year. Such
information shall, for each fiscal year--
``(1) be submitted as part of the requirements for
drug establishment registration set forth in section
510; and
``(2) include for each such facility, at a minimum,
identification of the facility's business operation as
that of an OTC monograph drug facility.
``(e) Effect of Failure To Pay Fees.--
``(1) OTC monograph drug facility fee.--
``(A) In general.--Failure to pay the fee
under subsection (a)(1) within 20 calendar days
of the due date as specified in subparagraph
(D) of such subsection shall result in the
following:
``(i) The Secretary shall place the
facility on a publicly available
arrears list.
``(ii) All OTC monograph drugs
manufactured in such a facility or
containing an ingredient manufactured
in such a facility shall be deemed
misbranded under section 502(ff).
``(B) Application of penalties.--The
penalties under this paragraph shall apply
until the fee established by subsection (a)(1)
is paid.
``(2) Order requests.--An OTC monograph order request
submitted by a person subject to fees under subsection
(a) shall be considered incomplete and shall not be
accepted for filing by the Secretary until all fees
owed by such person under this section have been paid.
``(3) Meetings.--A person subject to fees under this
section shall be considered ineligible for OTC
monograph drug meetings until all such fees owed by
such person have been paid.
``(f) Crediting and Availability of Fees.--
``(1) In general.--Fees authorized under subsection
(a) shall be collected and available for obligation
only to the extent and in the amount provided in
advance in appropriations Acts. Such fees are
authorized to remain available until expended.
``(2) Collections and appropriation acts.--
``(A) In general.--Subject to subparagraph
(C), the fees authorized by this section shall
be collected and available in each fiscal year
in an amount not to exceed the amount specified
in appropriation Acts, or otherwise made
available for obligation, for such fiscal year.
``(B) Use of fees and limitation.--The fees
authorized by this section shall be available
to defray increases in the costs of the
resources allocated for OTC monograph drug
activities (including increases in such costs
for an additional number of full-time
equivalent positions in the Department of
Health and Human Services to be engaged in such
activities), only if the Secretary allocates
for such purpose an amount for such fiscal year
(excluding amounts from fees collected under
this section) no less than $12,000,000,
multiplied by the adjustment factor applicable
to the fiscal year involved under subsection
(c)(1).
``(C) Compliance.--The Secretary shall be
considered to have met the requirements of
subparagraph (B) in any fiscal year if the
costs funded by appropriations and allocated
for OTC monograph drug activities are not more
than 15 percent below the level specified in
such subparagraph.
``(D) Provision for early payments in
subsequent years.--Payment of fees authorized
under this section for a fiscal year (after
fiscal year 2019), prior to the due date for
such fees, may be accepted by the Secretary in
accordance with authority provided in advance
in a prior year appropriations Act.
``(3) Authorization of appropriations.--For each of
the fiscal years 2019 through 2023, there is authorized
to be appropriated for fees under this section an
amount equal to the total amount of fees assessed for
such fiscal year under this section.
``(g) Collection of Unpaid Fees.--In any case where the
Secretary does not receive payment of a fee assessed under
subsection (a) within 30 calendar days after it is due, such
fee shall be treated as a claim of the United States Government
subject to subchapter II of chapter 37 of title 31, United
States Code.
``(h) Construction.--This section may not be construed to
require that the number of full-time equivalent positions in
the Department of Health and Human Services, for officers,
employers, and advisory committees not engaged in OTC monograph
drug activities, be reduced to offset the number of officers,
employees, and advisory committees so engaged.
``SEC. 744N. REAUTHORIZATION; REPORTING REQUIREMENTS.
``(a) Performance Report.--Beginning with fiscal year 2019,
and not later than 120 calendar days after the end of each
fiscal year thereafter for which fees are collected under this
part, the Secretary shall prepare and submit to the Committee
on Energy and Commerce of the House of Representatives and the
Committee on Health, Education, Labor, and Pensions of the
Senate a report concerning the progress of the Food and Drug
Administration in achieving the goals identified in the letters
described in section 2001(b) of the Over-the-Counter Monograph
Safety, Innovation, and Reform Act of 2019 during such fiscal
year and the future plans of the Food and Drug Administration
for meeting such goals.
``(b) Fiscal Report.--Not later than 120 calendar days after
the end of fiscal year 2019 and each subsequent fiscal year for
which fees are collected under this part, the Secretary shall
prepare and submit to the Committee on Energy and Commerce of
the House of Representatives and the Committee on Health,
Education, Labor, and Pensions of the Senate a report on the
implementation of the authority for such fees during such
fiscal year and the use, by the Food and Drug Administration,
of the fees collected for such fiscal year.
``(c) Public Availability.--The Secretary shall make the
reports required under subsections (a) and (b) available to the
public on the internet website of the Food and Drug
Administration.
``(d) Reauthorization.--
``(1) Consultation.--In developing recommendations to
present to the Congress with respect to the goals
described in subsection (a), and plans for meeting the
goals, for OTC monograph drug activities for the first
5 fiscal years after fiscal year 2023, and for the
reauthorization of this part for such fiscal years, the
Secretary shall consult with--
``(A) the Committee on Energy and Commerce of
the House of Representatives;
``(B) the Committee on Health, Education,
Labor, and Pensions of the Senate;
``(C) scientific and academic experts;
``(D) health care professionals;
``(E) representatives of patient and consumer
advocacy groups; and
``(F) the regulated industry.
``(2) Public review of recommendations.--After
negotiations with the regulated industry, the Secretary
shall--
``(A) present the recommendations developed
under paragraph (1) to the congressional
committees specified in such paragraph;
``(B) publish such recommendations in the
Federal Register;
``(C) provide for a period of 30 calendar
days for the public to provide written comments
on such recommendations;
``(D) hold a meeting at which the public may
present its views on such recommendations; and
``(E) after consideration of such public
views and comments, revise such recommendations
as necessary.
``(3) Transmittal of recommendations.--Not later than
January 15, 2023, the Secretary shall transmit to the
Congress the revised recommendations under paragraph
(2), a summary of the views and comments received under
such paragraph, and any changes made to the
recommendations in response to such views and
comments.''.
Subtitle I--Other Provisions
SEC. 391. PROTECTING ACCESS TO BIOLOGICAL PRODUCTS.
Section 351(k)(7) of the Public Health Service Act (42 U.S.C.
262(k)(7)) is amended by adding at the end the following:
``(D) Deemed licenses.--
``(i) No additional exclusivity
through deeming.--An approved
application that is deemed to be a
license for a biological product under
this section pursuant to section
7002(e)(4) of the Biologics Price
Competition and Innovation Act of 2009
shall not be treated as having been
first licensed under subsection (a) for
purposes of subparagraphs (A) and (B).
``(ii) Application of limitations on
exclusivity.--Subparagraph (C) shall
apply with respect to a reference
product referred to in such
subparagraph that was the subject of an
approved application that was deemed to
be a license pursuant to section
7002(e)(4) of the Biologics Price
Competition and Innovation Act of 2009.
``(iii) Applicability.--The
exclusivity periods described in
section 527, section 505A(b)(1)(A)(ii),
and section 505A(c)(1)(A)(ii) of the
Federal Food, Drug, and Cosmetic Act
shall continue to apply to a biological
product after an approved application
for the biological product is deemed to
be a license for the biological product
under subsection (a) pursuant to
section 7002(e)(4) of the Biologics
Price Competition and Innovation Act of
2009.''.
SEC. 392. ORPHAN DRUG CLARIFICATION.
Section 527(c) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 360cc(c)) is amended by adding at the end the
following:
``(3) Applicability.--This subsection applies to any
drug designated under section 526 for which an
application was approved under section 505 of this Act
or licensed under section 351 of the Public Health
Service Act after the date of enactment of the FDA
Reauthorization Act of 2017, regardless of the date on
which such drug was designated under section 526.''.
SEC. 393. CONDITIONS OF USE FOR BIOSIMILAR BIOLOGICAL PRODUCTS.
Section 351(k)(2)(A)(iii) of the Public Health Service Act
(42 U.S.C. 262(k)(2)(A)(iii) is amended--
(1) in subclause (I), by striking ``; and'' and
inserting a semicolon;
(2) in subclause (II), by striking the period and
inserting ``; and'' ; and
(3) by adding at the end the following:
``(III) may include
information to show that the
conditions of use prescribed,
recommended, or suggested in
the labeling proposed for the
biological product have been
previously approved for the
reference product.''.
SEC. 394. CLARIFYING THE MEANING OF NEW CHEMICAL ENTITY.
Chapter V of the Federal Food, Drug, and Cosmetic Act is
amended--
(1) in section 505 (21 U.S.C. 355)--
(A) in subsection (c)(3)(E)--
(i) in clause (ii), by striking
``active ingredient (including any
ester or salt of the active
ingredient)'' and inserting ``active
moiety (as defined by the Secretary in
section 314.3 of title 21, Code of
Federal Regulations (or any successor
regulations))''; and
(ii) in clause (iii), by striking
``active ingredient (including any
ester or salt of the active
ingredient)'' and inserting ``active
moiety (as defined by the Secretary in
section 314.3 of title 21, Code of
Federal Regulations (or any successor
regulations))'';
(B) in subsection (j)(5)(F)--
(i) in clause (ii), by striking
``active ingredient (including any
ester or salt of the active
ingredient)'' and inserting ``active
moiety (as defined by the Secretary in
section 314.3 of title 21, Code of
Federal Regulations (or any successor
regulations))''; and
(ii) in clause (iii), by striking
``active ingredient (including any
ester or salt of the active
ingredient)'' and inserting ``active
moiety (as defined by the Secretary in
section 314.3 of title 21, Code of
Federal Regulations (or any successor
regulations))'';
(C) in subsection (l)(2)(A)(i), by striking
``active ingredient (including any ester or
salt of the active ingredient)'' and inserting
``active moiety (as defined by the Secretary in
section 314.3 of title 21, Code of Federal
Regulations (or any successor regulations))'';
(D) in subsection (s), in the matter
preceding paragraph (1), by striking ``active
ingredient (including any ester or salt of the
active ingredient)'' and inserting ``active
moiety (as defined by the Secretary in section
314.3 of title 21, Code of Federal Regulations
(or any successor regulations))''; and
(E) in subsection (u)(1), in the matter
preceding subparagraph (A)--
(i) by striking ``active ingredient
(including any ester or salt of the
active ingredient)'' and inserting
``active moiety (as defined by the
Secretary in section 314.3 of title 21,
Code of Federal Regulations (or any
successor regulations))''; and
(ii) by striking ``same active
ingredient'' and inserting ``same
active moiety'';
(2) in section 512(c)(2)(F) (21 U.S.C.
360b(c)(2)(F))--
(A) in clause (i), by striking ``active
ingredient (including any ester or salt of the
active ingredient)'' and inserting ``active
moiety (as defined by the Secretary in section
314.3 of title 21, Code of Federal Regulations
(or any successor regulations))'';
(B) in clause (ii), by striking ``active
ingredient (including any ester or salt of the
active ingredient)'' and inserting ``active
moiety (as defined by the Secretary in section
314.3 of title 21, Code of Federal Regulations
(or any successor regulations))''; and
(C) in clause (v), by striking ``active
ingredient (including any ester or salt of the
active ingredient)'' and inserting ``active
moiety (as defined by the Secretary in section
314.3 of title 21, Code of Federal Regulations
(or any successor regulations))'';
(3) in section 524(a)(4)(C) (21 U.S.C.
360n(a)(4)(C)), by striking ``active ingredient
(including any ester or salt of the active
ingredient)'' and inserting ``active moiety (as defined
by the Secretary in section 314.3 of title 21, Code of
Federal Regulations (or any successor regulations))'';
(4) in section 529(a)(4)(A)(ii) (21 U.S.C.
360ff(a)(4)(A)(ii)), by striking ``active ingredient
(including any ester or salt of the active
ingredient)'' and inserting ``active moiety (as defined
by the Secretary in section 314.3 of title 21, Code of
Federal Regulations (or any successor regulations))'';
and
(5) in section 565A(a)(4)(D) (21 U.S.C. 360bbb-
4a(a)(4)(D)), by striking ``active ingredient
(including any ester or salt of the active
ingredient)'' and inserting ``active moiety (as defined
by the Secretary in section 314.3 of title 21, Code of
Federal Regulations (or any successor regulations))''.
TITLE IV--REVENUE PROVISIONS
SEC. 401. PERMANENT EXTENSION OF REDUCTION IN MEDICAL EXPENSE DEDUCTION
FLOOR.
(a) In General.--Section 213(a) of the Internal Revenue Code
of 1986 is amended by striking ``10 percent'' and inserting
``7.5 percent''.
(b) Conforming Amendments.--
(1) Section 213 of such Code is amended by striking
subsection (f).
(2) Section 56(b)(1) of such Code is amended by
striking subparagraph (B) and by redesignating
subparagraphs (C), (D), (E), and (F), as subparagraphs
(B), (C), (D), and (E), respectively.
(c) Effective Date.--The amendment made by this section shall
apply to taxable years ending after December 31, 2018.
SEC. 402. SAFE HARBOR FOR HIGH DEDUCTIBLE HEALTH PLANS WITHOUT
DEDUCTIBLE FOR INSULIN.
(a) In General.--Section 223(c)(2)(C) of the Internal Revenue
Code of 1986 is amended by inserting ``or for insulin or any
device for the delivery of insulin'' before the period at the
end.
(b) Effective Date.--The amendment made by this section shall
apply to months beginning after the date of the enactment of
this Act.
SEC. 403. INCLUSION OF CERTAIN OVER-THE-COUNTER MEDICAL PRODUCTS AS
QUALIFIED MEDICAL EXPENSES.
(a) HSAs.--Section 223(d)(2) of the Internal Revenue Code of
1986 is amended--
(1) by striking the last sentence of subparagraph (A)
and inserting the following: ``For purposes of this
subparagraph, amounts paid for menstrual care products
shall be treated as paid for medical care.''; and
(2) by adding at the end the following new
subparagraph:
``(D) Menstrual care product.--For purposes
of this paragraph, the term `menstrual care
product' means a tampon, pad, liner, cup,
sponge, or similar product used by individuals
with respect to menstruation or other genital-
tract secretions.''.
(b) Archer MSAs.--Section 220(d)(2)(A) of such Code is
amended by striking the last sentence and inserting the
following: ``For purposes of this subparagraph, amounts paid
for menstrual care products (as defined in section
223(d)(2)(D)) shall be treated as paid for medical care.''.
(c) Health Flexible Spending Arrangements and Health
Reimbursement Arrangements.--Section 106 of such Code is
amended by striking subsection (f) and inserting the following
new subsection:
``(f) Reimbursements for Menstrual Care Products.--For
purposes of this section and section 105, expenses incurred for
menstrual care products (as defined in section 223(d)(2)(D))
shall be treated as incurred for medical care.''.
(d) Effective Dates.--
(1) Distributions from savings accounts.--The
amendment made by subsections (a) and (b) shall apply
to amounts paid after December 31, 2019.
(2) Reimbursements.--The amendment made by subsection
(c) shall apply to expenses incurred after December 31,
2019.
TITLE V--MISCELLANEOUS
SEC. 501. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS DURING INITIAL
PERIOD.
Section 1847A(c)(4) of the Social Security Act (42 U.S.C.
1395w-3a(c)(4)) is amended--
(1) in each of subparagraphs (A) and (B), by
redesignating clauses (i) and (ii) as subclauses (I)
and (II), respectively, and moving such subclauses 2
ems to the right;
(2) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii) and moving such clauses 2 ems to
the right;
(3) by striking ``unavailable.--In the case'' and
inserting ``unavailable.--
``(A) In general.--Subject to subparagraph
(B), in the case''; and
(4) by adding at the end the following new
subparagraph:
``(B) Limitation on payment amount for
biosimilar biological products during initial
period.--In the case of a biosimilar biological
product furnished on or after July 1, 2020, in
lieu of applying subparagraph (A) during the
initial period described in such subparagraph
with respect to the biosimilar biological
product, the amount payable under this section
for the biosimilar biological product is the
lesser of the following:
``(i) The amount determined under
clause (ii) of such subparagraph for
the biosimilar biological product.
``(ii) The amount determined under
subsection (b)(1)(B) for the reference
biological product.''.
SEC. 502. GAO STUDY AND REPORT ON AVERAGE SALES PRICE.
(a) Study.--
(1) In general.--The Comptroller General of the
United States (in this section referred to as the
``Comptroller General'') shall conduct a study on
spending for applicable drugs under part B of title
XVIII of the Social Security Act.
(2) Applicable drugs defined.--In this section, the
term ``applicable drugs'' means drugs and biologicals--
(A) for which reimbursement under such part B
is based on the average sales price of the drug
or biological; and
(B) that account for the largest percentage
of total spending on drugs and biologicals
under such part B (as determined by the
Comptroller General, but in no case less that
25 drugs or biologicals).
(3) Requirements.--The study under paragraph (1)
shall include an analysis of the following:
(A) The extent to which each applicable drug
is paid for--
(i) under such part B for Medicare
beneficiaries; or
(ii) by private payers in the
commercial market.
(B) Any change in Medicare spending or
Medicare beneficiary cost-sharing that would
occur if the average sales price of an
applicable drug was based solely on payments by
private payers in the commercial market.
(C) The extent to which drug manufacturers
provide rebates, discounts, or other price
concessions to private payers in the commercial
market for applicable drugs, which the
manufacturer includes in its average sales
price calculation, for--
(i) formulary placement;
(ii) utilization management
considerations; or
(iii) other purposes.
(D) Barriers to drug manufacturers providing
such price concessions for applicable drugs.
(E) Other areas determined appropriate by the
Comptroller General.
(b) Report.--Not later than 2 years after the date of the
enactment of this Act, the Comptroller General shall submit to
Congress a report on the study conducted under subsection (a),
together with recommendations for such legislation and
administrative action as the Secretary determines appropriate.
SEC. 503. REQUIRING PRESCRIPTION DRUG PLANS AND MA-PD PLANS TO REPORT
POTENTIAL FRAUD, WASTE, AND ABUSE TO THE SECRETARY
OF HHS.
Section 1860D-4 of the Social Security Act (42 U.S.C. 1395w-
104) is amended by adding at the end the following new
subsection:
``(p) Reporting Potential Fraud, Waste, and Abuse.--Beginning
January 1, 2021, the PDP sponsor of a prescription drug plan
shall report to the Secretary, as specified by the Secretary--
``(1) any substantiated or suspicious activities (as
defined by the Secretary) with respect to the program
under this part as it relates to fraud, waste, and
abuse; and
``(2) any steps made by the PDP sponsor after
identifying such activities to take corrective
actions.''.
SEC. 504. ESTABLISHMENT OF PHARMACY QUALITY MEASURES UNDER MEDICARE
PART D.
Section 1860D-4(c) of the Social Security Act (42 U.S.C.
1395w-104(c)) is amended by adding at the end the following new
paragraph:
``(8) Application of pharmacy quality measures.--
``(A) In general.--A PDP sponsor that
implements incentive payments to a pharmacy or
price concessions paid by a pharmacy based on
quality measures shall use measures established
or approved by the Secretary under subparagraph
(B) with respect to payment for covered part D
drugs dispensed by such pharmacy.
``(B) Standard pharmacy quality measures.--
The Secretary shall establish or approve
standard quality measures from a consensus and
evidence-based organization for payments
described in subparagraph (A). Such measures
shall focus on patient health outcomes and be
based on proven criteria measuring pharmacy
performance.
``(C) Effective date.--The requirement under
subparagraph (A) shall take effect for plan
years beginning on or after January 1, 2023, or
such earlier date specified by the Secretary if
the Secretary determines there are sufficient
measures established or approved under
subparagraph (B) to meet the requirement under
subparagraph (A).''.
SEC. 505. IMPROVING COORDINATION BETWEEN THE FOOD AND DRUG
ADMINISTRATION AND THE CENTERS FOR MEDICARE &
MEDICAID SERVICES.
(a) In General.--
(1) Public meeting.--
(A) In general.--Not later than 12 months
after the date of the enactment of this Act,
the Secretary of Health and Human Services
(referred to in this section as the
``Secretary'') shall convene a public meeting
for the purposes of discussing and providing
input on improvements to coordination between
the Food and Drug Administration and the
Centers for Medicare & Medicaid Services in
preparing for the availability of novel medical
products described in subsection (c) on the
market in the United States.
(B) Attendees.--The public meeting shall
include--
(i) representatives of relevant
Federal agencies, including
representatives from each of the
medical product centers within the Food
and Drug Administration and
representatives from the coding,
coverage, and payment offices within
the Centers for Medicare & Medicaid
Services;
(ii) stakeholders with expertise in
the research and development of novel
medical products, including
manufacturers of such products;
(iii) representatives of commercial
health insurance payers;
(iv) stakeholders with expertise in
the administration and use of novel
medical products, including physicians;
and
(v) stakeholders representing
patients and with expertise in the
utilization of patient experience data
in medical product development.
(C) Topics.--The public meeting shall include
a discussion of--
(i) the status of the drug and
medical device development pipeline
related to the availability of novel
medical products;
(ii) the anticipated expertise
necessary to review the safety and
effectiveness of such products at the
Food and Drug Administration and
current gaps in such expertise, if any;
(iii) the expertise necessary to make
coding, coverage, and payment decisions
with respect to such products within
the Centers for Medicare & Medicaid
Services, and current gaps in such
expertise, if any;
(iv) trends in the differences in the
data necessary to determine the safety
and effectiveness of a novel medical
product and the data necessary to
determine whether a novel medical
product meets the reasonable and
necessary requirements for coverage and
payment under title XVIII of the Social
Security Act pursuant to section
1862(a)(1)(A) of such Act (42 U.S.C.
1395y(a)(1)(A));
(v) the availability of information
for sponsors of such novel medical
products to meet each of those
requirements; and
(vi) the coordination of information
related to significant clinical
improvement over existing therapies for
patients between the Food and Drug
Administration and the Centers for
Medicare & Medicaid Services with
respect to novel medical products.
(D) Trade secrets and confidential
information.--No information discussed as a
part of the public meeting under this paragraph
shall be construed as authorizing the Secretary
to disclose any information that is a trade
secret or confidential information subject to
section 552(b)(4) of title 5, United States
Code.
(2) Improving transparency of criteria for medicare
coverage.--
(A) Draft guidance.--Not later than 18 months
after the public meeting under paragraph (1),
the Secretary shall update the final guidance
titled ``National Coverage Determinations with
Data Collection as a Condition of Coverage:
Coverage with Evidence Development'' to address
any opportunities to improve the availability
and coordination of information as described in
clauses (iv) through (vi) of paragraph (1)(C).
(B) Final guidance.--Not later than 12 months
after issuing draft guidance under subparagraph
(A), the Secretary shall finalize the updated
guidance to address any such opportunities.
(b) Report on Coding, Coverage, and Payment Processes Under
Medicare for Novel Medical Products.--Not later than 12 months
after the date of the enactment of this Act, the Secretary
shall publish a report on the Internet website of the
Department of Health and Human Services regarding processes
under the Medicare program under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.) with respect to the
coding, coverage, and payment of novel medical products
described in subsection (c). Such report shall include the
following:
(1) A description of challenges in the coding,
coverage, and payment processes under the Medicare
program for novel medical products.
(2) Recommendations to--
(A) incorporate patient experience data (such
as the impact of a disease or condition on the
lives of patients and patient treatment
preferences) into the coverage and payment
processes within the Centers for Medicare &
Medicaid Services;
(B) decrease the length of time to make
national and local coverage determinations
under the Medicare program (as those terms are
defined in subparagraph (A) and (B),
respectively, of section 1862(l)(6) of the
Social Security Act (42 U.S.C. 1395y(l)(6));
(C) streamline the coverage process under the
Medicare program and incorporate input from
relevant stakeholders into such coverage
determinations; and
(D) identify potential mechanisms to
incorporate novel payment designs similar to
those in development in commercial insurance
plans and State plans under title XIX of such
Act (42 U.S.C. 1396 et seq.) into the Medicare
program.
(c) Novel Medical Products Described.--For purposes of this
section, a novel medical product described in this subsection
is a medical product, including a drug, biological (including
gene and cell therapy), or medical device, that has been
designated as a breakthrough therapy under section 506(a) of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 356(a)), a
breakthrough device under section 515B of such Act (21 U.S.C.
360e-3), or a regenerative advanced therapy under section
506(g) of such Act (21 U.S.C. 356(g)).
SEC. 506. PATIENT CONSULTATION IN MEDICARE NATIONAL AND LOCAL COVERAGE
DETERMINATIONS IN ORDER TO MITIGATE BARRIERS TO
INCLUSION OF SUCH PERSPECTIVES.
Section 1862(l) of the Social Security Act (42 U.S.C.
1395y(l)) is amended by adding at the end the following new
paragraph:
``(7) Patient consultation in national and local
coverage determinations.--The Secretary may consult
with patients and organizations representing patients
in making national and local coverage
determinations.''.
SEC. 507. MEDPAC REPORT ON SHIFTING COVERAGE OF CERTAIN MEDICARE PART B
DRUGS TO MEDICARE PART D.
(a) Study.--The Medicare Payment Advisory Commission (in this
section referred to as the ``Commission'') shall conduct a
study on shifting coverage of certain drugs and biologicals for
which payment is currently made under part B of title XVIII of
the Social Security Act (42 U.S.C. 1395j et seq.) to part D of
such title (42 U.S.C. 1395w-21 et seq.). Such study shall
include an analysis of--
(1) differences in program structures and payment
methods for drugs and biologicals covered under such
parts B and D, including effects of such a shift on
program spending, beneficiary cost-sharing liability,
and utilization management techniques for such drugs
and biologicals; and
(2) the feasibility and policy implications of
shifting coverage of drugs and biologicals for which
payment is currently made under such part B to such
part D.
(b) Report.--
(1) In general.--Not later than June 30, 2021, the
Commission shall submit to Congress a report containing
the results of the study conducted under subsection
(a).
(2) Contents.--The report under paragraph (1) shall
include information, and recommendations as the
Commission deems appropriate, regarding--
(A) formulary design under such part D;
(B) the ability of the benefit structure
under such part D to control total spending on
drugs and biologicals for which payment is
currently made under such part B;
(C) changes to the bid process under such
part D, if any, that may be necessary to
integrate coverage of such drugs and
biologicals into such part D; and
(D) any other changes to the program that
Congress should consider in determining whether
to shift coverage of such drugs and biologicals
from such part B to such part D.
(E) the feasibility and policy implications
of creating a methodology to preserve the
healthcare provider's ability to take title of
the drug, including a methodology under which--
(i) prescription drug plans negotiate
reimbursement rates and other
arrangements with drug manufacturers on
behalf of a wholesaler;
(ii) wholesalers purchase the drugs
from the manufacturers at the
negotiated rate and ship them through
distributors to physicians to
administer to patients;
(iii) physicians and hospitals
purchase the drug from the wholesaler
via the distributor;
(iv) after administering the drug,
the physician submits a claim to the
MAC for their drug administration fee;
(v) to be reimbursed for the purchase
of the drug from the distributor, the
physician furnishes the claim for the
drug itself to the wholesaler and the
wholesaler would refund the cost of the
drug to the physician; and
(vi) the wholesaler passes this claim
to the PDP to receive reimbursement.
SEC. 508. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE
TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.
Part A of title XI of the Social Security Act is amended by
adding at the end the following new section:
``SEC. 1150C. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE
TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.
``(a) In General.--The Secretary shall require that each
direct-to-consumer advertisement for a prescription drug or
biological product for which payment is available under title
XVIII or XIX includes an appropriate disclosure of truthful and
non-misleading pricing information with respect to the drug or
product.
``(b) Determination by CMS.--The Secretary, acting through
the Administrator of the Centers for Medicare & Medicaid
Services, shall determine the components of the requirement
under subsection (a), such as the forms of advertising, the
manner of disclosure, the price point listing, and the price
information for disclosure.''.
SEC. 509. CHIEF PHARMACEUTICAL NEGOTIATOR AT THE OFFICE OF THE UNITED
STATES TRADE REPRESENTATIVE.
(a) In General.--Section 141 of the Trade Act of 1974 (19
U.S.C. 2171) is amended--
(1) in subsection (b)(2)--
(A) by striking ``and one Chief Innovation
and Intellectual Property Negotiator'' and
inserting ``one Chief Innovation and
Intellectual Property Negotiator, and one Chief
Pharmaceutical Negotiator'';
(B) by striking ``or the Chief Innovation and
Intellectual Property Negotiator'' and
inserting ``the Chief Innovation and
Intellectual Property Negotiator, or the Chief
Pharmaceutical Negotiator''; and
(C) by striking ``and the Chief Innovation
and Intellectual Property Negotiator'' and
inserting ``the Chief Innovation and
Intellectual Property Negotiator, and the Chief
Pharmaceutical Negotiator''; and
(2) in subsection (c), by adding at the end the
following new paragraph:
``(7) The principal function of the Chief
Pharmaceutical Negotiator shall be to conduct trade
negotiations and to enforce trade agreements relating
to United States pharmaceutical products and services.
The Chief Pharmaceutical Negotiator shall be a vigorous
advocate on behalf of United States pharmaceutical
interests. The Chief Pharmaceutical Negotiator shall
perform such other functions as the United States Trade
Representative may direct.''.
(b) Compensation.--Section 5314 of title 5, United States
Code, is amended by striking ``Chief Innovation and
Intellectual Property Negotiator, Office of the United States
Trade Representative.'' and inserting the following:
``Chief Innovation and Intellectual Property
Negotiator, Office of the United States Trade
Representative.
``Chief Pharmaceutical Negotiator, Office of the
United States Trade Representative.''.
(c) Report Required.--Not later than the date that is one
year after the appointment of the first Chief Pharmaceutical
Negotiator pursuant to paragraph (2) of section 141(b) of the
Trade Act of 1974, as amended by subsection (a), and annually
thereafter, the United States Trade Representative shall submit
to the Committee on Finance of the Senate and the Committee on
Ways and Means of the House of Representatives a report
describing in detail--
(1) enforcement actions taken by the United States
Trade Representative during the one-year period
preceding the submission of the report to ensure the
protection of United States pharmaceutical products and
services; and
(2) other actions taken by the United States Trade
Representative to advance United States pharmaceutical
products and services.
SEC. 510. WAIVING MEDICARE COINSURANCE FOR COLORECTAL CANCER SCREENING
TESTS.
Section 1833(a) of the Social Security Act (42 U.S.C.
1395l(a)) is amended--
(1) by moving the flush text following paragraph (9)
2 ems to the left; and
(2) by adding at the end of such flush text the
following new sentence: ``For items and services
furnished on or after January 1, 2021, paragraph (1)(Y)
shall apply with respect to a colorectal cancer
screening test regardless of the code that is billed
for the establishment of a diagnosis as a result of the
test, or for the removal of tissue or other matter or
other procedure that is furnished in connection with,
as a result of, and in the same clinical encounter as
the screening test.''.
----------
2. An Amendment To Be Offered by Representative Tonko of New York or
His Designee, Debatable for 10 Minutes
Add at the end of title VIII the following (and conform the
table of contents accordingly):
SEC. 812. ADDITION OF NEW MEASURES BASED ON ACCESS TO BIOSIMILAR
BIOLOGICAL PRODUCTS TO THE 5-STAR RATING SYSTEM
UNDER MEDICARE ADVANTAGE.
(a) In General.--Section 1853(o)(4) of the Social Security
Act (42 U.S.C. 1395w-23(o)(4)) is amended by adding at the end
the following new subparagraph:
``(E) Addition of new measures based on
access to biosimilar biological products.--
``(i) In general.--For 2021 and
subsequent years, the Secretary shall
add a new set of measures to the 5-star
rating system based on access to
biosimilar biological products covered
under part B and, in the case of MA-PD
plans, such products that are covered
part D drugs. Such measures shall
assess the impact a plan's benefit
structure may have on enrollees'
utilization of or ability to access
biosimilar biological products,
including in comparison to the
reference biological product, and shall
include measures, as applicable, with
respect to the following:
``(I) Coverage.--Assessing
whether a biosimilar biological
product is on the plan
formulary in lieu of or in
addition to the reference
biological product.
``(II) Preferencing.--
Assessing tier placement or
cost-sharing for a biosimilar
biological product relative to
the reference biological
product.
``(III) Utilization
management tools.--Assessing
whether and how utilization
management tools are used with
respect to a biosimilar
biological product relative to
the reference biological
product.
``(IV) Utilization.--
Assessing the percentage of
enrollees prescribed the
biosimilar biological product
when the reference biological
product is also available.
``(ii) Definitions.--In this
subparagraph, the terms `biosimilar
biological product' and `reference
biological product' have the meaning
given those terms in section
1847A(c)(6).
``(iii) Protecting patient
interests.--In developing such
measures, the Secretary shall ensure
that each measure developed to address
coverage, preferencing, or utilization
management is constructed such that
patients retain equal access to
appropriate therapeutic options without
undue administrative burden.''.
(b) Clarification Regarding Application to Prescription Drug
Plans.--To the extent the Secretary of Health and Human
Services applies the 5-star rating system under section
1853(o)(4) of the Social Security Act (42 U.S.C. 1395w-
23(o)(4)), or a similar system, to prescription drug plans
under part D of title XVIII of such Act, the provisions of
subparagraph (E) of such section, as added by subsection (a) of
this section, shall apply under the system with respect to such
plans in the same manner as such provisions apply to the 5-star
rating system under such section 1853(o)(4).
----------
3. An Amendment To Be Offered by Representative Peters of California or
His Designee, Debatable for 10 Minutes
Page 195, line 9, strike ``$500,000,000'' and insert
``$400,000,000''.
At the end of subtitle A of title VII, add the following:
SEC. 703. INNOVATION NETWORK.
Part A of title IV of the Public Health Service Act (42
U.S.C. 281 et seq.), as amended by section 702, is further
amended by adding at the end the following:
``SEC. 404P. INNOVATION NETWORK.
``(a) Funds.--The Director of NIH shall award grants or
contracts to eligible entities to develop, expand, and enhance
the commercialization of biomedical products.
``(b) Eligible Entity.--In this section, the term `eligible
entity' means an entity receiving funding under--
``(1) the Small Business Innovation Research program
of the National Institutes of Health; or
``(2) the Small Business Technology Transfer program
of the National Institutes of Health.
``(c) Use of Funds.--An eligible entity shall use the funds
received through such grant or contract to support--
``(1) the Commercialization Readiness Pilot program
of the National Institutes of Health;
``(2) the Innovation Corps program of the National
Institutes of Health;
``(3) the Commercialization Accelerator program of
the National Institutes of Health;
``(4) the Commercialization Assistance program of the
National Institutes of Health; and
``(5) such other programs and activities as the
Director of NIH determines to be appropriate, to
support the commercialization stage of research, later
stage research and development, technology transfer,
and commercialization technical assistance.
``(d) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section $100,000,000 for
each of fiscal years 2021 through 2025, to be available until
expended.''.
----------
4. An Amendment To Be Offered by Representative Kennedy of
Massachusetts or His Designee, Debatable for 10 Minutes
In section 1192 of the Social Security Act, as proposed to be
added by section 101(a)--
(1) in subsection (a), strike ``the Secretary shall''
and insert ``subject to subsection (h), the Secretary
shall''; and
(2) by adding at the end the following new
subsection:
``(h) Conflict of Interest.--
``(1) In general.--In the case the Inspector General
of the Department of Health and Human Services
determines the Secretary has a conflict, with respect
to a matter described in paragraph (2), the individual
described in paragraph (3) shall carry out the duties
of the Secretary under this part, with respect to a
negotiation-eligible drug, that would otherwise be such
a conflict.
``(2) Matter described.--A matter described in this
paragraph is--
``(A) a financial interest (as described in
section 2635.402 of title 5, Code of Federal
Regulations (except for an interest described
in subsection (b)(2)(iv) of such section)) on
the date of the selected drug publication date,
with respect the price applicability year (as
applicable);
``(B) a personal or business relationship (as
described in section 2635.502 of such title) on
the date of the selected drug publication date,
with respect the price applicability year;
``(C) employment by a manufacturer of a
negotiation-eligible drug during the preceding
10-year period beginning on the date of the
selected drug publication date, with respect to
each price applicability year; and
``(D) any other matter the General Counsel
determines appropriate.
``(3) Individual described.--An individual described
in this paragraph is--
``(A) the highest-ranking officer or employee
of the Department of Health and Human Services
(as determined by the organizational chart of
the Department) that does not have a conflict
under this subsection; and
``(B) is nominated by the President and
confirmed by the Senate with respect to the
position;''.
----------
5. An Amendment To Be Offered by Representative O'Halleran of Arizona
or His Designee, Debatable for 10 Minutes
Add at the end of title VIII the following new section (and
conform the table of contents accordingly):
SEC. 812. GRADUATE MEDICAL EDUCATION IMPROVEMENTS IN RURAL AND
UNDERSERVED COMMUNITIES.
Part P of title III of the Public Health Service Act (42
U.S.C. 280g et seq.) is amended by adding at the end the
following new section:
``SEC. 399V-7. GRADUATE MEDICAL EDUCATION IMPROVEMENTS IN RURAL AND
UNDERSERVED COMMUNITIES.
``(a) Rural and Underserved Community GME Grant Program.--Not
later than 1 year after the date of the enactment of this Act,
the Secretary of Health and Human Services (in this section
referred to as the `Secretary'), acting through the
Administrator of the Health Resources and Services
Administration, shall establish a rural and underserved
community graduate medical education grant program under which
the Secretary shall award grants to specified hospitals (as
defined in subsection (b)) that have not established an
approved medical residency training program (as defined for
purposes of section 1886(h) of the Social Security Act (42
U.S.C. 1395ww(h))) in order to encourage such hospitals to
establish such a program, or to establish an affiliation with a
hospital that has established such a program in order to host
residents under such program.
``(b) Use of Funds.--Grants awarded under subsection (a) may
be used by a specified hospital for any initial costs
associated with establishing such a program or such an
affiliation, including costs associated with faculty
development, administration, infrastructure, supplies, and
legal and consultant services.
``(c) Specified Hospital Defined.--For purposes of subsection
(a), the term `specified hospital' means a hospital or critical
access hospital (as such terms are defined in section 1861 of
the Social Security Act (42 U.S.C. 1395x)) that--
``(1) is--
``(A) located in a rural area (as defined in
section 1886(d)(2)(D) of such Act (42 U.S.C.
1395ww(d)(2)(D))); or
``(B) treated as being located in a rural
area pursuant to section 1886(d)(8)(E) of such
Act (42 U.S.C. 1395ww(d)(8)(E)); and
``(2) is located in a medically underserved area (as
defined in section 330I(a) of the Public Health Service
Act (42 U.S.C. 254c-14(a))).
``(d) Critical Access Hospital Grant Program.--Not later than
1 year after the date of the enactment of this Act, the
Secretary, acting through the Administrator of the Health
Resources and Services Administration, shall establish a grant
program under which the Secretary awards grants to critical
access hospitals (as defined in section 1861 of the Social
Security Act (42 U.S.C. 1395x)) that do not have in effect an
affiliation with a hospital with an approved medical residency
training program to host residents of such program in order to
assist such critical access hospitals in setting up such
affiliations in order to host such residents.
``(e) Limitation on Grant Amounts.--No hospital may receive
an aggregate amount of grants under this section in excess of
$250,000.
``(f) Reports.--
``(1) HHS.--Not later than 5 years after the date of
the enactment of this Act, the Secretary of Health and
Human Services shall submit to the Committee on Energy
and Commerce of the House of Representatives and the
Committee on Health, Education, Labor, and Pensions of
the Senate a report on graduate medical residency
training programs of hospitals that received a grant
under subsection (a) or (d). Such report shall include
the following:
``(A) The number of hospitals that applied
for a grant under this section.
``(B) The number of hospitals that were
awarded such a grant.
``(C) The number of residency positions
created by hospitals receiving such a grant.
``(D) An estimate of the number of such
positions such hospitals will create after the
date of the submission of such report.
``(E) A description of any challenges faced
by hospitals in applying for such a grant or
using funds awarded under such a grant.
``(2) GAO.--Not later than 10 years after the date of
the enactment of this Act, the Comptroller General of
the United States shall submit to Congress a report
containing an analysis of--
``(A) the number of residents who trained at
a hospital or critical access hospital that
received a grant under subsection (a) or (d);
and
``(B) whether such residents continued to
practice medicine in a rural area (as defined
in section 1886(d)(2)(D) of the Social Security
Act (42 U.S.C. 1395ww(d)(2)(D))) or in a
medically underserved area (as defined in
section 330I(a) of the Public Health Service
Act (42 U.S.C. 254c-14(a))) after completing
such training.
``(g) Funding.--There are authorized to be appropriated such
sums as are necessary for purposes of making grants under this
section for each of fiscal years 2020 through 2029.''.
----------
6. An Amendment To Be Offered by Representative Jackson Lee of Texas or
Her Designee, Debatable for 10 Minutes
At the end of title VIII, add the following new section (and
update the table of sections accordingly):
SEC. ___. SENSE OF CONGRESS REGARDING THE IMPACT OF THE HIGH COST OF
PRESCRIPTION DRUGS ON COMMUNITIES OF COLOR AND
PERSONS LIVING IN RURAL OR SPARSELY POPULATED AREAS
OF THE UNITED STATES.
It is the sense of the Congress that--
(1) the United States has the highest drug prices in
the world and for millions of Americans the cost of
prescription drugs is increasing as a barrier to proper
disease treatment, especially for communities of color
and for persons living in rural or sparsely populated
areas of the nation;
(2) the Patient Protection and Affordable Care Act
(Public Law 111-148) substantially reduced the number
of uninsured Americans, but over 28 million Americans
remain without insurance and approximately 55 percent
of uninsured Americans under the age of 65 are persons
of color;
(3) without health insurance, paying retail prices
for medications is invariably burdensome or financially
impossible;
(4) the median net worth of Caucasian households in
2016 was 9.7 times higher than African-American
households and 8.3 times higher than Hispanic
households, which contributes to disparities in
negative health consequences, including for example the
underuse of insulin among insured adults with diabetes;
and
(5) due to the high cost of prescription drugs to
communities of color and for persons living in rural or
sparsely populated areas of the nation, this Act should
positively impact such communities and persons (and the
Secretaries of Health and Human Services, Labor, and
Treasury should monitor such impact).
----------
7. An Amendment To Be Offered by Representative Gottheimer of New
Jersey or His Designee, Debatable for 10 Minutes
At the end of subtitle B of title VII, insert the following:
SEC. 712. STUDY ON HIGH-RISK, HIGH-REWARD DRUGS.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary of Health and Human
Services shall conduct a study to identify--
(1) diseases or conditions that lack a treatment
approved by the Food and Drug Administration and
instances in which development of a treatment for such
diseases or conditions could fill an unmet medical need
for the treatment of a serious or life-threatening
disease or condition or a rare disease or condition;
and
(2) appropriate incentives that would lead to the
development, approval, and marketing of such
treatments.
(b) Report to Congress; Recommendations.--Not later than one
year after the date of enactment of this Act, the Secretary
shall submit to the Congress a report that includes--
(1) findings from the study under subsection (a); and
(2) recommendations regarding legislation necessary
to create appropriate incentives identified pursuant to
subsection (a)(2).
----------
8. An Amendment To Be Offered by Representative Axne of Iowa or Her
Designee, Debatable for 10 Minutes
At the end of title VII, add the following:
Subtitle D--Reducing Administrative Costs and Burdens in Health Care
SEC. 731. REDUCING ADMINISTRATIVE COSTS AND BURDENS IN HEALTH CARE.
Title II of the Public Health Service Act (42 U.S.C. 202 et
seq.) is amended by adding at the end the following:
``PART E--REDUCING ADMINISTRATIVE COSTS AND BURDENS IN HEALTH CARE
``SEC. 281. ELIMINATING UNNECESSARY ADMINISTRATIVE BURDENS AND COSTS.
``(a) Reducing Administrative Burdens and Costs.--The
Secretary, in consultation with providers of health services,
health care suppliers of services, health care payers, health
professional societies, health vendors and developers, health
care standard development organizations and operating rule
entities, health care quality organizations, health care
accreditation organizations, public health entities, States,
patients, and other appropriate entities, shall, in accordance
with subsection (b)--
``(1) establish a goal of reducing unnecessary costs
and administrative burdens across the health care
system, including the Medicare program under title
XVIII of the Social Security Act, the Medicaid program
under title XIX of such Act, and the private health
insurance market, by at least half over a period of 10
years from the date of enactment of this section;
``(2) develop strategies and benchmarks for meeting
the goal established under paragraph (1);
``(3) develop recommendations for meeting the goal
established under paragraph (1); and
``(4) take action to reduce unnecessary costs and
administrative burdens based on recommendations
identified in this subsection.
``(b) Strategies, Recommendations, and Actions.--
``(1) In general.--To achieve the goal established
under subsection (a)(1), the Secretary, in consultation
with the entities described in such subsection, shall
not later than 1 year after the date of enactment of
this section, develop strategies and recommendations
and take actions to meet such goal in accordance with
this subsection. No strategies, recommendation, or
action shall undermine the quality of patient care or
patient health outcomes.
``(2) Strategies.--The strategies developed under
paragraph (1) shall address unnecessary costs and
administrative burdens. Such strategies shall include
broad public comment and shall prioritize--
``(A) recommendations identified as a result
of efforts undertaken to implement section
3001;
``(B) recommendations and best practices
identified as a result of efforts undertaken
under this part;
``(C) a review of regulations, rules, and
requirements of the Department of Health and
Human Services that could be modified or
eliminated to reduce unnecessary costs and
administrative burden imposed on patients,
providers, payers, and other stakeholders
across the health care system; and
``(D) feedback from stakeholders in rural or
frontier areas on how to reduce unnecessary
costs and administrative burdens on the health
care system in those areas.
``(3) Recommendations.--The recommendations developed
under paragraph (1) shall include--
``(A) actions that improve the
standardization and automation of
administrative transactions;
``(B) actions that integrate clinical and
administrative functions;
``(C) actions that improve patient care and
reduce unnecessary costs and administrative
burdens borne by patients, their families, and
other caretakers;
``(D) actions that advance the development
and adoption of open application programming
interfaces and other emerging technologies to
increase transparency and interoperability,
empower patients, and facilitate better
integration of clinical and administrative
functions;
``(E) actions to be taken by the Secretary
and actions that need to be taken by other
entities; and
``(F) other areas, as the Secretary
determines appropriate, to reduce unnecessary
costs and administrative burdens required of
health care providers.
``(4) Consistency.--Any improvements in electronic
processes proposed by the Secretary under this section
should leverage existing information technology
definitions under Federal Law. Specifically, any
electronic processes should not be construed to include
a facsimile, a proprietary payer portal that does not
meet standards specified by the Secretary, or an
electronic form image.
``(5) Actions.--The Secretary shall take action to
achieve the goal established under subsection (a)(1),
and, not later than 1 year after the date of enactment
of this section, and biennially thereafter, submit to
Congress and make publically available, a report
describing the actions taken by the Secretary pursuant
to goals, strategies, and recommendations described in
this subsection.
``(6) FACA.--The Federal Advisory Committee Act (5
U.S.C. App.) shall not apply to the development of the
goal, strategies, recommendations, or actions described
in this section.
``(7) Rule of construction.--Nothing in this
subsection shall be construed to authorize, or be used
by, the Federal Government to inhibit or otherwise
restrain efforts made to reduce waste, fraud, and abuse
across the health care system.
``SEC. 282. GRANTS TO STATES TO DEVELOP AND IMPLEMENT RECOMMENDATIONS
TO ACCELERATE STATE INNOVATION TO REDUCE HEALTH
CARE ADMINISTRATIVE COSTS.
``(a) Grants.--
``(1) In general.--Not later than 6 months after the
date of enactment of this section, the Secretary shall
award grants to at least 15 States, and one
coordinating entity designated as provided for under
subsection (e), to enable such States to establish and
administer private-public multi-stakeholder commissions
for the purpose of reducing health care administrative
costs and burden within and across States. Not less
than 3 of such grants shall be awarded to States that
are primarily rural, frontier, or a combination
thereof, in nature.
``(2) Entities.--For purposes of this section, the
term `State' means a State, a State designated entity,
or a multi-State collaborative (as defined by the
Secretary).
``(3) Priority.--In awarding grants under this
section, the Secretary shall give priority to
applications submitted by States that propose to carry
out a pilot program or support the adoption of
electronic health care transactions and operating
rules.
``(b) Application.--
``(1) In general.--To be eligible to receive a grant
under subsection (a) a State shall submit to the
Secretary an application in such a manner and
containing such information as the Secretary may
reasonably require, including the information described
in paragraph (2).
``(2) Required information.--In addition to any
additional information required by the Secretary under
this subsection, an application shall include a
description of--
``(A) the size and composition of the
commission to be established under the grant,
including the stakeholders represented and the
degree to which the commission reflects
important geographic and population
characteristics of the State;
``(B) the relationship of the commission to
the State official responsible for coordinating
and implementing the recommendations resulting
from the commission, and the role and
responsibilities of the State with respect to
the commission, including any participation,
review, oversight, implementation or other
related functions;
``(C) the history and experience of the State
in addressing health care administrative costs,
and any experience similar to the purpose of
the commission to improve health care
administrative processes and the exchange of
health care administrative data;
``(D) the resources and expertise that will
be made available to the commission by
commission members or other possible sources,
and how Federal funds will be used to leverage
and complement these resources;
``(E) the governance structure and procedures
that the commission will follow to make,
implement, and pilot recommendations;
``(F) the proposed objectives relating to the
simplification of administrative transactions
and operating rules, increased standardization,
and the efficiency and effectiveness of the
transmission of health information;
``(G) potential cost savings and other
improvements in meeting the objectives
described in subparagraph (F); and
``(H) the method or methods by which the
recommendations described in subsection (c)
will be reviewed, tested, adopted, implemented,
and updated as needed.
``(c) Multi-Stakeholder Commission.--
``(1) In general.--Not later than 90 days after the
date on which a grant is awarded to a State under this
section, the State official described in subsection
(b)(2)(B), the State insurance commissioner, or other
appropriate State official shall convene a multi-
stakeholder commission, in accordance with this
subsection.
``(2) Membership.--The commission convened under
paragraph (1) shall include representatives from health
plans, health care providers, health vendors, relevant
State agencies, health care standard development
organizations, and operating rule entities, relevant
professional and trade associations, patients, and
other entities determined appropriate by the State.
``(3) Recommendations.--Not later than one year after
the date on which a grant is awarded to a State under
this section, the commission shall make recommendations
and plans, consistent with the application submitted by
the State under subsection (b), and intended to meet
the objectives defined in the application. Such
recommendations shall comply with, and build upon, all
relevant Federal requirements and regulations, and may
include--
``(A) common, uniform specifications, best
practices, and conventions, for the efficient,
effective exchange of administrative
transactions adopted pursuant to the Health
Insurance Portability and Accountability Act of
1996 (Public Law 104-191);
``(B) the development of streamlined business
processes for the exchange and use of health
care administrative data; and
``(C) specifications, incentives,
requirements, tools, mechanisms, and resources
to improve--
``(i) the access, exchange, and use
of health care administrative
information through electronic means;
``(ii) the implementation of
utilization management protocols; and
``(iii) compliance with Federal and
State laws.
``(d) Use of Funds for Implementation.--A State may use
amounts received under a grant under this section for one or
more of the following:
``(1) The development, implementation, and best use
of shared data infrastructure that supports the
electronic transmission of administrative data.
``(2) The development and provision of training and
educational materials, forums, and activities as well
as technical assistance to effectively implement, use,
and benefit from electronic health care transactions
and operating rules.
``(3) To accelerate the early adoption and
implementation of administrative transactions and
operating rules designated by the Secretary and that
have been adopted pursuant to the Health Insurance
Portability and Accountability Act of 1996 (Public Law
104-191), including transactions and operating rules
described in section 1173(a)(2) of the Social Security
Act.
``(4) To accelerate the early adoption and
implementation of additional or updated administrative
transactions, operating rules, and related data
exchange standards that are being considered for
adoption under the Health Insurance Portability and
Accountability Act of 1996 or are adopted pursuant to
such Act, or as designated by the Secretary, including
the electronic claim attachment.
``(5) To conduct pilot projects to test approaches to
implement and use the electronic health care
transactions and operating rules in practice under a
variety of different settings. With respect to the
electronic attachment transaction, priority shall be
given to pilot projects that test and evaluate methods
and mechanisms to most effectively incorporate patient
health data from electronic health records and other
electronic sources with the electronic attachment
transaction.
``(6) To assess barriers to the adoption,
implementation, and effective use of electronic health
care transactions and operating rules, as well as to
explore, identify, and plan options, approaches, and
resources to address barriers and make improvements.
``(7) The facilitation of public and private
initiatives to reduce administrative costs and
accelerate the adoption, implementation, and effective
use of electronic health care transactions and
operating rules for State programs.
``(8) Developing, testing, implementing, and
assessing additional data exchange specifications,
operating rules, incentives, requirements, tools,
mechanisms, and resources to accelerate the adoption
and effective use of the transactions and operating
rules.
``(9) Ongoing needs assessments and planning related
to the development and implementation of administrative
simplification initiatives.
``(e) Coordinating Entity.--
``(1) Functions.--Not later than 6 months after the
date of enactment of this section, the Secretary shall
designate a coordinating entity under this subsection
for the purpose of--
``(A) providing technical assistance to
States relating to the simplification of
administrative transactions and operating
rules, increased standardization, and the
efficiency and effectiveness of the
transmission of health care information;
``(B) evaluating pilot projects and other
efforts conducted under this section for impact
and best practices to inform broader national
use;
``(C) using consistent evaluation
methodologies to compare return on investment
across efforts conducted under this section;
``(D) compiling, synthesizing, disseminating,
and adopting lessons learned to promote the
adoption of electronic health care transactions
and operating rules across the health care
system; and
``(E) making recommendations to the Secretary
and the National Committee on Vital and Health
Statistics regarding the national adoption of
efforts conducted under this section.
``(2) Eligibility.--The entity designated under
paragraph (1) shall be a qualified nonprofit entity
that--
``(A) focuses its mission on administrative
simplification;
``(B) has demonstrated experience using a
multi-stakeholder and consensus-based process
for the development of common, uniform
specifications, operating rules, best
practices, and conventions, for the efficient,
effective exchange of administrative
transactions that includes representation by or
participation from health plans, health care
providers, vendors, States, relevant Federal
agencies, and other health care standard
development organizations;
``(C) has demonstrated experience providing
technical assistance to health plans, health
care providers, vendors, and States relating to
the simplification of administrative
transactions and operating rules, increased
standardization, and the efficiency and
effectiveness of the transmission of health
care information;
``(D) has demonstrated experience evaluating
and measuring the adoption and return on
investment of administrative transactions and
operating rules;
``(E) has demonstrated experience gathering,
synthesizing, and adopting common, uniform
specifications, operating rules, best
practices, and conventions for national use
based on lessons learned to promote the
adoption of electronic health care transactions
and operating rules across the health care
system;
``(F) has a public set of guiding principles
that ensure processes are open and transparent,
and supports nondiscrimination and conflict of
interest policies that demonstrate a commitment
to open, fair, and nondiscriminatory practices;
``(G) builds on the transaction standards
issued under Health Insurance Portability and
Accountability Act of 1996; and
``(H) allows for public review and updates of
common, uniform specifications, operating
rules, best practices, and conventions to
support administrative simplification.
``(f) Period and Amount.--A grant awarded to a State under
this section shall be for a period of 5 years and shall not
exceed $50,000,000 for such 5-year period. A grant awarded to
the coordinating entity designated by the Secretary under
subsection (e) shall be for a period of 5 years and shall not
exceed $15,000,000 for such 5-year period.
``(g) Reports.--
``(1) States.--Not later than 1 year after receiving
a grant under this section, and biennially thereafter,
a State shall submit to the Secretary a report on the
outcomes experienced by the State under the grant.
``(2) Coordinating entity.--Not later than 1 year
after receiving a grant under this section, and at
least biennially thereafter, the coordinating entity
shall submit to the Secretary and the National
Committee on Vital and Health Statistics a report of
evaluations conducted under the grant under this
section and recommendations regarding the national
adoption of efforts conducted under this section.
``(3) Secretary.--Not later than 6 months after the
date on which the States and coordinating entity submit
the report required under paragraphs (1) and (2), the
Secretary, in consultation with National Committee on
Vital and Health Statistics, shall 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 on the outcomes
achieved under the grants under this section.
``(4) GAO.--Not later than 6 months after the date on
which the Secretary submits the final report under
paragraph (3), the Comptroller General of the United
States shall conduct a study, and 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 on the outcomes
of the activities carried out under this section which
shall contain a list of best practices and
recommendations to States concerning administrative
simplification.
``(h) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section, $250,000,000 for
the 5-fiscal-year period beginning with fiscal year 2020.''.
----------
9. An Amendment To Be Offered by Representative Finkenauer of Iowa or
Her Designee, Debatable for 10 Minutes
Add at the end of the bill the following new section (and
conform the table of contents accordingly):
SEC. 812. REGULATIONS REQUIRING DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS TO
INCLUDE TRUTHFUL AND NOT MISLEADING PRICING
INFORMATION.
(a) In General.--Not later than the date that is one year
after the date of the enactment of the Elijah E. Cummings Lower
Drug Costs Now Act, the Secretary of Health and Human Services,
acting through the Administrator of the Centers for Medicare &
Medicaid Services (referred to in this section as the
``Administrator''), shall promulgate final regulations
requiring each direct-to-consumer advertisement on television
(including broadcast, cable, streaming, and satellite
television) for a prescription drug or biological product for
which payment is available under title XVIII or XIX of the
Social Security Act to include a textual statement, which shall
be truthful and not misleading, indicating the list price, as
determined on the first day of the quarter during which the
advertisement is being aired or otherwise broadcast, for a
typical 30-day regimen or typical course of treatment
(whichever is most appropriate).
(b) Determinations.--In promulgating final regulations under
subsection (a), the Administrator shall determine--
(1) whether such regulations should apply with
respect to additional forms of advertising;
(2) the manner and format of textual statements
described in such subsection;
(3) appropriate enforcement mechanisms; and
(4) whether such textual statements should include
any other price information, as appropriate.
----------
10. An Amendment To Be Offered by Representative Luria of Virginia or
Her Designee, Debatable for 10 Minutes
At the end of section 101(b), add the following:
(3) FEHBP.--Section 8902 of title 5, United States
Code, is amended by adding at the end the following:
``(p) A contract may not be made or a plan approved under
this chapter with any carrier that has affirmatively elected,
pursuant to section 1197 of the Social Security Act, not to
participate in the Fair Price Negotiation Program established
under section 1191 of such Act for any selected drug (as that
term is defined in section 1192(c) of such Act).''.
----------
11. An Amendment To Be Offered by Representative Cunningham of South
Carolina or His Designee, Debatable for 10 Minutes
Page 62, after line 2, insert the following:
(4) Option of secretary of veterans affairs to
purchase covered drugs at maximum fair prices.--Section
8126 of title 38, United States Code, is amended--
(A) in subsection (a)(2), by inserting ``,
subject to subsection (j),'' after ``may not
exceed'';
(B) in subsection (d), in the matter
preceding paragraph (1), by inserting ``,
subject to subsection (j)'' after ``for the
procurement of the drug''; and
(C) by adding at the end the following new
subsection:
``(j)(1) In the case of a covered drug that is a selected
drug, for any year during the price applicability period for
such drug, if the Secretary determines that the maximum fair
price of such drug for such year is less than the price for
such drug otherwise in effect pursuant to this section
(including after application of any reduction under subsection
(a)(2) and any discount under subsection (c)), at the option of
the Secretary, in lieu of the maximum price (determined after
application of the reduction under subsection (a)(2) and any
discount under subsection (c), as applicable) that would be
permitted to be charged during such year for such drug pursuant
to this section without application of this subsection, the
maximum price permitted to be charged during such year for such
drug pursuant to this section shall be such maximum fair price
for such drug and year.
``(2) For purposes of this subsection:
``(A) The term `maximum fair price' means, with
respect to a selected drug and year during the price
applicability period for such drug, the maximum fair
price (as defined in section 1191(c)(2) of the Social
Security Act) for such drug and year.
``(B) The term `negotiation eligible drug' has the
meaning given such term in section 1192(d)(1) of the
Social Security Act.
``(C) The term `price applicability period' has, with
respect to a selected drug, the meaning given such term
in section 1191(b)(2) of such Act
``(D) The term `selected drug' means, with respect to
a year, a drug that is a selected drug under section
1192(c) of such Act for such year.''.
----------
12. An Amendment To Be Offered by Representative Scanlon of
Pennsylvania or Her Designee, Debatable for 10 Minutes
Add at the end of title VIII the following new section (and
conform the table of contents accordingly):
SEC. 812. IMPROVING TRANSPARENCY AND PREVENTING THE USE OF ABUSIVE
SPREAD PRICING AND RELATED PRACTICES IN MEDICAID.
(a) Pass-through Pricing Required.--
(1) In general.--Section 1927(e) of the Social
Security Act (42 U.S.C. 1396r-8(e)) is amended by
adding at the end the following:
``(6) Pass-through pricing required.--A contract
between the State and a pharmacy benefit manager
(referred to in this paragraph as a `PBM'), or a
contract between the State and a managed care entity or
other specified entity (as such terms are defined in
section 1903(m)(9)(D)) that includes provisions making
the entity responsible for coverage of covered
outpatient drugs dispensed to individuals enrolled with
the entity, shall require that payment for such drugs
and related administrative services (as applicable),
including payments made by a PBM on behalf of the State
or entity, is based on a pass-through pricing model
under which--
``(A) any payment made by the entity or the
PBM (as applicable) for such a drug--
``(i) is limited to--
``(I) ingredient cost; and
``(II) a professional
dispensing fee that is not less
than the professional
dispensing fee that the State
plan or waiver would pay if the
plan or waiver was making the
payment directly;
``(ii) is passed through in its
entirety by the entity or PBM to the
pharmacy that dispenses the drug; and
``(iii) is made in a manner that is
consistent with section 1902(a)(30)(A)
and sections 447.512, 447.514, and
447.518 of title 42, Code of Federal
Regulations (or any successor
regulation) as if such requirements
applied directly to the entity or the
PBM;
``(B) payment to the entity or the PBM (as
applicable) for administrative services
performed by the entity or PBM is limited to a
reasonable administrative fee that covers the
reasonable cost of providing such services;
``(C) the entity or the PBM (as applicable)
shall make available to the State, and the
Secretary upon request, all costs and payments
related to covered outpatient drugs and
accompanying administrative services incurred,
received, or made by the entity or the PBM,
including ingredient costs, professional
dispensing fees, administrative fees, post-sale
and post-invoice fees. Discounts, or related
adjustments such as direct and indirect
remuneration fees, and any and all
remuneration; and
``(D) any form of spread pricing whereby any
amount charged or claimed by the entity or the
PBM (as applicable) that is in excess of the
amount paid to the pharmacies on behalf of the
entity, including any post-sale or post-invoice
fees, discounts, or related adjustments such as
direct and indirect remuneration fees or
assessments (after allowing for a reasonable
administrative fee as described in subparagraph
(B)), is not allowable for purposes of claiming
Federal matching payments under this title.''.
(2) Conforming amendment.--Clause (xiii) of section
1903(m)(2)(A) of such Act (42 U.S.C. 1396b(m)(2)(A)) is
amended--
(A) by striking ``and (III)'' and inserting
``(III)''; and
(B) by inserting before the period at the end
the following: ``, and (IV) pharmacy benefit
management services provided by the entity, or
provided by a pharmacy benefit manager on
behalf of the entity under a contract or other
arrangement between the entity and the pharmacy
benefit manager, shall comply with the
requirements of section 1927(e)(6)''.
(3) Effective date.--The amendments made by this
subsection apply to contracts between States and
managed care entities, other specified entities, or
pharmacy benefits managers that are entered into or
renewed on or after the date that is 18 months after
the date of enactment of this Act.
(b) Survey of Retail Prices.--
(1) In general.--Section 1927(f) of the Social
Security Act (42 U.S.C. 1396r-8(f)) is amended--
(A) by striking ``and'' after the semicolon
at the end of paragraph (1)(A)(i) and all that
precedes it through ``(1)'' and inserting the
following:
``(1) Survey of retail prices.--The Secretary shall
conduct a survey of retail community drug prices, to
include at least the national average drug acquisition
cost, as follows:
``(A) Use of vendor.--The Secretary may
contract services for--
``(i) with respect to retail
community pharmacies, the determination
on a monthly basis of retail survey
prices of the national average drug
acquisition cost for covered outpatient
drugs for such pharmacies, net of all
discounts and rebates (to the extent
any information with respect to such
discounts and rebates is available),
the average reimbursement received for
such drugs by such pharmacies from all
sources of payment, including third
parties, and, to the extent available,
the usual and customary charges to
consumers for such drugs; and'';
(B) by adding at the end of paragraph (1) the
following:
``(F) Survey reporting.--In order to meet the
requirement of section 1902(a)(54), a State
shall require that any retail community
pharmacy in the State that receives any
payment, administrative fee, discount, or
rebate related to the dispensing of covered
outpatient drugs to individuals receiving
benefits under this title, regardless of
whether such payment, fee, discount, or rebate
is received from the State or a managed care
entity directly or from a pharmacy benefit
manager or another entity that has a contract
with the State or a managed care entity, shall
respond to surveys of retail prices conducted
under this subsection.
``(G) Survey information.--Information on
retail community prices obtained under this
paragraph shall be made publicly available and
shall include at least the following:
``(i) The monthly response rate of
the survey including a list of
pharmacies not in compliance with
subparagraph (F).
``(ii) The sampling frame and number
of pharmacies sampled monthly.
``(iii) Characteristics of reporting
pharmacies, including type (such as
independent or chain), geographic or
regional location, and dispensing
volume.
``(iv) Reporting of a separate
national average drug acquisition cost
for each drug for independent retail
pharmacies and chain operated
pharmacies.
``(v) Information on price
concessions including on and off
invoice discounts, rebates, and other
price concessions.
``(vi) Information on average
professional dispensing fees paid.
``(H) Penalties.--
``(i) Failure to provide timely
information.--A retail community
pharmacy that fails to respond to a
survey conducted under this subsection
on a timely basis may be subject to a
civil monetary penalty in the amount of
$10,000 for each day in which such
information has not been provided.
``(ii) False information.--A retail
community pharmacy that knowingly
provides false information in response
to a survey conducted under this
subsection may be subject to a civil
money penalty in an amount not to
exceed $100,000 for each item of false
information.
``(iii) Other penalties.--Any civil
money penalties imposed under this
subparagraph shall be in addition to
other penalties as may be prescribed by
law. The provisions of section 1128A
(other than subsections (a) and (b))
shall apply to a civil money penalty
under this subparagraph in the same
manner as such provisions apply to a
penalty or proceedings under section
1128A(a).
``(I) Report on specialty pharmacies.--
``(i) In general.--Not later than 1
year after the effective date of this
subparagraph, the Secretary shall
submit a report to Congress examining
specialty drug coverage and
reimbursement under this title.
``(ii) Content of report.--Such
report shall include a description of
how State Medicaid programs define
specialty drugs, how much State
Medicaid programs pay for specialty
drugs, how States and managed care
plans determine payment for specialty
drugs, the settings in which specialty
drugs are dispensed (such as retail
community pharmacies or specialty
pharmacies), whether acquisition costs
for specialty drugs are captured in the
national average drug acquisition cost
survey, and recommendations as to
whether specialty pharmacies should be
included in the survey of retail prices
to ensure national average drug
acquisition costs capture drugs sold at
specialty pharmacies and how such
specialty pharmacies should be
defined.'';
(C) in paragraph (2)--
(i) in subparagraph (A), by inserting
``, including payments rates under
Medicaid managed care plans,'' after
``under this title''; and
(ii) in subparagraph (B), by
inserting ``and the basis for such
dispensing fees'' before the semicolon;
and
(D) in paragraph (4), by inserting ``, and
$5,000,000 for fiscal year 2020 and each fiscal
year thereafter,'' after ``2010''.
(2) Effective date.--The amendments made by this
subsection take effect on the 1st day of the 1st
quarter that begins on or after the date that is 18
months after the date of enactment of this Act.
(c) Manufacturer Reporting of Wholesale Acquisition Cost.--
Section 1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is
amended--
(1) in subparagraph (A)(i)--
(A) in subclause (I), by striking ``and''
after the semicolon;
(B) in subclause (II), by adding ``and''
after the semicolon;
(C) by moving the left margins of subclause
(I) and (II) 2 ems to the right; and
(D) by adding at the end the following:
``(III) in the case of rebate
periods that begin on or after
the date of enactment of this
subclause, on the wholesale
acquisition cost (as defined in
section 1847A(c)(6)(B)) for
covered outpatient drugs for
the rebate period under the
agreement (including for all
such drugs that are sold under
a new drug application approved
under section 505(c) of the
Federal Food, Drug, and
Cosmetic Act);''; and
(2) in subparagraph (D)--
(A) in the matter preceding clause (i), by
inserting ``and clause (vii) of this
subparagraph'' after ``1847A'';
(B) in clause (v), by striking ``and'' after
the comma;
(C) in clause (vi), by striking the period
and inserting ``, and''; and
(D) by inserting after clause (vi) the
following:
``(vii) to the Secretary to disclose
(through a website accessible to the
public) the most recently reported
wholesale acquisition cost (as defined
in section 1847A(c)(6)(B)) for each
covered outpatient drug (including for
all such drugs that are sold under a
new drug application approved under
section 505(c) of the Federal Food,
Drug, and Cosmetic Act), as reported
under subparagraph (A)(i)(III).''.
Page 195, line 9, strike ``$500,000,000'' and insert
``$680,000,000''.
----------
PART C--TEXT OF AMENDMENT TO H.R. 5038 CONSIDERED AS ADOPTED
Page 87, line 18, strike ``2,500'' and insert ``500''.
Page 87, line 25, strike ``2,500'' and insert ``500''.