1.This Act may be cited as
the Protecting Patients and Hospitals
From Price Gouging Act
.
2.
(a)Congress finds that—
(1)many
pharmaceutical drugs are necessary to maintain the health and welfare of the
American people;
(2)currently the
Nation is facing a chronic shortage of vital drugs necessary in surgery, to
treat cancer, and to fight other life-threatening illnesses; and
(3)in order to
prevent any party within the chain of distribution of any vital drugs from
taking unfair advantage of consumers during market shortages, the public
interest requires that such conduct be prohibited and made subject to criminal
penalties.
(b)The purpose of this Act is to prohibit
excessive pricing during market shortages.
3.As used in this Act—
(1)the term
market shortage means a situation in which the total supply of all
clinically interchangeable versions of an FDA-regulated drug is inadequate to
meet the current or projected demand at the user level;
(2)the term
drug means a drug intended for use by human beings, which—
(A)because of its
toxicity or other potentiality for harmful effect, or the method of its use, or
the collateral measures necessary to its use, is not safe for use except under
the supervision of a practitioner licensed by law to administer such drug;
or
(B)is limited by an
approved application under section 505 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355) to use under the professional supervision of a practitioner
licensed by law to administer such drug;
(3)the term
biologic means a virus, therapeutic serum, toxin, antitoxin,
vaccine, blood, blood component or derivative, allergenic product, or analogous
product, or arsphenamine or derivative of arsphenamine (or any other trivalent
organic arsenic compound), applicable to the prevention, treatment, or cure of
a disease or condition of human beings; and
(4)the term
vital drug means any drug or biologic used to prevent or treat a
serious or life-threatening disease or medical condition, for which there is no
other available source with sufficient supply of that drug or biologic or
alternative drug or biologic available.
4.Unreasonably
excessive drug pricing
(a)
(1)The
President may issue an Executive order declaring a market shortage for a period
of 6 months with regard to one or more vital drugs due to a market shortage
under this Act.
(2)If the President issues an Executive order under paragraph
(1), it shall be unlawful for any person to sell vital drugs at a price that is
unreasonably excessive and indicates that the seller is taking unfair advantage
of the circumstances related to a market shortage to unreasonably increase
prices during such period.
(b)The
Attorney General is authorized to enforce penalties under this Act.
5.
(a)
(1)Whoever sells, or offers to sell, any vital drug during a
declared market shortage with the knowledge and intent to charge a price that
is unreasonably excessive under the circumstances shall be guilty of an offense
under this section and subject to injunction and penalties as provided in
paragraphs (2) and (3).
(2)Action in
district court for injunctionWhenever it shall appear to the
Attorney General that any person is engaged in or about to engage in acts or
practices constituting a violation of any provision of this section and until
such complaint is dismissed by the Attorney General or set aside by a court on
review, the Attorney General may in his or her discretion bring an action in
the proper district court of the United States, the United States District
Court for the District of Columbia, or the United States courts of any
territory or other place subject to the jurisdiction of the United States to
enjoin such acts or practices, and upon a proper showing a permanent or
temporary injunction or restraining order shall be granted without bond in the
interest of the public.
(3)Any person acting with the knowledge and intent to
charge a price that is unreasonably excessive under the circumstances shall be
guilty of an offense under this section and title 18, United States Code, and
subject to imprisonment for a term not to exceed 3 years, fined an amount not
to exceed $5,000,000, or both.
(b)The
criminal penalty provided by subsection (a) may be imposed only pursuant to a
criminal action brought by the Attorney General or other officer of the
Department of Justice.
(c)In assessing the penalty provided by subsection (a) each
day of a continuing violation shall be considered a separate violation.
(d)
(1)This section shall apply—
(A)in the
geographical area where the vital drug market shortage has been declared;
and
(B)to all
wholesalers and distributors in the chain of distribution.
(2)This
section shall not apply to a hospital (as defined in section 1861(e) of the
Social Security Act (42 U.S.C. 1395x(e)) or a physician (as defined in section
1861(q) of the Social Security Act (42 U.S.C. 1395x(q)).
6.Determination of
unreasonably excessive
(a)The Attorney General,
in determining whether an alleged violator's price was unreasonably excessive,
shall consider whether—
(1)the price
reasonably reflected additional costs, not within the control of that person or
company, that were paid, incurred, or reasonably anticipated by that person or
company;
(2)the price
reasonably reflected additional risks taken by that person or company to
produce, distribute, obtain, or sell such product under the
circumstances;
(3)there is a gross
disparity between the challenged price and the price at which the same or
similar goods were readily available in the same region and during the same
Presidentially declared market shortage;
(4)the marginal
benefit received by the wholesaler or distributor is significantly changed in
comparison with marginal earnings in the year before a market shortage was
declared;
(5)the price charged
was comparable to the price at which the goods were generally available in the
trade area if the wholesaler or distributor did not sell or offer to sell the
prescription drug in question prior to the time a market shortage was declared;
and
(6)the price was
substantially attributable to local, regional, national, or international
market conditions.
(b)Not
later than 1 year after the date of enactment of this Act and annually
thereafter, the Attorney General or designee, shall consult with
representatives of the National Association of Wholesalers, Group Purchasing
Organizations, Pharmaceutical Distributors, Hospitals, Manufacturers, patients,
and other interested community organizations to reassess the criteria set forth
in subsection (a) in determining unreasonably excessive and prepare and submit
to Congress a report on the results of the reassessment.
7.
(a)Any market shortage declared by the President in
accordance with this Act shall be in effect for a period of not to exceed 6
months from the date on which the President issues the Executive order.
(b)Any market shortage declared by the
President in accordance with this Act shall terminate if—
(1)there is enacted
a law terminating the market shortage which shall be passed by Congress after a
national market shortage is declared; or
(2)the President
issues a proclamation terminating the market shortage;
whichever
comes first.(c)The President may renew the state of market shortage
declared under subsection (a), if the President declares that the severe
shortage continues to affect the health and well being of citizens beyond the
initial 6-month period.