[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3513 Introduced in House (IH)]

114th CONGRESS
  1st Session
                                H. R. 3513

         To ensure greater affordability of prescription drugs.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 16, 2015

 Mr. Cummings (for himself, Mr. Ellison, Ms. Norton, and Mr. Sarbanes) 
 introduced the following bill; which was referred to the Committee on 
  Energy and Commerce, and in addition to the Committees on Ways and 
Means and the Judiciary, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
         To ensure greater affordability of prescription drugs.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Prescription Drug 
Affordability Act of 2015''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
               TITLE I--DRUGS UNDER THE MEDICARE PROGRAM

Sec. 101. Negotiation of lower covered part D drug prices on behalf of 
                            Medicare beneficiaries.
Sec. 102. Acceleration of the closing of the Medicare Part D donut 
                            hole.
                TITLE II--PRESCRIPTION DRUG IMPORTATION

Sec. 201. Prescription drug importation.
Sec. 202. Sense of the House of Representatives regarding trade 
                            agreements.
                TITLE III--MEDICARE AND MEDICAID REBATES

Sec. 301. Requiring drug manufacturers to provide drug rebates for 
                            drugs dispensed to low-income individuals.
Sec. 302. Applying the Medicaid additional rebate requirement to 
                            generic drugs.
                    TITLE IV--PAY-FOR-DELAY BLOCKING

Sec. 401. Preserving access to affordable generics.
                             TITLE V--FRAUD

Sec. 501. Conditions on award of drug exclusivity.
                         TITLE VI--TRANSPARENCY

Sec. 601. Drug manufacturer reporting.

               TITLE I--DRUGS UNDER THE MEDICARE PROGRAM

SEC. 101. NEGOTIATION OF LOWER COVERED PART D DRUG PRICES ON BEHALF OF 
              MEDICARE BENEFICIARIES.

    (a) Negotiation by Secretary.--Section 1860D-11 of the Social 
Security Act (42 U.S.C. 1395w-111) is amended by striking subsection 
(i) (relating to noninterference) and inserting the following:
    ``(i) Negotiation of Lower Drug Prices.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, the Secretary shall negotiate with pharmaceutical 
        manufacturers the prices (including discounts, rebates, and 
        other price concessions) that may be charged to PDP sponsors 
        and MA organizations for covered part D drugs for part D 
        eligible individuals who are enrolled under a prescription drug 
        plan or under an MA-PD plan.
            ``(2) No change in rules for formularies.--
                    ``(A) In general.--Nothing in paragraph (1) shall 
                be construed to authorize the Secretary to establish or 
                require a particular formulary.
                    ``(B) Construction.--Subparagraph (A) shall not be 
                construed as affecting the Secretary's authority to 
                ensure appropriate and adequate access to covered part 
                D drugs under prescription drug plans and under MA-PD 
                plans, including compliance of such plans with 
                formulary requirements under section 1860D-4(b)(3).
            ``(3) Construction.--Nothing in this subsection shall be 
        construed as preventing the sponsor of a prescription drug 
        plan, or an organization offering an MA-PD plan, from obtaining 
        a discount or reduction of the price for a covered part D drug 
        below the price negotiated under paragraph (1).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act and shall first 
apply to negotiations and prices for plan years beginning on January 1, 
2016.

SEC. 102. ACCELERATION OF THE CLOSING OF THE MEDICARE PART D DONUT 
              HOLE.

    (a) Reduction in Coinsurance.--Section 1860D-2(b)(2) of the Social 
Security Act (42 U.S.C. 1395w-102(b)(2)) is amended--
            (1) in each of subclauses (II) and (III) of subparagraph 
        (C)(ii), by striking ``2020'' and inserting ``2017''; and
            (2) in subparagraph (D)(ii)--
                    (A) in subclause (II), by inserting ``and'' at the 
                end; and
                    (B) by striking clauses (III) through (VI) and 
                inserting the following:
                                    ``(III) 2017 is 100 percent.''.
    (b) Increase in Manufacturer Rebate.--Section 1860D-14A(g)(4)(A) of 
the Social Security Act (42 U.S.C. 1395w-114a(g)(4)(A)) is amended by 
inserting ``(or, for 2017 and subsequent years, 75 percent)'' after 
``50 percent''.

                TITLE II--PRESCRIPTION DRUG IMPORTATION

SEC. 201. PRESCRIPTION DRUG IMPORTATION.

    (a) Importation by Pharmacists and Wholesalers.--Section 804(b) of 
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 384(b)) is amended 
by striking ``The Secretary,'' and inserting ``The Secretary, not later 
than January 1, 2016,''.
    (b) Importation by Individuals.--
            (1) In general.--Section 804 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 384) is amended--
                    (A) in subsection (f), by striking ``within 
                Canada'';
                    (B) in subsection (j)--
                            (i) in paragraph (1), in the matter 
                        preceding subparagraph (A), by inserting ``from 
                        countries other than Canada'' after 
                        ``devices''; and
                            (ii) in paragraph (3)--
                                    (I) in the heading, by striking 
                                ``from canada'' and inserting ``from 
                                countries other than canada''; and
                                    (II) in subparagraph (C), by 
                                striking ``from Canada,''; and
                    (C) by striking subsection (l) and inserting the 
                following:
    ``(l) Importation of Prescription Drugs From Canada.--Individuals 
may import from Canada any prescription drug that meets the 
requirements of subparagraphs (A) through (F) of subsection (j)(3).''.
            (2) Regulations.--Not later than January 1, 2016, the 
        Secretary of Health and Human Services shall promulgate 
        regulations with respect to subsection (l) of section 804 of 
        the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 384) (as 
        amended by paragraph (1)(B)).
            (3) Effective date.--The amendments made by paragraph (1) 
        shall take effect on the effective date of the final 
        regulations promulgated in accordance with paragraph (2).
    (c) FDASIA Amendment.--Subsection (c) of section 708 of the Food 
and Drug Administration Safety and Innovation Act (Public Law 112-144; 
126 Stat. 1068) is amended by striking ``The amendment made by'' and 
all that follows through the period at the end and inserting ``The 
amendment made by subsection (a) and the regulations promulgated under 
subsection (b) shall apply beginning on the effective date of the 
regulations promulgated under section 804(b) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 384(b)) and the amendments made by section 
201(b) of the Prescription Drug Affordability Act of 2015.''.

SEC. 202. SENSE OF THE HOUSE OF REPRESENTATIVES REGARDING TRADE 
              AGREEMENTS.

    It is the sense of the House of Representatives that the United 
States Trade Representative should not negotiate trade agreements that 
would raise the prices of prescription drugs in the United States, 
extend the periods of market exclusivity otherwise available for 
prescription drugs, or remove flexibility in Federal or State law 
regarding pricing of prescription drugs.

                TITLE III--MEDICARE AND MEDICAID REBATES

SEC. 301. REQUIRING DRUG MANUFACTURERS TO PROVIDE DRUG REBATES FOR 
              DRUGS DISPENSED TO LOW-INCOME INDIVIDUALS.

    (a) In General.--Section 1860D-2 of the Social Security Act (42 
U.S.C. 1395w-102) is amended--
            (1) in subsection (e)(1), in the matter preceding 
        subparagraph (A), by inserting ``and subsection (f)'' after 
        ``this subsection''; and
            (2) by adding at the end the following new subsection:
    ``(f) Prescription Drug Rebate Agreement for Rebate Eligible 
Individuals.--
            ``(1) Requirement.--
                    ``(A) In general.--For plan years beginning on or 
                after January 1, 2017, in this part, the term `covered 
                part D drug' does not include any drug or biological 
                product that is manufactured by a manufacturer that has 
                not entered into and have in effect a rebate agreement 
                described in paragraph (2).
                    ``(B) 2016 plan year requirement.--Any drug or 
                biological product manufactured by a manufacturer that 
                declines to enter into a rebate agreement described in 
                paragraph (2) for the period beginning on January 1, 
                2016, and ending on December 31, 2016, shall not be 
                included as a `covered part D drug' for the subsequent 
                plan year.
            ``(2) Rebate agreement.--A rebate agreement under this 
        subsection shall require the manufacturer to provide to the 
        Secretary a rebate for each rebate period (as defined in 
        paragraph (6)(B)) ending after December 31, 2015, in the amount 
        specified in paragraph (3) for any covered part D drug of the 
        manufacturer dispensed after December 31, 2015, to any rebate 
        eligible individual (as defined in paragraph (6)(A)) for which 
        payment was made by a PDP sponsor or MA organization under this 
        part for such period, including payments passed through the 
        low-income and reinsurance subsidies under sections 1860D-14 
        and 1860D-15(b), respectively. Such rebate shall be paid by the 
        manufacturer to the Secretary not later than 30 days after the 
        date of receipt of the information described in section 1860D-
        12(b)(7), including as such section is applied under section 
        1857(f)(3), or 30 days after the receipt of information under 
        subparagraph (D) of paragraph (3), as determined by the 
        Secretary. Insofar as not inconsistent with this subsection, 
        the Secretary shall establish terms and conditions of such 
        agreement relating to compliance, penalties, and program 
        evaluations, investigations, and audits that are similar to the 
        terms and conditions for rebate agreements under paragraphs (3) 
        and (4) of section 1927(b).
            ``(3) Rebate for rebate eligible medicare drug plan 
        enrollees.--
                    ``(A) In general.--The amount of the rebate 
                specified under this paragraph for a manufacturer for a 
                rebate period, with respect to each dosage form and 
                strength of any covered part D drug provided by such 
                manufacturer and dispensed to a rebate eligible 
                individual, shall be equal to the product of--
                            ``(i) the total number of units of such 
                        dosage form and strength of the drug so 
                        provided and dispensed for which payment was 
                        made by a PDP sponsor or an MA organization 
                        under this part for the rebate period, 
                        including payments passed through the low-
                        income and reinsurance subsidies under sections 
                        1860D-14 and 1860D-15(b), respectively; and
                            ``(ii) the amount (if any) by which--
                                    ``(I) the Medicaid rebate amount 
                                (as defined in subparagraph (B)) for 
                                such form, strength, and period, 
                                exceeds
                                    ``(II) the average Medicare drug 
                                program rebate eligible rebate amount 
                                (as defined in subparagraph (C)) for 
                                such form, strength, and period.
                    ``(B) Medicaid rebate amount.--For purposes of this 
                paragraph, the term `Medicaid rebate amount' means, 
                with respect to each dosage form and strength of a 
                covered part D drug provided by the manufacturer for a 
                rebate period--
                            ``(i) in the case of a single source drug 
                        or an innovator multiple source drug, the 
                        amount specified in paragraph (1)(A)(ii)(II) or 
                        (2)(C) of section 1927(c) plus the amount, if 
                        any, specified in subparagraph (A)(ii) of 
                        paragraph (2) of such section, for such form, 
                        strength, and period; or
                            ``(ii) in the case of any other covered 
                        outpatient drug, the amount specified in 
                        paragraph (3)(A)(i) of such section for such 
                        form, strength, and period.
                    ``(C) Average medicare drug program rebate eligible 
                rebate amount.--For purposes of this subsection, the 
                term `average Medicare drug program rebate eligible 
                rebate amount' means, with respect to each dosage form 
                and strength of a covered part D drug provided by a 
                manufacturer for a rebate period, the sum, for all PDP 
                sponsors under part D and MA organizations 
                administering an MA-PD plan under part C, of--
                            ``(i) the product, for each such sponsor or 
                        organization, of--
                                    ``(I) the sum of all rebates, 
                                discounts, or other price concessions 
                                (not taking into account any rebate 
                                provided under paragraph (2) or any 
                                discounts under the program under 
                                section 1860D-14A) for such dosage form 
                                and strength of the drug dispensed, 
                                calculated on a per-unit basis, but 
                                only to the extent that any such 
                                rebate, discount, or other price 
                                concession applies equally to drugs 
                                dispensed to rebate eligible Medicare 
                                drug plan enrollees and drugs dispensed 
                                to PDP and MA-PD enrollees who are not 
                                rebate eligible individuals; and
                                    ``(II) the number of the units of 
                                such dosage and strength of the drug 
                                dispensed during the rebate period to 
                                rebate eligible individuals enrolled in 
                                the prescription drug plans 
                                administered by the PDP sponsor or the 
                                MA-PD plans administered by the MA 
                                organization; divided by
                            ``(ii) the total number of units of such 
                        dosage and strength of the drug dispensed 
                        during the rebate period to rebate eligible 
                        individuals enrolled in all prescription drug 
                        plans administered by PDP sponsors and all MA-
                        PD plans administered by MA organizations.
                    ``(D) Use of estimates.--The Secretary may 
                establish a methodology for estimating the average 
                Medicare drug program rebate eligible rebate amounts 
                for each rebate period based on bid and utilization 
                information under this part and may use these estimates 
                as the basis for determining the rebates under this 
                section. If the Secretary elects to estimate the 
                average Medicare drug program rebate eligible rebate 
                amounts, the Secretary shall establish a reconciliation 
                process for adjusting manufacturer rebate payments not 
                later than 3 months after the date that manufacturers 
                receive the information collected under section 1860D-
                12(b)(7)(B).
            ``(4) Length of agreement.--The provisions of paragraph (4) 
        of section 1927(b) (other than clauses (iv) and (v) of 
        subparagraph (B)) shall apply to rebate agreements under this 
        subsection in the same manner as such paragraph applies to a 
        rebate agreement under such section.
            ``(5) Other terms and conditions.--The Secretary shall 
        establish other terms and conditions of the rebate agreement 
        under this subsection, including terms and conditions related 
        to compliance, that are consistent with this subsection.
            ``(6) Definitions.--In this subsection and section 1860D-
        12(b)(7):
                    ``(A) Rebate eligible individual.--The term `rebate 
                eligible individual' means--
                            ``(i) a subsidy eligible individual (as 
                        defined in section 1860D-14(a)(3)(A));
                            ``(ii) a Medicaid beneficiary treated as a 
                        subsidy eligible individual under clause (v) of 
                        section 1860D-14(a)(3)(B); and
                            ``(iii) any part D eligible individual not 
                        described in clause (i) or (ii) who is 
                        determined for purposes of the State plan under 
                        title XIX to be eligible for medical assistance 
                        under clause (i), (iii), or (iv) of section 
                        1902(a)(10)(E).
                    ``(B) Rebate period.--The term `rebate period' has 
                the meaning given such term in section 1927(k)(8).''.
    (b) Reporting Requirement for the Determination and Payment of 
Rebates by Manufacturers Related to Rebate for Rebate Eligible Medicare 
Drug Plan Enrollees.--
            (1) Requirements for pdp sponsors.--Section 1860D-12(b) of 
        the Social Security Act (42 U.S.C. 1395w-112(b)) is amended by 
        adding at the end the following new paragraph:
            ``(7) Reporting requirement for the determination and 
        payment of rebates by manufacturers related to rebate for 
        rebate eligible medicare drug plan enrollees.--
                    ``(A) In general.--For purposes of the rebate under 
                section 1860D-2(f) for contract years beginning on or 
                after January 1, 2017, each contract entered into with 
                a PDP sponsor under this part with respect to a 
                prescription drug plan shall require that the sponsor 
                comply with subparagraphs (B) and (C).
                    ``(B) Report form and contents.--Not later than a 
                date specified by the Secretary, a PDP sponsor of a 
                prescription drug plan under this part shall report to 
                each manufacturer--
                            ``(i) information (by National Drug Code 
                        number) on the total number of units of each 
                        dosage, form, and strength of each drug of such 
                        manufacturer dispensed to rebate eligible 
                        Medicare drug plan enrollees under any 
                        prescription drug plan operated by the PDP 
                        sponsor during the rebate period;
                            ``(ii) information on the price discounts, 
                        price concessions, and rebates for such drugs 
                        for such form, strength, and period;
                            ``(iii) information on the extent to which 
                        such price discounts, price concessions, and 
                        rebates apply equally to rebate eligible 
                        Medicare drug plan enrollees and PDP enrollees 
                        who are not rebate eligible Medicare drug plan 
                        enrollees; and
                            ``(iv) any additional information that the 
                        Secretary determines is necessary to enable the 
                        Secretary to calculate the average Medicare 
                        drug program rebate eligible rebate amount (as 
                        defined in paragraph (3)(C) of such section), 
                        and to determine the amount of the rebate 
                        required under this section, for such form, 
                        strength, and period.
                Such report shall be in a form consistent with a 
                standard reporting format established by the Secretary.
                    ``(C) Submission to secretary.--Each PDP sponsor 
                shall promptly transmit a copy of the information 
                reported under subparagraph (B) to the Secretary for 
                the purpose of audit oversight and evaluation.
                    ``(D) Confidentiality of information.--The 
                provisions of subparagraph (D) of section 1927(b)(3), 
                relating to confidentiality of information, shall apply 
                to information reported by PDP sponsors under this 
                paragraph in the same manner that such provisions apply 
                to information disclosed by manufacturers or 
                wholesalers under such section, except--
                            ``(i) that any reference to `this section' 
                        in clause (i) of such subparagraph shall be 
                        treated as being a reference to this section;
                            ``(ii) the reference to the Director of the 
                        Congressional Budget Office in clause (iii) of 
                        such subparagraph shall be treated as including 
                        a reference to the Medicare Payment Advisory 
                        Commission; and
                            ``(iii) clause (iv) of such subparagraph 
                        shall not apply.
                    ``(E) Oversight.--Information reported under this 
                paragraph may be used by the Inspector General of the 
                Department of Health and Human Services for the 
                statutorily authorized purposes of audit, 
                investigation, and evaluations.
                    ``(F) Penalties for failure to provide timely 
                information and provision of false information.--In the 
                case of a PDP sponsor--
                            ``(i) that fails to provide information 
                        required under subparagraph (B) on a timely 
                        basis, the sponsor is subject to a civil money 
                        penalty in the amount of $10,000 for each day 
                        in which such information has not been 
                        provided; or
                            ``(ii) that knowingly (as defined in 
                        section 1128A(i)) provides false information 
                        under such subparagraph, the sponsor 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. 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).''.
            (2) Application to ma organizations.--Section 1857(f)(3) of 
        the Social Security Act (42 U.S.C. 1395w-27(f)(3)) is amended 
        by adding at the end the following:
                    ``(D) Reporting requirement related to rebate for 
                rebate eligible medicare drug plan enrollees.--Section 
                1860D-12(b)(7).''.
    (c) Deposit of Rebates Into Medicare Prescription Drug Account.--
Section 1860D-16(c) of the Social Security Act (42 U.S.C. 1395w-116(c)) 
is amended by adding at the end the following new paragraph:
            ``(6) Rebate for rebate eligible medicare drug plan 
        enrollees.--Amounts paid under a rebate agreement under section 
        1860D-2(f) shall be deposited into the Account.''.
    (d) Exclusion From Determination of Best Price and Average 
Manufacturer Price Under Medicaid.--
            (1) Exclusion from best price determination.--Section 
        1927(c)(1)(C)(ii)(I) of the Social Security Act (42 U.S.C. 
        1396r-8(c)(1)(C)(ii)(I)) is amended by inserting ``and amounts 
        paid under a rebate agreement under section 1860D-2(f)'' after 
        ``this section''.
            (2) Exclusion from average manufacturer price 
        determination.--Section 1927(k)(1)(B)(i) of the Social Security 
        Act (42 U.S.C. 1396r-8(k)(1)(B)(i)) is amended--
                    (A) in subclause (IV), by striking ``and'' after 
                the semicolon;
                    (B) in subclause (V), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
                                    ``(VI) amounts paid under a rebate 
                                agreement under section 1860D-2(f).''.

SEC. 302. APPLYING THE MEDICAID ADDITIONAL REBATE REQUIREMENT TO 
              GENERIC DRUGS.

    (a) In General.--Section 1927(c)(3) of the Social Security Act (42 
U.S.C. 1396r-8(c)(3)) is amended--
            (1) in subparagraph (A), by striking ``The amount'' and 
        inserting ``Except as provided in subparagraph (C), the 
        amount''; and
            (2) by adding at the end the following new subparagraph:
                    ``(C) Additional rebate.--
                            ``(i) In general.--The amount of the rebate 
                        specified in this paragraph for a rebate 
                        period, with respect to each dosage form and 
                        strength of a covered outpatient drug other 
                        than a single source drug or an innovator 
                        multiple source drug, shall be increased in the 
                        manner that the rebate for a dosage form and 
                        strength of a single source drug or an 
                        innovator multiple source drug is increased 
                        under subparagraphs (A) and (D) of paragraph 
                        (2), except as provided in clause (ii).
                            ``(ii) Special rules for application of 
                        provision.--In applying subparagraphs (A) and 
                        (D) of paragraph (2) under clause (i)--
                                    ``(I) the reference in subparagraph 
                                (A)(i) of such paragraph to `1990' 
                                shall be deemed a reference to `2014';
                                    ``(II) subject to clause (iii), the 
                                reference in subparagraph (A)(ii) of 
                                such paragraph to `calendar quarter 
                                beginning July 1, 1990' shall be deemed 
                                a reference to the `calendar quarter in 
                                which the average manufacturer price 
                                for the drug is the lowest during the 
                                12-calendar quarter period ending on 
                                September 30, 2014';
                                    ``(III) subject to clause (iii), 
                                the reference in subparagraph (A)(ii) 
                                of such paragraph to `September 1990' 
                                shall be deemed a reference to `the 
                                last month of such calendar quarter';
                                    ``(IV) the references in 
                                subparagraph (D) of such paragraph to 
                                `paragraph (1)(A)(ii)', `this 
                                paragraph', and `December 31, 2009' 
                                shall be deemed references to 
                                `subparagraph (A)', `this 
                                subparagraph', and `December 31, 2014', 
                                respectively; and
                                    ``(V) any reference in such 
                                paragraph to a `single source drug or 
                                an innovator multiple source drug' 
                                shall be deemed to be a reference to a 
                                drug to which clause (i) applies.
                            ``(iii) Special rule for certain 
                        noninnovator multiple source drugs.--In 
                        applying paragraph (2)(A)(ii)(II) under clause 
                        (i) with respect to a covered outpatient drug 
                        that is first sold as a drug other than a 
                        single source drug or an innovator multiple 
                        source drug after the date that is 3 years 
                        before the date of the enactment of this 
                        subparagraph, such paragraph shall be applied--
                                    ``(I) by substituting `the 
                                applicable quarter' for `the calendar 
                                quarter beginning July 1, 1990'; and
                                    ``(II) by substituting `the last 
                                month in such applicable quarter' for 
                                `September 1990'.
                            ``(iv) Applicable quarter defined.--In this 
                        subsection, the term `applicable quarter' 
                        means, with respect to a drug described in 
                        clause (iii), the fifth full calendar quarter 
                        in which the drug is sold as a drug other than 
                        a single source drug or an innovator multiple 
                        source drug.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to rebate periods beginning after December 31, 2014.

                    TITLE IV--PAY-FOR-DELAY BLOCKING

SEC. 401. PRESERVING ACCESS TO AFFORDABLE GENERICS.

    The Federal Trade Commission Act (15 U.S.C. 44 et seq.) is amended 
by inserting after section 26 (15 U.S.C. 57c-2) the following:

``SEC. 27. PRESERVING ACCESS TO AFFORDABLE GENERICS.

    ``(a) In General.--
            ``(1) Enforcement proceeding.--The Commission may initiate 
        a proceeding to enforce the provisions of this section against 
        the parties to any agreement resolving or settling, on a final 
        or interim basis, a patent infringement claim, in connection 
        with the sale of a drug product.
            ``(2) Presumption and violation.--In such a proceeding, an 
        agreement shall be presumed to have anticompetitive effects and 
        be a violation of this section if--
                    ``(A) an ANDA filer receives anything of value, 
                including an exclusive license; and
                    ``(B) the ANDA filer agrees to limit or forego 
                research, development, manufacturing, marketing, or 
                sales of the ANDA product for any period of time.
    ``(b) Exclusions.--Nothing in this section shall prohibit a 
resolution or settlement of a patent infringement claim in which the 
consideration granted by the NDA holder to the ANDA filer as part of 
the resolution or settlement includes only one or more of the 
following:
            ``(1) The right to market the ANDA product in the United 
        States prior to the expiration of--
                    ``(A) any patent that is the basis for the patent 
                infringement claim; or
                    ``(B) any patent right or other statutory 
                exclusivity that would prevent the marketing of such 
                drug.
            ``(2) A payment for reasonable litigation expenses not to 
        exceed $7,500,000.
            ``(3) A covenant not to sue on any claim that the ANDA 
        product infringes a United States patent.
    ``(c) Definitions.--In this section:
            ``(1) Agreement.--The term `agreement' means anything that 
        would constitute an agreement under section 1 of the Sherman 
        Act (15 U.S.C. 1) or section 5 of this Act.
            ``(2) Agreement resolving or settling a patent infringement 
        claim.--The term `agreement resolving or settling a patent 
        infringement claim' includes any agreement that is entered into 
        within 30 days of the resolution or the settlement of the 
        claim, or any other agreement that is contingent upon, provides 
        a contingent condition for, or is otherwise related to the 
        resolution or settlement of the claim.
            ``(3) ANDA.--The term `ANDA' means an abbreviated new drug 
        application filed under section 505(j) of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 355(j)) or a new drug 
        application filed under section 505(b)(2) of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 355(b)(2)).
            ``(4) ANDA filer.--The term `ANDA filer' means a party that 
        owns or controls an ANDA filed with the Commission of Food and 
        Drugs or has the exclusive rights under such ANDA to distribute 
        the ANDA product.
            ``(5) ANDA product.--The term `ANDA product' means the 
        product to be manufactured under the ANDA that is the subject 
        of the patent infringement claim.
            ``(6) Drug product.--The term `drug product' has the 
        meaning given such term in section 314.3(b) of title 21, Code 
        of Federal Regulations (or any successor regulation).
            ``(7) NDA.--The term `NDA' means a new drug application 
        filed under section 505(b) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355(b)).
            ``(8) NDA holder.--The term `NDA holder' means--
                    ``(A) the holder of an approved NDA application for 
                a drug product;
                    ``(B) a person owning or controlling enforcement of 
                the patent listed in the Approved Drug Products With 
                Therapeutic Equivalence Evaluations (commonly known as 
                the `FDA Orange Book') in connection with the NDA; or
                    ``(C) the predecessors, subsidiaries, divisions, 
                groups, and affiliates controlled by, controlling, or 
                under common control with any of the entities described 
                in subparagraphs (A) and (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.
            ``(9) Party.--The term `party' means any person, 
        partnership, corporation, or other legal entity.
            ``(10) Patent infringement.--The term `patent infringement' 
        means infringement of any patent or of any filed patent 
        application, extension, reissue, renewal, division, 
        continuation, continuation in part, reexamination, patent term 
        restoration, patents of addition, and extensions thereof.
            ``(11) Patent infringement claim.--The term `patent 
        infringement claim' means any allegation made to an ANDA filer, 
        whether or not included in a complaint filed with a court of 
        law, that its ANDA or ANDA product may infringe any patent held 
        by, or exclusively licensed to, the NDA holder of the drug 
        product.
            ``(12) Statutory exclusivity.--The term `statutory 
        exclusivity' means those prohibitions on the approval of drug 
        applications under clauses (ii) through (iv) of section 
        505(c)(3)(E) (5- and 3-year data exclusivity), section 527 
        (orphan drug exclusivity), or section 505A (pediatric 
        exclusivity) of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 355(c)(3)(E), 360cc, 355a).''.

                             TITLE V--FRAUD

SEC. 501. CONDITIONS ON AWARD OF DRUG EXCLUSIVITY.

    Subchapter E of chapter V of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 360bbb et seq.) is amended by adding at the end the 
following:

``SEC. 569D. CONDITIONS ON AWARD OF DRUG EXCLUSIVITY.

    ``(a) Termination of Exclusivity.--Notwithstanding any other 
provision of this Act, any period of exclusivity described in 
subsection (b) granted to a person or assigned to a person on or after 
the date of enactment of this section with respect to a drug shall be 
terminated if the person to which such exclusivity was granted or any 
person to which such exclusivity is assigned--
            ``(1) commits a violation described in subsection (c)(1) 
        with respect to such drug; or
            ``(2) fails to report such a violation as required by 
        subsection (e).
    ``(b) Exclusivities Affected.--The periods of exclusivity described 
in this subsection are those periods of exclusivity granted under any 
of the following sections:
            ``(1) Clause (ii), (iii), or (iv) of section 505(c)(3)(E).
            ``(2) Clause (iv) of section 505(j)(5)(B).
            ``(3) Clause (ii), (iii), or (iv) of section 505(j)(5)(F).
            ``(4) Section 505A.
            ``(5) Section 505E.
            ``(6) Section 527.
            ``(7) Section 351(k)(7) of the Public Health Service Act.
            ``(8) Any other provision of this Act that provides for 
        market exclusivity (or extension of market exclusivity) with 
        respect to a drug.
    ``(c) Violations.--
            ``(1) In general.--A violation described in this subsection 
        is a violation of a law described in paragraph (2) that results 
        in--
                    ``(A) a criminal conviction of a person described 
                in subsection (a);
                    ``(B) a civil judgment against a person described 
                in subsection (a); or
                    ``(C) a settlement agreement in which a person 
                described in subsection (a) admits to fault.
            ``(2) Laws described.--The laws described in this paragraph 
        are the following:
                    ``(A) The provisions of this Act that prohibit--
                            ``(i) the adulteration or misbranding of a 
                        drug;
                            ``(ii) the making of false statements to 
                        the Secretary or committing fraud; or
                            ``(iii) the illegal marketing of a drug.
                    ``(B) The provisions of subchapter III of chapter 
                37 of title 31, United States Code (commonly known as 
                the `False Claims Act').
                    ``(C) Section 287 of title 18, United States Code.
                    ``(D) The Medicare and Medicaid Patient Protection 
                and Program Act of 1987 (commonly known as the 
                `Antikickback Statute').
                    ``(E) Section 1927 of the Social Security Act.
                    ``(F) A State law against fraud comparable to a law 
                described in subparagraphs (A) through (E).
    ``(d) Date of Exclusivity Termination.--The date on which the 
exclusivity shall be terminated as described in subsection (a) is the 
date on which, as applicable--
            ``(1) a final judgment is entered relating to a violation 
        described in subparagraph (A) or (B) of subsection (c)(1); or
            ``(2)(A) a settlement agreement described in subsection 
        (c)(1)(C) is approved by a court order that is or becomes final 
        and nonappealable; or
            ``(B) if there is no court order approving a settlement 
        agreement described in subsection (c)(1)(C), a court order 
        dismissing the applicable case, issued after the settlement 
        agreement, is or becomes final and nonappealable.
    ``(e) Reporting of Information.--A person described in subsection 
(a) that commits a violation described in subsection (c)(1) shall 
report such violation to the Secretary no later than 30 days after the 
date that--
            ``(1) a final judgment is entered relating to a violation 
        described in subparagraph (A) or (B) of subsection (c)(1); or
            ``(2)(A) a settlement agreement described in subsection 
        (c)(1)(C) is approved by a court order that is or becomes final 
        and nonappealable; or
            ``(B) if there is no court order approving a settlement 
        agreement described in subsection (c)(1)(C), a court order 
        dismissing the applicable case, issued after the settlement 
        agreement, is or becomes final and nonappealable.''.

                         TITLE VI--TRANSPARENCY

SEC. 601. DRUG MANUFACTURER REPORTING.

    (a) Reporting on Domestic Sales.--The manufacturer of a drug 
approved under section 505 of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 355) or section 351 of the Public Health Service Act (42 
U.S.C. 262) shall submit to the Secretary of Health and Human Services 
and to Congress an annual report, which shall be made publicly 
available, outlining with respect to each such drug, during the 
previous calendar year--
            (1) the total expenditures of the manufacturer on--
                    (A) drug research and development;
                    (B) clinical trials;
                    (C) materials and manufacturing;
                    (D) acquisition costs, including costs for the 
                purchase of patents and licensing; and
                    (E) marketing and advertising for the promotion of 
                the drug to consumers and prescribers;
            (2) the total profit to the manufacturer attributable to 
        such drug;
            (3) the total amount of financial assistance the 
        manufacturer has provided through patient prescription 
        assistance programs with respect to such drug, if any;
            (4) any Federal benefits received by the manufacturer, 
        including tax credits, grants from the National Institutes of 
        Health, and other Federal benefits with respect to such drug; 
        and
            (5) any additional information the manufacturer chooses to 
        provide related to drug pricing decisions, such as total 
        expenditures on drug research and development or clinical 
        trials on drugs that failed to receive approval by the Food and 
        Drug Administration.
    (b) Reporting on Foreign Sales.--In the case of a manufacturer of a 
drug that sells such drug to the Federal Government, including through 
the health programs of the Department of Veterans Affairs, the 
Department of Defense, and the Indian Health Service and through the 
Medicare program under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.), or that has entered into an agreement under 
section 340B of the Public Health Service Act (42 U.S.C. 256b), the 
manufacturer shall include in the report submitted under subsection (a) 
information about the price of the drug, and profits from and volume of 
sales of the drug, in each foreign country in which the drug is sold, 
as applicable.
                                 <all>