[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4619 Introduced in House (IH)]
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116th CONGRESS
1st Session
H. R. 4619
To amend title XVIII of the Social Security Act to require drug
manufacturers to pay a Medicare part D rebate for certain drugs if the
price of such drugs increases faster than inflation.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 8, 2019
Ms. Schakowsky (for herself, Mr. Higgins of New York, and Ms. Wild)
introduced the following bill; which was referred to the Committee on
Energy and Commerce, and in addition to the Committee on Ways and
Means, 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 amend title XVIII of the Social Security Act to require drug
manufacturers to pay a Medicare part D rebate for certain drugs if the
price of such drugs increases faster than inflation.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Pharmaceutical Rebates for Excessive
Pricing Above Inflation Act'' or the ``Pharmaceutical REPAI Act''.
SEC. 2. MEDICARE PART D PRESCRIPTION DRUG INFLATION REBATE BY
MANUFACTURERS.
Part D of title XVIII of the Social Security Act is amended by
inserting after section 1860D-14A (42 U.S.C. 1395w-114a) the following
new section:
``SEC. 1860D-14B. MANUFACTURER REBATE FOR CERTAIN DRUGS WITH PRICES
INCREASING FASTER THAN INFLATION.
``(a) In General.--Subject to the provisions of this section, in
order for coverage to be available under this part for a part D
rebatable drug of a manufacturer dispensed during an applicable year,
the manufacturer must have entered into and have in effect an agreement
described in subsection (b). For purposes of this section the term
`applicable year' means a year beginning with 2022.
``(b) Agreements.--
``(1) Terms of agreement.--An agreement described in this
subsection, with respect to a manufacturer of a part D
rebatable drug, is an agreement under which the following
applies:
``(A) Secretarial provision of information.--Not
later than 9 months after the end of each applicable
year with respect to which the agreement is in effect,
the Secretary, for the part D rebatable drug of the
manufacturer, reports to the manufacturer the following
for such year:
``(i) Information on the total units (as
defined in subsection (g)(2)) dispensed for
each dosage form and strength with respect to
such part D rebatable drug and year.
``(ii) Information on the amount (if any)
of the excess average manufacturer price
increase described in subsection (c)(1)(B) for
each dosage form and strength with respect to
such drug and year.
``(iii) The rebate amount specified under
subsection (c) for each dosage form and
strength with respect to such drug and year.
``(B) Manufacturer requirements.--For each
applicable year with respect to which the agreement is
in effect, the manufacturer of the part D rebatable
drug, for each dosage form and strength with respect to
such drug, not later than 30 days after the date of
receipt from the Secretary of the information described
in subparagraph (A) for such year, provides to the
Secretary a rebate that is equal to the amount
specified in subsection (c) for such dosage form and
strength with respect to such drug for such year.
``(2) Length of agreement.--
``(A) In general.--An agreement under this section,
with respect to a part D rebatable drug, shall be
effective for an initial period of not less than one
year and shall be automatically renewed for a period of
not less than one year unless terminated under
subparagraph (B).
``(B) Termination.--
``(i) By secretary.--The Secretary may
provide for termination of an agreement under
this section for violation of the requirements
of the agreement or other good cause shown.
Such termination shall not be effective earlier
than 60 days after the date of notice of such
termination. The Secretary shall provide, upon
request, a manufacturer with a hearing
concerning such a termination, but such hearing
shall not delay the effective date of the
termination.
``(ii) By a manufacturer.--A manufacturer
may terminate an agreement under this section
for any reason. Any such termination shall not
be effective until the year beginning at least
60 days after the date the manufacturer
provides notice to the Secretary.
``(C) Effectiveness of termination.--Any
termination under this paragraph shall not affect
rebates due under the agreement under this section
before the effective date of its termination.
``(D) Delay before reentry.--In the case of any
agreement under this section with a manufacturer which
is terminated in a plan year, another such agreement
with the manufacturer (or a successor manufacturer) may
not be entered into before the subsequent plan year,
unless the Secretary finds good cause for an earlier
reinstatement of such an agreement.
``(3) Information.--For purposes of carrying out this
section, the Secretary shall use information submitted by
manufacturers under section 1927(b)(3).
``(c) Rebate Amount.--
``(1) In general.--For purposes of this section, the amount
specified in this subsection for a dosage form and strength
with respect to a part D rebatable drug and applicable year is,
subject to subparagraphs (B) and (C) of paragraph (3), the
amount equal to the product of--
``(A) the total average number of units weighted
by, and dispensed for, such dosage form and strength
with respect to such part D rebatable drug and year;
and
``(B) the amount (if any) by which--
``(i) the average manufacturer price (as
defined in subsection (g)) paid for such dosage
form and strength with respect to such part D
rebatable drug during the year; exceeds
``(ii) the inflation-adjusted payment
amount determined under paragraph (2) for such
dosage form and strength with respect to such
part D rebatable drug during the year.
``(2) Determination of inflation-adjusted payment amount.--
The inflation-adjusted payment amount determined under this
paragraph for a dosage form and strength with respect to a part
D rebatable drug for an applicable year, subject to
subparagraphs (A) and (D) of paragraph (3), is--
``(A) the average manufacturer price paid for such
dosage form and strength with respect to such drug in
the payment amount benchmark year (as defined in
subsection (g)(3)); increased by
``(B) the percentage by which the rebate period
CPI-U (as defined in subsection (g)(5)) for the
applicable year exceeds the benchmark period CPI-U (as
defined in subsection (g)(4)).
``(3) Special treatment of certain drugs and exemption.--
``(A) Subsequently approved drugs.--In the case of
a part D rebatable drug first approved by the Food and
Drug Administration after January 1, 2016, subparagraph
(A) of paragraph (2) shall be applied as if the term
`payment amount benchmark year' were defined under
subsection (g)(3) as the first year beginning after the
day on which the drug was first marketed and
subparagraph (B) of paragraph (2) shall be applied as
if the term `benchmark period CPI-U' were defined under
subsection (g)(4) as if the reference to `January 2016'
under such subsection were a reference to `January of
the first year beginning after the date on which the
drug was first marketed by any manufacturer'.
``(B) Exemption for shortages.--The Secretary may
reduce or waive the rebate under paragraph (1) with
respect to a part D rebatable drug in the case of a
shortage of such drug or other exigent circumstances,
as determined by the Secretary.
``(C) Treatment of new formulations.--
``(i) In general.--In the case of a part D
rebatable drug that is a line extension of a
single source drug or an innovator multiple
source drug that is an oral solid dosage form,
the Secretary shall establish a formula for
determining the amount specified in this
subsection with respect to such part D
rebatable drug and an applicable year with
consideration of the single source drug or an
innovator multiple source drug.
``(ii) Line extension defined.--In this
subparagraph, the term `line extension' means,
with respect to a part D rebatable drug, a new
formulation of the drug (as determined by the
Secretary), such as an extended release
formulation, but does not include an abuse-
deterrent formulation of the drug (as
determined by the Secretary), regardless of
whether such abuse-deterrent formulation is an
extended release formulation.
``(d) Rebate Deposits.--Amounts paid as rebates under subsection
(c) shall be deposited into the Medicare Prescription Drug Account in
the Federal Supplementary Medical Insurance Trust Fund established
under section 1841.
``(e) Civil Money Penalty.--In the case of a manufacturer of a part
D rebatable drug with an agreement in effect under this section who has
failed to comply with the terms of the agreement under subsection
(b)(1)(B) with respect to such drug for an applicable year, the
Secretary may impose a civil money penalty on such manufacturer in an
amount equal to 125 percent of the amount specified in subsection (c)
for such drug for such year. 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 subsection in the same manner as such provisions apply to a
penalty or proceeding under section 1128A(a).
``(f) Judicial Review.--There shall be no judicial review of the
following:
``(1) The determination of units under this section.
``(2) The determination of whether a drug is a part D
rebatable drug under this section.
``(3) The calculation of the rebate amount under this
section.
``(g) Definitions.--In this section:
``(1) Part d rebatable drug defined.--
``(A) In general.--The term `part D rebatable drug'
means a drug or biological that would (without
application of this section) be a covered part D drug,
except such term shall, with respect to an applicable
year, not include such a drug or biological if the
average total cost under a prescription drug plan under
this part or MA-PD plan under part C for such year per
individual who uses such a drug or biological, as
determined by the Secretary, are less than, subject to
subparagraph (B), $100, as determined by the Secretary
using the most recent data available or, if data is not
available, as estimated by the Secretary.
``(B) Increase.--The dollar amount applied under
subparagraph (A)--
``(i) for 2023, shall be the dollar amount
specified under such subparagraph for 2022,
increased by the percentage increase in the
consumer price index for all urban consumers
(United States city average) as of January of
2022; and
``(ii) for a subsequent year, shall be the
dollar amount specified in this subparagraph
(or subparagraph (A)) for the previous year,
increased by the percentage increase in the
consumer price index for all urban consumers
(United States city average) as of January of
the previous year.
Any dollar amount specified under this subparagraph
that is not a multiple of $10 shall be rounded to the
nearest multiple of $10.
``(2) Unit defined.--The term `unit' means, with respect to
a part D rebatable drug, the lowest identifiable quantity (such
as a capsule or tablet, milligram of molecules, or grams) of
the part D rebatable drug that is dispensed to individuals
enrolled under a prescription drug plan under this part or an
MA-PD plan under part C.
``(3) Payment amount benchmark year.--The term `payment
amount benchmark year' means the year beginning January 1,
2016.
``(4) Benchmark period cpi-u.--The term `benchmark period
CPI-U' means the consumer price index for all urban consumers
(United States city average) for January 2016.
``(5) Rebate period cpi-u.--The term `rebate period CPI-U'
means, with respect to an applicable year, the consumer price
index for all urban consumers (United States city average) for
January of such year.
``(6) Average manufacturer price.--The term `average
manufacturer price' has the meaning, with respect to a part D
rebatable drug of a manufacturer for an applicable year, given
such term in section 1927(k)(1), with respect to a covered
outpatient drug of a manufacturer for a rebate period under
section 1927. For purposes of applying the previous sentence,
with respect to a part D rebatable drug of a manufacturer and
an applicable year, the Secretary shall use the information
with respect to the average manufacturer price for such drug
reported by the manufacturer under section 1927(b)(3) with
respect to each of the quarters in the applicable year and
calculate an annual average manufacturer price for such
applicable year as the average of such average manufacturer
prices for each such quarter, weighted by units of such drug
sold or dispensed with respect to such applicable year.''.
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