[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5749 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 5749

To amend title XI of the Social Security Act to establish the American 
   Insulin Program to provide for lower prices for insulin drugs, to 
  maintain effort throughout the insulin supply chain, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 4, 2020

  Mr. Crist 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 XI of the Social Security Act to establish the American 
   Insulin Program to provide for lower prices for insulin drugs, to 
  maintain effort throughout the insulin supply chain, and for other 
                               purposes.

    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 ``Affordable Insulin for All Act''.

SEC. 2. PROVIDING FOR LOWER PRICES FOR INSULIN DRUGS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301) is 
amended by adding at the end the following new section:

``SEC. 1150C. ESTABLISHMENT OF PROGRAM.

    ``(a) In General.--The Secretary shall establish an American 
Insulin Program (in this section referred to as the `program') by not 
later than 30 days after the date of the enactment of this section. 
Under the program, the Secretary shall enter into agreements described 
in subsection (b) with manufacturers and provide for the performance of 
duties described in subsection (c). The Secretary shall establish a 
model agreement for use under the program by not later than 20 days 
after the date of the enactment of this section, 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 
                individuals access to Medicaid prices for insulin drugs 
                of the manufacturer.
                    ``(B) Provision of discounted prices as the point-
                of-sale.--
                            ``(i) In general.--Subject to clause (ii), 
                        such Medicaid prices shall be provided to the 
                        applicable beneficiary at the pharmacy or by 
                        the mail order service at the point-of-sale of 
                        an insulin drug.
                            ``(ii) Certification of unsustainable 
                        revenues.--
                                    ``(I) In general.--In the case the 
                                Secretary submits to Congress a 
                                certification that net revenues from 
                                the sale of insulin drugs by 
                                manufacturers with an agreement under 
                                this section is unsustainable because 
                                such manufactures will be unable to 
                                meet the demand for insulin drugs in 
                                the United States, subject to subclause 
                                (II), the Secretary may increase the 
                                Medicaid price by 5 percent.
                                    ``(II) Limitation.--The Secretary 
                                may not increase the Medicaid price in 
                                accordance with subclause (I) more than 
                                3 times.
                                    ``(III) Applicability of price 
                                increase.--An increase to the Medicaid 
                                price of insulin drugs described in 
                                subclause (I) shall apply to the sale 
                                of insulin drugs 90 days after the date 
                                of a certification described in such 
                                subclause.
                    ``(C) Timing of agreement.--
                            ``(i) Special rule for 2021.--In order for 
                        an agreement with a manufacturer to be in 
                        effect under this section with respect to the 
                        period beginning on January 1, 2021, and ending 
                        on December 31, 2021, the manufacturer shall 
                        enter into such agreement not later than 30 
                        days after the date of the establishment of a 
                        model agreement under subsection (a).
                            ``(ii) 2022 and subsequent years.--In order 
                        for an agreement with a manufacturer to be in 
                        effect under this section with respect to plan 
                        year 2022 or a subsequent plan year, the 
                        manufacturer shall enter into such agreement 
                        (or such agreement shall be renewed under 
                        paragraph (4)(A)) not later than January 30 of 
                        the preceding year.
            ``(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 clause (i) of 
        subsection (c)(1)(A) or procedures established under such 
        subsection (c)(1)(A).
            ``(4) Length of agreement.--
                    ``(A) In general.--An agreement under this section 
                shall be effective for an initial period of not less 
                than 18 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 insulin 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.
    ``(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 
                Medicaid price of an insulin drug of a manufacturer for 
                applicable individuals in each State;
                    ``(B) except as provided in subparagraph (C), the 
                establishment of procedures under which Medicaid prices 
                are provided to applicable individuals at pharmacies or 
                by mail order service at the point-of-sale of an 
                insulin drug;
                    ``(C) in the case where, during the period 
                beginning on January 1, 2022, and ending on December 
                31, 2022, it is not practicable to provide such 
                Medicaid prices at the point-of-sale (as described in 
                subparagraph (B)), the establishment of procedures to 
                provide such Medicaid prices as soon as practicable 
                after the point-of-sale;
                    ``(D) the establishment of procedures to ensure 
                that, not later than the applicable number of calendar 
                days after the dispensing of an insulin 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 insulin 
                        drug; and
                            ``(ii) the Medicaid price of the insulin 
                        drug; and
                    ``(E) providing a reasonable dispute resolution 
                mechanism to resolve disagreements between 
                manufacturers, applicable individuals, 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 state medicaid programs.--The 
        Secretary may collect appropriate data from each State Medicaid 
        program under title XIX in a timeframe that allows for Medicaid 
        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.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                providing for such implementation, the Secretary shall 
                not receive or distribute any funds of a manufacturer 
                under the program.
                    ``(B) Exception.--The limitation under subparagraph 
                (A) shall not apply to the Secretary with respect to 
                insulin drugs dispensed during the period beginning on 
                January 1, 2022, and ending on December 31, 2022, but 
                only if the Secretary determines that the exception to 
                such limitation under this subparagraph is necessary in 
                order for the Secretary to begin implementation of this 
                section and provide applicable beneficiaries timely 
                access to Medicaid prices during such period.
            ``(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 insulin 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) Implementation.--The Secretary may implement the 
        program under this section by program instruction or otherwise.
            ``(6) 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 monetary penalty.--
                    ``(A) In general.--The Secretary shall impose a 
                civil money penalty on a manufacturer that fails to 
                provide individuals Medicaid prices for insulin 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) Definitions.--In this section:
            ``(1) Applicable individual.--The term `applicable 
        individual' means an individual who has received a diagnosis of 
        diabetes.
            ``(2) 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.
            ``(3) Insulin drug.--The term `insulin drug' means a 
        medication approved by the Food and Drug Administration to 
        treat high blood glucose.
            ``(4) Manufacturer.--The term `manufacturer' means, with 
        respect to insulin drugs, 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 insulin drugs or a 
        retail pharmacy licensed under State law.
            ``(5) Medicaid price.--
                    ``(A) In general.--The term `Medicaid price' means, 
                with respect to an individual entitled to medical 
                assistance under title XIX, the net receipt specified 
                in subparagraph (B) for the dosage form and strength of 
                an insulin drug and any increase due to a certification 
                described in subsection (b)(1)(B)(ii)(I).
                    ``(B) Net receipt specified.--For purposes of 
                subparagraph (A), the net receipt specified in this 
                subparagraph shall be equal to the product of--
                            ``(i) the total number of units of each 
                        dosage form and strength purchased under the 
                        program in the rebate period (as determined by 
                        the Secretary), and
                            ``(ii) the amount that is the list price of 
                        such drug during such rebate period,
                less, the total amount of rebates that the manufacturer 
                paid with respect to such drug during such rebate 
                period.
            ``(6) Negotiated price.--The term `negotiated price' has 
        the meaning given such term in section 423.100 of title 42, 
        Code of Federal Regulations (as in effect on the date of 
        enactment of this section), except that such negotiated price 
        shall not include any dispensing fee for the applicable 
        drug.''.

SEC. 3. MAINTENANCE OF EFFORT THROUGHOUT THE INSULIN SUPPLY CHAIN.

    (a) Elimination of PBM Rebates.--Section 1128B(b)(3) of the Social 
Security Act (42 U.S.C. 1320a-7b(b)(3)) is amended--
            (1) in subparagraph (E), by inserting ``(except for a 
        payment practice that permits rebates, discounts, or price 
        concessions for insulin drugs (as defined in section 
        1150C(f)(3)) to be paid by a manufacturer to a PBM (as defined 
        in section 1150A(a))'' before the semicolon at the end; and
            (2) in subparagraph (J)--
                    (A) by moving the margin two ems to the left; and
                    (B) by inserting ``(except for an insulin drug)'' 
                after ``section 1860D-14A(g)''.
    (b) Exclusion of Insulin Payments From MLR.--Not later than 90 days 
after the date of the enactment of this Act, the Secretary of Health 
and Human Services shall exclude, beginning with plan years beginning 
on or after January 1, 2021, from the denominator (as defined in 
section 158.221(c) of title 45, Code of Federal Regulations) section of 
a medical loss ratio (as calculated under section 158.221(a) of such 
title) of a health insurance issuer (as defined in section 144.103 of 
such title) the amount of payments that such issuer paid during a MLR 
reporting year (as defined in section 144.103 of such title) for 
insulin drugs through the promulgation of a regulation.
    (c) Maximum Cost Sharing and Coinsurance for Insulin Drugs in 
Certain Private Plans and Medicare.--
            (1) PHSA amendment.--Subpart II of part A of title XXVII of 
        the Public Health Service Act (42 U.S.C. 300gg-11 et seq.) is 
        amended by inserting after section 2713 the following new 
        section:

``SEC. 2713A. COVERAGE OF INSULIN DRUGS.

    ``(a) In General.--Beginning with plan years beginning 90 days 
after the date of the enactment of this section, a group health plan 
and a health insurance issuer offering group or individual health 
insurance coverage shall, at a minimum provide coverage and may impose 
cost sharing for an insulin drug in accordance with subsection (b) for 
an individual that is provided a prescription for such drug.
    ``(b) Cost Sharing.--Beginning with plan years beginning 90 days 
after the date of the enactment of this section, the cost sharing 
incurred under a plan or coverage described in subsection (a) for an 
insulin drug may not exceed $10 for each 1-month period of coverage.
    ``(c) Insulin Drug Defined.--In this section, the term `insulin 
drug' has the meaning given such term in section 1150C(f)(3) of the 
Social Security Act.''.
            (2) Medicare amendments.--
                    (A) Coinsurance limitation.--Section 1860D-2(b)(2) 
                of the Social Security Act (42 U.S.C. 1395w-102(b)(2)) 
                is amended--
                            (i) in subparagraph (A), by striking 
                        ``Subject to subparagraphs (C) and (D)'' and 
                        inserting ``Subject to subparagraphs (C), (D), 
                        and (E)''; and
                            (ii) by adding at the end, the following 
                        new subparagraph:
                    ``(E) Coverage for insulin drugs.--Beginning with 
                plan years beginning 90 days after the date of the 
                enactment of this subparagraph, the coverage has 
                coinsurance (for costs above the annual deductible 
                specified in paragraph (1) and up to the initial 
                coverage limit under paragraph (3)) for an insulin drug 
                (as defined in section 1861(kkk)) is not more than $10 
                for each 1-month period of coverage.''.
                    (B) Insulin drug defined.--Section 1861 of the 
                Social Security Act (42 U.S.C. 1395x) is amended by 
                adding at the end the following new subsection:
    ``(kkk) Insulin Drug.--The term `insulin drug' has the meaning 
given such term in section 1150C(f)(3) furnished on or after 90 days 
after the date of the enactment of this subsection.''.
    (d) Freezing of Supplemental Rebates in Medicaid.--Section 1902(a) 
of the Social Security Act (42 U.S.C. 1396a(a)) is amended--
            (1) in paragraph (85), by striking at the end ``and'';
            (2) in paragraph (86), by striking the period at the end 
        and inserting ``; and''; and
            (3) by inserting after paragraph (86), the following new 
        paragraph:
            ``(87) provide that the State may not--
                    ``(A) secure from the manufacturer of a drug 
                payable under this title a supplemental rebate that is 
                not a rebate under section 1927 that exceeds the amount 
                of the supplemental rebate on the date of the enactment 
                of this paragraph; or
                    ``(B) secure any other supplemental rebates.''.
    (e) Elimination of Spread Pricing and Related Practices in 
Medicaid.--
            (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-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) 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 90 
        days after the date of enactment of this Act.

SEC. 4. GAO REPORT.

    Not later than 180 days after the date of the enactment of this 
Act, the Comptroller General of the United States shall submit to 
Congress a report on the feasibility and affordability of direct 
manufacturing by the Federal Government.
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