[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 637 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                 S. 637

            To prohibit price gouging in the sale of drugs.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 28, 2019

 Mr. Blumenthal (for himself, Mr. Merkley, Ms. Harris, Ms. Klobuchar, 
 Mr. Schatz, and Mr. Sanders) introduced the following bill; which was 
 read twice and referred to the Committee on Health, Education, Labor, 
                              and Pensions

_______________________________________________________________________

                                 A BILL


 
            To prohibit price gouging in the sale of drugs.

    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 ``Combatting Unreasonable Rises and 
Excessively High Drug Prices Act'' or the ``CURE High Drug Prices 
Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Average manufacturer price.--The term ``average 
        manufacturer price''--
                    (A) has the meaning given the term in section 
                1927(k) of the Social Security Act (42 U.S.C. 1396r-
                8(k)); or
                    (B) with respect to a drug for which there is no 
                average manufacturer price as so defined, means the 
                wholesale acquisition cost of the drug.
            (2) Drug.--The term ``drug''--
                    (A) has the meaning given the term in section 201 
                of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                321); and
                    (B) includes biological products, as defined in 
                section 351 of the Public Health Service Act (42 U.S.C. 
                262).
            (3) Federal health care program.--The term ``Federal health 
        care program'' has the meaning given the term in section 
        1128B(f) of the Social Security Act (42 U.S.C. 1320a-7b(f)).
            (4) Manufacturer.--The term ``manufacturer'' means a 
        person--
                    (A) that holds the application for a drug approved 
                under section 505 of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 355) or the license issued 
                under section 351 of the Public Health Service Act (42 
                U.S.C. 262); or
                    (B) who is responsible for setting the price for 
                the drug.
            (5) Price gouging.--The term ``price gouging'' means an 
        increase in the average manufacturer price of a qualifying drug 
        that--
                    (A) is in substantial excess of an amount that 
                could be reasonably justified by an increase in cost of 
                producing the drug or by an increase in cost due to 
                appropriate expansion of access to the drug to promote 
                public health; and
                    (B) that because of insufficient competition in the 
                marketplace, consumers cannot reasonably avoid.
            (6) Qualifying drug.--The term ``qualifying drug'' means 
        any drug, including a combination product whose primary mode of 
        action is determined under section 503(g) of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 353(g)) to be that of a drug, 
        that--
                    (A) is subject to section 503(b)(1) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)); and
                    (B) is covered by a Federal health care program.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 3. PRICE GOUGING PROHIBITED.

    (a) In General.--A manufacturer shall not engage in price gouging 
in the sale of a qualifying drug.
    (b) Presumption.--Price gouging shall be presumed if the average 
manufacturer price has increased--
            (1) 10 percent or more within the previous 12-month period;
            (2) 20 percent or more in the previous 36-month period; or
            (3) 30 percent or more within the previous 60-month period.
    (c) Notice by Secretary.--The Secretary shall notify the 
manufacturer of an increase, within the previous 2 years, in the 
average manufacturer price of a qualifying drug the Secretary has 
reason to believe constitutes price gouging, by sending notice to the 
manufacturer, requesting a statement of justification for the increase, 
which may include--
            (1) itemizing the components of the cost of producing the 
        qualifying drug;
            (2) identifying the circumstances and timing of an increase 
        in materials or manufacturing costs that caused an increase in 
        the average manufacturer price of the qualifying drug within 
        the 5-year period preceding the date of the average 
        manufacturer price increase;
            (3) identifying the circumstances and timing of any 
        expenditures made by the manufacturer to expand access to the 
        qualifying drug and explaining any improvement in public health 
        associated with those expenditures;
            (4) providing sales and price information for other 
        qualifying drugs with similar therapeutic effects, as relevant 
        to assessing the extent of competition in the marketplace, and 
        the choice available to consumers; and
            (5) providing any other information that the manufacturer 
        believes to be relevant to a determination of whether a 
        violation of this Act has occurred.
    (d) Statement.--Not later than 45 days after the date on which a 
manufacturer receives a statement under subsection (c), the 
manufacturer shall submit to the Secretary a statement described in 
subsection (c).
    (e) Determination by Secretary.--If the Secretary determines, after 
review of the statement of justification, or based on reasonable belief 
if the manufacturer fails to submit a statement of justification as 
required, that the manufacturer has engaged in price gouging with 
respect to a qualifying drug, the Secretary shall notify the 
manufacturer of the determination.
    (f) Remedy.--
            (1) In general.--The Secretary may order that a 
        manufacturer determined under subsection (e) to have engaged in 
        price gouging with respect to a qualifying drug--
                    (A) restore to any consumer, including a third-
                party payor, any excessive amount paid as a result of a 
                price increase that violates this Act;
                    (B) make the drug available to participants of any 
                qualified health plan or Federal health plan for a 
                period of up to 1 year at the price at which the drug 
                was made available to consumers immediately before the 
                violation of this Act; or
                    (C) if the price gouging is done knowingly, or 
                occurs after a previous determination by the Secretary 
                or price gouging by the manufacturer, pay a civil 
                penalty of up to 3 times the excessive amount the 
                manufacturer received as a result of a violation of 
                this Act.
            (2) Appeals.--Any person adversely affected by a 
        determination of the Secretary under this subsection may obtain 
        review of the determination in accordance with section 1128A(e) 
        of the Social Security Act (42 U.S.C. 1320a-7a(e)).
    (g) Enforcement by Attorney General.--
            (1) In general.--If a manufacturer determined under 
        subsection (e) to have engaged in price gouging fails to comply 
        with an order of the Secretary under subsection (f), the 
        Secretary may refer the matter to the Attorney General for 
        enforcement.
            (2) Subpoenas.--The Attorney General may subpoena documents 
        or testimony as may assist in establishing whether the 
        manufacturer engaged in price gouging in violation of this Act.
            (3) Action.--The Attorney General may bring an action in an 
        appropriate district court for relief, including any relief 
        described in subsection (f) and such further relief as the 
        court determines is appropriate.

SEC. 4. EFFECTIVE DATE; APPLICABILITY.

    This Act shall--
            (1) take effect on January 1, 2020; and
            (2) apply with respect to all increases in the average 
        manufacturer price of a qualifying drug occurring on or after 
        that date.
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