,i #aafth ,,congress #ast ,session ,h4 ,r4 #baac ,,in ,,the ,,house ,,of ,,representatives ,april #h1 #bjai,mr4 ,neal 7for himself and ,mr4 ,brady7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committee on ,energy and ,commerce1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend titles ,,xi and ,,xviii of the ,social ,security ,act to provide for drug manufacturer price transparency1 to require certain manufacturers to report on product samples provided to certain health care providers1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,prescription ,drug ,sunshine1 ,transparency1 ,accountability and ,reporting ,act or the ,prescription ,drug ,,star ,act4 #b4 ,drug manufacturer price transparency 7a7 ,in general ,title ,,xi of the ,social ,security ,act 7#db ,u4,s4,c4 #acja et seq47 is amended by inserting after section #aabh,k the following new section3 #aabh,l4 ,drug manufacturer price transparency 7a7 ,in general ,with respect to each year1 beginning with #bjba1 the ,secretary shall1 at least once during such year1 determine if there is a triggered ,,spike increase 7in accordance with subsection 7b77 with respect to an applicable drug 7as defined in subsection 7f77#a774 ,if the ,secretary determines1 with respect to a year1 there is such an increase with respect to an applicable drug1 the manufacturer of the applicable drug shall submit to the ,secretary the justification described in subsection 7c71 subject to subsection 7b77#d71 for each such triggered ,,spike increase in accordance with the timing described in subsection 7d74 7b7 ,triggered ,,spike increase 7#a7 ,in general ,a triggered ,,spike increase occurs1 with respect an applicable drug and year 7beginning with #bjba and referred to in this paragraph as the applicable year71 in any of the following cases3 7,a7 ,if there is at least a #aj percent 7or #aj1jjj7 cumulative increase with respect to the wholesale acquisition cost 7or alternative cost measure specified by the ,secretary under paragraph 7#c77 of such drug during a calendar-year period beginning and ending within the lookback period that is the #e-year period preceding such applicable year4 7,b7 ,if there is at least a #be percent 7or #be1jjj7 cumulative increase with respect to the wholesale acquisition cost 7or such alternative cost measure7 of such drug during any three-calendar-year period beginning and ending within such lookback period4 7,c7 ,in the case of such a drug that is first covered under title ,,xviii with respect to such applicable year1 if the estimated cost or spending under such title per individual or per user of such drug 7as estimated by the ,secretary7 for such applicable year 7or per course of treatment in such applicable year1 as defined by the ,secretary7 is at least #bf1jjj4 7#b7 ,indexing dollar amounts ,the dollar amounts applied under paragraph 7#a7 for #bjbb and each subsequent year shall be the dollar amounts specified in such paragraph for the previous year increased by the annual percentage increase in the consumer price index 7all items2 ,u4,s4 city average7 as of ,september of such previous year4 ,if any amount established under paragraph 7#a71 after application of this paragraph1 for a year is not a multiple of #aj1 it shall be rounded to the nearest multiple of #aj4 7#c7 ,alternative to ,,wac ,the ,secretary may1 for purposes of making determinations under paragraph 7#a71 in addition to using the wholesale acquisition cost for an applicable drug1 use alternative cost measures of such drug1 or use such alternative cost measure if the wholesale acquisition cost is not available4 7#d7 ,exception ,a justification under subsection 7c7 shall not be required for a triggered ,,spike increase described in paragraph 7#a7 of an applicable drug of a manufacturer if-- 7,a7 there is any portion of the lookback period described in the respective subparagraph of such paragraph for such increase that is included within the lookback period for another triggered ,,spike increase 7or combination of such increases7 for which a justification is made under this section for such drug by such manufacturer2 or 7,b7 such increase is less than the wholesale acquisition cost 7or alternative cost measure specified by the ,secretary under paragraph 7#c77 of such drug during the calendar-year period described in paragraph 7#a77;,a7 or the three-calendar-year period described in paragraph 7#a77;,b71 as applicable1 for such increase1 increased by the percentage increase in the consumer price index for all urban consumers 7all items2 ,united ,states city average7 for the #ab-month period ending six months prior to the calendar-year period so described and for the #cf-month period ending six months prior to the three-calendar-year period so described1 respectively4 7#e7 ,unit determination ,for purposes of determining the wholesale acquisition cost in carrying out this section1 the ,secretary shall determine a unit 7such as a unit size7 to apply4 7#f7 ,public posting ,beginning with respect to #bjba1 the ,secretary shall publicly post on the ,internet website of the ,department of ,health and ,human ,services-- 7,a7 alternative percentages1 dollar amounts1 and lookback periods that1 if applied under paragraph 7#a71 would be projected to increase the number of applicable drugs for which a triggered ,,spike increase would occur for such year2 and 7,b7 the number of applicable drugs for which a triggered ,,spike increase would occur for such year of such an alternative percentage1 dollar amount1 or period were applied for such year4 7c7 ,justification described 7#a7 ,in general ,the justification described in this subsection1 with respect to a triggered ,,spike increase described in subsection 7b77#a7 of an applicable drug of a manufacturer1 is-- 7,a7 all of the information described in paragraph 7#b72 7,b7 all of the information and supporting documentation described in paragraph 7#c71 as applicable to the increase and drug2 and 7,c7 a certification described in paragraph 7#d74 7#b7 ,required information ,for purposes of paragraph 7#a71 the information described in this paragraph is the following3 7,a7 ,the individual factors that have contributed to the increase in the wholesale acquisition cost4 7,b7 ,an explanation of the role of each factor in contributing to such increase4 7#c7 ,information as applicable ,for purposes of paragraph 7#a71 the information and supporting documentation described in this paragraph is the following1 as applicable to the increase of the drug3 7,a7 ,total expenditures of the manufacturer on-- 7i7 materials and manufacturing for such drug2 7ii7 acquiring patents and licensing for each drug of the manufacturer2 and 7iii7 costs to purchase or acquire the drug from another company1 if applicable4 7,b7 ,the percentage of total expenditures of the manufacturer on research and development for such drug that was derived from ,federal funds4 7,c7 ,the total expenditures of the manufacturer on research and development for such drug4 7,d7 ,the total revenue and net profit generated from the applicable drug for each calendar year since drug approval4 7,e7 ,the total costs associated with marketing and advertising for the applicable drug4 7,f7 ,additional information specific to the manufacturer of the applicable drug1 such as-- 7i7 the total revenue and net profit of the manufacturer for the period of such increase1 as determined by the ,secretary2 7ii7 metrics used to determine executive compensation2 7iii7 total expenditures on-- 7,i7 drug research and development2 or 7,,ii7 clinical trials on drugs that failed to receive approval by the ,food and ,drug ,administration2 and 7iv7 any additional information related to drug pricing decisions of the manufacturer4 7,g7 ,any other relevant information and supporting documentation necessary to justify the triggering ,,spike increase4 7,h7 ,any other relevant information and supporting documentation1 as specified by the ,secretary4 7#d7 ,certification ,for purposes of paragraph 7#a71 the certification described in this paragraph is a certification1 that all such information and documentation is accurate and complete1 by one of the following3 7,a7 ,the chief executive officer of the manufacturer4 7,b7 ,the chief financial officer of the manufacturer4 7,c7 ,an individual who has delegated authority to sign for1 and who reports directly to1 such chief executive officer or chief financial officer4 7d7 ,timing 7#a7 ,notification ,not later than #fj days after the date on which the ,secretary makes the determination that there is a triggering ,,spike increase with respect to an applicable drug1 the ,secretary shall notify the manufacturer of the applicable drug of such determination4 7#b7 ,submission of justification ,not later than #ij days after the date on which a manufacturer receives a notification under paragraph 7#a71 subject to subsection 7b77#d71 the manufacturer shall submit to the ,secretary the justification required under subsection 7a71 including a summary of such justification1 in a form and manner specified by the ,secretary4 ,in specifying such form1 with respect to the summary required under the previous sentence1 the ,secretary shall provide that such summary shall be in an easily understandable format1 as specified by the ,secretary1 and shall permit the manufacturer to exclude proprietary information from such summary4 7#c7 ,posting on ,internet website ,not later than #cj days after receiving the complete justification under paragraph 7#b71 the ,secretary shall post on the ,internet website of the ,centers for ,medicare ,medicaid ,services the summary included for such justification4 7e7 ,penalties 7#a7 ,failure to submit timely justification ,if the ,secretary determines that a manufacturer has failed to submit a justification as required under this section1 including in accordance with the timing and form required1 with respect to an applicable drug1 the ,secretary shall apply a civil monetary penalty in an amount of #aj1jjj for each day the manufacturer has failed to submit such justification as so required4 7#b7 ,false information ,any manufacturer that submits a justification under this section that knowingly provides false information in such justification is subject to a civil monetary penalty in an amount not to exceed #ajj1jjj for each item of false information4 7#c7 ,application of procedures ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil monetary penalty under this subsection in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 ,civil monetary penalties imposed under this subsection are in addition to other penalties as may be prescribed by law4 7f7 ,definitions ,in this section3 7#a7 ,applicable drug 7,a7 ,in general ,subject to subparagraph 7,b71 the term applicable drug means1 with respect to a lookback period described in subsection 7b77#a71 a covered outpatient drug 7as defined in paragraph 7#b7 of section #aibg7k71 without application of paragraph 7#c7 of such section7 that is covered under title ,,xviii and is not a low cost drug4 7,b7 ,exclusion of low cost drugs ,for purposes of subparagraph 7,a71 not later than ,january #a1 #bjba1 the ,secretary shall specify a threshold 7such as a cost or spending threshold7 for identifying 7and shall identify7 low cost drugs to be excluded from the definition of the term applicable drug1 such as a drug that has a wholesale acquisition cost of less than #aj per unit or less than #ajj in average estimated expenditures under title ,,xviii per individual per year or per user of such drug per year4 ,for purposes of this section1 a drug shall not be considered specified as a low cost drug for a lookback period described in subsection 7b77#a7 with respect to a year unless such drug is identified as being below the specified threshold for the entirety of the lookback period4 7#b7 ,manufacturer ,the term manufacturer has the meaning given that term in section #ahdg;,a7c77#f77;,a74 7#c7 ,wholesale acquisition cost ,the term wholesale acquisition cost has the meaning given that term in section #ahdg;,a7c77#f77;,b74 4 7b7 ,reporting to the ,secretary of the ,treasury 7#a7 ,in general ,subpart ,a of part ,,iii of subchapter ,a of chapter #fa of the ,internal ,revenue ,code of #aihf is amended by inserting after section #fjci;,j the following new section3 #fjci,k4 ,drug price ,,spike increase reporting ,each manufacturer 7within the meaning of section #aabh,l of the ,social ,security ,act7 shall file a return 7as such time and in such form and manner as the ,secretary may provide7 showing for each year with respect to which such section applies all information and supporting documentation and the certification included within a justification reported by the manufacturer under subsection 7c77#a7 of such section4 4 7#b7 ,clerical amendment ,the table of sections for subpart ,a of part ,,iii of subchapter ,a of chapter #fa of such ,code is amended by inserting after the item relating to section #fjci;,j the following new item3 ,sec4 #fjci,k4 ,drug price ,,spike increase reporting4 4 #c4 ,requirement for manufacturers of certain drugs1 devices1 biologicals1 and medical supplies to report on product samples provided to certain health care providers 7a7 ,in general ,section #aabh;,g7a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g;h7a77 is amended by adding at the end the following new paragraph3 7#c7 ,certain product samples 7,a7 ,in general ,in addition to the requirements under paragraphs 7#a77;,a7 and 7#b71 on the #ijth day of each calendar year 7beginning with #bjbc71 any applicable manufacturer that provides a payment or other transfer of value that is a product sample described in subparagraph 7,b7 to any covered recipient 7or to an entity or individual at the request of1 or designated on behalf of1 such a covered recipient7 shall submit to the ,secretary1 in such electronic form as the ,secretary shall require1 the following information 7aggregated per each drug1 device1 biological1 or medical supply1 as applicable7 with respect to the preceding calendar year3 7i7 ,the total quantity of all such payments or other transfers of value provided to all covered recipients4 7ii7 ,the total value of all such payments or other transfers of value provided to all covered recipients4 7iii7 ,if applicable1 information described in clauses 7vii7 and 7viii7 of paragraph 7#a77;,a7 with respect to such a payment or other transfer of value4 7,b7 ,product sample described ,for purposes of subparagraph 7,a71 a product sample described in this subparagraph is a product sample that is not intended to be sold and is intended for patient use4 4 7b7 ,public availability of information ,section #aabh;,g7c77#a77;,c77ii7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g;h7c77#a77;,c77ii77 is amended-- 7#a7 by striking 7ii7 contains and inserting 7ii77,i7 with respect to information that is not information submitted under paragraph 7#c7 of subsection 7a71 contains2 7#b7 by striking 1 as applicable2 and inserting 1 as applicable2 and2 and 7#c7 by adding at the end the following new subclause3 7,,ii7 with respect to information submitted under paragraph 7#c7 of subsection 7a71 contains information that is presented by the name of the applicable manufacturer1 the total amount of all payments or other transfers of value described in such paragraph provided to all covered recipients1 the total value of all such payments or other transfers of value provided to all covered recipients1 and the name of the covered drug1 device1 biological1 or medical supply1 as applicable2 4 7c7 ,conforming amendment ,section #aabh;,g7e77#aj77;,b77ii7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g;h7e77#aj77;,b77ii77 is amended by striking ,product samples and inserting ,except for purposes of paragraph 7#c7 of subsection 7a71 product samples4 7d7 ,reporting to the ,secretary of the ,treasury 7#a7 ,in general ,subpart ,a of part ,,iii of subchapter ,a of chapter #fa of the ,internal ,revenue ,code of #aihf1 as amended by section #b1 is further amended by inserting after section #fjci,k the following new section3 #fjci,l4 ,product samples of applicable manufacturers ,each applicable manufacturer 7within the meaning of section #aabh;,g7a77#c7 of the ,social ,security ,act7 shall file a return 7as such time and in such form and manner as the ,secretary may provide7 showing for each year to which such section applies-- 7#a7 the amount described in section #aabh;,g7a77#c77;,a77ii7 of such ,act with respect to such year1 and 7#b7 the portion of such amount for which a deduction was claimed under section #afb4 4 7#b7 ,clerical amendment ,the table of sections for subpart ,a of part ,,iii of subchapter ,a of chapter #fa of such ,code1 as amended by section #b1 is further amended by inserting after the item relating to section #fjci,k the following new item3 ,sec4 #fjci,l4 ,product samples of applicable manufacturers4 4 #d4 ,analysis and report on inpatient hospital drug costs 7a7 ,analysis ,the ,secretary of ,health and ,human ,services shall conduct an analysis that1 to the extent practicable-- 7#a7 focuses on drugs that are furnished in the inpatient setting2 7#b7 includes data on inpatient hospital drug costs1 ,medicare spending1 volume1 and spending per admission2 7#c7 considers trends in inpatient hospital drug costs1 such as trends by hospital size1 classification of urban or rural1 whether the hospital is a teaching hospital1 or other categorization2 and 7#d7 examines the impact of drug shortages on services that are furnished in an inpatient hospital setting4 ,in conducting such analysis1 the ,secretary may conduct hospital surveys1 use data from hospital cost reports1 or use other data as determined by the ,secretary4 7b7 ,report ,not later than ,january #a1 #bjba1 the ,secretary shall submit to the ,committee on ,ways and ,means of the ,house of ,representatives and the ,finance ,committee of the ,senate a report on drug costs in the inpatient hospital setting1 including the analyses described in paragraphs 7#a7 through 7#d7 of subsection 7a74 7c7 ,funding ,for purposes of carrying out this section1 there shall be transferred to the ,secretary #c1jjj1jjj from the ,federal ,hospital ,insurance ,trust ,fund under section #ahag of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;i74 #e4 ,public disclosure of drug discounts ,section #aaej;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;b-#bc7 is amended-- 7#a7 in subsection 7c71 in the matter preceding paragraph 7#a71 by inserting 7other than as permitted under subsection 7e77 after disclosed by the ,secretary2 and 7#b7 by adding at the end the following new subsection3 7e7 ,public availability of certain information 7#a7 ,in general ,in order to allow the comparison of ,p,b,ms' ability to negotiate rebates1 discounts1 and price concessions and the amount of such rebates1 discounts1 and price concessions that are passed through to plan sponsors1 beginning ,january #a1 #bjbj1 the ,secretary shall make available on the ,internet website of the ,department of ,health and ,human ,services the information with respect to the second preceding calendar year provided to the ,secretary on generic dispensing rates 7as described in paragraph 7#a7 of subsection 7b77 and information provided to the ,secretary under paragraphs 7#b7 and 7#c7 of such subsection that1 as determined by the ,secretary1 is with respect to each ,,pbm4 7#b7 ,availability of data ,in carrying out paragraph 7#a71 the ,secretary shall ensure the following3 7,a7 ,confidentiality ,the information described in such paragraph is displayed in a manner that prevents the disclosure of information on rebates1 discounts1 and price concessions1 with respect to an individual drug or an individual plan4 7,b7 ,class of drug ,the information described in such paragraph is made available by class of drug1 using an existing classification system1 but only if the class contains such number of drugs1 as specified by the ,secretary1 to ensure confidentiality of proprietary information or other information that is prevented to be disclosed under subparagraph 7,a74 4 #f4 ,requiring certain manufacturers to report drug pricing information with respect to drugs under the ,medicare program 7a7 ,in general ,section #ahdg;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7 is amended-- 7#a7 in subsection 7b7-- 7,a7 in paragraph 7#b77;,a71 by inserting or subsection 7f77#b71 as applicable before the period at the end2 7,b7 in paragraph 7#c71 in the matter preceding subparagraph 7,a71 by inserting or subsection 7f77#b71 as applicable1 before determined by2 and 7,c7 in paragraph 7#f77;,a71 in the matter preceding clause 7i71 by inserting or subsection 7f77#b71 as applicable1 before determined by2 and 7#b7 in subsection 7f7-- 7,a7 by striking ,for requirements and inserting the following3 7#a7 ,in general ,for requirements 2 and 7,b7 by adding at the end the following new paragraph3 7#b7 ,manufacturers without a rebate agreement under title ,,xix 7,a7 ,in general ,in the case of a manufacturer of a drug or biological described in subparagraph 7,c71 7,e71 or 7,g7 of section #ahdb7o77#a7 or in clause 7ii7 or 7iii7 of section #ahha7;b77#ad77;,b7 that does not have a rebate agreement in effect under section #aibg1 for calendar quarters beginning on or after ,january #a1 #bjbj1 such manufacturer shall report to the ,secretary the information described in subsection 7b77#c77;,a77iii7 of such section #aibg with respect to such drug or biological in a time and manner specified by the ,secretary4 7,b7 ,audit ,information reported under subparagraph 7,a7 is subject to audit by the ,inspector ,general of the ,department of ,health and ,human ,services4 7,c7 ,verification ,the ,secretary may survey wholesalers and manufacturers that directly distribute drugs described in subparagraph 7,a71 when necessary1 to verify manufacturer prices and manufacturer's average sales prices 7including wholesale acquisition cost7 if required to make payment reported under subparagraph 7,a74 ,the ,secretary may impose a civil monetary penalty in an amount not to exceed #ajj1jjj on a wholesaler1 manufacturer1 or direct seller1 if the wholesaler1 manufacturer1 or direct seller of such a drug refuses a request for information about charges or prices by the ,secretary in connection with a survey under this subparagraph or knowingly provides false information4 ,the provisions of section #aabh;,a 7other than subsections 7a7 7with respect to amounts of penalties or additional assessments7 and 7b77 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 #aabh;,a7a74 7,d7 ,confidentiality ,notwithstanding any other provision of law1 information disclosed by manufacturers or wholesalers under this paragraph 7other than the wholesale acquisition cost for purposes of carrying out this section7 is confidential and shall not be disclosed by the ,secretary in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler1 except-- 7i7 as the ,secretary determines to be necessary to carry out this section 7including the determination and implementation of the payment amount71 or to carry out section #ahdg;,b2 7ii7 to permit the ,comptroller ,general to review the information provided2 and 7iii7 to permit the ,director of the ,congressional ,budget ,office to review the information provided4 4 7b7 ,enforcement ,section #ahdg;,a such ,act 7#db ,u4,s4,c4 #aciew-#c;a7 is further amended-- 7#a7 in subsection 7d77#d7-- 7,a7 in subparagraph 7,a71 by striking ,in general and inserting ,misrepresentation2 7,b7 in subparagraph 7,b71 by striking subparagraph 7,b7 and inserting subparagraph 7,a71 7,b71 or 7,c72 7,c7 by redesignating subparagraph 7,b7 as subparagraph 7,d72 and 7,d7 by inserting after subparagraph 7,a7 the following new subparagraphs3 7,b7 ,failure to provide timely information ,if the ,secretary determines that a manufacturer described in subsection 7f77#b7 has failed to report on information described in section #aibg7;b77#c77;,a77iii7 with respect to a drug or biological in accordance with such subsection1 the ,secretary shall apply a civil money penalty in an amount of #aj1jjj for each day the manufacturer has failed to report such information and such amount shall be paid to the ,treasury4 7,c7 ,false information ,any manufacturer required to submit information under subsection 7f77#b7 that knowingly provides false information is subject to a civil money penalty in an amount not to exceed #ajj1jjj for each item of false information4 ,such civil money penalties are in addition to other penalties as may be prescribed by law4 2 and 7#b7 in subsection 7c77#f77;,a71 by striking the period at the end and inserting 1 except that1 for purposes of subsection 7f77#b71 the ,secretary may1 if the ,secretary determines appropriate1 exclude repackagers of a drug or biological from such term44 7c7 ,report ,not later than ,january #a1 #bjba1 the ,inspector ,general of the ,department of ,health and ,human ,services shall assess and submit to ,congress a report on the accuracy of average sales price information submitted by manufacturers under section #ahdg;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a74 ,such report shall include any recommendations on how to improve the accuracy of such information4