,i  #aag? ,,congress  #a/ ,session  ,h4 
,r4 #dhaa  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,july #bi1 #bjba,mr4  
,doggett 7= himself1 ,mr4 ,bey]1 ,mr4   
,blum5au]1 ,mr4 ,b[man1 ,ms4 ,bu%1 ,mr4 
,c>twright1 ,mr4 ,ca/ro ( ,texas1 ,mr4  
,cicill9e1 ,mr4 ,cleav]1 ,mr4 ,coh51    
,mr4 ,de,fazio1 ,ms4 ,de,lauro1 ,mrs4   
,d+ell1 ,ms4 ,escob>1 ,mr4 ,espaillat1  
,mr4 ,g>am5di1 ,mr4 ,g>ca ( ,ill9ois1   
,mr4 ,gre5 ( ,texas1 ,mr4 ,grijalva1    
,ms4 ,jackson ,lee1 ,ms4 ,jayapal1 ,mr4 
,kahele1 ,ms4 ,kaptur1 ,mr4 ,khanna1    
,mr4 ,kim ( ,new ,j]sey1 ,mr4           
,kri%namoor?i1 ,mr4 ,langev91 ,ms4 ,lee 
( ,cali=nia1 ,mr4 ,lev9 ( ,mi*igan1 ,mr4
 ,l[5?al1 ,mr4 ,mc,nerney1 ,mr4 ,mfume1 
,mr4 ,nadl]1 ,mr4 ,neguse1 ,ms4 ,norton1
 ,ms4 ,ocasio-,cortez1 ,ms4 ,om>1 ,mr4  
,p]lmutt]1 ,ms4 ,p+ree1 ,mr4 ,pocan1    
,ms4 ,port]1 ,ms4 ,pressley1 ,mr4       
,rask91 ,ms4 ,s*ak[sky1 ,mr4 ,%]man1    
,mr4 ,takano1 ,mr4 ,?ompson (           
,mississippi1 ,ms4 ,titus1 ,ms4 ,tlaib1 
,mr4 ,torres ( ,new ,york1 ,mr4 ,vela1  

,mr4 ,y>mu?1 ,ms4 ,leg] ,f]n&ez1 ,ms4   
,moore ( ,wiscons91 ,ms4 ,wat]s1 ,ms4   
,*u1 ,ms4 ,newman1 & ,ms4 ,velzquez7    
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,en]gy & ,comm]ce1 & 9 
addition to ! ,committees on ,ways &    
,means1 ,ov]sight & ,re=m1 ,vet]ans'    
,affairs1 & ,arm$ ,s]vices1 = a p]iod to
 be subsequ5tly det]m9$ by ! ,speak]1 9 
ea* case = consid]ation ( su* provisions
 z fall )9 ! jurisdiction ( ! committee 
conc]n$  ,a ,,bill  ,to am5d title      
,,xviii ( ! ,social ,security ,act to   
require ! ,secret>y ( ,heal? & ,human   
,s]vices to negotiate prices ( drugs    
furni%$ "u ! ,m$ic>e program1 & = o!r   
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,m$ic>e ,negotiation &     
,competitive ,lic5s+ ,act ( #bjba4  #b4 
,requir+ ! ,secret>y ( ,heal? & ,human  
,s]vices to negotiate prices ( drugs    
furni%$ "u ! ,m$ic>e program  7a7 ,"p ,d
 ,section #ahfj;,d-#aa ( ! ,social      
,security ,act 7#db ,u4,s4,c4           
#aciew-#aaa7 is am5d$ by /rik+          

subsection 7i7 & ins]t+ ! foll[+ new    
subsection3  7i7 ,negotiation ( l[] drug
 prices  7#a7 ,9 g5]al ,not)/&+ any o!r 
provision ( law1 ! ,secret>y %all1 =    
plan ye>s beg9n+ on or aft] ! date ( !  
enactm5t ( ?is subsection1 negotiate )  
ph>maceutical manufactur]s ! negotiat$  
prices 7includ+ disc\nts1 rebates1 & o!r
 price concessions7 t may be *>g$ to    
,,pdp sponsors & ,,ma organizations dur+
 a negotiat$ price p]iod 7z specifi$ by 
! ,secret>y7 = specifi$ cov]$ "p ,d     
drugs = su* plan ye> = "p ,d eligible   
individuals :o are enroll$ "u a         
prescription drug plan or "u an         
,,ma-,,pd plan4  7#b7 ,negotiation      
consid]ations  7,a7 ,factors ,9         
negotiat+ su* prices "u p>agraph 7#a71 !
 ,secret>y %all take into acc\nt !      
foll[+ factors3 7i7 ,! comp>ative       
cl9ical effectiv5ess & co/ effectiv5ess1
 :5 available f an imp>tial s\rce1 ( su*
 drug4  7ii7 ,! budget>y impact (       
provid+ cov]age ( su* drug4  7iii7 ,!   
numb] ( simil>ly effective drugs or     

alt]native treatm5t regim5s = ea*       
approv$ use ( su* drug4  7iv7 ,!        
associat$ f9ancial burd5 on pati5ts t   
utilize su* drug4  7v7 ,! associat$     
unmet pati5t ne$ = su* drug4  7vi7 ,!   
total rev5ues f global sales obta9$ by !
 manufactur] = su* drug & ! associat$   
inve/m5t 9 rese>* & developm5t ( su*    
drug by ! manufactur]4  7,b7 ,assessm5t 
( factors ,= purposes ( assess+ !       
factors describ$ 9 subp>agraph 7,a7 )   
respect to a cov]$ "p ,d drug1 !        
,secret>y %all1 z soon z practicable1   
e/abli% a value assessm5t process       
consi/+ ( /&>diz$ measures = su*        
factors4 ,) respect to a negotiation t  
occurs be=e ! ,secret>y e/abli%es su* a 
process1 ! ,secret>y may use su* o!r    
assessm5ts z ! ,secret>y det]m9es       
appropriate 7su* z assessm5ts us$ )     
respect to asc]ta9+ ! value ( drugs by !
 ,secret>y ( ,vet]ans ,affairs1 !       
,pati5t-,c5t]$ ,outcomes ,rese>*        
,in/itute1 ! ,in/itute = ,cl9ical &     
,economic ,review1 & o!r c\ntries74     

7#c7 ,specifi$ cov]$ "p ,d drugs ,9 ?is 
subsection1 ! t]m specifi$ cov]$ "p ,d  
drug means1 ) respect to a negotiat$    
price p]iod beg9n+ dur+-- 7,a7 ! fir/   
plan ye> beg9n+ on or aft] ! date ( !   
enactm5t ( ?is subsection1 a cov]$ "p ,d
 drug t is a sole s\rce drug 7z def9$ 9 
section #ahcc7t77#ad77;,f77i77-- 7i7 )  
respect to :i* gross rev5ues = ! prec$+ 
plan ye> 7 #ajj1jjj1jjj or great]2 or   
7ii7 t conta9s an active +r$i5t t 0 fir/
 approv$ by ! ,adm9i/rator = ,food &    
,drugs n lat] ?an #aj ye>s prior to !   
beg9n+ ( su* fir/ plan ye>2  7,b7 !     
second plan ye> beg9n+ on or aft] ! date
 ( ! enactm5t ( ?is subsection1 a cov]$ 
"p ,d drug t is a sole s\rce drug 7z s  
def9$7 or a biosimil> biological        
product2  7,c7 ! ?ird plan ye> beg9n+ on
 or aft] ! date ( ! enactm5t ( ?is      
subsection1 a cov]$ "p ,d drug-- 7i7 t  
is describ$ 9 subp>agraph 7,b72 or  7ii7
 ) respect to :i*1 dur+ ! prec$+ plan   
ye>1 few] ?an #c manufactur]s 7o!r ?an !
 manufactur] ( su* drug7 m>ket$ a g5]ic 

v]sion ( su* drug2 &  7,d7 ! f\r? plan  
ye> beg9n+ on or aft] ! date ( !        
enactm5t ( ?is subsection or a subsequ5t
 plan ye>1 a cov]$ "p ,d drug4  7#d7    
,negotiat$ price limitations &          
f9alization ,! negotiat$ price ( ea*    
specifi$ cov]$ "p ,d drug = a negotiat$ 
price p]iod-- 7,a7 may n be less ?an an 
am\nt necess>y to all[ su* manufactur]  
to rec\p su* manufactur]'s rese>* &     
developm5t co/s associat$ ) su* drug2   
7,b7 subject to subp>agraph 7,a71 may n 
exce$ #aaj p]c5t ( ! m$ian price ( su*  
drug = ! prec$+ plan ye> 9 ! #aj        
c\ntries ( ! ,organisation = ,economic  
,coop]ation & ,developm5t ) ! highe/    
gross dome/ic product & ) a p] capita   
income t is n less ?an half ! p] capita 
income ( ! ,unit$ ,/ates = su* prec$+   
plan ye>2 &  7,c7 %all be f9aliz$ n lat]
 ?an #cj days be=e a ,,pdp sponsor is   
requir$ to submit in=mation describ$ 9  
subsection 7b77#b7 = ! fir/ plan ye> 9  
su* negotiat$ price p]iod4  7#e7        
,competitive lic5s+ au?ority  7,a7 ,9   

g5]al ,not)/&+ any exclusivity "u clause
 7iii7 or 7iv7 ( section                
#eje7;j77#e77;,f7 ( ! ,f$]al ,food1     
,drug1 & ,cosmetic ,act1 clause 7iii7 or
 7iv7 ( section #eje7;c77#c77;,e7 ( su* 
,act1 section #cea7k77#g77;,a7 ( !      
,public ,heal? ,s]vice ,act1 or section 
#ebg7;a7 ( ! ,f$]al ,food1 ,drug1 &     
,cosmetic ,act1 or by an ext5sion ( su* 
exclusivity "u section #eje;,a ( su*    
,act or section #eje;,e ( su* ,act1 &   
any o!r provision ( law t provides =    
m>ket exclusivity 7or ext5sion ( m>ket  
exclusivity7 ) respect to a drug1 9 !   
case t ! ,secret>y is unable to         
successfully negotiate an appropriate   
price = a specifi$ cov]$ "p ,d drug = a 
negotiat$ price p]iod1 ! ,secret>y %all 
au?orize ! use ( any pat5t1 cl9ical     
trial data1 or o!r exclusivity grant$ by
 ! ,f$]al gov]nm5t ) respect to su* drug
 z ! ,secret>y det]m9es appropriate =   
purposes ( manufactur+ su* drug = sale  
"u a ,f$]al heal? c>e program1 !        
insurance program "u *apt] #hi ( title  

#e1 ,unit$ ,/ates ,code1 or a gr\p heal?
 plan or heal? insurance cov]age (f]$ by
 a heal? insurance issu]4 ,any entity   
mak+ use ( a competitive lic5se to use  
pat5t1 cl9ical trial data1 or o!r       
exclusivity "u ?is section %all provide 
to ! manufactur] hold+ su* exclusivity  
reasonable comp5sation1 z det]m9$ by !  
,secret>y bas$ on ! foll[+ factors3 7i7 
,! risk-adju/$ value ( any ,f$]al       
gov]nm5t subsidies & inve/m5ts 9 rese>* 
& developm5t us$ to support ! developm5t
 ( su* drug4  7ii7 ,! risk-adju/$ value 
( any inve/m5t made by su* manufactur] 9
 ! rese>* & developm5t ( su* drug4      
7iii7 ,! impact ( ! price1 includ+      
lic5se comp5sation paym5ts1 on meet+ !  
m$ical ne$ ( all pati5ts4  7iv7 ,!      
relation%ip betwe5 ! price ( su* drug1  
includ+ comp5sation paym5ts1 & ! heal?  
b5efits ( su* drug4  7v7 ,o!r relevant  
factors det]m9$ appropriate by !        
,secret>y to provide reasonable         
comp5sation4  7,b7 ,reasonable          
comp5sation  7i7 ,limitations           

,reasonable comp5sation describ$ 9      
subp>agraph 7,a7 ) respect to a specifi$
 cov]$ outpati5t drug & a plan ye> may n
 be made 9 an am\nt-- 7,i7 less ?an an  
am\nt necess>y to all[ su* manufactur]  
to rec\p su* manufactur]'s rese>* &     
developm5t co/s associat$ ) su* drug2 & 
7,,ii7 subject to subclause 7,i71 great]
 ?an #ab p]c5t ( ! negotiat$ price set  
by ! ,secret>y = su* drug & su* plan    
ye>4  7ii7 ,recov]y ,! manufactur]      
describ$ 9 subp>agraph 7,a7 may seek    
recov]y aga9/ ! ,unit$ ,/ates 9 ! ,unit$
 ,/ates ,c\rt ( ,f$]al ,claims4  7,c7   
,int]im p]iod ,until #a ye> aft] a drug 
describ$ 9 subp>agraph 7,a7 is approv$  
"u section #eje7;j7 ( ! ,f$]al ,food1   
,drug1 & ,cosmetic ,act or section      
#cea7k7 ( ! ,public ,heal? ,s]vice ,act 
& is provid$ "u lic5se issu$ by !       
,secret>y "u su* subp>agraph1 ,,pdp     
plans & ,,ma-,,pd plans %all n pay m =  
su* drug ?an #aaj p]c5t ( ! m$ian ( !   
prices available1 dur+ ! mo/ rec5t      
#ab-mon? p]iod = :i* data is available  

prior to ! beg9n+ ( su* negotiat$ price 
p]iod1 f ! manufactur] to any :olesal]1 
retail]1 provid]1 heal? ma9t5ance       
organization1 nonpr(it entity1 or       
gov]nm5tal entity 9 ! t5 ,organisation =
 ,economic ,coop]ation & ,developm5t    
c\ntries t h ! l>ge/ gross dome/ic      
product ) a p] capita income t is n less
 ?an half ! p] capita income ( ! ,unit$ 
,/ates4  7,d7 ,au?orization = secret>y  
to procure drugs directly  7i7 ,9 g5]al 
,! ,secret>y may procure a drug         
manufactur$ pursuant to a competitive   
lic5se "u subp>agraph 7,a7 = purposes ( 
?is "p or pursuant to a ,f$]al program  
lic5se "u subp>agraph 7,c77ii7 =        
purposes ( a ,f$]al program directly f !
 entity manufactur+ ! drug pursuant to  
su* a lic5se4  7ii7 ,cl>ification reg>d+
 application ( buy am]ican act ,9 ! case
 :]e ! ,secret>y procures a drug "u ?is 
subp>agraph1 ! provisions ( *apt] #hc ( 
title #da1 ,unit$ ,/ates ,code 7commonly
 ref]r$ to z ! ,buy ,am]ican ,act7 %all 
apply4  7,e7 ,priority = u4s4           

manufactur]s 9 au?oriz+ competitive     
lic5ses ,9 au?oriz+ a competitive lic5se
 "u ?is p>agraph1 ! ,secret>y-- 7i7 %all
 give pref]5ce to entities t ! ,secret>y
 det]m9es h ! highe/ safety & security  
/&>ds2 &  7ii7 may give priority to     
entities t w manufacture su* drug 9 !   
,unit$ ,/ates4  7#f7 ,,fda review (     
lic5s$ drug applications ,! ,secret>y   
%all prioritize review ( applications "u
 section #eje7;j7 ( ! ,f$]al ,food1     
,drug1 & ,cosmetic ,act = drugs lic5s$  
"u p>agraph 7#c77;,a74  7#g7            
,prohibition ( anticompetitive behavior 
,no drug manufactur] may engage 9       
anticompetitive behavior ) ano!r        
manufactur] t may int]f]e ) ! issuance &
 implem5tation ( a competitive lic5se or
 run contr>y to public policy4  7#h7    
,requir$ report+ ,! ,secret>y may       
require ph>maceutical manufactur]s or   
any o!r entity to disclose to !         
,secret>y su* in=mation t ! ,secret>y   
det]m9es necess>y = purposes ( c>ry+ out
 ?is subsection4  7#i7 ,cl>ification    

,no?+ 9 ?is subsection %all be con/ru$ z
 prev5t+ ! sponsor ( a prescription drug
 plan or an organization (f]+ an        
,,ma-,,pd plan f obta9+ a disc\nt or    
r$uction ( ! price = a cov]$ "p ,d drug 
bel[ ! price negotiat$ by ! ,secret>y4  
7#aj7 ,publication ( negotiat$ prices & 
contract t]ms ,! ,secret>y %all make    
available on a public website ! price   
negotiat$ "u ?is subsection1 & any      
contract t]ms associat$ ) su* price1 )  
respect to ea* specifi$ cov]$ "p ,d     
drug4  4  7b7 ,"p ,b  7#a7 ,9 g5]al     
,section #ahdb7o7 ( ! ,social ,security 
,act 7#db ,u4,s4,c4 #acieu7o77 is am5d$ 
by add+ at ! end ! foll[+ new p>agraph3 
7#h7 7,a7 ,not)/&+ any prec$+ provision 
( ?is subsection1 9 ! case ( a drug or  
biological describ$ 9 p>agraph 7#a7     
furni%$ dur+ a negotiat$ price p]iod    
beg9n+ on or aft] ,janu>y #a ( ! fir/   
ye> beg9n+ on or aft] ! date ( !        
enactm5t ( ?is p>agraph1 ! am\nt payable
 "u ?is "p = su* drug or biological %all
 be equal to ! negotiat$ price = su*    

drug or biological & p]iod1 z e/abli%$  
pursuant to subp>agraph 7,b74  7,b7 ,!  
provisions ( section #ahfj;,d-#aa7;i7   
%all be appli$ to ! negotiation ( a     
negotiat$ price = a drug or biological  
describ$ 9 subp>agraph 7,a7 & a         
negotiat$ price p]iod 9 a simil> mann]  
7z det]m9$ by ! ,secret>y7 z su*        
provisions apply ) respect to !         
negotiation ( a negotiat$ price = a     
specifi$ "p ,d drug = a negotiat$ price 
p]iod "u su* section4  4  7#b7          
,application to ,,ma ,section #aheb ( ! 
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#bb7 is am5d$ by add+ at ! end ! 
foll[+ new subsection3  7o7 ,limitation 
on reimbursem5t = c]ta9 drugs ,9 ! case 
( a drug or biological furni%$ dur+ a   
negotiat$ price p]iod 7z def9$ =        
purposes ( section #ahdb7o77#h77 = :i*  
paym5t may be made "u su* section1 !    
total reimbursem5t = su* drug or        
biological made by an ,m$ic>e ,advantage
 plan may n exce$ ! negotiat$ price =   
su* drug or biological & p]iod e/abli%$ 

pursuant to su* section4  4  #c4        
,id5tification ( prescription drug price
 spikes  7a7 ,def9itions ,9 ?is section3
 7#a7 ,applicable entity ,! t]m         
applicable entity means ! hold] ( an    
application approv$ "u subsection 7c7 or
 7j7 ( section #eje ( ! ,f$]al ,food1   
,drug1 & ,cosmetic ,act 7#ba ,u4,s4,c4  
#cee7 or ( a lic5se issu$ "u subsection 
7a7 or 7k7 ( section #cea ( ! ,public   
,heal? ,s]vice ,act 7#db ,u4,s4,c4 #bfb7
 = a drug describ$ 9 p>agraph 7#e77;,a74
  7#b7 ,av]age manufactur] price ,! t]m 
av]age manufactur] price-- 7,a7 has !   
same mean+ giv5 su* t]m "u section      
#aibg7k77#a7 ( ! ,social ,security ,act 
7#db ,u4,s4,c4 #acifr-#h7k77#a772 or    
7,b7 ) respect to a drug = :i* !re is no
 av]age manufactur] price z s def9$1 su*
 t]m %all mean ! :olesale acquisition   
co/ ( ! drug4  7#c7 ,comm]ce ,! t]m     
comm]ce has ! mean+ giv5 su* t]m 9      
section #d ( ! ,f$]al ,trade ,commission
 ,act 7#ae ,u4,s4,c4 #dd74  7#d7        
,inspector ,g5]al ,! t]m ,inspector     

,g5]al means ! ,inspector ,g5]al ( !    
,dep>tm5t ( ,heal? & ,human ,s]vices4   
7#e7 ,prescription drug  7,a7 ,9 g5]al  
,! t]m prescription drug means any drug 
7z def9$ 9 section #bja7;g7 ( ! ,f$]al  
,food1 ,drug1 & ,cosmetic ,act 7#ba     
,u4,s4,c4 #cba7;g7771 includ+ a         
comb9ation product ^: prim>y mode (     
action is det]m9$ "u section #ejc7;g7 ( 
su* ,act 7#ba ,u4,s4,c4 #cec7;g77 to be 
t ( a drug1 & t-- 7i7 is subject to     
section #ejc7;b77#a7 ( ! ,f$]al ,food1  
,drug1 & ,cosmetic ,act 7#ba ,u4,s4,c4  
#cec7;b77#a772 &  7ii7 is cov]$ by a    
,f$]al heal? c>e program 7z def9$ 9     
section #aabh;,b7f7 ( ! ,social         
,security ,act 7#db ,u4,s4,c4           
#acbj;a-#g;b7f7774  7,b7 ,treatm5t (    
re=mulat$ drugs ,= purposes ( ?is       
section1 a prescription drug ) respect  
to :i* ! ,secret>y ( ,heal? & ,human    
,s]vices has approv$ any m9or           
re=mulation t does n produce a mean+ful 
!rapeutic b5efit1 ! drug t 0 approv$    
prior to any su* re=mulation & ! drug ) 

any su* re=mulation %all be consid]$ "o 
prescription drug4  7#f7 ,price spike   
7,a7 ,9 g5]al ,! t]m price spike means  
an increase 9 ! av]age manufactur] price
 9 comm]ce ( a prescription drug = :i* !
 price spike p]c5tage is equal to or    
great] ?an applicable price increase    
all[ance4  7,b7 ,price spike p]c5tage ,!
 price spike p]c5tage is ! p]c5tage 7if 
any7 by :i*-- 7i7 ! av]age manufactur]  
price ( a prescription drug 9 comm]ce = 
! cal5d> ye>2 exce$s  7ii7 ! av]age     
manufactur] price ( su* prescription    
drug 9 comm]ce = ! cal5d> ye> prec$+ su*
 ye>4  7,c7 ,applicable price increase  
all[ance ,! applicable price increase   
all[ance = any cal5d> ye> is ! p]c5tage 
7r\nd$ to ! ne>e/ "o-t5? ( #a p]c5t7 by 
:i* ! ,c-,,cpi-,u 7z def9$ 9 section    
#a7;f77#f7 ( ! ,int]nal ,rev5ue ,code ( 
#aihf7 = t ye> exce$s ! ,c-,,cpi-,u = ! 
prec$+ cal5d> ye>4  7#g7 ,price spike   
rev5ue  7,a7 ,9 g5]al ,! price spike    
rev5ue = any cal5d> ye> is an am\nt     
equal to-- 7i7 ! gross price spike      

rev5ue1 m9us  7ii7 ! adju/m5t am\nt4    
7,b7 ,gross price spike rev5ue ,! gross 
price spike rev5ue = any cal5d> ye> is  
an am\nt equal to ! product (-- 7i7 an  
am\nt equal to ! diff]5ce betwe5 clause 
7i7 ( p>agraph 7#f77;,b7 & clause 7ii7 (
 su* p>agraph2 &  7ii7 ! total numb] (  
units ( ! prescription drug :i* 7 sold 9
 comm]ce 9 su* cal5d> ye>4  7,c7        
,adju/m5t am\nt ,! adju/m5t am\nt is !  
am\nt1 if any1 ( ! gross price spike    
rev5ue :i* ! ,inspector ,g5]al has      
det]m9$ is due solely to an increase 9 !
 co/ ( ! inputs necess>y to manufacture 
! prescription drug subject to ! price  
spike4  7b7 ,submission by ph>maceutical
 companies ( in=mation to ,inspector    
,g5]al  7#a7 ,9 g5]al ,= ea*            
prescription drug1 ! applicable entity  
%all submit to ! ,inspector ,g5]al a    
qu>t]ly report t includes ! foll[+3 7,a7
 ,= ea* prescription drug ( ! applicable
 entity-- 7i7 ! total numb] ( units ( ! 
prescription drug :i* 7 sold 9 comm]ce 9
 ! prec$+ cal5d> qu>t]2  7ii7 ! av]age &

 m$ian price p] unit ( su* prescription 
drug 9 comm]ce 9 ! prec$+ cal5d> qu>t]1 
disaggregated by mon?2 &  7iii7 ! gross 
rev5ues f sales ( su* prescription drug 
9 comm]ce 9 ! prec$+ cal5d> qu>t]4  7,b7
 ,su* in=mation relat$ to increas$ input
 co/s or public heal? consid]ations z ! 
applicable entity may wi% ! ,inspector  
,g5]al to consid] 9 mak+ a det]m9ation  
"u clause 7ii7 ( subsection 7c77#b77;,b7
 or an assessm5t 9 clause 7iii7 ( su*   
subsection = ! prec$+ cal5d> qu>t]4     
7,c7 ,su* in=mation relat$ to any       
anticipat$ increas$ input co/s = !      
subsequ5t cal5d> qu>t] z ! applicable   
entity may wi% ! ,inspector ,g5]al to   
consid] 9 mak+ a det]m9ation "u clause  
7ii7 ( subsection 7c77#b77;,b7 or an    
assessm5t 9 clause 7iii7 ( su*          
subsection = su* cal5d> qu>t]4  7#b7    
,p5alty = failure to submit  7,a7 ,9    
g5]al ,an applicable entity describ$ 9  
p>agraph 7#a7 t fails to submit         
in=mation to ! ,inspector ,g5]al reg>d+ 
a prescription drug1 z requir$ by su*   

p>agraph1 be=e ! date specifi$ 9        
p>agraph 7#c7 %all be liable = a civil  
p5alty1 z det]m9$ "u subp>agraph 7,b74  
7,b7 ,am\nt ( p5alty ,! am\nt ( ! civil 
p5alty %all be equal to ! product (--   
7i7 an am\nt1 z det]m9$ appropriate by !
 ,inspector ,g5]al1 :i* is-- 7,i7 n less
 ?an #j4e p]c5t ( ! gross rev5ues f     
sales ( ! prescription drug describ$ 9  
subp>agraph 7,a7 = ! prec$+ cal5d> ye>1 
&  7,,ii7 n great] ?an #a p]c5t ( !     
gross rev5ues f sales ( su* prescription
 drug = ! prec$+ cal5d> ye>1 &  7ii7 !  
numb] ( days 9 ! p]iod betwe5-- 7,i7 !  
applicable date specifi$ 9 p>agraph     
7#c71 &  7,,ii7 ! date on :i* !         
,inspector ,g5]al receives ! in=mation  
describ$ 9 p>agraph 7#a7 f ! applicable 
entity4  7#c7 ,submission deadl9e ,an   
applicable entity %all submit ea*       
qu>t]ly report describ$ 9 p>agraph 7#a7 
n lat] ?an ,janu>y #ag1 ,april #ah1     
,june #ae1 & ,septemb] #ae ( ea* cal5d> 
ye>4  7c7 ,assessm5t by ,inspector      
,g5]al  7#a7 ,9 g5]al ,n lat] ?an ! la/ 

day 9 ,febru>y ( ea* ye>1 ! ,inspector  
,g5]al1 9 consultation ) o!r relevant   
,f$]al ag5cies 7includ+ ! ,f$]al ,trade 
,commission71 %all-- 7,a7 complete an   
assessm5t ( ! in=mation ! ,inspector    
,g5]al receiv$ pursuant to subsection   
7b77#a7 ) respect to sales (            
prescription drugs 9 ! prec$+ cal5d>    
ye>2 &  7,b7 9 ! case ( any prescription
 drug :i* satisfies ! conditions        
describ$ 9 p>agraph 7#a7 or 7#b7 (      
subsection 7d71 submit a recomm5dation  
to ! ,secret>y ( ,heal? & ,human        
,s]vices t su* drug be exempt$ f        
application ( ! tax impos$ "u section   
#daib ( ! ,int]nal ,rev5ue ,code ( #aihf
 7z add$ by section #c ( ?is ,act7 = su*
 ye>4  7#b7 ,elem5ts ,! assessm5t       
requir$ by p>agraph 7#a77;,a7 %all      
include ! foll[+3 7,a7 ,id5tification ( 
ea* price spike relat+ to a prescription
 drug 9 ! prec$+ cal5d> ye>4  7,b7 ,=   
ea* price spike id5tifi$ "u subp>agraph 
7,a7-- 7i7 a det]m9ation ( ! price spike
 rev5ue2  7ii7 a det]m9ation reg>d+ !   

accuracy ( ! in=mation submitt$ by !    
applicable entity reg>d+ increas$ input 
co/s2 &  7iii7 an assessm5t ( !         
rationale ( ! applicable entity = !     
price spike4  7d7 ,exemption ( c]ta9    
drugs  7#a7 ,9 g5]al ,! ,secret>y (     
,heal? & ,human ,s]vices1 ^u            
recomm5dation ( ! ,inspector ,g5]al     
pursuant to subsection 7c77#a77;,b71 may
 exempt any prescription drug :i* has   
be5 subject to a price spike dur+ !     
prec$+ cal5d> ye> f application ( ! tax 
impos$ "u section #daib ( ! ,int]nal    
,rev5ue ,code ( #aihf = su* ye>1 if !   
,secret>y det]m9es t-- 7,a7 bas$ on     
in=mation submitt$ pursuant to          
subsection 7b77#a77;,b71 a =-cause price
 increase exemption %\ld apply2 or  7,b7
 7i7 ! prescription drug :i* has be5    
subject to a price spike has an av]age  
manufactur] price ( n great] ?an #aj = a
 #cj day supply2 &  7ii7 su* drug is    
m>ket$ by n less ?an #c o!r hold]s (    
applications approv$ "u subsection 7c7  
or 7j7 ( section #eje ( ! ,f$]al ,food1 

,drug1 & ,cosmetic ,act 7#ba ,u4,s4,c4  
#cee71 :]e su* applications approv$ "u  
su* subsection 7j7 use z a ref]5ce drug 
! drug s approv$ "u su* subsection 7c74 
7#b7 ,cl>ification ,9 consid]+1 "u      
p>agraph 7#a77;,a71 in=mation submitt$  
pursuant to subsection 7b77#a77;,b71 !  
,secret>y-- 7,a7 has ! discretion to    
det]m9e t su* in=mation does n w>rant a 
=-cause price increase exemption2 &     
7,b7 %all exclude f su* consid]ation any
 in=mation submitt$ by ! applicable     
entity ?reat5+ to curtail or limit      
production ( ! prescription drug if !   
,secret>y does n grant an exemption f ! 
application ( ! tax "u section #daib ( !
 ,int]nal ,rev5ue ,code ( #aihf4  7e7   
,inspector ,g5]al report to ,int]nal    
,rev5ue ,s]vice  7#a7 ,9 g5]al ,subject 
to p>agraph 7#c71 n lat] ?an ! la/ day 9
 ,febru>y ( ea* ye>1 ! ,inspector ,g5]al
 %all transmit to ! ,int]nal ,rev5ue    
,s]vice a report on ! f9d+s ( !         
,inspector ,g5]al ) respect to !        
in=mation ! ,inspector ,g5]al receiv$ "u

 subsection 7b77#a7 ) respect to !      
prec$+ cal5d> ye> & ! assessm5t c>ri$   
out by ! ,inspector ,g5]al "u subsection
 7c77#a77;,a7 ) respect to su*          
in=mation4  7#b7 ,cont5ts ,! report     
transmitt$ "u p>agraph 7#a7 %all include
 ! foll[+3 7,a7 ,! in=mation receiv$ "u 
subsection 7b77#a7 ) respect to ! prec$+
 cal5d> ye>4  7,b7 ,! price spikes      
id5tifi$ "u subp>agraph 7,a7 (          
subsection 7c77#b74  7,c7 ,! price spike
 rev5ue det]m9ations made "u subp>agraph
 7,b77i7 ( su* subsection4  7,d7 ,!     
det]m9ations & assessm5ts made "u       
clauses 7ii7 & 7iii7 ( subp>agraph 7,b7 
( su* subsection4  7#c7 ,notice &       
opportunity = he>+  7,a7 ,9 g5]al ,no   
report %all be transmitt$ to ! ,int]nal 
,rev5ue ,s]vice "u p>agraph 7#a7 9      
reg>ds to a prescription drug unless !  
,inspector ,g5]al has provid$ !         
applicable entity )-- 7i7 ! assessm5t ( 
su* drug "u subsection 7c77#a77;,a72 &  
7ii7 notice ( _! "r to a he>+ 9 reg>ds  
to su* assessm5t4  7,b7 ,notice ,!      

notice requir$ "u subp>agraph 7,a7 %all 
be provid$ to ! applicable entity n lat]
 ?an #cj days aft] completion ( !       
assessm5t "u subsection 7c77#a77;,a74   
7,c7 ,reque/ = he>+ ,subject to         
subp>agraph 7,e71 an applicable entity  
may reque/ a he>+ be=e ! ,secret>y (    
,heal? & ,human ,s]vices n lat] ?an #cj 
days aft] ! date on :i* ! notice "u     
subp>agraph 7,b7 is receiv$4  7,d7      
,completion ( he>+ ,9 ! case ( an       
applicable entity :i* reque/s a he>+    
pursuant to subp>agraph 7,c71 !         
,secret>y ( ,heal? & ,human ,s]vices    
%all1 n lat] ?an #ab mon?s aft] ! date  
on :i* ! assessm5t "u subsection        
7c77#a77;,a7 0 complet$ by ! ,inspector 
,g5]al-- 7i7 make a f9al det]m9ation 9  
reg>ds to ! accuracy ( su* assessm5t2 & 
7ii7 provide ! report describ$ 9        
p>agraph 7#b7 to ! ,int]nal ,rev5ue     
,s]vice4  7,e7 ,limitation ,an          
applicable entity may reque/ a he>+ "u  
subp>agraph 7,c7 ) respect to a p>ticul>
 prescription drug only once )9 a #e-ye>

 p]iod4  7#d7 ,publication  7,a7 ,9     
g5]al ,n lat] ?an ! la/ day 9 ,febru>y (
 ea* ye>1 subject to subp>agraph 7,b71 !
 ,inspector ,g5]al %all make ! report   
transmitt$ "u p>agraph 7#a7 available to
 ! public1 includ+ on ! ,int]net website
 ( ! ,inspector ,g5]al1 subject to      
subp>agraph 7,b74  7,b7 ,propriet>y     
in=mation ,! ,inspector ,g5]al %all     
ensure t any in=mation made public 9    
accordance ) subp>agraph 7,a7 excludes  
trade secrets & confid5tial comm]cial   
in=mation4  7f7 ,notification ,!        
,secret>y ( ! ,treasury1 9 conjunction )
 ! ,inspector ,g5]al1 %all notify1 at   
su* "t & 9 su* mann] z ! ,secret>y ( !  
,treasury %all provide1 ea* applicable  
entity 9 reg>d to any prescription drug 
:i* has be5 det]m9$ to h be5 subject to 
a price spike dur+ ! prec$+ cal5d> ye> &
 ! am\nt ( ! tax impos$ on su*          
applicable entity pursuant to section   
#daib ( ! ,int]nal ,rev5ue ,code (      
#aihf4  #d4 ,excise tax on prescription 
drugs subject to price spikes  7a7 ,9   

g5]al ,sub*apt] ,e ( *apt] #cb ( !      
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new section3  
#daib4 ,prescription drugs subject to   
price spikes  7a7 ,imposition ( tax     
7#a7 ,9 g5]al ,subject to p>agraph 7#c71
 = ea* taxable prescription drug sold by
 an applicable entity dur+ ! cal5d> ye>1
 !re is h]eby impos$ on su* entity a tax
 equal to ! great] (-- 7,a7 ! annual    
price spike tax = su* prescription drug1
 or  7,b7 subject to p>agraph 7#b71 !   
cumulative price spike tax = su*        
prescription drug4  7#b7 ,limitation ,9 
! case ( a taxable prescription drug =  
:i* ! applicable p]iod 7z det]m9$ "u    
subsection 7c77#b77;,e77i77 is less ?an 
#b cal5d> ye>s1 ! cumulative price spike
 tax %all n apply4  7#c7 ,exemption ,=  
any cal5d> ye> 9 :i* ! ,secret>y (      
,heal? & ,human ,s]vices has provid$ an 
exemption = a taxable prescription drug 
pursuant to section #c7;d7 ( ! ,m$ic>e  
,negotiation & ,competitive ,lic5s+ ,act
 ( #bjba1 ! am\nt ( ! tax det]m9$ "u    

p>agraph 7#a7 = su* drug or device = su*
 cal5d> ye> %all be r$uc$ to z]o4  7b7  
,annual price spike tax  7#a7 ,9 g5]al  
,! am\nt ( ! annual price spike tax %all
 be equal to ! applicable p]c5tage ( !  
price spike rev5ue receiv$ by !         
applicable entity on ! sale ( ! taxable 
prescription drug dur+ ! cal5d> ye>4    
7#b7 ,applicable p]c5tage ,= purposes ( 
p>agraph 7#a71 ! applicable p]c5tage    
%all be equal to-- 7,a7 9 ! case ( a    
taxable prescription drug :i* has be5   
subject to a price spike p]c5tage great]
 ?an ! applicable price increase        
all[ance 7z def9$ 9 section             
#c7;a77#f77;,c7 ( ! ,m$ic>e ,negotiation
 & ,competitive ,lic5s+ ,act ( #bjba7 b 
less ?an #ae p]c5t1 #ej p]c5t1  7,b7 9 !
 case ( a taxable prescription drug :i* 
has be5 subject to a price spike        
p]c5tage equal to or great] ?an #ae     
p]c5t b less ?an #bj p]c5t1 #ge p]c5t1 &
  7,c7 9 ! case ( a taxable prescription
 drug :i* has be5 subject to a price    
spike p]c5tage equal to or great] ?an   

#bj p]c5t1 #ajj p]c5t4  7c7 ,cumulative 
price spike tax  7#a7 ,9 g5]al ,! am\nt 
( ! cumulative price spike tax %all be  
equal to ! applicable p]c5tage ( !      
cumulative price spike rev5ue receiv$ by
 ! applicable entity on ! sale ( !      
taxable prescription drug dur+ ! cal5d> 
ye>4  7#b7 ,applicable p]c5tage  7,a7 ,9
 g5]al ,= purposes ( p>agraph 7#a71 !   
applicable p]c5tage %all be equal to--  
7i7 9 ! case ( a taxable prescription   
drug :i* has be5 subject to a cumulative
 price spike p]c5tage great] ?an !      
cumulative price increase all[ance b    
less ?an ! fir/ multi-ye> p]c5tage1 #ej 
p]c5t1  7ii7 9 ! case ( a taxable       
prescription drug :i* has be5 subject to
 a cumulative price spike p]c5tage equal
 to or great] ?an ! fir/ multi-ye>      
p]c5tage b less ?an ! second multi-ye>  
p]c5tage1 #ge p]c5t1 &  7iii7 9 ! case (
 a taxable prescription drug :i* has be5
 subject to a cumulative price spike    
p]c5tage equal to or great] ?an ! second
 multi-ye> p]c5tage1 #ajj p]c5t4  7,b7  

,cumulative price spike p]c5tage ,!     
cumulative price spike p]c5tage is !    
p]c5tage 7if any7 by :i*-- 7i7 ! av]age 
manufactur] price ( ! taxable           
prescription drug 9 comm]ce = ! prec$+  
cal5d> ye>1 exce$s  7ii7 ! av]age       
manufactur] price ( su* prescription    
drug 9 comm]ce = ! base ye>4  7,c7      
,cumulative price increase all[ance ,=  
purposes ( clause 7i7 ( subp>agraph     
7,a71 ! cumulative price increase       
all[ance = any cal5d> ye> is ! p]c5tage 
7r\nd$ to ! ne>e/ "o-t5? ( #a p]c5t7 by 
:i* ! ,c-,,cpi-,u 7z def9$ 9 section    
#a7;f77#f77 = t ye> exce$s ! ,c-,,cpi-,u
 = ! base ye>4  7,d7 ,multi-ye>         
p]c5tages ,= purposes ( subp>agraph     
7,a71 ! fir/ multi-ye> p]c5tage & second
 multi-ye> p]c5tage %all be det]m9$ 9   
accordance ) ! foll[+ table3 ,numb] (   
ye>s 9 applicable period,first multi-ye>
 percentage,second multi-ye> p]c5tage#b 
ye>s#ag4ebb4ec ye>s#bjbed ye>s#bb4ebg4ee
 ye>s#becj4  7,e7 ,applicable p]iod &   
base ye>  7i7 ,applicable p]iod ,!      

applicable p]iod %all be ! less] (--    
7,i7 ! #e prec$+ cal5d> ye>s1  7,,ii7   
all cal5d> ye>s beg9n+ aft] ! date (    
enactm5t ( ?is section1 or  7,,iii7 all 
cal5d> ye>s 9 :i* ! taxable prescription
 drug 0 sold 9 comm]ce4  7ii7 ,base ye> 
,! base ye> %all be ! cal5d> ye>        
imm$iately prec$+ ! applicable p]iod4   
7#c7 ,cumulative price spike rev5ue ,=  
purposes ( p>agraph 7#a71 ! cumulative  
price spike rev5ue = any taxable        
prescription drug %all be an am\nt equal
 to-- 7,a7 an am\nt equal to ! product  
(-- 7i7 an am\nt 7n less ?an z]o7 equal 
to-- 7,i7 ! av]age manufactur] price (  
su* prescription drug 9 comm]ce = !     
prec$+ cal5d> ye>1 m9us  7,,ii7 ! av]age
 manufactur] price ( su* prescription   
drug 9 comm]ce = ! base ye>1 &  7ii7 !  
total numb] ( units ( su* prescription  
drug :i* 7 sold 9 comm]ce 9 ! prec$+    
cal5d> ye>1 m9us  7,b7 an am\nt equal to
 ! sum ( ! adju/m5t am\nts1 if any1     
det]m9$ "u section #c7;a77#g77;,c7 ( !  
,m$ic>e ,negotiation & ,competitive     

,lic5s+ ,act ( #bjba = ea* cal5d> ye>   
dur+ ! applicable p]iod4  7d7           
,def9itions ,= purposes ( ?is section-- 
7#a7 ,taxable prescription drug ,! t]m  
taxable prescription drug means a       
prescription drug :i* has be5 id5tifi$  
by ! ,inspector ,g5]al ( ! ,dep>tm5t (  
,heal? & ,human ,s]vices z be+ subject  
to a price spike4  7#b7 ,o!r t]ms ,!    
t]ms applicable entity1 av]age          
manufactur] price1 price spike1 price   
spike p]c5tage1 & price spike rev5ue h !
 same mean+ giv5 su* t]ms "u section    
#c7;a7 ( ! ,m$ic>e ,negotiation &       
,competitive ,lic5s+ ,act ( #bjba4  4   
7b7 ,cl]ical am5dm5ts  7#a7 ,! head+ (  
sub*apt] ,e ( *apt] #cb ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by /rik+ 
,m$ical devices & ins]t+ ,c]ta9 m$ical  
devices & prescription drugs4  7#b7 ,!  
table ( sub*apt]s = *apt] #cb ( su*     
,code is am5d$ by /rik+ ! item relat+ to
 sub*apt] ,e & ins]t+ ! foll[+ new item3
  ,sub*apt] ,e4 ,c]ta9 m$ical devices & 
prescription drugs  4  7#c7 ,! table (  

sections = sub*apt] ,e ( *apt] #cb ( su*
 ,code is am5d$ by add+ at ! end !      
foll[+ new item3  ,sec4 #daib4          
,prescription drugs subject to price    
spikes4  4  7c7 ,effective date ,!      
am5dm5ts made by ?is section %all apply 
to sales aft] ! date ( ! enactm5t ( ?is 
,act4  #e4 ,application ( ,m$ic>e prices
 to o!r insur]s & ! un9sur$  7a7 ,f$]al 
heal? c>e programs ,"p ,a ( title ,,xi (
 ! ,social ,security ,act 7#db ,u4,s4,c4
 #acja et seq47 is am5d$ by add+ at !   
end ! foll[+ new section3  #aaej;,c4    
,application ( ,m$ic>e negotiat$ prices 
7a7 ,9 g5]al ,not)/&+ any o!r provision 
( law1 ! price recogniz$ "u a ,f$]al    
heal? c>e program 7z def9$ 9 section    
#aabh;,b7 or ! insurance program        
e/abli%$ "u *apt] #hi ( title #e1 ,unit$
 ,/ates ,code1 = a specifi$ cov]$ "p ,d 
drug 7z def9$ 9 section                 
#ahfj;,d-#aa7;i771 or a drug or         
biological = :i* paym5t may be made "u  
section #ahdb7o71 ) respect to a ye> =  
:i* cov]age is provid$ "u su* ,f$]al    

heal? c>e program or su* insurance      
program may n exce$ ! price = su* drug  
e/abli%$ "u su* section #ahfj;,d-#aa7;i7
 or #ahdb7o71 z applicable4  7b7        
,application ( o!r provisions ,!        
provisions ( section #ahfj;,d-#aa7;i7   
%all apply ) respect to a ,f$]al heal?  
c>e program & ! insurance program       
e/abli%$ "u *apt] #hi ( title #e1 ,unit$
 ,/ates ,code1 9 ! same mann] z su*     
provisions apply ) respect to a         
prescription drug plan or an ,,ma-,,pd  
plan "u "p ,d or ,c1 respectively1 (    
title ,,xviii4  4  7b7 ,private insur]  
,subp>t ,,ii ( "p ,a ( title ,,xxvii ( !
 ,public ,heal? ,s]vice ,act 7#db       
,u4,s4,c4 #cjj;gg-#aa et seq47 is am5d$ 
by add+ at ! end ! foll[+ new section3  
#bgcj4 ,application ( ,m$ic>e negotiat$ 
prices  7a7 ,9 g5]al ,not)/&+ any o!r   
provision ( law1 ! price recogniz$ "u a 
gr\p heal? plan1 or "u individual or    
gr\p heal? insurance cov]age (f]$ by a  
heal? insurance issu]1 = a specifi$     
cov]$ "p ,d drug 7z def9$ 9 section     

#ahfj;,d-#aa7;i771 or a drug or         
biological = :i* paym5t may be made "u  
section #ahdb7o71 ) respect to a ye> =  
:i* cov]age is provid$ "u su* plan or   
su* cov]age may n exce$ ! price = su*   
drug e/abli%$ "u su* section            
#ahfj;,d-#aa7;i7 or #ahdb7o71 z         
applicable4  7b7 ,application ( o!r     
provisions ,! provisions ( section      
#ahfj;,d-#aa7;i7 %all apply ) respect to
 a gr\p heal? plan1 or individual or    
gr\p heal? insurance cov]age (f]$ by a  
heal? insurance issu]1 9 ! same mann] z 
su* provisions apply ) respect to a     
prescription drug plan or an ,,ma-,,pd  
plan "u "p ,d or ,c1 respectively1 (    
title ,,xviii4  4  7c7 ,un9sur$  7#a7 ,9
 g5]al ,not)/&+ any o!r provision ( law1
 ! am\nt t a ph>macy furni%+ a drug to a
 specifi$ individual 7z def9$ 9 p>agraph
 7#b77 may require z paym5t = su* drug f
 su* individual %all n exce$ ! price =  
su* drug e/abli%$ "u section            
#ahfj;,d-#aa7;i7 ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciew-#aaa7;i77    

7or1 if applicable1 "u section          
#ahdb7o77#h7 ( su* ,act74  7#b7         
,def9ition ,= purposes ( p>agraph 7#a71 
! t]m specifi$ individual means1 )      
respect to a drug1 an individual :o is n
 cov]$1 or :o has no cov]age ) respect  
to su* drug1 "u a gr\p heal? plan or    
gr\p or individual heal? insurance      
cov]age 7z su* t]ms are def9$ 9 section 
#bgia ( ! ,public ,heal? ,s]vice ,act   
7#db ,u4,s4,c4 #cjj;gg-#ia77 or "u a    
,f$]al heal? c>e program 7z def9$ 9     
section #aabh;,b ( ! ,social ,security  
,act1 b includ+ ! insurance program     
e/abli%$ "u *apt] #hi ( title #e1 ,unit$
 ,/ates ,code74  7#c7 ,en=cem5t ,!      
,secret>y ( ,heal? & ,human ,s]vices may
 impose a civil monet>y p5alty ( n m ?an
 #aj1jjj p] day on a ph>macy = a        
violation ( p>agraph 7#a74  #f4         
,manufactur] provision ( in=mation  7a7 
,9 g5]al ,9 ! case ( a manufactur] ( a  
drug or biological subject to a         
competitive lic5s+ agreem5t "u section  
#ahfj;,d-#aa7;i77#e7 ( ! ,social        

,security ,act1 z add$ by ?is ,act1 su* 
manufactur] %all1 ^u reque/ f an entity 
elect+ to manufacture su* drug or       
biological1 provide to su* entity       
mat]ials1 data1 & in=mation relat+ to ! 
manufacture or supply ( su* drug or     
biological1 includ+-- 7#a7 cellul>      
clones & hybridoma /ocks2  7#b7         
plasmids1 plasmid maps1 & sequ5ces (    
antibody complem5t>ity det]m9+ regions2 
7#c7 physico*emical & biophysical       
*>act]ization2  7#d7 gr[? conditions &  
protocols2  7#e7 att5uation or          
inactivation protocols2  7#f7 extraction
 & purification protocols2  7#g7 syn!tic
 "w-up & s*emes2  7#h7 suffici5t        
quantities ( ! drug or biological =     
te/+2  7#i7 ! protocols & me?ods us$ =  
te/+ ! drug or biological2 &  7#aj7 !   
expect$ outcomes f ^? protocols4  7b7   
,en=cem5t ,! ,secret>y ( ,heal? & ,human
 ,s]vices may impose a civil monet>y    
p5alty on a manufactur] ( n m ?an       
#aj1jjj p] day = a violation (          
subsection 7a74  #g4 ,applicability (   

negotiat$ price to prescription drugs   
furni%$ by ! ,dep>tm5t ( ,def5se & !    
,dep>tm5t ( ,vet]ans ,affairs  7a7 ,9   
g5]al ,section #habf7;a7 ( title #ch1   
,unit$ ,/ates ,code1 is am5d$-- 7#a7 9  
p>agraph 7#b71 by ins]t+ 1 b may n exce$
 ! am\nt ( ! price negotiat$ by !       
,secret>y ( ,heal? & ,human ,s]vices "u 
section #ahfj;,d-#aa7;i7 ( ! ,social    
,security ,act 7#db ,u4,s4,c4           
#aciew-#aaa7;i77 7z am5d$ by ! ,m$ic>e  
,negotiation & ,competitive ,lic5s+ ,act
 ( #bjai7 = a specifi$ cov]$ "p ,d drug 
7z def9$ 9 su* section7 7or1 if         
applicable1 may n exce$ ! am\nt ( !     
price negotiat$ by ! ,secret>y ( ,heal? 
& ,human ,s]vices "u section            
#ahdb7o77#h7 ( su* ,act = a drug or     
biological payable "u su* section7 t is 
a cov]$ drug ( a manufactur] aft] be/   
int]e/s ( ! ,dep>tm5t or su* ,f$]al     
ag5cies2 &  7#b7 9 p>agraph 7#c71 by    
ins]t+ or1 = a cov]$ drug ( a           
manufactur] t is a specifi$ cov]$ "p ,d 
drug 7z def9$ 9 section #ahfj;,d-#aa7;i7

 ( ! ,social ,security ,act 7#db        
,u4,s4,c4 #aciew-#aaa7;i77 7z am5d$ by !
 ,m$ic>e ,negotiation & ,competitive    
,lic5s+ ,act ( #bjai77 or a drug or     
biological = :i* paym5t may be made "u  
section #ahdb7o77#h7 ( su* ,act1 ! price
 negotiat$ by ! ,secret>y ( ,heal? &    
,human ,s]vices "u su* section          
#ahjf;,d-#aa7;i7 or #ahdb7o77#h7 7z     
applicable7 = ! specifi$ cov]$ "p ,d    
drug or ! drug or biological aft] !     
price *>g$ "u ! ,f$]al ,supply ,s*$ule  
at ! "t ! drug is procur$4  7b7         
,dep>tm5t ( ,def5se elem5ts = purposes (
 pric+ /&>ds ,section #ajgd;g7f7 ( title
 #aj1 ,unit$ ,/ates ,code1 is am5d$--   
7#a7 9 ! head]1 by ins]t+ & national    
mail-,ord] ph>macy program aft] ph>macy 
program2  7#b7 by /rik+ ! ,,tric>e      
retail ph>macy program %all be treat$ z 
an elem5t ( ! ,dep>tm5t ( ,def5se &     
ins]t+ ! ,,tric>e retail ph>macy program
 & ! national mail-ord] ph>macy program 
%all be treat$ z elem5ts ( ! ,dep>tm5t (
 ,def5se2 &  7#c7 by /rik+ provid$ by   

ph>macies "u ! program & ins]t+ provid$ 
"u su* programs4  #h4 ,specifi$ cov]$ "p
 ,d drugs excise tax  7a7 ,9 g5]al      
,sub*apt] ,e ( *apt] #cb ( ! ,int]nal   
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new section3  #daic4  
,specifi$ cov]$ "p ,d drugs  7a7 ,9     
g5]al ,!re is h]eby impos$ on ! sale by 
! manufactur]1 produc]1 or import] ( any
 specifi$ cov]$ "p ,d drug = a price 9  
excess ( ! negotiat$ price 9 violation (
 section #ahfj;,d-#aa7;i77#e77;,c7 ( !  
,social ,security ,act dur+ any p]iod   
describ$ 9 su* section a tax equal to   
#ajj p]c5t ( ! price = :i* s sold4  7b7 
,def9itions ,! t]ms specifi$ cov]$ "p ,d
 drug & negotiat$ price h ! mean+ su*   
t]ms h "u section #ahfj;,d-#aa ( !      
,social ,security ,act4  4  7b7 ,cl]ical
 am5dm5ts  7#a7 ,! head+ ( sub*apt] ,e (
 *apt] #cb ( ! ,int]nal ,rev5ue ,code ( 
#aihf is am5d$ by /rik+ ,m$ical devices 
& ins]t+ ,o!r m$ical products4  7#b7 ,! 
table ( sub*apt]s = *apt] #cb ( su*     
,code is am5d$ by /rik+ ! item relat+ to

 sub*apt] ,e & ins]t+ ! foll[+ new item3
  ,sub*apt] ,e4 ,o!r m$ical products  4 
7#c7 ,! table ( sections = sub*apt] ,e (
 *apt] #cb ( su* ,code is am5d$ by add+ 
at ! end ! foll[+ new item3  ,sec4      
#daic4 ,specifi$ cov]$ "p ,d drugs4  4  
7c7 ,effective date ,! am5dm5ts made by 
?is section %all apply to sales on or   
aft] ! date t is #a ye> aft] ! date ( ! 
enactm5t ( ?is ,act4  #i4 ,drug         
manufactur] report+ ,"p ,p ( title ,,iii
 ( ! ,public ,heal? ,s]vice ,act 7#db   
,u4,s4,c4 #bhj;g et seq47 is am5d$ by   
add+ at ! end ! foll[+3  #cii,v-#g4     
,drug manufactur] report+  7a7 ,m&atory 
report+ ,a drug manufactur] %all submit 
to ! ,secret>y & to ,congress an annual 
report specify+ ) respect to ! previ\s  
cal5d> ye> 7except z provid$ 9          
subsection 7d77#b77-- 7#a7 ! total      
exp5ditures ( ! manufactur] on-- 7,a7   
dome/ic & =eign drug rese>* &           
developm5t1 includ+ an itemiz$          
description (-- 7i7 basic & precl9ical  
rese>*2  7ii7 cl9ical rese>*1 report$   

sep>ately = ea* cl9ical trial2  7iii7   
developm5t ( alt]native dosage =ms &    
/r5g?s = ! drug molecule or comb9ations1
 includ+ ! molecule2  7iv7 o!r drug     
developm5t activities1 su* z noncl9ical 
laboratory /udies & record & report     
ma9t5ance2  7v7 pursu+ new or exp&$     
indications = su* drug ?r\gh supplem5tal
 applications "u section #eje ( ! ,f$]al
 ,food1 ,drug1 & ,cosmetic ,act2  7vi7  
c>ry+ out po/m>ket requirem5ts relat$ to
 su* drug1 includ+ "u section           
#eje7o77#c7 ( su* ,act2  7vii7 c>ry+ out
 risk evaluation & mitigation /rategies 
9 accordance ) section #eje-a ( su*     
,act2 &  7viii7 m>ket+ rese>*2  7,b7 !  
acquisition ( drug compon5ts & packag+1 
9 total & p] unit sold1 brok5 out by    
s\rce & co/ & id5tify+ specific co/s t  
reflect int]nal transf]s )9 !           
manufactur]'s company2  7,c7 o!r        
acquisitions relat+ to drugs1 includ+ = 
! pur*ase ( pat5ts & lic5s+ or !        
acquisition ( any corporate entity own+ 
any rights to a drug dur+ or aft]       

developm5t ( ! drug2 &  7,d7 m>ket+1    
adv]tis+1 & educat+ = ! promotion ( a   
drug1 includ+ a breakd[n ( am\nts aim$  
at consum]s1 prescrib]s1 manag$ c>e     
organizations1 & o!rs1 irrespective (   
:e!r a p>ticul> drug is m5tion$ 9 !     
m>ket+1 adv]tis+1 or educat+2  7#b7 !   
gross rev5ue1 net rev5ue1 gross pr(it1 &
 net pr(it ( ! manufactur] ) respect to 
drugs2  7#c7 ! total numb] ( units ( ea*
 type ( drug t 7 sold 9 int]/ate        
comm]ce2  7#d7 pric+ in=mation ) respect
 to ! sale ( drugs1 includ+-- 7,a7      
:olesale acquisition co/2  7,b7 net     
av]age price realiz$ by prescription    
drug b5efit manag]s = drugs provid$ to  
individuals 9 ! ,unit$ ,/ates1 aft]     
acc\nt+ = any rebates or o!r paym5ts f !
 manufactur] to ! ph>macy b5efit manag] 
& f ! ph>macy b5efit manag] to !        
manufactur]2 &  7,c7 ! net price ( ea*  
drug1 aft] acc\nt+ = disc\nts1 rebates1 
or o!r f9ancial consid]ations1 *>g$ to  
pur*as]s 9 ea* applicable c\ntry ( !    
,organisation = ,economic ,co-op]ation &

 ,developm5t2  7#e7 any ,f$]al b5efits  
receiv$ by ! manufactur] ) respect to a 
drug1 includ+ ! am\nts & p]iods ( impact
 = ea* su* b5efit1 includ+ tax cr$its2  
,f$]al grants1 includ+ f ! ,national    
,in/itutes ( ,heal?1 ! ,dep>tm5t (      
,def5se1 ! ,dep>tm5t ( ,en]gy1 ! ,c5t]s 
= ,disease ,control & ,prev5tion1 or o!r
 ,f$]al dep>tm5ts or ag5cies2 pat5t     
applications t b5efitt$ f su* grants2   
pat5t ext5sions2 exclusivity p]iods2 &  
waiv]s ( fees2  7#f7 ! p]c5tage ( rese>*
 & developm5t exp5ditures describ$ 9    
clauses 7i7 ?r\gh 7v7 ( p>agraph        
7#a77;,a7 t 7 d]iv$ f ,f$]al funds2     
7#g7 executive comp5sation = ! *ief     
executive (fic]1 *ief f9ancial (fic]1 & 
! #c o!r mo/ highly comp5sat$ executive 
(fic]s1 includ+ bonuses1 paid by su*    
manufactur]1 & /ock options affiliat$ ) 
! manufactur] t 7 (f]$ to or accru$ by  
su* (fic]s2 &  7#h7 any o!r in=mation z 
! ,secret>y may require4  7b7 ,volunt>y 
supplem5tal report+ ,a drug manufactur] 
may supplem5t a report "u subsection 7a7

 ) any additional in=mation !           
manufactur] *ooses to provide relat$ to 
drug pric+ decisions1 su* z-- 7#a7 total
 exp5ditures on drug rese>*1 drug       
developm5t1 & cl9ical trials on drugs t 
fail$ to receive approval by ! ,food &  
,drug ,adm9i/ration2 &  7#b7 a li/ (    
drugs & drug prices ( o!r manufactur]s =
 purposes ( comp>ison ) ! manufactur]'s 
own drugs & drug prices4  7c7 ,special  
rule ,a drug manufactur] %all-- 7#a7 to 
! ext5t possible1 disaggregate !        
in=mation requir$ to be report$ by ?is  
section by ! p>ticul> drug involv$2 &   
7#b7 submit all in=mation requir$ to be 
report$ by ?is section ) respect to ea* 
applicable drug 9 a s+le annual report4 
7d7 ,submission ( reports  7#a7 ,9 g5]al
  7,a7 ,submission by drug manufactur]s 
,drug manufactur]s %all submit ! annual 
reports requir$ "u ?is section to !     
,secret>y 9 a usable =mat1 z ! ,secret>y
 may require4  7,b7 ,collation by !     
,secret>y ,! ,secret>y %all collate !   
reports receiv$ z describ$ 9 subp>agraph

 7,a7 & submit su* collat$ reports to   
,congress1 toge!r ) an analysis ( !     
reports by ! ,secret>y t includes-- 7i7 
a summ>y ( data f ! reports2  7ii7      
consid]ation ( factors su* z tr5ds on   
rese>* & developm5t co/s1 ,f$]al        
b5efits1 & manufactur] pati5t assi/ance 
programs2 &  7iii7 ! relation%ip betwe5 
! factors describ$ 9 clause 7ii7 &      
prescription drug prices4  7,c7 ,public 
availability ,! ,secret>y %all make !   
reports submitt$ by manufactur]s z      
describ$ 9 subp>agraph 7,a7 & ! collat$ 
reports toge!r ) ! analysis ( !         
,secret>y describ$ 9 subp>agraph 7,b7   
publicly available1 includ+ by po/+ su* 
reports to ! int]net website ( !        
,dep>tm5t ( ,heal? & ,human ,s]vices1 9 
a se>*able =mat4  7#b7 ,initial report  
7,a7 ,9 g5]al ,a drug manufactur] %all  
submit an initial report pursuant to ?is
 section n lat] ?an "o ye> aft] ! date (
 enactm5t ( ?is subp>agraph 7except z   
provid$ 9 subp>agraph 7,b774  7,b7      
,report+ p]iod ,not)/&+ ! requirem5t 9  

subsection 7a7 t ea* report "u su*      
subsection be = ! previ\s cal5d> ye>1 ! 
initial report ( a drug manufactur] "u  
subsection 7a7 %all include1 = ea* drug 
m>ket$ by ! manufactur]1 ! in=mation    
describ$ 9 p>agraphs 7#a7 ?r\gh 7#f7 (  
subsection 7a7 = ! cal5d> ye> p]iod     
beg9n+ ) ! lat] (-- 7i7 ! cal5d> ye> 9  
:i* ! drug 0 approv$ "u section #eje ( !
 ,f$]al ,food1 ,drug1 & ,cosmetic ,act1 
0 lic5s$ "u section #cea ( ?is ,act1 or 
receiv$ an exemption "u section #eje7;i7
 ( ! ,f$]al ,food1 ,drug1 & ,cosmetic   
,act or section #cea7;a77#c7 ( ?is ,act2
 &  7ii7 ! cal5d> ye> 9 :i* !           
manufactur] acquir$ ! drug s approv$1   
lic5s$1 or exempt$4  7,c7 ,small        
bus9esses ,9 ! case ( a drug manufactur]
 t has few] ?an #ejj employees1 !       
initial report requir$ by 9 subp>agraph 
7,a7 %all be submitt$ by a date det]m9$ 
by ! ,secret>y1 :i* %all be-- 7i7 n     
e>li] ?an ! deadl9e describ$ 9          
subp>agraph 7,a72 &  7ii7 n lat] ?an !  
date t is #c ye>s aft] ! date ( enactm5t

 ( ?is clause4  7e7 ,audit by ?ird p>ty 
,! ,secret>y %all select a p]c5tage 7to 
be det]m9$ by ! ,secret>y7 ( ! reports  
submitt$ "u subsection 7a7 = a fiscal   
ye> to be audit$ by an accr$it$         
?ird-p>ty auditor 7to be select$ by !   
,secret>y74  7f7 ,p5alty = noncompliance
 ,! ,secret>y %all report to ! ,(fice ( 
! ,inspector ,g5]al any manufactur]'s   
failure to submit a complete report z   
requir$ "u ?is section4 ,any manufactur]
 t fails to submit a complete report    
requir$ "u ?is section %all be subject  
to a civil p5alty ( up to #bjj1jjj = ea*
 day on :i* ! violation cont9ues4 ,!    
,secret>y %all collect ! civil p5alties 
"u ?is subsection &1 )\t fur!r          
appropriation1 %all use su* funds to    
support rese>* ( ! ,national ,in/itutes 
( ,heal?4  7g7 ,def9ition ,9 ?is        
section1 ! t]m drug manufactur] means ! 
manufactur] ( an approv$ drug 7includ+ a
 drug approv$ "u subsection 7c7 or 7j7 (
 section #eje ( ! ,f$]al ,food1 ,drug1 &
 ,cosmetic ,act & a biological product  

lic5s$ "u subsection 7a7 or 7k7 (       
section #cea ( ?is ,act74  4