(a) Short title.—This Act may be cited as the “Affordable Medications Act”.

(b) Table of contents.—The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Part P of title III of the Public Health Service Act (42 U.S.C. 280g et seq.) is amended by adding at the end the following:

(a) Information reporting by independent charity patient assistance programs.—Section 6033(b) of the Internal Revenue Code of 1986 is amended by striking the period at the end of paragraph (16) and inserting “, and” and by inserting after paragraph (16) the following new paragraph:

“(17) the total amount of patient assistance (within the meaning of section 399V–7 of the Public Health Service Act) provided to individuals who are prescribed drugs manufactured by any contributor to the organization.”.

(b) GAO study and report on impact of copayment coupons and other patient assistance programs on prescription drug pricing and expenditures.—

(1) STUDY.—The Comptroller General of the United States shall conduct a study on the impact of copayment coupons and other patient assistance programs on prescription drug pricing and expenditures. Such study shall include an analysis of the following:

(A) The extent to which copayment coupons and patient assistance programs contribute to inflated prescription drug prices and health insurance premiums, including with respect to—

(i) the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.);

(ii) the Medicare program under title XVIII of such Act (42 U.S.C. 1395 et seq.);

(iii) the TRICARE program under chapter 55 of title 10, United States Code;

(iv) health care under the laws administered by the Secretary of Veterans Affairs;

(v) the commercial health insurance market; and

(vi) the cash pay health market.

(B) The extent to which manufacturers offering copayment coupons and other patient assistance programs or sponsoring manufacturer patient assistance programs report obtaining tax deductions for offering or sponsoring such assistance (either as business expenses or charitable deductions), including—

(i) the total reported value of the tax deductions claimed by manufacturers for offering or sponsoring patient assistance programs during the 10 years preceding the date of enactment of this Act;

(ii) a description of the methodology manufacturers reported for assigning a value to the tax deduction claimed by manufacturers for offering or sponsoring patient assistance programs; and

(iii) a description of the extent to which the activities of independent charity patient assistance programs, which are sponsored by, or receive funding from, pharmaceutical manufacturers (as determined using tax returns, sales data, and other public disclosures) provide a financial benefit to the manufacturers that sponsor them.

(C) Oversight that is conducted to ensure that independent charity patient assistance programs adhere to guidance from the Office of the Inspector General of the Department of Health and Human Services on avoiding waste, fraud, and abuse.

(2) DEFINITIONS.—In this subsection, the terms “patient assistance”, “independent charity patient assistance program”, “manufacturer”, and “manufacturer patient assistance program” have the meaning given those terms under section 399V–7 of the Public Health Service Act, as added by section 101.

(3) REPORT.—Not later than 2 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report describing the findings of the study required under this subsection.

(a) Negotiating fair prices.—

(1) IN GENERAL.—Section 1860D–11 of the Social Security Act (42 U.S.C. 1395w–111) is amended by striking subsection (i) (relating to noninterference) and by inserting the following:

“(i) Negotiating fair prices with drug manufacturers.—

“(1) IN GENERAL.—Notwithstanding any other provision of law, in furtherance of the goals of providing quality care and containing costs under this part, the Secretary shall, with respect to applicable covered part D drugs, and may, with respect to other covered part D drugs, negotiate, using the negotiation technique or techniques that the Secretary determines will maximize savings and value to the government for prescription drug plans and MA–PD plans and for plan enrollees (in a manner that may be similar to Federal entities and that may include, but is not limited to, formularies, reference pricing, discounts, rebates, other price concessions, and coverage determinations), with drug manufacturers the prices that may be charged to PDP sponsors and MA organizations for such drugs for part D eligible individuals who are enrolled in a prescription drug plan or in an MA–PD plan. In conducting such negotiations, the Secretary shall consider the drug’s current price, initial launch price, prevalence of disease and usage, and approved indications, the number of similarly effective alternative treatments for each approved use of the drug, the budgetary impact of providing coverage under this part for such drug for all individuals who would likely benefit from the drug, evidence on the drug’s effectiveness and safety compared to similar drugs, and the quality and quantity of clinical data and rigor of the applicable process of approval of a drug under section 505 of the Federal Food, Drug, and Cosmetic Act or a biological product under section 351 of the Public Health Service Act.

“(2) USE OF LOWER OF VA OR BIG FOUR PRICE IF NEGOTIATIONS FAIL.—If, after attempting to negotiate for a price with respect to a covered part D drug under paragraph (1) for a period of 1 year, the Secretary is not successful in obtaining an appropriate price for the drug (as determined by the Secretary), the Secretary shall establish the price that may be charged to PDP sponsors and MA organizations for such drug for part D eligible individuals who are enrolled in a prescription drug plan or in an MA–PD plan at an amount equal to the lesser of—

“(A) the price paid by the Secretary of Veterans Affairs to procure the drug under the laws administered by the Secretary of Veterans Affairs; or

“(B) the price paid to procure the drug under section 8126 of title 38, United States Code.

“(3) APPLICABLE COVERED PART D DRUG DEFINED.—For purposes of this subsection, the term ‘applicable covered part D drug’ means a covered part D drug that the Secretary determines to be appropriate for negotiation under paragraph (1) based on one or more of the following factors as applied to such drug:

“(A) Spending on a per beneficiary basis.

“(B) The proportion of total spending under this title.

“(C) Unit price increases over the preceding 5 years.

“(D) Initial launch price.

“(E) Availability of less expensive, similarly effective alternative treatments.

“(F) Status of the drug as a follow-on to previously approved drugs.

“(G) Any other criteria determined by the Secretary.

“(4) PDP SPONSORS AND MA ORGANIZATION MAY NEGOTIATE LOWER PRICES.—Nothing in this subsection shall be construed as preventing the sponsor of a prescription drug plan, or an organization offering an MA–PD plan, from obtaining a discount or reduction of the price for a covered part D drug below the price negotiated under paragraph (1) or the price established under paragraph (2).

“(5) NO EFFECT ON EXISTING APPEALS PROCESS.—Nothing in this subsection shall be construed to affect the appeals procedures under subsections (g) and (h) of section 1860D–4.”.

(2) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on the date of the enactment of this Act and shall first apply to negotiations and prices for plan years beginning on January 1, 2020.

(b) Requirement To include a link to the Medicare Drug Spending Dashboard on the Medicare Plan Finder.—Beginning not later than January 1, 2020, the Secretary of Health and Human Services shall ensure that the Medicare Plan Finder on the Medicare.gov internet website includes a link to the Medicare Drug Spending Dashboard on the CMS.gov internet website. Such link shall be easily accessible on the Medicare Plan Finder.

(c) Reports to Congress.—

(1) SECRETARY OF HHS.—

(A) IN GENERAL.—Not later than 3 years after the date of the enactment of this Act, and every 6 months thereafter, the Secretary of Health and Human Services shall submit to Congress a report on the following:

(i) The price negotiations conducted by the Secretary under section 1860D–11(i) of the Social Security Act (42 U.S.C. 1395w–111(i)), as amended by subsection (a), including a description of—

(I) how such price negotiations are achieving lower prices for covered part D drugs (as defined in section 1860D–2(e) of the Social Security Act (42 U.S.C. 1395w–102(e))) for Medicare beneficiaries;

(II) how such lower prices are passed through to Medicare beneficiaries;

(III) how such price negotiations are affecting drug prices in the private market; and

(IV) how such price negotiations are affecting the list price of covered part D drugs.

(ii) Data on spending under part D of the Medicare program on covered part D drugs, including data on covered part D drugs with—

(I) spending on a per beneficiary basis that is above the median spending on other drugs in the same class or above the median spending of other drug classes; and

(II) high unit cost increases over the past five years, especially where such increases are greater than the increases for covered part D drugs in general.

(iii) A list of the covered part D drugs with no therapeutic substitute and data on spending under part D of the Medicare program on such drugs.

(iv) Access to covered part D drugs and, where available, compliance rates and health outcomes associated with compliance rates.

(v) Appeals by enrollees with respect to covered part D drugs not included on plan formularies.

(B) PUBLIC AVAILABILITY OF REPORT.—The Secretary of Health and Human Services shall publish on the internet website of the Centers for Medicare & Medicaid Services a copy of each report submitted under subparagraph (A), including the detailed tables, figures, and data published in the report and its appendices.

(2) MEDPAC.—

(A) STUDY.—The Comptroller General of the United States shall conduct a study on the price negotiations conducted by the Secretary under section 1860D–11(i) of the Social Security Act (42 U.S.C. 1395w–111(i)), as amended by subsection (a), including an analysis of—

(i) how such price negotiations are achieving lower prices for covered part D drugs (as defined in section 1860D–2(e) of the Social Security Act (42 U.S.C. 1395w–102(e))) for Medicare beneficiaries;

(ii) who is benefiting from such lower prices, such as Medicare beneficiaries, the Federal Government, States, prescription drug plans and MA–PD plans, or other entities;

(iii) how such price negotiations are a factor affecting drug prices in the private market; and

(iv) how such price negotiations are a factor affecting the list price of covered part D drugs.

(B) REPORT.—Not later than January 1, 2022, the Comptroller General of the United States shall submit to Congress a report on the study conducted under subparagraph (A), together with recommendations for improving such price negotiations.

(d) CMI testing of negotiating drug and biological prices To improve value.—Section 1115A(b)(2) of the Social Security Act (42 U.S.C. 1315a(b)(2)) is amended—

(1) in subparagraph (A), by adding at the end the following new sentence: “The models selected under this subparagraph shall include at least three of the models described in subparagraph (D), which shall be implemented by not later than 18 months after the date of the enactment of the Affordable Medications Act”; and

(2) by adding at the end the following new subparagraph:

“(D) MODELS OF NEGOTIATING DRUG AND BIOLOGICAL PRICES TO IMPROVE VALUE.—The models described in this subparagraph are the following models for negotiating drug and biological prices under the applicable titles (including under both parts B and D of title XVIII) in order to improve the value of payments for such drugs and biologicals under such titles:

“(i) Discounting or eliminating patient cost-sharing on high-value drugs and biologicals.

“(ii) Value-based formularies.

“(iii) Indications-based pricing.

“(iv) Reference pricing.

“(v) Risk-sharing agreements based on outcomes.

“(vi) Pricing based on comparative effectiveness research.

“(vii) Episode-based payments for chemotherapy and other conditions determined appropriate by the Secretary.

“(viii) Alternative ways of paying for drugs and biologicals under part B of title XVIII.

“(ix) Other models determined appropriate by the Secretary.”.

(a) Identification of prescription drug price spikes.—

(1) DEFINITIONS.—In this subsection:

(A) APPLICABLE ENTITY.—The term “applicable entity” means the holder of an application approved under subsection (c) or (j) of section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or of a license issued under subsection (a) or (k) of section 351 of the Public Health Service Act (42 U.S.C. 262) for a drug described in paragraph (5)(A).

(B) AVERAGE MANUFACTURER PRICE.—The term “average manufacturer price”—

(i) has the same meaning given such term under section 1927(k)(1) of the Social Security Act (42 U.S.C. 1396r–8(k)(1)); or

(ii) with respect to a drug for which there is no average manufacturer price as so defined, such term shall mean the wholesale acquisition cost of the drug.

(C) COMMERCE.—The term “commerce” has the meaning given such term in section 4 of the Federal Trade Commission Act (15 U.S.C. 44).

(D) INSPECTOR GENERAL.—The term “Inspector General” means the Inspector General of the Department of Health and Human Services.

(E) PRESCRIPTION DRUG.—

(i) IN GENERAL.—The term “prescription drug” means any drug (as defined in section 201(g) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(g))), including a combination product whose primary mode of action is determined under section 503(g) of such Act (21 U.S.C. 353(g)) to be that of a drug, and that—

(I) is subject to section 503(b)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)); and

(II) is covered by a Federal health care program (as defined in section 1128B(f) of the Social Security Act (42 U.S.C. 1320a–7b(f))).

(ii) TREATMENT OF REFORMULATED DRUGS.—For purposes of this subsection, a prescription drug with respect to which the Secretary of Health and Human Services has approved any minor reformulation that does not produce a meaningful therapeutic benefit, the drug that was approved prior to any such reformulation and the drug with any such reformulation shall be considered one prescription drug.

(F) PRICE SPIKE.—

(i) IN GENERAL.—The term “price spike” means an increase in the average manufacturer price in commerce of a prescription drug for which the price spike percentage is equal to or greater than applicable price increase allowance.

(ii) PRICE SPIKE PERCENTAGE.—The price spike percentage is the percentage (if any) by which—

(I) the average manufacturer price of a prescription drug in commerce for the calendar year; exceeds

(II) the average manufacturer price of such prescription drug in commerce for the calendar year preceding such year.

(iii) APPLICABLE PRICE INCREASE ALLOWANCE.—The applicable price increase allowance for any calendar year is the percentage (rounded to the nearest one-tenth of 1 percent) by which the C–CPI–U (as defined in section 1(f)(6) of the Internal Revenue Code of 1986) for that year exceeds the C–CPI–U for the preceding calendar year.

(G) PRICE SPIKE REVENUE.—

(i) IN GENERAL.—The price spike revenue for any calendar year is an amount equal to—

(I) the gross price spike revenue; minus

(II) the adjustment amount.

(ii) GROSS PRICE SPIKE REVENUE.—The gross price spike revenue for any calendar year is an amount equal to the product of—

(I) an amount equal to the difference between subclause (I) of subparagraph (F)(ii) and subclause (II) of such subparagraph; and

(II) the total number of units of the prescription drug which were sold in commerce in such calendar year.

(iii) ADJUSTMENT AMOUNT.—The adjustment amount is the amount, if any, of the gross price spike revenue which the Inspector General has determined is due solely to an increase in the cost of the inputs necessary to manufacture the prescription drug subject to the price spike.

(2) SUBMISSION BY PHARMACEUTICAL COMPANIES OF INFORMATION TO INSPECTOR GENERAL.—

(A) IN GENERAL.—For each prescription drug, the applicable entity shall submit to the Inspector General a quarterly report that includes the following:

(i) For each prescription drug of the applicable entity—

(I) the total number of units of the prescription drug which were sold in commerce in the preceding calendar quarter;

(II) the average and median price per unit of such prescription drug in commerce in the preceding calendar quarter, disaggregated by month; and

(III) the gross revenues from sales of such prescription drug in commerce in the preceding calendar quarter.

(ii) Such information related to increased input costs or public health considerations as the applicable entity may wish the Inspector General to consider in making a determination under subclause (II) of paragraph (3)(B)(ii) or an assessment in subclause (III) of such paragraph for the preceding calendar quarter.

(iii) Such information related to any anticipated increased input costs for the subsequent calendar quarter as the applicable entity may wish the Inspector General to consider in making a determination under subclause (II) of paragraph (3)(B)(ii) or an assessment in subclause (III) of such paragraph for such calendar quarter.

(B) PENALTY FOR FAILURE TO SUBMIT.—

(i) IN GENERAL.—An applicable entity described in subparagraph (A) that fails to submit information to the Inspector General regarding a prescription drug, as required by such subparagraph, before the date specified in subparagraph (C) shall be liable for a civil penalty, as determined under clause (ii).

(ii) AMOUNT OF PENALTY.—The amount of the civil penalty shall be equal to the product of—

(I) an amount, as determined appropriate by the Inspector General, which is—

(aa) not less than 0.5 percent of the gross revenues from sales of the prescription drug described in clause (i) for the preceding calendar year, and

(bb) not greater than 1 percent of the gross revenues from sales of such prescription drug for the preceding calendar year, and

(II) the number of days in the period between—

(aa) the applicable date specified in subparagraph (C), and

(bb) the date on which the Inspector General receives the information described in subparagraph (A) from the applicable entity.

(C) SUBMISSION DEADLINE.—An applicable entity shall submit each quarterly report described in subparagraph (A) not later than January 17, April 18, June 15, and September 15 of each calendar year.

(3) ASSESSMENT BY INSPECTOR GENERAL.—

(A) IN GENERAL.—Not later than the last day in February of each year, the Inspector General, in consultation with other relevant Federal agencies (including the Federal Trade Commission), shall—

(i) complete an assessment of the information the Inspector General received pursuant to paragraph (2)(A) with respect to sales of prescription drugs in the preceding calendar year; and

(ii) in the case of any prescription drug which satisfies the conditions described in subparagraph (A) or (B) of paragraph (4), submit a recommendation to the Secretary of Health and Human Services that such drug be exempted from application of the tax imposed under section 4192 of the Internal Revenue Code of 1986 (as added by subsection (b) of this section) for such year.

(B) ELEMENTS.—The assessment required by subparagraph (A) shall include the following:

(i) Identification of each price spike relating to a prescription drug in the preceding calendar year.

(ii) For each price spike identified under clause (i)—

(I) a determination of the price spike revenue;

(II) a determination regarding the accuracy of the information submitted by the applicable entity regarding increased input costs; and

(III) an assessment of the rationale of the applicable entity for the price spike.

(4) EXEMPTION OF CERTAIN DRUGS.—

(A) IN GENERAL.—The Secretary of Health and Human Services, upon recommendation of the Inspector General pursuant to paragraph (3)(A)(ii), may exempt any prescription drug which has been subject to a price spike during the preceding calendar year from application of the tax imposed under section 4192 of the Internal Revenue Code of 1986 for such year, if the Secretary determines that—

(i) based on information submitted pursuant to paragraph (2)(A)(ii), a for-cause price increase exemption should apply; or

(ii) (I) the prescription drug which has been subject to a price spike has an average manufacturer price of not greater than $10 for a 30-day supply; and

(II) such drug is marketed by not less than three other holders of applications approved under subsection (c) or (j) of section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355), where such applications approved under such subsection (j) use as a reference drug the drug so approved under such subsection (c).

(B) CLARIFICATION.—In considering, under subparagraph (A)(i), information submitted pursuant to paragraph (2)(A)(ii), the Secretary—

(i) has the discretion to determine that such information does not warrant a for-cause price increase exemption; and

(ii) shall exclude from such consideration any information submitted by the applicable entity threatening to curtail or limit production of the prescription drug if the Secretary does not grant an exemption from the application of the tax under section 4192 of the Internal Revenue Code of 1986.

(5) INSPECTOR GENERAL REPORT TO INTERNAL REVENUE SERVICE.—

(A) IN GENERAL.—Subject to subparagraph (C), not later than the last day in February of each year, the Inspector General shall transmit to the Internal Revenue Service a report on the findings of the Inspector General with respect to the information the Inspector General received under paragraph (2)(A) with respect to the preceding calendar year and the assessment carried out by the Inspector General under paragraph (3)(A) with respect to such information.

(B) CONTENTS.—The report transmitted under subparagraph (A) shall include the following:

(i) The information received under paragraph (2)(A) with respect to the preceding calendar year.

(ii) The price spikes identified under clause (i) of paragraph (3)(B).

(iii) The price spike revenue determinations made under clause (ii)(I) of such paragraph.

(iv) The determinations and assessments made under subclauses (II) and (III) of clause (ii) of such paragraph.

(C) NOTICE AND OPPORTUNITY FOR HEARING.—

(i) IN GENERAL.—No report shall be transmitted to the Internal Revenue Service under subparagraph (A) in regards to a prescription drug unless the Inspector General has provided the applicable entity with—

(I) the assessment of such drug under paragraph (3)(A); and

(II) notice of their right to a hearing in regards to such assessment.

(ii) NOTICE.—The notice required under clause (i) shall be provided to the applicable entity not later than 30 days after completion of the assessment under paragraph (3)(A).

(iii) REQUEST FOR HEARING.—Subject to clause (v), an applicable entity may request a hearing before the Secretary of Health and Human Services not later than 30 days after the date on which the notice under clause (ii) is received.

(iv) COMPLETION OF HEARING.—In the case of an applicable entity which requests a hearing pursuant to clause (iii), the Secretary of Health and Human Services shall, not later than 12 months after the date on which the assessment under paragraph (3)(A) was completed by the Inspector General—

(I) make a final determination in regards the accuracy of such assessment; and

(II) provide the report described in subparagraph (B) to the Internal Revenue Service.

(v) LIMITATION.—An applicable entity may request a hearing under clause (iii) with respect to a particular prescription drug only once within a 5-year period.

(D) PUBLICATION.—

(i) IN GENERAL.—Not later than the last day in February of each year, subject to clause (ii), the Inspector General shall make the report transmitted under subparagraph (A) available to the public, including on the internet website of the Inspector General.

(ii) PROPRIETARY INFORMATION.—The Inspector General shall ensure that any information made public in accordance with clause (i) excludes trade secrets and confidential commercial information.

(6) NOTIFICATION.—The Secretary of the Treasury, in conjunction with the Inspector General, shall notify, at such time and in such manner as the Secretary of the Treasury shall provide, each applicable entity in regard to any prescription drug which has been determined to have been subject to a price spike during the preceding calendar year and the amount of the tax imposed on such applicable entity pursuant to section 4192 of the Internal Revenue Code of 1986.

(b) Excise tax on prescription drugs subject to price spikes.—

(1) IN GENERAL.—Subchapter E of chapter 32 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

(2) CLERICAL AMENDMENTS.—

(A) The heading of subchapter E of chapter 32 of the Internal Revenue Code of 1986 is amended by striking “Medical devices” and inserting “Certain medical devices and prescription drugs”.

(B) The table of subchapters for chapter 32 of such Code is amended by striking the item relating to subchapter E and inserting the following new item:

(3) The table of sections for subchapter E of chapter 32 of such Code is amended by adding at the end the following new item:

“Sec. 4192. Prescription drugs subject to price spikes.”.

(4) EFFECTIVE DATE.—The amendments made by this section shall apply to sales after the date of the enactment of this Act.

(c) Revenues collected.—There are authorized to be appropriated to the Secretary of Health and Human Services such sums as are equal to any increase in revenue to the Treasury by reason of the provisions of this section or the amendments made by this section for the purposes of—

(1) funding or conducting research on the economic and policy implications of price patterns of prescription drugs;

(2) increasing amounts available to the National Institutes of Health for research and development of drugs;

(3) reducing prescription drug cost-sharing for patients; or

(4) reducing health insurance premiums.

(a) In general.—Section 804 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 384) is amended to read as follows:

(b) Penalties with respect to online pharmacies.—Section 303 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 333) is amended by adding at the end the following:

“(h) In the case of a person operating an internet website, whether in the United States or in another country, that violates section 301(aa) by—

“(1) selling, by means of the internet, with the intent to defraud or mislead or with reckless disregard for safety of the public, an adulterated or counterfeit drug to an individual in the United States; or

“(2) dispenses, by means of the internet, a drug to an individual in the United States who the person knows or has reasonable cause to believe, does not possess a valid prescription for that drug,

such person shall be imprisoned for not more than 10 years or fined not more than $250,000.”.

(c) No preemption.—Nothing in this section, including the amendments made by this section, shall be construed to preempt, alter, displace, abridge, or supplant any remedy available under any State or Federal law, including common law, that provides a remedy for civil relief.

(d) Reports.—

(1) HHS.—Not later than 1 year after the date on which final regulations are promulgated to carry out section 804 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 384), as amended by subsection (a), and every 2 years thereafter, the Secretary of Health and Human Services, after consultation with appropriate Federal agencies, shall submit to Congress and make public a report on the importation of drugs into the United States.

(2) GAO REPORT.—Not later than 18 months after the first report is submitted under paragraph (1), the Comptroller General of the United States shall submit to Congress a report containing an analysis of the implementation of the amendments made by this section, including a review of drug safety and cost-savings and expenses, including cost-savings to consumers in the United States and trans-shipment and importation tracing processes, resulting from such implementation.

(a) In general.—Section 1860D–2 of the Social Security Act (42 U.S.C. 1395w–102) is amended—

(1) in subsection (e)(1), in the matter preceding subparagraph (A), by inserting “and subsection (f)” after “this subsection”; and

(2) by adding at the end the following new subsection:

“(f) Prescription drug rebate agreement for rebate eligible individuals.—

“(1) REQUIREMENT.—

“(A) IN GENERAL.—For plan years beginning on or after January 1, 2020, in this part, the term ‘covered part D drug’ does not include any drug or biological product that is manufactured by a manufacturer that has not entered into and have in effect a rebate agreement described in paragraph (2).

“(B) 2020 PLAN YEAR REQUIREMENT.—Any drug or biological product manufactured by a manufacturer that declines to enter into a rebate agreement described in paragraph (2) for the period beginning on January 1, 2020, and ending on December 31, 2020, shall not be included as a ‘covered part D drug’ for the subsequent plan year.

“(2) REBATE AGREEMENT.—A rebate agreement under this subsection shall require the manufacturer to provide to the Secretary a rebate for each rebate period (as defined in paragraph (6)(B)) ending after December 31, 2019, in the amount specified in paragraph (3) for any covered part D drug of the manufacturer dispensed after December 31, 2019, to any rebate eligible individual (as defined in paragraph (6)(A)) for which payment was made by a PDP sponsor or MA organization under this part for such period, including payments passed through the low-income and reinsurance subsidies under sections 1860D–14 and 1860D–15(b), respectively. Such rebate shall be paid by the manufacturer to the Secretary not later than 30 days after the date of receipt of the information described in section 1860D–12(b)(8), including as such section is applied under section 1857(f)(3), or 30 days after the receipt of information under subparagraph (D) of paragraph (3), as determined by the Secretary. Insofar as not inconsistent with this subsection, the Secretary shall establish terms and conditions of such agreement relating to compliance, penalties, and program evaluations, investigations, and audits that are similar to the terms and conditions for rebate agreements under paragraphs (3) and (4) of section 1927(b).

“(3) REBATE FOR REBATE ELIGIBLE MEDICARE DRUG PLAN ENROLLEES.—

“(A) IN GENERAL.—The amount of the rebate specified under this paragraph for a manufacturer for a rebate period, with respect to each dosage form and strength of any covered part D drug provided by such manufacturer and dispensed to a rebate eligible individual, shall be equal to the product of—

“(i) the total number of units of such dosage form and strength of the drug so provided and dispensed for which payment was made by a PDP sponsor or an MA organization under this part for the rebate period, including payments passed through the low-income and reinsurance subsidies under sections 1860D–14 and 1860D–15(b), respectively; and

“(ii) the amount (if any) by which—

“(I) the Medicaid rebate amount (as defined in subparagraph (B)) for such form, strength, and period; exceeds

“(II) the average Medicare drug program rebate eligible rebate amount (as defined in subparagraph (C)) for such form, strength, and period.

“(B) MEDICAID REBATE AMOUNT.—For purposes of this paragraph, the term ‘Medicaid rebate amount’ means, with respect to each dosage form and strength of a covered part D drug provided by the manufacturer for a rebate period—

“(i) in the case of a single source drug or an innovator multiple source drug, the amount specified in paragraph (1)(A)(ii)(II) or (2)(C) of section 1927(c) plus the amount, if any, specified in subparagraph (A)(ii) of paragraph (2) of such section, for such form, strength, and period; or

“(ii) in the case of any other covered outpatient drug, the amount specified in paragraph (3)(A)(i) of such section for such form, strength, and period.

“(C) AVERAGE MEDICARE DRUG PROGRAM REBATE ELIGIBLE REBATE AMOUNT.—For purposes of this subsection, the term ‘average Medicare drug program rebate eligible rebate amount’ means, with respect to each dosage form and strength of a covered part D drug provided by a manufacturer for a rebate period, the sum, for all PDP sponsors under part D and MA organizations administering an MA–PD plan under part C, of—

“(i) the product, for each such sponsor or organization, of—

“(I) the sum of all rebates, discounts, or other price concessions (not taking into account any rebate provided under paragraph (2) or any discounts under the program under section 1860D–14A) for such dosage form and strength of the drug dispensed, calculated on a per-unit basis, but only to the extent that any such rebate, discount, or other price concession applies equally to drugs dispensed to rebate eligible Medicare drug plan enrollees and drugs dispensed to PDP and MA–PD enrollees who are not rebate eligible individuals; and

“(II) the number of the units of such dosage and strength of the drug dispensed during the rebate period to rebate eligible individuals enrolled in the prescription drug plans administered by the PDP sponsor or the MA–PD plans administered by the MA organization; divided by

“(ii) the total number of units of such dosage and strength of the drug dispensed during the rebate period to rebate eligible individuals enrolled in all prescription drug plans administered by PDP sponsors and all MA–PD plans administered by MA organizations.

“(D) USE OF ESTIMATES.—The Secretary may establish a methodology for estimating the average Medicare drug program rebate eligible rebate amounts for each rebate period based on bid and utilization information under this part and may use these estimates as the basis for determining the rebates under this section. If the Secretary elects to estimate the average Medicare drug program rebate eligible rebate amounts, the Secretary shall establish a reconciliation process for adjusting manufacturer rebate payments not later than 3 months after the date that manufacturers receive the information collected under section 1860D–12(b)(8)(B).

“(4) LENGTH OF AGREEMENT.—The provisions of paragraph (4) of section 1927(b) (other than clauses (iv) and (v) of subparagraph (B)) shall apply to rebate agreements under this subsection in the same manner as such paragraph applies to a rebate agreement under such section.

“(5) OTHER TERMS AND CONDITIONS.—The Secretary shall establish other terms and conditions of the rebate agreement under this subsection, including terms and conditions related to compliance, that are consistent with this subsection.

“(6) DEFINITIONS.—In this subsection and section 1860D–12(b)(8):

“(A) REBATE ELIGIBLE INDIVIDUAL.—The term ‘rebate eligible individual’ means—

“(i) a subsidy eligible individual (as defined in section 1860D–14(a)(3)(A));

“(ii) a Medicaid beneficiary treated as a subsidy eligible individual under clause (v) of section 1860D–14(a)(3)(B); and

“(iii) any part D eligible individual not described in clause (i) or (ii) who is determined for purposes of the State plan under title XIX to be eligible for medical assistance under clause (i), (iii), or (iv) of section 1902(a)(10)(E).

“(B) REBATE PERIOD.—The term ‘rebate period’ has the meaning given such term in section 1927(k)(8).”.

(b) Reporting requirement for the determination and payment of rebates by manufacturers related to rebate for rebate eligible Medicare drug plan enrollees.—

(1) REQUIREMENTS FOR PDP SPONSORS.—Section 1860D–12(b) of the Social Security Act (42 U.S.C. 1395w–112(b)) is amended by adding at the end the following new paragraph:

“(8) REPORTING REQUIREMENT FOR THE DETERMINATION AND PAYMENT OF REBATES BY MANUFACTURERS RELATED TO REBATE FOR REBATE ELIGIBLE MEDICARE DRUG PLAN ENROLLEES.—

“(A) IN GENERAL.—For purposes of the rebate under section 1860D–2(f) for contract years beginning on or after January 1, 2020, each contract entered into with a PDP sponsor under this part with respect to a prescription drug plan shall require that the sponsor comply with subparagraphs (B) and (C).

“(B) REPORT FORM AND CONTENTS.—Not later than a date specified by the Secretary, a PDP sponsor of a prescription drug plan under this part shall report to each manufacturer—

“(i) information (by National Drug Code number) on the total number of units of each dosage, form, and strength of each drug of such manufacturer dispensed to rebate eligible Medicare drug plan enrollees under any prescription drug plan operated by the PDP sponsor during the rebate period;

“(ii) information on the price discounts, price concessions, and rebates for such drugs for such form, strength, and period;

“(iii) information on the extent to which such price discounts, price concessions, and rebates apply equally to rebate eligible Medicare drug plan enrollees and PDP enrollees who are not rebate eligible Medicare drug plan enrollees; and

“(iv) any additional information that the Secretary determines is necessary to enable the Secretary to calculate the average Medicare drug program rebate eligible rebate amount (as defined in paragraph (3)(C) of such section), and to determine the amount of the rebate required under this section, for such form, strength, and period.

Such report shall be in a form consistent with a standard reporting format established by the Secretary.

“(C) SUBMISSION TO SECRETARY.—Each PDP sponsor shall promptly transmit a copy of the information reported under subparagraph (B) to the Secretary for the purpose of audit oversight and evaluation.

“(D) CONFIDENTIALITY OF INFORMATION.—The provisions of subparagraph (D) of section 1927(b)(3), relating to confidentiality of information, shall apply to information reported by PDP sponsors under this paragraph in the same manner that such provisions apply to information disclosed by manufacturers or wholesalers under such section, except—

“(i) that any reference to ‘this section’ in clause (i) of such subparagraph shall be treated as being a reference to this section;

“(ii) the reference to the Director of the Congressional Budget Office in clause (iii) of such subparagraph shall be treated as including a reference to the Medicare Payment Advisory Commission; and

“(iii) clause (iv) of such subparagraph shall not apply.

“(E) OVERSIGHT.—Information reported under this paragraph may be used by the Inspector General of the Department of Health and Human Services for the statutorily authorized purposes of audit, investigation, and evaluations.

“(F) PENALTIES FOR FAILURE TO PROVIDE TIMELY INFORMATION AND PROVISION OF FALSE INFORMATION.—In the case of a PDP sponsor—

“(i) that fails to provide information required under subparagraph (B) on a timely basis, the sponsor is subject to a civil money penalty in the amount of $10,000 for each day in which such information has not been provided; or

“(ii) that knowingly (as defined in section 1128A(i)) provides false information under such subparagraph, the sponsor is subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information.

Such civil money penalties are in addition to other penalties as may be prescribed by law. The provisions of section 1128A (other than subsections (a) and (b)) 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 1128A(a).”.

(2) APPLICATION TO MA ORGANIZATIONS.—Section 1857(f)(3) of the Social Security Act (42 U.S.C. 1395w–27(f)(3)) is amended by adding at the end the following:

“(E) REPORTING REQUIREMENT RELATED TO REBATE FOR REBATE ELIGIBLE MEDICARE DRUG PLAN ENROLLEES.—Section 1860D–12(b)(8).”.

(c) Deposit of rebates into Medicare Prescription Drug Account.—Section 1860D–16(c) of the Social Security Act (42 U.S.C. 1395w–116(c)) is amended by adding at the end the following new paragraph:

“(6) REBATE FOR REBATE ELIGIBLE MEDICARE DRUG PLAN ENROLLEES.—Amounts paid under a rebate agreement under section 1860D–2(f) shall be deposited into the Account.”.

(d) Exclusion from determination of best price and average manufacturer price under Medicaid.—

(1) EXCLUSION FROM BEST PRICE DETERMINATION.—Section 1927(c)(1)(C)(ii)(I) of the Social Security Act (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is amended by inserting “and amounts paid under a rebate agreement under section 1860D–2(f)” after “this section”.

(2) EXCLUSION FROM AVERAGE MANUFACTURER PRICE DETERMINATION.—Section 1927(k)(1)(B)(i) of the Social Security Act (42 U.S.C. 1396r–8(k)(1)(B)(i)) is amended—

(A) in subclause (IV), by striking “and” after the semicolon;

(B) in subclause (V), by striking the period at the end and inserting “; and”; and

(C) by adding at the end the following:

“(VI) amounts paid under a rebate agreement under section 1860D–2(f).”.

(a) Qualified health plans.—Section 1302(c) of the Patient Protection and Affordable Care Act (42 U.S.C. 18022(c)) is amended—

(1) in paragraph (3)(A)(i), by inserting “, including cost-sharing with respect to prescription drugs covered by the plan” after “charges”; and

(2) by adding at the end the following:

“(5) PRESCRIPTION DRUG COST-SHARING.—

“(A) 2020.—For plan years beginning in 2020, the cost-sharing incurred under a health plan with respect to prescription drugs covered by the plan shall not exceed $250 per month for each enrolled individual, or $500 for each family.

“(B) 2021 AND LATER.—

“(i) IN GENERAL.—In the case of any plan year beginning in a calendar year after 2020, the limitation under this paragraph shall be equal to the applicable dollar amount under subparagraph (A) for plan years beginning in 2020, increased by an amount equal to the product of that amount and the medical care component of the consumer price index for all urban consumers (as published by the Bureau of Labor Statistics) for that year.

“(ii) ADJUSTMENT TO AMOUNT.—If the amount of any increase under clause (i) is not a multiple of $5, such increase shall be rounded to the next lowest multiple of $5.”.

(b) Group health plans.—Section 2707(b) of the Public Health Service Act (42 U.S.C. 300gg–6(b)) is amended—

(1) by striking “annual”; and

(2) by striking “paragraph (1) of section 1302(c)” and inserting “paragraphs (1) and (5) of section 1302(c) of the Patient Protection and Affordable Care Act”.

(c) Effective date.—The amendments made by subsections (a) and (b) shall take effect with respect to plans beginning after December 31, 2019.

Section 102(b)(5)(C) of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (19 U.S.C. 4201(b)(5)(C)) is amended by striking the end period and inserting the following: “, including by ensuring that trade agreements do not require a party to provide biological product exclusivity of more than 7 years.” .

Part B of title IV of the Public Health Service Act (42 U.S.C. 284 et seq.) is amended by adding at the end the following:

(a) In general.—Part E of title IV of the Public Health Service Act (42 U.S.C. 287 et seq.) is amended by adding at the end the following:

(b) Clerical amendment.—Section 401(b) of the Public Health Service Act (42 U.S.C. 281(b)) is amended—

(1) by redesignating paragraph (25) as paragraph (26); and

(2) by inserting after paragraph (24) the following:

“(25) The Center for Clinical Research.”.

(a) Drug exclusivity.—

(1) NEW CHEMICAL ENTITY EXCLUSIVITY.—

(A) IN GENERAL.—Section 505(j)(5) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)) is amended—

(i) in subparagraph (B)—

(I) in clause (i), by inserting “except that such approval may not be made effective before the date that is 5 years after the date on which the drug to which the application refers was approved under subsection (c)” before the period; and

(II) in clause (ii), by inserting “except that such approval may not be made effective before the date that is 5 years after the date on which the drug to which the application refers was approved under subsection (c)” before the period; and

(ii) in subparagraph (F)(ii)—

(I) by striking “expiration of five years” and inserting “expiration of 3 years”;

(II) by striking “, except that such an application may be submitted under this subsection after the expiration of four years from the date of the approval of the subsection (b) application if it contains a certification of patent invalidity or noninfringement described in subclause (IV) of paragraph (2)(A)(vii)”; and

(III) by striking “seven and one-half years” and inserting “6 and one-half years”.

(B) CONFORMING AMENDMENTS.—Chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended—

(i) in subsection (v)(2)(A)(i)(II) of section 505, by inserting “the 3-year exclusivity period referred to” before “under clause (ii) of subsection (j)(5)(F)”;

(ii) in subsections (b)(1)(A)(i)(I) and (c)(1)(A)(i)(I) of section 505A—

(I) by striking “five years” each place such term appears and inserting “3 years”;

(II) by striking “seven and one-half years” each place such term appears and inserting “6 and one-half years”; and

(III) by striking “eight years” each place such term appears and inserting “7 years”; and

(iii) in section 505E, by striking “the 4- and 5-year periods described in subsections (c)(3)(E)(ii) and (j)(5)(F)(ii) of section 505, the 3-year periods described in clauses (iii) and (iv) of subsection (c)(3)(E) and clauses (iii) and (iv) of subsection (j)(5)(F)” and inserting “the 4- and 5-year periods described in subsection (c)(3)(E)(ii) of section 505, the 3-year periods described in clauses (iii) and (iv) of subsection (c)(3)(E) and clauses (ii), (iii), and (iv) of subsection (j)(5)(F)”.

(2) NEW CLINICAL INVESTIGATION EXCLUSIVITY.—Section 505(c)(3)(E)(iv) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(c)(3)(E)(iv)) is amended by inserting “, and the supplement shows a significant clinical benefit over existing therapies manufactured by the applicant in the 5-year period preceding the submission of the application,” before “the Secretary”.

(3) BIOLOGICAL PRODUCT EXCLUSIVITY.—

(A) IN GENERAL.—Section 351(k)(7)(A) of the Public Health Service Act (42 U.S.C. 262(k)(7)(A)) is amended by striking “12 years” and inserting “7 years”.

(B) CONFORMING AMENDMENTS.—Paragraphs (2)(A) and (3)(A) of section 351(m) of the Public Health Service Act (42 U.S.C. 262(m)) is amended by striking “12 years” each place it appears and inserting “7 years”.

(b) Applicability.—The amendments made by subsection (a) apply only with respect to a drug or biological product for which the listed drug (as described in section 505(j)(7) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(7))) or reference product (as such term is used in section 351 of the Public Health Service Act (42 U.S.C. 262)) is approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act or licensed under section 351(a) of the Public Health Service Act, as applicable, on or after the date of enactment of this Act.

(c) GAO study.—Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study and submit to Congress a report that includes—

(1) (A) the number of requests for designation as a drug for a rare disease or condition under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) the Food and Drug Administration receives each year in the previous 10-year period;

(B) the number of such requests granted, denied, and pending;

(C) the names of all drugs receiving such designation during such period, including the date of approval and indication for which market exclusivity was granted; and

(D) any drugs for which such designation has been revoked or amended during such period;

(2) for each drug so designated as a drug for a rare disease or condition in the previous 10-year period, the total annual expenditures for such drugs under the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) and the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), the number of Medicare and Medicaid beneficiaries who used each such drug each year during such time period, and any changes in price per unit during such time period; and

(3) for a sample of drugs (selected by the Comptroller General) so designated in the previous 10-year period, to the extent feasible—

(A) gross revenues of the manufacturers with respect to each such drug, and manufacturer spending for marketing and patient assistance programs;

(B) the average price per drug and how those prices changed over time for the selected drugs based on industry drug pricing benchmarks; and

(C) the indications that were the basis of such designation and other approved indications for the drugs, and the indications for which each drug has most commonly been used, including non-approved indications for which the drug may be recommended by external organizations such as physician or patient organizations.

(a) In general.—Subchapter E of chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bbb et seq.) is amended by adding at the end the following:

(b) FTC.—There are authorized to be appropriated to the Federal Trade Commission such sums as may be necessary for the purpose of carrying out activities related to addressing criminal activity and anticompetitive practices by pharmaceutical companies.

(a) In general.—The Federal Trade Commission Act (15 U.S.C. 44 et seq.) is amended by inserting after section 26 (15 U.S.C. 57c–2) the following:

(b) Effective date.—Section 27 of the Federal Trade Commission Act, as added by this section, shall apply to all agreements described in section 27(a)(1) of that Act entered into after June 17, 2013. Section 27(f) of the Federal Trade Commission Act, as added by this section, shall apply to agreements entered into on or after the date of enactment of this Act.

(a) Amendments to Federal Food, Drug, and Cosmetic Act.—

(1) IN GENERAL.—Section 505(j)(5)(B) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(B)) is amended—

(A) in clause (iv)(II)—

(i) by striking item (bb); and

(ii) by redesignating items (cc) and (dd) as items (bb) and (cc), respectively; and

(B) by adding at the end the following:

“(v) FIRST APPLICANT DEFINED.—As used in this subsection, the term ‘first applicant’ means an applicant—

“(I) (aa) that, on the first day on which a substantially complete application containing a certification described in paragraph (2)(A)(vii)(IV) is submitted for approval of a drug, submits a substantially complete application that contains and lawfully maintains a certification described in paragraph (2)(A)(vii)(IV) for the drug; and

“(bb) that has not entered into a disqualifying agreement described under clause (vii)(II); or

“(II) (aa) for the drug that is not described in subclause (I) and that, with respect to the applicant and drug, each requirement described in clause (vi) is satisfied; and

“(bb) that has not entered into a disqualifying agreement described under clause (vii)(II).

“(vi) REQUIREMENT.—The requirements described in this clause are the following:

“(I) The applicant described in clause (v)(II) submitted and lawfully maintains a certification described in paragraph (2)(A)(vii)(IV) or a statement described in paragraph (2)(A)(viii) for each unexpired patent for which a first applicant described in clause (v)(I) had submitted a certification described in paragraph (2)(A)(vii)(IV) on the first day on which a substantially complete application containing such a certification was submitted.

“(II) With regard to each such unexpired patent for which the applicant described in clause (v)(II) submitted a certification described in paragraph (2)(A)(vii)(IV), no action for patent infringement was brought against such applicant within the 45-day period specified in paragraph (5)(B)(iii); or if an action was brought within such time period, such an action was withdrawn or dismissed by a court (including a district court) without a decision that the patent was valid and infringed; or if an action was brought within such time period and was not withdrawn or so dismissed, such applicant has obtained the decision of a court (including a district court) that the patent is invalid or not infringed (including any substantive determination that there is no cause of action for patent infringement or invalidity, and including a settlement order or consent decree signed and entered by the court stating that the patent is invalid or not infringed).

“(III) If an applicant described in clause (v)(I) has begun commercial marketing of such drug, the applicant described in clause (v)(II) does not begin commercial marketing of such drug until the date that is 30 days after the date on which the applicant described in clause (v)(I) began such commercial marketing.”.

(2) CONFORMING AMENDMENT.—Section 505(j)(5)(D)(i)(IV) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(IV)) is amended by striking “The first applicant” and inserting “The first applicant, as defined in subparagraph (B)(v)(I),”.

(b) Applicability.—The amendments made by subsection (a) shall apply only with respect to an application filed under section 505(j) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)) to which the amendments made by section 1102(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173) apply.

(a) Amendments to Federal Food, Drug, and Cosmetic Act.—

(1) LIMITATIONS ON AGREEMENTS TO DEFER COMMERCIAL MARKETING DATE.—Section 505(j)(5)(B) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(B)), as amended by section 402, is further amended by adding at the end the following:

“(vii) AGREEMENT BY FIRST APPLICANT TO DEFER COMMERCIAL MARKETING; LIMITATION ON ACCELERATION OF DEFERRED COMMERCIAL MARKETING DATE.—

“(I) AGREEMENT TO DEFER APPROVAL OR COMMERCIAL MARKETING DATE.—An agreement described in this subclause is an agreement between a first applicant and the holder of the application for the listed drug or an owner of one or more of the patents as to which any applicant submitted a certification qualifying such applicant for the 180-day exclusivity period whereby that applicant agrees, directly or indirectly, (aa) not to seek an approval of its application that is made effective on the earliest possible date under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, (bb) not to begin the commercial marketing of its drug on the earliest possible date after receiving an approval of its application that is made effective under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, or (cc) to both items (aa) and (bb).

“(II) AGREEMENT THAT DISQUALIFIES APPLICANT FROM FIRST APPLICANT STATUS.—An agreement described in this subclause is an agreement between an applicant and the holder of the application for the listed drug or an owner of one or more of the patents as to which any applicant submitted a certification qualifying such applicant for the 180-day exclusivity period whereby that applicant agrees, directly or indirectly, not to seek an approval of its application or not to begin the commercial marketing of its drug until a date that is after the expiration of the 180-day exclusivity period awarded to another applicant with respect to such drug (without regard to whether such 180-day exclusivity period is awarded before or after the date of the agreement).

“(viii) LIMITATION ON ACCELERATION.—If an agreement described in clause (vii)(I) includes more than 1 possible date when an applicant may seek an approval of its application or begin the commercial marketing of its drug—

“(I) the applicant may seek an approval of its application or begin such commercial marketing on the date that is the earlier of—

“(aa) the latest date set forth in the agreement on which that applicant can receive an approval that is made effective under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, or begin the commercial marketing of such drug, without regard to any other provision of such agreement pursuant to which the commercial marketing could begin on an earlier date; or

“(bb) 180 days after another first applicant begins commercial marketing of such drug; and

“(II) the latest date set forth in the agreement on which that applicant can receive an approval that is made effective under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, or begin the commercial marketing of such drug, without regard to any other provision of such agreement pursuant to which commercial marketing could begin on an earlier date, shall be the date used to determine whether an applicant is disqualified from first applicant status pursuant to clause (vii)(II).”.

(2) NOTIFICATION OF FDA.—Section 505(j) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)) is amended by adding at the end the following:

“(14) (A) The holder of an abbreviated application under this subsection shall submit to the Secretary a notification that includes—

“(i) (I) the text of any agreement entered into by such holder described under paragraph (5)(B)(vii)(I); or

“(II) if such an agreement has not been reduced to text, a written detailed description of such agreement that is sufficient to disclose all the terms and conditions of the agreement; and

“(ii) the text, or a written detailed description in the event of an agreement that has not been reduced to text, of any other agreements that are contingent upon, provide a contingent condition for, or are otherwise related to an agreement described in clause (i).

“(B) The notification described under subparagraph (A) shall be submitted not later than 10 business days after execution of the agreement described in subparagraph (A)(i). Such notification is in addition to any notification required under section 1112 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

“(C) Any information or documentary material filed with the Secretary pursuant to this paragraph shall be exempt from disclosure under section 552 of title 5, United States Code, and no such information or documentary material may be made public, except as may be relevant to any administrative or judicial action or proceeding. Nothing in this paragraph is intended to prevent disclosure to either body of the Congress or to any duly authorized committee or subcommittee of the Congress.”.

(3) PROHIBITED ACTS.—Section 301(e) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331(e)) is amended by striking “505 (i) or (k)” and inserting “505 (i), (j)(11), or (k)”.

(b) Infringement of patent.—Section 271(e) of title 35, United States Code, is amended by adding at the end the following:

“(7) The exclusive remedy under this section for an infringement of a patent for which the Secretary of Health and Human Services has published information pursuant to subsection (b)(1) or (c)(2) of section 505 of the Federal Food, Drug, and Cosmetic Act shall be an action brought under this subsection within the 45-day period described in subsection (j)(5)(B)(iii) or (c)(3)(C) of section 505 of the Federal Food, Drug, and Cosmetic Act.”.

(c) Applicability.—

(1) LIMITATIONS ON ACCELERATION OF DEFERRED COMMERCIAL MARKETING DATE.—The amendment made by subsection (a)(1) shall apply only with respect to—

(A) an application filed under section 505(j) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)) to which the amendments made by section 1102(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173) apply; and

(B) an agreement described under section 505(j)(5)(B)(vii)(I) of the Federal Food, Drug, and Cosmetic Act (as added by subsection (a)(1)) executed after the date of enactment of this Act.

(2) NOTIFICATION OF FDA.—The amendments made by paragraphs (2) and (3) of subsection (a) shall apply only with respect to an agreement described under section 505(j)(5)(B)(vii)(I) of the Federal Food, Drug, and Cosmetic Act (as added by subsection (a)(1)) executed after the date of enactment of this Act.

Section 505(j)(7) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(7)) is amended by adding at the end the following:

“(D) (i) The Commissioner shall—

“(I) not later than 9 months after the date of enactment of the Affordable Medications Act, publish a complete, up-to-date list on the internet website of the Food and Drug Administration of all drugs, including authorized generics, together with, with respect to the drug, as applicable—

“(aa) the drug trade name;

“(bb) the established name;

“(cc) each active pharmaceutical ingredient facility (as defined in section 744B(a)(4)(a)(ii));

“(dd) each generic drug facility;

“(ee) each contract manufacturing organization facility (as defined in section 744A(5));

“(ff) the date any authorized generic drug entered the market;

“(gg) the marketing status; and

“(hh) any other information the Secretary may require to mitigate or prevent drug shortages;

“(II) designate each drug on the list that is a sole-source generic drug;

“(III) designate each drug on the list that is an essential medicine, as identified by the World Health Organization, or another entity designated by the Secretary that meets evidence-based standards as required by the Secretary; and

“(IV) maintain a confidential list of the identity and address of each facility described in subclause (I), and publicly report on the website only the city and State or country of each such facility.

“(ii) The Commissioner may choose not to make information collected under clause (i) publicly available if the Secretary determines that disclosure of such information would adversely affect the public health (such as by increasing the possibility of hoarding or other disruption of the availability of drug products to patients).

“(iii) The Commissioner shall notify relevant Federal agencies, including the Centers for Medicare & Medicaid Services and the Federal Trade Commission, when the Commissioner first publishes the information under clause (i) that the information has been published and will be updated regularly.

“(iv) In this subparagraph, the term ‘sole-source’ means, with respect to a drug, there is not more than one approved drug on the list of drugs under subparagraph (A), not including drugs on the discontinued section of such list.”.

(a) In general.—Part IX of subchapter B of chapter 1 of subtitle A of the Internal Revenue Code of 1986 (relating to items not deductible) is amended by adding at the end the following new section:

(b) Conforming amendment.—The table of sections for such part IX of the Internal Revenue Code of 1986 is amended by adding after the item relating to section 280H the following new item:

“Sec. 280I. Disallowance of deduction for direct-to-consumer advertising of prescription drugs.”.

(c) Effective date.—The amendments made by subsections (a) and (b) shall apply to amounts paid or incurred after the date of the enactment of this Act, in taxable years ending after such date.

(d) Oversight of prescription drugs.—

(1) IN GENERAL.—The Secretary of Health and Human Services (referred to in this subsection as the “Secretary”), acting through the Commissioner of Food and Drugs and in coordination with other Federal agencies, shall conduct oversight of the risks and benefits of drugs that are on the market and how such risks are presented in drug advertisements for the purpose of correcting false or misleading information published in direct-to-consumer advertisements and to disseminate corrective information to health care providers and the general public regarding the risks and benefits of a drug on an quarterly basis.

(2) PREREVIEW OF TELEVISION ADVERTISEMENTS.—The Secretary, acting through the Commissioner of Food and Drugs and in consultation with relevant stakeholders, shall issue new, or update current, guidance issued under section 503C of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353c). In carrying out this paragraph, the Secretary shall focus on drugs that present the greatest risk to consumers, drugs that represent the greatest proportion of total spending in Federal programs, drugs with high unit price increases over the preceding year, drugs with high launch prices, or any other priority drugs identified by the Secretary.

(3) FUNDING.—There is authorized to be appropriated to the Secretary an amount equal to the increase in revenue resulting from the enactment of section 280I of the Internal Revenue Code of 1986, as added by subsection (a).

(a) Duty To disclose.—Whenever a drug manufacturer, including any representative of the manufacturer, communicates with a health care practitioner about a drug manufactured by the drug manufacturer, including through promotional, educational, or marketing communications, meetings or paid events, and the provision of goods, gifts, and samples, the drug manufacturer shall disclose to the practitioner the wholesale acquisition cost (as defined in section 1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w–3a(c)(6)(B))) for a 30-day supply of the drug, which may include a brief qualitative explanation of reduced cost availability for certain consumers.

(b) Enforcement by Federal Trade Commission.—

(1) UNFAIR OR DECEPTIVE ACTS OR PRACTICES.—A violation of subsection (a) by a person with respect to whom the Commission is empowered under section 5(a)(2) of the Federal Trade Commission Act (15 U.S.C. 45(a)(2)) shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).

(2) POWERS OF FEDERAL TRADE COMMISSION.—

(A) IN GENERAL.—The Federal Trade Commission shall enforce this section in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made a part of this Act.

(B) PRIVILEGES AND IMMUNITIES.—Any person who violates this section shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act (15 U.S.C. 41 et seq.).

(c) Rulemaking.—The Federal Trade Commission shall promulgate in accordance with section 553 of title 5, United States Code, such rules as may be necessary to carry out this section.

(d) Savings provision.—Nothing in this section shall be construed to limit, impair, or supersede the operation of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) or any other provision of Federal law.

(a) In general.—Subparagraph (C) of section 1927(k)(1) of the Social Security Act (42 U.S.C. 1396r–8(k)(1)) is amended—

(1) in the subparagraph heading, by striking “Inclusion” and inserting “Exclusion”;

(2) by striking “a new drug application” and inserting “the manufacturer’s new drug application”; and

(3) by striking “inclusive” and inserting “exclusive”.

(b) Effective date.—The amendments made by this section shall take effect on the first day of the first fiscal quarter that begins after the date of enactment of this Act.