United States S 378: Stop Price Gouging Act

Bill Text

II
116TH CONGRESS
1ST SESSION S. 378
To amend the Internal Revenue Code of 1986 to establish an excise tax
on certain prescription drugs which have been subject to a price spike,
and for other purposes.
IN THE SENATE OF THE UNITED STATES
FEBRUARY 7, 2019
Mr. BROWN (for himself, Mrs. GILLIBRAND, and Ms. HASSAN) introduced the
following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to establish
an excise tax on certain prescription drugs which have
been subject to a price spike, and for other purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Stop Price Gouging 4
Act’’. 5
SEC. 2. IDENTIFICATION OF PRESCRIPTION DRUG PRICE 6
SPIKES. 7
(a) DEFINITIONS.—In this section: 8
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•S 378 IS
(1) APPLICABLE ENTITY.—The term ‘‘applica-1
ble entity’’ means the holder of an application ap-2
proved under subsection (c) or (j) of section 505 of 3
the Federal Food, Drug, and Cosmetic Act (21 4
U.S.C. 355) or of a license issued under subsection 5
(a) or (k) of section 351 of the Public Health Serv-6
ice Act (42 U.S.C. 262) for a drug described in 7
paragraph (5)(A). 8
(2) AVERAGE MANUFACTURER PRICE.—The 9
term ‘‘average manufacturer price’’— 10
(A) has the same meaning given such term 11
under section 1927(k)(1) of the Social Security 12
Act (42 U.S.C. 1396r–8(k)(1)); or 13
(B) with respect to a drug for which there 14
is no average manufacturer price as so defined, 15
such term shall mean the wholesale acquisition 16
cost of the drug. 17
(3) COMMERCE.—The term ‘‘commerce’’ has 18
the meaning given such term in section 4 of the 19
Federal Trade Commission Act (15 U.S.C. 44). 20
(4) INSPECTOR GENERAL.—The term ‘‘Inspec-21
tor General’’ means the Inspector General of the De-22
partment of Health and Human Services. 23
(5) PRESCRIPTION DRUG.— 24
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•S 378 IS
(A) IN GENERAL.—The term ‘‘prescription 1
drug’’ means any drug (as defined in section 2
201(g) of the Federal Food, Drug, and Cos-3
metic Act (21 U.S.C. 321(g))), including a com-4
bination product whose primary mode of action 5
is determined under section 503(g) of such Act 6
(21 U.S.C. 353(g)) to be that of a drug, and 7
that— 8
(i) is subject to section 503(b)(1) of 9
the Federal Food, Drug, and Cosmetic Act 10
(21 U.S.C. 353(b)(1)); and 11
(ii) is covered by a Federal health 12
care program (as defined in section 13
1128B(f) of the Social Security Act (42 14
U.S.C. 1320a–7b(f))). 15
(B) TREATMENT OF REFORMULATED 16
DRUGS.—For purposes of this section, a pre-17
scription drug with respect to which the Sec-18
retary of Health and Human Services has ap-19
proved any minor reformulation that does not 20
produce a meaningful therapeutic benefit, the 21
drug that was approved prior to any such refor-22
mulation and the drug with any such reformu-23
lation shall be considered one prescription drug. 24
(6) PRICE SPIKE.— 25
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•S 378 IS
(A) IN GENERAL.—The term ‘‘price spike’’ 1
means an increase in the average manufacturer 2
price in commerce of a prescription drug for 3
which the price spike percentage is equal to or 4
greater than applicable price increase allowance. 5
(B) PRICE SPIKE PERCENTAGE.—The 6
price spike percentage is the percentage (if any) 7
by which— 8
(i) the average manufacturer price of 9
a prescription drug in commerce for the 10
calendar year; exceeds 11
(ii) the average manufacturer price of 12
such prescription drug in commerce for the 13
calendar year preceding such year. 14
(C) APPLICABLE PRICE INCREASE ALLOW-15
ANCE.—The applicable price increase allowance 16
for any calendar year is the percentage (round-17
ed to the nearest one-tenth of 1 percent) by 18
which the C-CPI-U (as defined in section 19
1(f)(6) of the Internal Revenue Code of 1986) 20
for that year exceeds the C-CPI-U for the pre-21
ceding calendar year. 22
(7) PRICE SPIKE REVENUE.— 23
(A) IN GENERAL.—The price spike revenue 24
for any calendar year is an amount equal to— 25
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•S 378 IS
(i) the gross price spike revenue, 1
minus 2
(ii) the adjustment amount. 3
(B) GROSS PRICE SPIKE REVENUE.—The 4
gross price spike revenue for any calendar year 5
is an amount equal to the product of— 6
(i) an amount equal to the difference 7
between clause (i) of paragraph (6)(B) and 8
clause (ii) of such paragraph; and 9
(ii) the total number of