S.Amdt. 2726

SA 2726. Mr. MERKLEY (for himself and Mr. Welch) submitted an
amendment intended to be proposed by him to the bill S. 4638, to
authorize appropriations for fiscal year 2025 for military activities
of the Department of Defense, for military construction, and for
defense activities of the Department of Energy, to prescribe military
personnel strengths for such fiscal year, and for other purposes; which
was ordered to lie on the table; as follows:

At the appropriate place in title VII, insert the
following:

SEC. 7__. REFERENCE PRICES FOR PRESCRIPTION DRUGS UNDER THE
TRICARE PROGRAM.

(a) In General.--Each year, the Secretary of Defense shall
establish the reference price for each prescription drug
provided to beneficiaries under the TRICARE program--
(1) by determining the lowest retail list price for the
drug among the countries specified in subsection (b) in which
the drug is available, if drug pricing information is
available for at least 3 of such countries; or
(2) in the case of a drug for which drug pricing
information or dosage equivalents are not available for at
least 3 of such countries, by determining an appropriate
price based on the determination by the Secretary of--
(A) the added therapeutic effect of the drug;
(B) the value of the drug;
(C) patient access to the drug;

[[Page S5021]]

(D) the costs associated with researching and developing
the drug; and
(E) other factors, as the Secretary determines appropriate.
(b) Reference Countries.--The countries specified in this
subsection are Japan, Germany, the United Kingdom, France,
Italy, Canada, Australia, Spain, the Netherlands,
Switzerland, and Sweden.
(c) Application Under TRICARE Program.--
(1) Federal supply schedule.--In procuring a prescription
drug under the Federal Supply Schedule of the General
Services Administration, the Secretary of Defense, and any
drug manufacturer providing the prescription drug to the
Secretary, shall comply with the price limitations under
section 8126 of title 38, United States Code, or the
reference price limitations for such drug established under
subsection (a), whichever is lower.
(2) Contracts with pharmacy benefits managers.--
(A) In general.--In entering into contracts with pharmacy
benefits managers to carry out the pharmacy benefits program
under section 1074g of title 10, United States Code, the
Secretary of Defense shall ensure that the price for
prescription drugs provided by such pharmacy benefits
managers to beneficiaries under the TRICARE program does not
exceed the price for such drug established under the pharmacy
benefits program or the reference price for such drug
established under subsection (a), whichever is lower.
(B) Drug manufacturers.--A drug manufacturer may not sell a
prescription drug under the pharmacy benefits program under
section 1074g of title 10, United States Code, for an amount
that exceeds the limitation under subparagraph (A).
(3) Direct purchasing.--
(A) In general.--In making direct purchases of prescription
drugs under any authority not covered by paragraph (1) or
(2), the Secretary of Defense shall ensure that the price for
such drug does not exceed the reference price for such drug
established under subsection (a).
(B) Drug manufacturers.--A drug manufacturer may not sell a
prescription drug to the Secretary of Defense under an
authority specified in subparagraph (A) for an amount that
exceeds the reference price for such drug established under
subsection (a).
(d) Enforcement.--
(1) Civil penalty.--A drug manufacturer who does not comply
with the requirements under subsection (c) shall be subject
to a civil penalty, for each year in which the violation
occurs and with respect to each drug for which the violation
occurs, in an amount equal to 5 times the difference
between--
(A) the total amount received by the manufacturer for sales
of the drug under the TRICARE program for the year; less
(B) the total amount the manufacturer would have received
for sales of the drug under the TRICARE program for the year
if the manufacturer had complied with subsection (c).
(2) Amounts collected.--
(A) In general.--Each year, the Secretary of the Treasury
shall transfer to the Director of the National Institutes of
Health an amount equal to the amount collected in civil
penalties under subsection (e) for the previous year.
(B) Use of amounts.--The Director of the National
Institutes of Health shall use amounts transferred under
subparagraph (A) for purposes of conducting drug research and
development.
(e) Applicability to Brand and Generic Drugs.--The
reference price established under subsection (a) shall apply
to drugs approved under subsection (c) or (j) of section 505
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355)
or under subsection (a) or (k) of section 351 of the Public
Health Service Act (42 U.S.C. 262).
(f) TRICARE Program Defined.--In this section, the term
``TRICARE program'' has the meaning given that term in
section 1072 of title 10, United States Code.
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