This bill amends titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act to modify provisions related to the affordability of prescription drugs under the Medicare and Medicaid programs. Specifically, the bill:

• requires the Centers for Medicare & Medicaid to negotiate lower prices on behalf of beneficiaries for drugs covered under Medicare Part D;
• accelerates closure of the Medicare Part D coverage gap known as the "donut hole," under which beneficiaries who have reached a certain level of yearly drug costs become fully responsible for any additional drug costs up to a certain limit;
• requires drug manufacturers to issue rebates for prescription drugs dispensed to eligible low-income individuals under Medicare or Medicaid; and
• expands the application of certain prescription drug rebate requirements under Medicaid to include rebates for generic drugs.

The bill also amends the Federal Food, Drug, and Cosmetic Act to: (1) allow the importation by individuals of prescription drugs from Canada and, potentially, other countries; and (2) establish certain conditions on the award of market exclusivity with respect to drugs. Specifically, a drug manufacturer's market exclusivity shall be terminated if the manufacturer commits, or fails to report, a drug-related violation such as misbranding, illegal marketing, or fraud.

In addition, the bill amends the Federal Trade Commission Act to: (1) establish restrictions on certain anticompetitive patent settlements known as "pay-for-delay" agreements, which effectively block generic drug competition; and (2) allow the Federal Trade Commission to initiate proceedings to enforce these restrictions against any parties to such a settlement.

The bill also requires drug manufacturers to produce and share annual reports containing specified information related to domestic and foreign sales.