[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 19 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 19
To provide for certain reforms with respect to the Medicare program
under title XVIII of the Social Security Act, the Medicaid program
under title XIX of such Act, the Food and Drug Administration, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 21, 2021
Mrs. Rodgers of Washington (for herself, Mr. Brady, Ms. Foxx, Mr.
Guthrie, Mr. Nunes, and Mr. Allen) introduced the following bill; which
was referred to the Committee on Energy and Commerce, and in addition
to the Committees on Ways and Means, and the Judiciary, for a period to
be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To provide for certain reforms with respect to the Medicare program
under title XVIII of the Social Security Act, the Medicaid program
under title XIX of such Act, the Food and Drug Administration, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Lower Costs, More Cures Act of
2021''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--MEDICARE PARTS B AND D
Subtitle A--Medicare Part B Provisions
Sec. 101. Improvements to Medicare site-of-service transparency.
Sec. 102. Requiring manufacturers of certain single-dose container or
single-use package drugs payable under part
B of the Medicare program to provide
refunds with respect to discarded amounts
of such drugs.
Sec. 103. Providing for variation in payment for certain drugs covered
under part B of the Medicare program.
Sec. 104. Establishment of maximum add-on payment for drugs and
biologicals.
Sec. 105. Treatment of drug administration services furnished by
certain excepted off-campus outpatient
departments of a provider.
Subtitle B--Drug Price Transparency
Sec. 111. Reporting on explanation for drug price increases.
Sec. 112. Public disclosure of drug discounts.
Sec. 113. Study of pharmaceutical supply chain intermediaries and
merger activity.
Sec. 114. Making prescription drug marketing sample information
reported by manufacturers available to
certain individuals and entities.
Sec. 115. Sense of Congress regarding the need to expand commercially
available drug pricing comparison
platforms.
Subtitle C--Medicare Part D Benefit Redesign
Sec. 121. Medicare part D benefit redesign.
Subtitle D--Other Medicare Part D Provisions
Sec. 131. Allowing the offering of additional prescription drug plans
under Medicare part D.
Sec. 132. Allowing certain enrollees of prescription drug plans and MA-
PD plans under Medicare program to spread
out cost-sharing under certain
circumstances.
Sec. 133. Establishing a monthly cap on beneficiary incurred costs for
insulin products and supplies under a
prescription drug plan or MA-PD plan.
Sec. 134. Growth rate of Medicare part D out-of-pocket cost threshold.
TITLE II--MEDICAID
Sec. 201. Medicaid pharmacy and therapeutics committee improvements.
Sec. 202. GAO report on conflicts of interest in State Medicaid program
drug use review boards and pharmacy and
therapeutics (P&T) committees.
Sec. 203. Ensuring the accuracy of manufacturer price and drug product
information under the Medicaid drug rebate
program.
Sec. 204. Improving transparency and preventing the use of abusive
spread pricing and related practices in
Medicaid.
Sec. 205. T-MSIS drug data analytics reports.
Sec. 206. Risk-sharing value-based payment agreements for covered
outpatient drugs under Medicaid.
Sec. 207. Applying Medicaid drug rebate requirement to drugs provided
as part of outpatient hospital services.
TITLE III--FOOD AND DRUG ADMINISTRATION
Subtitle A--Pay-for-Delay
Sec. 301. Unlawful agreements.
Sec. 302. Notice and certification of agreements.
Sec. 303. Forfeiture of 180-day exclusivity period.
Sec. 304. Commission litigation authority.
Sec. 305. Statute of limitations.
Subtitle B--Advancing Education on Biosimilars
Sec. 321. Education on biological products.
Subtitle C--Other Provisions
Sec. 331. Clarifying the meaning of new chemical entity.
TITLE IV--REVENUE PROVISION
Sec. 401. Safe harbor for high deductible health plans without
deductible for insulin.
TITLE V--MISCELLANEOUS
Sec. 501. Payment for biosimilar biological products during initial
period.
Sec. 502. GAO study and report on average sales price.
Sec. 503. Requiring prescription drug plans and MA-PD plans to report
potential fraud, waste, and abuse to the
Secretary of HHS.
Sec. 504. Establishment of pharmacy quality measures under Medicare
part D.
Sec. 505. Improving coordination between the Food and Drug
Administration and the Centers for Medicare
& Medicaid Services.
Sec. 506. Patient consultation in Medicare national and local coverage
determinations in order to mitigate
barriers to inclusion of such perspectives.
Sec. 507. MedPAC report on shifting coverage of certain Medicare part B
drugs to Medicare part D.
Sec. 508. Requirement that direct-to-consumer advertisements for
prescription drugs and biological products
include truthful and non-misleading pricing
information.
Sec. 509. Chief Pharmaceutical Negotiator at the Office of the United
States Trade Representative.
TITLE I--MEDICARE PARTS B AND D
Subtitle A--Medicare Part B Provisions
SEC. 101. IMPROVEMENTS TO MEDICARE SITE-OF-SERVICE TRANSPARENCY.
Section 1834(t) of the Social Security Act (42 U.S.C. 1395m(t)) is
amended--
(1) in paragraph (1)--
(A) in the heading, by striking ``In general'' and
inserting ``Site payment'';
(B) in the matter preceding subparagraph (A)--
(i) by striking ``or to'' and inserting ``,
to'';
(ii) by inserting ``, or to a physician for
services furnished in a physician's office''
after ``surgical center''; and
(iii) by inserting ``(or 2022 with respect
to a physician for services furnished in a
physician's office)'' after ``2018''; and
(C) in subparagraph (A)--
(i) by striking ``and the'' and inserting
``, the''; and
(ii) by inserting ``, and the physician fee
schedule under section 1848 (with respect to
the practice expense component of such payment
amount)'' after ``such section'';
(2) by redesignating paragraphs (2) through (4) as
paragraphs (3) through (5), respectively; and
(3) by inserting after paragraph (1) the following new
paragraph:
``(2) Physician payment.--Beginning in 2022, the Secretary
shall expand the information included on the Internet website
described in paragraph (1) to include--
``(A) the amount paid to a physician under section
1848 for an item or service for the settings described
in paragraph (1); and
``(B) the estimated amount of beneficiary liability
applicable to the item or service.''.
SEC. 102. REQUIRING MANUFACTURERS OF CERTAIN SINGLE-DOSE CONTAINER OR
SINGLE-USE PACKAGE DRUGS PAYABLE UNDER PART B OF THE
MEDICARE PROGRAM TO PROVIDE REFUNDS WITH RESPECT TO
DISCARDED AMOUNTS OF SUCH DRUGS.
Section 1847A of the Social Security Act (42 U.S.C. 1395w-3a) is
amended by adding at the end the following new subsection:
``(i) Refund for Certain Discarded Single-Dose Container or Single-
Use Package Drugs.--
``(1) Secretarial provision of information.--
``(A) In general.--For each calendar quarter
beginning on or after January 1, 2022, the Secretary
shall, with respect to a refundable single-dose
container or single-use package drug (as defined in
paragraph (8)), report to each manufacturer (as defined
in subsection (c)(6)(A)) of such refundable single-dose
container or single-use package drug the following for
the calendar quarter:
``(i) Subject to subparagraph (C),
information on the total number of units of the
billing and payment code of such drug, if any,
that were discarded during such quarter, as
determined using a mechanism such as the JW
modifier used as of the date of enactment of
this subsection (or any such successor modifier
that includes such data as determined
appropriate by the Secretary).
``(ii) The refund amount that the
manufacturer is liable for pursuant to
paragraph (3).
``(B) Determination of discarded amounts.--For
purposes of subparagraph (A)(i), with respect to a
refundable single-dose container or single-use package
drug furnished during a quarter, the amount of such
drug that was discarded shall be determined based on
the amount of such drug that was unused and discarded
for each drug on the date of service.
``(C) Exclusion of units of packaged drugs.--The
total number of units of the billing and payment code
of a refundable single-dose container or single-use
package drug of a manufacturer furnished during a
calendar quarter for purposes of subparagraph (A)(i),
and the determination of the estimated total allowed
charges for the drug in the quarter for purposes of
paragraph (3)(A)(ii), shall not include such units that
are packaged into the payment amount for an item or
service and are not separately payable.
``(2) Manufacturer requirement.--For each calendar quarter
beginning on or after January 1, 2022, the manufacturer of a
refundable single-dose container or single-use package drug
shall, for such drug, provide to the Secretary a refund that is
equal to the amount specified in paragraph (3) for such drug
for such quarter.
``(3) Refund amount.--
``(A) In general.--The amount of the refund
specified in this paragraph is, with respect to a
refundable single-dose container or single-use package
drug of a manufacturer assigned to a billing and
payment code for a calendar quarter beginning on or
after January 1, 2022, an amount equal to the estimated
amount (if any) by which--
``(i) the product of--
``(I) the total number of units of
the billing and payment code for such
drug that were discarded during such
quarter (as determined under paragraph
(1)); and
``(II)(aa) in the case of a
refundable single-dose container or
single-use package drug that is a
single source drug or biological, the
amount of payment determined for such
drug or biological under subsection
(b)(1)(B) for such quarter; or
``(bb) in the case of a refundable
single-dose container or single-use
package drug that is a biosimilar
biological product, the amount of
payment determined for such product
under subsection (b)(1)(C) for such
quarter; exceeds
``(ii) an amount equal to the applicable
percentage (as defined in subparagraph (B)) of
the estimated total allowed charges for such
drug under this part during the quarter.
``(B) Applicable percentage defined.--
``(i) In general.--For purposes of
subparagraph (A)(ii), the term `applicable
percentage' means--
``(I) subject to subclause (II), 10
percent; and
``(II) if applicable, in the case
of a refundable single-dose container
or single-use package drug described in
clause (ii), a percentage specified by
the Secretary pursuant to such clause.
``(ii) Treatment of drugs that have unique
circumstances.--In the case of a refundable
single-dose container or single-use package
drug that has unique circumstances involving
similar loss of product as that described in
paragraph (8)(B)(ii), the Secretary, through
notice and comment rulemaking, may increase the
applicable percentage otherwise applicable
under clause (i)(I) as determined appropriate
by the Secretary.
``(4) Frequency.--Amounts required to be refunded pursuant
to paragraph (2) shall be paid in regular intervals (as
determined appropriate by the Secretary).
``(5) Refund deposits.--Amounts paid as refunds pursuant to
paragraph (2) shall be deposited into the Federal Supplementary
Medical Insurance Trust Fund established under section 1841.
``(6) Enforcement.--
``(A) Audits.--
``(i) Manufacturer audits.--Each
manufacturer of a refundable single-dose
container or single-use package drug that is
required to provide a refund under this
subsection shall be subject to periodic audit
with respect to such drug and such refunds by
the Secretary.
``(ii) Provider audits.--The Secretary
shall conduct periodic audits of claims
submitted under this part with respect to
refundable single-dose container or single-use
package drugs in accordance with the authority
under section 1833(e) to ensure compliance with
the requirements applicable under this
subsection.
``(B) Civil money penalty.--
``(i) In general.--The Secretary shall
impose a civil money penalty on a manufacturer
of a refundable single-dose container or
single-use package drug who has failed to
comply with the requirement under paragraph (2)
for such drug for a calendar quarter in an
amount equal to the sum of--
``(I) the amount that the
manufacturer would have paid under such
paragraph with respect to such drug for
such quarter; and
``(II) 25 percent of such amount.
``(ii) Application.--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).
``(7) Implementation.--The Secretary shall implement this
subsection through notice and comment rulemaking.
``(8) Definition of refundable single-dose container or
single-use package drug.--
``(A) In general.--Except as provided in
subparagraph (B), in this subsection, the term
`refundable single-dose container or single-use package
drug' means a single source drug or biological (as
defined in section 1847A(c)(6)(D)) or a biosimilar
biological product (as defined in section
1847A(c)(6)(H)) for which payment is made under this
part and that is furnished from a single-dose container
or single-use package.
``(B) Exclusions.--The term `refundable single-dose
container or single-use package drug' does not
include--
``(i) a drug or biological that is either a
radiopharmaceutical or an imaging agent;
``(ii) a drug or biological approved by the
Food and Drug Administration for which dosage
and administration instructions included in the
labeling require filtration during the drug
preparation process, prior to dilution and
administration, and require that any unused
portion of such drug after the filtration
process be discarded after the completion of
such filtration process; or
``(iii) a drug or biological approved by
the Food and Drug Administration on or after
the date of enactment of this subsection and
with respect to which payment has been made
under this part for fewer than 18 months.
``(9) Report to congress.--Not later than 3 years after the
date of enactment of this subsection, the Office of the
Inspector General, after consultation with the Centers for
Medicare & Medicaid Services and the Food and Drug
Administration, shall submit to the Committee on Energy and
Commerce and the Committee on Ways and Means of the House of
Representatives and the Committee on Finance in the Senate, a
report on any impact this section is reported to have on the
licensure, market entry, market retention, or marketing of
biosimilar biological products. Such report shall be updated
periodically at the direction of the Committee on Energy and
Commerce and the Committee on Ways and Means of the House of
Representatives and the Committee on Finance in the Senate.''.
SEC. 103. PROVIDING FOR VARIATION IN PAYMENT FOR CERTAIN DRUGS COVERED
UNDER PART B OF THE MEDICARE PROGRAM.
(a) In General.--Section 1847A(b) of the Social Security Act (42
U.S.C. 1395w-3a(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A), by inserting after ``or
106 percent'' the following: ``(or, for a multiple
source drug (other than autologous cellular
immunotherapy) furnished on or after January 1, 2022,
the applicable percent specified in paragraph (9)(A)
for the drug and quarter involved)''; and
(B) in subparagraph (B) of paragraph (1), by
inserting after ``106 percent'' the following: ``(or,
for a single source drug or biological (other than
autologous cellular immunotherapy) furnished on or
after January 1, 2022, the applicable percent specified
in paragraph (9)(A) for the drug or biological and
quarter involved)''; and
(2) by adding at the end the following new paragraph:
``(9) Application of variable percentages based on
percentile ranking of per beneficiary allowed charges.--
``(A) Applicable percent to be applied.--
``(i) In general.--Subject to clauses (ii),
with respect to a drug or biological furnished
in a calendar quarter beginning on or after
January 1, 2022, if the Secretary determines
that the percentile rank of a drug or
biological under subparagraph (B)(i)(III), with
respect to per beneficiary allowed charges for
all such drugs or biologicals, is--
``(I) at least equal to the 85th
percentile, the applicable percent for
the drug for such quarter under this
subparagraph is 104 percent;
``(II) at least equal to the 70th
percentile, but less than the 85th
percentile, such applicable percent is
106 percent;
``(III) at least equal to the 50th
percentile, but less than the 70th
percentile, such applicable percent is
108 percent; or
``(IV) less than the 50th
percentile, such applicable percent is
110 percent.
``(ii) Cases where data not sufficiently
available to compute per beneficiary allowed
charges.--Subject to clause (iii), in the case
of a drug or biological furnished for which the
amount of payment is determined under
subparagraph (A) or (B) of paragraph (1) and
not under subsection (c)(4), for calendar
quarters during a period in which data are not
sufficiently available to compute a per
beneficiary allowed charges for the drug or
biological, the applicable percent is 106
percent.
``(B) Determination of percentile rank of per
beneficiary allowed charges of drugs.--
``(i) In general.--With respect to a
calendar quarter beginning on or after January
1, 2022, for drugs and biologicals for which
the amount of payment is determined under
subparagraph (A) or (B) of paragraph (1),
except for drugs or biologicals for which data
are not sufficiently available, the Secretary
shall--
``(I) compute the per beneficiary
allowed charges (as defined in
subparagraph (C)) for each such drug or
biological;
``(II) adjust such per beneficiary
allowed charges for the quarter, to the
extent provided under subparagraph (D);
and
``(III) array such adjusted per
beneficiary allowed charges for all
such drugs or biologicals from high to
low and rank such drugs or biologicals
by percentile of such arrayed per
beneficiary allowed charges.
``(ii) Frequency.--The Secretary shall make
the computations under clause (i)(I) every 6
months (or, if necessary, as determined by the
Secretary, every 9 or 12 months) and such
computations shall apply to succeeding calendar
quarters until a new computation has been made.
``(iii) Applicable data period.--For
purposes of this paragraph, the term
`applicable data period' means the most recent
period for which the data necessary for making
the computations under clause (i) are
available, as determined by the Secretary.
``(C) Per beneficiary allowed charges defined.--In
this paragraph, the term `per beneficiary allowed
charges' means, with respect to a drug or biological
for which the amount of payment is determined under
subparagraph (A) or (B) of paragraph (1)--
``(i) the allowed charges for the drug or
biological for which payment is so made for the
applicable data period, as estimated by the
Secretary; divided by
``(ii) the number of individuals for whom
any payment for the drug or biological was made
under paragraph (1) for the applicable data
period, as estimated by the Secretary.
``(D) Adjustment to reflect changes in average
sales price.--In applying this paragraph for a
particular calendar quarter, the Secretary shall adjust
the per beneficiary allowed charges for a drug or
biological by multiplying such per beneficiary allowed
charges under subparagraph (C) for the applicable data
period by the ratio of--
``(i) the average sales price for the drug
or biological for the most recent calendar
quarter used under subsection (c)(5)(B); to
``(ii) the average sales price for the drug
or biological for the calendar quarter (or the
weighted average for the quarters involved)
included in the applicable data period.''.
(b) Application of Judicial Review Provisions.--Section 1847A(g) of
the Social Security Act is amended--
(1) by striking ``and'' at the end of paragraph (4);
(2) by striking the period at the end of paragraph (5) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(6) the determination of per beneficiary allowed charges
of drugs or biologicals and ranking of such charges under
subsection (b)(9).''.
SEC. 104. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT FOR DRUGS AND
BIOLOGICALS.
(a) In General.--Section 1847A of the Social Security Act (42
U.S.C. 1395w-3a), as amended by section 103, is further amended--
(1) in subsection (b)--
(A) in paragraph (1), in the matter preceding
subparagraph (A), by striking ``paragraph (7)'' and
inserting ``paragraphs (7) and (10)''; and
(B) by adding at the end the following new
paragraph:
``(10) Maximum add-on payment amount.--
``(A) In general.--In determining the payment
amount under the provisions of subparagraph (A), (B),
or (C) of paragraph (1) of this subsection, subsection
(c)(4)(A)(ii), or subsection (d)(3)(C) for a drug or
biological furnished on or after January 1, 2022, if
the applicable add-on payment (as defined in
subparagraph (B)) for each drug or biological on a
claim for a date of service exceeds the maximum add-on
payment amount specified under subparagraph (C) for the
drug or biological, then the payment amount otherwise
determined for the drug or biological under those
provisions, as applicable, shall be reduced by the
amount of such excess.
``(B) Applicable add-on payment defined.--In this
paragraph, the term `applicable add-on payment' means
the following amounts, determined without regard to the
application of subparagraph (A):
``(i) In the case of a multiple source
drug, an amount equal to the difference
between--
``(I) the amount that would
otherwise be applied under paragraph
(1)(A); and
``(II) the amount that would be
applied under such paragraph if `100
percent' were substituted for the
applicable percent (as defined in
paragraph (9)) for such drug.
``(ii) In the case of a single source drug
or biological, an amount equal to the
difference between--
``(I) the amount that would
otherwise be applied under paragraph
(1)(B); and
``(II) the amount that would be
applied under such paragraph if `100
percent' were substituted for the
applicable percent (as defined in
paragraph (9)) for such drug or
biological.
``(iii) In the case of a biosimilar
biological product, the amount otherwise
determined under paragraph (8)(B).
``(iv) In the case of a drug or biological
during the initial period described in
subsection (c)(4)(A), an amount equal to the
difference between--
``(I) the amount that would
otherwise be applied under subsection
(c)(4)(A)(ii); and
``(II) the amount that would be
applied under such subsection if `100
percent' were substituted, as
applicable, for--
``(aa) `103 percent' in
subclause (I) of such
subsection; or
``(bb) any percent in
excess of 100 percent applied
under subclause (II) of such
subsection.
``(v) In the case of a drug or biological
to which subsection (d)(3)(C) applies, an
amount equal to the difference between--
``(I) the amount that would
otherwise be applied under such
subsection; and
``(II) the amount that would be
applied under such subsection if `100
percent' were substituted, as
applicable, for--
``(aa) any percent in
excess of 100 percent applied
under clause (i) of such
subsection; or
``(bb) `103 percent' in
clause (ii) of such subsection.
``(C) Maximum add-on payment amount specified.--For
purposes of subparagraph (A), the maximum add-on
payment amount specified in this subparagraph is--
``(i) with respect to a drug or biological
(other than autologous cellular
immunotherapy)--
``(I) for each of 2022 through
2029, $1,000; and
``(II) for a subsequent year, the
amount specified in this subparagraph
for the preceding year increased by the
percentage increase in the consumer
price index for all urban consumers
(all items; United States city average)
for the 12-month period ending with
June of the previous year; or
``(ii) with respect to a drug or biological
consisting of autologous cellular
immunotherapy--
``(I) for each of 2022 through
2029, $2,000; and
``(II) for a subsequent year, the
amount specified in this subparagraph
for the preceding year increased by the
percentage increase in the consumer
price index for all urban consumers
(all items; United States city average)
for the 12-month period ending with
June of the previous year.
Any amount determined under this subparagraph that is
not a multiple of $10 shall be rounded to the nearest
multiple of $10.''; and
(2) in subsection (c)(4)(A)(ii), by striking ``in the
case'' and inserting ``subject to subsection (b)(10), in the
case''.
(b) Conforming Amendments Relating to Separately Payable Drugs.--
(1) OPPS.--Section 1833(t)(14) of the Social Security Act
(42 U.S.C. 1395l(t)(14)) is amended--
(A) in subparagraph (A)(iii)(II), by inserting ``,
subject to subparagraph (I)'' after ``are not
available''; and
(B) by adding at the end the following new
subparagraph:
``(I) Application of maximum add-on payment for
separately payable drugs and biologicals.--In
establishing the amount of payment under subparagraph
(A) for a specified covered outpatient drug that is
furnished as part of a covered OPD service (or group of
services) on or after January 1, 2022, if such payment
is determined based on the average price for the year
established under section 1847A pursuant to clause
(iii)(II) of such subparagraph, the provisions of
subsection (b)(10) of section 1847A shall apply to the
amount of payment so established in the same manner as
such provisions apply to the amount of payment under
section 1847A.''.
(2) ASC.--Section 1833(i)(2)(D) of the Social Security Act
(42 U.S.C. 1395l(i)(2)(D)) is amended--
(A) by moving clause (v) 6 ems to the left;
(B) by redesignating clause (vi) as clause (vii);
and
(C) by inserting after clause (v) the following new
clause:
``(vi) If there is a separate payment under
the system described in clause (i) for a drug
or biological furnished on or after January 1,
2022, the provisions of subsection (t)(14)(I)
shall apply to the establishment of the amount
of payment for the drug or biological under
such system in the same manner in which such
provisions apply to the establishment of the
amount of payment under subsection
(t)(14)(A).''.
SEC. 105. TREATMENT OF DRUG ADMINISTRATION SERVICES FURNISHED BY
CERTAIN EXCEPTED OFF-CAMPUS OUTPATIENT DEPARTMENTS OF A
PROVIDER.
Section 1833(t)(16) of the Social Security Act (42 U.S.C.
1395l(t)(16)) is amended by adding at the end the following new
subparagraph:
``(G) Special payment rule for drug administration
services furnished by an excepted department of a
provider.--
``(i) In general.--In the case of a covered
OPD service that is a drug administration
service (as defined by the Secretary) furnished
by a department of a provider described in
clause (ii) or (iv) of paragraph (21)(B), the
payment amount for such service furnished on or
after January 1, 2022, shall be the same
payment amount (as determined in paragraph
(21)(C)) that would apply if the drug
administration service was furnished by an off-
campus outpatient department of a provider (as
defined in paragraph (21)(B)).
``(ii) Application without regard to budget
neutrality.--The reductions made under this
subparagraph--
``(I) shall not be considered an
adjustment under paragraph (2)(E); and
``(II) shall not be implemented in
a budget neutral manner.''.
Subtitle B--Drug Price Transparency
SEC. 111. REPORTING ON EXPLANATION FOR DRUG PRICE INCREASES.
(a) In General.--Title III of the Public Health Service Act (42
U.S.C. 241 et seq.) is amended by adding at the end the following:
``PART W--DRUG PRICE REPORTING; DRUG VALUE FUND
``SEC. 399OO. REPORTING ON EXPLANATION FOR DRUG PRICE INCREASES.
``(a) Definitions.--In this section:
``(1) Manufacturer.--The term `manufacturer' means the
person--
``(A) that holds the application for a drug
approved under section 505 of the Federal Food, Drug,
and Cosmetic Act or licensed under section 351 of this
Act; or
``(B) who is responsible for setting the wholesale
acquisition cost for the drug.
``(2) Qualifying drug.--The term `qualifying drug' means
any drug that is approved under subsection (c) or (j) of
section 505 of the Federal Food, Drug, and Cosmetic Act or
licensed under subsection (a) or (k) of section 351 of this
Act--
``(A) that has a wholesale acquisition cost of $100
or more, adjusted for inflation occurring after the
date of enactment of this section, for a month's supply
or a typical course of treatment that lasts less than a
month, and is--
``(i) subject to section 503(b)(1) of the
Federal Food, Drug, and Cosmetic Act;
``(ii) administered or otherwise dispensed
to treat a disease or condition affecting more
than 200,000 persons in the United States; and
``(iii) not a vaccine; and
``(B) for which, during the previous calendar year,
at least 1 dollar of the total amount of sales were for
individuals enrolled under the Medicare program under
title XVIII of the Social Security Act (42 U.S.C. 1395
et seq.) or under a State Medicaid plan under title XIX
of such Act (42 U.S.C. 1396 et seq.) or under a waiver
of such plan.
``(3) Wholesale acquisition cost.--The term `wholesale
acquisition cost' has the meaning given that term in section
1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
3a(c)(6)(B)).
``(b) Report.--
``(1) Report required.--The manufacturer of a qualifying
drug shall submit a report to the Secretary for each increase
in the price of a qualifying drug that results in an increase
in the wholesale acquisition cost of that drug that is equal
to--
``(A) 10 percent or more within a single calendar
year beginning on or after January 1, 2021; or
``(B) 25 percent or more within three consecutive
calendar years for which the first such calendar year
begins on or after January 1, 2021.
``(2) Report deadline.--Each report described in paragraph
(1) shall be submitted to the Secretary--
``(A) in the case of a report with respect to an
increase in the price of a qualifying drug that occurs
during the period beginning on January 1, 2021, and
ending on the day that is 60 days after the date of
enactment of this section, not later than 90 days after
such date of enactment; and
``(B) in the case of a report with respect to an
increase in the price of a qualifying drug that occurs
after the period described in subparagraph (A), not
later than 30 days prior to the planned effective date
of such price increase for such qualifying drug.
``(c) Contents.--A report under subsection (b), consistent with the
standard for disclosures described in section 213.3(d) of title 12,
Code of Federal Regulations (as in effect on the date of enactment of
this section), shall, at a minimum, include--
``(1) with respect to the qualifying drug--
``(A) the percentage by which the manufacturer will
raise the wholesale acquisition cost of the drug within
the calendar year or three consecutive calendar years
as described in subsection (b)(1)(A) or (b)(1)(B), if
applicable, and the effective date of such price
increase;
``(B) an explanation for, and description of, each
price increase for such drug that will occur during the
calendar year period described in subsection (b)(1)(A)
or the three consecutive calendar year period described
in subsection (b)(1)(B), as applicable;
``(C) if known and different from the manufacturer
of the qualifying drug, the identity of--
``(i) the sponsor or sponsors of any
investigational new drug applications under
section 505(i) of the Federal Food, Drug, and
Cosmetic Act for clinical investigations with
respect to such drug, for which the full
reports are submitted as part of the
application--
``(I) for approval of the drug
under section 505 of such Act; or
``(II) for licensure of the drug
under section 351 of this Act; and
``(ii) the sponsor of an application for
the drug approved under such section 505 of the
Federal Food, Drug, and Cosmetic Act or
licensed under section 351 of this Act;
``(D) a description of the history of the
manufacturer's price increases for the drug since the
approval of the application for the drug under section
505 of the Federal Food, Drug, and Cosmetic Act or the
issuance of the license for the drug under section 351
of this Act, or since the manufacturer acquired such
approved application or license, if applicable;
``(E) the current wholesale acquisition cost of the
drug;
``(F) the total expenditures of the manufacturer
on--
``(i) materials and manufacturing for such
drug; and
``(ii) acquiring patents and licensing for
such drug;
``(G) the percentage of total expenditures of the
manufacturer on research and development for such drug
that was derived from Federal funds;
``(H) the total expenditures of the manufacturer on
research and development for such drug that is
necessary to demonstrate that it meets applicable
statutory standards for approval under section 505 of
the Federal Food, Drug, and Cosmetic Act or licensure
under section 351 of this Act, as applicable;
``(I) the total expenditures of the manufacturer on
pursuing new or expanded indications or dosage changes
for such drug under section 505 of the Federal Food,
Drug, and Cosmetic Act or section 351 of this Act;
``(J) the total expenditures of the manufacturer on
carrying out postmarket requirements related to such
drug, including under section 505(o)(3) of the Federal
Food, Drug, and Cosmetic Act;
``(K) the total revenue and the net profit
generated from the qualifying drug for each calendar
year since the approval of the application for the drug
under section 505 of the Federal Food, Drug, and
Cosmetic Act or the issuance of the license for the
drug under section 351, or since the manufacturer
acquired such approved application or license; and
``(L) the total costs associated with marketing and
advertising for the qualifying drug;
``(2) with respect to the manufacturer--
``(A) the total revenue and the net profit of the
manufacturer for each of the 1-year period described in
subsection (b)(1)(A) or the 3-year period described in
subsection (b)(1)(B), as applicable;
``(B) all stock-based performance metrics used by
the manufacturer to determine executive compensation
for each of the 1-year period described in subsection
(b)(1)(A) or the 3-year period described in subsection
(b)(1)(B), as applicable; and
``(C) any additional information the manufacturer
chooses to provide related to drug pricing decisions,
such as total expenditures on--
``(i) drug research and development; or
``(ii) clinical trials, including on drugs
that failed to receive approval by the Food and
Drug Administration; and
``(3) such other related information as the Secretary
considers appropriate and as specified by the Secretary through
notice-and-comment rulemaking.
``(d) Information Provided.--The manufacturer of a qualifying drug
that is required to submit a report under subsection (b), shall ensure
that such report and any explanation for, and description of, each
price increase described in subsection (c)(1)(B) shall be truthful, not
misleading, and accurate.
``(e) Civil Monetary Penalty.--Any manufacturer of a qualifying
drug that fails to submit a report for the drug as required by this
section, following notification by the Secretary to the manufacturer
that the manufacturer is not in compliance with this section, shall be
subject to a civil monetary penalty of $75,000 for each day on which
the violation continues.
``(f) False Information.--Any manufacturer that submits a report
for a drug as required by this section that knowingly provides false
information in such report is subject to a civil monetary penalty in an
amount not to exceed $75,000 for each item of false information.
``(g) Public Posting.--
``(1) In general.--Subject to paragraph (3), the Secretary
shall post each report submitted under subsection (b) on the
public website of the Department of Health and Human Services
the day the price increase of a qualifying drug is scheduled to
go into effect.
``(2) Format.--In developing the format in which reports
will be publicly posted under paragraph (1), the Secretary
shall consult with stakeholders, including beneficiary groups,
and shall seek feedback from consumer advocates and readability
experts on the format and presentation of the content of such
reports to ensure that such reports are--
``(A) user-friendly to the public; and
``(B) written in plain language that consumers can
readily understand.
``(3) Protected information.--Nothing in this section shall
be construed to authorize the public disclosure of information
submitted by a manufacturer that is prohibited from disclosure
by applicable laws concerning the protection of trade secrets,
commercial information, and other information covered under
such laws.
``SEC. 399OO-1. ANNUAL REPORT TO CONGRESS.
``(a) In General.--Subject to subsection (b), the Secretary shall
submit to Congress, and post on the public website of the Department of
Health and Human Services in a way that is user-friendly to the public
and written in plain language that consumers can readily understand, an
annual report--
``(1) summarizing the information reported pursuant to
section 399OO;
``(2) including copies of the reports and supporting
detailed economic analyses submitted pursuant to such section;
``(3) detailing the costs and expenditures incurred by the
Department of Health and Human Services in carrying out section
399OO; and
``(4) explaining how the Department of Health and Human
Services is improving consumer and provider information about
drug value and drug price transparency.
``(b) Protected Information.--Nothing in this section shall be
construed to authorize the public disclosure of information submitted
by a manufacturer that is prohibited from disclosure by applicable laws
concerning the protection of trade secrets, commercial information, and
other information covered under such laws.''.
(b) Effective Date.--The amendment made by subsection (a) takes
effect on the date of enactment of this Act.
SEC. 112. PUBLIC DISCLOSURE OF DRUG DISCOUNTS.
Section 1150A of the Social Security Act (42 U.S.C. 1320b-23) is
amended--
(1) in subsection (c), in the matter preceding paragraph
(1), by inserting ``(other than as permitted under subsection
(e))'' after ``disclosed by the Secretary''; and
(2) by adding at the end the following new subsection:
``(e) Public Availability of Certain Information.--
``(1) In general.--In order to allow the comparison of
PBMs' ability to negotiate rebates, discounts, direct and
indirect remuneration fees, administrative fees, and price
concessions and the amount of such rebates, discounts, direct
and indirect remuneration fees, administrative fees, and price
concessions that are passed through to plan sponsors, beginning
January 1, 2022, the Secretary shall make available on the
Internet website of the Department of Health and Human Services
the information with respect to the second preceding calendar
year provided to the Secretary on generic dispensing rates (as
described in paragraph (1) of subsection (b)) and information
provided to the Secretary under paragraphs (2) and (3) of such
subsection that, as determined by the Secretary, is with
respect to each PBM.
``(2) Availability of data.--In carrying out paragraph (1),
the Secretary shall ensure the following:
``(A) Confidentiality.--The information described
in such paragraph is displayed in a manner that
prevents the disclosure of information, with respect to
an individual drug or an individual plan, on rebates,
discounts, direct and indirect remuneration fees,
administrative fees, and price concessions.
``(B) Class of drug.--The information described in
such paragraph is made available by class of drug,
using an existing classification system, but only if
the class contains such number of drugs, as specified
by the Secretary (but not fewer than three drugs), to
ensure confidentiality of proprietary information or
other information that is prevented to be disclosed
under subparagraph (A).''.
SEC. 113. STUDY OF PHARMACEUTICAL SUPPLY CHAIN INTERMEDIARIES AND
MERGER ACTIVITY.
(a) Initial Report.--Not later than 1 year after the date of
enactment of this Act, the Commission shall submit to the appropriate
committees of Congress a report that--
(1) addresses at minimum--
(A) whether pharmacy benefit managers--
(i) charge payers a higher price than the
reimbursement rate at which the pharmacy
benefit managers reimburse competing
pharmacies;
(ii) steer patients for anticompetitive
purposes to any pharmacies, including retail,
mail-order, or any other type of pharmacy, in
which the pharmacy benefit manager has an
ownership interest;
(iii) audit or review proprietary data,
including acquisition costs, patient
information, or dispensing information, of
competing pharmacies that can be used for
anticompetitive purposes; or
(iv) use formulary designs to increase the
market share of higher cost prescription drugs
and depress the market share of lower cost
prescription drugs (each net of rebates and
discounts);
(B) how companies and payers assess the benefits,
costs, and risks of contracting with intermediaries,
including pharmacy services administrative
organizations, and whether more information about the
roles of intermediaries should be available to
consumers and payers; and
(C) whether there are any specific legal or
regulatory obstacles the Commission currently faces in
ensuring a competitive and transparent marketplace in
the pharmaceutical supply chain, including the pharmacy
benefit manager marketplace and pharmacy services
administrative organizations; and
(2) provides--
(A) observations or conclusions drawn from the
November 2017 roundtable entitled ``Understanding
Competition in Prescription Drug Markets: Entry and
Supply Chain Dynamics'', and any similar efforts;
(B) specific actions the Commission intends to take
as a result of the November 2017 roundtable, and any
similar efforts, including a detailed description of
relevant forthcoming actions, additional research or
roundtable discussions, consumer education efforts, or
enforcement actions; and
(C) policy or legislative recommendations to--
(i) improve transparency and competition in
the pharmaceutical supply chain;
(ii) prevent and deter anticompetitive
behavior in the pharmaceutical supply chain;
and
(iii) best ensure that consumers benefit
from any cost savings or efficiencies that may
result from mergers and consolidations.
(b) Interim Report.--Not later than 180 days after the date of
enactment of this Act, the Commission shall submit to the appropriate
committees of Congress an interim report on the progress of the report
required by subsection (a), along with preliminary findings and
conclusions based on information collected to that date.
(c) Definitions.--In this section:
(1) Appropriate committees of congress.--The term
``appropriate committees of Congress'' means--
(A) the Committee on Energy and Commerce of the
House of Representatives;
(B) the Committee on the Judiciary of the Senate;
and
(C) the Committee on the Judiciary of the House of
Representatives.
(2) Commission.--The term ``Commission'' means the Federal
Trade Commission.
SEC. 114. MAKING PRESCRIPTION DRUG MARKETING SAMPLE INFORMATION
REPORTED BY MANUFACTURERS AVAILABLE TO CERTAIN
INDIVIDUALS AND ENTITIES.
(a) In General.--Section 1128H of the Social Security Act (42
U.S.C. 1320a-7i) is amended--
(1) by redesignating subsection (b) as subsection (e); and
(2) by inserting after subsection (a) the following new
subsections:
``(b) Data Sharing Agreements.--
``(1) In general.--The Secretary shall enter into
agreements with the specified data sharing individuals and
entities described in paragraph (2) under which--
``(A) upon request of such an individual or entity,
as applicable, the Secretary makes available to such
individual or entity the information submitted under
subsection (a) by manufacturers and authorized
distributors of record; and
``(B) such individual or entity agrees to not
disclose publicly or to another individual or entity
any information that identifies a particular
practitioner or health care facility.
``(2) Specified data sharing individuals and entities.--For
purposes of paragraph (1), the specified data sharing
individuals and entities described in this paragraph are the
following:
``(A) Oversight agencies.--Health oversight
agencies (as defined in section 164.501 of title 45,
Code of Federal Regulations), including the Centers for
Medicare & Medicaid Services, the Office of the
Inspector General of the Department of Health and Human
Services, the Government Accountability Office, the
Congressional Budget Office, the Medicare Payment
Advisory Commission, and the Medicaid and CHIP Payment
and Access Commission.
``(B) Researchers.--Individuals who conduct
scientific research (as defined in section 164.501 of
title 45, Code of Federal Regulations) in relevant
areas as determined by the Secretary.
``(C) Payers.--Private and public health care
payers, including group health plans, health insurance
coverage offered by health insurance issuers, Federal
health programs, and State health programs.
``(3) Exemption from freedom of information act.--Except as
described in paragraph (1), the Secretary may not be compelled
to disclose the information submitted under subsection (a) to
any individual or entity. For purposes of section 552 of title
5, United States Code (commonly referred to as the Freedom of
Information Act), this paragraph shall be considered a statute
described in subsection (b)(3)(B) of such section.
``(c) Penalties.--
``(1) Data sharing agreements.--Subject to paragraph (3),
any specified data sharing individual or entity described in
subsection (b)(2) that violates the terms of a data sharing
agreement the individual or entity has with the Secretary under
subsection (b)(1) shall be subject to a civil money penalty of
not less than $1,000, but not more than $10,000, for each such
violation. Such penalty shall be imposed and collected in the
same manner as civil money penalties under subsection (a) of
section 1128A are imposed and collected under that section.
``(2) Failure to report.--Subject to paragraph (3), any
manufacturer or authorized distributor of record of an
applicable drug under subsection (a) that fails to submit
information required under such subsection in a timely manner
in accordance with rules or regulations promulgated to carry
out such subsection shall be subject to a civil money penalty
of not less than $1,000, but not more than $10,000, for each
such failure. Such penalty shall be imposed and collected in
the same manner as civil money penalties under subsection (a)
of section 1128A are imposed and collected under that section.
``(3) Limitation.--The total amount of civil money
penalties imposed under paragraph (1) or (2) with respect to a
year and an individual or entity described in paragraph (1) or
a manufacturer or distributor described in paragraph (2),
respectively, shall not exceed $150,000.
``(d) Drug Sample Distribution Information.--
``(1) In general.--Not later than January 1 of each year
(beginning with 2022), the Secretary shall maintain a list
containing information related to the distribution of samples
of applicable drugs. Such list shall provide the following
information with respect to the preceding year:
``(A) The name of the manufacturer or authorized
distributor of record of an applicable drug for which
samples were requested or distributed under this
section.
``(B) The quantity and class of drug samples
requested.
``(C) The quantity and class of drug samples
distributed.
``(2) Public availability.--The Secretary shall make the
information in such list available to the public on the
Internet website of the Food and Drug Administration.''.
(b) FDA Maintenance of Information.--The Food and Drug
Administration shall maintain information available to affected
reporting companies to ensure their ability to fully comply with the
requirements of section 1128H of the Social Security Act.
(c) Prohibition on Distribution of Samples of Opioids.--Section
503(d) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(d))
is amended--
(1) by moving the margin of paragraph (4) 2 ems to the
left; and
(2) by adding at the end the following:
``(5) No person may distribute a drug sample of a drug that is--
``(A) an applicable drug (as defined in section 1128H(e) of
the Social Security Act);
``(B) a controlled substance (as defined in section 102 of
the Controlled Substances Act) for which the findings required
under section 202(b)(2) of such Act have been made; and
``(C) approved under section 505 for use in the management
or treatment of pain (other than for the management or
treatment of a substance use disorder).''.
(d) MedPAC Report.--Not later than 3 years after the date of the
enactment of this Act, the Medicare Payment Advisory Commission shall
conduct a study on the impact of drug samples on provider prescribing
practices and health care costs and may, as the Commission deems
appropriate, make recommendations on such study.
SEC. 115. SENSE OF CONGRESS REGARDING THE NEED TO EXPAND COMMERCIALLY
AVAILABLE DRUG PRICING COMPARISON PLATFORMS.
It is the sense of Congress that--
(1) commercially available drug pricing comparison
platforms can, at no cost, help patients find the lowest price
for their medications at their local pharmacy;
(2) such platforms should be integrated, to the maximum
extent possible, in the health care delivery ecosystem; and
(3) pharmacy benefit managers should work to disclose
generic and brand name drug prices to such platforms to ensure
that--
(A) patients can benefit from the lowest possible
price available to them; and
(B) overall drug prices can be reduced as more
educated purchasing decisions are made based on price
transparency.
Subtitle C--Medicare Part D Benefit Redesign
SEC. 121. MEDICARE PART D BENEFIT REDESIGN.
(a) Benefit Structure Redesign.--Section 1860D-2(b) of the Social
Security Act (42 U.S.C. 1395w- 102(b)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i), by
inserting ``for a year preceding 2022 and for
costs above the annual deductible specified in
paragraph (1) and up to the annual out-of-
pocket threshold specified in paragraph (4)(B)
for 2022 and each subsequent year'' after
``paragraph (3)'';
(ii) in clause (i), by inserting after ``25
percent'' the following: ``(or, for 2022 and
each subsequent year, 15 percent)''; and
(iii) in clause (ii), by inserting ``(or,
for 2022 and each subsequent year, 15
percent)'' after ``25 percent'';
(B) in subparagraph (C)--
(i) in clause (i), in the matter preceding
subclause (I), by inserting ``for a year
preceding 2022,'' after ``paragraph (4),''; and
(ii) in clause (ii)(III), by striking ``and
each subsequent year'' and inserting ``and
2021''; and
(C) in subparagraph (D)--
(i) in clause (i)--
(I) in the matter preceding
subclause (I), by inserting ``for a
year preceding 2022,'' after
``paragraph (4),''; and
(II) in subclause (I)(bb), by
striking ``a year after 2018'' and
inserting ``each of years 2018 through
2021''; and
(ii) in clause (ii)(V), by striking ``2019
and each subsequent year'' and inserting ``each
of years 2019 through 2021'';
(2) in paragraph (3)(A)--
(A) in the matter preceding clause (i), by
inserting ``for a year preceding 2022,'' after ``and
(4),''; and
(B) in clause (ii), by striking ``for a subsequent
year'' and inserting ``for each of years 2007 through
2021'';
(3) in paragraph (4)--
(A) in subparagraph (A)--
(i) in clause (i)--
(I) by redesignating subclauses (I)
and (II) as items (aa) and (bb),
respectively, and indenting
appropriately;
(II) in the matter preceding item
(aa), as redesignated by subclause (I),
by striking ``is equal to the greater
of--'' and inserting ``is equal to--
``(I) for a year preceding 2022,
the greater of--'';
(III) by striking the period at the
end of item (bb), as redesignated by
subclause (I), and inserting ``; and'';
and
(IV) by adding at the end the
following:
``(II) for 2022 and each succeeding
year, $0.''; and
(ii) in clause (ii)--
(I) by striking ``clause (i)(I)''
and inserting ``clause (i)(I)(aa)'';
and
(II) by adding at the end the
following new sentence: ``The Secretary
shall continue to calculate the dollar
amounts specified in clause (i)(I)(aa),
including with the adjustment under
this clause, after 2021 for purposes of
section 1860D-14(a)(1)(D)(iii).'';
(B) in subparagraph (B)--
(i) in clause (i)--
(I) in subclause (V), by striking
``or'' at the end;
(II) in subclause (VI)--
(aa) by striking ``for a
subsequent year'' and inserting
``for 2021''; and
(bb) by striking the period
at the end and inserting a
semicolon; and
(III) by adding at the end the
following new subclauses:
``(VII) for 2022, is equal to
$3,100; or
``(VIII) for a subsequent year, is
equal to the amount specified in this
subparagraph for the previous year,
increased by the annual percentage
increase described in paragraph (6) for
the year involved.''; and
(ii) in clause (ii), by striking ``clause
(i)(II)'' and inserting ``clause (i)'';
(C) in subparagraph (C)(i), by striking ``and for
amounts'' and inserting ``and for a year preceding 2022
for amounts''; and
(D) in subparagraph (E), by striking ``In
applying'' and inserting ``For each of 2011 through
2021, in applying''.
(b) Decreasing Reinsurance Payment Amount.--Section 1860D-15(b)(1)
of the Social Security Act (42 U.S.C. 1395w-115(b)(1)) is amended--
(1) by striking ``equal to 80 percent'' and inserting
``equal to-
``(A) for a year preceding 2022, 80 percent'';
(2) in subparagraph (A), as added by paragraph (1), by
striking the period at the end and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(B) for 2022 and each subsequent year, the sum
of--
``(i) an amount equal to 20 percent of the
allowable reinsurance costs (as specified in
paragraph (2)) attributable to that portion of
gross covered prescription drug costs as
specified in paragraph (3) incurred in the
coverage year after such individual has
incurred costs that exceed the annual out-of-
pocket threshold specified in section 1860D-
2(b)(4)(B) with respect to applicable drugs (as
defined in section 1860D-14B(g)(2)); and
``(ii) an amount equal to 30 percent of the
allowable reinsurance costs (as specified in
paragraph (2)) attributable to that portion of
gross covered prescription drug costs as
specified in paragraph (3) incurred in the
coverage year after such individual has
incurred costs that exceed the annual out-of-
pocket threshold specified in section 1860D-
2(b)(4)(B) with respect to covered part D drugs
that are not applicable drugs (as so
defined).''.
(c) Manufacturer Discount Program.--
(1) In general.--Part D of title XVIII of the Social
Security Act is amended by inserting after section 1860D-14A
(42 U.S.C. 1495w-114) the following new section:
``SEC. 1860D-14B. MANUFACTURER DISCOUNT PROGRAM.
``(a) Establishment.--The Secretary shall establish a manufacturer
discount program (in this section referred to as the `program'). Under
the program, the Secretary shall enter into agreements described in
subsection (b) with manufacturers and provide for the performance of
the duties described in subsection (c). The Secretary shall establish a
model agreement for use under the program by not later than January 1,
2023, in consultation with manufacturers, and allow for comment on such
model agreement.
``(b) Terms of Agreement.--
``(1) In general.--
``(A) Agreement.--An agreement under this section
shall require the manufacturer to provide applicable
beneficiaries access to discounted prices for
applicable drugs of the manufacturer that are dispensed
on or after January 1, 2024.
``(B) Provision of discounted prices at the point-
of-sale.--The discounted prices described in
subparagraph (A) shall be provided to the applicable
beneficiary at the pharmacy or by the mail order
service at the point-of-sale of an applicable drug.
``(2) Provision of appropriate data.--Each manufacturer
with an agreement in effect under this section shall collect
and have available appropriate data, as determined by the
Secretary, to ensure that it can demonstrate to the Secretary
compliance with the requirements under the program.
``(3) Compliance with requirements for administration of
program.--Each manufacturer with an agreement in effect under
this section shall comply with requirements imposed by the
Secretary or a third party with a contract under subsection
(d)(3), as applicable, for purposes of administering the
program, including any determination under subparagraph (A) of
subsection (c)(1) or procedures established under such
subsection (c)(1).
``(4) Length of agreement.--
``(A) In general.--An agreement under this section
shall be effective for an initial period of not less
than 12 months and shall be automatically renewed for a
period of not less than 1 year unless terminated under
subparagraph (B).
``(B) Termination.--
``(i) By the secretary.--The Secretary may
provide for termination of an agreement under
this section for a knowing and willful
violation of the requirements of the agreement
or other good cause shown. Such termination
shall not be effective earlier than 30 days
after the date of notice to the manufacturer of
such termination. The Secretary shall provide,
upon request, a manufacturer with a hearing
concerning such a termination, and such hearing
shall take place prior to the effective date of
the termination with sufficient time for such
effective date to be repealed if the Secretary
determines appropriate.
``(ii) By a manufacturer.--A manufacturer
may terminate an agreement under this section
for any reason. Any such termination shall be
effective, with respect to a plan year--
``(I) if the termination occurs
before January 30 of a plan year, as of
the day after the end of the plan year;
and
``(II) if the termination occurs on
or after January 30 of a plan year, as
of the day after the end of the
succeeding plan year.
``(iii) Effectiveness of termination.--Any
termination under this subparagraph shall not
affect discounts for applicable drugs of the
manufacturer that are due under the agreement
before the effective date of its termination.
``(iv) Notice to third party.--The
Secretary shall provide notice of such
termination to a third party with a contract
under subsection (d)(3) within not less than 30
days before the effective date of such
termination.
``(5) Effective date of agreement.--An agreement under this
section shall take effect on a date determined appropriate by
the Secretary, which may be at the start of a calendar quarter.
``(c) Duties Described.--The duties described in this subsection
are the following:
``(1) Administration of program.--Administering the
program, including--
``(A) the determination of the amount of the
discounted price of an applicable drug of a
manufacturer;
``(B) the establishment of procedures under which
discounted prices are provided to applicable
beneficiaries at pharmacies or by mail order service at
the point-of-sale of an applicable drug;
``(C) the establishment of procedures to ensure
that, not later than the applicable number of calendar
days after the dispensing of an applicable drug by a
pharmacy or mail order service, the pharmacy or mail
order service is reimbursed for an amount equal to the
difference between--
``(i) the negotiated price of the
applicable drug; and
``(ii) the discounted price of the
applicable drug;
``(D) the establishment of procedures to ensure
that the discounted price for an applicable drug under
this section is applied before any coverage or
financial assistance under other health benefit plans
or programs that provide coverage or financial
assistance for the purchase or provision of
prescription drug coverage on behalf of applicable
beneficiaries as the Secretary may specify; and
``(E) providing a reasonable dispute resolution
mechanism to resolve disagreements between
manufacturers, applicable beneficiaries, and the third
party with a contract under subsection (d)(3).
``(2) Monitoring compliance.--
``(A) In general.--The Secretary shall monitor
compliance by a manufacturer with the terms of an
agreement under this section.
``(B) Notification.--If a third party with a
contract under subsection (d)(3) determines that the
manufacturer is not in compliance with such agreement,
the third party shall notify the Secretary of such
noncompliance for appropriate enforcement under
subsection (e).
``(3) Collection of data from prescription drug plans and
ma-pd plans.--The Secretary may collect appropriate data from
prescription drug plans and MA-PD plans in a timeframe that
allows for discounted prices to be provided for applicable
drugs under this section.
``(d) Administration.--
``(1) In general.--Subject to paragraph (2), the Secretary
shall provide for the implementation of this section, including
the performance of the duties described in subsection (c).
``(2) Limitation.--In providing for the implementation of
this section, the Secretary shall not receive or distribute any
funds of a manufacturer under the program.
``(3) Contract with third parties.--The Secretary shall
enter into a contract with 1 or more third parties to
administer the requirements established by the Secretary in
order to carry out this section. At a minimum, the contract
with a third party under the preceding sentence shall require
that the third party--
``(A) receive and transmit information between the
Secretary, manufacturers, and other individuals or
entities the Secretary determines appropriate;
``(B) receive, distribute, or facilitate the
distribution of funds of manufacturers to appropriate
individuals or entities in order to meet the
obligations of manufacturers under agreements under
this section;
``(C) provide adequate and timely information to
manufacturers, consistent with the agreement with the
manufacturer under this section, as necessary for the
manufacturer to fulfill its obligations under this
section; and
``(D) permit manufacturers to conduct periodic
audits, directly or through contracts, of the data and
information used by the third party to determine
discounts for applicable drugs of the manufacturer
under the program.
``(4) Performance requirements.--The Secretary shall
establish performance requirements for a third party with a
contract under paragraph (3) and safeguards to protect the
independence and integrity of the activities carried out by the
third party under the program under this section.
``(5) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to the program under this section.
``(e) Enforcement.--
``(1) Audits.--Each manufacturer with an agreement in
effect under this section shall be subject to periodic audit by
the Secretary.
``(2) Civil money penalty.--
``(A) In general.--The Secretary shall impose a
civil money penalty on a manufacturer that fails to
provide applicable beneficiaries discounts for
applicable drugs of the manufacturer in accordance with
such agreement for each such failure in an amount the
Secretary determines is commensurate with the sum of--
``(i) the amount that the manufacturer
would have paid with respect to such discounts
under the agreement, which will then be used to
pay the discounts which the manufacturer had
failed to provide; and
``(ii) 25 percent of such amount.
``(B) Application.--The provisions of section 1128A
(other than subsections (a) and (b)) shall apply to a
civil money penalty under this paragraph in the same
manner as such provisions apply to a penalty or
proceeding under section 1128A(a).
``(f) Clarification Regarding Availability of Other Covered Part D
Drugs.--Nothing in this section shall prevent an applicable beneficiary
from purchasing a covered part D drug that is not on the formulary of
the prescription drug plan or MA-PD plan that the applicable
beneficiary is enrolled in.
``(g) Definitions.--In this section:
``(1) Applicable beneficiary.--The term `applicable
beneficiary' means an individual who, on the date of dispensing
a covered part D drug--
``(A) is enrolled in a prescription drug plan or an
MA-PD plan;
``(B) is not enrolled in a qualified retiree
prescription drug plan; and
``(C) has incurred costs for covered part D drugs
in the year that are equal to or exceed the annual
deductible specified in section 1860D-2(b)(1) for such
year.
``(2) Applicable drug.--The term `applicable drug' means,
with respect to an applicable beneficiary, a covered part D
drug--
``(A) approved under a new drug application under
section 505(c) of the Federal Food, Drug, and Cosmetic
Act or, in the case of a biologic product, licensed
under section 351 of the Public Health Service Act
(including a product licensed under subsection (k) of
such section); and
``(B)(i) if the PDP sponsor of the prescription
drug plan or the MA organization offering the MA-PD
plan uses a formulary, which is on the formulary of the
prescription drug plan or MA-PD plan that the
applicable beneficiary is enrolled in;
``(ii) if the PDP sponsor of the prescription drug
plan or the MA organization offering the MA-PD plan
does not use a formulary, for which benefits are
available under the prescription drug plan or MA-PD
plan that the applicable beneficiary is enrolled in; or
``(iii) is provided through an exception or appeal.
``(3) Applicable number of calendar days.--The term
`applicable number of calendar days' means--
``(A) with respect to claims for reimbursement
submitted electronically, 14 days; and
``(B) with respect to claims for reimbursement
submitted otherwise, 30 days.
``(4) Discounted price.--
``(A) In general.--The term `discounted price'
means, with respect to an applicable drug of a
manufacturer furnished during a year to an applicable
beneficiary, 90 percent of the negotiated price of such
drug.
``(B) Clarification.--Nothing in this section shall
be construed as affecting the responsibility of an
applicable beneficiary for payment of a dispensing fee
for an applicable drug.
``(C) Special case for claims spanning
deductible.--In the case where the entire amount of the
negotiated price of an individual claim for an
applicable drug with respect to an applicable
beneficiary does not fall at or above the annual
deductible specified in section 1860D-2(b)(1) for the
year, the manufacturer of the applicable drug shall
provide the discounted price under this section on only
the portion of the negotiated price of the applicable
drug that falls at or above such annual deductible.
``(5) Manufacturer.--The term `manufacturer' means any
entity which is engaged in the production, preparation,
propagation, compounding, conversion, or processing of
prescription drug products, either directly or indirectly by
extraction from substances of natural origin, or independently
by means of chemical synthesis, or by a combination of
extraction and chemical synthesis. Such term does not include a
wholesale distributor of drugs or a retail pharmacy licensed
under State law.
``(6) Negotiated price.--The term `negotiated price' has
the meaning given such term in section 1860D-2(d)(1)(B), except
that such negotiated price shall not include any dispensing fee
for an applicable drug.
``(7) Qualified retiree prescription drug plan.--The term
`qualified retiree prescription drug plan' has the meaning
given such term in section 11860D-22(a)(2).''.
(2) Sunset of medicare coverage gap discount program.--
Section 1860D-14A of the Social Security Act (42 U.S.C. 1395-
114a) is amended--
(A) in subsection (a), in the first sentence, by
striking ``The Secretary'' and inserting ``Subject to
subsection (h), the Secretary''; and
(B) by adding at the end the following new
subsection:
``(h) Sunset of Program.--
``(1) In general.--The program shall not apply to
applicable drugs dispensed on or after January 1, 2024, and,
subject to paragraph (2), agreements under this section shall
be terminated as of such date.
``(2) Continued application for applicable drugs dispensed
prior to sunset.--The provisions of this section (including all
responsibilities and duties) shall continue to apply after
January 1, 2024, with respect to applicable drugs dispensed
prior to such date.''.
(3) Inclusion of actuarial value of manufacturer discounts
in bids.--Section 1860D-11 of the Social Security Act (42
U.S.C. 1395w-111) is amended--
(A) in subsection (b)(2)(C)(iii)--
(i) by striking ``assumptions regarding the
reinsurance'' and inserting ``assumptions
regarding--
``(I) the reinsurance''; and
(ii) by adding at the end the following:
``(II) for 2024 and each subsequent
year, the manufacturer discounts
provided under section 1860D- 14B
subtracted from the actuarial value to
produce such bid; and''; and
(B) in subsection (c)(1)(C)--
(i) by striking ``an actuarial valuation of
the reinsurance'' and inserting ``an actuarial
valuation of--
``(i) the reinsurance'';
(ii) in clause (i), as added by clause (i)
of this subparagraph, by adding ``and'' at the
end; and
(iii) by adding at the end the following:
``(ii) for 2024 and each subsequent year,
the manufacturer discounts provided under
section 1860D-14B;''.
(4) Clarification regarding exclusion of manufacturer
discounts from troop.--Section 1860D-2(b)(4) of the Social
Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
(A) in subparagraph (C), by inserting ``and subject
to subparagraph (F)'' after ``subparagraph (E)''; and
(B) by adding at the end the following new
subparagraph:
``(F) Clarification regarding exclusion of
manufacturer discounts.--In applying subparagraph (A),
incurred costs shall not include any manufacturer
discounts provided under section 1860D-14B.''.
(d) Determination of Allowable Reinsurance Costs.--Section 1860D-
15(b) of the Social Security Act (42 U.S.C. 1395w-115(b)) is amended--
(1) in paragraph (2)--
(A) by striking ``Costs.--For purposes'' and
inserting ``Costs.--
``(A) In general.--Subject to subparagraph (B), for
purposes''; and
(B) by adding at the end the following new
subparagraph:
``(B) Inclusion of manufacturer discounts on
applicable drugs.--For purposes of applying
subparagraph (A), the term `allowable reinsurance
costs' shall include the portion of the negotiated
price (as defined in section 1860D-14B(g)(6)) of an
applicable drug (as defined in section 1860D-14(g)(2))
that was paid by a manufacturer under the manufacturer
discount program under section 1860D-14B.''; and
(2) in paragraph (3)--
(A) in the first sentence, by striking ``For
purposes'' and inserting ``Subject to paragraph (2)(B),
for purposes''; and
(B) in the second sentence, by inserting ``or, in
the case of an applicable drug, by a manufacturer''
after ``by the individual or under the plan''.
(e) Updating Risk Adjustment Methodologies to Account for Part D
Modernization Redesign.--Section 1860D-15(c) of the Social Security Act
(42 U.S.C. 1395w-115(c)) is amended by adding at the end the following
new paragraph:
``(3) Updating risk adjustment methodologies to account for
part d modernization redesign.--The Secretary shall update the
risk adjustment model used to adjust bid amounts pursuant to
this subsection as appropriate to take into account changes in
benefits under this part pursuant to the amendments made by
section 121 of the Lower Costs, More Cures Act of 2021.''.
(f) Conditions for Coverage of Drugs Under This Part.--Section
1860D-43 of the Social Security Act (42 U.S.C. 1395w-153) is amended--
(1) in subsection (a)--
(A) in paragraph (2), by striking ``and'' at the
end;
(B) in paragraph (3), by striking the period at the
end and inserting a semicolon; and
(C) by adding at the end the following new
paragraphs:
``(4) participate in the manufacturer discount program
under section 1860D-14B;
``(5) have entered into and have in effect an agreement
described in subsection (b) of such section 1860D-14B with the
Secretary; and
``(6) have entered into and have in effect, under terms and
conditions specified by the Secretary, a contract with a third
party that the Secretary has entered into a contract with under
subsection (d)(3) of such section 1860D-14B.'';
(2) by striking subsection (b) and inserting the following:
``(b) Effective Date.--Paragraphs (1) through (3) of subsection (a)
shall apply to covered part D drugs dispensed under this part on or
after January 1, 2011, and before January 1, 2024, and paragraphs (4)
through (6) of such subsection shall apply to covered part D drugs
dispensed on or after January 1, 2024.''; and
(3) in subsection (c), by striking paragraph (2) and
inserting the following:
``(2) the Secretary determines that in the period beginning
on January 1, 2011, and ending on December 31, 2011 (with
respect to paragraphs (1) through (3) of subsection (a)) or the
period beginning on January 1, 2024, and ending December 31,
2024 (with respect to paragraphs (4) through (6) of such
subsection), there were extenuating circumstances.''.
(g) Conforming Amendments.--
(1) Section 1860D-2 of the Social Security Act (42 U.S.C.
1395w-102) is amended--
(A) in subsection (a)(2)(A)(i)(I), by striking ``,
or an increase in the initial'' and inserting ``or for
a year preceding 2024 an increase in the initial'';
(B) in subsection (c)(1)(C)--
(i) in the subparagraph heading, by
striking ``at initial coverage limit''; and
(ii) by inserting ``for a year preceding
2024 or the annual out-of-pocket threshold
specified in subsection (b)(4)(B) for the year
for 2024 and each subsequent year'' after
``subsection (b)(3) for the year'' each place
it appears; and
(C) in subsection (d)(1)(A), by striking ``or an
initial'' and inserting ``or for a year preceding 2024,
an initial''.
(2) Section 1860D-4(a)(4)(B)(i) of the Social Security Act
(42 U.S.C. 1395w-104(a)(4)(B)(i)) is amended by striking ``the
initial'' and inserting ``for a year preceding 2024, the
initial''.
(3) Section 1860D-14(a) of the Social Security Act (42
U.S.C. 1395w-114(a)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (C), by striking ``The
continuation'' and inserting ``For a year
preceding 2024, the continuation'';
(ii) in subparagraph (D)(iii), by striking
``1860D-2(b)(4)(A)(i)(I)'' and inserting
``1860D-2(b)(4)(A)(i)(I)(aa)''; and
(iii) in subparagraph (E), by striking
``The elimination'' and inserting ``For a year
preceding 2024, the elimination''; and
(B) in paragraph (2)--
(i) in subparagraph (C), by striking ``The
continuation'' and inserting ``For a year
preceding 2024, the continuation''; and
(ii) in subparagraph (E)--
(I) by inserting ``for a year
preceding 2024,'' after ``subsection
(c)''; and
(II) by striking ``1860D-
2(b)(4)(A)(i)(I)'' and inserting
``1860D-2(b)(4)(A)(i)(I)(aa)''.
(4) Section 1860D-21(d)(7) of the Social Security Act (42
U.S.C. 1395w-131(d)(7)) is amended by striking ``section 1860D-
2(b)(4)(B)(i)'' and inserting ``section 1860D-2(b)(4)(C)(i)''.
(5) Section 1860D-22(a)(2)(A) of the Social Security Act
(42 U.S.C. 1395w-132(a)(2)(A)) is amended--
(A) by striking ``the value of any discount'' and
inserting the following: ``the value of--
``(i) for years prior to 2024, any
discount'';
(B) in clause (i), as inserted by subparagraph (A)
of this paragraph, by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following new clause:
``(ii) for 2024 and each subsequent year,
any discount provided pursuant to section
1860D-14B.''.
(6) Section 1860D-41(a)(6) of the Social Security Act (42
U.S.C. 1395w-151(a)(6)) is amended--
(A) by inserting ``for a year before 2024'' after
``1860D-2(b)(3)''; and
(B) by inserting ``for such year'' before the
period.
(h) Effective Date.--The amendments made by this section shall
apply to plan year 2024 and subsequent plan years.
Subtitle D--Other Medicare Part D Provisions
SEC. 131. ALLOWING THE OFFERING OF ADDITIONAL PRESCRIPTION DRUG PLANS
UNDER MEDICARE PART D.
(a) Rescinding and Issuance of New Guidance.--Not later than one
year after the date of the enactment of this Act, the Secretary of
Health and Human Services (in this section referred to as the
``Secretary'') shall--
(1) rescind sections of any sub-regulatory guidance that
limit the number of prescription drug plans in each PDP region
that may be offered by a PDP sponsor under part D of title
XVIII of the Social Security Act (42 U.S.C. 1395w-101 et seq.);
and
(2) issue new guidance specifying that a PDP sponsor may
offer up to 4 (or a greater number if determined appropriate by
the Secretary) prescription drug plans in each PDP region,
except in cases where the PDP sponsor may offer up to 2
additional plans in a PDP region pursuant to section 1860D-
11(d)(4) of the Social Security Act (42 U.S.C. 1395w-
111(d)(4)), as added by subsection (b).
(b) Offering of Additional Plans.--Section 1860D-11(d) of the
Social Security Act (42 U.S.C. 1395w-111(d)) is amended by adding at
the end the following new paragraph:
``(4) Offering of additional plans.--
``(A) In general.--For plan year 2022 and each
subsequent plan year, a PDP sponsor may offer up to 2
additional prescription drug plans in a PDP region (in
addition to any limit established by the Secretary
under this part) provided that the PDP sponsor complies
with subparagraph (B) with respect to at least one such
prescription drug plan.
``(B) Requirements.--In order to be eligible to
offer up to 2 additional plans in a PDP region pursuant
to subparagraph (A), a PDP sponsor must ensure that,
with respect to at least one such prescription drug
plan, the sponsor or any entity that provides pharmacy
benefits management services under a contract with any
such sponsor or plan does not receive direct or
indirect remuneration, as defined in section 423.308 of
title 42, Code of Federal Regulations (or any successor
regulation), unless at least 25 percent of the
aggregate reductions in price or other remuneration
received by the PDP sponsor or entity from drug
manufacturers with respect to the plan and plan year--
``(i) are reflected at the point-of-sale to
the enrollee; or
``(ii) are used to reduce total beneficiary
cost-sharing estimated by the PDP sponsor for
prescription drug coverage under the plan in
the annual bid submitted by the PDP sponsor
under section 1860D-11(b).
``(C) Definition of reductions in price.--For
purposes of subparagraph (B), the term `reductions in
price' refers only to collectible amounts, as
determined by the Secretary, which excludes amounts
which after adjudication and reconciliation with
pharmacies and manufacturers are duplicate in nature,
contrary to other contractual clauses, or otherwise
ineligible (such as due to beneficiary disenrollment or
coordination of benefits).''.
(c) Rule of Construction.--Nothing in the provisions of, or
amendments made by, this section shall be construed as limiting the
ability of the Secretary to increase any limit otherwise applicable on
the number of prescription drug plans that a PDP sponsor may offer, at
the discretion of the PDP sponsor, in a PDP region under part D of
title XVIII of the Social Security Act (42 U.S.C. 1395w-101 et seq.).
SEC. 132. ALLOWING CERTAIN ENROLLEES OF PRESCRIPTION DRUG PLANS AND MA-
PD PLANS UNDER MEDICARE PROGRAM TO SPREAD OUT COST-
SHARING UNDER CERTAIN CIRCUMSTANCES.
(a) Standard Prescription Drug Coverage.--Section 1860D-2(b)(2) of
the Social Security Act (42 U.S.C. 1395w-102(b)(2)), as amended by
section 121, is further amended--
(1) in subparagraph (A), by striking ``Subject to
subparagraphs (C) and (D)'' and inserting ``Subject to
subparagraphs (C), (D), and (E)''; and
(2) by adding at the end the following new subparagraph:
``(E) Enrollee option regarding spreading cost-
sharing.--
``(i) In general.--The Secretary shall
establish by regulation a process under which,
with respect to plan year 2022 and subsequent
plan years, a prescription drug plan or an MA-
PD plan shall, in the case of a part D eligible
individual enrolled with such plan for such
plan year with respect to whom the plan
projects that the dispensing of a covered part
D drug to such individual will result in the
individual incurring costs within a 30-day
period that are equal to a significant
percentage (as specified by the Secretary
pursuant to such regulation) of the annual out-
of-pocket threshold specified in paragraph
(4)(B) for such plan year, provide such
individual with the option to make the
coinsurance payment required under subparagraph
(A) for such costs in the form of equal monthly
installments over the remainder of such plan
year.
``(ii) Significant percentage
limitations.--In specifying a significant
percentage pursuant to the regulation
established by the Secretary under clause (i),
the Secretary may not specify a percentage that
is less than 30 percent or greater than 100
percent.''.
(b) Alternative Prescription Drug Coverage.--Section 1860D-2(c) of
the Social Security Act (42 U.S.C. 1395w-102(c)) is amended by adding
at the end the following new paragraph:
``(4) Same enrollee option regarding spreading cost-
sharing.--For plan year 2022 and subsequent plan years, the
coverage provides the enrollee option regarding spreading cost-
sharing described in and required under subsection
(b)(2)(E).''.
SEC. 133. ESTABLISHING A MONTHLY CAP ON BENEFICIARY INCURRED COSTS FOR
INSULIN PRODUCTS AND SUPPLIES UNDER A PRESCRIPTION DRUG
PLAN OR MA-PD PLAN.
(a) In General.--Section 1860D-2 of the Social Security Act (42
U.S.C. 1395w-102), as amended by sections 121 and 133, is further
amended--
(1) in subsection (b)(2)--
(A) in subparagraph (A), by striking ``and (E)''
and inserting ``(E), and (F)'';
(B) in subparagraph (B), by striking ``and (D)''
and inserting ``(D), and (F)''; and
(C) by adding at the end the following new
subparagraph:
``(F) Cap on incurred costs for insulin products
and supplies.--
``(i) In general.--The coverage provides
benefits, for costs above the annual deductible
specified in paragraph (1) and up to the annual
out-of-pocket threshold described in paragraph
(4)(B) and with respect to a month (beginning
with January of 2022), with cost sharing that
is equal to $0 for a specified covered part D
drug (as defined in clause (iii)) furnished to
an individual who has incurred costs during
such month with respect to specified covered
part D drugs equal to--
``(I) for months occurring in 2022,
$50; or
``(II) for months occurring in a
subsequent year, the amount applicable
under this clause for months occurring
in the year preceding such subsequent
year, increased by the annual
percentage increase specified in
paragraph (6) for such subsequent year
and rounded to the nearest dollar.
``(ii) Application.--The provisions of
clauses (i) through (iii) of paragraph (4)(C)
shall apply with respect to the determination
of the incurred costs for specified covered
part D drugs for purposes of clause (i) in the
same manner as such provisions apply with
respect to the determination of incurred costs
for covered part D drugs for purposes of
paragraph (4)(A).
``(iii) Specified covered part d drug.--For
purposes of this subparagraph, the term
`specified covered part D drug' means a covered
part D drug that is--
``(I) insulin; or
``(II) a medical supply associated
with the injection of insulin (as
defined in regulations of the Secretary
promulgated pursuant to subsection
(e)(1)(B)).''; and
(2) in subsection (c), by adding at the end the following
new paragraph:
``(5) Same protection with respect to expenditures for
insulin and certain medical supplies.--The coverage provides
the coverage required under subsection (b)(2)(F).''.
(b) Conforming Amendments.--
(1) In general.--Section 1860D-14(a)(1)(D) of the Social
Security Act (42 U.S.C. 1395w-114(a)(1)(D)), as amended by
section 121, is further amended--
(A) in clause (ii), by striking ``section 1860D-
2(b)(2)'' and inserting ``section 1860D-2(b)(2)(A)'';
and
(B) in clause (iii), by striking ``section 1860D-
2(b)(2)'' and inserting ``section 1860D-2(b)(2)(A)''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply with respect to plan year 2022 and each subsequent
plan year.
SEC. 134. GROWTH RATE OF MEDICARE PART D OUT-OF-POCKET COST THRESHOLD.
(a) Providing Medicare Part D Beneficiaries With Certain 2020
Offset Payments.--Section 1860D-2(b)(4) of the Social Security Act (42
U.S.C. 1395w-102(b)(4)) is amended by adding at the end the following
new subparagraph:
``(F) 2020 offset payments.--
``(i) In general.--Subject to clause (iv),
the Secretary shall provide for payment from
the Medicare Prescription Drug Account as
follows:
``(I) In the case of a specified
individual (as defined in clause
(ii)(I)) who as of the last day of a
calendar quarter in 2020 has incurred
costs for covered part D drugs so that
the individual has exceeded the annual
out-of-pocket threshold applied under
subparagraph (B)(i)(V) for 2020,
payment to the individual by not later
than 15th day of the third month
following the end of such quarter of
the amount by which such threshold so
applied exceeded the target threshold
for 2020.
``(II) In the case of a specified
individual who is not described in
subclause (I) and who as of the last
day of 2020 has incurred costs for
covered part D drugs so that the
individual has exceeded the target
threshold for 2020, payment to the
individual by not later than December
31, 2021, of the amount by which such
incurred costs exceeded the target
threshold for 2020.
``(ii) Definitions.--For purposes of this
subparagraph:
``(I) Specified individual.--The
term `specified individual' means an
individual who--
``(aa) is enrolled in a
prescription drug plan or an
MA- PD plan;
``(bb) is not enrolled in a
qualified retiree prescription
drug plan; and
``(cc) is not entitled to
an income-related subsidy under
section 1860D-14(a).
``(II) Target threshold for 2020.--
The term `target threshold for 2020'
means the annual out-of-pocket
threshold that would have been applied
under subparagraph (B)(i) for 2020 if
such threshold had been determined in
accordance with subclause (IV) of such
subparagraph instead of subclause (V)
of such subparagraph.
``(iii) Notification.--In the case of any
specified individual who during 2020 has
incurred costs for covered part D drugs so that
the individual has exceeded the target
threshold for 2020, the Secretary shall, not
later than September 30, 2021, provide to such
individual a notification informing such
individual of such individual's right to a
payment described in clause (i) and the
estimated timing of such payment.
``(iv) Clarification.--The Secretary shall
provide only 1 payment under this subparagraph
with respect to any individual.
``(v) Implementation.--The Secretary may
implement this subparagraph by program
instruction or otherwise.''.
(b) Reduced Growth Rate for 2021 of Medicare Part D Out-of-Pocket
Cost Threshold.--Section 1860D-2(b)(4)(B)(i) of the Social Security Act
(42 U.S.C. 1395w-102(b)(4)(B)(i)) is amended--
(1) in subclause (V), by striking at the end ``or'';
(2) by redesignating subclause (VI) as subclause (VIII);
and
(3) by inserting after subclause (V) the following new
subclauses:
``(VI) for 2021, is equal to the
amount that would have been applied
under this subparagraph for 2020 if
such amount had been determined in
accordance with subclause (IV) instead
of subclause (V), increased by the
lesser of--
``(aa) the annual
percentage increase described
in paragraph (7) for 2021, plus
2 percentage points; or
``(bb) the annual
percentage increase described
in paragraph (6) for 2021;
``(VII) for 2022, is equal to the
amount that would have been applied
under this subparagraph for 2022 if the
amendments made by section 1101(d)(1)
of the Health Care and Education
Reconciliation Act of 2010 and by
section 134 of the Lower Costs, More
Cures Act of 2021 had not been enacted;
or''.
TITLE II--MEDICAID
SEC. 201. MEDICAID PHARMACY AND THERAPEUTICS COMMITTEE IMPROVEMENTS.
(a) In General.--Subparagraph (A) of section 1927(d)(4) of the
Social Security Act (42 U.S.C. 1396r-8(d)(4)) is amended to read as
follows:
``(A)(i) The formulary is developed and reviewed by
a pharmacy and therapeutics committee consisting of
physicians, pharmacists, and other appropriate
individuals appointed by the Governor of the State.
``(ii) Subject to clause (vi), the State
establishes and implements a conflict of interest
policy for the pharmacy and therapeutics committee
that--
``(I) is publicly accessible;
``(II) requires all committee members to
complete, on at least an annual basis, a
disclosure of relationships, associations, and
financial dealings that may affect their
independence of judgement in committee matters;
and
``(III) contains clear processes, such as
recusal from voting or discussion, for those
members who report a conflict of interest,
along with appropriate processes to address any
instance where a member fails to report a
conflict of interest.
``(iii) The membership of the pharmacy and
therapeutics committee--
``(I) includes at least 1 actively
practicing physician and at least 1 actively
practicing pharmacist, each of whom--
``(aa) is independent and free of
conflict with respect to manufacturers
and Medicaid participating plans or
subcontractors, including pharmacy
benefit managers; and
``(bb) has expertise in the care of
1 or more Medicaid-specific populations
such as elderly or disabled
individuals, children with complex
medical needs, or low-income
individuals with chronic illnesses; and
``(II) is made publicly available.
``(iv) At the option of the State, the State's drug
use review board established under subsection (g)(3)
may serve as the pharmacy and therapeutics committee
provided the State ensures that such board meets the
requirements of clauses (ii) and (iii).
``(v) The State reviews and has final approval of
the formulary established by the pharmacy and
therapeutics committee.
``(vi) If the Secretary determines it appropriate
or necessary based on the findings and recommendations
of the Comptroller General of the United States in the
report submitted to Congress under section 203 of the
Lower Costs, More Cures Act of 2021, the Secretary
shall issue guidance that States must follow for
establishing conflict of interest policies for the
pharmacy and therapeutics committee in accordance with
the requirements of clause (ii), including appropriate
standards and requirements for identifying, addressing,
and reporting on conflicts of interest.''.
(b) Application to Medicaid Managed Care Organizations.--Clause
(xiii) of section 1903(m)(2)(A) of the Social Security Act (42 U.S.C.
1396b(m)(2)(A)) is amended--
(1) by striking ``and (III)'' and inserting ``(III)'';
(2) by striking the period at the end and inserting ``, and
(IV) any formulary used by the entity for covered outpatient
drugs dispensed to individuals eligible for medical assistance
who are enrolled with the entity is developed and reviewed by a
pharmacy and therapeutics committee that meets the requirements
of clauses (ii) and (iii) of section 1927(d)(4)(A).''; and
(3) by moving the left margin 2 ems to the left.
(c) Effective Date.--The amendments made by this section shall take
effect on the date that is 1 year after the date of enactment of this
Act.
SEC. 202. GAO REPORT ON CONFLICTS OF INTEREST IN STATE MEDICAID PROGRAM
DRUG USE REVIEW BOARDS AND PHARMACY AND THERAPEUTICS
(P&T) COMMITTEES.
(a) Investigation.--The Comptroller General of the United States
shall conduct an investigation of potential or existing conflicts of
interest among members of State Medicaid program State drug use review
boards (in this section referred to as ``DUR Boards'') and pharmacy and
therapeutics committees (in this section referred to as ``P&T
Committees'').
(b) Report.--Not later than 24 months after the date of enactment
of this Act, the Comptroller General shall submit to Congress a report
on the investigation conducted under subsection (a) that includes the
following:
(1) A description outlining how DUR Boards and P&T
Committees operate in States, including details with respect
to--
(A) the structure and operation of DUR Boards and
statewide P&T Committees;
(B) States that operate separate P&T Committees for
their fee-for-service Medicaid program and their
Medicaid managed care organizations or other Medicaid
managed care arrangements (collectively referred to in
this section as ``Medicaid MCOs)''; and
(C) States that allow Medicaid MCOs to have their
own P&T Committees and the extent to which pharmacy
benefit managers administer or participate in such P&T
Committees.
(2) A description outlining the differences between DUR
Boards established in accordance with section 1927(g)(3) of the
Social Security Act (42 U.S.C. 1396r(g)(3)) and P&T Committees.
(3) A description outlining the tools P&T Committees may
use to determine Medicaid drug coverage and utilization
management policies.
(4) An analysis of whether and how States or P&T Committees
establish participation and independence requirements for DUR
Boards and P&T Committees, including with respect to entities
with connections with drug manufacturers, State Medicaid
programs, managed care organizations, and other entities or
individuals in the pharmaceutical industry.
(5) A description outlining how States, DUR Boards, or P&T
Committees define conflicts of interest.
(6) A description of how DUR Boards and P&T Committees
address conflicts of interest, including who is responsible for
implementing such policies.
(7) A description of the tools, if any, States use to
ensure that there are no conflicts of interest on DUR Boards
and P&T Committees.
(8) An analysis of the effectiveness of tools States use to
ensure that there are no conflicts of interest on DUR Boards
and P&T Committees and, if applicable, recommendations as to
how such tools could be improved.
(9) A review of strategies States may use to guard against
conflicts of interest on DUR Boards and P&T Committees and to
ensure compliance with the requirements of titles XI and XIX of
the Social Security Act (42 U.S.C. 1301 et seq., 1396 et seq.)
and access to effective, clinically appropriate, and medically
necessary drug treatments for Medicaid beneficiaries, including
recommendations for such legislative and administrative actions
as the Comptroller General determines appropriate.
SEC. 203. ENSURING THE ACCURACY OF MANUFACTURER PRICE AND DRUG PRODUCT
INFORMATION UNDER THE MEDICAID DRUG REBATE PROGRAM.
(a) Audit of Manufacturer Price and Drug Product Information.--
(1) In general.--Subparagraph (B) of section 1927(b)(3) of
the Social Security Act (42 U.S.C. 1396r-8(b)(3)) is amended to
read as follows:
``(B) Audits and surveys of manufacturer price and
drug product information.--
``(i) Audits.--The Secretary shall conduct
ongoing audits of the price and drug product
information reported by manufacturers under
subparagraph (A) for the most recently ended
rebate period to ensure the accuracy and
timeliness of such information. In conducting
such audits, the Secretary may employ
evaluations, surveys, statistical sampling,
predictive analytics and other relevant tools
and methods.
``(ii) Verifications surveys of average
manufacturer price and manufacturer's average
sales price.--In addition to the audits
required under clause (i), the Secretary may
survey wholesalers and manufacturers (including
manufacturers that directly distribute their
covered outpatient drugs (in this subparagraph
referred to as `direct sellers')), when
necessary, to verify manufacturer prices and
manufacturer's average sales prices (including
wholesale acquisition cost) to make payment
reported under subparagraph (A).
``(iii) Penalties.--In addition to other
penalties as may be prescribed by law,
including under subparagraph (C) of this
paragraph, the Secretary may impose a civil
monetary penalty in an amount not to exceed
$185,000 on an annual basis on a wholesaler,
manufacturer, or direct seller, if the
wholesaler, manufacturer, or direct seller of a
covered outpatient drug refuses a request for
information about charges or prices by the
Secretary in connection with an audit or survey
under this subparagraph or knowingly provides
false information. The provisions of section
1128A (other than subsections (a) (with respect
to amounts of penalties or additional
assessments) and (b)) shall apply to a civil
money penalty under this clause in the same
manner as such provisions apply to a penalty or
proceeding under section 1128A(a).
``(iv) Reports.--
``(I) Report to congress.--The
Secretary shall, not later than 18
months after date of enactment of this
subparagraph, submit a report to the
Committee on Energy and Commerce of the
House of Representatives and the
Committee on Finance of the Senate
regarding additional regulatory or
statutory changes that may be required
in order to ensure accurate and timely
reporting and oversight of manufacturer
price and drug product information,
including whether changes should be
made to reasonable assumption
requirements to ensure such assumptions
are reasonable and accurate or whether
another methodology for ensuring
accurate and timely reporting of price
and drug product information should be
considered to ensure the integrity of
the drug rebate program under this
section.
``(II) Annual reports.--The
Secretary shall, on at least an annual
basis, submit a report to the Committee
on Energy and Commerce of the House of
Representatives and the Committee on
Finance of the Senate summarizing the
results of the audits and surveys
conducted under this subparagraph
during the period that is the subject
of the report.
``(III) Content.--Each report
submitted under subclause (II) shall,
with respect to the period that is the
subject of the report, include
summaries of--
``(aa) error rates in the
price, drug product, and other
relevant information supplied
by manufacturers under
subparagraph (A);
``(bb) the timeliness with
which manufacturers,
wholesalers, and direct sellers
provide information required
under subparagraph (A) or under
clause (i) or (ii) of this
subparagraph;
``(cc) the number of
manufacturers, wholesalers, and
direct sellers and drug
products audited under this
subparagraph;
``(dd) the types of price
and drug product information
reviewed under the audits
conducted under this
subparagraph;
``(ee) the tools and
methodologies employed in such
audits;
``(ff) the findings of such
audits, including which
manufacturers, if any, were
penalized under this
subparagraph; and
``(gg) such other relevant
information as the Secretary
shall deem appropriate.
``(IV) Protection of information.--
In preparing a report required under
subclause (II), the Secretary shall
redact such proprietary information as
the Secretary determines appropriate to
prevent disclosure of, and to
safeguard, such information.
``(v) Appropriations.--Out of any funds in
the Treasury not otherwise appropriated, there
is appropriated to the Secretary $2,000,000 for
fiscal year 2022 and each fiscal year
thereafter to carry out this subparagraph.''.
(2) Effective date.--The amendments made by this subsection
shall take effect on the first day of the first fiscal quarter
that begins after the date of enactment of this Act.
(b) Increased Penalties for Noncompliance With Reporting
Requirements.--
(1) Increased penalty for late reporting of information.--
Section 1927(b)(3)(C)(i) of the Social Security Act (42 U.S.C.
1396r-8(b)(3)(C)(i)) is amended by striking ``increased by
$10,000 for each day in which such information has not been
provided and such amount shall be paid to the Treasury'' and
inserting ``, for each covered outpatient drug with respect to
which such information is not provided, $50,000 for the first
day that such information is not provided on a timely basis and
$19,000 for each subsequent day that such information is not
provided''.
(2) Increased penalty for knowingly reporting false
information.--Section 1927(b)(3)(C)(ii) of the Social Security
Act (42 U.S.C. 1396r-8(b)(3)(C)(ii)) is amended by striking
``$100,000'' and inserting ``$500,000''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the first day of the first fiscal quarter
that begins after the date of enactment of this Act.
SEC. 204. IMPROVING TRANSPARENCY AND PREVENTING THE USE OF ABUSIVE
SPREAD PRICING AND RELATED PRACTICES IN MEDICAID.
(a) Pass-Through Pricing Required.--
(1) In general.--Section 1927(e) of the Social Security Act
(42 U.S.C. 1396r-8(e)) is amended by adding at the end the
following:
``(6) Pass-through pricing required.--A contract between
the State and a pharmacy benefit manager (referred to in this
paragraph as a `PBM'), or a contract between the State and a
managed care entity or other specified entity (as such terms
are defined in section 1903(m)(9)(D)) that includes provisions
making the entity responsible for coverage of covered
outpatient drugs dispensed to individuals enrolled with the
entity, shall require that payment for such drugs and related
administrative services (as applicable), including payments
made by a PBM on behalf of the State or entity, is based on a
pass-through pricing model under which--
``(A) any payment made by the entity of the PBM (as
applicable) for such a drug--
``(i) is limited to--
``(I) ingredient cost; and
``(II) a professional dispensing
fee that is not less than the
professional dispensing fee that the
State plan or waiver would pay if the
plan or waiver was making the payment
directly;
``(ii) is passed through in its entirety by
the entity or PBM to the pharmacy that
dispenses the drug; and
``(iii) is made in a manner that is
consistent with section 1902(a)(30)(A) and
sections 447.512, 447.514, and 447.518 of title
42, Code of Federal Regulations (or any
successor regulation), as if such requirements
applied directly to the entity or the PBM;
``(B) payment to the entity or the PBM (as
applicable) for administrative services performed by
the entity or PBM is limited to a reasonable
administrative fee that covers the reasonable cost of
providing such services;
``(C) the entity or the PBM (as applicable) shall
make available to the State, and the Secretary upon
request, all costs and payments related to covered
outpatient drugs and accompanying administrative
services incurred, received, or made by the entity or
the PBM, including ingredient costs, professional
dispensing fees, administrative fees, post-sale and
post-in-voice fees. Discounts, or related adjustments
such as direct and indirect remuneration fees, and any
and all remuneration; and
``(D) any form of spread pricing whereby any amount
charged or claimed by the entity or the PBM (as
applicable) is in excess of the amount paid to the
pharmacies on behalf of the entity, including any post-
sale or post-invoice fees, discounts, or related
adjustments such as direct and indirect remuneration
fees or assessments (after allowing for a reasonable
administrative fee as described in subparagraph (B)) is
not allowable for purposes of claiming Federal matching
payments under this title.''.
(2) Conforming amendment.--Clause (xiii) of section
1903(m)(2)(A) of such Act (42 U.S.C. 1396b(m)(2)(A)), as
amended by section 202, is further amended--
(A) by striking ``and (IV)'' and inserting
``(IV)''; and
(B) by inserting before the period at the end the
following: ``, and (V) pharmacy benefit management
services provided by the entity, or provided by a
pharmacy benefit manager on behalf of the entity under
a contract or other arrangement between the entity and
the pharmacy benefit manager, shall comply with the
requirements of section 1927(e)(6)''.
(3) Effective date.--The amendments made by this subsection
apply to contracts between States and managed care entities,
other specified entities, or pharmacy benefits managers that
are entered into or renewed on or after the date that is 18
months after the date of enactment of this Act.
(b) Survey of Retail Prices.--
(1) In general.--Section 1927(f) of the Social Security Act
(42 U.S.C. 1396r-8(f)) is amended--
(A) by striking ``and'' after the semicolon at the
end of paragraph (1)(A)(i) and all that precedes it
through ``(1)'' and inserting the following:
``(1) Survey of retail prices.--The Secretary shall conduct
a survey of retail community drug prices, to include at least
the national average drug acquisition cost, as follows:
``(A) Use of vendor.--The Secretary may contract
services for--
``(i) with respect to retail community
pharmacies, the determination on a monthly
basis of retail survey prices of the national
average drug acquisition cost for covered
outpatient drugs for such pharmacies, net of
all discounts and rebates (to the extent any
information with respect to such discounts and
rebates is available), the average
reimbursement received for such drugs by such
pharmacies from all sources of payment,
including third parties, and, to the extent
available, the usual and customary charges to
consumers for such drugs; and'';
(B) by adding at the end of paragraph (1) the
following:
``(F) Survey reporting.--In order to meet the
requirement of section 1902(a)(54), a State shall
require that any retail community pharmacy in the State
that receives any payment, administrative fee,
discount, or rebate related to the dispensing of
covered outpatient drugs to individuals receiving
benefits under this title, regardless of whether such
payment, fee, discount, or rebate is received from the
State or a managed care entity directly or from a
pharmacy benefit manager or another entity that has a
contract with the State or a managed care entity, shall
respond to surveys of retail prices conducted under
this subsection.
``(G) Survey information.--Information on retail
community prices obtained under this paragraph shall be
made publicly available and shall include at least the
following:
``(i) The monthly response rate of the
survey including a list of pharmacies not in
compliance with subparagraph (F).
``(ii) The sampling frame and number of
pharmacies sampled monthly.
``(iii) Characteristics of reporting
pharmacies, including type (such as independent
or chain), geographic or regional location, and
dispensing volume.
``(iv) Reporting of a separate national
average drug acquisition cost for each drug for
independent retail pharmacies and chain
operated pharmacies.
``(v) Information on price concessions
including on and off invoice discounts,
rebates, and other price concessions.
``(vi) Information on average professional
dispensing fees paid.
``(H) Penalties.--
``(i) Failure to provide timely
information.--A retail community pharmacy that
fails to respond to a survey conducted under
this subsection on a timely basis may be
subject to a civil monetary penalty in the
amount of $10,000 for each day in which such
information has not been provided.
``(ii) False information.--A retail
community pharmacy that knowingly provides
false information in response to a survey
conducted under this subsection may be subject
to a civil money penalty in an amount not to
exceed $100,000 for each item of false
information.
``(iii) Other penalties.--Any civil money
penalties imposed under this subparagraph shall
be 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 proceedings
under section 1128A(a).
``(I) Report on specialty pharmacies.--
``(i) In general.--Not later than 1 year
after the effective date of this subparagraph,
the Secretary shall submit a report to Congress
examining specialty drug coverage and
reimbursement under this title.
``(ii) Content of report.--Such report
shall include a description of how State
Medicaid programs define specialty drugs, how
much State Medicaid programs pay for specialty
drugs, how States and managed care plans
determine payment for specialty drugs, the
settings in which specialty drugs are dispensed
(such as retail community pharmacies or
specialty pharmacies), whether acquisition
costs for specialty drugs are captured in the
national average drug acquisition cost survey,
and recommendations as to whether specialty
pharmacies should be included in the survey of
retail prices to ensure national average drug
acquisition costs capture drugs sold at
specialty pharmacies and how such specialty
pharmacies should be defined.'';
(C) in paragraph (2)--
(i) in subparagraph (A), by inserting ``,
including payments rates under Medicaid managed
care plans,'' after ``under this title''; and
(ii) in subparagraph (B), by inserting
``and the basis for such dispensing fees''
before the semicolon; and
(D) in paragraph (4), by inserting ``, and
$5,000,000 for fiscal year 2022 and each fiscal year
thereafter,'' after ``2010''.
(2) Effective date.--The amendments made by this subsection
take effect on the 1st day of the 1st quarter that begins on or
after the date that is 18 months after the date of enactment of
this Act.
(c) Manufacturer Reporting of Wholesale Acquisition Cost.--Section
1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)), as amended by section
141, is further amended--
(1) in subparagraph (A)(i)--
(A) in subclause (I), by striking ``and'' after the
semicolon;
(B) in subclause (II), by adding ``and'' after the
semicolon;
(C) by moving the left margins of subclauses (I)
and (II) 2 ems to the right; and
(D) by adding at the end the following:
``(III) in the case of rebate
periods that begin on or after the date
of enactment of this subclause, on the
wholesale acquisition cost (as defined
in section 1847A(c)(6)(B)) for covered
outpatient drugs for the rebate period
under the agreement (including for all
such drugs that are sold under a new
drug application approved under section
505(c) of the Federal Food, Drug, and
Cosmetic Act);''; and
(2) in subparagraph (D)--
(A) in the matter preceding clause (i), by
inserting ``and clause (vii) of this subparagraph''
after ``1847A'';
(B) in clause (vi), by striking ``and'' after the
comma;
(C) in clause (vii), by striking the period and
inserting ``, and''; and
(D) by inserting after clause (vii) the following:
``(viii) to the Secretary to disclose
(through a website accessible to the public)
the most recently reported wholesale
acquisition cost (as defined in section
1847A(c)(6)(B)) for each covered outpatient
drug (including for all such drugs that are
sold under a new drug application approved
under section 505(c) of the Federal Food, Drug,
and Cosmetic Act), as reported under
subparagraph (A)(i)(III).''.
SEC. 205. T-MSIS DRUG DATA ANALYTICS REPORTS.
(a) In General.--Not later than May 1 of each calendar year
beginning with calendar year 2023, the Secretary of Health and Human
Services (in this section referred to as the ``Secretary'') shall
publish on a website of the Centers for Medicare & Medicaid Services
that is accessible to the public a report of the most recently
available data on provider prescribing patterns under the Medicaid
program.
(b) Content of Report.--
(1) Required content.--Each report required under
subsection (a) for a calendar year shall include the following
information with respect to each State (and, to the extent
available, with respect to Puerto Rico, the United States
Virgin Islands, Guam, the Northern Mariana Islands, and
American Samoa):
(A) A comparison of covered outpatient drug (as
defined in section 1927(k)(2) of the Social Security
Act (42 U.S.C. 1396r-8(k)(2))) prescribing patterns
under the State Medicaid plan or waiver of such plan
(including drugs prescribed on a fee-for-service basis
and drugs prescribed under managed care arrangements
under such plan or waiver)--
(i) across all forms or models of
reimbursement used under the plan or waiver;
(ii) within specialties and subspecialties,
as defined by the Secretary;
(iii) by episodes of care for--
(I) each chronic disease category,
as defined by the Secretary, that is
represented in the 10 conditions that
accounted for the greatest share of
total spending under the plan or waiver
during the year that is the subject of
the report;
(II) procedural groupings; and
(III) rare disease diagnosis codes;
(iv) by patient demographic
characteristics, including race (to the extent
that the Secretary determines that there is
sufficient data available with respect to such
characteristic in a majority of States),
gender, and age;
(v) by patient high-utilizer or risk
status; and
(vi) by high and low resource settings by
facility and place of service categories, as
determined by the Secretary.
(B) In the case of medical assistance for covered
outpatient drugs (as so defined) provided under a State
Medicaid plan or waiver of such plan in a managed care
setting, an analysis of the differences in managed care
prescribing patterns when a covered outpatient drug is
prescribed in a managed care setting as compared to
when the drug is prescribed in a fee-for-service
setting.
(2) Additional content.--A report required under subsection
(a) for a calendar year may include State-specific information
about prescription utilization management tools under State
Medicaid plans or waivers of such plans, including--
(A) a description of prescription utilization
management tools under State programs to provide long-
term services and supports under a State Medicaid plan
or a waiver of such plan;
(B) a comparison of prescription utilization
management tools applicable to populations covered
under a State Medicaid plan waiver under section 1115
of the Social Security Act (42 U.S.C. 1315) and the
models applicable to populations that are not covered
under the waiver;
(C) a comparison of the prescription utilization
management tools employed by different Medicaid managed
care organizations, pharmacy benefit managers, and
related entities within the State;
(D) a comparison of the prescription utilization
management tools applicable to each enrollment category
under a State Medicaid plan or waiver; and
(E) a comparison of the prescription utilization
management tools applicable under the State Medicaid
plan or waiver by patient high-utilizer or risk status.
(3) Additional analysis.--To the extent practicable, the
Secretary shall include in each report published under
subsection (a)--
(A) analyses of national, State, and local patterns
of Medicaid population-based prescribing behaviors; and
(B) recommendations for administrative or
legislative action to improve the effectiveness of, and
reduce costs for, covered outpatient drugs under
Medicaid while ensuring timely beneficiary access to
medically necessary covered outpatient drugs.
(c) Use of T-MSIS Data.--Each report required under subsection (a)
shall--
(1) be prepared using data and definitions from the
Transformed Medicaid Statistical Information System (T-MSIS)
data set (or a successor data set) that is not more than 24
months old on the date that the report is published; and
(2) as appropriate, include a description with respect to
each State of the quality and completeness of the data, as well
as any necessary caveats describing the limitations of the data
reported to the Secretary by the State that are sufficient to
communicate the appropriate uses for the information.
(d) Preparation of Report.--Each report required under subsection
(a) shall be prepared by the Administrator for the Centers for Medicare
& Medicaid Services.
(e) Appropriation.--For fiscal year 2022 and each fiscal year
thereafter, there is appropriated to the Secretary $2,000,000 to carry
out this section.
SEC. 206. RISK-SHARING VALUE-BASED PAYMENT AGREEMENTS FOR COVERED
OUTPATIENT DRUGS UNDER MEDICAID.
(a) In General.--Section 1927 of the Social Security Act (42 U.S.C.
1396r-8) is amended by adding at the end the following new subsection:
``(l) State Option To Pay for Covered Outpatient Drugs Through
Risk-Sharing Value-Based Agreements.--
``(1) In general.--Beginning January 1, 2022, a State shall
have the option to pay (whether on a fee-for-service or managed
care basis) for covered outpatient drugs that are potentially
curative treatments intended for one-time use that are
administered to individuals under this title by entering into a
risk-sharing value-based payment agreement with the
manufacturer of the drug in accordance with the requirements of
this subsection.
``(2) Secretarial approval.--
``(A) In general.--A State shall submit a request
to the Secretary to enter into a risk-sharing value
based payment agreement, and the Secretary shall not
approve a proposed risk-sharing value-based payment
agreement between a State and a manufacturer for
payment for a covered outpatient drug of the
manufacturer unless the following requirements are met:
``(i) Manufacturer is party to rebate
agreement and in compliance with
requirements.--The manufacturer has a rebate
agreement in effect as required under
subsections (a) and (b) of this section and is
in compliance with all applicable requirements
under this title.
``(ii) No increase to projected net federal
spending.--
``(I) In general.--The Chief
Actuary certifies that the projected
payments for each covered outpatient
drug under such proposed agreement
would not result in greater estimated
Federal spending under this title than
the net Federal spending that would
result in the absence of the agreement.
``(II) Net federal spending
defined.--For purposes of this
subsection, the term `net Federal
spending' means the amount of Federal
payments the Chief Actuary estimates
would be made under this title for
administering a covered outpatient drug
to an individual eligible for medical
assistance under a State plan or a
waiver of such plan, reduced by the
amount of all rebates the Chief Actuary
estimates would be paid with respect to
the administering of such drug,
including all rebates under this title
and any supplemental or other
additional rebates, in the absence of
such an agreement.
``(III) Information.--The Chief
Actuary shall make the certifications
required under this clause based on the
most recently available and reliable
drug pricing and product information.
The State and manufacturer shall
provide the Secretary and the Chief
Actuary with all necessary information
required to make the estimates needed
for such certifications.
``(iii) Launch and list price
justifications.--The manufacturer submits all
relevant information and supporting
documentation necessary for pricing decisions
as deemed appropriate by the Secretary, which
shall be truthful and non-misleading, including
manufacturer information and supporting
documentation for launch price or list price
increases, and any applicable justification
required under section 1128L.
``(iv) Confidentiality of information;
penalties.--The provisions of subparagraphs (C)
and (D) of subsection (b)(3) shall apply to a
manufacturer that fails to submit the
information and documentation required under
clauses (ii) and (iii) on a timely basis, or
that knowingly provides false or misleading
information, in the same manner as such
provisions apply to a manufacturer with a
rebate agreement under this section.
``(B) Consideration of state request for
approval.--
``(i) In general.--The Secretary shall
treat a State request for approval of a risk-
sharing value-based payment agreement in the
same manner that the Secretary treats a State
plan amendment, and subpart B of part 430 of
title 42, Code of Federal Regulations,
including, subject to clause (ii), the timing
requirements of section 430.16 of such title
(as in effect on the date of enactment of this
subsection), shall apply to a request for
approval of a risk-sharing value-based payment
agreement in the same manner as such subpart
applies to a State plan amendment.
``(ii) Timing.--The Secretary shall consult
with the Commissioner of Food and Drugs as
required under subparagraph (C) and make a
determination on whether to approve a request
from a State for approval of a proposed risk-
sharing value-based payment agreement (or
request additional information necessary to
allow the Secretary to make a determination
with respect to such request for approval)
within the time period, to the extent
practicable, specified in section 430.16 of
title 42, Code of Federal Regulations (as in
effect on the date of enactment of this
subsection), but in no case shall the Secretary
take more than 180 days after the receipt of
such request for approval or response to such
request for additional information to make such
a determination (or request additional
information).
``(C) Consultation with the commissioner of food
and drugs.--In considering whether to approve a risk-
sharing value-based payment agreement, the Secretary,
to the extent necessary, shall consult with the
Commissioner of Food and Drugs to determine whether the
relevant clinical parameters specified in such
agreement are appropriate.
``(3) Installment-based payment structure.--
``(A) In general.--A risk-sharing value-based
payment agreement shall provide for a payment structure
under which, for every installment year of the
agreement (subject to subparagraph (B)), the State
shall pay the total installment year amount in equal
installments to be paid at regular intervals over a
period of time that shall be specified in the
agreement.
``(B) Requirements for installment payments.--
``(i) Timing of first payment.--The State
shall make the first of the installment
payments described in subparagraph (A) for an
installment year not later than 30 days after
the end of such year.
``(ii) Length of installment period.--The
period of time over which the State shall make
the installment payments described in
subparagraph (A) for an installment year shall
not be longer than 5 years.
``(iii) Nonpayment or reduced payment of
installments following a failure to meet
clinical parameter.--If, prior to the payment
date (as specified in the agreement) of any
installment payment described in subparagraph
(A) or any other alternative date or time frame
(as otherwise specified in the agreement), the
covered outpatient drug which is subject to the
agreement fails to meet a relevant clinical
parameter of the agreement, the agreement shall
provide that--
``(I) the installment payment shall
not be made; or
``(II) the installment payment
shall be reduced by a percentage
specified in the agreement that is
based on the outcome achieved by the
drug relative to the relevant clinical
parameter.
``(4) Notice of intent.--
``(A) In general.--Subject to subparagraph (B), a
manufacturer of a covered outpatient drug shall not be
eligible to enter into a risk-sharing value-based
payment agreement under this subsection with respect to
such drug unless the manufacturer notifies the
Secretary that the manufacturer is interested in
entering into such an agreement with respect to such
drug. The decision to submit and timing of a request to
enter into a proposed risk-sharing value-based payment
agreement shall remain solely within the discretion of
the State and shall only be effective upon Secretarial
approval as required under this subsection.
``(B) Treatment of subsequently approved drugs.--
``(i) In general.--In the case of a
manufacturer of a covered outpatient drug
approved under section 505 of the Federal Food,
Drug, and Cosmetic Act or licensed under
section 351 of the Public Health Service Act
after the date of enactment of this subsection,
not more than 90 days after meeting with the
Food and Drug Administration following phase II
clinical trials for such drug (or, in the case
of a drug described in clause (ii), not later
than March 31, 2022), the manufacturer must
notify the Secretary of the manufacturer's
intent to enter into a risk-sharing value-based
payment agreement under this subsection with
respect to such drug. If no such meeting has
occurred, the Secretary may use discretion as
to whether a potentially curative treatment
intended for one-time use may qualify for a
risk-sharing value-based payment agreement
under this section. A manufacturer notification
of interest shall not have any influence on a
decision for approval by the Food and Drug
Administration.
``(ii) Application to certain subsequently
approved drugs.--A drug described in this
clause is a covered outpatient drug of a
manufacturer--
``(I) that is approved under
section 505 of the Federal Food, Drug,
and Cosmetic Act or licensed under
section 351 of the Public Health
Service Act after the date of enactment
of this subsection; and
``(II) with respect to which, as of
January 1, 2022, more than 90 days have
passed after the manufacturer's meeting
with the Food and Drug Administration
following phase II clinical trials for
such drug.
``(iii) Parallel approval.--The Secretary,
in coordination with the Administrator of the
Centers for Medicare & Medicaid Services and
the Commissioner of Food and Drugs, shall, to
the extent practicable, approve a State's
request to enter into a proposed risk-sharing
value-based payment agreement that otherwise
meets the requirements of this subsection at
the time that such a drug is approved by the
Food and Drug Administration to help provide
that no State that wishes to enter into such an
agreement is required to pay for the drug in
full at one time if the State is seeking to pay
over a period of time as outlined in the
proposed agreement.
``(iv) Rule of construction.--Nothing in
this paragraph shall be applied or construed to
modify or affect the timeframes or factors
involved in the Secretary's determination of
whether to approve or license a drug under
section 505 of the Federal Food, Drug, and
Cosmetic Act or section 351 of the Public
Health Service Act.
``(5) Special payment rules.--
``(A) In general.--Except as otherwise provided in
this paragraph, with respect to an individual who is
administered a unit of a covered outpatient drug that
is purchased under a State plan by a State Medicaid
agency under a risk-sharing value-based payment
agreement in an installment year, the State shall
remain liable to the manufacturer of such drug for
payment for such unit without regard to whether the
individual remains enrolled in the State plan under
this title (or a waiver of such plan) for each
installment year for which the State is to make
installment payments for covered outpatient drugs
purchased under the agreement in such year.
``(B) Death.--In the case of an individual
described in subparagraph (A) who dies during the
period described in such subparagraph, the State plan
shall not be liable for any remaining payment for the
unit of the covered outpatient drug administered to the
individual which is owed under the agreement described
in such subparagraph.
``(C) Withdrawal of approval.--In the case of a
covered outpatient drug that is the subject of a risk-
sharing value-based agreement between a State and a
manufacturer under this subsection, including a drug
approved in accordance with section 506(c) of the
Federal Food, Drug, and Cosmetic Act, and such drug is
the subject of an application that has been withdrawn
by the Secretary, the State plan shall not be liable
for any remaining payment that is owed under the
agreement.
``(D) Alternative arrangement under agreement.--
Subject to approval by the Secretary, the terms of a
proposed risk-sharing value-based payment agreement
submitted for approval by a State may provide that
subparagraph (A) shall not apply.
``(E) Guidance.--Not later than January 1, 2022,
the Secretary shall issue guidance to States
establishing a process for States to notify the
Secretary when an individual who is administered a unit
of a covered outpatient drug that is purchased by a
State plan under a risk-sharing value-based payment
agreement ceases to be enrolled under the State plan
under this title (or a waiver of such plan) or dies
before the end of the installment period applicable to
such unit under the agreement.
``(6) Treatment of payments under risk-sharing value-based
agreements for purposes of average manufacturer price; best
price.--The Secretary shall treat any payments made to the
manufacturer of a covered outpatient drug under a risk-sharing
value-based payment agreement under this subsection during a
rebate period in the same manner that the Secretary treats
payments made under a State supplemental rebate agreement under
sections 447.504(c)(19) and 447.505(c)(7) of title 42, Code of
Federal Regulations (or any successor regulations), for
purposes of determining average manufacturer price and best
price under this section with respect to the covered outpatient
drug and a rebate period and for purposes of offsets required
under subsection (b)(1)(B).
``(7) Assessments and report to congress.--
``(A) Assessments.--
``(i) In general.--Not later than 180 days
after the end of each assessment period of any
risk-sharing value-based payment agreement for
a State approved under this subsection, the
Secretary shall conduct an evaluation of such
agreement which shall include an evaluation by
the Chief Actuary to determine whether program
spending under the risk-sharing value-based
payment agreement aligned with the projections
for the agreement made under paragraph
(2)(A)(ii), including an assessment of whether
actual Federal spending under this title under
the agreement was less or more than net Federal
spending would have been in the absence of the
agreement.
``(ii) Assessment period.--For purposes of
clause (i)--
``(I) the first assessment period
for a risk-sharing value-based payment
agreement shall be the period of time
over which payments are scheduled to be
made under the agreement for the first
10 individuals who are administered
covered outpatient drugs under the
agreement except that such period shall
not exceed the 5-year period after the
date on which the Secretary approves
the agreement; and
``(II) each subsequent assessment
period for a risk-sharing value-based
payment agreement shall be the 5-year
period following the end of the
previous assessment period.
``(B) Results of assessments.--
``(i) Termination option.--If the Secretary
determines as a result of the assessment by the
Chief Actuary under subparagraph (A) that the
actual Federal spending under this title for
any covered outpatient drug that was the
subject of the State's risk-sharing value-based
payment agreement was greater than the net
Federal spending that would have resulted in
the absence of the agreement, the Secretary may
terminate approval of such agreement and shall
immediately conduct an assessment under this
paragraph of any other ongoing risk-sharing
value-based payment agreement to which the same
manufacturer is a party.
``(ii) Repayment required.--
``(I) In general.--If the Secretary
determines as a result of the
assessment by the Chief Actuary under
subparagraph (A) that the Federal
spending under the risk-sharing value-
based agreement for a covered
outpatient drug that was subject to
such agreement was greater than the net
Federal spending that would have
resulted in the absence of the
agreement, the manufacturer shall repay
the difference to the State and Federal
governments in a timely manner as
determined by the Secretary.
``(II) Termination for failure to
pay.--The failure of a manufacturer to
make repayments required under
subclause (I) in a timely manner shall
result in immediate termination of all
risk-sharing value-based agreements to
which the manufacturer is a party.
``(III) Additional penalties.--In
the case of a manufacturer that fails
to make repayments required under
subclause (I), the Secretary may treat
such manufacturer in the same manner as
a manufacturer that fails to pay
required rebates under this section,
and the Secretary may--
``(aa) suspend or terminate
the manufacturer's rebate
agreement under this section;
and
``(bb) pursue any other
remedy that would be available
if the manufacturer had failed
to pay required rebates under
this section.
``(C) Report to congress.--Not later than 5 years
after the first risk-sharing value-based payment
agreement is approved under this subsection, the
Secretary shall submit to Congress and make available
to the public a report that includes--
``(i) an assessment of the impact of risk-
sharing value-based payment agreements on
access for individuals who are eligible for
benefits under a State plan or waiver under
this title to medically necessary covered
outpatient drugs and related treatments;
``(ii) an analysis of the impact of such
agreements on overall State and Federal
spending under this title;
``(iii) an assessment of the impact of such
agreements on drug prices, including launch
price and price increases; and
``(iv) such recommendations to Congress as
the Secretary deems appropriate.
``(8) Guidance and regulations.--
``(A) In general.--Not later than January 1, 2022,
the Secretary shall issue guidance to States seeking to
enter into risk-sharing value-based payment agreements
under this subsection that includes a model template
for such agreements. The Secretary may issue any
additional guidance or promulgate regulations as
necessary to implement and enforce the provisions of
this subsection.
``(B) Model agreements.--
``(i) In general.--If a State expresses an
interest in pursuing a risk-sharing value-based
payment agreement under this subsection with a
manufacturer for the purchase of a covered
outpatient drug, the Secretary may share with
such State any risk-sharing value-based
agreement between a State and the manufacturer
for the purchase of such drug that has been
approved under this subsection. While such
shared agreement may serve as a template for a
State that wishes to propose, the use of a
previously approved agreement shall not affect
the submission and approval process for
approval of a proposed risk-sharing value-based
payment agreement under this subsection,
including the requirements under paragraph
(2)(A).
``(ii) Confidentiality.--In the case of a
risk-sharing value-based payment agreement that
is disclosed to a State by the Secretary under
this subparagraph and that is only in effect
with respect to a single State, the
confidentiality of information provisions
described in subsection (b)(3)(D) shall apply
to such information.
``(C) OIG consultation.--
``(i) In general.--The Secretary shall
consult with the Office of the Inspector
General of the Department of Health and Human
Services to determine whether there are
potential program integrity concerns with
agreement approvals or templates and address
accordingly.
``(ii) OIG policy updates as necessary.--
The Inspector General of the Department of
Health and Human Services shall review and
update, as necessary, any policies or
guidelines of the Office of the Inspector
General of the Department of Human Services
(including policies related to the enforcement
of section 1128B) to accommodate the use of
risk-sharing value-based payment agreements in
accordance with this section.
``(9) Rules of construction.--
``(A) Modifications.--Nothing in this subsection or
any regulations promulgated under this subsection shall
prohibit a State from requesting a modification from
the Secretary to the terms of a risk-sharing value-
based payment agreement. A modification that is
expected to result in any increase to projected net
State or Federal spending under the agreement shall be
subject to recertification by the Chief Actuary as
described in paragraph (2)(A)(ii) before the
modification may be approved.
``(B) Rebate agreements.--Nothing in this
subsection shall be construed as requiring a State to
enter into a risk-sharing value-based payment agreement
or as limiting or superseding the ability of a State to
enter into a supplemental rebate agreement for a
covered outpatient drug.
``(C) FFP for payments under risk-sharing value-
based payment agreements.--Federal financial
participation shall be available under this title for
any payment made by a State to a manufacturer for a
covered outpatient drug under a risk-sharing value-
based payment agreement in accordance with this
subsection, except that no Federal financial
participation shall be available for any payment made
by a State to a manufacturer under such an agreement on
and after the effective date of a disapproval of such
agreement by the Secretary.
``(D) Continued application of other provisions.--
Except as expressly provided in this subsection,
nothing in this subsection or in any regulations
promulgated under this subsection shall affect the
application of any other provision of this Act.
``(10) Appropriations.--For fiscal year 2022 and each
fiscal year thereafter, there are appropriated to the Secretary
$5,000,000 for the purpose of carrying out this subsection.
``(11) Definitions.--In this subsection:
``(A) Chief actuary.--The term `Chief Actuary'
means the Chief Actuary of the Centers for Medicare &
Medicaid Services.
``(B) Installment year.--The term `installment
year' means, with respect to a risk-sharing value-based
payment agreement, a 12-month period during which a
covered outpatient drug is administered under the
agreement.
``(C) Potentially curative treatment intended for
one-time use.--The term `potentially curative treatment
intended for one-time use' means a treatment that
consists of the administration of a covered outpatient
drug that--
``(i) is a form of gene therapy for a rare
disease, as defined by the Commissioner of Food
and Drugs, designated under section 526 of the
Federal Food, Drug, and Cosmetics Act, and
approved under section 505 of such Act or
licensed under subsection (a) or (k) of section
351 of the Public Health Service Act to treat a
serious or life-threatening disease or
condition;
``(ii) if administered in accordance with
the labeling of such drug, is expected to
result in either--
``(I) the cure of such disease or
condition; or
``(II) a reduction in the symptoms
of such disease or condition to the
extent that such disease or condition
is not expected to lead to early
mortality; and
``(iii) is expected to achieve a result
described in clause (ii), which may be achieved
over an extended period of time, after not more
than 3 administrations.
``(D) Relevant clinical parameter.--The term
`relevant clinical parameter' means, with respect to a
covered outpatient drug that is the subject of a risk-
sharing value-based payment agreement--
``(i) a clinical endpoint specified in the
drug's labeling or supported by one or more of
the compendia described in section
1861(t)(2)(B)(ii)(I) that--
``(I) is able to be measured or
evaluated on an annual basis for each
year of the agreement on an independent
basis by a provider or other entity;
and
``(II) is required to be achieved
(based on observed metrics in patient
populations) under the terms of the
agreement; or
``(ii) a surrogate endpoint (as defined in
section 507(e)(9) of the Federal Food, Drug,
and Cosmetic Act), including those developed by
patient-focused drug development tools, that--
``(I) is able to be measured or
evaluated on an annual basis for each
year of the agreement on an independent
basis by a provider or other entity;
and
``(II) has been qualified by the
Food and Drug Administration.
``(E) Risk-sharing value-based payment agreement.--
The term `risk-sharing value-based payment agreement'
means an agreement between a State plan and a
manufacturer--
``(i) for the purchase of a covered
outpatient drug of the manufacturer that is a
potentially curative treatment intended for
one-time use;
``(ii) under which payment for such drug
shall be made pursuant to an installment-based
payment structure that meets the requirements
of paragraph (3);
``(iii) which conditions payment on the
achievement of at least 2 relevant clinical
parameters (as defined in subparagraph (C));
``(iv) which provides that--
``(I) the State plan will directly
reimburse the manufacturer for the
drug; or
``(II) a third party will reimburse
the manufacture in a manner approved by
the Secretary; and
``(v) is approved by the Secretary in
accordance with paragraph (2).
``(F) Total installment year amount.--The term
`total installment year amount' means, with respect to
a risk-sharing value-based payment agreement for the
purchase of a covered outpatient drug and an
installment year, an amount equal to the product of--
``(i) the unit price of the drug charged
under the agreement; and
``(ii) the number of units of such drug
administered under the agreement during such
installment year.''.
(b) Conforming Amendments.--
(1) Section 1903(i)(10)(A) of the Social Security Act (42
U.S.C. 1396b(i)(10)(A)) is amended by striking ``or unless
section 1927(a)(3) applies'' and inserting ``, section
1927(a)(3) applies with respect to such drugs, or such drugs
are the subject of a risk-sharing value-based payment agreement
under section 1927(l)''.
(2) Section 1927(b) of the Social Security Act (42 U.S.C.
1396r-8(b)) is amended--
(A) in paragraph (1)(A), by inserting ``(except for
drugs for which payment is made by a State under a
risk-sharing value-based payment agreement under
subsection (l))'' after ``under the State plan for such
period''; and
(B) in paragraph (3)--
(i) in subparagraph (C)(i), by inserting
``or subsection (l)(2)(A)'' after
``subparagraph (A)''; and
(ii) in subparagraph (D), in the matter
preceding clause (i), by inserting ``, under
subsection (l)(2)(A),'' after ``under this
paragraph''.
SEC. 207. APPLYING MEDICAID DRUG REBATE REQUIREMENT TO DRUGS PROVIDED
AS PART OF OUTPATIENT HOSPITAL SERVICES.
(a) In General.--Section 1927(k)(3) of the Social Security Act (42
U.S.C. 1396r-8(k)(3)) is amended to read as follows:
``(3) Limiting definition.--
``(A) In general.--The term `covered outpatient
drug' does not include any drug, biological product, or
insulin provided as part of, or as incident to and in
the same setting as, any of the following (and for
which payment may be made under this title as part of
payment for the following and not as direct
reimbursement for the drug):
``(i) Inpatient hospital services.
``(ii) Hospice services.
``(iii) Dental services, except that drugs
for which the State plan authorizes direct
reimbursement to the dispensing dentist are
covered outpatient drugs.
``(iv) Physicians' services.
``(v) Outpatient hospital services.
``(vi) Nursing facility services and
services provided by an intermediate care
facility for the mentally retarded.
``(vii) Other laboratory and x-ray
services.
``(viii) Renal dialysis.
``(B) Other exclusions.--Such term also does not
include any such drug or product for which a National
Drug Code number is not required by the Food and Drug
Administration or a drug or biological used for a
medical indication which is not a medically accepted
indication.
``(C) State option.--At the option of a State, such
term may include any drug, biological product, or
insulin for which the State is the primary payer under
this title or a demonstration project concerning this
title, and that is provided on an outpatient basis as
part of, or as incident to and in the same setting as,
described in clause (iv) or (v) of subparagraph (A) and
for which payment is made as part of payment for such
services.
``(D) No effect on best price.--Any drug,
biological product, or insulin excluded from the
definition of such term as a result of this paragraph
shall be treated as a covered outpatient drug for
purposes of determining the best price (as defined in
subsection (c)(1)(C)) for such drug, biological
product, or insulin.''.
(b) Effective Date; Implementation Guidance.--
(1) In general.--The amendment made by subsection (a) shall
take effect on the date that is 1 year after the date of
enactment of this Act.
(2) Implementation and guidance.--Not later than 1 year
after the date of enactment of this Act, the Secretary of
Health and Human Services shall issue guidance and relevant
informational bulletins for States, manufacturers (as defined
in section 1927(k)(5) of the Social Security Act (42 U.S.C.
1396r-8(k)(5))), and other relevant stakeholders, including
health care providers, regarding implementation of the
amendment made by subsection (a).
TITLE III--FOOD AND DRUG ADMINISTRATION
Subtitle A--Pay-for-Delay
SEC. 301. UNLAWFUL AGREEMENTS.
(a) Agreements Prohibited.--Subject to subsections (b) and (c), it
shall be unlawful for an NDA or BLA holder and a subsequent filer (or
for two subsequent filers) to enter into, or carry out, an agreement
resolving or settling a covered patent infringement claim on a final or
interim basis if under such agreement--
(1) a subsequent filer directly or indirectly receives from
such holder (or in the case of such an agreement between two
subsequent filers, the other subsequent filer) anything of
value, including a license; and
(2) the subsequent filer agrees to limit or forego research
on, or development, manufacturing, marketing, or sales, for any
period of time, of the covered product that is the subject of
the application described in subparagraph (A) or (B) of
subsection (g)(8).
(b) Exclusion.--It shall not be unlawful under subsection (a) if a
party to an agreement described in such subsection demonstrates by
clear and convincing evidence that the value described in subsection
(a)(1) is compensation solely for other goods or services that the
subsequent filer has promised to provide.
(c) Limitation.--Nothing in this section shall prohibit an
agreement resolving or settling a covered patent infringement claim in
which the consideration granted by the NDA or BLA holder to the
subsequent filer (or from one subsequent filer to another) as part of
the resolution or settlement includes only one or more of the
following:
(1) The right to market the covered product that is the
subject of the application described in subparagraph (A) or (B)
of subsection (g)(8) in the United States before the expiration
of--
(A) any patent that is the basis of the covered
patent infringement claim; or
(B) any patent right or other statutory exclusivity
that would prevent the marketing of such covered
product.
(2) A payment for reasonable litigation expenses not to
exceed $7,500,000 in the aggregate.
(3) A covenant not to sue on any claim that such covered
product infringes a patent.
(d) Enforcement by Federal Trade Commission.--
(1) General application.--The requirements of this section
apply, according to their terms, to an NDA or BLA holder or
subsequent filer that is--
(A) a person, partnership, or corporation over
which the Commission has authority pursuant to section
5(a)(2) of the Federal Trade Commission Act (15 U.S.C.
45(a)(2)); or
(B) a person, partnership, or corporation over
which the Commission would have authority pursuant to
such section but for the fact that such person,
partnership, or corporation is not organized to carry
on business for its own profit or that of its members.
(2) Unfair or deceptive acts or practices enforcement
authority.--
(A) In general.--A violation of this section shall
be treated as an unfair or deceptive act or practice in
violation of section 5(a)(1) of the Federal Trade
Commission Act (15 U.S.C. 45(a)(1)).
(B) Powers of commission.--Except as provided in
subparagraph (C) and paragraphs (1)(B) and (3)--
(i) the 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 section; and
(ii) any NDA or BLA holder or subsequent
filer that violates this section shall be
subject to the penalties and entitled to the
privileges and immunities provided in the
Federal Trade Commission Act.
(C) Judicial review.--In the case of a cease and
desist order issued by the Commission under section 5
of the Federal Trade Commission Act (15 U.S.C. 45) for
violation of this section, a party to such order may
obtain judicial review of such order as provided in
such section 5, except that--
(i) such review may only be obtained in--
(I) the United States Court of
Appeals for the District of Columbia
Circuit;
(II) the United States Court of
Appeals for the circuit in which the
ultimate parent entity, as defined in
section 801.1(a)(3) of title 16, Code
of Federal Regulations, or any
successor thereto, of the NDA or BLA
holder (if any such holder is a party
to such order) is incorporated as of
the date that the application described
in subparagraph (A) or (B) of
subsection (g)(8) or an approved
application that is deemed to be a
license for a biological product under
section 351(k) of the Public Health
Service Act (42 U.S.C. 262(k)) pursuant
to section 7002(e)(4) of the Biologics
Price Competition and Innovation Act of
2009 (Public Law 111-148; 124 Stat.
817) is submitted to the Commissioner
of Food and Drugs; or
(III) the United States Court of
Appeals for the circuit in which the
ultimate parent entity, as so defined,
of any subsequent filer that is a party
to such order is incorporated as of the
date that the application described in
subparagraph (A) or (B) of subsection
(g)(8) is submitted to the Commissioner
of Food and Drugs; and
(ii) the petition for review shall be filed
in the court not later than 30 days after such
order is served on the party seeking review.
(3) Additional enforcement authority.--
(A) Civil penalty.--The Commission may commence a
civil action to recover a civil penalty in a district
court of the United States against any NDA or BLA
holder or subsequent filer that violates this section.
(B) Special rule for recovery of penalty if cease
and desist order issued.--
(i) In general.--If the Commission has
issued a cease and desist order in a proceeding
under section 5 of the Federal Trade Commission
Act (15 U.S.C. 45) for violation of this
section--
(I) the Commission may commence a
civil action under subparagraph (A) to
recover a civil penalty against any
party to such order at any time before
the expiration of the 1-year period
beginning on the date on which such
order becomes final under section 5(g)
of such Act (15 U.S.C. 45(g)); and
(II) in such civil action, the
findings of the Commission as to the
material facts in such proceeding shall
be conclusive, unless--
(aa) the terms of such
order expressly provide that
the Commission's findings shall
not be conclusive; or
(bb) such order became
final by reason of section
5(g)(1) of such Act (15 U.S.C.
45(g)(1)), in which case such
findings shall be conclusive if
supported by evidence.
(ii) Relationship to penalty for violation
of an order.--The penalty provided in clause
(i) for violation of this section is separate
from and in addition to any penalty that may be
incurred for violation of an order of the
Commission under section 5(l) of the Federal
Trade Commission Act (15 U.S.C. 45(l)).
(C) Amount of penalty.--
(i) In general.--The amount of a civil
penalty imposed in a civil action under
subparagraph (A) on a party to an agreement
described in subsection (a) shall be sufficient
to deter violations of this section, but in no
event greater than--
(I) if such party is the NDA or BLA
holder (or, in the case of an agreement
between two subsequent filers, the
subsequent filer who gave the value
described in subsection (a)(1)), the
greater of--
(aa) 3 times the value
received by such NDA or BLA
holder (or by such subsequent
filer) that is reasonably
attributable to the violation
of this section; or
(bb) 3 times the value
given to the subsequent filer
(or to the other subsequent
filer) reasonably attributable
to the violation of this
section; and
(II) if such party is the
subsequent filer (or, in the case of an
agreement between two subsequent
filers, the subsequent filer who
received the value described in
subsection (a)(1)), 3 times the value
received by such subsequent filer that
is reasonably attributable to the
violation of this section.
(ii) Factors for consideration.--In
determining such amount, the court shall take
into account--
(I) the nature, circumstances,
extent, and gravity of the violation;
(II) with respect to the violator,
the degree of culpability, any history
of violations, the ability to pay, any
effect on the ability to continue doing
business, profits earned by the NDA or
BLA holder (or, in the case of an
agreement between two subsequent
filers, the subsequent filer who gave
the value described in subsection
(a)(1)), compensation received by the
subsequent filer (or, in the case of an
agreement between two subsequent
filers, the subsequent filer who
received the value described in
subsection (a)(1)), and the amount of
commerce affected; and
(III) other matters that justice
requires.
(D) Injunctions and other equitable relief.--In a
civil action under subparagraph (A), the United States
district courts are empowered to grant mandatory
injunctions and such other and further equitable relief
as they deem appropriate.
(4) Remedies in addition.--Remedies provided in this
subsection are in addition to, and not in lieu of, any other
remedy provided by Federal law.
(5) Preservation of authority of commission.--Nothing in
this section shall be construed to affect any authority of the
Commission under any other provision of law.
(e) Federal Trade Commission Rulemaking.--The Commission may, in
its discretion, by rule promulgated under section 553 of title 5,
United States Code, exempt from this section certain agreements
described in subsection (a) if the Commission finds such agreements to
be in furtherance of market competition and for the benefit of
consumers.
(f) Antitrust Laws.--Nothing in this section shall modify, impair,
limit, or supersede the applicability of the antitrust laws as defined
in subsection (a) of the first section of the Clayton Act (15 U.S.C.
12(a)), and of section 5 of the Federal Trade Commission Act (15 U.S.C.
45) to the extent that such section 5 applies to unfair methods of
competition. Nothing in this section shall modify, impair, limit, or
supersede the right of a subsequent filer to assert claims or
counterclaims against any person, under the antitrust laws or other
laws relating to unfair competition.
(g) Definitions.--In this section:
(1) Agreement resolving or settling a covered patent
infringement claim.--The term ``agreement resolving or settling
a covered patent infringement claim'' means any agreement
that--
(A) resolves or settles a covered patent
infringement claim; or
(B) is contingent upon, provides for a contingent
condition for, or is otherwise related to the
resolution or settlement of a covered patent
infringement claim.
(2) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(3) Covered patent infringement claim.--The term ``covered
patent infringement claim'' means an allegation made by the NDA
or BLA holder to a subsequent filer (or, in the case of an
agreement between two subsequent filers, by one subsequent
filer to another), whether or not included in a complaint filed
with a court of law, that--
(A) the submission of the application described in
subparagraph (A) or (B) of paragraph (9), or the
manufacture, use, offering for sale, sale, or
importation into the United States of a covered product
that is the subject of such an application--
(i) in the case of an agreement between an
NDA or BLA holder and a subsequent filer,
infringes any patent owned by, or exclusively
licensed to, the NDA or BLA holder of the
covered product; or
(ii) in the case of an agreement between
two subsequent filers, infringes any patent
owned by the subsequent filer; or
(B) in the case of an agreement between an NDA or
BLA holder and a subsequent filer, the covered product
to be manufactured under such application uses a
covered product as claimed in a published patent
application.
(4) Covered product.--The term ``covered product'' means a
drug (as defined in section 201(g) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321(g))), including a biological
product (as defined in section 351(i) of the Public Health
Service Act (42 U.S.C. 262(i))).
(5) NDA or bla holder.--The term ``NDA or BLA holder''
means--
(A) the holder of--
(i) an approved new drug application filed
under section 505(b)(1) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355(b)(1))
for a covered product; or
(ii) a biologics license application filed
under section 351(a) of the Public Health
Service Act (42 U.S.C. 262(a)) with respect to
a biological product;
(B) a person owning or controlling enforcement of
the patent on--
(i) the list published under section
505(j)(7) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(7)) in
connection with the application described in
subparagraph (A)(i); or
(ii) any list published under section 351
of the Public Health Service Act (42 U.S.C.
262) comprised of patents associated with
biologics license applications filed under
section 351(a) of such Act (42 U.S.C. 262(a));
or
(C) the predecessors, subsidiaries, divisions,
groups, and affiliates controlled by, controlling, or
under common control with any entity described in
subparagraph (A) or (B) (such control to be presumed by
direct or indirect share ownership of 50 percent or
greater), as well as the licensees, licensors,
successors, and assigns of each of the entities.
(6) Patent.--The term ``patent'' means a patent issued by
the United States Patent and Trademark Office.
(7) Statutory exclusivity.--The term ``statutory
exclusivity'' means those prohibitions on the submission or
approval of drug applications under clauses (ii) through (iv)
of section 505(c)(3)(E) (5- and 3-year exclusivity), clauses
(ii) through (iv) of section 505(j)(5)(F) (5-year and 3-year
exclusivity), section 505(j)(5)(B)(iv) (180-day exclusivity),
section 527 (orphan drug exclusivity), section 505A (pediatric
exclusivity), or section 505E (qualified infectious disease
product exclusivity) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355(c)(3)(E), 355(j)(5)(B)(iv), 355(j)(5)(F),
360cc, 355a, 355f), or prohibitions on the submission or
licensing of biologics license applications under section
351(k)(6) (interchangeable biological product exclusivity) or
section 351(k)(7) (biological product reference product
exclusivity) of the Public Health Service Act (42 U.S.C.
262(k)(6), (7)).
(8) Subsequent filer.--The term ``subsequent filer''
means--
(A) in the case of a drug, a party that owns or
controls an abbreviated new drug application submitted
pursuant to section 505(j) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355(j)) or a new drug
application submitted pursuant to section 505(b)(2) of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355(b)(2)) and filed under section 505(b)(1) of such
Act (21 U.S.C. 355(b)(1)) or has the exclusive rights
to distribute the covered product that is the subject
of such application; or
(B) in the case of a biological product, a party
that owns or controls an application filed with the
Food and Drug Administration under section 351(k) of
the Public Health Service Act (42 U.S.C. 262(k)) or has
the exclusive rights to distribute the biological
product that is the subject of such application.
(h) Effective Date.--This section applies with respect to
agreements described in subsection (a) entered into on or after the
date of the enactment of this Act.
SEC. 302. NOTICE AND CERTIFICATION OF AGREEMENTS.
(a) Notice of All Agreements.--Section 1111(7) of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (21
U.S.C. 355 note) is amended by inserting ``or the owner of a patent for
which a claim of infringement could reasonably be asserted against any
person for making, using, offering to sell, selling, or importing into
the United States a biological product that is the subject of a
biosimilar biological product application'' before the period at the
end.
(b) Certification of Agreements.--Section 1112 of such Act (21
U.S.C. 355 note) is amended by adding at the end the following:
``(d) Certification.--The Chief Executive Officer or the company
official responsible for negotiating any agreement under subsection (a)
or (b) that is required to be filed under subsection (c) shall, within
30 days of such filing, execute and file with the Assistant Attorney
General and the Commission a certification as follows:`I declare that
the following is true, correct, and complete to the best of my
knowledge: The materials filed with the Federal Trade Commission and
the Department of Justice under section 1112 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003, with
respect to the agreement referenced in this certification--' `
```(1) represent the complete, final, and exclusive
agreement between the parties;
```(2) include any ancillary agreements that are contingent
upon, provide a contingent condition for, were entered into
within 30 days of, or are otherwise related to, the referenced
agreement; and
```(3) include written descriptions of any oral agreements,
representations, commitments, or promises between the parties
that are responsive to subsection (a) or (b) of such section
1112 and have not been reduced to writing.'''.
SEC. 303. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD.
Section 505(j)(5)(D)(i)(V) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by inserting ``section
301 of the Lower Costs, More Cures Act of 2021 or'' after ``that the
agreement has violated''.
SEC. 304. COMMISSION LITIGATION AUTHORITY.
Section 16(a)(2) of the Federal Trade Commission Act (15 U.S.C.
56(a)(2)) is amended--
(1) in subparagraph (D), by striking ``or'' after the
semicolon;
(2) in subparagraph (E), by moving the margin 2 ems to the
left and inserting ``or'' after the semicolon; and
(3) by inserting after subparagraph (E) the following:
``(F) under section 301(d)(3)(A) of the Lower Costs, More
Cures Act of 2021;''.
SEC. 305. STATUTE OF LIMITATIONS.
(a) In General.--Except as provided in subsection (b), the
Commission shall commence any administrative proceeding or civil action
to enforce section 301 of this Act not later than 6 years after the
date on which the parties to the agreement file the Notice of Agreement
as provided by section 1112(c)(2) and (d) of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (21 U.S.C. 355 note).
(b) Civil Action After Issuance of Cease and Desist Order.--If the
Commission has issued a cease and desist order under section 5 of the
Federal Trade Commission Act (15 U.S.C. 45) for violation of section
301 of this Act and the proceeding for the issuance of such order was
commenced within the period required by subsection (a) of this section,
such subsection does not prohibit the commencement, after such period,
of a civil action under section 301(d)(3)(A) against a party to such
order or a civil action under subsection (l) of such section 5 for
violation of such order.
Subtitle B--Advancing Education on Biosimilars
SEC. 321. EDUCATION ON BIOLOGICAL PRODUCTS.
(a) Website; Continuing Education.--Subpart 1 of part F of title
III of the Public Health Service Act (42 U.S.C. 262 et seq.) is amended
by adding at the end the following:
``SEC. 352A. EDUCATION ON BIOLOGICAL PRODUCTS.
``(a) Internet Website.--
``(1) In general.--The Secretary shall maintain and operate
an internet website to provide educational materials for health
care providers, patients, and caregivers, regarding the meaning
of the terms, and the standards for review and licensing of,
biological products, including biosimilar biological products
and interchangeable biosimilar biological products.
``(2) Content.--Educational materials provided under
paragraph (1) may include--
``(A) explanations of key statutory and regulatory
terms, including `biosimilar' and `interchangeable',
and clarification regarding the use of interchangeable
biosimilar biological products;
``(B) information related to development programs
for biological products, including biosimilar
biological products and interchangeable biosimilar
biological products and relevant clinical
considerations for prescribers, which may include, as
appropriate and applicable, information related to the
comparability of such biological products;
``(C) an explanation of the process for reporting
adverse events for biological products, including
biosimilar biological products and interchangeable
biosimilar biological products; and
``(D) an explanation of the relationship between
biosimilar biological products and interchangeable
biosimilar biological products licensed under section
351(k) and reference products (as defined in section
351(i)), including the standards for review and
licensing of each such type of biological product.
``(3) Format.--The educational materials provided under
paragraph (1) may be--
``(A) in formats such as webinars, continuing
medical education modules, videos, fact sheets,
infographics, stakeholder toolkits, or other formats as
appropriate and applicable; and
``(B) tailored for the unique needs of health care
providers, patients, caregivers, and other audiences,
as the Secretary determines appropriate.
``(4) Other information.--In addition to the information
described in paragraph (2), the Secretary shall continue to
publish the following information:
``(A) The action package of each biological product
licensed under subsection (a) or (k).
``(B) The summary review of each biological product
licensed under subsection (a) or (k).
``(5) Confidential and trade secret information.--This
subsection does not authorize the disclosure of any trade
secret, confidential commercial or financial information, or
other matter described in section 552(b) of title 5.
``(b) Continuing Education.--The Secretary shall advance education
and awareness among health care providers regarding biological
products, including biosimilar biological products and interchangeable
biosimilar biological products, as appropriate, including by developing
or improving continuing education programs that advance the education
of such providers on the prescribing of, and relevant clinical
considerations with respect to, biological products, including
biosimilar biological products and interchangeable biosimilar
biological products.''.
(b) Application Under the Medicare Merit-Based Incentive Payment
System.--Section 1848(q)(5)(C) of the Social Security Act (42 U.S.C.
1395w-4(q)(5)(C)) is amended by adding at the end the following new
clause:
``(iv) Clinical medical education program
on biosimilar biological products.--Completion
of a clinical medical education program
developed or improved under section 352A(b) of
the Public Health Service Act by a MIPS
eligible professional during a performance
period shall earn such eligible professional
one-half of the highest potential score for the
performance category described in paragraph
(2)(A)(iii) for such performance period. A MIPS
eligible professional may only count the
completion of such a program for purposes of
such category one time during the eligible
professional's lifetime.''.
Subtitle C--Other Provisions
SEC. 331. CLARIFYING THE MEANING OF NEW CHEMICAL ENTITY.
Chapter V of the Federal Food, Drug, and Cosmetic Act is amended--
(1) in section 505 (21 U.S.C. 355)--
(A) in subsection (c)(3)(E)--
(i) in clause (ii), by striking ``active
ingredient (including any ester or salt of the
active ingredient)'' and inserting ``active
moiety (as defined by the Secretary in section
314.3 of title 21, Code of Federal Regulations
(or any successor regulations))''; and
(ii) in clause (iii), by striking ``active
ingredient (including any ester or salt of the
active ingredient)'' and inserting ``active
moiety (as defined by the Secretary in section
314.3 of title 21, Code of Federal Regulations
(or any successor regulations))'';
(B) in subsection (j)(5)(F)--
(i) in clause (ii), by striking ``active
ingredient (including any ester or salt of the
active ingredient)'' and inserting ``active
moiety (as defined by the Secretary in section
314.3 of title 21, Code of Federal Regulations
(or any successor regulations))''; and
(ii) in clause (iii), by striking ``active
ingredient (including any ester or salt of the
active ingredient)'' and inserting ``active
moiety (as defined by the Secretary in section
314.3 of title 21, Code of Federal Regulations
(or any successor regulations))'';
(C) in subsection (l)(2)(A)(i), by striking
``active ingredient (including any ester or salt of the
active ingredient)'' and inserting ``active moiety (as
defined by the Secretary in section 314.3 of title 21,
Code of Federal Regulations (or any successor
regulations))'';
(D) in subsection (s), in the matter preceding
paragraph (1), by striking ``active ingredient
(including any ester or salt of the active
ingredient)'' and inserting ``active moiety (as defined
by the Secretary in section 314.3 of title 21, Code of
Federal Regulations (or any successor regulations))'';
and
(E) in subsection (u)(1), in the matter preceding
subparagraph (A)--
(i) by striking ``active ingredient
(including any ester or salt of the active
ingredient)'' and inserting ``active moiety (as
defined by the Secretary in section 314.3 of
title 21, Code of Federal Regulations (or any
successor regulations))''; and
(ii) by striking ``same active ingredient''
and inserting ``same active moiety'';
(2) in section 512(c)(2)(F) (21 U.S.C. 360b(c)(2)(F))--
(A) in clause (i), by striking ``active ingredient
(including any ester or salt of the active
ingredient)'' and inserting ``active moiety (as defined
by the Secretary in section 314.3 of title 21, Code of
Federal Regulations (or any successor regulations))'';
(B) in clause (ii), by striking ``active ingredient
(including any ester or salt of the active
ingredient)'' and inserting ``active moiety (as defined
by the Secretary in section 314.3 of title 21, Code of
Federal Regulations (or any successor regulations))'';
and
(C) in clause (v), by striking ``active ingredient
(including any ester or salt of the active
ingredient)'' and inserting ``active moiety (as defined
by the Secretary in section 314.3 of title 21, Code of
Federal Regulations (or any successor regulations))'';
(3) in section 524(a)(4)(C) (21 U.S.C. 360n(a)(4)(C)), by
striking ``active ingredient (including any ester or salt of
the active ingredient)'' and inserting ``active moiety (as
defined by the Secretary in section 314.3 of title 21, Code of
Federal Regulations (or any successor regulations))'';
(4) in section 529(a)(4)(A)(ii) (21 U.S.C.
360ff(a)(4)(A)(ii)), by striking ``active ingredient (including
any ester or salt of the active ingredient)'' and inserting
``active moiety (as defined by the Secretary in section 314.3
of title 21, Code of Federal Regulations (or any successor
regulations))''; and
(5) in section 565A(a)(4)(D) (21 U.S.C. 360bbb-
4a(a)(4)(D)), by striking ``active ingredient (including any
ester or salt of the active ingredient)'' and inserting
``active moiety (as defined by the Secretary in section 314.3
of title 21, Code of Federal Regulations (or any successor
regulations))''.
TITLE IV--REVENUE PROVISION
SEC. 401. SAFE HARBOR FOR HIGH DEDUCTIBLE HEALTH PLANS WITHOUT
DEDUCTIBLE FOR INSULIN.
(a) In General.--Section 223(c)(2)(C) of the Internal Revenue Code
of 1986 is amended by inserting ``or for insulin or any device for the
delivery of insulin'' before the period at the end.
(b) Effective Date.--The amendment made by this section shall apply
to months beginning after the date of the enactment of this Act.
TITLE V--MISCELLANEOUS
SEC. 501. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS DURING INITIAL
PERIOD.
Section 1847A(c)(4) of the Social Security Act (42 U.S.C. 1395w-
3a(c)(4)) is amended--
(1) in each of subparagraphs (A) and (B), by redesignating
clauses (i) and (ii) as subclauses (I) and (II), respectively,
and moving such subclauses 2 ems to the right;
(2) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii) and moving such clauses 2 ems to the right;
(3) by striking ``unavailable.--In the case'' and inserting
``unavailable.--
``(A) In general.--Subject to subparagraph (B), in
the case''; and
(4) by adding at the end the following new subparagraph:
``(B) Limitation on payment amount for biosimilar
biological products during initial period.--In the case
of a biosimilar biological product furnished on or
after July 1, 2023, in lieu of applying subparagraph
(A) during the initial period described in such
subparagraph with respect to the biosimilar biological
product, the amount payable under this section for the
biosimilar biological product is the lesser of the
following:
``(i) The amount determined under clause
(ii) of such subparagraph for the biosimilar
biological product.
``(ii) The amount determined under
subsection (b)(1)(B) for the reference
biological product.''.
SEC. 502. GAO STUDY AND REPORT ON AVERAGE SALES PRICE.
(a) Study.--
(1) In general.--The Comptroller General of the United
States (in this section referred to as the ``Comptroller
General'') shall conduct a study on spending for applicable
drugs under part B of title XVIII of the Social Security Act.
(2) Applicable drugs defined.--In this section, the term
``applicable drugs'' means drugs and biologicals--
(A) for which reimbursement under such part B is
based on the average sales price of the drug or
biological; and
(B) that account for the largest percentage of
total spending on drugs and biologicals under such part
B (as determined by the Comptroller General, but in no
case less than 25 drugs or biologicals).
(3) Requirements.--The study under paragraph (1) shall
include an analysis of the following:
(A) The extent to which each applicable drug is
paid for--
(i) under such part B for Medicare
beneficiaries; or
(ii) by private payers in the commercial
market.
(B) Any change in Medicare spending or Medicare
beneficiary cost-sharing that would occur if the
average sales price of an applicable drug was based
solely on payments by private payers in the commercial
market.
(C) The extent to which drug manufacturers provide
rebates, discounts, or other price concessions to
private payers in the commercial market for applicable
drugs, which the manufacturer includes in its average
sales price calculation, for--
(i) formulary placement;
(ii) utilization management considerations;
or
(iii) other purposes.
(D) Barriers to drug manufacturers providing such
price concessions for applicable drugs.
(E) Other areas determined appropriate by the
Comptroller General.
(b) Report.--Not later than 2 years after the date of the enactment
of this Act, the Comptroller General shall submit to Congress a report
on the study conducted under subsection (a), together with
recommendations for such legislation and administrative action as the
Secretary determines appropriate.
SEC. 503. REQUIRING PRESCRIPTION DRUG PLANS AND MA-PD PLANS TO REPORT
POTENTIAL FRAUD, WASTE, AND ABUSE TO THE SECRETARY OF
HHS.
Section 1860D-4 of the Social Security Act (42 U.S.C. 1395w-104) is
amended by adding at the end the following new subsection:
``(p) Reporting Potential Fraud, Waste, and Abuse.--Beginning
January 1, 2022, the PDP sponsor of a prescription drug plan shall
report to the Secretary, as specified by the Secretary--
``(1) any substantiated or suspicious activities (as
defined by the Secretary) with respect to the program under
this part as it relates to fraud, waste, and abuse; and
``(2) any steps made by the PDP sponsor after identifying
such activities to take corrective actions.''.
SEC. 504. ESTABLISHMENT OF PHARMACY QUALITY MEASURES UNDER MEDICARE
PART D.
Section 1860D-4(c) of the Social Security Act (42 U.S.C. 1395w-
104(c)) is amended by adding at the end the following new paragraph:
``(8) Application of pharmacy quality measures.--
``(A) In general.--A PDP sponsor that implements
incentive payments to a pharmacy or price concessions
paid by a pharmacy based on quality measures shall use
measures established or approved by the Secretary under
subparagraph (B) with respect to payment for covered
part D drugs dispensed by such pharmacy.
``(B) Standard pharmacy quality measures.--The
Secretary shall establish or approve standard quality
measures from a consensus and evidence-based
organization for payments described in subparagraph
(A). Such measures shall focus on patient health
outcomes and be based on proven criteria measuring
pharmacy performance.
``(C) Effective date.--The requirement under
subparagraph (A) shall take effect for plan years
beginning on or after January 1, 2023, or such earlier
date specified by the Secretary if the Secretary
determines there are sufficient measures established or
approved under subparagraph (B) to meet the requirement
under subparagraph (A).''.
SEC. 505. IMPROVING COORDINATION BETWEEN THE FOOD AND DRUG
ADMINISTRATION AND THE CENTERS FOR MEDICARE & MEDICAID
SERVICES.
(a) In General.--
(1) Public meeting.--
(A) In general.--Not later than 12 months after the
date of the enactment of this Act, the Secretary of
Health and Human Services (referred to in this section
as the ``Secretary'') shall convene a public meeting
for the purposes of discussing and providing input on
improvements to coordination between the Food and Drug
Administration and the Centers for Medicare & Medicaid
Services in preparing for the availability of novel
medical products described in subsection (c) on the
market in the United States.
(B) Attendees.--The public meeting shall include--
(i) representatives of relevant Federal
agencies, including representatives from each
of the medical product centers within the Food
and Drug Administration and representatives
from the coding, coverage, and payment offices
within the Centers for Medicare & Medicaid
Services;
(ii) stakeholders with expertise in the
research and development of novel medical
products, including manufacturers of such
products;
(iii) representatives of commercial health
insurance payers;
(iv) stakeholders with expertise in the
administration and use of novel medical
products, including physicians; and
(v) stakeholders representing patients and
with expertise in the utilization of patient
experience data in medical product development.
(C) Topics.--The public meeting shall include a
discussion of--
(i) the status of the drug and medical
device development pipeline related to the
availability of novel medical products;
(ii) the anticipated expertise necessary to
review the safety and effectiveness of such
products at the Food and Drug Administration
and current gaps in such expertise, if any;
(iii) the expertise necessary to make
coding, coverage, and payment decisions with
respect to such products within the Centers for
Medicare & Medicaid Services, and current gaps
in such expertise, if any;
(iv) trends in the differences in the data
necessary to determine the safety and
effectiveness of a novel medical product and
the data necessary to determine whether a novel
medical product meets the reasonable and
necessary requirements for coverage and payment
under title XVIII of the Social Security Act
pursuant to section 1862(a)(1)(A) of such Act
(42 U.S.C. 1395y(a)(1)(A));
(v) the availability of information for
sponsors of such novel medical products to meet
each of those requirements; and
(vi) the coordination of information
related to significant clinical improvement
over existing therapies for patients between
the Food and Drug Administration and the
Centers for Medicare & Medicaid Services with
respect to novel medical products.
(D) Trade secrets and confidential information.--No
information discussed as a part of the public meeting
under this paragraph shall be construed as authorizing
the Secretary to disclose any information that is a
trade secret or confidential information subject to
section 552(b)(4) of title 5, United States Code.
(2) Improving transparency of criteria for medicare
coverage.--
(A) Draft guidance.--Not later than 18 months after
the public meeting under paragraph (1), the Secretary
shall update the final guidance titled ``National
Coverage Determinations with Data Collection as a
Condition of Coverage: Coverage with Evidence
Development'' to address any opportunities to improve
the availability and coordination of information as
described in clauses (iv) through (vi) of paragraph
(1)(C).
(B) Final guidance.--Not later than 12 months after
issuing draft guidance under subparagraph (A), the
Secretary shall finalize the updated guidance to
address any such opportunities.
(b) Report on Coding, Coverage, and Payment Processes Under
Medicare for Novel Medical Products.--Not later than 12 months after
the date of the enactment of this Act, the Secretary shall publish a
report on the internet website of the Department of Health and Human
Services regarding processes under the Medicare program under title
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) with respect
to the coding, coverage, and payment of novel medical products
described in subsection (c). Such report shall include the following:
(1) A description of challenges in the coding, coverage,
and payment processes under the Medicare program for novel
medical products.
(2) Recommendations to--
(A) incorporate patient experience data (such as
the impact of a disease or condition on the lives of
patients and patient treatment preferences) into the
coverage and payment processes within the Centers for
Medicare & Medicaid Services;
(B) decrease the length of time to make national
and local coverage determinations under the Medicare
program (as those terms are defined in subparagraph (A)
and (B), respectively, of section 1862(l)(6) of the
Social Security Act (42 U.S.C. 1395y(l)(6)));
(C) streamline the coverage process under the
Medicare program and incorporate input from relevant
stakeholders into such coverage determinations; and
(D) identify potential mechanisms to incorporate
novel payment designs similar to those in development
in commercial insurance plans and State plans under
title XIX of such Act (42 U.S.C. 1396 et seq.) into the
Medicare program.
(c) Novel Medical Products Described.--For purposes of this
section, a novel medical product described in this subsection is a
medical product, including a drug, biological (including gene and cell
therapy), or medical device, that has been designated as a breakthrough
therapy under section 506(a) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 356(a)), a breakthrough device under section 515B of
such Act (21 U.S.C. 360e-3), or a regenerative advanced therapy under
section 506(g) of such Act (21 U.S.C. 356(g)).
SEC. 506. PATIENT CONSULTATION IN MEDICARE NATIONAL AND LOCAL COVERAGE
DETERMINATIONS IN ORDER TO MITIGATE BARRIERS TO INCLUSION
OF SUCH PERSPECTIVES.
Section 1862(l) of the Social Security Act (42 U.S.C. 1395y(l)) is
amended by adding at the end the following new paragraph:
``(7) Patient consultation in national and local coverage
determinations.--The Secretary may consult with patients and
organizations representing patients in making national and
local coverage determinations.''.
SEC. 507. MEDPAC REPORT ON SHIFTING COVERAGE OF CERTAIN MEDICARE PART B
DRUGS TO MEDICARE PART D.
(a) Study.--The Medicare Payment Advisory Commission (in this
section referred to as the ``Commission'') shall conduct a study on
shifting coverage of certain drugs and biologicals for which payment is
currently made under part B of title XVIII of the Social Security Act
(42 U.S.C. 1395j et seq.) to part D of such title (42 U.S.C. 1395w-21
et seq.). Such study shall include an analysis of--
(1) differences in program structures and payment methods
for drugs and biologicals covered under such parts B and D,
including effects of such a shift on program spending,
beneficiary cost-sharing liability, and utilization management
techniques for such drugs and biologicals; and
(2) the feasibility and policy implications of shifting
coverage of drugs and biologicals for which payment is
currently made under such part B to such part D.
(b) Report.--
(1) In general.--Not later than June 30, 2023, the
Commission shall submit to Congress a report containing the
results of the study conducted under subsection (a).
(2) Contents.--The report under paragraph (1) shall include
information, and recommendations as the Commission deems
appropriate, regarding--
(A) formulary design under such part D;
(B) the ability of the benefit structure under such
part D to control total spending on drugs and
biologicals for which payment is currently made under
such part B;
(C) changes to the bid process under such part D,
if any, that may be necessary to integrate coverage of
such drugs and biologicals into such part D;
(D) any other changes to the program that Congress
should consider in determining whether to shift
coverage of such drugs and biologicals from such part B
to such part D; and
(E) the feasibility and policy implications of
creating a methodology to preserve the healthcare
provider's ability to take title of the drug, including
a methodology under which--
(i) prescription drug plans negotiate
reimbursement rates and other arrangements with
drug manufacturers on behalf of a wholesaler;
(ii) wholesalers purchase the drugs from
the manufacturers at the negotiated rate and
ship them through distributors to physicians to
administer to patients;
(iii) physicians and hospitals purchase the
drug from the wholesaler via the distributor;
(iv) after administering the drug, the
physician submits a claim to the MAC for their
drug administration fee;
(v) to be reimbursed for the purchase of
the drug from the distributor, the physician
furnishes the claim for the drug itself to the
wholesaler and the wholesaler would refund the
cost of the drug to the physician; and
(vi) the wholesaler passes this claim to
the PDP to receive reimbursement.
SEC. 508. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE
TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.
Part A of title XI of the Social Security Act is amended by adding
at the end the following new section:
``SEC. 1150C. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE
TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.
``(a) In General.--The Secretary shall require that each direct-to-
consumer advertisement for a prescription drug or biological product
for which payment is available under title XVIII or XIX includes an
appropriate disclosure of truthful and non-misleading pricing
information with respect to the drug or product.
``(b) Determination by CMS.--The Secretary, acting through the
Administrator of the Centers for Medicare & Medicaid Services, shall
determine the components of the requirement under subsection (a), such
as the forms of advertising, the manner of disclosure, the price point
listing, and the price information for disclosure.''.
SEC. 509. CHIEF PHARMACEUTICAL NEGOTIATOR AT THE OFFICE OF THE UNITED
STATES TRADE REPRESENTATIVE.
(a) In General.--Section 141 of the Trade Act of 1974 (19 U.S.C.
2171) is amended--
(1) in subsection (b)(2)--
(A) by striking ``and one Chief Innovation and
Intellectual Property Negotiator'' and inserting ``one
Chief Innovation and Intellectual Property Negotiator,
and one Chief Pharmaceutical Negotiator'';
(B) by striking ``or the Chief Innovation and
Intellectual Property Negotiator'' and inserting ``the
Chief Innovation and Intellectual Property Negotiator,
or the Chief Pharmaceutical Negotiator''; and
(C) by striking ``and the Chief Innovation and
Intellectual Property Negotiator'' and inserting ``the
Chief Innovation and Intellectual Property Negotiator,
and the Chief Pharmaceutical Negotiator''; and
(2) in subsection (c), by adding at the end the following
new paragraph:
``(7) The principal function of the Chief Pharmaceutical
Negotiator shall be to conduct trade negotiations and to
enforce trade agreements relating to United States
pharmaceutical products and services. The Chief Pharmaceutical
Negotiator shall be a vigorous advocate on behalf of United
States pharmaceutical interests. The Chief Pharmaceutical
Negotiator shall perform such other functions as the United
States Trade Representative may direct.''.
(b) Compensation.--Section 5314 of title 5, United States Code, is
amended by striking ``Chief Innovation and Intellectual Property
Negotiator, Office of the United States Trade Representative.'' and
inserting the following:
``Chief Innovation and Intellectual Property Negotiator,
Office of the United States Trade Representative.
``Chief Pharmaceutical Negotiator, Office of the United
States Trade Representative.''.
(c) Report Required.--Not later than the date that is one year
after the appointment of the first Chief Pharmaceutical Negotiator
pursuant to paragraph (2) of section 141(b) of the Trade Act of 1974,
as amended by subsection (a), and annually thereafter, the United
States Trade Representative shall submit to the Committee on Finance of
the Senate and the Committee on Ways and Means of the House of
Representatives a report describing in detail--
(1) enforcement actions taken by the United States Trade
Representative during the one-year period preceding the
submission of the report to ensure the protection of United
States pharmaceutical products and services; and
(2) other actions taken by the United States Trade
Representative to advance United States pharmaceutical products
and services.
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