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<dc:title>117 HR 5237 IH: Reduced Costs and Continued Cures Act of 2021</dc:title>
<dc:publisher>U.S. House of Representatives</dc:publisher>
<dc:date>2021-09-10</dc:date>
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<dc:language>EN</dc:language>
<dc:rights>Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.</dc:rights>
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<distribution-code display="yes">I</distribution-code><congress display="yes">117th CONGRESS</congress><session display="yes">1st Session</session><legis-num display="yes">H. R. 5237</legis-num><current-chamber>IN THE HOUSE OF REPRESENTATIVES</current-chamber><action display="yes"><action-date date="20210910">September 10, 2021</action-date><action-desc><sponsor name-id="P000608">Mr. Peters</sponsor> (for himself, <cosponsor name-id="S001180">Mr. Schrader</cosponsor>, <cosponsor name-id="R000602">Miss Rice of New York</cosponsor>, <cosponsor name-id="M001202">Mrs. Murphy of Florida</cosponsor>, and <cosponsor name-id="C001110">Mr. Correa</cosponsor>) introduced the following bill; which was referred to the <committee-name committee-id="HIF00">Committee on Energy and Commerce</committee-name>, and in addition to the Committees on <committee-name committee-id="HWM00">Ways and Means</committee-name>, and <committee-name committee-id="HJU00">the Judiciary</committee-name>, 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</action-desc></action><legis-type>A BILL</legis-type><official-title display="yes">To amend titles XI, XVIII, and XIX of the Social Security Act to lower prescription drug prices in the Medicare and Medicaid programs, to improve transparency related to pharmaceutical prices and transactions, to lower patients’ out-of-pocket costs, and to ensure accountability to taxpayers, and for other purposes.</official-title></form><legis-body id="H0EC3B60014484D04B241C1136B0D9ED5" style="OLC"><section id="HBAFE62FD63624C79B9FF8905A7A37998" section-type="section-one"><enum>1.</enum><header>Short title; table of contents</header><subsection id="H76C4717884074706A8062363CF75918D"><enum>(a)</enum><header>Short title</header><text display-inline="yes-display-inline">This Act may be cited as the <quote><short-title>Reduced Costs and Continued Cures Act of 2021</short-title></quote>.</text></subsection><subsection id="H73CB77AB8C144A0888D0D6FFF118D637"><enum>(b)</enum><header>Table of contents</header><text display-inline="yes-display-inline">The table of contents of this Act is as follows:</text><toc container-level="legis-body-container" quoted-block="no-quoted-block" lowest-level="section" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded"><toc-entry idref="HBAFE62FD63624C79B9FF8905A7A37998" level="section">Sec. 1. Short title; table of contents.</toc-entry><toc-entry idref="H129C97F8A9E4401AB90ACAE6AE4FD2E1" level="title">Title I—Establishment of part B payment rules for negotiation-eligible drugs and biologicals</toc-entry><toc-entry idref="HA0EB9383AB9047A49388E726E61CBCDA" level="section">Sec. 101. Establishment of part B payment rules for negotiation-eligible drugs and biologicals.</toc-entry><toc-entry idref="HAC097B3817C54330B207431CD181658C" level="title">Title II—Medicare</toc-entry><toc-entry idref="HEAB4056C5EC8455DAA1848D26CABA922" level="subtitle">Subtitle A—Part B</toc-entry><toc-entry idref="H3D11604871E84B6EB653A90D8558EB12" level="section">Sec. 201. Inclusion of value of coupons in determination of average sales price for drugs and biologicals under Medicare part B.</toc-entry><toc-entry idref="H7D2D2CA88BE4474B8E11B4BB603FE60B" level="section">Sec. 202. Payment for biosimilar biological products during initial period.</toc-entry><toc-entry idref="H5493B8BD29B744B0A619CB7DEFBA60DF" level="section">Sec. 203. Temporary increase in Medicare part B payment for biosimilar biological products.</toc-entry><toc-entry idref="H41FF0B88773D4A1B9DC64764299C92FB" level="section">Sec. 204. Medicare part B rebate by manufacturers.</toc-entry><toc-entry level="section" idref="H8D737B1B45154964BFE28B42D0805DD7">Sec. 205. 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.</toc-entry><toc-entry idref="H2649F6B75A844D03B2C51105FED1BC35" level="section">Sec. 206. Establishment of maximum add-on payment for drugs and biologicals.</toc-entry><toc-entry idref="H8218AB29A4E94FCC8C2F6A2D409E1A43" level="section">Sec. 207. Treatment of drug administration services furnished by certain excepted off-campus outpatient departments of a provider.</toc-entry><toc-entry idref="HCFBA82DF1B5C4E0293FC14493DE7E848" level="section">Sec. 208. GAO study and report on average sales price.</toc-entry><toc-entry idref="H32A7EBF2C7314A188B02CA56E8A69BE7" level="section">Sec. 209. Authority to use alternative payment for drugs and biologicals to prevent potential drug shortages.</toc-entry><toc-entry idref="H7A11075EB3984B34945AC31CB99EFF4F" level="subtitle">Subtitle B—Part D</toc-entry><toc-entry idref="HD458639A5FD7434C8D9FD6FFCDB722C9" level="section">Sec. 221. Medicare part D modernization redesign.</toc-entry><toc-entry level="section" idref="H7D9CF4392F5B495A9F90474CB02CB2FA">Sec. 222. Monthly out-of-pocket cost sharing maximum for enrollees who incur a significant portion of costs towards annual out-of-pocket threshold.</toc-entry><toc-entry idref="H2C6AC69FB07348A8B6F1EE77D9D91CE3" level="section">Sec. 223. Public disclosure of drug discounts and other pharmacy benefit manager (PBM) provisions.</toc-entry><toc-entry idref="H794E5AAA1F584E268691DC4B3FA1B30D" level="section">Sec. 224. Public disclosure of direct and indirect remuneration review and audit results.</toc-entry><toc-entry idref="H4731E40E665E47D1876A2E6046FEB133" level="section">Sec. 225. Improvements to provision of parts A and B claims data to prescription drug plans.</toc-entry><toc-entry idref="H2267598484CD4C09A8AC285531652209" level="section">Sec. 226. Medicare part D rebate by manufacturers.</toc-entry><toc-entry idref="H7097B65945CD41C79371EE10706506EE" level="section">Sec. 227. Prohibiting branding on part D benefit cards.</toc-entry><toc-entry idref="HD27ECA6141CF4C568FD22BD251F87085" level="section">Sec. 228. Requiring prescription drug plans and MA–PD plans to report potential fraud, waste, and abuse to the Secretary of HHS.</toc-entry><toc-entry idref="HE43A7321EA6044D587104517B80AB252" level="section">Sec. 229. Establishment of pharmacy quality measures under Medicare part D.</toc-entry><toc-entry idref="HC56E6CF9FD6B4CFF9DD2262273CD0315" level="section">Sec. 230. Addition of new measures based on access to biosimilar biological products to the 5-star rating system under Medicare Advantage.</toc-entry><toc-entry idref="H8E0C61EF650C43DA9143329993446421" level="section">Sec. 231. HHS study and report on the influence of pharmaceutical manufacturer third-party reimbursement hubs on health care providers who prescribe their drugs and biologicals.</toc-entry><toc-entry level="section">Sec. 232. Definition of strength for the purposes of determining interchangeability of biologic and biosimilar products.</toc-entry><toc-entry idref="H34A6A6EECCC24A0599652CA3B58E17D7" level="subtitle">Subtitle C—Miscellaneous</toc-entry><toc-entry idref="H92989A332762482AAC9D0D761DC66A61" level="section">Sec. 233. Drug manufacturer price transparency.</toc-entry><toc-entry idref="H870AAD4415DB438B91143739F715D955" level="section">Sec. 234. Strengthening and expanding pharmacy benefit managers transparency requirements.</toc-entry><toc-entry idref="H06D28DEF24F54626B1DA0748FC8DA159" level="section">Sec. 235. Prescription drug pricing dashboards.</toc-entry><toc-entry idref="H30D5E2575C1E4F57BA2BDDEC05F51DD9" level="section">Sec. 236. Improving coordination between the Food and Drug Administration and the Centers for Medicare &amp; Medicaid Services.</toc-entry><toc-entry idref="HC9E4804217894A20A5816E064FCA185A" level="section">Sec. 237. Patient consultation in Medicare national and local coverage determinations in order to mitigate barriers to inclusion of such perspectives.</toc-entry><toc-entry idref="H00447AD551984A578FA5011273EF8F53" level="section">Sec. 238. GAO study on increases to Medicare and Medicaid spending due to copayment coupons and other patient assistance programs.</toc-entry><toc-entry idref="H6BE2B23B14B84E00A2036E7C084315C6" level="section">Sec. 239. MedPAC report on shifting coverage of certain Medicare part B drugs to Medicare part D.</toc-entry><toc-entry idref="H50A00BB91C3F44B091599134DEFE3199" level="section">Sec. 240. Taking steps to fulfill treaty obligations to Tribal communities.</toc-entry><toc-entry level="section">Sec. 241. Establishing a monthly cap on beneficiary incurred costs for insulin products and supplies under a prescription drug plan or MA–PD plan.</toc-entry><toc-entry idref="H8B38AD2BA07747DE848CCB3746C19F10" level="title">Title III—Medicaid</toc-entry><toc-entry idref="H98BB1AABE14146F19AE89D434812AF1C" level="section">Sec. 301. Medicaid pharmacy and therapeutics committee improvements.</toc-entry><toc-entry idref="H0358185F97DF4B7CB16B06BAC8EC14A5" level="section">Sec. 302. Improving reporting requirements and developing standards for the use of drug use review boards in State Medicaid programs.</toc-entry><toc-entry idref="HDF32E7FD00DC47C6976DE5D45F4830B9" level="section">Sec. 303. GAO report on conflicts of interest in State Medicaid program drug use review boards and pharmacy and therapeutics (P&amp;T) committees.</toc-entry><toc-entry idref="H38E4C56549AF469885F8CB2E393D0A92" level="section">Sec. 304. Ensuring the accuracy of manufacturer price and drug product information under the Medicaid drug rebate program.</toc-entry><toc-entry idref="H815DE0E865DF436BAABA7EFC08A8E02D" level="section">Sec. 305. T–MSIS drug data analytics reports.</toc-entry><toc-entry idref="H05CC3EE5E9F1456DB1B2F6388351CA0A" level="section">Sec. 306. Risk-sharing value-based payment agreements for covered outpatient drugs under Medicaid.</toc-entry><toc-entry idref="H9AA3021665D34DCD96F44E3C338863B6" level="section">Sec. 307. Modification of maximum rebate amount under Medicaid drug rebate program.</toc-entry><toc-entry idref="H31FAF5905AA549D88EB06D861552B229" level="section">Sec. 308. Applying Medicaid drug rebate requirement to drugs provided as part of outpatient hospital services.</toc-entry><toc-entry idref="H0E3B53CB85804FAE9E38437C580C0AFA" level="title">Title IV—Addressing Intermediaries and Drug Competition</toc-entry><toc-entry idref="HE9DFD9BDBC3A41C9A50BECA0F15747E2" level="section">Sec. 401. Health plan oversight of pharmacy benefit manager services.</toc-entry><toc-entry idref="H68B9C7E094034D00AA4D4B33B06FCF62" level="section">Sec. 402. Study of pharmaceutical supply chain intermediaries and merger activity.</toc-entry><toc-entry idref="H7152A6DC68EB4D3E99C804CAD3C1DE32" level="section">Sec. 403. Requirement that direct-to-consumer advertisements for prescription drugs and biological products include truthful and non-misleading pricing information.</toc-entry><toc-entry idref="H063AF4955892447BB0963FDAEB5C3343" level="section">Sec. 404. Change conditions of first generic exclusivity to spur access and competition.</toc-entry><toc-entry idref="H6316D799224D4209B1E1CDA46060B406" level="section">Sec. 405. Ending the practice preventing market competition known as <quote>Pay-for-Delay</quote>.</toc-entry><toc-entry idref="HE3DAA59D3CD24103A4BA56E9E662702B" level="section">Sec. 406. Empowering the FTC to prevent <quote>product hopping</quote>.</toc-entry><toc-entry idref="H69C957D4587A49A2919CE173DA4F3138" level="section">Sec. 407. Promoting competition by limiting patent thickets.</toc-entry><toc-entry idref="H8D6CE2D808BB46F8BA2867F444566128" level="title">Title V—Beneficiary cost sharing fairness</toc-entry><toc-entry idref="HF91C3BF3B57E4ABCAB235AD5F4311C24" level="section">Sec. 501. Repealing of rule by the Department of Health and Human Services.</toc-entry><toc-entry idref="H62592549FAB44C7184E8B939F3337256" level="section">Sec. 502. Defining cost under prescription drug plans under part D of Medicare.</toc-entry></toc></subsection></section><title id="H129C97F8A9E4401AB90ACAE6AE4FD2E1"><enum>I</enum><header>Establishment of part B payment rules for negotiation-eligible drugs and biologicals</header><section id="HA0EB9383AB9047A49388E726E61CBCDA"><enum>101.</enum><header>Establishment of part B payment rules for negotiation-eligible drugs and biologicals</header><text display-inline="no-display-inline">Section 1847A of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-3a">42 U.S.C. 1395w–3a</external-xref>) is amended—</text><paragraph id="H150CD1DB35D8421E8A7808CE1182AFE5"><enum>(1)</enum><text>in paragraph (1)—</text><subparagraph id="H7639FF3B4C9A4F61B7F8A9937E77052B"><enum>(A)</enum><text>in the matter preceding subparagraph (A), by striking <quote>Subject to paragraph (7)</quote> and inserting <quote>Subject to paragraphs (7) and (9)</quote>;</text></subparagraph><subparagraph id="H6771FCB43B534036A2504AD0CFB462BA"><enum>(B)</enum><text>in subparagraph (B), by striking at the end <quote>or</quote>;</text></subparagraph><subparagraph id="HD9C36D1513DD44308A3DEBF433A631C6"><enum>(C)</enum><text>in subparagraph (C), by striking the period at the end and inserting <quote>; or</quote>; and</text></subparagraph><subparagraph id="H36913EB6363B4907A623C231D1A45491"><enum>(D)</enum><text>by adding at the end the following new subparagraph: </text><quoted-block style="OLC" id="HC044B06FAA9A4E149C31CC0E575C2D18" display-inline="no-display-inline"><subparagraph id="HBAAE859910CF4804BD83059B20BB13DE"><enum>(D)</enum><text display-inline="yes-display-inline">in the case of a negotiation-eligible drug or biological, the maximum allowable cost determined under paragraph (9). </text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="HE862ADB87B3349AA96A34363801C41BE"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text><quoted-block style="OLC" id="H637068FB54224AAC905CC1CC610265ED" display-inline="no-display-inline"><paragraph id="H7BCE1CEEB9624BDA91248BB759D52A97"><enum>(9)</enum><header>Rules for negotiation-eligible drugs and biologicals</header><subparagraph id="HF81C2173D2D44898B64876E673B2F58A" commented="no"><enum>(A)</enum><header>Notification of manufacturers of negotiation-eligible drugs and biologicals</header><clause id="H3185446B39734E77BFA5459025284F90" commented="no"><enum>(i)</enum><header>In general</header><text>Not later than 180 days after the date of the enactment of this paragraph, the Secretary shall notify each manufacturer of each negotiation-eligible drug or biological that is subject to negotiation for payment under this part.</text></clause><clause id="H194144BAEE9B48E991F20A3760460881" commented="no"><enum>(ii)</enum><header>Negotiation-eligible drug or biological</header><text>In this paragraph, the term <quote>negotiation-eligible drug or biological</quote> means a single source drug or biological for which each of the following have expired:</text><subclause id="H54C36C3837D4433EBAC8303403BAD3AF" commented="no"><enum>(I)</enum><text display-inline="yes-display-inline">The period of regulatory data protections or exclusivity granted for such drug or biological (including for new chemical entities, biologics, orphan drugs, pediatric formulations, and clinical trials).</text></subclause><subclause id="HA87909D1B96241FCAB93A271A43E6AE1" commented="no"><enum>(II)</enum><text display-inline="yes-display-inline">Subject to the succeeding sentence, the period of any patents issued for such drug or biological up to 1 year after the approval of such drug or biological. In the case of small molecule product that is a such a drug or biological, the period of any patents listed in the publication, Approved Drug Products With Therapeutic Equivalence Evaluations (referred to as the <quote>Orange Book</quote>).</text></subclause></clause></subparagraph><subparagraph id="H0302F8CDF4294C23A9B63D61A8AEE7DC"><enum>(B)</enum><header>Negotiation</header><clause id="H3F3CCC72A8D44BAAB39BE83017FC087C"><enum>(i)</enum><header>In general</header><text>With respect to period during which the negotiated price of such drug or biological is not more than 75 percent of the average sales price of such drug or biological (as determined on an annual basis), the Secretary and the manufacturer of a negotiation-eligible drug or biological shall during the negotiation period negotiate a maximum allowable cost for such drug or biological.</text></clause><clause id="HF3427CF112DF4D8C86F58F72E50ACECF"><enum>(ii)</enum><header>Maximum allowable cost</header><text display-inline="yes-display-inline">In this subparagraph, the term <quote>maximum allowable cost</quote> means the amount agreed to by the Secretary and the manufacturer of a negotiation-eligible drug or biological for a unit of such drug or biological that is not less than 65 percent and not more than 75 percent of the lowest average sales price of such drug or biological for the preceding 1-year period.</text></clause><clause id="HA1059B24FAF0406C8D90F05C1ECF94A2"><enum>(iii)</enum><header>Exclusions</header><text>The maximum allowable cost under this section shall be excluded from the calculation of the manufacturer’s average sales price under section 1847A(c), average manufacturer price under section 1927(k)(1), best price under section 1927(c)(1)(C), and non-Federal average manufacturer price under <external-xref legal-doc="usc" parsable-cite="usc/38/8126">38 U.S.C. 8126(h)</external-xref>.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section></title><title id="HAC097B3817C54330B207431CD181658C"><enum>II</enum><header>Medicare</header><subtitle id="HEAB4056C5EC8455DAA1848D26CABA922"><enum>A</enum><header>Part B</header><section id="H3D11604871E84B6EB653A90D8558EB12"><enum>201.</enum><header>Inclusion of value of coupons in determination of average sales price for drugs and biologicals under Medicare part B</header><text display-inline="no-display-inline">Section 1847A(c) of the Social Security Act (42 U.S.C. 1395w–3a(c)) is amended—</text><paragraph id="H15AC1AF9F0F14679A91F83ED10DF32B2"><enum>(1)</enum><text>in paragraph (3)—</text><subparagraph id="H745603956CCD47CAB7B9FB2E6A858DC3"><enum>(A)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">discounts</header-in-text>.—In calculating</quote> and inserting </text><quoted-block style="OLC" id="H422BF30AD47C4028AF936376235D5D06" display-inline="yes-display-inline"><text><header-in-text level="paragraph" style="OLC">discounts to purchasers and coupons provided to privately insured individuals</header-in-text>.—</text><subparagraph id="H26CFBFE5F5EF437DBCA246AA84F8E1FD"><enum>(A)</enum><header>Discounts to purchasers</header><text>In calculating</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph><subparagraph id="HAA23A0BA110041DBB8BFC79DFC4A5598"><enum>(B)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="HF6A1B1591090430785F0830DFDD4DB63" style="OLC"><subparagraph id="H3EF20B06E56C4C29818AA3A5612157C0"><enum>(B)</enum><header>Coupons provided to reduce cost-sharing</header><text>For calendar quarters beginning on or after July 1, 2024, in calculating the manufacturer's average sales price under this subsection, such price shall include the value (as defined in paragraph (6)(J)) of any coupons provided under a drug coupon program of a manufacturer (as those terms are defined in subparagraphs (K) and (L), respectively, of paragraph (6)).</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="H59EEDD51282B4619B9562C976522124C"><enum>(2)</enum><text>in paragraph (6), by adding at the end the following new subparagraphs:</text><quoted-block display-inline="no-display-inline" id="HD9017B493B74438DA29CB8E76A46427C" style="OLC"><subparagraph id="HAB3FCE2C9AC042659D537F336A93AEB7"><enum>(J)</enum><header>Value</header><text>The term <quote>value</quote> means, with respect to a coupon (as defined in subparagraph (K)), the difference, if any, between—</text><clause id="H67A50331F3B3411A9FC443BF9F613BEA"><enum>(i)</enum><text>the amount of any reduction or elimination of cost-sharing or other out-of-pocket costs described in such subparagraph to a patient as a result of the use of such coupon; and</text></clause><clause id="H9DB1E0558F21476F9BB88873CAAE6966"><enum>(ii)</enum><text>any charge to the patient for the use of such coupon.</text></clause></subparagraph><subparagraph id="H6B9F69D302394A24943D4AB21EB5C778"><enum>(K)</enum><header>Coupon</header><text>The term <term>coupon</term> means any financial support that is provided to a patient, either directly to the patient or indirectly to the patient through a physician, prescriber, pharmacy, or other provider, under a drug coupon program of a manufacturer (as defined in subparagraph (L)) that is used to reduce or eliminate cost-sharing or other out-of-pocket costs of the patient, including costs related to a deductible, coinsurance, or copayment, with respect to a drug or biological, including a biosimilar biological product, of the manufacturer.</text></subparagraph><subparagraph id="H0906D309D78E49D5A0A726FFDC5E1C8E"><enum>(L)</enum><header>Drug coupon program</header><clause id="H623BA0A89C96421A828519FFF585B0F6"><enum>(i)</enum><header>In general</header><text>Subject to clause (ii), the term <term>drug coupon program</term> means, with respect to a manufacturer, a program through which the manufacturer provides coupons to patients as described in subparagraph (K).</text></clause><clause id="H57C43318DB5D4699974AC50A9521CF3B"><enum>(ii)</enum><header>Exclusions</header><text>Such term does not include—</text><subclause id="HC24A93295D284591853C80CF45DAE2CF"><enum>(I)</enum><text>a patient assistance program operated by a manufacturer that provides free or discounted drugs or biologicals, including biosimilar biological products, (through in-kind donations) to patients of low income; or</text></subclause><subclause id="H2B74D873A867410DB8DCF78A39E77B95"><enum>(II)</enum><text>a contribution by a manufacturer to a nonprofit or Foundation that provides free or discounted drugs or biologicals, including biosimilar biological products, (through in-kind donations) to patients of low income.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section><section id="H7D2D2CA88BE4474B8E11B4BB603FE60B"><enum>202.</enum><header>Payment for biosimilar biological products during initial period</header><text display-inline="no-display-inline">Section 1847A(c)(4) of the Social Security Act (42 U.S.C. 1395w–3a(c)(4)) is amended—</text><paragraph id="H2D9AF36FE6FD4533BA23FA6E4714B726"><enum>(1)</enum><text>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;</text></paragraph><paragraph id="H1880AAC2EBB94BA58B11C94C9A88E8AE"><enum>(2)</enum><text>by redesignating subparagraphs (A) and (B) as clauses (i) and (ii) and moving such clauses 2 ems to the right;</text></paragraph><paragraph id="H807F39B50D8445B6A8EFD94B55E3C95A"><enum>(3)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">unavailable</header-in-text>.—In the case</quote> and inserting </text><quoted-block style="OLC" id="H8A9911411F404A869AEB783A2E0B9D73" display-inline="yes-display-inline"><text><header-in-text level="paragraph" style="OLC">unavailable</header-in-text>.—</text><subparagraph id="H79A31BB6AB144738AD3E435438A4692E"><enum>(A)</enum><header>In general</header><text>Subject to subparagraph (B), in the case</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H9ED1788909EE4922A14742C2BD336685"><enum>(4)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="H4069FF4DE1FB4A0DBECF3B869450C794" style="OLC"><subparagraph id="HDFA71E3EDFA74DD092AE59580C063A1C"><enum>(B)</enum><header>Limitation on payment amount for biosimilar biological products during initial period</header><text>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:</text><clause commented="no" id="H8C6786C864224CCEA244B68046FEE9DB"><enum>(i)</enum><text>The amount determined under clause (ii) of such subparagraph for the biosimilar biological product.</text></clause><clause commented="no" id="HDEC59D1AEFA44D2BA3C634ABD96A2BAC"><enum>(ii)</enum><text>The amount determined under subsection (b)(1)(B) for the reference biological product.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section><section id="H5493B8BD29B744B0A619CB7DEFBA60DF"><enum>203.</enum><header>Temporary increase in Medicare part B payment for biosimilar biological products</header><text display-inline="no-display-inline">Section 1847A(b)(8) of the Social Security Act (42 U.S.C. 1395w–3a(b)(8)) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="H807F183C29C247BC8E81E86997550B31"><enum>(1)</enum><text display-inline="yes-display-inline">by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and indenting appropriately;</text></paragraph><paragraph id="H36E9A1735C534CE2A54097F88329DE25"><enum>(2)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">product</header-in-text>.—The amount</quote> and inserting the following: </text><quoted-block style="OLC" id="HA29A25906DCC4AF6998D63379C046B47" display-inline="yes-display-inline"><text><header-in-text level="paragraph" style="OLC">product</header-in-text>.—</text><subparagraph id="H4C8922AD67104148B1F93BAAD0F22E79"><enum>(A)</enum><header>In general</header><text>Subject to subparagraph (B), the amount</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H3769F2544256499CBE4A51144E877C55"><enum>(3)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="H8849B98D9504426C9AF0D2DD58A072C4" style="OLC"><subparagraph id="H1549C1AA38BF4879B33E353781CABE0F"><enum>(B)</enum><header>Temporary payment increase for biosimilar biological products</header><clause id="H4458CD2799E747858A0B1832F237EBFD"><enum>(i)</enum><header>In general</header><text>Beginning January 1, 2023, in the case of a biosimilar biological product described in paragraph (1)(C) that is furnished during the applicable 5-year period for such product, the amount specified in this paragraph for such product is an amount equal to the lesser of the following:</text><subclause id="HC0098C04994040608161D862F4A1514F"><enum>(I)</enum><text>The amount specified in subparagraph (A) for such product if clause (ii) of such subparagraph was applied by substituting <quote>8 percent</quote> for <quote>6 percent</quote>.</text></subclause><subclause id="HFF9FDE829B6B4A22B28915C84D41853C"><enum>(II)</enum><text>The amount determined under subsection (b)(1)(B) for the reference biological product.</text></subclause></clause><clause id="H3107BD289BC548009681A43749D5CE91"><enum>(ii)</enum><header>Applicable 5-year period</header><text>For purposes of clause (i), the applicable 5-year period for a biosimilar biological product is—</text><subclause id="HB7253C9F24454B95BFC7080309C25AA8"><enum>(I)</enum><text>in the case of such a product for which payment was made under this paragraph as of December 31, 2012, the 5-year period beginning on January 1, 2023; and</text></subclause><subclause commented="no" display-inline="no-display-inline" id="HF6E33A4C76F74722AB0855EA3F3135DB"><enum>(II)</enum><text>in the case of such a product that is not described in subclause (I), the 5-year period beginning on the first day of the first calendar quarter in which payment was made for such product under this paragraph.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section><section id="H41FF0B88773D4A1B9DC64764299C92FB"><enum>204.</enum><header>Medicare part B rebate by manufacturers</header><subsection id="H29B478CA499843519FB1526CFFDF4C44"><enum>(a)</enum><header>In general</header><text>Section 1834 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395m">42 U.S.C. 1395m</external-xref>) is amended by adding at the end the following new subsection:</text><quoted-block id="HAA489026DF33460EAB9F49BBBB5C7E94" style="OLC"><subsection id="H3CF5F3AF9EB84551A33EE64E827680A2"><enum>(x)</enum><header>Rebate by manufacturers for single source drugs with prices increasing faster than inflation</header><paragraph id="HF6192387EBED496BB5DF417080ECB184"><enum>(1)</enum><header>Requirements</header><subparagraph id="HE7197C6EDE8B49C59DBEE6380818A9C8"><enum>(A)</enum><header>Secretarial provision of information</header><text>Not later than 6 months after the end of each calendar quarter beginning on or after July 1, 2024, the Secretary shall, for each part B rebatable drug, report to each manufacturer of such part B rebatable drug the following for such calendar quarter:</text><clause id="H8DC76BBAFF664F89A860C7D852B5143D"><enum>(i)</enum><text>Information on the total number of units of the billing and payment code described in subparagraph (A)(i) of paragraph (3) with respect to such drug and calendar quarter.</text></clause><clause id="H7CA0093312684D049035118C9F47158E"><enum>(ii)</enum><text>Information on the amount (if any) of the excess average sales price increase described in subparagraph (A)(ii) of such paragraph for such drug and calendar quarter.</text></clause><clause id="H384FBD4030F14B98AAC1E4BB5FA3B7EB"><enum>(iii)</enum><text>The rebate amount specified under such paragraph for such part B rebatable drug and calendar quarter.</text></clause></subparagraph><subparagraph id="HA181587633E540A7A3526FACE63AC5E2"><enum>(B)</enum><header>Manufacturer requirement</header><text>For each calendar quarter beginning on or after July 1, 2024, the manufacturer of a part B rebatable drug shall, for such drug, not later than 30 days after the date of receipt from the Secretary of the information described in subparagraph (A) for such calendar quarter, provide to the Secretary a rebate that is equal to the amount specified in paragraph (3) for such drug for such calendar quarter.</text></subparagraph></paragraph><paragraph id="H3454817ED4E54A7DB2B1A0BA2F8C7BFB"><enum>(2)</enum><header>Part B rebatable drug defined</header><subparagraph id="H8D92B95320924FFD9B1855FA833897A0"><enum>(A)</enum><header>In general</header><text>In this subsection, the term <quote>part B rebatable drug</quote> means a single source drug or biological (as defined in subparagraph (D) of section 1847A(c)(6)), including a biosimilar biological product (as defined in subparagraph (H) of such section), paid for under this part, except such term shall not include such a drug or biological—</text><clause id="HECA3CD4CB50947F5AAD35C9C2E7A6456"><enum>(i)</enum><text>if the average total allowed charges for a year per individual that uses such a drug or biological, as determined by the Secretary, are less than, subject to subparagraph (B), $100; or</text></clause><clause id="H510DC1F23D11462BBEEB687AD2D4BCC2"><enum>(ii)</enum><text>that is a vaccine described in subparagraph (A) or (B) of section 1861(s)(10).</text></clause></subparagraph><subparagraph id="H5B59FEF7F2CC40D6ABC0228D39229327"><enum>(B)</enum><header>Increase</header><text>The dollar amount applied under subparagraph (A)(i)—</text><clause id="H595D806E49A444FE8E6A6EC12FF3B56D"><enum>(i)</enum><text>for 2025, shall be the dollar amount specified under such subparagraph for 2024, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year; and</text></clause><clause id="H02B7B3239A90414CB87DB7B0747C0027"><enum>(ii)</enum><text>for a subsequent year, shall be the dollar amount specified in this clause (or clause (i)) for the previous year, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year.</text></clause><continuation-text continuation-text-level="subparagraph">Any dollar amount specified under this subparagraph that is not a multiple of $10 shall be rounded to the nearest multiple of $10. </continuation-text></subparagraph></paragraph><paragraph id="HE66A73565B1644DFA21BB18D4EC780BF"><enum>(3)</enum><header>Rebate amount</header><subparagraph id="H8B78E8F5E8DD4C288D557D66267DBD89"><enum>(A)</enum><header>In general</header><text>For purposes of paragraph (1), the amount specified in this paragraph for a part B rebatable drug assigned to a billing and payment code for a calendar quarter is, subject to paragraph (4), the amount equal to the product of—</text><clause id="H6F97FD927CA84EEDACEEFEDCC5D4B083"><enum>(i)</enum><text>subject to subparagraphs (B) and (G), the total number of units of the billing and payment code for such part B rebatable drug furnished under this part during the calendar quarter; and</text></clause><clause id="H768E70761B1447EF9B53F30411DFEE91"><enum>(ii)</enum><text>the amount (if any) by which—</text><subclause id="H7DC896D49F6F4E1D8DD3490D31448A6B"><enum>(I)</enum><text>the payment amount under subparagraph (B) or (C) of section 1847A(b)(1), as applicable, for such part B rebatable drug during the calendar quarter; exceeds</text></subclause><subclause id="H725EAAED15FA4A8FADA1D49612E7C049"><enum>(II)</enum><text>the inflation-adjusted payment amount determined under subparagraph (C) for such part B rebatable drug during the calendar quarter.</text></subclause></clause></subparagraph><subparagraph id="H6818BE6C07E04167A1979B8AD624F2B8"><enum>(B)</enum><header>Excluded units</header><text>For purposes of subparagraph (A)(i), the total number of units of the billing and payment code for each part B rebatable drug furnished during a calendar quarter shall not include—</text><clause id="HCEC5BBEF124E4DB8962D103ECE4536C2"><enum>(i)</enum><text>units packaged into the payment for a procedure or service under section 1833(t) or under section 1833(i) (instead of separately payable under such respective section);</text></clause><clause id="HA3209C48C6174B5EBA5FB7BA3FB73E32"><enum>(ii)</enum><text>units included under the single payment system for renal dialysis services under section 1881(b)(14); or</text></clause><clause id="H11F8B150B800473EBAA78BCEF52A73D8"><enum>(iii)</enum><text>units of a part B rebatable drug of a manufacturer furnished to an individual, if such manufacturer, with respect to the furnishing of such units of such drug, provides for discounts under section 340B of the Public Health Service Act or for rebates under section 1927.</text></clause></subparagraph><subparagraph id="H65FAA3F893384384949BE07CC6ABD367"><enum>(C)</enum><header>Determination of inflation-adjusted payment amount</header><text>The inflation-adjusted payment amount determined under this subparagraph for a part B rebatable drug for a calendar quarter is—</text><clause id="HE55AD335988D4AC697A606DF4B89F80F"><enum>(i)</enum><text>the payment amount for the billing and payment code for such drug in the payment amount benchmark quarter (as defined in subparagraph (D)); increased by</text></clause><clause id="HE2BAB36006364ECF81B49A749983BFFF"><enum>(ii)</enum><text>the percentage by which the rebate period CPI–U (as defined in subparagraph (F)) for the calendar quarter exceeds the benchmark period CPI–U (as defined in subparagraph (E)).</text></clause></subparagraph><subparagraph id="H385EB492011F442CB8E77B8DA8F47FBE"><enum>(D)</enum><header>Payment amount benchmark quarter</header><text>The term <quote>payment amount benchmark quarter</quote> means the calendar quarter beginning January 1, 2016.</text></subparagraph><subparagraph id="H7C850A00964C4D68925B76A20EF49CE7"><enum>(E)</enum><header>Benchmark period CPI–U</header><text>The term <quote>benchmark period CPI–U</quote> means the consumer price index for all urban consumers (United States city average) for July 2015.</text></subparagraph><subparagraph id="HEDA09A23EEA44DCB8C2E15301FF3E4D3"><enum>(F)</enum><header>Rebate period CPI–U</header><text>The term <quote>rebate period CPI–U</quote> means, with respect to a calendar quarter described in subparagraph (C), the greater of the benchmark period CPI–U and the consumer price index for all urban consumers (United States city average) for the first month of the calendar quarter that is two calendar quarters prior to such described calendar quarter.</text></subparagraph><subparagraph id="H5AB88617AE6245B58ABEE2D8A5AAB345"><enum>(G)</enum><header>Counting units</header><clause id="H1D80222D161346AB8F5961E1E919B2E6"><enum>(i)</enum><header>Cut-off period to count units</header><text>For purposes of subparagraph (A)(i), subject to clause (ii), to count the total number of billing units for a part B rebatable drug for a quarter, the Secretary may use a cut-off period in order to exclude from such total number of billing units for such quarter claims for services furnished during such quarter that were not processed at an appropriate time prior to the end of the cut-off period.</text></clause><clause id="H4DFA4865DBB14E95AAD614BF546EB908"><enum>(ii)</enum><header>Counting units for claims processed after cut-off period</header><text>If the Secretary uses a cut-off period pursuant to clause (i), in the case of units of a part B rebatable drug furnished during a quarter but pursuant to application of such cut-off period excluded for purposes of subparagraph (A)(i) from the total number of billing units for the drug for such quarter, the Secretary shall count such units of such drug so furnished in the total number of billing units for such drug for a subsequent quarter, as the Secretary determines appropriate.</text></clause></subparagraph></paragraph><paragraph id="H2E149E88BC7E40DBBDCF673694AC6C57"><enum>(4)</enum><header>Special treatment of certain drugs and exemption</header><subparagraph id="H05AEC03BF0CD43D1A66E9622C4BD2C3D"><enum>(A)</enum><header>Subsequently approved drugs</header><text>Subject to subparagraph (B), in the case of a part B rebatable drug first approved or licensed by the Food and Drug Administration after July 1, 2015, clause (i) of paragraph (3)(C) shall be applied as if the term <quote>payment amount benchmark quarter</quote> were defined under paragraph (3)(D) as the third full calendar quarter after the day on which the drug was first marketed and clause (ii) of paragraph (3)(C) shall be applied as if the term <quote>benchmark period CPI–U</quote> were defined under paragraph (3)(E) as if the reference to <quote>July 2015</quote> under such paragraph were a reference to <quote>the first month of the first full calendar quarter after the day on which the drug was first marketed</quote>.</text></subparagraph><subparagraph id="H1EA19F0905EF484791D629B8B0D51D85"><enum>(B)</enum><header>Timeline for provision of rebates for subsequently approved drugs</header><text>In the case of a part B rebatable drug first approved or licensed by the Food and Drug Administration after July 1, 2015, paragraph (1)(B) shall be applied as if the reference to <quote>July 1, 2024</quote> under such paragraph were a reference to the later of the 6th full calendar quarter after the day on which the drug was first marketed or July 1, 2024.</text></subparagraph><subparagraph id="H6247283643024955A2AC3BA3EEC98371"><enum>(C)</enum><header>Exemption for shortages</header><text>The Secretary may reduce or waive the rebate amount under paragraph (1)(B) with respect to a part B rebatable drug that is described as currently in shortage on the shortage list in effect under section 506E of the Federal Food, Drug, and Cosmetic Act or in the case of other exigent circumstances, as determined by the Secretary.</text></subparagraph><subparagraph id="H2B25C3798A5748DDB49BC48960896E56"><enum>(D)</enum><header>Selected drugs</header><text>In the case of a part B rebatable drug that is a selected drug (as defined in section 1192(c)) for a price applicability period (as defined in section 1191(b)(2))—</text><clause id="HB5A6455C25AD49258D9EC96C198B6E01"><enum>(i)</enum><text>for calendar quarters during such period for which a maximum fair price (as defined in section 1191(c)(2)) for such drug has been determined and is applied under part E of title XI, the rebate amount under paragraph (1)(B) shall be waived; and</text></clause><clause id="H36545A1E74064177B35F468EF520B90A"><enum>(ii)</enum><text>in the case such drug is determined (pursuant to such section 1192(c)) to no longer be a selected drug, for each applicable year beginning after the price applicability period with respect to such drug, clause (i) of paragraph (3)(C) shall be applied as if the term <quote>payment amount benchmark quarter</quote> were defined under paragraph (3)(D) as the calendar quarter beginning January 1 of the last year beginning during such price applicability period with respect to such selected drug and clause (ii) of paragraph (3)(C) shall be applied as if the term <quote>benchmark period CPI–U</quote> were defined under paragraph (3)(E) as if the reference to <quote>July 2015</quote> under such paragraph were a reference to the July of the year preceding such last year.</text></clause></subparagraph></paragraph><paragraph id="H60F1BD6D8A21458B8B171EEA3CC58A1C"><enum>(5)</enum><header>Application to beneficiary coinsurance</header><text>In the case of a part B rebatable drug, if the payment amount for a quarter exceeds the inflation adjusted payment for such quarter—</text><subparagraph id="H7E33A37496044FF5981A0119DCCB93D1"><enum>(A)</enum><text>in computing the amount of any coinsurance applicable under this title to an individual with respect to such drug, the computation of such coinsurance shall be based on the inflation-adjusted payment amount determined under paragraph (3)(C) for such part B rebatable drug; and</text></subparagraph><subparagraph id="HD19804E465F448E98AA9F95290D2ECE7"><enum>(B)</enum><text>the amount of such coinsurance is equal to 20 percent of such inflation-adjusted payment amount so determined.</text></subparagraph></paragraph><paragraph id="H75C41F1EB6374A4F90857F32C5108785"><enum>(6)</enum><header>Rebate deposits</header><text>Amounts paid as rebates under paragraph (1)(B) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under section 1841.</text></paragraph><paragraph id="H387097185C2643BDA3400D479ADA6026"><enum>(7)</enum><header>Civil money penalty</header><text>If a manufacturer of a part B rebatable drug has failed to comply with the requirements under paragraph (1)(B) for such drug for a calendar quarter, the manufacturer shall be subject to, in accordance with a process established by the Secretary pursuant to regulations, a civil money penalty in an amount equal to at least 125 percent of the amount specified in paragraph (3) for such drug for such calendar quarter. 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 paragraph in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).</text></paragraph><paragraph id="HA097EF50DBA34038BBB02B1FE41DCE2F"><enum>(8)</enum><header>Study and report</header><subparagraph id="H50100144971442648C9B8E99140079EE"><enum>(A)</enum><header>Study</header><text>The Secretary shall conduct a study of the feasibility of and operational issues involved with the following:</text><clause id="H339412DD7D1143308B07B4E339A9E706"><enum>(i)</enum><text>Including multiple source drugs (as defined in section 1847A(c)(6)(C)) in the rebate system under this subsection.</text></clause><clause id="HD1A5BA6AA3F24C84B98DF0C10BB0F154"><enum>(ii)</enum><text>Including drugs and biologicals paid for under MA plans under part C in the rebate system under this subsection.</text></clause><clause id="H93496D1055A74D15BCF14CE5EECE3E5D"><enum>(iii)</enum><text>Including drugs excluded under paragraph (2)(A) and units of the billing and payment code of the drugs excluded under paragraph (3)(B) in the rebate system under this subsection.</text></clause></subparagraph><subparagraph id="H0A705F5029DD4BE4A48C4DF6A6C83A51"><enum>(B)</enum><header>Report</header><text>Not later than 3 years after the date of the enactment of this subsection, the Secretary shall submit to Congress a report on the study conducted under subparagraph (A).</text></subparagraph></paragraph><paragraph id="H574A363E6CDC4399AAD8AC6DD4A7C732"><enum>(9)</enum><header>Application to multiple source drugs</header><text>The Secretary may, based on the report submitted under paragraph (8) and pursuant to rulemaking, apply the provisions of this subsection to multiple source drugs (as defined in section 1847A(c)(6)(C)), including, for purposes of determining the rebate amount under paragraph (3), by calculating manufacturer-specific average sales prices for the benchmark period and the rebate period.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="HF99D1C6F1E514830B2FE247C8067D67F"><enum>(b)</enum><header>Amounts payable; cost-Sharing</header><text>Section 1833 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395l">42 U.S.C. 1395l</external-xref>) is amended—</text><paragraph id="H110F19E0B0B64316BD68451BBE76D8A7"><enum>(1)</enum><text>in subsection (a)—</text><subparagraph id="HB0631CCA798C4522A65CB44C91180B35"><enum>(A)</enum><text>in paragraph (1)—</text><clause id="H88873A4075484765A8520FFBE2B5F5FE"><enum>(i)</enum><text>in subparagraph (S), by striking <quote>with respect to</quote> and inserting <quote>subject to subparagraph (DD), with respect to</quote>;</text></clause><clause id="HBFE65496B4624AE7B496E872ED7D6A48"><enum>(ii)</enum><text>by striking <quote>and (CC)</quote> and inserting <quote>(CC)</quote>; and</text></clause><clause id="HAB5C4DCFF2E640F6B6BB65905549FD00"><enum>(iii)</enum><text>by inserting before the semicolon at the end the following: <quote>, and (DD) with respect to a part B rebatable drug (as defined in paragraph (2) of section 1834(x)) for which the payment amount for a calendar quarter under paragraph (3)(A)(ii)(I) of such section for such quarter exceeds the inflation-adjusted payment under paragraph (3)(A)(ii)(II) of such section for such quarter, the amounts paid shall be the difference between (i) the payment amount under paragraph (3)(A)(ii)(I) of such section for such drug, and (ii) 20 percent of the inflation-adjusted payment amount under paragraph (3)(A)(ii)(II) of such section for such drug</quote>; and</text></clause></subparagraph><subparagraph id="HFD667D8DF7F7495AA64E27099AD64C96"><enum>(B)</enum><text>by adding at the end of the flush left matter following paragraph (9) the following:</text><quoted-block id="HD410AEFD97DA43B490BB90C9078140C4" style="OLC"><text display-inline="no-display-inline">For purposes of applying paragraph (1)(DD), subsections (i)(9) and (t)(8)(F), and section 1834(x)(5), the Secretary shall make such estimates and use such data as the Secretary determines appropriate, and notwithstanding any other provision of law, may do so by program instruction or otherwise.</text><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="H83D1F328A0EB4E17BA2495F7D730569A"><enum>(2)</enum><text>in subsection (i), by adding at the end the following new paragraph:</text><quoted-block id="H1C6F328A99B040B0922ED21EAB2CD556" style="OLC"><paragraph id="H90663E1A78F74FE2BEB081A18F89A0BA"><enum>(9)</enum><text>In the case of a part B rebatable drug (as defined in paragraph (2) of section 1834(x)) for which payment under this subsection is not packaged into a payment for a covered OPD service (as defined in subsection (t)(1)(B)) (or group of services) furnished on or after July 1, 2024, under the system under this subsection, in lieu of calculation of coinsurance and the amount of payment otherwise applicable under this subsection, the provisions of section 1834(x)(5), paragraph (1)(DD) of subsection (a), and the flush left matter following paragraph (9) of subsection (a), shall, as determined appropriate by the Secretary, apply under this subsection in the same manner as such provisions of section 1834(x)(5) and subsection (a) apply under such section and subsection.</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H3A927B309D104620B38D05C5E3D79F9F"><enum>(3)</enum><text>in subsection (t)(8), by adding at the end the following new subparagraph:</text><quoted-block id="HE9FDB9FD1B45418384092FC4CB380D7B" style="OLC"><subparagraph id="H89C259A9ABAA4FA68B891FE9C3513321"><enum>(F)</enum><header>Part B rebatable drugs</header><text>In the case of a part B rebatable drug (as defined in paragraph (2) of section 1834(x)) for which payment under this part is not packaged into a payment for a service furnished on or after July 1, 2024, under the system under this subsection, in lieu of calculation of coinsurance and the amount of payment otherwise applicable under this subsection, the provisions of section 1834(x)(5), paragraph (1)(DD) of subsection (a), and the flush left matter following paragraph (9) of subsection (a), shall, as determined appropriate by the Secretary, apply under this subsection in the same manner as such provisions of section 1834(x)(5) and subsection (a) apply under such section and subsection.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="HB14B656EA2BE4F8AA8F843105E9E6425"><enum>(c)</enum><header>Conforming amendments</header><paragraph id="HA84D29C00F114DF0AFA011F5801E4A41"><enum>(1)</enum><header>To part B ASP calculation</header><text>Section 1847A(c)(3) of the Social Security Act (42 U.S.C. 1395w–3a(c)(3)) is amended by inserting <quote>or section 1834(x)</quote> after <quote>section 1927</quote>.</text></paragraph><paragraph id="H3FED8C60963E4598A4FB627F86ADB697"><enum>(2)</enum><header>Excluding part B drug inflation rebate from best price</header><text>Section 1927(c)(1)(C)(ii)(I) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)</external-xref>) is amended by inserting <quote>or section 1834(x)</quote> after <quote>this section</quote>.</text></paragraph><paragraph id="HE706EEC9C1194D498CB3C2AD08BF2CBB"><enum>(3)</enum><header>Coordination with Medicaid rebate information disclosure</header><text>Section 1927(b)(3)(D)(i) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(b)(3)(D)(i)</external-xref>) is amended by striking <quote>or to carry out section 1847B</quote> and inserting <quote>to carry out section 1847B or section 1834(x)</quote>.</text></paragraph></subsection></section><section id="H8D737B1B45154964BFE28B42D0805DD7"><enum>205.</enum><header>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</header><text display-inline="no-display-inline">Section 1847A of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395-3a">42 U.S.C. 1395–3a</external-xref>), as amended by section 206, is amended by adding at the end the following new subsection:</text><quoted-block display-inline="no-display-inline" id="H61F625DA51DE49488D2AB64462EEACD1" style="OLC"><subsection id="HFBAC09F1554A453E81D5E99886DACA85"><enum>(i)</enum><header>Refund for certain discarded single-Dose container or single-Use package drugs</header><paragraph id="HB8882CD730A248279955E9A36EAF1039"><enum>(1)</enum><header>Secretarial provision of information</header><subparagraph id="HF8791880B335416DB1ABBA877FA317B6"><enum>(A)</enum><header>In general</header><text>For each calendar quarter beginning on or after July 1, 2024, 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:</text><clause id="H19D95DBA7BD7485599B3B52EFABDB524"><enum>(i)</enum><text>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).</text></clause><clause id="HBDBEDA84812F4F7C8361D11DB4297463"><enum>(ii)</enum><text>The refund amount that the manufacturer is liable for pursuant to paragraph (3).</text></clause></subparagraph><subparagraph id="HFB42901C6E484B3DB251EC5DCEF290F6"><enum>(B)</enum><header>Determination of discarded amounts</header><text>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.</text></subparagraph><subparagraph id="H26DB3A2886274C8C800BF1F768DE5686"><enum>(C)</enum><header>Exclusion of units of packaged drugs</header><text>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.</text></subparagraph></paragraph><paragraph id="H846A10B956214FB0BBE433D2F9C1780C"><enum>(2)</enum><header>Manufacturer requirement</header><text>For each calendar quarter beginning on or after July 1, 2024, 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.</text></paragraph><paragraph id="H4E7E6895140146199EDD368483EEB362"><enum>(3)</enum><header>Refund amount</header><subparagraph id="H2740A630157143E8ADC37933FC8A4442"><enum>(A)</enum><header>In general</header><text>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 July 1, 2024, an amount equal to the estimated amount (if any) by which—</text><clause id="HDD325D7713C349CDA2E2410D23EC9AB9"><enum>(i)</enum><text>the product of—</text><subclause id="H1CE1CFF0631841848A8450CB7DCAB422"><enum>(I)</enum><text>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</text></subclause><subclause id="H74AB0BDD3BD246DB81DA78913A69A2AE"><enum>(II)</enum><item commented="no" display-inline="yes-display-inline" id="H4B3AE1A0A5EA434EA4A30709E6DCED03"><enum>(aa)</enum><text>in the case of a refundable single-dose container or single-use package drug that is a single source drug or biological, the amount determined for such drug under subsection (b)(4); or</text></item><item id="H12F69C3217524239B320D16BE1FC5E06" indent="up1"><enum>(bb)</enum><text>in the case of a refundable single-dose container or single-use package drug that is a biosimilar biological product, the average sales price determined under subsection (b)(8)(A); exceeds</text></item></subclause></clause><clause id="H2B0310D6101C439BABB04487A234C30F"><enum>(ii)</enum><text>an amount equal to the applicable percentage (as defined in subparagraph (B)) of the estimated total allowed charges for such drug during the quarter.</text></clause></subparagraph><subparagraph id="H734E06700A694BB19015B7843A5C8D7E"><enum>(B)</enum><header>Applicable percentage defined</header><clause id="H0E996C6D4AC24134BCA80FBC178B5F56"><enum>(i)</enum><header>In general</header><text>For purposes of subparagraph (A)(ii), the term <term>applicable percentage</term> means—</text><subclause id="H1681E89A52F24ADBB10C7C89CD6D0EA7"><enum>(I)</enum><text>subject to subclause (II), 10 percent; and</text></subclause><subclause id="H2528926724DA4F23A545BE692C31FB52"><enum>(II)</enum><text>in the case of a refundable single-dose container or single-use package drug described in subclause (I) of clause (iii) and, if applicable, a refundable single-dose container or single-use package drug described in subclause (II) of such clause, a percentage specified by the Secretary pursuant to clause (ii).</text></subclause></clause><clause id="HF497CB629C2040AC8BEE1EDD9A78E29A"><enum>(ii)</enum><header>Treatment of drugs that require filtration or other unique circumstances</header><text>The Secretary, through notice and comment rulemaking—</text><subclause id="H7CAFF587EB0841D18843274BE16CD85C"><enum>(I)</enum><text>in the case of a refundable single-dose container or single-use package drug described in subclause (I) of clause (iii), shall increase the applicable percentage otherwise applicable under clause (i)(I) as determined appropriate by the Secretary; and</text></subclause><subclause id="H1113516346BD4F5ABC91FADBD7FCEE38"><enum>(II)</enum><text>in the case of a refundable single-dose container or single-use package drug described in subclause (II) of clause (iii), may increase the applicable percentage otherwise applicable under clause (i)(I) as determined appropriate by the Secretary.</text></subclause></clause><clause id="H38DDD1BC5A78469191C0286D786EFA65"><enum>(iii)</enum><header>Drug described</header><text>For purposes of clause (ii), a refundable single-dose container or single-use package drug described in this clause is either of the following:</text><subclause id="HF4F85912E1BB4DDE810FC84BBAA6F94E"><enum>(I)</enum><text>A refundable single-dose container or single-use package drug for which preparation instructions required and approved by the Commissioner of the Food and Drug Administration include 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.</text></subclause><subclause id="H46EFD8F2B3DB407E9335C0644A98F0F1"><enum>(II)</enum><text>Any other refundable single-dose container or single-use package drug that has unique circumstances involving similar loss of product.</text></subclause></clause></subparagraph></paragraph><paragraph id="H4AEEB8325E4749D098A9A80D15E22E79"><enum>(4)</enum><header>Frequency</header><text>Amounts required to be refunded pursuant to paragraph (2) shall be paid in regular intervals (as determined appropriate by the Secretary).</text></paragraph><paragraph id="HD228D0F1932D4A80AC25E3DD91965521"><enum>(5)</enum><header>Refund deposits</header><text>Amounts paid as refunds pursuant to paragraph (2) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under section 1841.</text></paragraph><paragraph id="H49D04D217FEF4E3CA52B4CF5BAF5F739"><enum>(6)</enum><header>Enforcement</header><subparagraph id="H2E1AA8145E734F3385C285BA7442C286"><enum>(A)</enum><header>Audits</header><clause id="H8CE0D712F0714123A5B5529E68E9C443"><enum>(i)</enum><header>Manufacturer audits</header><text>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.</text></clause><clause id="HEB95D28DE2024CE197DF4CA667D78609"><enum>(ii)</enum><header>Provider audits</header><text>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.</text></clause></subparagraph><subparagraph id="H1DF6FF5AB6714B0C9EE4D73CF252B14F"><enum>(B)</enum><header>Civil money penalty</header><clause id="H7ADCF03586BF49B3AF45BF5B9EB3D08B"><enum>(i)</enum><header>In general</header><text>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—</text><subclause id="HCF65AF4CE1204E48AC2815A8285BEE62"><enum>(I)</enum><text>the amount that the manufacturer would have paid under such paragraph with respect to such drug for such quarter; and</text></subclause><subclause id="H27E9175DCF60418EB6C7D85E2358FCA8"><enum>(II)</enum><text>25 percent of such amount.</text></subclause></clause><clause id="H9DEB851F9C3B4F10B3BFF4EF6C0B97A1"><enum>(ii)</enum><header>Application</header><text>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).</text></clause></subparagraph></paragraph><paragraph id="H97FA92DA636C412692A7F20C322D5199"><enum>(7)</enum><header>Implementation</header><text>The Secretary shall implement this subsection through notice and comment rulemaking.</text></paragraph><paragraph id="H91643AEBD878416C9182C937B3253DA9"><enum>(8)</enum><header>Definition of refundable single-dose container or single-use package drug</header><subparagraph id="H560119B15A8C467FBA2A7F373C489585"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), in this subsection, the term <term>refundable single-dose container or single-use package drug</term> 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 established under this part and that is furnished from a single-dose container or single-use package.</text></subparagraph><subparagraph id="HB8D81FE987A249A5A5C1B9F8377484B2"><enum>(B)</enum><header>Exclusions</header><text>The term <term>refundable single-dose container or single-use package drug</term> does not include a drug or biological that is either a radiopharmaceutical or an imaging agent.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H2649F6B75A844D03B2C51105FED1BC35"><enum>206.</enum><header>Establishment of maximum add-on payment for drugs and biologicals</header><subsection id="H2ED46F1B38FB46C6A8519B8C0B0D4F0A"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 1847A of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-3a">42 U.S.C. 1395w–3a</external-xref>) is amended—</text><paragraph id="HDEAC5910410D442898EC796B7E6D1BF9"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (b)—</text><subparagraph id="H8DE2F1AEB56F46C686E6B3AD04565FA3"><enum>(A)</enum><text display-inline="yes-display-inline">in paragraph (1), in the matter preceding subparagraph (A), by striking <quote>paragraph (7)</quote> and inserting <quote>paragraphs (7) and (9)</quote>; and</text></subparagraph><subparagraph id="H74AE933750B7431983FC654A7D11701B"><enum>(B)</enum><text>by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="H95C79E9495BC4015B20FC2EAF6FCB6D2" style="OLC"><paragraph id="H3EF588E4A7B043EDA71E1AE5B620EF84"><enum>(9)</enum><header>Maximum add-on payment amount</header><subparagraph id="HE35C2321CBAC40D7A2E6B6899AE98B66"><enum>(A)</enum><header>In general</header><text>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, 2024, 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.</text></subparagraph><subparagraph id="H63741782B3AA4A9F8A5389C202240CA1"><enum>(B)</enum><header>Applicable add-on payment defined</header><text>In this paragraph, the term <term>applicable add-on payment</term> means the following amounts, determined without regard to the application of subparagraph (A):</text><clause id="HBCFE8CE1FE5844CABD011B53D46152FB"><enum>(i)</enum><text>In the case of a multiple source drug, an amount equal to the difference between—</text><subclause id="H315D81329AF34938A9489C302CD3EFB4"><enum>(I)</enum><text>the amount that would otherwise be applied under paragraph (1)(A); and</text></subclause><subclause id="HD92ECF2B125147C3B4329F3D49B58BE2"><enum>(II)</enum><text>the amount that would be applied under such paragraph if <quote>100 percent</quote> were substituted for <quote>106 percent</quote>.</text></subclause></clause><clause id="H51246044DC3B43FA95D9F9ECE578215E"><enum>(ii)</enum><text>In the case of a single source drug or biological, an amount equal to the difference between—</text><subclause id="HA2789E4EB4654B919099C07A4B98AB96"><enum>(I)</enum><text>the amount that would otherwise be applied under paragraph (1)(B); and</text></subclause><subclause id="H6F8EE1E4FAB5495384604B1676C270C0"><enum>(II)</enum><text>the amount that would be applied under such paragraph if <quote>100 percent</quote> were substituted for <quote>106 percent</quote>.</text></subclause></clause><clause id="HDBAEC60C86E84D92BAD9C44C4219FCF0"><enum>(iii)</enum><text>In the case of a biosimilar biological product, the amount otherwise determined under paragraph (8)(B).</text></clause><clause id="H3BEB5E8419B947259BB942BD21374BC7"><enum>(iv)</enum><text>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—</text><subclause id="HDA0DD9CC230747A6B641CF7F6C9364F6"><enum>(I)</enum><text>the amount that would otherwise be applied under subsection (c)(4)(A)(ii); and</text></subclause><subclause id="H975BD9B4C17C4F89B876355758CE59A5"><enum>(II)</enum><text>the amount that would be applied under such subsection if <quote>100 percent</quote> were substituted, as applicable, for—</text><item id="H475DEFDB60C743448ADE7629719E88CA"><enum>(aa)</enum><text><quote>103 percent</quote> in subclause (I) of such subsection; or</text></item><item id="H62412F91315D4B4A94803314065B6F45"><enum>(bb)</enum><text>any percent in excess of 100 percent applied under subclause (II) of such subsection.</text></item></subclause></clause><clause id="H8FCEFBB277D546FEBFE5D8E5762AF308"><enum>(v)</enum><text>In the case of a drug or biological to which subsection (d)(3)(C) applies, an amount equal to the difference between—</text><subclause id="H22AE5D46FF564CB29F29E780FFBECB14"><enum>(I)</enum><text>the amount that would otherwise be applied under such subsection; and</text></subclause><subclause id="HA8CECE98490E41F7989932D8D891B675"><enum>(II)</enum><text>the amount that would be applied under such subsection if <quote>100 percent</quote> were substituted, as applicable, for—</text><item id="H8167177FF9C744049CF5EF169C674AC9"><enum>(aa)</enum><text>any percent in excess of 100 percent applied under clause (i) of such subsection; or</text></item><item id="H3355069A2BA24B3EAB08272446CDB114"><enum>(bb)</enum><text><quote>103 percent</quote> in clause (ii) of such subsection.</text></item></subclause></clause></subparagraph><subparagraph id="HC6410769833F420AB54109EA1BBAEBEB"><enum>(C)</enum><header>Maximum add-on payment amount specified</header><text>For purposes of subparagraph (A), the maximum add-on payment amount specified in this subparagraph is—</text><clause id="H2EFE569029D24F6B9A519E556E1100BB"><enum>(i)</enum><text>for each of 2024 through 2031, $1,000; and</text></clause><clause id="H0606732D270045618D243BA944C5181B"><enum>(ii)</enum><text>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.</text></clause><continuation-text continuation-text-level="subparagraph">Any amount determined under this subparagraph that is not a multiple of $10 shall be rounded to the nearest multiple of $10.</continuation-text></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="H58B4187631A540CAB58718ACD500C0E6"><enum>(2)</enum><text>in subsection (c)(4)(A)(ii), by striking <quote>in the case</quote> and inserting <quote>subject to subsection (b)(9), in the case</quote>.</text></paragraph></subsection><subsection id="H39FAA58E470E46DBA03578302E7A6F5B"><enum>(b)</enum><header>Conforming amendments relating to separately payable drugs</header><paragraph id="H05C922B70F7B4CE4B648D09ABB1986B7"><enum>(1)</enum><header>OPPS</header><text>Section 1833(t)(14) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395l">42 U.S.C. 1395l(t)(14)</external-xref>) is amended—</text><subparagraph id="HEF806DB9907045FEBEF61A1ABDD831F7"><enum>(A)</enum><text>in subparagraph (A)(iii)(II), by inserting <quote>, subject to subparagraph (I)</quote> after <quote>are not available</quote>; and</text></subparagraph><subparagraph id="HB629847CBD8D4F80B2E281CB93A7C749"><enum>(B)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="HFAA8DAE6137240E28F5E033896F37C2B" style="OLC"><subparagraph id="H8D8EE1C3E3FA4F3AAA0AD446AE1BE13D"><enum>(I)</enum><header>Application of maximum add-on payment for separately payable drugs and biologicals</header><text>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, 2024, 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)(9) 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.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="H20004CCA51F347E1955EA5577CADE691"><enum>(2)</enum><header>ASC</header><text>Section 1833(i)(2)(D) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395l">42 U.S.C. 1395l(i)(2)(D)</external-xref>) is amended—</text><subparagraph id="HEE82369EF2184BA59A211607521B1584"><enum>(A)</enum><text>by moving clause (v) 6 ems to the left;</text></subparagraph><subparagraph id="HDE0C984A97E84E31A2B14CBA28355D26"><enum>(B)</enum><text>by redesignating clause (vi) as clause (vii); and</text></subparagraph><subparagraph id="HE629D3D64C554B279C533D461C9E8862"><enum>(C)</enum><text>by inserting after clause (v) the following new clause:</text><quoted-block display-inline="no-display-inline" id="H8AFBE07DB84B4A438FCE9A6DCC44B249" style="OLC"><clause id="H9C89EC32D5E9478D902258A1DE2E8D25" indent="up3"><enum>(vi)</enum><text>If there is a separate payment under the system described in clause (i) for a drug or biological furnished on or after January 1, 2024, 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).</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection></section><section id="H8218AB29A4E94FCC8C2F6A2D409E1A43"><enum>207.</enum><header>Treatment of drug administration services furnished by certain excepted off-campus outpatient departments of a provider</header><text display-inline="no-display-inline">Section 1833(t)(16) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395l">42 U.S.C. 1395l(t)(16)</external-xref>) is amended by adding at the end the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="H7349A6C1236F4D2B8D943F1B8EA6CE07" style="OLC"><subparagraph id="H49FF6D664D5C45EEA5F7B681F40CDA79"><enum>(G)</enum><header>Special payment rule for drug administration services furnished by an excepted department of a provider</header><clause id="HF36B2DBB87BA4804B25817F72AE876BE"><enum>(i)</enum><header>In general</header><text>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, 2024, 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)).</text></clause><clause id="HC936BA3F10F54D478379650F464DFE39"><enum>(ii)</enum><header>Application without regard to budget neutrality</header><text>The reductions made under this subparagraph—</text><subclause id="H668A699DBFCB415D840A3090F9C8C12B"><enum>(I)</enum><text>shall not be considered an adjustment under paragraph (2)(E); and</text></subclause><subclause commented="no" display-inline="no-display-inline" id="H88531A89836243EC9FB5C3FC14C3CB0E"><enum>(II)</enum><text>shall not be implemented in a budget neutral manner.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="HCFBA82DF1B5C4E0293FC14493DE7E848"><enum>208.</enum><header>GAO study and report on average sales price</header><subsection id="H6BACD8B3B9BF4FFF9D7689ACAD6DA123"><enum>(a)</enum><header>Study</header><paragraph id="H87D86BD1DE4846DE8F930920DD8FFC76"><enum>(1)</enum><header>In general</header><text>The Comptroller General of the United States (in this section referred to as the <quote>Comptroller General</quote>) shall conduct a study on spending for applicable drugs under part B of title XVIII of the Social Security Act.</text></paragraph><paragraph id="H080B09DD034F47539C3291D937095857"><enum>(2)</enum><header>Applicable drugs defined</header><text>In this section, the term <quote>applicable drugs</quote> means drugs and biologicals—</text><subparagraph id="HF3B360D736144C1CA290005F4A88548F"><enum>(A)</enum><text>for which reimbursement under such part B is based on the average sales price of the drug or biological; and</text></subparagraph><subparagraph id="HB746C5715CF846558C43920AD2866EF6"><enum>(B)</enum><text>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 that 25 drugs or biologicals).</text></subparagraph></paragraph><paragraph id="H35EE651644154D0E87F7617179768E54"><enum>(3)</enum><header>Requirements</header><text>The study under paragraph (1) shall include an analysis of the following:</text><subparagraph id="H66E10A19338C47FCB2B05FD088E47FE5"><enum>(A)</enum><text>The extent to which each applicable drug is paid for—</text><clause id="H0AFD1A915EBE4C2DACE55F414DF6ECE6"><enum>(i)</enum><text>under such part B for Medicare beneficiaries; or</text></clause><clause id="HECF45286700C4388A37A603A41CCC3A0"><enum>(ii)</enum><text>by private payers in the commercial market.</text></clause></subparagraph><subparagraph id="H9D2799925F4C4C79B2C419A806C1EF7F"><enum>(B)</enum><text>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.</text></subparagraph><subparagraph id="HBBDF4F64A5944F3AAA53D353B1D21521"><enum>(C)</enum><text>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—</text><clause id="HEA8B23D3088B482A9A8879EA72821508"><enum>(i)</enum><text>formulary placement;</text></clause><clause id="H46D8066CCF9A4C4BB16193B01B4A7AB0"><enum>(ii)</enum><text>utilization management considerations; or</text></clause><clause id="HD701605E967140E4AEE97FC293D8A807"><enum>(iii)</enum><text>other purposes.</text></clause></subparagraph><subparagraph id="H208F1C05549C425FA6E2F77C0AA7AF7E"><enum>(D)</enum><text>Barriers to drug manufacturers providing such price concessions for applicable drugs.</text></subparagraph><subparagraph id="H5B68B5D5C3DE4F98AF94D232D9B14044"><enum>(E)</enum><text>Other areas determined appropriate by the Comptroller General.</text></subparagraph></paragraph></subsection><subsection id="HD5F066078BFD4A4A9499D716288CFAB1"><enum>(b)</enum><header>Report</header><text>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.</text></subsection></section><section id="H32A7EBF2C7314A188B02CA56E8A69BE7"><enum>209.</enum><header>Authority to use alternative payment for drugs and biologicals to prevent potential drug shortages</header><subsection id="H69CEB5360A474449A94740732B8B719F"><enum>(a)</enum><header>In general</header><text>Section 1847A(e) of the Social Security Act (42 U.S.C. 1395w–3a(e)) is amended—</text><paragraph id="H685B49F939E54E2C8B3DC34D8FB6E67C"><enum>(1)</enum><text>by striking <quote><header-in-text level="subsection" style="OLC">Payment in Response to Public Health Emergency</header-in-text>.—In the case</quote> and inserting </text><quoted-block style="OLC" id="H318FC63E1BF44A6BBEA1CB10A8FC6E58" display-inline="yes-display-inline"><text><header-in-text level="subsection" style="OLC">Payments.—</header-in-text></text><paragraph id="HB757A440C9B84E14ACB89A4AD43E3A34"><enum>(1)</enum><header>In response to public health emergency</header><text>In the case</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H07C05278D5784E36A246D3D1BA1B1F84"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="HA806D09780CE41C58995B9471009FCF1" style="OLC"><paragraph id="HDA7B5D041E8C426D916800507993F9FE"><enum>(2)</enum><header>Preventing potential drug shortages</header><subparagraph id="H95251006395245F384E6F832ACD13F42"><enum>(A)</enum><header>In general</header><text>In the case of a drug or biological that the Secretary determines is described in subparagraph (B) for one or more quarters beginning on or after January 1, 2024, the Secretary may use wholesale acquisition cost (or other reasonable measure of a drug or biological price) instead of the manufacturer’s average sales price for such quarters and for subsequent quarters until the end of the quarter in which such drug or biological is removed from the drug shortage list under section 506E of the Federal Food, Drug, and Cosmetic Act, or in the case of a drug or biological described in subparagraph (B)(ii), the date on which the Secretary determines that the total manufacturing capacity or the total number of manufacturers of such drug or biological is sufficient to mitigate a potential shortage of the drug or biological.</text></subparagraph><subparagraph id="H3AE491DA1C7647BA9FC06AC67F2E7329"><enum>(B)</enum><header>Drug or biological described</header><text>For purposes of subparagraph (A), a drug or biological described in this subparagraph is a drug or biological—</text><clause id="HB14227E735B34991B7774BDCA7657A4B"><enum>(i)</enum><text>that is listed on the drug shortage list maintained by the Food and Drug Administration pursuant to section 506E of the Federal Food, Drug, and Cosmetic Act, and with respect to which any manufacturer of such drug or biological notifies the Secretary of a permanent discontinuance or an interruption that is likely to lead to a meaningful disruption in the manufacturer’s supply of that drug pursuant to section 506C(a) of such Act; or</text></clause><clause id="H9B65AEF67FCC42AEB865EBAE5D8F637F"><enum>(ii)</enum><text>that—</text><subclause id="H031817E8EBBC4FDEAA374BB4E42D4939"><enum>(I)</enum><text>is described in section 506C(a) of such Act;</text></subclause><subclause id="H555987BC3FE245619CCA80CF2FE06CFF"><enum>(II)</enum><text>was listed on the drug shortage list maintained by the Food and Drug Administration pursuant to section 506E of such Act within the preceding 5 years; and</text></subclause><subclause id="H993150C994F14D4C87D59F13C70F775E"><enum>(III)</enum><text>for which the total manufacturing capacity of all manufacturers with an approved application for such drug or biological that is currently marketed or total number of manufacturers with an approved application for such drug or biological that is currently marketed declines during a 6-month period, as determined by the Secretary.</text></subclause></clause></subparagraph><subparagraph id="HDBD7167059844A7B9E3A5CC633C4548C"><enum>(C)</enum><header>Provision of additional information</header><text>For each quarter in which the amount of payment for a drug or biological described in subparagraph (B) pursuant to subparagraph (A) exceeds the amount of payment for the drug or biological otherwise applicable under this section, each manufacturer of such drug or biological shall provide to the Secretary information related to the potential cause or causes of the shortage and the expected duration of the shortage with respect to such drug.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H5EE51A7A1F06407CA87FE621300A7634"><enum>(b)</enum><header>Tracking shortage drugs through claims</header><text>The Secretary of Health and Human Services (referred to in this section as the <quote>Secretary</quote>) shall establish a mechanism (such as a modifier) for purposes of tracking utilization under title XVIII of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395">42 U.S.C. 1395 et seq.</external-xref>) of drugs and biologicals listed on the drug shortage list maintained by the Food and Drug Administration pursuant to section 506E of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/356e">21 U.S.C. 356e</external-xref>).</text></subsection><subsection id="HE782A9F609734F329757EFE2B955DEFD"><enum>(c)</enum><header>HHS report and recommendations</header><paragraph id="HBCC96CA97CFC486C99A33F5B1BBFE1DE"><enum>(1)</enum><header>In general</header><text>Not later than July 1, 2024, the Secretary shall submit to Congress a report on shortages of drugs within the Medicare program under title XVIII of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395">42 U.S.C. 1395 et seq.</external-xref>). The report shall include—</text><subparagraph id="H6A5D7F4F9A544FC8B589831D016153BA"><enum>(A)</enum><text>an analysis of—</text><clause id="HC0E41952D2A940C796366541FD262078"><enum>(i)</enum><text>the effect of drug shortages on Medicare beneficiary access, quality, safety, and out-of-pocket costs;</text></clause><clause id="H8B440DCE63624C5B89CFDC4C30C741D1"><enum>(ii)</enum><text>the effect of drug shortages on health providers, including hospitals and physicians, across the Medicare program;</text></clause><clause id="H09BC1D3CC3374045B48DC107D613E41F"><enum>(iii)</enum><text>the current role of the Centers for Medicare &amp; Medicaid Services (CMS) in addressing drug shortages, including CMS’s working relationship and communication with other Federal agencies and stakeholders;</text></clause><clause id="H77480ACA223B490485307A869B746AED"><enum>(iv)</enum><text>the role of all actors in the drug supply chain (including drug manufacturers, distributors, wholesalers, secondary wholesalers, group purchasing organizations, hospitals, and physicians) on drug shortages within the Medicare program; and</text></clause><clause id="H0404F349D96E4FCF920CBF35C9A00491"><enum>(v)</enum><text>payment structures and incentives under parts A, B, C, and D of the Medicare program and their effect, if any, on drug shortages; and</text></clause></subparagraph><subparagraph id="HC38FB08F917D4D998E5A358F72A193E0"><enum>(B)</enum><text>relevant findings and recommendations to Congress.</text></subparagraph></paragraph><paragraph id="HD744CD1A0F144A04833367ED69A6F279"><enum>(2)</enum><header>Public availability</header><text>The report under this subsection shall be made available to the public.</text></paragraph><paragraph id="HE5B885C2B50F4058AD43CFCA2C5A44C5"><enum>(3)</enum><header>Consultation</header><text>The Secretary shall consult with the drug shortage task force authorized under section 506D(a)(1)(A) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/356d">21 U.S.C. 356d(a)(1)(A)</external-xref>) in preparing the report under this subsection, as appropriate.</text></paragraph></subsection></section></subtitle><subtitle id="H7A11075EB3984B34945AC31CB99EFF4F" style="OLC"><enum>B</enum><header>Part D</header><section id="HD458639A5FD7434C8D9FD6FFCDB722C9"><enum>221.</enum><header>Medicare part D modernization redesign</header><subsection id="H2D700D6826224D7BBE6AB86DF7F15701"><enum>(a)</enum><header>Benefit structure redesign</header><text>Section 1860D–2(b) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-102">42 U.S.C. 1395w–102(b)</external-xref>) is amended—</text><paragraph id="HA5D2B58FBF2745BC811FE827133F8957"><enum>(1)</enum><text>in paragraph (2)—</text><subparagraph id="H59DDAF9B86B142BDBB21E737D0A8CB70"><enum>(A)</enum><text>in subparagraph (A), in the matter preceding clause (i), by inserting <quote>for a year preceding 2024 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 2024 and each subsequent year</quote> after <quote>paragraph (3)</quote>;</text></subparagraph><subparagraph id="H86E286B6D93D473081AF3CD7D476085C"><enum>(B)</enum><text>in subparagraph (C)—</text><clause id="H3AB978DAA19D4DF69E4C77AFCE2EB18D"><enum>(i)</enum><text>in clause (i), in the matter preceding subclause (I), by inserting <quote>for a year preceding 2024, </quote> after <quote>paragraph (4),</quote>; and</text></clause><clause id="HC1B63719837D412F8C106ECF934BD2B5"><enum>(ii)</enum><text>in clause (ii)(III), by striking <quote>and each subsequent year</quote> and inserting <quote>, 2021, 2022, and 2023</quote>; and</text></clause></subparagraph><subparagraph id="H09CCC5832FA145F688C7EFBFEE0145C0"><enum>(C)</enum><text>in subparagraph (D)—</text><clause id="H603E037300474C7C810C371525EE98B4"><enum>(i)</enum><text>in clause (i)—</text><subclause id="HE6F44D990C764FB99E368F432493D747"><enum>(I)</enum><text>in the matter preceding subclause (I), by inserting <quote>for a year preceding 2024, </quote> after <quote>paragraph (4),</quote>; and</text></subclause><subclause id="HB0D2DC1CB05245CCA931F316FC1B7B31"><enum>(II)</enum><text>in subclause (I)(bb), by striking <quote>a year after 2018</quote> and inserting <quote>each of years 2018 through 2023</quote>; and</text></subclause></clause><clause id="H44C1080BFFB24A5C97239770C4A40900"><enum>(ii)</enum><text>in clause (ii)(V), by striking <quote>2019 and each subsequent year</quote> and inserting <quote>each of years 2019 through 2023</quote>;</text></clause></subparagraph></paragraph><paragraph id="H90442CE4B9534297B831A4A34C2492FE"><enum>(2)</enum><text>in paragraph (3)(A)—</text><subparagraph id="H3DEDE34EB67E47868929B5A47D8F7632"><enum>(A)</enum><text>in the matter preceding clause (i), by inserting <quote>for a year preceding 2024,</quote> after <quote>and (4),</quote>; and</text></subparagraph><subparagraph id="HE90E8EC6CC954EF3BDC445381D32401C"><enum>(B)</enum><text>in clause (ii), by striking <quote>for a subsequent year</quote> and inserting <quote>for each of years 2007 through 2023</quote>; and</text></subparagraph></paragraph><paragraph id="H2023DD15EC75466193987C9BC5ECB74D"><enum>(3)</enum><text>in paragraph (4)—</text><subparagraph id="H8AFFA85CEDC649118E2BB0AFB1D5A501"><enum>(A)</enum><text>in subparagraph (A)—</text><clause id="HDE13C35C5C7F493A99D0A0ED5FFFBEF5"><enum>(i)</enum><text>in clause (i)—</text><subclause id="H13D26336585348EDB013D59CE1CE5209"><enum>(I)</enum><text>by redesignating subclauses (I) and (II) as items (aa) and (bb), respectively, and indenting appropriately;</text></subclause><subclause id="HFA71E99441024B57885B08A31226C3B9"><enum>(II)</enum><text>in the matter preceding item (aa), as redesignated by subclause (I), by striking <quote>is equal to the greater of—</quote> and inserting </text><quoted-block style="OLC" id="H01DF70AD2CA34FDFA6BFB5FBD476EF99" display-inline="yes-display-inline"><text>is equal to—</text><subclause id="H91991B4B1EBB41E4B6F87AFF3172A861"><enum>I</enum><text>for a year preceding 2024, the greater of—</text></subclause><after-quoted-block>;</after-quoted-block></quoted-block></subclause><subclause id="H92BBB55F27A94D809D35B8521AF49BAC"><enum>(III)</enum><text>by striking the period at the end of item (bb), as redesignated by subclause (I), and inserting <quote>; and</quote>; and</text></subclause><subclause id="H975ECD6D258F439FADCD5BA91B10C153"><enum>(IV)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="HCB081579E0A848B1AFEF1653AAAB41C3"><subclause id="H56C8E5011C9D44FE98112E4964087A37"><enum>(II)</enum><text>for 2024 and each succeeding year, $0.</text></subclause><after-quoted-block>; and</after-quoted-block></quoted-block></subclause></clause><clause id="HFC621E2532D446CEAC8F8358B15A7004"><enum>(ii)</enum><text>in clause (ii)—</text><subclause id="H1DA0493AEF4B4094BC556C05E9007F2E"><enum>(I)</enum><text>by striking <quote>clause (i)(I)</quote> and inserting <quote>clause (i)(I)(aa)</quote>; and</text></subclause><subclause commented="no" id="HDF6EE8E69FCE43D3BFAC2303DD3A16B6"><enum>(II)</enum><text>by adding at the end the following new sentence: <quote>The Secretary shall continue to calculate the dollar amounts specified in clause (i)(I)(aa), including with the adjustment under this clause, after 2023 for purposes of section 1860D–14(a)(1)(D)(iii).</quote>;</text></subclause></clause></subparagraph><subparagraph id="H73A7D13A97174BD9977943C830894823"><enum>(B)</enum><text>in subparagraph (B)—</text><clause id="H91F11F9A46754AA5813CBFC72D4031FB"><enum>(i)</enum><text>in clause (i)—</text><subclause id="HCE3BE2D9628F491B82F53EEACF1B1424"><enum>(I)</enum><text>in subclause (V), by striking <quote>or</quote> at the end;</text></subclause><subclause id="H460AE32A3FD14D8987512C618FF56536"><enum>(II)</enum><text>in subclause (VI)—</text><item id="H9514CCA795914A149EFB9C521C352743"><enum>(aa)</enum><text>by striking <quote>for a subsequent year</quote> and inserting <quote>for 2021, 2022, and 2023</quote>; and</text></item><item id="HDEB8FAA573AB458CA425AD8A1191169E"><enum>(bb)</enum><text>by striking the period at the end and inserting a semicolon; and</text></item></subclause><subclause id="HA89E284EC02444A386356E299B1A7E02"><enum>(III)</enum><text>by adding at the end the following new subclauses:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H56CCD418F6664DE29E896F96A84E200F"><subclause id="H51106758358E4A6BA3D8761FE749B6E8"><enum>(VII)</enum><text>for 2024, is equal to:</text><item id="H7D4B24C357B34FA59D08E54225865A5E"><enum>(aa)</enum><text>$3,100 for beneficiaries determined to have income that is over 400 percent of the Federal poverty line applicable to a family of the size involved;</text></item><item id="H5514D8C3482543F4BD9B2F641EB4BD89"><enum>(bb)</enum><text display-inline="yes-display-inline">$2,000 for beneficiaries determined to have income that is between 300 to 400 percent of the Federal poverty line applicable to a family of the size involved; or</text></item><item id="HA25A786A299242609814F39C232760E2"><enum>(cc)</enum><text display-inline="yes-display-inline">$1,200 for beneficiaries determined to have income that is below 300 percent of the Federal poverty line applicable to a family of the size involved; or</text></item></subclause><subclause id="H8080C491F379462FB2FE6FBCCC09DD11"><enum>(VIII)</enum><text>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.</text></subclause><after-quoted-block>; and</after-quoted-block></quoted-block></subclause></clause><clause id="H8B5771491EC345D2BAA0F8F3F84C55EB"><enum>(ii)</enum><text>in clause (ii), by striking <quote>clause (i)(II)</quote> and inserting <quote>clause (i)</quote>;</text></clause></subparagraph><subparagraph id="H8C9520EBB5484DB7BAC55AE8FFF127C7"><enum>(C)</enum><text>in subparagraph (C)(i), by striking <quote>and for amounts</quote> and inserting <quote>and for a year preceding 2024 for amounts</quote>; and</text></subparagraph><subparagraph id="HBCC4EF54479B4953B92B4336E091359A"><enum>(D)</enum><text>in subparagraph (E), by striking <quote>In applying</quote> and inserting <quote>For each of 2011 through 2023, in applying</quote>.</text></subparagraph></paragraph></subsection><subsection id="HEB1F7F13547B4E0E8A54CCA950404149"><enum>(b)</enum><header>Decreasing reinsurance payment amount</header><text>Section 1860D–15(b) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-115">42 U.S.C. 1395w–115(b)</external-xref>) is amended—</text><paragraph id="H440A638D34194458B8BFD28792C91AA4"><enum>(1)</enum><text>in paragraph (1)—</text><subparagraph id="HD0849E93C352409D8E086681AB90D9AB"><enum>(A)</enum><text>by striking <quote>equal to 80 percent</quote> and inserting </text><quoted-block style="OLC" id="H0A7D8706F87D4B4AB589E4BC1993DE37" display-inline="yes-display-inline"><text>equal to—</text><subparagraph id="H32A75B5721734887992C3132292C46FC"><enum>(A)</enum><text>for a year preceding 2024, 80 percent</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph><subparagraph id="HEBC97F50AB5342B58E52ADAD72CA14EE"><enum>(B)</enum><text>in subparagraph (A), as added by paragraph (1), by striking the period at the end and inserting <quote>; and</quote>; and</text></subparagraph><subparagraph id="H021B6313E5B6472185443AB4F93B934B"><enum>(C)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H6E74D273DD25451DB2771A1A2C529653"><subparagraph id="H3F8D844732BA4D4BBBC6286CA89C9249"><enum>(B)</enum><text>for 2024 and each subsequent year, the sum of—</text><clause id="H18A84EFA9FBE41C5BD1F86B983C8D266"><enum>(i)</enum><text>an amount equal to the applicable percentage specified in paragraph (5)(A) of such allowable reinsurance costs attributable to that portion of gross 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</text></clause><clause id="H8F17E66DF2144DB5915BB6131C5ED9F2"><enum>(ii)</enum><text>an amount equal to the applicable percentage specified in paragraph (5)(B) of allowable reinsurance costs attributable to that portion of gross 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).</text></clause></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="HFEFA4D89BABF4CBF85A567F27F0B415A"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H0D4C605F347F462483552261C50184BA"><paragraph id="H123075B1DAC94C96AB72CDF0C0725673"><enum>(5)</enum><header>Applicable percentage specified</header><text>For purposes of paragraph (1)(B), the applicable percentage specified in this paragraph is—</text><subparagraph id="H21CA8937D001407EB009C3AA3FE75555"><enum>(A)</enum><text>with respect to applicable drugs (as defined in section 1860D–14B(g)(2))—</text><clause id="HC4169F6713E047ABB840DAB0EC7ECB88"><enum>(i)</enum><text>for 2024, 60 percent;</text></clause><clause id="H656617AD57394019A0ACF81ADDEF3968"><enum>(ii)</enum><text>for 2025, 40 percent; and</text></clause><clause id="H34272397AE2F433EA7E98C70C870C6E2"><enum>(iii)</enum><text>for 2026 and each subsequent year, 20 percent; and</text></clause></subparagraph><subparagraph id="H4A92026A8A894627ACB4640A4D607B5D"><enum>(B)</enum><text>with respect to covered part D drugs that are not applicable drugs (as so defined)—</text><clause id="HC4C94D5E8A2240AA9DA45072BCFBE28F"><enum>(i)</enum><text>for 2024, 80 percent;</text></clause><clause id="HD15972E3A7DB454AB3D07AE4C802C1CB"><enum>(ii)</enum><text>for 2025, 60 percent; and</text></clause><clause id="HB38B865DF7C44B87805322222536831D"><enum>(iii)</enum><text>for 2026 and each subsequent year, 40 percent.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H7BD2947854204266A85FA277FEC002B5"><enum>(c)</enum><header>Manufacturer discount program during initial and catastrophic phases of coverage</header><paragraph id="H8A0010B6FEFA450ABD2B6ED5DCF69D98"><enum>(1)</enum><header>In general</header><text>Part D of title XVIII of the Social Security Act is amended by inserting after section 1860D–14A (<external-xref legal-doc="usc" parsable-cite="usc/42/1495w-114">42 U.S.C. 1495w–114</external-xref>) the following new section:</text><quoted-block style="OLC" display-inline="no-display-inline" id="HCFF6B28A57A64B43A55CAFD235043DEC"><section id="H6EC643157BDA4A7E80ACA5CA0C5B32C4"><enum>1860D–14B.</enum><header>Manufacturer discount program</header><subsection id="H3E6A2CE5A42042C9B843BEFEBDEE98C1"><enum>(a)</enum><header>Establishment</header><text>The Secretary shall establish a manufacturer discount program (in this section referred to as the <quote>program</quote>). 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.</text></subsection><subsection id="H346041FC04CD48629CEFDE0FE2AA9B20"><enum>(b)</enum><header>Terms of agreement</header><paragraph id="HA56B1E2DDB8442A9B18CE7E73B8D2611"><enum>(1)</enum><header>In general</header><subparagraph id="H67855E1B6D82418184DB9A5F46C75261"><enum>(A)</enum><header>Agreement</header><text>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.</text></subparagraph><subparagraph id="H736A3BED136B4601895F00F3D01E4866"><enum>(B)</enum><header>Provision of discounted prices at the point-of-sale</header><text>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.</text></subparagraph></paragraph><paragraph id="HAAD2FADB250244C5B4C6F3ECB32779B2"><enum>(2)</enum><header>Provision of appropriate data</header><text>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.</text></paragraph><paragraph id="H2578CD3F56AA40CDB28295F67A4CF980"><enum>(3)</enum><header>Compliance with requirements for administration of program</header><text>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).</text></paragraph><paragraph id="HC10D04C92AA54035B6EEF4F39D4D62A6"><enum>(4)</enum><header>Length of agreement</header><subparagraph id="H7603198402974C46AC71A71615186899"><enum>(A)</enum><header>In general</header><text>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).</text></subparagraph><subparagraph id="HB3AD661CCAFD4660B93AE22CECF3400F"><enum>(B)</enum><header>Termination</header><clause id="H60281ADB41AC445C8D688C9A304A20A6"><enum>(i)</enum><header>By the Secretary</header><text>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.</text></clause><clause id="HD415707AC3C5496FAF64FFDCF9A00701"><enum>(ii)</enum><header>By a manufacturer</header><text>A manufacturer may terminate an agreement under this section for any reason. Any such termination shall be effective, with respect to a plan year—</text><subclause id="H908D31C8F2CA4E46B396FE26EAEDD844"><enum>(I)</enum><text>if the termination occurs before January 30 of a plan year, as of the day after the end of the plan year; and</text></subclause><subclause id="HEAD7765156104EC2B43CA33BA47979F7"><enum>(II)</enum><text>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.</text></subclause></clause><clause id="H63D460E5D3D04224B2E337A1A72A0974"><enum>(iii)</enum><header>Effectiveness of termination</header><text>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.</text></clause><clause id="H9C34F2266BFC4697B99C8A5D67D7C520"><enum>(iv)</enum><header>Notice to third party</header><text>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.</text></clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H71E6D07AC6C641909EAEDEA8615EA44A"><enum>(5)</enum><header display-inline="yes-display-inline">Effective date of agreement</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection><subsection id="H8856F7DF3CBF4DC2959593F3FE4BA48B"><enum>(c)</enum><header>Duties described</header><text>The duties described in this subsection are the following:</text><paragraph id="H781FDD4E5806411899418D7377DD2821"><enum>(1)</enum><header>Administration of program</header><text>Administering the program, including—</text><subparagraph id="H318BA22296124EC98EC345D2E6B67D5E"><enum>(A)</enum><text>the determination of the amount of the discounted price of an applicable drug of a manufacturer;</text></subparagraph><subparagraph id="H922CA40F7A564F7EBC7A09ED1B5005EA"><enum>(B)</enum><text>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;</text></subparagraph><subparagraph id="H36B6FB695DE74F12AEBC015A1F4D1222"><enum>(C)</enum><text>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—</text><clause id="H822546DFB1684E9DBA6089EF02CF4425"><enum>(i)</enum><text>the negotiated price of the applicable drug; and</text></clause><clause id="H85600864B8834FAA830BC1B4800B353F"><enum>(ii)</enum><text>the discounted price of the applicable drug;</text></clause></subparagraph><subparagraph id="HD48273B32B8241C987BDC97A5ED6C006"><enum>(D)</enum><text>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</text></subparagraph><subparagraph id="H9A1B328EB5A44D72873276861406E1C3"><enum>(E)</enum><text>providing a reasonable dispute resolution mechanism to resolve disagreements between manufacturers, applicable beneficiaries, and the third party with a contract under subsection (d)(3).</text></subparagraph></paragraph><paragraph id="H70ECDC9255C64F70AE8B2B6277B575CB"><enum>(2)</enum><header>Monitoring compliance</header><subparagraph id="H5E8752A478374F378DF145F8923AFB0C"><enum>(A)</enum><header>In general</header><text>The Secretary shall monitor compliance by a manufacturer with the terms of an agreement under this section.</text></subparagraph><subparagraph id="HE5BF33AAEC6747F6938E6E53F8F570AA"><enum>(B)</enum><header>Notification</header><text>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).</text></subparagraph></paragraph><paragraph id="HC8EC1A82C88C4AF5BCCC01D159A252A8"><enum>(3)</enum><header>Collection of data from prescription drug plans and MA–PD plans</header><text>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.</text></paragraph></subsection><subsection id="HD8A8EB867A214DF5AB8F9239ADDE887F"><enum>(d)</enum><header>Administration</header><paragraph id="HEEC2DAA932B148FB96F7FE9B8CE6F293"><enum>(1)</enum><header>In general</header><text>Subject to paragraph (2), the Secretary shall provide for the implementation of this section, including the performance of the duties described in subsection (c).</text></paragraph><paragraph id="HF1D02782525E4F4D8F1CDAD4CC6C7678"><enum>(2)</enum><header>Limitation</header><text>In providing for the implementation of this section, the Secretary shall not receive or distribute any funds of a manufacturer under the program.</text></paragraph><paragraph id="HED82A15DF54445E3B57812E4F1360772"><enum>(3)</enum><header>Contract with third parties</header><text>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—</text><subparagraph id="H6D0D49D4DA8D474BB2CFDC6983208239"><enum>(A)</enum><text>receive and transmit information between the Secretary, manufacturers, and other individuals or entities the Secretary determines appropriate;</text></subparagraph><subparagraph id="H240CBA0EB98A4B69B11FEAA194D1E6EA"><enum>(B)</enum><text>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;</text></subparagraph><subparagraph id="HC62EA89D5DF14B738044BB51F77D20FC"><enum>(C)</enum><text>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</text></subparagraph><subparagraph id="H8A426D25110549EF8EFD9ABB104027EE"><enum>(D)</enum><text>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.</text></subparagraph></paragraph><paragraph id="H9D7EA7E95F654D85B1DE7A43BE1AACE2"><enum>(4)</enum><header>Performance requirements</header><text>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.</text></paragraph><paragraph id="H148A0ECCD99140D89CA0DCD1EE9EFC73"><enum>(5)</enum><header>Administration</header><text><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/44/35">Chapter 35</external-xref> of title 44, United States Code, shall not apply to the program under this section.</text></paragraph><paragraph id="H2646E614E5B7421C955FBD60EB0B0757"><enum>(6)</enum><header>Funding</header><text>For purposes of carrying out this section, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under section 1841 to the Centers for Medicare &amp; Medicaid Services Program Management Account, of $4,000,000 for each of fiscal years 2021 through 2024, to remain available until expended.”.</text></paragraph></subsection><subsection id="H5AAEE90B4A504CC4B4729259E7632D78"><enum>(e)</enum><header>Enforcement</header><paragraph id="HA83E64B1161A4C99A2867713BD6F4780"><enum>(1)</enum><header>Audits</header><text>Each manufacturer with an agreement in effect under this section shall be subject to periodic audit by the Secretary.</text></paragraph><paragraph id="HA24293AC7E8648D29F0A986EE8C5C768"><enum>(2)</enum><header>Civil money penalty</header><subparagraph id="HD985A3AB5051444FB5747F4C1CA23C49"><enum>(A)</enum><header>In general</header><text>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—</text><clause id="H1876113171FC4A1C956301A099FC16B8"><enum>(i)</enum><text>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</text></clause><clause id="HCFAD6DF8FEC3430F8B93D09C4908B0E9"><enum>(ii)</enum><text>25 percent of such amount.</text></clause></subparagraph><subparagraph id="H3DB051C4C9BE43E4825333DE93618E92"><enum>(B)</enum><header>Application</header><text>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).</text></subparagraph></paragraph></subsection><subsection id="HC830F1B7B6164C21A30C4A2E2F6A68BF"><enum>(f)</enum><header>Clarification regarding availability of other covered part D drugs</header><text>Nothing in this section shall prevent an applicable beneficiary from purchasing a covered part D drug that is not an applicable drug (including a generic drug or a drug that is not on the formulary of the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in).</text></subsection><subsection id="HE0A74CBF1BB84344945221E0C4D93AA5"><enum>(g)</enum><header>Definitions</header><text>In this section:</text><paragraph id="H4A30BDB9003943B09E9B4951C6556339"><enum>(1)</enum><header>Applicable beneficiary</header><text>The term <term>applicable beneficiary</term> means an individual who, on the date of dispensing a covered part D drug—</text><subparagraph id="H6822B386744747368F0A2F2C152F28F5"><enum>(A)</enum><text>is enrolled in a prescription drug plan or an MA–PD plan;</text></subparagraph><subparagraph id="H2B78C218A8F94376B94B51659038B807"><enum>(B)</enum><text>is not enrolled in a qualified retiree prescription drug plan; and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H4AEE6B3DEC45415BA7BFC0FCFF31A5EE"><enum>(C)</enum><text display-inline="yes-display-inline">has incurred costs for covered part D drugs in the year that are above the annual deductible specified in section 1860D–2(b)(1) for such year.</text></subparagraph></paragraph><paragraph id="HA3F243C555554851AE27EF0AEB12B85C"><enum>(2)</enum><header>Applicable drug</header><text>The term <term>applicable drug</term> means, with respect to an applicable beneficiary, a covered part D drug—</text><subparagraph id="H5A5C2E716D1A45EB987C54B921AFDAC0"><enum>(A)</enum><text>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 351); and</text></subparagraph><subparagraph id="H3ED5CF679C15421681CD47EB8D6DE8F6"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="H498F769E47B74C27A54ED41DBFF179F1"><enum>(i)</enum><text>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;</text></clause><clause id="HE89751372A6747298A992DAB54F1A2DB" indent="up1"><enum>(ii)</enum><text>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</text></clause><clause id="H4B25D843D768488D8C6219D7CF15D3CE" indent="up1"><enum>(iii)</enum><text>is provided through an exception or appeal.</text></clause></subparagraph></paragraph><paragraph id="H5C563ED0C19746E7BBCFCB139DA116C4"><enum>(3)</enum><header>Applicable number of calendar days</header><text>The term <term>applicable number of calendar days</term> means—</text><subparagraph id="HC30164DC5E8543A390D53784AE315B19"><enum>(A)</enum><text>with respect to claims for reimbursement submitted electronically, 14 days; and</text></subparagraph><subparagraph id="H8A27B79DF6AD4F79ACEEE403D5F51584"><enum>(B)</enum><text>with respect to claims for reimbursement submitted otherwise, 30 days.</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H96AEC120EEF54ED8B13808A1EF408109"><enum>(4)</enum><header display-inline="yes-display-inline">Discounted price</header><subparagraph commented="no" display-inline="no-display-inline" id="HA783971A1EE74B2FA3E7C60C48F9CEF9"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the term <term>discounted price</term> means 90 percent of the negotiated price of the applicable drug of a manufacturer.</text></subparagraph><subparagraph display-inline="no-display-inline" commented="no" id="H935B77DE16484B2A93CFFC7383AF67FD"><enum>(B)</enum><header>Phase-in for certain drugs dispensed for subsidy eligible individuals</header><clause display-inline="no-display-inline" commented="no" id="H730986D8016C4664839D3A5CCF82E04F"><enum>(i)</enum><header>In general</header><text>In the case of an applicable drug of a specified manufacturer (as defined in clause (ii)) that is dispensed for an applicable beneficiary who is a subsidy eligible individual (as defined in section 1860D–14(a)(3), the term <term>discounted price</term> means the specified LIS percent (as defined in clause (iii)) of the negotiated price of the applicable drug of the manufacturer.</text></clause><clause display-inline="no-display-inline" commented="no" id="H51950E9883624487BE61CCFD0A916873"><enum>(ii)</enum><header>Specified manufacturer</header><text>In this subparagraph, the term <term>specified manufacturer</term> means a manufacturer of an applicable drug for which, in the calendar year 2 years prior to the current plan year (referred to in this clause as the <quote>applicable period</quote>), the total reimbursement under this title during the applicable period represented less than 1 percent of the total reimbursement under this title for all prescription drugs during such period.</text></clause><clause display-inline="no-display-inline" commented="no" id="HF278BD972F23482FBBCE7F965C699470"><enum>(iii)</enum><header>Specified LIS percent</header><text>In this subparagraph, the term <term>specified LIS percent</term> means—</text><subclause display-inline="no-display-inline" commented="no" id="H67A33BE5B70048E1B6C944752A623FDA"><enum>(I)</enum><text>for 2024, 98 percent;</text></subclause><subclause display-inline="no-display-inline" commented="no" id="HD5853F6BCB0E460085FBC5CC96453C8F"><enum>(II)</enum><text>for 2025, 97 percent;</text></subclause><subclause display-inline="no-display-inline" commented="no" id="HFDF16BF899964607B0D0031F9C0DB973"><enum>(III)</enum><text>for 2026, 96 percent;</text></subclause><subclause display-inline="no-display-inline" commented="no" id="HB966A329BB6E4E2A93BEDE420FDDE973"><enum>(IV)</enum><text>for 2027, 95 percent;</text></subclause><subclause display-inline="no-display-inline" commented="no" id="H7F1EF6E5697A4717AF03D477F87EBD35"><enum>(V)</enum><text>for 2028, 94 percent;</text></subclause><subclause display-inline="no-display-inline" commented="no" id="H83DBB624CFF54EB58C537260E93E8E04"><enum>(VI)</enum><text>for 2029, 93 percent;</text></subclause><subclause display-inline="no-display-inline" commented="no" id="H46DEE3E3BA28483DA80D302E7D076E15"><enum>(VII)</enum><text>for 2030, 92 percent;</text></subclause><subclause display-inline="no-display-inline" commented="no" id="H54CD23A608474822B8FB0A1BA93355A8"><enum>(VIII)</enum><text>for 2031, 91 percent; and</text></subclause><subclause display-inline="no-display-inline" commented="no" id="H66F86E4B5CB24693BDCE8B2A580AD41C"><enum>(IX)</enum><text>for 2032 and each subsequent year, 90 percent.</text></subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H56D36C73BF784F83BF6D19824626ABA9"><enum>(C)</enum><header display-inline="yes-display-inline">Clarification</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph><paragraph id="H82B9D118C5E9444A873BADAA3E84423B"><enum>(5)</enum><header>Manufacturer</header><text>The term <term>manufacturer</term> 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.</text></paragraph><paragraph id="HBAEF679CCB554834ACADE1C5C2E0406E"><enum>(6)</enum><header>Negotiated price</header><text>The term <term>negotiated price</term> 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 the applicable drug.</text></paragraph><paragraph id="H0428A77748024FE4B64DA09AE7FEA5C7"><enum>(7)</enum><header>Qualified retiree prescription drug plan</header><text>The term <term>qualified retiree prescription drug plan</term> has the meaning given such term in section 1860D–22(a)(2).</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="H446E84D42B0F4817BCB296F986B5F014"><enum>(2)</enum><header>Sunset of Medicare coverage gap discount program</header><text>Section 1860D–14A of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395-114a">42 U.S.C. 1395–114a</external-xref>) is amended—</text><subparagraph id="H017AFB51B6504BC3BBAC53BE1D94D8BC"><enum>(A)</enum><text>in subsection (a), in the first sentence, by striking <quote>The Secretary</quote> and inserting <quote>Subject to subsection (h), the Secretary</quote>; and</text></subparagraph><subparagraph id="H76839A980C124D57B4D1311C858F9240"><enum>(B)</enum><text>by adding at the end the following new subsection:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H1287888EEB914380AE92984CCC8E8041"><subsection id="H5D9C6DBC2C014C3B962A3FEFDD9FC23F"><enum>(h)</enum><header>Sunset of program</header><paragraph id="H18C4514DC85B424395BDA07C281727E7"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph><paragraph id="H9E94B24CE4D24FC5BCE3E1AE7E616825"><enum>(2)</enum><header>Continued application for applicable drugs dispensed prior to sunset</header><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="HF4DBDBDB59D84F899E102A182AA7B56F"><enum>(3)</enum><header>Inclusion of actuarial value of manufacturer discounts in bids</header><text>Section 1860D–11 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-111">42 U.S.C. 1395w–111</external-xref>) is amended—</text><subparagraph id="H64875DF395AE4C34B21908447799B1CD"><enum>(A)</enum><text>in subsection (b)(2)(C)(iii)—</text><clause id="H0805323FE2FA43269396F6A7FCBBD0B1"><enum>(i)</enum><text>by striking <quote>assumptions regarding the reinsurance</quote> and inserting </text><quoted-block style="OLC" id="H39E0DCCB919A4D9AB0B0CE8E25E0BF38" display-inline="yes-display-inline"><text>assumptions regarding—</text><subclause id="H1A534FAD99DE43DEA30B54F9D04F1807"><enum>(I)</enum><text>the reinsurance</text></subclause><after-quoted-block>; and</after-quoted-block></quoted-block></clause><clause id="HCB099460163A49A49ADA122A25478C00"><enum>(ii)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H65167E9342324C59833A864DCCB90B99"><subclause id="HD683307A62824D35B25A6DED84324A9F"><enum>(II)</enum><text>for 2024 and each subsequent year, the manufacturer discounts provided under section 1860D–14B subtracted from the actuarial value to produce such bid; and</text></subclause><after-quoted-block>; and</after-quoted-block></quoted-block></clause></subparagraph><subparagraph id="H79A612CC49094173A94A632A5E9A7000"><enum>(B)</enum><text>in subsection (c)(1)(C)—</text><clause id="H900066B742054E16AB830FDEBE87BDE9"><enum>(i)</enum><text>by striking <quote>an actuarial valuation of the reinsurance</quote> and inserting </text><quoted-block style="OLC" id="H3E6F7E01E435480AA85016DD1F626C5B" display-inline="yes-display-inline"><text>an actuarial valuation of—</text><clause id="H975B7CA4FD944525BAB3FE9983BE4168"><enum>(i)</enum><text>the reinsurance</text></clause><after-quoted-block>;</after-quoted-block></quoted-block></clause><clause id="H16B941580ECE49E98A45A86D9B2E260C"><enum>(ii)</enum><text>in clause (i), as added by clause (i) of this subparagraph, by adding <quote>and</quote> at the end; and</text></clause><clause id="H1493D0A9C66A4509AA8CB4BC5F5E80CA"><enum>(iii)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="HE244F35504164DD0B2168B47ECD391D2"><clause id="HE0F6B1C0CF9444C8B2B7A17B5F17EA2D"><enum>(ii)</enum><text>for 2024 and each subsequent year, the manufacturer discounts provided under section 1860D–14B;</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></clause></subparagraph></paragraph><paragraph commented="no" id="H5AF9569B7469446C974A3303EB534E4C"><enum>(4)</enum><header>Clarification regarding exclusion of manufacturer discounts from TrOOP</header><text>Section 1860D–2(b)(4) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-102">42 U.S.C. 1395w–102(b)(4)</external-xref>) is amended—</text><subparagraph id="H21EDA76A82FB4CB7876D57FB8DB83058"><enum>(A)</enum><text>in subparagraph (C), by inserting <quote>and subject to subparagraph (F)</quote> after <quote>subparagraph (E)</quote>; and</text></subparagraph><subparagraph id="HCF0C057FDD2244FAACC6B3B874622649"><enum>(B)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="HC906B36ACFE14825A47D81953F95D902"><subparagraph id="H71757F2EDE8E4C1B82B660176202C432"><enum>(F)</enum><header>Clarification regarding exclusion of manufacturer discounts</header><text>In applying subparagraph (A), incurred costs shall not include any manufacturer discounts provided under section 1860D–14B.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection><subsection id="HC3508BA2F3D144F0B640CD38F66DB211"><enum>(d)</enum><header>Determination of allowable reinsurance costs</header><text>Section 1860D–15(b) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-115">42 U.S.C. 1395w–115(b)</external-xref>) is amended—</text><paragraph id="HE4C116E1CC664DAC994D676DCD2B2793"><enum>(1)</enum><text>in paragraph (2)—</text><subparagraph id="HCCAC24A96A7447A3A32712844F0A00B8"><enum>(A)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">costs</header-in-text>.—For purposes</quote> and inserting </text><quoted-block style="OLC" id="HA7BA7619269646C8998B010CBED116ED" display-inline="yes-display-inline"><text><header-in-text level="paragraph" style="OLC">costs</header-in-text>.—</text><subparagraph id="H531ADE502BFF48DEB6B42FF10D2CAFFE"><enum>(A)</enum><header>In general</header><text>Subject to subparagraph (B), for purposes</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph><subparagraph id="H9D4B6C65BB064D248820732CC4CC1189"><enum>(B)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H4CBA3C92A0F74774A9EAAB314418A52E"><subparagraph id="H2F7E3D31D7B846F2A31BD326ABA9F71A"><enum>(B)</enum><header>Inclusion of manufacturer discounts on applicable drugs</header><text>For purposes of applying subparagraph (A), the term <term>allowable reinsurance costs</term> 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–14B(g)(2)) that was paid by a manufacturer under the manufacturer discount program under section 1860D–14B.</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="H2C4B6266AB7341D5AB47E204DDD19438"><enum>(2)</enum><text>in paragraph (3)—</text><subparagraph id="H7D82FE0E78F94B7CB0244026B78D598D"><enum>(A)</enum><text>in the first sentence, by striking <quote>For purposes</quote> and inserting <quote>Subject to paragraph (2)(B), for purposes</quote>; and</text></subparagraph><subparagraph id="H2BAA95869A3A4FD7BB0E84FD00F26128"><enum>(B)</enum><text>in the second sentence, by inserting <quote>or, in the case of an applicable drug, by a manufacturer</quote> after <quote>by the individual or under the plan</quote>.</text></subparagraph></paragraph></subsection><subsection id="HC252C3FB81EA4276B38128F5E56A46AF"><enum>(e)</enum><header>Updating risk adjustment methodologies To account for part D modernization redesign</header><text>Section 1860D–15(c) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-115">42 U.S.C. 1395w–115(c)</external-xref>) is amended by adding at the end the following new paragraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H293F32D71BF34D7FB33647FCD1B6B009"><paragraph id="H648DE05D90D14CCB99266CE0A3857A19"><enum>(3)</enum><header>Updating risk adjustment methodologies to account for part D modernization redesign</header><text>The Secretary shall update the risk adjustment methodologies 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 2 of the <short-title>Seniors Prescription Drug Relief Act</short-title>.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" id="H341D3B658AC348C6B291FA80CEA495B3"><enum>(f)</enum><header>Conditions for coverage of drugs under this part</header><text>Section 1860D–43 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-153">42 U.S.C. 1395w–153</external-xref>) is amended—</text><paragraph commented="no" id="HB5F711BEE1CD427595BBEBA7FA0D3C03"><enum>(1)</enum><text>in subsection (a)—</text><subparagraph commented="no" id="HB0A4729DE7994F248202F98440B683CB"><enum>(A)</enum><text>in paragraph (2), by striking <quote>and</quote> at the end;</text></subparagraph><subparagraph commented="no" id="H0096A0A5A96443CFB68BE7B2DDCF4D94"><enum>(B)</enum><text>in paragraph (3), by striking the period at the end and inserting a semicolon; and</text></subparagraph><subparagraph commented="no" id="HF0B0D91CA02849F489653BE448171522"><enum>(C)</enum><text>by adding at the end the following new paragraphs:</text><quoted-block id="H75569B3B6C8D47C196B7F272B8C164A3" style="OLC"><paragraph commented="no" id="H5B4A60D360AA4C878E5AC7ADCDD54E0A"><enum>(4)</enum><text>participate in the manufacturer discount program under section 1860D–14B;</text></paragraph><paragraph commented="no" id="HB5D478E70464463881BB386B6074346A"><enum>(5)</enum><text>have entered into and have in effect an agreement described in subsection (b) of such section 1860D–14B with the Secretary; and</text></paragraph><paragraph commented="no" id="HCAB6098127FF4C64A8B556A8787CB8EC"><enum>(6)</enum><text>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.</text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph commented="no" id="HE79C2C60220043BEAF71BD9B5F802289"><enum>(2)</enum><text>by striking subsection (b) and inserting the following:</text><quoted-block id="H72766DD5643D4675AC8858554E4647EA" style="OLC"><subsection commented="no" id="H46C8818D09184E7B92507857E9A13B85"><enum>(b)</enum><header>Effective date</header><text>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.</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph commented="no" id="HFA4B1859582C4079B89006EF73DC2203"><enum>(3)</enum><text>in subsection (c), by striking paragraph (2) and inserting the following:</text><quoted-block id="HCD7FA8D610A9425297723BE26BC3F4B5" style="OLC"><paragraph commented="no" id="H5243E8384C294EB2B566F052973975C0"><enum>(2)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H65B5C919E17D4A99A40C911E71BB289D"><enum>(g)</enum><header>Conforming amendments</header><paragraph id="H742865CDE09344D49E6440AF71BF9EDA"><enum>(1)</enum><text>Section 1860D–2 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-102">42 U.S.C. 1395w–102</external-xref>) is amended—</text><subparagraph id="HC48450B61D0448F3858019312EE3A83D"><enum>(A)</enum><text>in subsection (a)(2)(A)(i)(I), by striking <quote>, or an increase in the initial</quote> and inserting <quote>or for a year preceding 2024 an increase in the initial</quote>;</text></subparagraph><subparagraph id="H05DA88B190A549B481C1F10276B61B93"><enum>(B)</enum><text>in subsection (c)(1)(C)—</text><clause id="H0C7285DF6AE14E67A98F3E1A0CA25FE6"><enum>(i)</enum><text>in the subparagraph heading, by striking <quote><header-in-text level="subparagraph" style="OLC">at initial coverage limit</header-in-text></quote>; and</text></clause><clause id="H86BC5DFF711A4C758EFA83B085B923B7"><enum>(ii)</enum><text>by inserting <quote>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</quote> after <quote>subsection (b)(3) for the year</quote> each place it appears; and</text></clause></subparagraph><subparagraph id="H523357BFFFF84944B83AD57C6D46B615"><enum>(C)</enum><text>in subsection (d)(1)(A), by striking <quote>or an initial</quote> and inserting <quote>or for a year preceding 2024 an initial</quote>.</text></subparagraph></paragraph><paragraph id="HA7B2942BFA1D42C483BD99F5097413FE"><enum>(2)</enum><text>Section 1860D–4(a)(4)(B)(i) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-104">42 U.S.C. 1395w–104(a)(4)(B)(i)</external-xref>) is amended by striking <quote>the initial</quote> and inserting <quote>for a year preceding 2024, the initial</quote>.</text></paragraph><paragraph id="H808921D33A174908BB8B99FE2347FAAE"><enum>(3)</enum><text>Section 1860D–14(a) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-114">42 U.S.C. 1395w–114(a)</external-xref>) is amended—</text><subparagraph id="HB1D9EF6BD125421C9477D566D7D3C633"><enum>(A)</enum><text>in paragraph (1)—</text><clause id="HD2C03C57247543AC8A6E1CE5B6078457"><enum>(i)</enum><text>in subparagraph (C), by striking <quote>The continuation</quote> and inserting <quote>For a year preceding 2024, the continuation</quote>;</text></clause><clause id="HAC83E856A45E47FFBAD92850958353A9"><enum>(ii)</enum><text>in subparagraph (D)(iii), by striking <quote>1860D–2(b)(4)(A)(i)(I)</quote> and inserting <quote>1860D–2(b)(4)(A)(i)(I)(aa)</quote>; and</text></clause><clause id="HC3928ABB6DCF41C3AF342A9009945FE0"><enum>(iii)</enum><text>in subparagraph (E), by striking <quote>The elimination</quote> and inserting <quote>For a year preceding 2024, the elimination</quote>; and </text></clause></subparagraph><subparagraph id="H53C498381E2C46B08894D63CE7298E20"><enum>(B)</enum><text>in paragraph (2)—</text><clause id="H2CD1C048C7224AA6813404F6F45CF70C"><enum>(i)</enum><text>in subparagraph (C), by striking <quote>The continuation</quote> and inserting <quote>For a year preceding 2024, the continuation</quote>; and</text></clause><clause id="H568984933C914F2691CB1B43279EE559"><enum>(ii)</enum><text>in subparagraph (E)—</text><subclause id="HE56545DC6B264E78B991EC4DE8FC4589"><enum>(I)</enum><text>by inserting <quote>for a year preceding 2024,</quote> after <quote>subsection (c)</quote>; and</text></subclause><subclause id="HFEA6254BF8A747409EE112751A71F4A6"><enum>(II)</enum><text>by striking <quote>1860D–2(b)(4)(A)(i)(I)</quote> and inserting <quote>1860D–2(b)(4)(A)(i)(I)(aa)</quote>.</text></subclause></clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H2916310AC928406DAC3E0783C95AFE03"><enum>(4)</enum><text display-inline="yes-display-inline">Section 1860D–21(d)(7) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-131">42 U.S.C. 1395w–131(d)(7)</external-xref>) is amended by striking <quote>section 1860D–2(b)(B)(4)(B)(i)</quote> and inserting <quote>section 1860D–2(b)(B)(4)(C)(i)</quote>.</text></paragraph><paragraph id="H91C719D3EC724A5B8BC08AE776492837"><enum>(5)</enum><text display-inline="yes-display-inline">Section 1860D–22(a)(2)(A) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-132">42 U.S.C. 1395w–132(a)(2)(A)</external-xref>) is amended—</text><subparagraph id="H46173E57D2AF485490BF9502585AB7ED"><enum>(A)</enum><text display-inline="yes-display-inline">by striking <quote>the value of any discount</quote> and inserting the following: </text><quoted-block style="OLC" id="H14241F93D60D4FB08B8154548F276172" display-inline="yes-display-inline"><text>the value of—</text><clause id="H05F41C7E9DFC41C6802E70239E498A4E"><enum>(i)</enum><text display-inline="yes-display-inline">for years prior to 2024, any discount</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph><subparagraph id="H3470D38F8E224E8FB3C823B7CA8BCBDA"><enum>(B)</enum><text>in clause (i), as inserted by subparagraph (A) of this paragraph, by striking the period at the end and inserting <quote>; and</quote>; and</text></subparagraph><subparagraph id="H636197327BDD41C3921630C39BE8CE0E"><enum>(C)</enum><text>by adding at the end the following new clause:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H93AB9F55FFC04989A5C35D8B8680DFAF"><clause commented="no" id="HD3CDB5CC9C63453FA3D2E1DA8D27BE11"><enum>(ii)</enum><text>for 2024 and each subsequent year, any discount provided pursuant to section 1860D–14B.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="H724C3E56B56244188D5C2B3ADE2EDFB8"><enum>(6)</enum><text>Section 1860D–41(a)(6) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-151">42 U.S.C. 1395w–151(a)(6)</external-xref>) is amended—</text><subparagraph id="H95E5A0A14D7543E0B05689CC2524649E"><enum>(A)</enum><text>by inserting <quote>for a year before 2024</quote> after <quote>1860D–2(b)(3)</quote>; and</text></subparagraph><subparagraph id="HC08609CEC5AE4FAB90C74CBC78A985B9"><enum>(B)</enum><text>by inserting <quote>for such year</quote> before the period.</text></subparagraph></paragraph></subsection><subsection id="HA132051B1156418284518A8F7A7B07CA"><enum>(h)</enum><header>Effective date</header><text>The amendments made by this section shall apply to plan year 2024 and subsequent plan years.</text></subsection></section><section id="H7D9CF4392F5B495A9F90474CB02CB2FA"><enum>222.</enum><header>Monthly out-of-pocket cost sharing maximum for enrollees who incur a significant portion of costs towards annual out-of-pocket threshold</header><subsection id="H54D0B23DEF7C4BC9BC3A074307FDC0B0"><enum>(a)</enum><header>In general</header><text>Section 1860D–2(b) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-102">42 U.S.C. 1395w–102(b)</external-xref>), as amended by section 2, is amended—</text><paragraph id="HE7CD0E1628C94009B9A12F7ABBF14566"><enum>(1)</enum><text>in paragraph (2)—</text><subparagraph id="H22198D0E326342ADAFC873603A0458C0"><enum>(A)</enum><text>in subparagraph (A), by striking <quote>and (D)</quote> and inserting <quote>, (D), and (E)</quote>; and</text></subparagraph><subparagraph id="HD92C4F74998A42FD9630F608A03AADD3"><enum>(B)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H1AE9EB4256904540A34C53B67AB5A019"><subparagraph id="H6BB1EE3BEE534DBFB32583EC2D692F1D"><enum>(E)</enum><header>Monthly out-of-pocket cost sharing maximum for enrollees who incur a significant portion of costs towards annual out-of-pocket threshold</header><clause id="HF45027D26D08402882D74678C8E8A127"><enum>(i)</enum><header>Establishment of process</header><subclause id="HF8D9C49E27AB4537BBF764F34A456B75"><enum>(I)</enum><header>In general</header><text>For plan years beginning on or after January 1, 2024, the Secretary shall, through notice and comment rulemaking, establish a process under which each PDP sponsor offering a prescription drug plan and each MA organization offering an MA–PD plan shall each plan year automatically enroll applicable enrollees in the option to have their monthly out-of-pocket cost-sharing under the plan capped and paid in monthly installments in accordance with this subparagraph (referred to in this subparagraph as the <quote>monthly out-of-pocket cost sharing maximum option</quote>).</text></subclause><subclause id="H509E5CD7B65F40608BC97B88E649C2E9"><enum>(II)</enum><header>Opt out</header><text>The process established under this clause shall permit an applicable enrollee, prior to the beginning of the plan year or at any point during the plan year, to opt out of enrollment in the monthly out-of-pocket cost sharing maximum option and pay any out-of-pocket cost-sharing otherwise applicable for any covered part D drug in full at the time of the dispensing of such drug (or at the time of such opt out in the case of costs incurred during such enrollment that have not yet been billed to the enrollee).</text></subclause></clause><clause id="H0B4D8F04EAB84CE99D175830A84129DB"><enum>(ii)</enum><header>Definitions</header><subclause id="H0E50B8664E2145D79081FE6B57A2CCB3"><enum>(I)</enum><header>Applicable enrollee</header><text>In this subparagraph, the term <term>applicable enrollee</term> means any enrollee in a prescription drug plan or an MA–PD plan, including an enrollee who is a subsidy eligible individual (as defined in paragraph (3) of section 1860D–14(a)), who incurs or is likely to incur a significant percentage of costs for covered part D drugs.</text></subclause><subclause id="H56273DE6420F4850BDA7EDCF1D42F13B"><enum>(II)</enum><header>Significant percentage</header><text>For purposes of subclause (I), the Secretary shall, in the rulemaking under clause (i), define the term <term>significant percentage</term> with respect to a percentage of the annual out-of-pocket threshold specified in paragraph (4)(B) but in no case shall the <quote>significant percentage</quote> be less than 50 percent or more than 100 percent of the annual out-of-pocket threshold.</text></subclause></clause><clause id="H9F7DFC2A33D94A588C8E233BF4564681" commented="no"><enum>(iii)</enum><header>Determination of monthly out-of-pocket cost sharing maximum</header><text>For each month in a plan year in which an applicable enrollee is enrolled in the monthly out-of-pocket cost sharing maximum option, the PDP sponsor or MA organization shall determine a monthly out-of-pocket cost sharing maximum (as defined in clause (v)) for such enrollee.</text></clause><clause id="H8EF27A88A6604764A04D94E49B14F55A"><enum>(iv)</enum><header>Beneficiary monthly payments</header><text>With respect to an applicable enrollee who is enrolled in the monthly out-of-pocket cost sharing maximum option, for each month described in clause (iii), the PDP sponsor or MA organization shall bill such enrollee an amount (not to exceed the monthly out-of-pocket cost sharing maximum) for the out-of-pocket costs of such enrollee in such month.</text></clause><clause id="H925888ECCF964FF78BB0D9ED230FCDE7"><enum>(v)</enum><header>Monthly out-of-pocket cost sharing maximum defined</header><text>In this subparagraph, the term <term>monthly out-of-pocket cost sharing maximum</term> means, with respect to an enrollee—</text><subclause id="H6C900FD8712C47F088403C57760C386E"><enum>(I)</enum><text>for the first month in which this subparagraph applies, an amount determined by calculating—</text><item id="HC4C979C034CE476196E5D86E6BBB4297"><enum>(aa)</enum><text>the annual out-of-pocket threshold specified in paragraph (4)(B) minus the incurred costs of the enrollee as described in paragraph (4)(C); divided by</text></item><item id="HB5AEAC96F35C4E5CBE59B54C613216B3"><enum>(bb)</enum><text>the number of months remaining in the plan year; and</text></item></subclause><subclause id="H924BB3113E694DB8A0F14C8A65FA4C53"><enum>(II)</enum><text>for a subsequent month, an amount determined by calculating—</text><item id="H961BB8230B7E4CAAAF699EA91ACEC460"><enum>(aa)</enum><text>the sum of any remaining out-of-pocket costs owed by the enrollee from a previous month that have not yet been billed to the enrollee and any additional costs incurred by the enrollee; divided by</text></item><item id="HEAEBBB08B98C4DABAD7259F112BFBA45"><enum>(bb)</enum><text>the number of months remaining in the plan year.</text></item></subclause></clause><clause id="H082C91CFCAD24B33A888749F50C3C944"><enum>(vi)</enum><header>Additional requirements</header><text>The following requirements shall apply with respect to the monthly out-of-pocket cost sharing maximum option under this subparagraph:</text><subclause id="HD07E25163E44447C949DEF0DB99627D2"><enum>(I)</enum><header>Secretarial responsibilities</header><text>The Secretary shall provide information to part D eligible individuals on the monthly out-of-pocket cost sharing maximum option through educational materials, including through the notices provided under section 1804(a).</text></subclause><subclause id="H2111C42CE6234262ADAB09447A4F3585"><enum>(II)</enum><header>PDP sponsor and MA organization responsibilities</header><text>Each PDP sponsor offering a prescription drug plan or MA organization offering an MA–PD plan—</text><item id="H199AD65651994B3B8A9030E22D49276F"><enum>(aa)</enum><text>shall not limit the application of the monthly out-of-pocket cost sharing maximum option to certain covered part D drugs; </text></item><item id="H5618040327BF46EDB9C88D38272EB977"><enum>(bb)</enum><text>shall, prior to the plan year, notify prospective enrollees of such option, including the availability of the opt out under clause (i)(II);</text></item><item id="H3DC2CEC1DAA446D7BAE9172837644BB9"><enum>(cc)</enum><text>shall include information on such option in enrollee educational materials, including the availability of the opt out under clause (i)(II);</text></item><item id="H3D6610B18F92470EB63E825B515C75F1"><enum>(dd)</enum><text>shall have in place a mechanism to notify a pharmacy during the plan year when an enrollee incurs out-of-pocket costs with respect to covered part D drugs that make it likely the enrollee is an applicable enrollee;</text></item><item id="HBB1CCE082E124C79BFCBF05B3E8189EA"><enum>(ee)</enum><text>shall provide that a pharmacy, after receiving a notification described in item (dd) with respect to an enrollee, informs the enrollee of such notification;</text></item><item id="H26E9457C8C294112AC396D9662E7A47E"><enum>(ff)</enum><text>shall ensure that the application of this subparagraph has no effect on the amount paid to pharmacies (or the timing of such payments) with respect to covered part D drugs dispensed to the enrollee; and</text></item><item commented="no" id="H66EAB415F66348AAA2B05268305A1819"><enum>(gg)</enum><text>shall have in place a financial reconciliation process to correct inaccuracies in payments made by an enrollee under this subparagraph with respect to covered part D drugs during the plan year.</text></item></subclause><subclause id="H56C5B83CAB3B4D9282C617FEA42D16DD"><enum>(III)</enum><header>Failure to pay amount billed under monthly out-of-pocket cost sharing maximum option</header><text>If an applicable enrollee fails to pay the amount billed for a month as required under this subparagraph, the applicable enrollee's enrollment in the monthly out-of-pocket cost sharing maximum option shall be terminated and the enrollee shall pay the cost-sharing otherwise applicable for any covered part D drugs subsequently dispensed to the enrollee up to the annual out-of-pocket threshold specified in paragraph (4)(B).</text></subclause><subclause id="H94BE29E7B3084005872851133ED5A375"><enum>(IV)</enum><header>Clarification regarding past due amounts</header><text>Nothing in this subparagraph shall be construed as prohibiting a PDP sponsor or an MA organization from billing an enrollee for an amount owed under this subparagraph. </text></subclause><subclause id="H50277D986DF54817AA631F49E3522A8F"><enum>(V)</enum><header>Treatment of unsettled balances</header><text>Any unsettled balances with respect to amounts owed under this subparagraph shall be treated as plan losses and the Secretary shall not be liable for any such balances outside of those assumed as losses estimated in plan bids.</text></subclause></clause></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="H9FFCECC08EED4373930E0E96D8B092D7"><enum>(2)</enum><text>in paragraph (4)—</text><subparagraph id="H8EF8E7D2144B4082BB0E98580EF082F0"><enum>(A)</enum><text>in subparagraph (C), by striking <quote>and subject to subparagraph (F)</quote> and inserting <quote>and subject to subparagraphs (F) and (G)</quote>; and</text></subparagraph><subparagraph id="H5B56D2D5675344BF87E1FC8A23FA4D4F"><enum>(B)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H6CBA23FB376A4DF08E00B62566DBACA4"><subparagraph id="H7ACF88E117D14220A5B3EE15EE632B52"><enum>(G)</enum><header>Inclusion of costs paid under monthly out-of-pocket cost sharing maximum option</header><text>In applying subparagraph (A), with respect to an applicable enrollee who is enrolled in the monthly out-of-pocket cost sharing maximum option described in clause (i)(I) of paragraph (2)(E), costs shall be treated as incurred if such costs are paid by a PDP sponsor or an MA organization under the process provided under such paragraph.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection><subsection id="H741E2732DB9646E68328D3469B53F708"><enum>(b)</enum><header>Application to alternative prescription drug coverage</header><text>Section 1860D–2(c) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-102">42 U.S.C. 1395w–102(c)</external-xref>) is amended by adding at the end the following new paragraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="H4F091603242D40AFA50AA113BE4099D6"><paragraph id="H479BBF9532D04A7C80562CE901E2908B"><enum>(4)</enum><header>Same monthly out-of-pocket cost sharing maximum</header><text>For plan years beginning on or after January 1, 2024, the monthly out-of-pocket cost sharing maximum for applicable enrollees under the process provided under subsection (b)(2)(E) shall apply to such coverage.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><section commented="no" display-inline="no-display-inline" id="H2C6AC69FB07348A8B6F1EE77D9D91CE3" section-type="subsequent-section"><enum>223.</enum><header display-inline="yes-display-inline">Public disclosure of drug discounts and other pharmacy benefit manager (PBM) provisions</header><subsection commented="no" display-inline="no-display-inline" id="H26154072E351485B90BA6D7F957E0E17"><enum>(a)</enum><header display-inline="yes-display-inline">Public disclosure of drug discounts</header><paragraph id="H82097401F54F4DC0A2F6B0C3B10E18C6"><enum>(1)</enum><header>In general</header><text>Section 1150A of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1320b-23">42 U.S.C. 1320b–23</external-xref>) is amended—</text><subparagraph id="H58EF2F23FEAE4C2FAD1FE8D1585CCB3D"><enum>(A)</enum><text>in subsection (c), in the matter preceding paragraph (1), by striking <quote>this section</quote> and inserting <quote>subsection (b)(1)</quote>; and</text></subparagraph><subparagraph id="H1675B6B1D7414D669C1DEC57C1914361"><enum>(B)</enum><text>by adding at the end the following new subsection:</text><quoted-block display-inline="no-display-inline" id="HD341FAECFEDF42FF8B7B813CC89FCA7D" style="OLC"><subsection id="H242FEFDF360147849B4DBCF05F867250"><enum>(e)</enum><header>Public availability of certain information</header><paragraph id="HA1AD9ACE084F4BDD859BD90B110893DA"><enum>(1)</enum><header>In general</header><text>Subject to paragraphs (2) and (3), in order to allow patients and employers to compare PBMs’ ability to negotiate rebates, discounts, and price concessions and the amount of such rebates, discounts, and price concessions that are passed through to plan sponsors, not later than July 1, 2025, the Secretary shall make available on the Internet website of the Department of Health and Human Services the information provided to the Secretary and described in paragraphs (2) and (3) of subsection (b) with respect to each PBM.</text></paragraph><paragraph id="H81E5CAF85D184023AC89715747ADE771"><enum>(2)</enum><header>Lag in data</header><text>The information made available in a plan year under paragraph (1) shall not include information with respect to such plan year or the two preceding plan years.</text></paragraph><paragraph id="H9769701769EE4240B8C5A61330A41006"><enum>(3)</enum><header>Confidentiality</header><text>The Secretary shall ensure that such information is displayed in a manner that prevents the disclosure of information on rebates, discounts, and price concessions with respect to an individual drug or an individual PDP sponsor, MA organization, or qualified health benefits plan.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H636E7D62ED944E579DA6953959465B72"><enum>(2)</enum><header display-inline="yes-display-inline">Effective date</header><text display-inline="yes-display-inline">The amendment made by paragraph (1)(A) shall take effect on January 1, 2025.</text></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H6D4D940AE1AE48B6B5386141AABBABC0"><enum>(b)</enum><header>Plan audit of pharmacy benefit manager data</header><text>Section 1860D–2(d)(3) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-102">42 U.S.C. 1395w–102(d)(3)</external-xref>) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="H7580093F38DA4756B742D9419F132898"><enum>(1)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">Audits</header-in-text>.—To protect</quote> and inserting the following: </text><quoted-block style="OLC" id="H9EC13F06456346BEBB6B47A19D75F77A" display-inline="yes-display-inline"><text><header-in-text level="paragraph" style="OLC">Audits</header-in-text>.—</text><subparagraph id="H3B5D561C0A4C4763881E96A220951847"><enum>(A)</enum><header>Audits of plans by the Secretary</header><text>To protect</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HB3EB936F08CF444387B40302B181E6DE"><enum>(2)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="HF1FF4A9B175147FD8274A31F9F0B623E" style="OLC"><subparagraph commented="no" display-inline="no-display-inline" id="H7A72D3F55677446BB3EA4D2E45151282"><enum>(B)</enum><header>Audits of pharmacy benefit managers by PDP sponsors and MA organizations</header><clause commented="no" display-inline="no-display-inline" id="HEE36CD7E540A4CF1BA6536FD908C646D"><enum>(i)</enum><header>In general</header><text>Beginning January 1, 2025, in order to ensure that—</text><subclause commented="no" display-inline="no-display-inline" id="HE686367467D74102A9028A06F196BADC"><enum>(I)</enum><text>contracting terms between a PDP sponsor offering a prescription drug plan or an MA organization offering an MA–PD plan and its contracted or owned pharmacy benefit manager are met; and</text></subclause><subclause commented="no" display-inline="no-display-inline" id="HB55CC814B0F343338377C42C9D038160"><enum>(II)</enum><text>the PDP sponsor and MA organization can account for the cost of each covered part D drug net of all direct and indirect remuneration,</text></subclause><continuation-text continuation-text-level="clause">the PDP sponsor or MA organization shall conduct financial audits. </continuation-text></clause><clause commented="no" display-inline="no-display-inline" id="HBBB1A675FFD74F13B69CCE70A2DC5DD9"><enum>(ii)</enum><header>Independent third party</header><text>An audit described in clause (i) shall—</text><subclause commented="no" display-inline="no-display-inline" id="H1D1F4C5903784ABCB42BFF0F024B280E"><enum>(I)</enum><text>be conducted by an independent third party; and</text></subclause><subclause commented="no" display-inline="no-display-inline" id="H609BC4A2F672495EA57087A48460A28A"><enum>(II)</enum><text>account and reconcile flows of funds that determine the net cost of covered part D drugs, including direct and indirect remuneration from drug manufacturers and pharmacies or provided to pharmacies.</text></subclause></clause><clause id="H1B6B4CE537BE4E17B17CE1465B273FA5"><enum>(iii)</enum><header>Rebate agreements</header><text>A PDP sponsor and an MA organization shall require pharmacy benefit managers to make rebate contracts with drug manufacturers made on their behalf available under audits described in clause (i).</text></clause><clause id="H552D4D8A7ABD48039DB1C3023696C2F9"><enum>(iv)</enum><header>Confidentiality agreements</header><text>Audits described in clause (i) shall be subject to confidentiality agreements to prevent, except as required under clause (vii), the redisclosure of data transmitted under the audit.</text></clause><clause id="HCB3FA93721DD449D8C7D56EA246B1D29"><enum>(v)</enum><header>Frequency</header><text>A financial audit under clause (i) shall be conducted periodically (but in no case less frequently than once every 2 years).</text></clause><clause id="H7532BD09F1C342C483D684BAC8017F0E"><enum>(vi)</enum><header>Timeframe for PBM to provide information</header><text>A PDP sponsor and an MA organization shall require that a pharmacy benefit manager that is being audited under clause (i) provide (as part of their contracting agreement) the requested information to the independent third party conducting the audit within 45 days of the date of the request.</text></clause><clause id="H697BBFF6CB5049D0A9AC4F6CDE7DFDE8"><enum>(vii)</enum><header>Submission of audit reports to the Secretary</header><subclause id="H42E04131DA654E0FB1A446A9302D8A64"><enum>(I)</enum><header>In general</header><text>A PDP sponsor and an MA organization shall submit to the Secretary the final report on any audit conducted under clause (i) within 30 days of the PDP sponsor or MA organization receiving the report from the independent third party conducting the audit.</text></subclause><subclause id="H04C5D9440C804B13B3AAAA1693BB4526"><enum>(II)</enum><header>Review</header><text>The Secretary shall review final reports submitted under clause (i) to determine the extent to which the goals specified in subclauses (I) and (II) of subparagraph (B)(i) are met.</text></subclause><subclause id="H0B19366B86EA47BD9D6C4D67EE0D0D30"><enum>(III)</enum><header>Confidentiality</header><text>Notwithstanding any other provision of law, information disclosed in a report submitted under clause (i) related to the net cost of a covered part D drug is confidential and shall not be disclosed by the Secretary or a Medicare contractor.</text></subclause></clause><clause id="H9FD45D80BEA947B3A8C8C9FAEBF44856"><enum>(viii)</enum><header>Notice of noncompliance</header><text>A PDP sponsor and an MA organization shall notify the Secretary if any pharmacy benefit manager is not complying with requests for access to information required under an audit under clause (i).</text></clause><clause id="H2A6282F82D34496F84BC685294447691"><enum>(ix)</enum><header>Civil monetary penalties</header><subclause id="HB3DB21FB12E1463B8574FC5DF4C10E6B"><enum>(I)</enum><header>In general</header><text>Subject to subclause (II), if the Secretary determines that a PDP sponsor or an MA organization has failed to conduct an audit under clause (i), the Secretary may impose a civil monetary penalty of not more than $10,000 for each day of such noncompliance.</text></subclause><subclause id="H6D8433BE64ED4B9D87C54BF25D701FA5"><enum>(II)</enum><header>Procedure</header><text>The provisions of section 1128A, other than subsections (a) and (b) and the first sentence of subsection (c)(1) of such section, shall apply to civil monetary penalties under this clause in the same manner as such provisions apply to a penalty or proceeding under section 1128A.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H151AF9399CFB46A7821134A615400D9F"><enum>(c)</enum><header>Disclosure to pharmacy of post-Point-of-Sale pharmacy price concessions and incentive payments</header><text>Section 1860D–2(d)(2) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-102">42 U.S.C. 1395w–102(d)(2)</external-xref>) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="HAF97BB6D1F2347F391A221DCCF101109"><enum>(1)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">Disclosure</header-in-text>.—A PDP sponsor</quote> and inserting the following: </text><quoted-block style="OLC" id="HD572264534BC40518C839107824B2173" display-inline="yes-display-inline"><text><header-in-text level="paragraph" style="OLC">Disclosure</header-in-text>.—</text><subparagraph id="HF39344B82FEF4FD39FD02EAD00E4111F"><enum>(A)</enum><header>To the Secretary</header><text>A PDP sponsor</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HEC4F5BB347224F7ABEC0BAE82A262001"><enum>(2)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="HF64858252CA4496BBF82569B6ACBCA09" style="OLC"><subparagraph commented="no" display-inline="no-display-inline" id="HAB816316051C425C885EDA5FB83B9C2B"><enum>(B)</enum><header>To pharmacies</header><clause commented="no" display-inline="no-display-inline" id="H61F544A939AE4534A4192A8281457430"><enum>(i)</enum><header>In general</header><text>For plan year 2025 and subsequent plan years, a PDP sponsor offering a prescription drug plan and an MA organization offering an MA–PD plan shall report any pharmacy price concession or incentive payment that occurs with respect to a pharmacy after payment for covered part D drugs at the point-of-sale, including by an intermediary organization with which a PDP sponsor or MA organization has contracted, to the pharmacy.</text></clause><clause commented="no" display-inline="no-display-inline" id="HD8E7B58206F44E94BFFD46ED715801F1"><enum>(ii)</enum><header>Timing</header><text>The reporting of price concessions and incentive payments to a pharmacy under clause (i) shall be made on a periodic basis (but in no case less frequently than annually).</text></clause><clause commented="no" display-inline="no-display-inline" id="HFCCFA31432FA4BC29D6674F0FABFF1A1"><enum>(iii)</enum><header>Claim level</header><text>The reporting of price concessions and incentive payments to a pharmacy under clause (i) shall be at the claim level or approximated at the claim level if the price concession or incentive payment was applied at a level other than at the claim level.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H0835866D08B74E7189CBC85363E8BDC4"><enum>(d)</enum><header>Disclosure of P&amp;T Committee conflicts of interest</header><paragraph commented="no" display-inline="no-display-inline" id="HA09C5FA245074AB5AE61B227BCC88A4D"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Section 1860D–4(b)(3)(A) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-104">42 U.S.C. 1395w–104(b)(3)(A)</external-xref>) is amended by adding at the end the following new clause:</text><quoted-block display-inline="no-display-inline" id="HCC9D0985063E4483B8705373B8182ED9" style="OLC"><clause commented="no" display-inline="no-display-inline" id="H13E6D3611A2241C19F2EB881E60FD3B2"><enum>(iii)</enum><header>Disclosure of conflicts of interest</header><text>With respect to plan year 2025 and subsequent plan years, a PDP sponsor of a prescription drug plan and an MA organization offering an MA–PD plan shall, as part of its bid submission under section 1860D–11(b), provide the Secretary with a completed statement of financial conflicts of interest, including with manufacturers, from each member of any pharmacy and therapeutic committee used by the sponsor or organization pursuant to this paragraph.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H1210F0A9466246CEAB32057934FFCEA1"><enum>(2)</enum><header>Inclusion in bid</header><text>Section 1860D–11(b)(2) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-111">42 U.S.C. 1395w–111(b)(2)</external-xref>) is amended—</text><subparagraph commented="no" display-inline="no-display-inline" id="H1687FCBDA8A24414AB344E2BFAAFA6CA"><enum>(A)</enum><text>by redesignating subparagraph (F) as subparagraph (G); and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H99A57FFC915C453486A51E68FF40D807"><enum>(B)</enum><text>by inserting after subparagraph (E) the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="HD984838E137549B9A93266622A329C27" style="OLC"><subparagraph commented="no" display-inline="no-display-inline" id="HDE2DFF38DC5247A08E1E90A3C4695D6A"><enum>(F)</enum><header>P&amp;T Committee conflicts of interest</header><text>The information required to be disclosed under section 1860D–4(b)(3)(A)(iii).</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HFE561B2A7A77446DA9353B45E4E6D46A"><enum>(e)</enum><header>Information on direct and indirect remuneration required To be included in bid</header><text>Section 1860D–11(b) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-111">42 U.S.C. 1395w–111(b)</external-xref>) is amended—</text><paragraph id="HDC365DD01A0149928D3A661452468CEA"><enum>(1)</enum><text>in paragraph (1), by adding at the end the following new sentence: <quote>With respect to actual amounts of direct and indirect remuneration submitted pursuant to clause (v) of paragraph (2), such amounts shall be consistent with data reported to the Secretary in a prior year.</quote>; and</text></paragraph><paragraph id="HF093E5AAB97843D18889FD35DFAE9B3E"><enum>(2)</enum><text>in paragraph (2)(C)—</text><subparagraph id="H2F25FF6014A64ABFAD7B003928E2A92B"><enum>(A)</enum><text>in clause (iii), by striking <quote>and</quote> at the end;</text></subparagraph><subparagraph id="HE9FCCFF720834AACB592EE573920F696"><enum>(B)</enum><text>in clause (iv), by striking the period at the end and inserting the following: <quote>, and, with respect to plan year 2025 and subsequent plan years, actual and projected administrative expenses assumed in the bid, categorized by the type of such expense, including actual and projected price concessions retained by a pharmacy benefit manager; and</quote>; and</text></subparagraph><subparagraph id="H046EA7831A114CDA863D61FD13BD093F"><enum>(C)</enum><text>by adding at the end the following new clause:</text><quoted-block display-inline="no-display-inline" id="H5607BC54A854403D9E0FE848A48757C8" style="OLC"><clause id="H9894C4287A2140829261F62CBE6C17F2"><enum>(v)</enum><text>with respect to plan year 2025 and subsequent plan years, actual and projected direct and indirect remuneration, categorized as received from each of the following:</text><subclause id="H4723C72001964F008AFE2BDB43311996"><enum>(I)</enum><text>A pharmacy.</text></subclause><subclause id="HDBE5F31160BA442A914540A652BB7C0E"><enum>(II)</enum><text>A manufacturer.</text></subclause><subclause id="H4BEF0AC498704B2583B8C26A25642D7D"><enum>(III)</enum><text>A pharmacy benefit manager.</text></subclause><subclause commented="no" id="HD40D9A1EAD454DD5809202C2503675D6"><enum>(IV)</enum><text>Other entities, as determined by the Secretary.</text></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection></section><section id="H794E5AAA1F584E268691DC4B3FA1B30D"><enum>224.</enum><header>Public disclosure of direct and indirect remuneration review and audit results</header><text display-inline="no-display-inline">Section 1860D–42 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-152">42 U.S.C. 1395w–152</external-xref>) is amended by adding at the end the following new subsection:</text><quoted-block display-inline="no-display-inline" id="H0B079BB8C43546B19902D10493F67228" style="OLC"><subsection id="H75C66FF8A2C64814B447AB043048DD35"><enum>(e)</enum><header>Public disclosure of direct and indirect remuneration review and financial audit results</header><paragraph id="HBB482A00B0EA4E5BA8751E9645F17B3A"><enum>(1)</enum><header>DIR review results</header><subparagraph id="HCD65A38748A9430A933F809D9851D6BA"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subparagraph (B), in 2023 and each subsequent year, the Secretary shall make available to the public on the Internet website of the Centers for Medicare &amp; Medicaid Services information on discrepancies related to summary and detailed DIR reports submitted by PDP sponsors pursuant to section 1860D–15 across all prescription drug plans based on the most recent data available. Information made available under this subparagraph shall include the following:</text><clause id="HA35DC9401E594109B6D9DAE1A62AD8A3"><enum>(i)</enum><text display-inline="yes-display-inline">The number of potential errors identified by the Secretary for PDP sponsors to review.</text></clause><clause id="HB66A9DE1368A4086AAB549FD39B66F95"><enum>(ii)</enum><text display-inline="yes-display-inline">The extent to which PDP sponsors resubmitted DIR reports to make changes for previous contract years.</text></clause><clause id="H7DF9F017916E497EA65CF5781C2795B5"><enum>(iii)</enum><text display-inline="yes-display-inline">The extent to which resubmitted DIR reports resulted in an increase or decrease in DIR in a previous contract year.</text></clause></subparagraph><subparagraph id="HB52B6F069D6140318050F3A4ADDF109B"><enum>(B)</enum><header>Exclusion of certain submissions in calculation</header><text display-inline="yes-display-inline">The Secretary shall exclude any information in DIR reports submitted with respect to PACE programs under section 1894 (pursuant to section 1860D–21(f)) and qualified retiree prescription drug plans (as defined in section 1860D–22(a)(2)) from the information that is made available to the public under subparagraph (A).</text></subparagraph></paragraph><paragraph id="H8EBE61588327456C8923E4CD8E4E868E"><enum>(2)</enum><header>Financial audit results</header><text display-inline="yes-display-inline">In 2023 and each subsequent year, the Secretary shall make available to the public on the Internet website of the Centers for Medicare &amp; Medicaid Services the results of DIR audits required under section 1860D–12(b)(3)(C). Information made available under this paragraph shall include the following:</text><subparagraph id="H3DA3D4D3AC0643D39BD969E560A02EDD"><enum>(A)</enum><text display-inline="yes-display-inline">With respect to the year, the number of PDP sponsors that received each of the following:</text><clause id="H8E11CB37EA1B4C30A30CCE5F39F673A5"><enum>(i)</enum><text display-inline="yes-display-inline">A notice of observations or findings that required the sponsor to make DIR report corrections.</text></clause><clause id="H7D915F22A23A409189DE47DAEBE72E7B"><enum>(ii)</enum><text display-inline="yes-display-inline">An unqualified audit opinion that renders the audit closed.</text></clause><clause id="H1936F2CBD8D647F59691D6F2AED1D0C6"><enum>(iii)</enum><text display-inline="yes-display-inline">A qualified audit opinion that requires the sponsor to submit a corrective action plan to the Secretary.</text></clause><clause id="HC31F2D1058564B50A60012F347F861E1"><enum>(iv)</enum><text display-inline="yes-display-inline">An adverse opinion, with a description of the types of actions that the Secretary takes when issuing an adverse opinion.</text></clause></subparagraph><subparagraph id="HAFFE1D2BE78945D7B481B250FB908166"><enum>(B)</enum><text>With respect to a preceding year:</text><clause id="HBC2F1E5EAD834B64A256DE4B77EA2E7D"><enum>(i)</enum><text display-inline="yes-display-inline">The number of PDP sponsors that reopened a previously closed reconciliation as a result of an audit, including as a result of DIR changes.</text></clause><clause id="H22D2EA22878F4AC2AA14E74541B49260"><enum>(ii)</enum><text display-inline="yes-display-inline">The extent to which the Secretary recouped an overpayment or made an underpayment as a result of a reopening of a previously closed reconciliation.</text></clause></subparagraph></paragraph><paragraph id="H4EE3E9A61FDA480D8278C5EB5BFD09FE"><enum>(3)</enum><header>Definition of DIR</header><text>For purposes of this subsection, the term <term>DIR</term> means direct and indirect remuneration as defined in section 423.308 of title 42, Code of Federal Regulations, or any successor regulation.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H4731E40E665E47D1876A2E6046FEB133"><enum>225.</enum><header>Improvements to provision of parts A and B claims data to prescription drug plans</header><subsection id="H77FD3B504A0840E990837D082CEBA11F"><enum>(a)</enum><header>Data use</header><paragraph id="HA9CB628F9B924E07974767080F6DB98A"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (6) of section 1860D–4(c) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-104">42 U.S.C. 1395w–104(c)</external-xref>), as added by section 50354 of division E of the Bipartisan Budget Act of 2018 (<external-xref legal-doc="public-law" parsable-cite="pl/115/123">Public Law 115–123</external-xref>), relating to providing prescription drug plans with parts A and B claims data to promote the appropriate use of medications and improve health outcomes, is amended—</text><subparagraph commented="no" id="H85D1E980829C4600ADE7C5C12559E247"><enum>(A)</enum><text>in subparagraph (B)—</text><clause commented="no" id="H25A00C6BAEEB46CCA1BB76191803D423"><enum>(i)</enum><text>by redesignating clauses (i), (ii), and (iii) as subclauses (I), (II), and (III), respectively, and moving such subclauses 2 ems to the right;</text></clause><clause commented="no" id="HCC6228F48AE24579BD611FB8C906B116"><enum>(ii)</enum><text>by striking <quote><header-in-text level="subparagraph" style="OLC">Purposes</header-in-text>.—A PDP sponsor</quote> and inserting </text><quoted-block style="OLC" id="HC13A475F9E6B44958A036DF30D6BA63D" display-inline="yes-display-inline"><text><header-in-text level="subparagraph" style="OLC">Purposes.</header-in-text>—</text><clause id="HED5905658C7C4039812E7F4B80D366B1"><enum>(i)</enum><header>In general</header><text>A PDP sponsor.</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></clause><clause commented="no" id="H4FCBF692EDAC44B286034C62F852CDAF"><enum>(iii)</enum><text>by adding at the end the following new clause:</text><quoted-block display-inline="no-display-inline" id="H5EC0B6CC80B94878935AA8972CF6D9FF" style="OLC"><clause commented="no" id="H3684EA538E3D494D9E0972A52027F9C7"><enum>(ii)</enum><header>Clarification</header><text>The limitation on data use under subparagraph (C)(i) shall not apply to the extent that the PDP sponsor is using the data provided to carry out any of the purposes described in clause (i).</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></clause></subparagraph><subparagraph commented="no" id="H1979556E58E24EB2AD9ECDDEA4FB077E"><enum>(B)</enum><text>in subparagraph (C)(i), by striking <quote>To inform</quote> and inserting <quote>Subject to subparagraph (B)(ii), to inform</quote>.</text></subparagraph></paragraph><paragraph commented="no" id="H030EA10F933240D38172ED25F0B0D16B"><enum>(2)</enum><header>Effective date</header><text>The amendments made by this subsection shall apply to plan years beginning on or after January 1, 2025.</text></paragraph></subsection><subsection commented="no" id="H74D873506D6143ACABBF6AE1333D661B"><enum>(b)</enum><header>Manner of provision</header><text>Subparagraph (D) of such paragraph (6) is amended—</text><paragraph id="H244855CC247A492BA017FEBCC9759A99"><enum>(1)</enum><text>by striking <quote><header-in-text level="subparagraph" style="OLC">described</header-in-text>.—The data described in this clause</quote> and inserting </text><quoted-block style="OLC" id="H9C5EC91592644C099F488C5495D9DA42" display-inline="yes-display-inline"><text><header-in-text level="subparagraph" style="OLC">described</header-in-text>.—</text><clause id="HD7AD2A8A5A4741D98C96BDAEAADFA943"><enum>(i)</enum><header>In general</header><text>The data described in this subparagraph</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H55A7FFC504A44FEE9DEC8901124F2312"><enum>(2)</enum><text>by adding at the end the following new clause:</text><quoted-block display-inline="no-display-inline" id="H15F618FB15A949AAB499A16C9BACF3AE" style="OLC"><clause id="H0638F4AD845243048874A4059B9515A1"><enum>(ii)</enum><header>Manner of provision</header><subclause id="HFD333B7FC3214E58980938F05EDD676C"><enum>(I)</enum><header>In general</header><text>Such data may be provided pursuant to this paragraph in the same manner as data under the Part D Enhanced Medication Therapy Management model tested under section 1115A, through Application Programming Interface, or in another manner as determined by the Secretary.</text></subclause><subclause id="HD6F48C7B14AB4DD68A42BF44A9C9E377"><enum>(II)</enum><header>Implementation</header><text>Notwithstanding any other provision of law, the Secretary may implement this clause by program instruction or otherwise.</text></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H8446427348C247FF9215E5A048AA14C5"><enum>(c)</enum><header>Technical correction</header><text>Such paragraph (6) is redesignated as paragraph (7).</text></subsection></section><section id="H2267598484CD4C09A8AC285531652209"><enum>226.</enum><header>Medicare part D rebate by manufacturers</header><subsection id="H9F93D412C83E4AC492C6FCD7375C53F2"><enum>(a)</enum><header>In general</header><text>Part D of title XVIII of the Social Security Act is amended by inserting after section 1860D–14A (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-114a">42 U.S.C. 1395w–114a</external-xref>) the following new section:</text><quoted-block id="H153B18F9A18E4D469EE414E2BB693F87" style="OLC"><section id="HD30CB379D0BB44B98443729EFF367885"><enum>1860D–14B.</enum><header>Manufacturer rebate for certain drugs with prices increasing faster than inflation</header><subsection id="H0DACB1B7C1194342A00A30F76082A4E2"><enum>(a)</enum><header>In general</header><paragraph id="HD89240959ED7499EB37BB4CFBD741887"><enum>(1)</enum><header>In general</header><text>Subject to the provisions of this section, in order for coverage to be available under this part for a part D rebatable drug (as defined in subsection (h)(1)) of a manufacturer (as defined in section 1927(k)(5)) dispensed during an applicable year, the manufacturer must have entered into and have in effect an agreement described in subsection (b).</text></paragraph><paragraph id="H14EF26AB7D8A4917816592794DF74DF8"><enum>(2)</enum><header>Authorizing coverage for drugs not covered under agreements</header><text>Paragraph (1) shall not apply to the dispensing of a covered part D drug if—</text><subparagraph id="HFDA36680054747718FF696E043A0ED12"><enum>(A)</enum><text>the Secretary has made a determination that the availability of the drug is essential to the health of beneficiaries under this part; or</text></subparagraph><subparagraph id="H4521199A1A66483BA0DF7B8DC5EE10EB"><enum>(B)</enum><text>the Secretary determines that in the period beginning on January 1, 2025, and ending on December 31, 2025, there were extenuating circumstances.</text></subparagraph></paragraph><paragraph id="H2394BB723D2C49129126EB2FDE882082"><enum>(3)</enum><header>Applicable year</header><text>For purposes of this section the term <quote>applicable year</quote> means a year beginning with 2025.</text></paragraph></subsection><subsection id="H9E374B528DBC4AB0B63AD2F169722F22"><enum>(b)</enum><header>Agreements</header><paragraph id="H44354A3FCA4C4F079A19C49E532A9153"><enum>(1)</enum><header>Terms of agreement</header><text>An agreement described in this subsection, with respect to a manufacturer of a part D rebatable drug, is an agreement under which the following shall apply:</text><subparagraph id="H419494A12B7240E3B4DB476C3E845A22"><enum>(A)</enum><header>Secretarial provision of information</header><text>Not later than 9 months after the end of each applicable year with respect to which the agreement is in effect, the Secretary, for each part D rebatable drug of the manufacturer, shall report to the manufacturer the following for such year:</text><clause id="H50B6E58CE7EB41A0968F06713D872BD4"><enum>(i)</enum><text>Information on the total number of units (as defined in subsection (h)(2)) for each dosage form and strength with respect to such part D rebatable drug and year.</text></clause><clause id="HC7B2CBB85BE345D6A1D83F25BB82CAF6"><enum>(ii)</enum><text>Information on the amount (if any) of the excess average manufacturer price increase described in subsection (c)(1)(B) for each dosage form and strength with respect to such drug and year.</text></clause><clause id="HA5A700A368AD4E21B43742BF3D6A9494"><enum>(iii)</enum><text>The rebate amount specified under subsection (c) for each dosage form and strength with respect to such drug and year.</text></clause></subparagraph><subparagraph id="H62011C6A9A6E406FB3269D600222B6DF"><enum>(B)</enum><header>Manufacturer requirements</header><text>For each applicable year with respect to which the agreement is in effect, the manufacturer of the part D rebatable drug, for each dosage form and strength with respect to such drug, not later than 30 days after the date of receipt from the Secretary of the information described in subparagraph (A) for such year, shall provide to the Secretary a rebate that is equal to the amount specified in subsection (c) for such dosage form and strength with respect to such drug for such year.</text></subparagraph></paragraph><paragraph id="H18B656F74C3A4FA090F2E2BC4B4995C4"><enum>(2)</enum><header>Length of agreement</header><subparagraph id="H52D36E302C434B988818FA1B847D34F3"><enum>(A)</enum><header>In general</header><text>An agreement under this section, with respect to a part D rebatable drug, shall be effective for an initial period of not less than one year and shall be automatically renewed for a period of not less than one year unless terminated under subparagraph (B).</text></subparagraph><subparagraph id="HEC57E1827C97483C97F6A3CE32FCB715"><enum>(B)</enum><header>Termination</header><clause id="H2929968A2485461C9C4257AF05749490"><enum>(i)</enum><header>By secretary</header><text>The Secretary may provide for termination of an agreement under this section for 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 of such termination. The Secretary shall provide, upon request, a manufacturer with a hearing concerning such a termination, but such hearing shall not delay the effective date of the termination.</text></clause><clause id="H35A200ACEA724356B8FE7CD07E4B335B"><enum>(ii)</enum><header>By a manufacturer</header><text>A manufacturer may terminate an agreement under this section for any reason. Any such termination shall be effective, with respect to a plan year—</text><subclause id="H908075FBB49F48C2AD250D5798D9E5B6"><enum>(I)</enum><text>if the termination occurs before January 30 of the plan year, as of the day after the end of the plan year; and</text></subclause><subclause id="HBB3E04FE68944D5AA4AF78F1AE3BB3AD"><enum>(II)</enum><text>if the termination occurs on or after January 30 of the plan year, as of the day after the end of the succeeding plan year.</text></subclause></clause></subparagraph><subparagraph id="HFECE467F872B4B8596D588D32A201D13"><enum>(C)</enum><header>Effectiveness of termination</header><text>Any termination under this paragraph shall not affect rebates due under the agreement under this section before the effective date of its termination.</text></subparagraph><subparagraph id="H974B5FFC076B4C1E81B9297786B4531F"><enum>(D)</enum><header>Delay before reentry</header><text>In the case of any agreement under this section with a manufacturer that is terminated in a plan year, the Secretary may not enter into another such agreement with the manufacturer (or a successor manufacturer) before the subsequent plan year, unless the Secretary finds good cause for an earlier reinstatement of such an agreement.</text></subparagraph></paragraph></subsection><subsection id="HED0E0481B28545F682554495223B91B7"><enum>(c)</enum><header>Rebate amount</header><paragraph id="H9A82BC55E18144F7859F980CB20B5BE5"><enum>(1)</enum><header>In general</header><text>For purposes of this section, the amount specified in this subsection for a dosage form and strength with respect to a part D rebatable drug and applicable year is, subject to subparagraphs (B) and (C) of paragraph (5), the amount equal to the product of—</text><subparagraph id="H5214B060916D4BDB9C23F43A4601D6A9"><enum>(A)</enum><text>the total number of units of such dosage form and strength with respect to such part D rebatable drug and year; and</text></subparagraph><subparagraph id="H75146EB390634D43820CC680BC12C8C3"><enum>(B)</enum><text>the amount (if any) by which—</text><clause id="HE0060843E52E48E1904C768110728091"><enum>(i)</enum><text>the annual manufacturer price (as determined in paragraph (2)) paid for such dosage form and strength with respect to such part D rebatable drug for the year; exceeds</text></clause><clause id="H1083EC670E944DA3963D424A0DEA4052"><enum>(ii)</enum><text>the inflation-adjusted payment amount determined under paragraph (3) for such dosage form and strength with respect to such part D rebatable drug for the year.</text></clause></subparagraph></paragraph><paragraph id="H51FAF2B2D21A4B68A6F8F16816B1E378"><enum>(2)</enum><header>Determination of annual manufacturer price</header><text>The annual manufacturer price determined under this paragraph for a dosage form and strength, with respect to a part D rebatable drug and an applicable year, is the sum of the products of—</text><subparagraph id="H428F31AE048D4098AC3E02B32BA71DC7"><enum>(A)</enum><text>the average manufacturer price (as defined in subsection (h)(6)) of such dosage form and strength, as calculated for a unit of such drug, with respect to each of the calendar quarters of such year; and</text></subparagraph><subparagraph id="H3E0DA4AF42B549A0ABD9559319F9439A"><enum>(B)</enum><text>the ratio of—</text><clause id="H1835F3016F98473DB4D55312FF20FCEA"><enum>(i)</enum><text>the total number of units of such dosage form and strength dispensed during each such calendar quarter of such year; to</text></clause><clause id="H4F3E0E60D9DB4137A28E74FDF78A0FF0"><enum>(ii)</enum><text>the total number of units of such dosage form and strength dispensed during such year.</text></clause></subparagraph></paragraph><paragraph id="H456EF352E77F4B5B97F7A4F03FAD718B"><enum>(3)</enum><header>Determination of inflation-adjusted payment amount</header><text>The inflation-adjusted payment amount determined under this paragraph for a dosage form and strength with respect to a part D rebatable drug for an applicable year, subject to subparagraphs (A) and (D) of paragraph (5), is—</text><subparagraph id="HB5097CD0E5EF42BC86879638BD39CE3A"><enum>(A)</enum><text>the benchmark year manufacturer price determined under paragraph (4) for such dosage form and strength with respect to such drug and an applicable year; increased by</text></subparagraph><subparagraph id="H4FAD0E6CD2BB47EF903A03F4DC7DCC9F"><enum>(B)</enum><text>the percentage by which the applicable year CPI–U (as defined in subsection (h)(5)) for the applicable year exceeds the benchmark period CPI–U (as defined in subsection (h)(4)).</text></subparagraph></paragraph><paragraph id="H32AD66A078EB4CAB84D7FBACB0600318"><enum>(4)</enum><header>Determination of benchmark year manufacturer price</header><text>The benchmark year manufacturer price determined under this paragraph for a dosage form and strength, with respect to a part D rebatable drug and an applicable year, is the sum of the products of—</text><subparagraph id="H5BA45492CF6D41828A606D1964FC757D"><enum>(A)</enum><text>the average manufacturer price (as defined in subsection (h)(6)) of such dosage form and strength, as calculated for a unit of such drug, with respect to each of the calendar quarters of the payment amount benchmark year (as defined in subsection (h)(3)); and</text></subparagraph><subparagraph id="H9EDA274C9598402EA67DD0D902D9C164"><enum>(B)</enum><text>the ratio of—</text><clause id="HDB05ACA023BA43AD9BD9267602B26479"><enum>(i)</enum><text>the total number of units of such dosage form and strength dispensed during each such calendar quarter of such payment amount benchmark year; to</text></clause><clause id="H98DC9FD95BB043008D4DCB07B5C95A0D"><enum>(ii)</enum><text>the total number of units of such dosage form and strength dispensed during such payment amount benchmark year.</text></clause></subparagraph></paragraph><paragraph id="HF6CE7DA62EB14FEEBB89B44AC89D8F2A"><enum>(5)</enum><header>Special treatment of certain drugs and exemption</header><subparagraph id="HC110033038FD438ABB501E1C0CF73A02"><enum>(A)</enum><header>Subsequently approved drugs</header><text>In the case of a part D rebatable drug first approved or licensed by the Food and Drug Administration after January 1, 2016, subparagraphs (A) and (B) of paragraph (4) shall be applied as if the term <quote>payment amount benchmark year</quote> were defined under subsection (h)(3) as the first calendar year beginning after the day on which the drug was first marketed by any manufacturer and subparagraph (B) of paragraph (3) shall be applied as if the term <quote>benchmark period CPI–U</quote> were defined under subsection (h)(4) as if the reference to <quote>January 2016</quote> under such subsection were a reference to <quote>January of the first year beginning after the date on which the drug was first marketed by any manufacturer</quote>.</text></subparagraph><subparagraph id="H329F0972633C4B6F98BF923D107A9E8A"><enum>(B)</enum><header>Exemption for shortages</header><text>The Secretary may reduce or waive the rebate under paragraph (1) with respect to a part D rebatable drug that is described as currently in shortage on the shortage list in effect under section 506E of the Federal Food, Drug, and Cosmetic Act or in the case of other exigent circumstances, as determined by the Secretary.</text></subparagraph><subparagraph id="HCAA2F5C7714047059F78859139F0D978"><enum>(C)</enum><header>Treatment of new formulations</header><clause id="HF0D301E4A7234506BCB6A4F688B570E7"><enum>(i)</enum><header>In general</header><text>In the case of a part D rebatable drug that is a line extension of a part D rebatable drug that is an oral solid dosage form, the Secretary shall establish a formula for determining the amount specified in this subsection with respect to such part D rebatable drug and an applicable year with consideration of the original part D rebatable drug.</text></clause><clause id="H723E00E7141B4AE49CAA200532E3310D"><enum>(ii)</enum><header>Line extension defined</header><text>In this subparagraph, the term <quote>line extension</quote> means, with respect to a part D rebatable drug, a new formulation of the drug (as determined by the Secretary), such as an extended release formulation, but does not include an abuse-deterrent formulation of the drug (as determined by the Secretary), regardless of whether such abuse-deterrent formulation is an extended release formulation.</text></clause></subparagraph><subparagraph id="H87C39D3439C847ED9061A07413986D0A"><enum>(D)</enum><header>Selected drugs</header><text>In the case of a part D rebatable drug that is a selected drug (as defined in section 1192(c)) for a price applicability period (as defined in section 1191(b)(2))—</text><clause id="H0069E1483EA943E8A7EA4AAC6A5720F9"><enum>(i)</enum><text>for plan years during such period for which a maximum fair price (as defined in section 1191(c)(2)) for such drug has been determined and is applied under part E of title XI, the rebate under subsection (b)(1)(B) shall be waived; and</text></clause><clause id="HDFA4EF4EBF5D4EB2BA8A13C17F9E0490"><enum>(ii)</enum><text>in the case such drug is determined (pursuant to such section 1192(c)) to no longer be a selected drug, for each applicable year beginning after the price applicability period with respect to such drug, subparagraphs (A) and (B) of paragraph (4) shall be applied as if the term <quote>payment amount benchmark year</quote> were defined under subsection (h)(3) as the last year beginning during such price applicability period with respect to such selected drug and subparagraph (B) of paragraph (3) shall be applied as if the term <quote>benchmark period CPI–U</quote> were defined under subsection (h)(4) as if the reference to <quote>January 2016</quote> under such subsection were a reference to January of the last year beginning during such price applicability period with respect to such drug.</text></clause></subparagraph></paragraph></subsection><subsection id="H1A4F86FA178140CD8D874FF74AC107B7"><enum>(d)</enum><header>Rebate deposits</header><text>Amounts paid as rebates under subsection (c) shall be deposited into the Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund established under section 1841.</text></subsection><subsection id="H570A3D7759734D1BBACE52D144FF89CD"><enum>(e)</enum><header>Information</header><text>For purposes of carrying out this section, the Secretary shall use information submitted by manufacturers under section 1927(b)(3).</text></subsection><subsection id="H2D5C1258850246FFAAB88E3C4D3576D0"><enum>(f)</enum><header>Civil money penalty</header><text>In the case of a manufacturer of a part D rebatable drug with an agreement in effect under this section who has failed to comply with the terms of the agreement under subsection (b)(1)(B) with respect to such drug for an applicable year, the Secretary may impose a civil money penalty on such manufacturer in an amount equal to 125 percent of the amount specified in subsection (c) for such drug for such year. 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 subsection in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).</text></subsection><subsection id="HA7D90C3E98AB476385A3E9A5846980CB"><enum>(g)</enum><header>Judicial review</header><text>There shall be no judicial review of the following:</text><paragraph id="H101A1D31025E4BF7A4DF667F4AA11393"><enum>(1)</enum><text>The determination of units under this section.</text></paragraph><paragraph id="HA553AAEA83AC4036A90D9FEF6EB38404"><enum>(2)</enum><text>The determination of whether a drug is a part D rebatable drug under this section.</text></paragraph><paragraph id="H867A1CE37A354533AC95F3808E86DFE1"><enum>(3)</enum><text>The calculation of the rebate amount under this section.</text></paragraph></subsection><subsection id="HEE3A2915E832473389D4F3A8F228D88D"><enum>(h)</enum><header>Definitions</header><text>In this section:</text><paragraph id="H8283336363214C91BCCB7073659F2F75"><enum>(1)</enum><header>Part D rebatable drug defined</header><subparagraph id="HD6161A2BF4B949D6AFC834B67721992C"><enum>(A)</enum><header>In general</header><text>The term <quote>part D rebatable drug</quote> means a drug or biological that would (without application of this section) be a covered part D drug, except such term shall, with respect to an applicable year, not include such a drug or biological if the average annual total cost under this part for such year per individual who uses such a drug or biological, as determined by the Secretary, is less than, subject to subparagraph (B), $100, as determined by the Secretary using the most recent data available or, if data is not available, as estimated by the Secretary.</text></subparagraph><subparagraph id="H62ED9D2BB09B4D108E0B5459FD841166"><enum>(B)</enum><header>Increase</header><text>The dollar amount applied under subparagraph (A)—</text><clause id="H250EA19199E747428EA2B950B2415B55"><enum>(i)</enum><text>for 2026, shall be the dollar amount specified under such subparagraph for 2025, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period beginning with January of 2025; and</text></clause><clause id="H8027D9E6CFF94C78B0441D8AE18E8C71"><enum>(ii)</enum><text>for a subsequent year, shall be the dollar amount specified in this subparagraph for the previous year, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period beginning with January of the previous year.</text></clause><continuation-text continuation-text-level="subparagraph">Any dollar amount specified under this subparagraph that is not a multiple of $10 shall be rounded to the nearest multiple of $10. </continuation-text></subparagraph></paragraph><paragraph id="H5CAC6E0EDD2F423A9A7B012D3984847B"><enum>(2)</enum><header>Unit defined</header><text>The term <quote>unit</quote> means, with respect to a part D rebatable drug, the lowest identifiable quantity (such as a capsule or tablet, milligram of molecules, or grams) of the part D rebatable drug that is dispensed to individuals under this part.</text></paragraph><paragraph id="H2BD32C0A93DD40A38636A69454B7C216"><enum>(3)</enum><header>Payment amount benchmark year</header><text>The term <quote>payment amount benchmark year</quote> means the year beginning January 1, 2016.</text></paragraph><paragraph id="H5EC2F164F01B45A4B0291C8425D37E49"><enum>(4)</enum><header>Benchmark period CPI–U</header><text>The term <quote>benchmark period CPI–U</quote> means the consumer price index for all urban consumers (United States city average) for January 2016.</text></paragraph><paragraph id="HF0B3D63B01B84D629A90C33BCCB4E66D"><enum>(5)</enum><header>Applicable year CPI–U</header><text>The term <quote>applicable year CPI–U</quote> means, with respect to an applicable year, the consumer price index for all urban consumers (United States city average) for January of such year.</text></paragraph><paragraph id="H37C04A630EEF4BF58EF6B07BF51D7A22"><enum>(6)</enum><header>Average manufacturer price</header><text>The term <quote>average manufacturer price</quote> has the meaning, with respect to a part D rebatable drug of a manufacturer, given such term in section 1927(k)(1), with respect to a covered outpatient drug of a manufacturer for a rebate period under section 1927.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H681EC21B20004960A976CB8632FDBEFC"><enum>(b)</enum><header>Conforming amendments</header><paragraph id="HC1094E49198D4524B8E0FD66F9753AB1"><enum>(1)</enum><header>To part B ASP calculation</header><text>Section 1847A(c)(3) of the Social Security Act (42 U.S.C. 1395w–3a(c)(3)), as amended by section 201(c)(1), is further amended by striking <quote>section 1927 or section 1834(x)</quote> and inserting <quote>section 1927, section 1834(x), or section 1860D–14B</quote>.</text></paragraph><paragraph id="H49EB24F663F44005899DCB2DCC921CD4"><enum>(2)</enum><header>Excluding part D drug inflation rebate from best price</header><text>Section 1927(c)(1)(C)(ii)(I) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)</external-xref>), as amended by section 201(c)(2), is further amended by striking <quote>or section 1834(x)</quote> and inserting <quote>, section 1834(x), or section 1860D–14B</quote>.</text></paragraph><paragraph id="H3826C21E975C4DA49CB0E664CFF51DCC"><enum>(3)</enum><header>Coordination with Medicaid rebate information disclosure</header><text>Section 1927(b)(3)(D)(i) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(b)(3)(D)(i)</external-xref>), as amended by section 201(c)(3), is further amended by striking <quote>or section 1834(x)</quote> and inserting <quote>, section 1834(x), or section 1860D–14B</quote>.</text></paragraph></subsection></section><section id="H7097B65945CD41C79371EE10706506EE"><enum>227.</enum><header>Prohibiting branding on part D benefit cards</header><subsection id="H5697CCA279E34AF6880F6CBA9CBDBFA5"><enum>(a)</enum><header>In general</header><text>Section 1851(j)(2)(B) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-21">42 U.S.C. 1395w–21(j)(2)(B)</external-xref>) is amended by striking <quote>co-branded network provider</quote> and inserting <quote>co-branded, co-owned, or affiliated network provider, pharmacy, or pharmacy benefit manager</quote>.</text></subsection><subsection id="HC37CEABE701649CE9B912E9729276AA6"><enum>(b)</enum><header>Effective date</header><text>The amendment made by subsection (a) shall apply to plan years beginning on or after January 1, 2025.</text></subsection></section><section id="HD27ECA6141CF4C568FD22BD251F87085"><enum>228.</enum><header>Requiring prescription drug plans and MA–PD plans to report potential fraud, waste, and abuse to the Secretary of HHS</header><text display-inline="no-display-inline">Section 1860D–4 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-104">42 U.S.C. 1395w–104</external-xref>), as amended by section 225, is amended by adding at the end the following new subsection:</text><quoted-block display-inline="no-display-inline" id="H321ABADB6CC94EB2AA6B45911DC16AB7" style="OLC"><subsection id="H9853839E836D42D58D4F88F689441D6E"><enum>(p)</enum><header>Reporting potential fraud, waste, and abuse</header><text>Beginning January 1, 2024, the PDP sponsor of a prescription drug plan shall report to the Secretary, as specified by the Secretary—</text><paragraph id="H3A53B23643A04C3B92985B4362931C7C"><enum>(1)</enum><text>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</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H7F718949640E425CB427679E31CC992F"><enum>(2)</enum><text>any steps made by the PDP sponsor after identifying such activities to take corrective actions.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="HE43A7321EA6044D587104517B80AB252"><enum>229.</enum><header>Establishment of pharmacy quality measures under Medicare part D</header><text display-inline="no-display-inline">Section 1860D–4(c) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-104">42 U.S.C. 1395w–104(c)</external-xref>), as amended by section 226, is amended by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="H15B6CA0C18C74C31933BE7B3985D9F4B" style="OLC"><paragraph id="HB2DFEF1994164E0895EFAFA509D81EAE"><enum>(8)</enum><header>Application of pharmacy quality measures</header><subparagraph id="H1FD605B354004DE1B489C3243292E4A9"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph><subparagraph id="H3544B09A14544A10BE4620B612938258"><enum>(B)</enum><header>Standard pharmacy quality measures</header><text>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.</text></subparagraph><subparagraph id="HFFA646EA704F46CAA8D094EE32303C50"><enum>(C)</enum><header>Effective date</header><text>The requirement under subparagraph (A) shall take effect for plan years beginning on or after January 1, 2026, 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).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="HC56E6CF9FD6B4CFF9DD2262273CD0315"><enum>230.</enum><header>Addition of new measures based on access to biosimilar biological products to the 5-star rating system under Medicare Advantage</header><subsection id="HC24A4B50F08B493CA317DE8D396BB30D"><enum>(a)</enum><header>In general</header><text>Section 1853(o)(4) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-23">42 U.S.C. 1395w–23(o)(4)</external-xref>) is amended by adding at the end the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="H9BB8C8AEF2714FE2ABB0A0016CA801F6" style="OLC"><subparagraph id="H0602CC3E507D4EB9BACE66190A1017C7"><enum>(E)</enum><header>Addition of new measures based on access to biosimilar biological products</header><clause id="HC43BC31832A54755BBC9A34DA0E5F31C"><enum>(i)</enum><header>In general</header><text>For 2028 and subsequent years, the Secretary shall add a new set of measures to the 5-star rating system based on access to biosimilar biological products covered under part B and, in the case of MA–PD plans, such products that are covered part D drugs. Such measures shall assess the impact a plan’s benefit structure may have on enrollees’ utilization of or ability to access biosimilar biological products, including in comparison to the reference biological product, and shall include measures, as applicable, with respect to the following:</text><subclause id="H4904BDBE38224A08B03E122CCC6DFFC1"><enum>(I)</enum><header>Coverage</header><text>Assessing whether a biosimilar biological product is on the plan formulary in lieu of or in addition to the reference biological product.</text></subclause><subclause id="HEDC3142393A14A7F98F919784BBA9BAA"><enum>(II)</enum><header>Preferencing</header><text>Assessing tier placement or cost-sharing for a biosimilar biological product relative to the reference biological product.</text></subclause><subclause id="H3EE5CC68A56845DE83F84C4CFBE4CEA3"><enum>(III)</enum><header>Utilization management tools</header><text>Assessing whether and how utilization management tools are used with respect to a biosimilar biological product relative to the reference biological product.</text></subclause><subclause id="H85C8A4CA0CA14286A128774842F10A45"><enum>(IV)</enum><header>Utilization</header><text>Assessing the percentage of enrollees prescribed the biosimilar biological product and the percentage of enrollees prescribed the reference biological product when the reference biological product is also on the plan formulary.</text></subclause></clause><clause id="H42BB59554E244D96847698306FEB859D"><enum>(ii)</enum><header>Definitions</header><text>In this subparagraph, the terms <quote>biosimilar biological product</quote> and <quote>reference biological product</quote> have the meaning given those terms in section 1847A(c)(6).</text></clause><clause id="H7180664CA90243889D80F6EF19DF75DA"><enum>(iii)</enum><header>Protecting Patient Interests</header><text>In developing such measures, the Secretary shall ensure that each measure developed to address coverage, preferencing, or utilization management is constructed such that patients retain access to appropriate therapeutic options without undue administrative burden.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="H2CAD55B5F12240248894745B152AF240"><enum>(b)</enum><header>Clarification regarding application to prescription drug plans</header><text>To the extent the Secretary of Health and Human Services applies the 5-star rating system under section 1853(o)(4) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-23">42 U.S.C. 1395w–23(o)(4)</external-xref>), or a similar system, to prescription drug plans under part D of title XVIII of such Act, the provisions of subparagraph (E) of such section, as added by subsection (a) of this section, shall apply under the system with respect to such plans in the same manner as such provisions apply to the 5-star rating system under such section 1853(o)(4).</text></subsection></section><section id="H8E0C61EF650C43DA9143329993446421"><enum>231.</enum><header>HHS study and report on the influence of pharmaceutical manufacturer third-party reimbursement hubs on health care providers who prescribe their drugs and biologicals</header><subsection id="HBC55D023DCF343C2A633964C66134440"><enum>(a)</enum><header>Study</header><paragraph id="H51475FF57D3F4967B567622566D7E3BF"><enum>(1)</enum><header>In general</header><text>The Secretary of Health and Human Services (in this section referred to as the <quote>Secretary</quote>) shall conduct a study on the influence of pharmaceutical manufacturer distribution models that provide third-party reimbursement hub services on health care providers who prescribe the manufacturer’s drugs and biologicals, including for Medicare part D beneficiaries.</text></paragraph><paragraph id="H224F01C606FD4B8DA7D0D2417232C272"><enum>(2)</enum><header>Requirements</header><text>The study under paragraph (1) shall include an analysis of the following:</text><subparagraph id="H06E8431615874E69B5FEE1E3F2AEAB23"><enum>(A)</enum><text>The influence of pharmaceutical manufacturer distribution models that provide third-party reimbursement hub services to health care providers who prescribe the manufacturer’s drugs and biologicals, including—</text><clause id="H6E57E5F748B046668D6E66F59BE0E8A0"><enum>(i)</enum><text>the operations of pharmaceutical manufacturer distribution models that provide reimbursement hub services for health care providers who prescribe the manufacturer’s products;</text></clause><clause id="H37759BE4F6C34BEEA2C38DFA952ED691"><enum>(ii)</enum><text>Federal laws affecting these pharmaceutical manufacturer distribution models; and</text></clause><clause id="H4A27E8DBFC5D401FB0335555D7EE5C1A"><enum>(iii)</enum><text>whether hub services could improperly incentivize health care providers to deem a drug or biological as medically necessary under section 423.578 of title 42, Code of Federal Regulations.</text></clause></subparagraph><subparagraph id="H20B55B6CD18148D9A25E4F6987678802"><enum>(B)</enum><text>Other areas determined appropriate by the Secretary.</text></subparagraph></paragraph></subsection><subsection id="H4B4C98529DDF40E28660504EC16DBAD2"><enum>(b)</enum><header>Report</header><text>Not later than January 1, 2024, the Secretary 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.</text></subsection><subsection commented="no" display-inline="no-display-inline" id="HF67E2DC7065A4D34912C9615DB8DE475"><enum>(c)</enum><header>Consultation</header><text>In conducting the study under subsection (a) and preparing the report under subsection (b), the Secretary shall consult with the Attorney General.</text></subsection></section><section id="H3C31C6948E8C4E9692F4CD432E9A1D24"><enum>232.</enum><header>Definition of strength for the purposes of determining interchangeability of biological and biosimilar products</header><subsection id="HFD9415B8F2614912BB7881453CD1556F"><enum>(a)</enum><text display-inline="yes-display-inline">Section 351(i) of the Public Health Service Act is amended by inserting the following after paragraph (4):</text><quoted-block style="OLC" id="HB4D5E33B3AC047C0BBAB5EEC37931AE1" display-inline="no-display-inline"><paragraph id="H2F8CAE9744FB43EDBCAE2FBE5F086F70"><enum>(5)</enum><text display-inline="yes-display-inline">The term <term>strength</term>, in reference to a biological product intended for administration by injection, means the total content of drug substance in the dosage form without regard to the concentration of drug substance or total volume of the biological product.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="HD07F5F6F1CF54A128E2E96284E903445"><enum>(b)</enum><text display-inline="yes-display-inline">Section 351(k)(7)(C)(ii)(I) of the Public Health Service Act is amended by inserting <quote>concentration,</quote> after <quote>delivery device,</quote>.</text></subsection></section></subtitle><subtitle id="H34A6A6EECCC24A0599652CA3B58E17D7" style="OLC"><enum>C</enum><header>Miscellaneous</header><section id="H92989A332762482AAC9D0D761DC66A61"><enum>233.</enum><header>Drug manufacturer price transparency</header><text display-inline="no-display-inline">Title XI of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1301">42 U.S.C. 1301 et seq.</external-xref>) is amended by inserting after section 1128K the following new section:</text><quoted-block display-inline="no-display-inline" id="H77DC814E12194D7FA5B41B292F9B040B" style="OLC"><section id="H9DEAE888168F40768562ABD653661BB8"><enum>1128L.</enum><header>Drug manufacturer price transparency</header><subsection id="HD3BADD721CBA471FACEB89D57A92297C"><enum>(a)</enum><header>In general</header><paragraph id="H6C465CE27756422EBC1467E04ABB7FC9"><enum>(1)</enum><header>Determinations</header><text>Beginning July 1, 2025, the Secretary shall make determinations as to whether a drug is an applicable drug as described in subsection (b).</text></paragraph><paragraph id="H6F9CB1DAA00E4740A2D353D321324736"><enum>(2)</enum><header>Required justification</header><text>If the Secretary determines under paragraph (1) that an applicable drug is described in subsection (b), the manufacturer of the applicable drug shall submit to the Secretary the justification described in subsection (c) in accordance with the timing described in subsection (d).</text></paragraph></subsection><subsection id="H665EB0C1FB314D25B646959D0D371831"><enum>(b)</enum><header>Applicable drug described</header><paragraph id="HA781608742514B5280ED8079D2EBDB47"><enum>(1)</enum><header>In general</header><text>An applicable drug is described in this subsection if it meets any of the following at the time of the determination:</text><subparagraph id="H16083A282E9443E8ACD9085DBCFA63F5"><enum>(A)</enum><header>Large increase</header><text>The drug (per dose)—</text><clause id="H43E360F940D641B28F81B9E6CA2EA6DB"><enum>(i)</enum><text>has a wholesale acquisition cost of at least $10; and</text></clause><clause id="HFC2CC8E37D0841608A265B6A3F0CBA55"><enum>(ii)</enum><text>had an increase in the wholesale acquisition cost, with respect to determinations made—</text><subclause commented="no" display-inline="no-display-inline" id="H108BD17200334FD9B87D911494418A5E"><enum>(I)</enum><text display-inline="yes-display-inline">during 2023, of at least 100 percent since the date of the enactment of this section;</text></subclause><subclause id="HD5163D4CA24D4A18955B7B7DCBE5E5C6"><enum>(II)</enum><text>during 2024, of at least 100 percent in the preceding 12 months or of at least 150 percent in the preceding 24 months;</text></subclause><subclause commented="no" display-inline="no-display-inline" id="H8AC0D8BE8DF6447B9DD7B6216CF32C1F"><enum>(III)</enum><text display-inline="yes-display-inline">during 2025, of at least 100 percent in the preceding 12 months or of at least 200 percent in the preceding 36 months;</text></subclause><subclause commented="no" display-inline="no-display-inline" id="HDBBD477469CC45FEB761B647307D480C"><enum>(IV)</enum><text display-inline="yes-display-inline">during 2026, of at least 100 percent in the preceding 12 months or of at least 250 percent in the preceding 48 months; or</text></subclause><subclause commented="no" display-inline="no-display-inline" id="H75CB0D4D42A24A1897813C9D7A929601"><enum>(V)</enum><text display-inline="yes-display-inline">on or after January 1, 2027, of at least 100 percent in the preceding 12 months or of at least 300 percent in the preceding 60 months.</text></subclause></clause></subparagraph><subparagraph id="H5674C89FFAA54EDCAADB5FA03C68820B"><enum>(B)</enum><header>High spending with increase</header><text>The drug—</text><clause commented="no" display-inline="no-display-inline" id="H4A52E5FE325843A9A27C4B4896759C78"><enum>(i)</enum><text display-inline="yes-display-inline">was in the top 50th percentile of net spending under title XVIII or XIX (to the extent data is available) during any 12-month period in the preceding 60 months; and</text></clause><clause id="HCA34FC590EE84CDCB14334D24BB0284B"><enum>(ii)</enum><text>per dose, had an increase in the wholesale acquisition cost, with respect to determinations made—</text><subclause commented="no" display-inline="no-display-inline" id="H8E996C90B9CC4ADF919546F8A0F3FED3"><enum>(I)</enum><text display-inline="yes-display-inline">during 2023, of at least 15 percent since the date of the enactment of this section;</text></subclause><subclause id="H5BD0E5687EB84C70A7BAF2C4E1ACC5E7"><enum>(II)</enum><text>during 2024, of at least 15 percent in the preceding 12 months or of at least 20 percent in the preceding 24 months;</text></subclause><subclause commented="no" display-inline="no-display-inline" id="HCFBFF8354C7C4342AF0B3A2613E5755D"><enum>(III)</enum><text display-inline="yes-display-inline">during 2025, of at least 15 percent in the preceding 12 months or of at least 30 percent in the preceding 36 months;</text></subclause><subclause commented="no" display-inline="no-display-inline" id="HDC4C3724AA3E47EA8D3141326E272499"><enum>(IV)</enum><text display-inline="yes-display-inline">during 2026, of at least 15 percent in the preceding 12 months or of at least 40 percent in the preceding 48 months; or</text></subclause><subclause commented="no" display-inline="no-display-inline" id="H4CA35FA12B2D466D94D01791C9A70DEB"><enum>(V)</enum><text display-inline="yes-display-inline">on or after January 1, 2027, of at least 15 percent in the preceding 12 months or of at least 50 percent in the preceding 60 months.</text></subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HA5011D23FE2D4D79BE76A62FBC649BF7"><enum>(C)</enum><header>High launch price for new drugs</header><text>In the case of a drug that is marketed for the first time on or after January 1, 2023, and for which the manufacturer has established the first wholesale acquisition cost on or after such date, such wholesale acquisition cost for a year's supply or a course of treatment for such drug exceeds the gross spending for covered part D drugs at which the annual out-of-pocket threshold under section 1860D–2(b)(4)(B) would be met for the year.</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H35C4C201615741EFB9F26FDD00A7FB87"><enum>(2)</enum><header>Special Rules</header><subparagraph commented="no" display-inline="no-display-inline" id="H3700726251A64F8C84E9B962B395DABF"><enum>(A)</enum><header>Authority of Secretary to substitute percentages within a de minimis range</header><text>For purposes of applying paragraph (1), the Secretary may substitute for each percentage described in subparagraph (A) or (B) of such paragraph (other than the percentile described subparagraph (B)(i) of such paragraph) a percentage within a de minimis range specified by the Secretary below the percentage so described.</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H145696A3F7944673BCDCC07C4FB1669E"><enum>(B)</enum><header display-inline="yes-display-inline">Drugs with high launch prices annually report until a therapeutic equivalent is available</header><text display-inline="yes-display-inline">In the case of a drug that the Secretary determines is an applicable drug described in subparagraph (C) of paragraph (1), such drug shall remain described in such subparagraph (C) (and the manufacturer of such drug shall annually report the justification under subsection (c)(2)) until the Secretary determines that there is a therapeutic equivalent (as defined in section 314.3 of title 21, Code of Federal Regulations, or any successor regulation) for such drug.</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H232588B3EE614607A83307B09077236C"><enum>(3)</enum><header>Dose</header><text>For purposes of applying paragraph (1), the Secretary shall establish a definition of the term <quote>dose</quote>.</text></paragraph></subsection><subsection id="HF7AECAE2748740FABDFB557FC6E9A195"><enum>(c)</enum><header>Justification described</header><paragraph id="HAB3855632FBC4410ACE468E7B7BEC89B"><enum>(1)</enum><header>Increase in WAC</header><text>In the case of a drug that the Secretary determines is an applicable drug described in subparagraph (A) or (B) of subsection (b)(1), the justification described in this subsection is all relevant, truthful, and nonmisleading information and supporting documentation necessary to justify the increase in the wholesale acquisition cost of the applicable drug of the manufacturer, as determined appropriate by the Secretary and which may include the following:</text><subparagraph id="H0BE3A541C1A44FA59B9479E4F51E3B4C"><enum>(A)</enum><text>The individual factors that have contributed to the increase in the wholesale acquisition cost.</text></subparagraph><subparagraph id="HBF7BC6C6A2FA40D4BD6F403589057A48"><enum>(B)</enum><text>An explanation of the role of each factor in contributing to such increase.</text></subparagraph><subparagraph id="H212D2E52A50B4FB39EB22BD838B0C703"><enum>(C)</enum><text>Total expenditures of the manufacturer on—</text><clause id="HACB489B3793A412E979F1E7E23D312F8"><enum>(i)</enum><text>materials and manufacturing for such drug;</text></clause><clause id="H29D399BD41424152B66B13D0FB92F7F9"><enum>(ii)</enum><text>acquiring patents and licensing for each drug of the manufacturer; and</text></clause><clause id="H09F1A0AB9BE34241BBC613302C648118"><enum>(iii)</enum><text>costs to purchase or acquire the drug from another company, if applicable.</text></clause></subparagraph><subparagraph id="HA04BFC3188B14EE293805480EF5EB0FD"><enum>(D)</enum><text>The percentage of total expenditures of the manufacturer on research and development for such drug that was derived from Federal funds.</text></subparagraph><subparagraph id="HA2C4E1CE2239469395AD5857D4111F17"><enum>(E)</enum><text>The total expenditures of the manufacturer on research and development for such drug.</text></subparagraph><subparagraph id="H255B2D086BE049689A4B57887F744D29"><enum>(F)</enum><text>The total revenue and net profit generated from the applicable drug for each calendar year since drug approval.</text></subparagraph><subparagraph id="H3D5F778544B94E5AB734076F7AFF4F90"><enum>(G)</enum><text>The total expenditures of the manufacturer that are associated with marketing and advertising for the applicable drug.</text></subparagraph><subparagraph id="HF1AD3ED7146B47ED993636FA19505DE6"><enum>(H)</enum><text>Additional information specific to the manufacturer of the applicable drug, such as—</text><clause id="HDB569621CADF4FBD9D73503DF7674660"><enum>(i)</enum><text>the total revenue and net profit of the manufacturer for the period of such increase, as determined by the Secretary;</text></clause><clause id="HD64C1CB5D56C491CB39FB8749521603E"><enum>(ii)</enum><text>metrics used to determine executive compensation; and</text></clause><clause id="HD97521B816784B18802C64B57E69A579"><enum>(iii)</enum><text>any additional information related to drug pricing decisions of the manufacturer, such as total expenditures on—</text><subclause id="HCEB37AA21E0541BF9536F49F8443E841"><enum>(I)</enum><text>drug research and development; or</text></subclause><subclause id="HC9E70DFED75E4EDC80FE6724CEDEC9EC"><enum>(II)</enum><text>clinical trials on drugs that failed to receive approval by the Food and Drug Administration.</text></subclause></clause></subparagraph></paragraph><paragraph id="HE4C749A0DABF4C029877FBE8A7B3135C"><enum>(2)</enum><header>High launch price</header><text>In the case of a drug that the Secretary determines is an applicable drug described in subparagraph (C) of subsection (b)(1), the justification described in this subsection is all relevant, truthful, and nonmisleading information and supporting documentation necessary to justify the wholesale acquisition cost of the applicable drug of the manufacturer, as determined by the Secretary and which may include the items described in subparagraph (C) through (H) of paragraph (1).</text></paragraph></subsection><subsection id="HE218950B4C1347F9A2E2A8654C1F6555"><enum>(d)</enum><header>Timing</header><paragraph id="H53C047FEE4C240DCB4B7E8FF39F4ADED"><enum>(1)</enum><header>Notification</header><text>Not later than 60 days after the date on which the Secretary makes the determination that a drug is an applicable drug under subsection (b), the Secretary shall notify the manufacturer of the applicable drug of such determination.</text></paragraph><paragraph id="HAAE0245EF8A94EA48F7C70B32A89A2B8"><enum>(2)</enum><header>Submission of justification</header><text>Not later than 180 days after the date on which a manufacturer receives a notification under paragraph (1), the manufacturer shall submit to the Secretary the justification required under subsection (a).</text></paragraph><paragraph id="H6C185BEE208342599302C22E02DC5B1E"><enum>(3)</enum><header>Posting on Internet website</header><subparagraph id="H46CA747988134959B7BE4CDCDBFE71CF"><enum>(A)</enum><header>In general</header><text>Subject to subparagraph (B), not later than 30 days after receiving the justification under paragraph (2), the Secretary shall post on the Internet website of the Centers for Medicare &amp; Medicaid Services the justification, together with a summary of such justification that is written and formatted using language that is easily understandable by beneficiaries under titles XVIII and XIX.</text></subparagraph><subparagraph id="H2C23682772FF4DD38C0B1E518B5D4BDD"><enum>(B)</enum><header>Exclusion of proprietary information</header><text>The Secretary shall exclude proprietary information, such as trade secrets and intellectual property, submitted by the manufacturer in the justification under paragraph (2) from the posting described in subparagraph (A).</text></subparagraph></paragraph></subsection><subsection id="H1D3013B83C20456FB3047DFA7C6A2A71"><enum>(e)</enum><header>Exception to requirement for submission</header><text display-inline="yes-display-inline">In the case of a drug that the Secretary determines is an applicable drug described in subparagraph (A) or (B) of subsection (b)(1), the requirement to submit a justification under subsection (a) shall not apply where the manufacturer, after receiving the notification under subsection (d)(1) with respect to the applicable drug of the manufacturer, reduces the wholesale acquisition cost of a drug so that it no longer is described in such subparagraph (A) or (B) for at least a 4-month period, as determined by the Secretary.</text></subsection><subsection id="HD0DD02193FEF4394A379D986346C8C9F"><enum>(f)</enum><header>Penalties</header><paragraph id="H50E597172CA64A97A7DF0638816B7A4C"><enum>(1)</enum><header>Failure to submit timely justification</header><text display-inline="yes-display-inline">If the Secretary determines that a manufacturer has failed to submit a justification as required under this section, including in accordance with the timing and form required, with respect to an applicable drug, the Secretary shall apply a civil monetary penalty in an amount of $10,000 for each day the manufacturer has failed to submit such justification as so required.</text></paragraph><paragraph id="H17651CA19F4343DCB1EF42413B2EFFF4"><enum>(2)</enum><header>False information</header><text display-inline="yes-display-inline">Any manufacturer that submits a justification under this section and knowingly provides false information in such justification is subject to a civil monetary penalty in an amount not to exceed $100,000 for each item of false information.</text></paragraph><paragraph id="H8CCFDB0F05FA423882C42427F7F5C4D3"><enum>(3)</enum><header>Application of procedures</header><text display-inline="yes-display-inline">The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil monetary penalty under this subsection in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). Civil monetary penalties imposed under this subsection are in addition to other penalties as may be prescribed by law.</text></paragraph></subsection><subsection id="H7F421403055C48CB80B5534377C4D52B"><enum>(g)</enum><header>Definitions</header><text>In this section:</text><paragraph id="HE3DAD004E1AB4874ADF6DF31F3E7F592"><enum>(1)</enum><header>Drug</header><text>The term <quote>drug</quote> means a drug, as defined in section 201(g) of the Federal Food, Drug, and Cosmetic Act, that is intended for human use and subject to section 503(b)(1) of such Act, including a product licensed under section 351 of the Public Health Service Act.</text></paragraph><paragraph id="HE2570606D1D94E5FBD0FF79844643F11"><enum>(2)</enum><header>Manufacturer</header><text>The term <term>manufacturer</term> has the meaning given that term in section 1847A(c)(6)(A).</text></paragraph><paragraph id="H5FB1F720D76E4FB7B04F65D6F7CF4288"><enum>(3)</enum><header>Wholesale acquisition cost</header><text>The term <term>wholesale acquisition cost</term> has the meaning given that term in section 1847A(c)(6)(B).</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H870AAD4415DB438B91143739F715D955"><enum>234.</enum><header>Strengthening and expanding pharmacy benefit managers transparency requirements</header><text display-inline="no-display-inline">Section 1150A of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1320b-23">42 U.S.C. 1320b–23</external-xref>), as amended by section 223, is amended—</text><paragraph id="H90694A97367941419608A345CF105740"><enum>(1)</enum><text>in subsection (a)—</text><subparagraph id="H255AB062A8C24A48B413627E6A29FCF9"><enum>(A)</enum><text>in paragraph (1), by striking <quote>or</quote> at then end;</text></subparagraph><subparagraph id="HD44441FA1528477EBC71CE6D222BF650"><enum>(B)</enum><text>in paragraph (2), by striking the comma at the end and inserting <quote>; or</quote>; and</text></subparagraph><subparagraph id="H26DE36B4B71B4970B1FE050034F38BAD"><enum>(C)</enum><text>by inserting after paragraph (2) the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="H9968445319F449B78C0AE2D652F2F180" style="OLC"><paragraph id="H07CEF3581E9C4647952D13D122E68FD4"><enum>(3)</enum><text>a State plan under title XIX, including a managed care entity (as defined in section 1932(a)(1)(B)),</text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="H21A1AFBE32414F479A89DE39F1D1F9AB"><enum>(2)</enum><text>in subsection (b)—</text><subparagraph id="H9FA595B4C06F43E3965E863E19E30FB6"><enum>(A)</enum><text>in paragraph (2)—</text><clause id="HED5BED10225C45909D04D8ADE4E6CB2A"><enum>(i)</enum><text>by striking <quote>(excluding bona fide</quote> and all that follows through <quote>patient education programs))</quote>; and</text></clause><clause id="H82CA2D931AF3430394DA6527F0E4B56E"><enum>(ii)</enum><text>by striking <quote>aggregate amount of</quote> and inserting <quote>aggregate amount and percentage of</quote>;</text></clause></subparagraph><subparagraph id="H09C8A8887595457083B3939A3B0D7632"><enum>(B)</enum><text>in paragraph (3), by striking <quote>aggregate amount of</quote> and inserting <quote>aggregate amount and percentage (defined as a share of gross drug costs) of</quote>; and</text></subparagraph><subparagraph id="HB4DB864784BB4A7081A59ACD3E7E0016"><enum>(C)</enum><text>by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="H693A583F4F5648729C037F286DC49F6A" style="OLC"><paragraph id="H4F33A7D2CF91436F8B13974129E6C76B"><enum>(4)</enum><text>The aggregate amount of bona fide service fees (which include distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs and patient education programs)) the PBM received from—</text><subparagraph id="HFF212C6DFE5C44E8BA21ED2FEB4E63C6"><enum>(A)</enum><text>PDP sponsors;</text></subparagraph><subparagraph id="H06A215DCE5624AFC8D3A1B249630D28E"><enum>(B)</enum><text>qualified health benefit plans;</text></subparagraph><subparagraph id="H57A0275D21C2498E8B8B86EA4EB95C6B"><enum>(C)</enum><text>managed care entities (as defined in section 1932(a)(1)(b)); and</text></subparagraph><subparagraph id="HE9CB0A620A694779BDDBD115DB566D47"><enum>(D)</enum><text>drug manufacturers.</text></subparagraph></paragraph><after-quoted-block>; </after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="HA41BA3473F454498A6A6432C68EF77CA"><enum>(3)</enum><text>in subsection (c), by adding at the end the following new paragraphs:</text><quoted-block display-inline="no-display-inline" id="HA5000BFDDEBA4BAB86B8993F786F3D85" style="OLC"><paragraph id="H1434A83C633A4DCC8686D02670FBFB41"><enum>(5)</enum><text>To States to carry out their administration and oversight of the State plan under title XIX.</text></paragraph><paragraph id="H88D1FB75993D431E863AB250EC67347D"><enum>(6)</enum><text>To the Federal Trade Commission to carry out section 5(a) of the Federal Trade Commission Act (<external-xref legal-doc="usc" parsable-cite="usc/15/45a">15 U.S.C. 45a</external-xref>) and any other relevant consumer protection or antitrust authorities enforced by such Commission, including reviewing proposed mergers in the prescription drug sector.</text></paragraph><paragraph id="H3FCB9D7781684F4587E2671149316471"><enum>(7)</enum><text>To assist the Department of Justice to carry out its antitrust authorities, including reviewing proposed mergers in the prescription drug sector.</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H6E283F04A59E411FA74C8B5EAE6BD2E3"><enum>(4)</enum><text>by adding at the end the following new subsection:</text><quoted-block display-inline="no-display-inline" id="H9E5302F6A7D14C668F6A40F76FB67D10" style="OLC"><subsection id="HEC434D2006724C64ADB29AFD9AAF16DD"><enum>(f)</enum><header>Annual OIG evaluation and report</header><paragraph id="HAEF64C39C9E34265B350B53F254F3BB6"><enum>(1)</enum><header>Analysis</header><text>The Inspector General of the Department of Health and Human Services shall conduct an annual evaluation of the information provided to the Secretary under this section. Such evaluation shall include an analysis of—</text><subparagraph id="H2E23DEA29891416EB0E9616185CA7EC5"><enum>(A)</enum><text>PBM rebates;</text></subparagraph><subparagraph id="HC1D2F202CA72412D8A8E38641EF72939"><enum>(B)</enum><text>administrative fees;</text></subparagraph><subparagraph id="H5A94A0E637F642BB9B93E3B409B920F9"><enum>(C)</enum><text>the difference between what plans pay PBMs and what PBMs pay pharmacies;</text></subparagraph><subparagraph id="H281752BB671C4C04B650FBB67F256249"><enum>(D)</enum><text>generic dispensing rates; and</text></subparagraph><subparagraph id="H8CAD58A3AF5F497B974354A48F0DD008"><enum>(E)</enum><text>other areas determined appropriate by the Inspector General.</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H620932BD6E8B4DB0BC659D7996A378C5"><enum>(2)</enum><header>Report</header><text>Not later than July 1, 2023, and annually thereafter, the Inspector General of the Department of Health and Human Services shall submit to Congress a report containing the results of the evaluation conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Inspector General determines appropriate. Such report shall not disclose the identity of a specific PBM, plan, or price charged for a drug.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section><section id="H06D28DEF24F54626B1DA0748FC8DA159"><enum>235.</enum><header>Prescription drug pricing dashboards</header><text display-inline="no-display-inline">Part A of title XI of the Social Security Act is amended by adding at the end the following new section:</text><quoted-block display-inline="no-display-inline" id="HCFA089B22DA34FE6B78FB36B4B9869B3" style="OLC"><section id="H36E66EA7808F49679FDA5A60FB1940D0"><enum>1150C.</enum><header>Prescription drug pricing dashboards</header><subsection id="H8CB9FFCBF8D74B769E788A29CE7E2AC5"><enum>(a)</enum><header>In general</header><text>Beginning not later than January 1, 2023, the Secretary shall establish, and annually update, internet website-based dashboards, through which beneficiaries, clinicians, researchers, and the public can review information on spending for, and utilization of, prescription drugs and biologicals (and related supplies and mechanisms of delivery) covered under each of parts B and D of title XVIII and under a State program under title XIX, including information on trends of such spending and utilization over time.</text></subsection><subsection id="H034A576A8CF1439E91F6DEF7FD798EFC"><enum>(b)</enum><header>Medicare part B drug and biological dashboard</header><paragraph id="HD4A2B68FB3CB49BBBAB61B072C9DF0D2"><enum>(1)</enum><header>In general</header><text>The dashboard established under subsection (a) for part B of title XVIII shall provide the information described in paragraph (2).</text></paragraph><paragraph id="H90B887E2E0DC46D89522211C8BF98D14"><enum>(2)</enum><header>Information described</header><text>The information described in this paragraph is the following information with respect to drug or biologicals covered under such part B:</text><subparagraph id="H4C146A2BCD8343EEB53F1C4989EF9209"><enum>(A)</enum><text>The brand name and, if applicable, the generic names of the drug or biological.</text></subparagraph><subparagraph id="H1320B435F68F4583A530BC1FD54F1553"><enum>(B)</enum><text>Consumer-friendly information on the uses and clinical indications of the drug or biological.</text></subparagraph><subparagraph id="HC375E67F40224F06B4B0DA8CD99CF79B"><enum>(C)</enum><text>The manufacturer or labeler of the drug or biological.</text></subparagraph><subparagraph id="HA17032D6703A461E9096F55952969744"><enum>(D)</enum><text>To the extent feasible, the following information:</text><clause id="H3AF6AEE8716A41F08A17B8FF1C9A8035"><enum>(i)</enum><text>Average total spending per dosage unit of the drug or biological in the most recent 2 calendar years for which data is available.</text></clause><clause id="H6CC75B1328FC4ECCB1A9400F5D3F3073"><enum>(ii)</enum><text>The percentage change in average spending on the drug or biological per dosage unit between the most recent calendar year for which data is available and—</text><subclause id="HCFEF2EBECA544BD5B6B29D9EDBCCEBEB"><enum>(I)</enum><text>the preceding calendar year; and</text></subclause><subclause id="H7F1B5FCF5D644D78B1488053208DE1E4"><enum>(II)</enum><text>the preceding 5 and 10 calendar years.</text></subclause></clause><clause id="HE8546805676D4C54A980929874D812C8"><enum>(iii)</enum><text>The annual growth rate in average spending per dosage unit of the drug or biological in the most recent 5 or 10 calendar years for which data is available.</text></clause><clause id="HD86F4015638C4A27BAC868109A066D90"><enum>(iv)</enum><text>Total spending for the drug or biological for the most recent calendar year for which data is available.</text></clause><clause id="H15DA2EF7B4DC463482298DA0F1BB0B2E"><enum>(v)</enum><text>The number of beneficiaries receiving the drug or biological in the most recent calendar year for which data is available.</text></clause><clause id="HF74D1C3B78754D9F90C85EB1C02C35A0"><enum>(vi)</enum><text>Average spending on the drug per beneficiary for the most recent calendar year for which data is available.</text></clause></subparagraph><subparagraph id="H6E512A34A39342178FCEA754E7B1A851"><enum>(E)</enum><text>The average sales price of the drug or biological (as determined under section 1847A) for the most recent quarter.</text></subparagraph><subparagraph commented="no" id="H51993AA9F6D34BBE9AB765D030971210"><enum>(F)</enum><text>Consumer-friendly information about the coinsurance amount for the drug or biological for beneficiaries for the most recent quarter. Such information shall not include coinsurance amounts for qualified medicare beneficiaries (as defined in section 1905(p)(1)).</text></subparagraph><subparagraph id="H44DEE8891CBC483F9892206B72DEAEAA"><enum>(G)</enum><text>For the most recent calendar year for which data is available—</text><clause id="HD444851AF4684DBF9C3745815710B6EA"><enum>(i)</enum><text>the 15 drugs and biologicals with the highest total spending under such part; and</text></clause><clause id="HC5877306C30342D8A02C4F771FCC2E41"><enum>(ii)</enum><text>any drug or biological for which the average annual per beneficiary spending exceeds the gross spending for covered part D drugs at which the annual out-of-pocket threshold under section 1860D–2(b)(4)(B) would be met for the year.</text></clause></subparagraph><subparagraph commented="no" id="H6815D3E5E47341BD9058E7A514948816"><enum>(H)</enum><text>Other information (not otherwise prohibited in law from being disclosed) that the Secretary determines would provide beneficiaries, clinicians, researchers, and the public with helpful information about drug and biological spending and utilization (including trends of such spending and utilization).</text></subparagraph></paragraph></subsection><subsection id="H2848AD111AA94A44AE6EBA658FB34754"><enum>(c)</enum><header>Medicare covered part D drug dashboard</header><paragraph id="H7C23120AD2244D8A94ED1E036FED11B8"><enum>(1)</enum><header>In general</header><text>The dashboard established under subsection (a) for part D of title XVIII shall provide the information described in paragraph (2).</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H6D098502417C4989ABAEF9DA96A261C2"><enum>(2)</enum><header>Information described</header><text>The information described in this paragraph is the following information with respect to covered part D drugs under such part D:</text><subparagraph commented="no" display-inline="no-display-inline" id="HAFBCD2F029064948B6B536A6477D5535"><enum>(A)</enum><text>The information described in subparagraphs (A) through (D) of subsection (b)(2).</text></subparagraph><subparagraph id="H2114EA4383F34F92B234DBF093ABDEF2"><enum>(B)</enum><text>Information on average annual beneficiary out-of-pocket costs below and above the annual out-of-pocket threshold under section 1860D–2(b)(4)(B) for the current plan year. Such information shall not include out-of-pocket costs for subsidy eligible individuals under section 1860D–14.</text></subparagraph><subparagraph id="H6AAD9399957F4EEC998F07838BD1790F"><enum>(C)</enum><text>Information on how to access resources as described in sections 1860D–1(c) and 1851(d).</text></subparagraph><subparagraph id="H9439780E947043048869196F4A610AD3"><enum>(D)</enum><text>For the most recent calendar year for which data is available—</text><clause id="HB2991C3E884F494387A28D749FBF51ED"><enum>(i)</enum><text>the 15 covered part D drugs with the highest total spending under such part; and</text></clause><clause id="HBE52A6C7966140D5B5783F934202C446"><enum>(ii)</enum><text>any covered part D drug for which the average annual per beneficiary spending exceeds the gross spending for covered part D drugs at which the annual out-of-pocket threshold under section 1860D–2(b)(4)(B) would be met for the year.</text></clause></subparagraph><subparagraph commented="no" id="HE0A5B9181B6A479FA1A9520FC9176A03"><enum>(E)</enum><text>Other information (not otherwise prohibited in law from being disclosed) that the Secretary determines would provide beneficiaries, clinicians, researchers, and the public with helpful information about covered part D drug spending and utilization (including trends of such spending and utilization).</text></subparagraph></paragraph></subsection><subsection id="H7CD1A8A54CF54C60A2300627A76F169E"><enum>(d)</enum><header>Medicaid covered outpatient drug dashboard</header><paragraph id="H238DDAE3810E46D58060ACB676AB5F03"><enum>(1)</enum><header>In general</header><text>The dashboard established under subsection (a) for title XIX shall provide the information described in paragraph (2).</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HEABD6669CACA4767A07A7D6A2855A642"><enum>(2)</enum><header>Information described</header><text>The information described in this paragraph is the following information with respect to covered outpatient drugs under such title:</text><subparagraph commented="no" display-inline="no-display-inline" id="HCD4AB8EDDA1A40B7AA91D8B24BDCC5B8"><enum>(A)</enum><text>The information described in subparagraphs (A) through (D) of subsection (b)(2).</text></subparagraph><subparagraph id="H4D61300FA08B4CAEB2A865127F5850E0"><enum>(B)</enum><text>For the most recent calendar year for which data is available, the 15 covered outpatient drugs with the highest total spending under such title.</text></subparagraph><subparagraph commented="no" id="HC21EBA0CCB9547ACA5A51705AA6E8F2D"><enum>(C)</enum><text>Other information (not otherwise prohibited in law from being disclosed) that the Secretary determines would provide beneficiaries, clinicians, researchers, and the public with helpful information about covered outpatient drug spending and utilization (including trends of such spending and utilization).</text></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H8F4477E6D841429BB4C10AB78EEF62A8"><enum>(e)</enum><header>Data files</header><text>The Secretary shall make available the underlying data for each dashboard established under subsection (a) in a machine-readable format.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H30D5E2575C1E4F57BA2BDDEC05F51DD9"><enum>236.</enum><header>Improving coordination between the Food and Drug Administration and the Centers for Medicare &amp; Medicaid Services</header><subsection id="HC51AC62695F545FC89F3B2566D432E95"><enum>(a)</enum><header>In general</header><paragraph id="H111A8DCF2A604D8CAD6E28A55D102D24"><enum>(1)</enum><header>Public meeting</header><subparagraph id="H117954B9C4784E5C88925890A71BF9D9"><enum>(A)</enum><header>In general</header><text>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 <quote>Secretary</quote>) 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 &amp; Medicaid Services in preparing for the availability of novel medical products described in subsection (c) on the market in the United States.</text></subparagraph><subparagraph id="H6F0DEF1F8A7349C8AE07617A61060430"><enum>(B)</enum><header>Attendees</header><text>The public meeting shall include—</text><clause id="H5D5610EB531A4126AB900DD278B7D845"><enum>(i)</enum><text>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 &amp; Medicaid Services;</text></clause><clause id="HB7765947A604493892072617F0A532A7"><enum>(ii)</enum><text>stakeholders with expertise in the research and development of novel medical products, including manufacturers of such products;</text></clause><clause id="HAE2DA782A03F41B88AA884C0A8688522"><enum>(iii)</enum><text>representatives of commercial health insurance payers;</text></clause><clause id="HBA5BA6FBD95149FF9E05434DE4215CDE"><enum>(iv)</enum><text>stakeholders with expertise in the administration and use of novel medical products, including physicians; and</text></clause><clause id="HF77057D2CB764C1785069F6515AA743B"><enum>(v)</enum><text>stakeholders representing patients and with expertise in the utilization of patient experience data in medical product development.</text></clause></subparagraph><subparagraph id="HA3FEECE79B824949BA8570ABAC9BA5C4"><enum>(C)</enum><header>Topics</header><text>The public meeting shall include a discussion of—</text><clause id="HFF1F9C0C557E4C1AB9503300F78331C3"><enum>(i)</enum><text>the status of the drug and medical device development pipeline related to the availability of novel medical products;</text></clause><clause id="H23CBFD0EA48043288DBAE2116D7EF454"><enum>(ii)</enum><text>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;</text></clause><clause id="H113A0337BE7C434CB51F1FD41AEE5194"><enum>(iii)</enum><text>the expertise necessary to make coding, coverage, and payment decisions with respect to such products within the Centers for Medicare &amp; Medicaid Services, and current gaps in such expertise, if any;</text></clause><clause id="H355CAE17944B48BDB4EB34DD737C9280"><enum>(iv)</enum><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/42/1395y">42 U.S.C. 1395y(a)(1)(A)</external-xref>);</text></clause><clause id="H355AEE6F1686488B9B8756B9AC4FB762"><enum>(v)</enum><text>the availability of information for sponsors of such novel medical products to meet each of those requirements; and</text></clause><clause id="HD2CB33700B2B4B2DA68620E4B72A20B9"><enum>(vi)</enum><text>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 &amp; Medicaid Services with respect to novel medical products.</text></clause></subparagraph><subparagraph id="HBF4EA450C8A749A9B5E37C3A1A06800B"><enum>(D)</enum><header>Trade secrets and confidential information</header><text>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.</text></subparagraph></paragraph><paragraph id="HE9C83E0AC5BC4D01B19F74D44ACFD26D"><enum>(2)</enum><header>Improving transparency of criteria for Medicare coverage</header><subparagraph id="H552A73C44040440E9E29D13F6212E3B9"><enum>(A)</enum><header>Draft guidance</header><text>Not later than 18 months after the public meeting under paragraph (1), the Secretary shall update the final guidance titled <quote>National Coverage Determinations with Data Collection as a Condition of Coverage: Coverage with Evidence Development</quote> to address any opportunities to improve the availability and coordination of information as described in clauses (iv) through (vi) of paragraph (1)(C).</text></subparagraph><subparagraph id="H952F8D3DED0B44C49302C3B56EFFE495"><enum>(B)</enum><header>Final guidance</header><text>Not later than 12 months after issuing draft guidance under subparagraph (A), the Secretary shall finalize the updated guidance to address any such opportunities.</text></subparagraph></paragraph></subsection><subsection id="H95B60C0FAC094CDDB1EDD7866CC20A0A"><enum>(b)</enum><header>Report on coding, coverage, and payment processes under medicare for novel medical products</header><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/42/1395">42 U.S.C. 1395 et seq.</external-xref>) with respect to the coding, coverage, and payment of novel medical products described in subsection (c). Such report shall include the following:</text><paragraph id="HFC166681892145F3ABA9456DEE82DA5F"><enum>(1)</enum><text>A description of challenges in the coding, coverage, and payment processes under the Medicare program for novel medical products.</text></paragraph><paragraph id="HAE90D0B1C2434926A47AC4E3FC3063E0"><enum>(2)</enum><text>Recommendations to—</text><subparagraph id="H8DA6410C9B64431C99759F85BFB077C6"><enum>(A)</enum><text>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 &amp; Medicaid Services;</text></subparagraph><subparagraph id="HE1040194E5DD49329EE32B5806DC8781"><enum>(B)</enum><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/42/1395y">42 U.S.C. 1395y(l)(6)</external-xref>));</text></subparagraph><subparagraph id="HC0261602DADC4148AC7786EF5662AC2A"><enum>(C)</enum><text>streamline the coverage process under the Medicare program and incorporate input from relevant stakeholders into such coverage determinations; and</text></subparagraph><subparagraph id="H629DE13C36404974880375638D4D9481"><enum>(D)</enum><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/42/1396">42 U.S.C. 1396 et seq.</external-xref>) into the Medicare program.</text></subparagraph></paragraph></subsection><subsection id="H4F3D9EC8A5064115B0298F6DD253C4E3"><enum>(c)</enum><header>Novel medical products described</header><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/21/356">21 U.S.C. 356(a)</external-xref>), a breakthrough device under section 515B of such Act (<external-xref legal-doc="usc" parsable-cite="usc/21/360e-3">21 U.S.C. 360e–3</external-xref>), or a regenerative advanced therapy under section 506(g) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/21/356">21 U.S.C. 356(g)</external-xref>).</text></subsection></section><section id="HC9E4804217894A20A5816E064FCA185A"><enum>237.</enum><header>Patient consultation in Medicare national and local coverage determinations in order to mitigate barriers to inclusion of such perspectives</header><text display-inline="no-display-inline">Section 1862(l) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395y">42 U.S.C. 1395y(l)</external-xref>) is amended by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="HF0B9E26A92AE44C9AA37CA0149347B0E" style="OLC"><paragraph id="H7DC16D67AE9C44FA8437F49A144E7C19"><enum>(7)</enum><header>Patient consultation in national and local coverage determinations</header><text>The Secretary may consult with patients and organizations representing patients in making national and local coverage determinations.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H00447AD551984A578FA5011273EF8F53"><enum>238.</enum><header>GAO study on increases to Medicare and Medicaid spending due to copayment coupons and other patient assistance programs</header><subsection id="H18424017951A4A32997FD4AF63EC9D80"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Comptroller General of the United States shall conduct a study on the impact of copayment coupons and other patient assistance programs on prescription drug pricing and expenditures within the Medicare and Medicaid programs. The study shall assess the following:</text><paragraph id="HBCBAEA909FC74E569B7FE73AC0615F6D"><enum>(1)</enum><text display-inline="yes-display-inline">The extent to which copayment coupons and other patient assistance programs contribute to inflated prescription drug prices under such programs.</text></paragraph><paragraph id="HD1E7E4FAA6BB48D2B2B5111267C1C632"><enum>(2)</enum><text display-inline="yes-display-inline">The impact copayment coupons and other patient assistance programs have in the Medicare Part D program established under part D of title XVIII of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-101">42 U.S.C. 1395w–101 et seq.</external-xref>) on utilization of higher-cost brand drugs and lower utilization of generic drugs in that program.</text></paragraph><paragraph id="HEE8735F83EAB41CBBF22A4AFDED3923A"><enum>(3)</enum><text display-inline="yes-display-inline">The extent to which manufacturers report or obtain tax benefits, including deductions of business expenses and charitable contributions, for any of the following:</text><subparagraph id="H7637F6A0C1BA4711ACD98F1434BC9E38"><enum>(A)</enum><text display-inline="yes-display-inline">Offering copayment coupons or other patient assistance programs.</text></subparagraph><subparagraph id="HE1F1C7C7997647C3B84F70799414A32E"><enum>(B)</enum><text display-inline="yes-display-inline">Sponsoring manufacturer patient assistance programs.</text></subparagraph><subparagraph id="H4ED9F6CCBA944D90A9D093581DF02B20"><enum>(C)</enum><text display-inline="yes-display-inline">Paying for sponsorships at outreach and advocacy events organized by patient assistance programs.</text></subparagraph></paragraph><paragraph id="H79B0CF4B6FA84D6B86719C0F58214C8D"><enum>(4)</enum><text display-inline="yes-display-inline">The efficacy of oversight conducted to ensure that independent charity patient assistance programs adhere to guidance from the Office of the Inspector General of the Department of Health and Human Services on avoiding waste, fraud, and abuse.</text></paragraph></subsection><subsection id="HB54CD58635A84B899E12CDF2B462E867"><enum>(b)</enum><header>Definitions</header><text>In this section:</text><paragraph id="H0411ADA46D4D4DD8AC2DA2148FBC9C80"><enum>(1)</enum><header>Independent charity patient assistance program</header><text>The term <term>independent charity patient assistance program</term> means any organization described in <external-xref legal-doc="usc" parsable-cite="usc/26/501">section 501(c)(3)</external-xref> of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code and which is not a private foundation (as defined in section 509(a) of such Code) that offers patient assistance.</text></paragraph><paragraph id="H789D70ACBB2749B2B47AD276077D55E9"><enum>(2)</enum><header>Manufacturer</header><text>The term <term>manufacturer</term> has the meaning given that term in section 1927(k)(5) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(k)(5)</external-xref>).</text></paragraph><paragraph id="H6EDF4E0808D24E75940DE60AF6407F8F"><enum>(3)</enum><header>Manufacturer patient assistance program</header><text>The term <term>manufacturer patient assistance program</term> means an organization, including a private foundation (as so defined), that is sponsored by, or receives funding from, a manufacturer and that offers patient assistance. Such term does not include an independent charity patient assistance program.</text></paragraph><paragraph id="HFDE086FB9DFE4035BFB72D860F3E3DBF"><enum>(4)</enum><header>Patient assistance</header><text>The term <term>patient assistance</term> means assistance provided to offset the cost of drugs for individuals. Such term includes free products, coupons, rebates, copay or discount cards, and other means of providing assistance to individuals related to drug costs, as determined by the Secretary of Health and Human Services.</text></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HFBD953391A8B4052B2D607C350970FF0"><enum>(c)</enum><header display-inline="yes-display-inline">Report</header><text display-inline="yes-display-inline">Not later than 24 months after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report describing the findings of the study required under subsection (a).</text></subsection></section><section id="H6BE2B23B14B84E00A2036E7C084315C6"><enum>239.</enum><header>MedPAC report on shifting coverage of certain Medicare part B drugs to Medicare part D</header><subsection id="HD8CBEA2F3CAA4A4EB6E0FF7D0413741C"><enum>(a)</enum><header>Study</header><text>The Medicare Payment Advisory Commission (in this section referred to as the <quote>Commission</quote>) 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 (<external-xref legal-doc="usc" parsable-cite="usc/42/1395j">42 U.S.C. 1395j et seq.</external-xref>) to part D of such title (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-21">42 U.S.C. 1395w–21 et seq.</external-xref>). Such study shall include an analysis of—</text><paragraph id="H930B141E1215456B8BA07E3B57CF366A"><enum>(1)</enum><text>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</text></paragraph><paragraph id="H660E07AC0C5A47E685363D515417D713"><enum>(2)</enum><text>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.</text></paragraph></subsection><subsection id="H6ACC6407A7B6428E8F060864A7512BDB"><enum>(b)</enum><header>Report</header><paragraph id="HB339BA29B0C44253810F912B81E05DFD"><enum>(1)</enum><header>In general</header><text>Not later than June 30, 2024, the Commission shall submit to Congress a report containing the results of the study conducted under subsection (a).</text></paragraph><paragraph id="HF65AC5C9EFE447B2AACB930F0FA47649"><enum>(2)</enum><header>Contents</header><text>The report under paragraph (1) shall include information, and recommendations as the Commission deems appropriate, regarding—</text><subparagraph id="H513BEFD4F613421F90747D231190E2CF"><enum>(A)</enum><text>formulary design under such part D;</text></subparagraph><subparagraph id="H88BD043775BE42F29E5B61BAD594B53E"><enum>(B)</enum><text>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;</text></subparagraph><subparagraph id="HD9A7DE1E65BA4C32A63CC329EB54CDD2"><enum>(C)</enum><text>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; and</text></subparagraph><subparagraph id="H1538D22F24F74021AD85D4A25ABA0C72"><enum>(D)</enum><text>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.</text></subparagraph></paragraph></subsection></section><section id="H50A00BB91C3F44B091599134DEFE3199"><enum>240.</enum><header>Taking steps to fulfill treaty obligations to Tribal communities</header><subsection id="H81E0DD9A9C724503B74D4E33DE17C97B"><enum>(a)</enum><header>GAO study</header><text display-inline="yes-display-inline">The Comptroller General shall conduct a study regarding access to, and the cost of, prescription drugs among Indians. The study shall include—</text><paragraph id="H33DE2D03A6C245FDA12DD45362014751"><enum>(1)</enum><text>a review of what Indian health programs pay for prescription drugs on reservations and in urban centers relative to other consumers;</text></paragraph><paragraph id="HAD24C20292B245739C78C4CAA16D9531"><enum>(2)</enum><text>recommendations to align the value of prescription drug discounts available under the Medicaid drug rebate program established under section 1927 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8</external-xref>) with prescription drug discounts available to Tribal communities through the purchased/referred care program of the Indian Health Service for physician administered drugs; and</text></paragraph><paragraph id="HC56A8C15A9C44DE7BBC4A456681FE937"><enum>(3)</enum><text>an examination of how Tribal communities and urban Indian organizations utilize the Medicare part D program established under title XVIII of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-101">42 U.S.C. 1395w–101 et seq.</external-xref>) and recommendations to improve enrollment among Indians in that program.</text></paragraph></subsection><subsection id="HD659FDB5E6384B0C9C901CB1812A90F6"><enum>(b)</enum><header>Report</header><text>Not later than 18 months after the date of the enactment of this Act, the Comptroller General shall submit to Congress a report containing the results of the study conducted under subsection (a), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate.</text></subsection><subsection id="H4043D9AD9E7C4B0CBCC9BF36E4888713"><enum>(c)</enum><header>Definitions</header><text>In this section:</text><paragraph id="HA68914BC32314B68852C9E5FA4DC272E"><enum>(1)</enum><header>Comptroller General</header><text>The term <term>Comptroller General</term> means the Comptroller General of the United States.</text></paragraph><paragraph id="HA82BFD5C9C544193A5BC7543CF7DCF3A"><enum>(2)</enum><header>Indian; Indian health program; Indian tribe</header><text>The terms <term>Indian</term>, <term>Indian health program</term>, and <term>Indian tribe</term> have the meanings given those terms in section 4 of the Indian Health Care Improvement Act (<external-xref legal-doc="usc" parsable-cite="usc/25/1603">25 U.S.C. 1603</external-xref>).</text></paragraph></subsection></section><section id="H53A8E5A69C674F1F930F41D82EE8AC50"><enum>241.</enum><header>Establishing a monthly cap on beneficiary incurred costs for insulin products and supplies under a prescription drug plan or MA–PD plan</header><subsection id="H51EA20D800104EB3938A60B5E0140B4D"><enum>(a)</enum><header>In general</header><text>Section 1860D–2 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-102">42 U.S.C. 1395w–102</external-xref>), as amended by sections 121 and 133, is further amended—</text><paragraph id="HD928AA7FD50A4C3AAA6890D17210D77F"><enum>(1)</enum><text>in subsection (b)(2)—</text><subparagraph id="H6F1EE130A5E3437DA08DEA9CC810C2ED"><enum>(A)</enum><text>in subparagraph (A), by striking <quote>and (E)</quote> and inserting <quote>(E), and (F)</quote>;</text></subparagraph><subparagraph id="H08E27F25A8E9466B8685E7522A1E7542"><enum>(B)</enum><text>in subparagraph (B), by striking <quote>and (D)</quote> and inserting <quote>(D), and (F)</quote>; and</text></subparagraph><subparagraph id="H5674828A3A654439B4038A55703E4A19"><enum>(C)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block id="H048DDA5E8A304CF4B23EACAA628E37AB" style="OLC"><subparagraph id="HD661D58AD06948D0B7FA1434608CC521"><enum>(F)</enum><header>Cap on incurred costs for insulin products and supplies</header><clause id="H1E11ED71AFE143AA889C2B25845B17B8"><enum>(i)</enum><header>In general</header><text>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—</text><subclause id="H6137B7A309EB47918C7F9D5977A1814D"><enum>(I)</enum><text>for months occurring in 2022, $50; or</text></subclause><subclause id="H7B655FCD17F54B1D9F7E3864099E5F75"><enum>(II)</enum><text>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.</text></subclause></clause><clause id="H1E47335977724EC89BEA4FFE966D8F30"><enum>(ii)</enum><header>Application</header><text>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).</text></clause><clause id="H11EDA0E2BC5941B88C1976265025C076"><enum>(iii)</enum><header>Specified covered part d drug</header><text>For purposes of this subparagraph, the term <quote>specified covered part D drug</quote> means a covered part D drug that is—</text><subclause id="H4A3C5A1AEFB84AAF9BC6761C51929B07"><enum>(I)</enum><text>insulin; or</text></subclause><subclause id="HED0D94C211FB4801A2F9F22038E8547B"><enum>(II)</enum><text>a medical supply associated with the injection of insulin (as defined in regulations of the Secretary promulgated pursuant to subsection (e)(1)(B)).</text></subclause></clause></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="H26701A0EDBD64AA697EF9C9EF03F4326"><enum>(2)</enum><text>in subsection (c), by adding at the end the following new paragraph:</text><quoted-block id="H3F0E5AD841AF4DFA8EDBEF37A57B9736" style="OLC"><paragraph id="H932A0DED10B94981BE9DAD59985FBFE0"><enum>(5)</enum><header>Same protection with respect to expenditures for insulin and certain medical supplies</header><text>The coverage provides the coverage required under subsection (b)(2)(F).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H1D06A78A0A5D4DFE952C4098C05EA2A9"><enum>(b)</enum><header>Conforming amendments</header><paragraph id="H6BF62A7CF59448F697E9A9EC8B8AD2C2"><enum>(1)</enum><header>In general</header><text>Section 1860D–14(a)(1)(D) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-114">42 U.S.C. 1395w–114(a)(1)(D)</external-xref>), as amended by section 121, is further amended—</text><subparagraph id="H8FC34BBEFC244893AC554F543F0235D8"><enum>(A)</enum><text>in clause (ii), by striking <quote>section 1860D–2(b)(2)</quote> and inserting <quote>section 1860D–2(b)(2)(A)</quote>; and</text></subparagraph><subparagraph id="HB70F67033F404EDDB8034EFACFFCDEC6"><enum>(B)</enum><text>in clause (iii), by striking <quote>section 1860D–2(b)(2)</quote> and inserting <quote>section 1860D–2(b)(2)(A)</quote>.</text></subparagraph></paragraph><paragraph id="HF8A328580704452B92C19DA7D9F9CA1C"><enum>(2)</enum><header>Effective date</header><text>The amendments made by paragraph (1) shall apply with respect to plan year 2022 and each subsequent plan year.</text></paragraph></subsection></section></subtitle></title><title id="H8B38AD2BA07747DE848CCB3746C19F10" style="OLC"><enum>III</enum><header>Medicaid</header><section id="H98BB1AABE14146F19AE89D434812AF1C"><enum>301.</enum><header>Medicaid pharmacy and therapeutics committee improvements</header><subsection id="HB639B44D1B1548CCBD83A972F9D82C61"><enum>(a)</enum><header>In general</header><text>Subparagraph (A) of section 1927(d)(4) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(d)(4)</external-xref>) is amended to read as follows:</text><quoted-block display-inline="no-display-inline" id="H77ABA1B3E9CD48E5A153DC0850C53A46" style="OLC"><subparagraph id="H8B7EA4AB380E44AF9E924B717B382B2B"><enum>(A)</enum><clause commented="no" display-inline="yes-display-inline" id="H074BC8D93443432CAD044C3CB96EB7B3"><enum>(i)</enum><text>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.</text></clause><clause id="H34020BCCD1F74EF69418D2F611A0AAEE" indent="up1"><enum>(ii)</enum><text>Subject to clause (vi), the State establishes and implements a conflict of interest policy for the pharmacy and therapeutics committee that—</text><subclause id="H0FE461B986604C278CE4FF83744C06BE"><enum>(I)</enum><text>is publicly accessible;</text></subclause><subclause commented="no" id="H59EA7E0101C7430E98DC7543BA76EAD7"><enum>(II)</enum><text>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</text></subclause><subclause commented="no" id="H4ED6F848847646C3A6892ABFE8699A0B"><enum>(III)</enum><text>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.</text></subclause></clause><clause commented="no" id="H984A2AD4AB7D4DB29F7F55379090E40A" indent="up1"><enum>(iii)</enum><text>The membership of the pharmacy and therapeutics committee—</text><subclause commented="no" id="H9A900C0E8C3D46F5B6DA50DDB6C55D1D"><enum>(I)</enum><text>includes at least 1 actively practicing physician and at least 1 actively practicing pharmacist, each of whom—</text><item commented="no" id="H64FB9B6DB30F4AD5B397FCF30904C42B"><enum>(aa)</enum><text>is independent and free of conflict with respect to manufacturers and Medicaid participating plans or subcontractors, including pharmacy benefit managers; and</text></item><item commented="no" id="HAEC9A9B0BBE44EF1B4FC626120C27528"><enum>(bb)</enum><text>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</text></item></subclause><subclause commented="no" id="H20F9B245C0784FCEA1BD231E78680A6F"><enum>(II)</enum><text>is made publicly available.</text></subclause></clause><clause commented="no" id="H9D0267B4AD5C4F07AC1BE360A8D35F81" indent="up1"><enum>(iv)</enum><text>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).</text></clause><clause commented="no" id="HB49C60B0A53E4138B5757340DB0294C9" indent="up1"><enum>(v)</enum><text>The State reviews and has final approval of the formulary established by the pharmacy and therapeutics committee.</text></clause><clause commented="no" id="HE7768CCFB6044EEC911C279D39E426CA" indent="up1"><enum>(vi)</enum><text>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 303 of the <short-title>Reduced Costs and Continued Cures Act of 2021</short-title>, 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.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H2CA4D11D73824358A77CF4483C1DB92A"><enum>(b)</enum><header>Application to Medicaid managed care organizations</header><text>Clause (xiii) of section 1903(m)(2)(A) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396b">42 U.S.C. 1396b(m)(2)(A)</external-xref>) is amended—</text><paragraph id="HD8E0CA548A614F8A86F243EE89383D14"><enum>(1)</enum><text>by striking <quote>and (III)</quote> and inserting <quote>(III)</quote>;</text></paragraph><paragraph id="H89C23541CD404934998BE76DFD416D81"><enum>(2)</enum><text>by striking the period at the end and inserting <quote>, 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).</quote>; and</text></paragraph><paragraph id="HD6AC43F327C74F1CBCDFF01BB3F7BD69"><enum>(3)</enum><text>by moving the left margin 2 ems to the left.</text></paragraph></subsection><subsection commented="no" id="H2291B96B4D6E4847B9370734B261B05B"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall take effect on the date that is 1 year after the date of enactment of this Act.</text></subsection></section><section id="H0358185F97DF4B7CB16B06BAC8EC14A5"><enum>302.</enum><header>Improving reporting requirements and developing standards for the use of drug use review boards in State Medicaid programs</header><subsection id="HA2B4FC4336B445CD9D875DDAD1BE313E"><enum>(a)</enum><header>In general</header><text>Section 1927(g)(3) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(g)(3)</external-xref>) is amended—</text><paragraph id="HE6116D8D86CF4399933747B20EE63F09"><enum>(1)</enum><text>by amending subparagraph (B) to read as follows:</text><quoted-block act-name="" id="HE89F8016A2234126BCC45506AFCEED98" style="traditional"><subparagraph id="HD9BC8F35B12F46C89CB982E954C20AF4"><enum>(B)</enum><header>Membership</header><clause id="H76CC7F9D0C8248FF9EBE71951C64C03B"><enum>(i)</enum><header>In general</header><text>The membership of the DUR Board shall include health care professionals who have recognized knowledge and expertise in one or more of the following:</text><subclause id="HE61BC84C06E5441D82D6B5EEE5D32803"><enum>(I)</enum><text>The clinically appropriate prescribing of covered outpatient drugs.</text></subclause><subclause id="H50AA0C9AD8F848E292B183C4147221A2"><enum>(II)</enum><text>The clinically appropriate dispensing and monitoring of covered outpatient drugs.</text></subclause><subclause id="H352D1A9C3DA746748027FA5DBBEB19A9"><enum>(III)</enum><text>Drug use review, evaluation, and intervention.</text></subclause><subclause id="H6487DA0BFD4F4587AEB02878C146A7E7"><enum>(IV)</enum><text>Medical quality assurance.</text></subclause></clause><clause id="H9F58875A3C4F48F083EEEF006B629914"><enum>(ii)</enum><header>Membership requirements</header><text>The membership of the DUR Board shall—</text><subclause id="HC13360DA10BF4283946B528F8FA08786"><enum>(I)</enum><text>be made up of at least <fraction>1/3</fraction> but no more than 51 percent members who are licensed and actively practicing physicians and at least <fraction>1/3</fraction> members who are licensed and actively practicing pharmacists; </text></subclause><subclause id="HEF36BD5713204B28AE52C59D3F864BCE"><enum>(II)</enum><text>include at least 1 licensed and actively practicing physician and at least 1 licensed and actively practicing pharmacist, each of whom—</text><item id="H064832E803DE4E1DBD967C50EE19D187"><enum>(aa)</enum><text>is independent and free of any conflict, including with respect to manufacturers, Medicaid managed care entities, or pharmacy benefit managers; and</text></item><item id="H95248A3980104CFDB40A2B029BE58FA2"><enum>(bb)</enum><text>has expertise in the care of 1 or more categories of individuals who are likely to be eligible for benefits under this title, including elderly or disabled individuals, children with complex medical needs, or low-income individuals with chronic illnesses; and</text></item></subclause><subclause id="H3FE4C843A569453B97B3110D90BFEBE0"><enum>(III)</enum><text>be made publicly available.</text></subclause></clause><clause id="H9CEAAAC4BF5F4E4485C74CAF51DA8520"><enum>(iii)</enum><header>Conflict of interest policy</header><text>The State shall establish and implement a conflict of interest policy for the DUR Board that—</text><subclause id="HAFF4067D9C2442EB8A7504F698AAAEC0"><enum>(I)</enum><text>is publicly accessible;</text></subclause><subclause commented="no" id="H67349707969F409FBAE9D48EB4586DB6"><enum>(II)</enum><text>requires all board 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 board matters; and</text></subclause><subclause commented="no" id="H9BDD23EA4FAE42F29C70242051BB7B24"><enum>(III)</enum><text>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.</text></subclause></clause></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H8F68EF0E703A43A2A4CC01C504EC2A6D"><enum>(2)</enum><text>by adding at the end the following new subparagraph:</text><quoted-block act-name="" id="HD7C0A17103084A6796FF93B62EDA424B" style="traditional"><subparagraph id="HB81571B53F3C444885CBD127EE1FD8C1"><enum>(E)</enum><header>DUR Board membership reports</header><clause id="HFE461DE2857D43A4BB7710406AEABB41"><enum>(i)</enum><header>DUR Board reports</header><text>Each State shall require the DUR Board to prepare and submit to the State an annual report on the DUR Board membership. Each such report shall include any conflicts of interest with respect to members of the DUR Board that the DUR Board recorded or was aware of during the period that is the subject of the report, and the process applied to address such conflicts of interest, in addition to any other information required by the State.</text></clause><clause id="H9A29AEC3F5E8444DAC353A29F320C55E"><enum>(ii)</enum><header>Inclusion of DUR Board membership information in State reports</header><text>Each annual State report to the Secretary required under subparagraph (D) shall include—</text><subclause id="H1FB1068410854BB3AA3319684A2DD679"><enum>(I)</enum><text>the number of individuals serving on the State's DUR Board;</text></subclause><subclause id="HF4CFDDEC16D943EDACBF10E221ECCFF0"><enum>(II)</enum><text>the names and professions of the individuals serving on such DUR Board;</text></subclause><subclause id="H6529E983E2B3490B98A3AF85491C2BC7"><enum>(III)</enum><text>any conflicts of interest or recusals with respect to members of such DUR Board reported by the DUR Board or that the State was aware of during the period that is the subject of the report; and</text></subclause><subclause id="H425FE30C65884C2D8063B1CF8CD77D3D"><enum>(IV)</enum><text>whether the State has elected for such DUR Board to serve as the committee responsible for developing a State formulary under subsection (d)(4)(A).</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H7AA94C6C9D5A493BA1A2356FB9BF0B4B"><enum>(b)</enum><header>Managed care requirements</header><text>Section 1932(i) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396u-2">42 U.S.C. 1396u–2(i)</external-xref>) is amended—</text><paragraph id="HEF71CA598EB74D06A622F4F37FB82F71"><enum>(1)</enum><text>by striking <quote>section 483.3(s)(4)</quote> and inserting <quote>section 438.3(s)(4)</quote>;</text></paragraph><paragraph id="H95753F657C2E43A0873F41A8B83B974C"><enum>(2)</enum><text>by striking <quote>483.3(s)(5)</quote> and inserting <quote>438.3(s)(5)</quote>; and</text></paragraph><paragraph id="H06775A0712384F03B961DAB10A470E2D"><enum>(3)</enum><text>by adding at the end the following: <quote>Such a managed care entity shall not be considered to be in compliance with the requirement of such section 438.3(s)(5) that the entity provide a detailed description of its drug utilization review activities unless the entity includes a description of the prospective drug review activities described in paragraph (2)(A) of section 1927(g) and the activities listed in paragraph (3)(C) of section 1927(g), makes the underlying drug utilization review data available to the State and the Secretary, and provides such other information as deemed appropriate by the Secretary.</quote>.</text></paragraph></subsection><subsection id="HFC14EE4100BF4AF4A024B1BA4D9DDE2B"><enum>(c)</enum><header>Development of national standards for Medicaid drug use review</header><text>The Secretary of Health and Human Services may promulgate regulations or guidance establishing national standards for Medicaid drug use review programs under section 1927(g) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8</external-xref>) and drug utilization review activities and requirements under section 1932(i) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396u-2">42 U.S.C. 1396u–2(i)</external-xref>), for the purpose of aligning review criteria for prospective and retrospective drug use review across all State Medicaid programs.</text></subsection><subsection id="H1841864FCF5A4C95B114A786007159C2"><enum>(d)</enum><header>CMS guidance</header><text>Not later than 18 months after the date of enactment of this Act, the Secretary of Health and Human Services shall issue guidance—</text><paragraph id="H9FE65FB2E9C24124A2503686819708CC"><enum>(1)</enum><text>outlining steps that States must take to come into compliance with statutory and regulatory requirements for prospective and retrospective drug use review under section 1927(g) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(g)</external-xref>) and drug utilization review activities and requirements under section 1932(i) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396u-2">42 U.S.C. 1396u–2(i)</external-xref>) (including with respect to requirements that were in effect before the date of enactment of this Act); and</text></paragraph><paragraph id="H45049910E32B4B32AB5C18212BFB96EB"><enum>(2)</enum><text>describing the actions that the Secretary will take to enforce such requirements.</text></paragraph></subsection><subsection commented="no" id="H31A4E556B2C641E5AFC0FD2C7B5ABC8E"><enum>(e)</enum><header>Effective date</header><text>The amendments made by this section shall take effect on the date that is 1 year after the date of enactment of this Act.</text></subsection></section><section id="HDF32E7FD00DC47C6976DE5D45F4830B9"><enum>303.</enum><header>GAO report on conflicts of interest in State Medicaid program drug use review boards and pharmacy and therapeutics (P&amp;T) committees</header><subsection id="HB4BBFC65300240D283AEC67426EF4FA8"><enum>(a)</enum><header>Investigation</header><text display-inline="yes-display-inline">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 <term>DUR Boards</term>) and pharmacy and therapeutics committees (in this section referred to as <term>P&amp;T Committees</term>).</text></subsection><subsection id="H08FBDBF2D34046A2A6ACF4A0EEC079AF"><enum>(b)</enum><header>Report</header><text>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:</text><paragraph id="H80B6B59A654F4CC7908F9AA41BF40DF7"><enum>(1)</enum><text>A description outlining how DUR Boards and P&amp;T Committees operate in States, including details with respect to—</text><subparagraph id="H4FD016D56D8F44EAB392CAC6BB4B618E"><enum>(A)</enum><text>the structure and operation of DUR Boards and statewide P&amp;T Committees;</text></subparagraph><subparagraph id="HD9E14B5E6E094727ACAA2D7EB3CD9630"><enum>(B)</enum><text>States that operate separate P&amp;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 <term>Medicaid MCOs)</term>; and</text></subparagraph><subparagraph id="HE90F6FF56A824D418D1DF3D7CD5B4758"><enum>(C)</enum><text>States that allow Medicaid MCOs to have their own P&amp;T Committees and the extent to which pharmacy benefit managers administer or participate in such P&amp;T Committees.</text></subparagraph></paragraph><paragraph id="H64A82326A0CD4C0E8C2031377A11ED48"><enum>(2)</enum><text>A description outlining the differences between DUR Boards established in accordance with section 1927(g)(3) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r">42 U.S.C. 1396r(g)(3)</external-xref>) and P&amp;T Committees.</text></paragraph><paragraph id="H5718AF0D537C4221992ACDA74129995B"><enum>(3)</enum><text>A description outlining the tools P&amp;T Committees may use to determine Medicaid drug coverage and utilization management policies.</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HD1D118857F8647C4B3E8DF5E6AC9B961"><enum>(4)</enum><text display-inline="yes-display-inline">An analysis of whether and how States or P&amp;T Committees establish participation and independence requirements for DUR Boards and P&amp;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.</text></paragraph><paragraph id="H70A7D902E1974462891BE28140A43AFF"><enum>(5)</enum><text>A description outlining how States, DUR Boards, or P&amp;T Committees define conflicts of interest.</text></paragraph><paragraph id="H078EC65EDAE94290AA97CBBBAD8E6BF7"><enum>(6)</enum><text>A description of how DUR Boards and P&amp;T Committees address conflicts of interest, including who is responsible for implementing such policies.</text></paragraph><paragraph id="H04DD44B7DFD34326846FDCA1F72FAB0F"><enum>(7)</enum><text>A description of the tools, if any, States use to ensure that there are no conflicts of interest on DUR Boards and P&amp;T Committees.</text></paragraph><paragraph id="H70EBE9A102F1430D9FBDF4BBC6B048FB"><enum>(8)</enum><text>An analysis of the effectiveness of tools States use to ensure that there are no conflicts of interest on DUR Boards and P&amp;T Committees and, if applicable, recommendations as to how such tools could be improved.</text></paragraph><paragraph id="HDF4E6F0A83B54578B56E8D96BAECD758"><enum>(9)</enum><text>A review of strategies States may use to guard against conflicts of interest on DUR Boards and P&amp;T Committees and to ensure compliance with the requirements of titles XI and XIX of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1301">42 U.S.C. 1301 et seq.</external-xref>, 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.</text></paragraph></subsection></section><section id="H38E4C56549AF469885F8CB2E393D0A92"><enum>304.</enum><header>Ensuring the accuracy of manufacturer price and drug product information under the Medicaid drug rebate program</header><subsection id="H8E4F0A76FC2C456CAE90A93CFE5A9E56"><enum>(a)</enum><header>Audit of manufacturer price and drug product information</header><paragraph id="HF2E27CE40E4842C69B6451D8D42E3B08"><enum>(1)</enum><header>In general</header><text>Subparagraph (B) of section 1927(b)(3) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(b)(3)</external-xref>) is amended to read as follows:</text><quoted-block act-name="" id="H41A079467776412FB591D1114F689FF1" style="traditional"><subparagraph id="H453545ADCCEB4AE1B027D28A07A5FB14"><enum>(B)</enum><header>Audits and surveys of manufacturer price and drug product information</header><clause id="H95B8F533BE784475AF6D477C0A9DE020"><enum>(i)</enum><header>Audits</header><text>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.</text></clause><clause id="H534818C072484DC89C62F788DE1869BE"><enum>(ii)</enum><header>Verifications surveys of average manufacturer price and manufacturer's average sales price</header><text>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 <term>direct sellers</term>)), when necessary, to verify manufacturer prices and manufacturer's average sales prices (including wholesale acquisition cost) to make payment reported under subparagraph (A).</text></clause><clause id="HD4B6906D9CCC434F86F1CC2413A6C049"><enum>(iii)</enum><header>Penalties</header><text>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).</text></clause><clause id="HAC6C650628664C788E2608ACDA71C123"><enum>(iv)</enum><header>Reports</header><subclause id="H13269F39C5124AB39478279A9F83CC7E"><enum>(I)</enum><header>Report to Congress</header><text>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.</text></subclause><subclause id="HB1D0C5AA25AD45CCAFB669E826C3901D"><enum>(II)</enum><header>Annual reports</header><text>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.</text></subclause><subclause id="H5AB2CDD4B491406CB6085B558C010BF2"><enum>(III)</enum><header>Content</header><text>Each report submitted under subclause (II) shall, with respect to the period that is the subject of the report, include summaries of—</text><item id="H56EE457C47A44F87AE2BA0B51AC8585D"><enum>(aa)</enum><text>error rates in the price, drug product, and other relevant information supplied by manufacturers under subparagraph (A);</text></item><item id="H1D5E47D6681E45A9971900B621A0E854"><enum>(bb)</enum><text>the timeliness with which manufacturers, wholesalers, and direct sellers provide information required under subparagraph (A) or under clause (i) or (ii) of this subparagraph;</text></item><item id="HE5988832EDAD472685FFFC13ABCDE2CF"><enum>(cc)</enum><text>the number of manufacturers, wholesalers, and direct sellers and drug products audited under this subparagraph;</text></item><item id="H937F9F98BFA149ED8610CFDF7A67D700"><enum>(dd)</enum><text>the types of price and drug product information reviewed under the audits conducted under this subparagraph;</text></item><item id="HD4057C75C1CB4DA2AA39BB67F83BAF48"><enum>(ee)</enum><text>the tools and methodologies employed in such audits;</text></item><item id="H775CB339D73B443784F0DC7041B39FB5"><enum>(ff)</enum><text>the findings of such audits, including which manufacturers, if any, were penalized under this subparagraph; and</text></item><item id="H9E06941AC5834B69A46A0D6FD5832218"><enum>(gg)</enum><text>such other relevant information as the Secretary shall deem appropriate.</text></item></subclause><subclause id="HD38C79C475E44504B86647C74F958FEC"><enum>(IV)</enum><header>Protection of information</header><text>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.</text></subclause></clause><clause id="H0AE4D19EEAD04B02A3F0D252EDB2F8FA"><enum>(v)</enum><header>Appropriations</header><text>Out of any funds in the Treasury not otherwise appropriated, there is appropriated to the Secretary $2,000,000 for fiscal year 2023 and each fiscal year thereafter to carry out this subparagraph.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="H8F2A4208EC5941FEAF120F7B22EC0C2A"><enum>(2)</enum><header>Effective date</header><text>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.</text></paragraph></subsection><subsection id="HF95E209AFE6E4529AEB96B0C4517DAE1"><enum>(b)</enum><header>Increased penalties for noncompliance with reporting requirements</header><paragraph id="HCCC755E1666F477DB4201F6A2C82489D"><enum>(1)</enum><header>Increased penalty for late reporting of information</header><text>Section 1927(b)(3)(C)(i) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(b)(3)(C)(i)</external-xref>) is amended by striking <quote>increased by $10,000 for each day in which such information has not been provided and such amount shall be paid to the Treasury</quote> and inserting <quote>, 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</quote>.</text></paragraph><paragraph id="HF721971231B7408CB1F308F76B5F4D01"><enum>(2)</enum><header>Increased penalty for knowingly reporting false information</header><text>Section 1927(b)(3)(C)(ii) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(b)(3)(C)(ii)</external-xref>) is amended by striking <quote>$100,000</quote> and inserting <quote>$500,000</quote>.</text></paragraph><paragraph id="HAE7078F1F09B4CD29668C613438AF7F0"><enum>(3)</enum><header>Effective date</header><text>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.</text></paragraph></subsection></section><section id="H815DE0E865DF436BAABA7EFC08A8E02D"><enum>305.</enum><header>T–MSIS drug data analytics reports</header><subsection id="H7C41AFF55ACB4E18816B53AC6E0B7BBF"><enum>(a)</enum><header>In general</header><text>Not later than May 1 of each calendar year beginning with calendar year 2024, the Secretary of Health and Human Services (in this section referred to as the <term>Secretary</term>) shall publish on a website of the Centers for Medicare &amp; Medicaid Services that is accessible to the public a report of the most recently available data on provider prescribing patterns under the Medicaid program.</text></subsection><subsection id="HFCBFFE15F80A4BD49C9F8B035466D09D"><enum>(b)</enum><header>Content of report</header><paragraph id="HEB681B2B49EF42CD9652DA01E84983C9"><enum>(1)</enum><header>Required content</header><text>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):</text><subparagraph id="H3FBCFC363782458295B07965F09FBC74"><enum>(A)</enum><text>A comparison of covered outpatient drug (as defined in section 1927(k)(2) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(k)(2)</external-xref>)) 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)—</text><clause id="H3D07CEA4ACBA4F858FDA2ED3892041F4"><enum>(i)</enum><text>across all forms or models of reimbursement used under the plan or waiver;</text></clause><clause id="HC387BE393E1C447A879135A43B320A5E"><enum>(ii)</enum><text>within specialties and subspecialties, as defined by the Secretary;</text></clause><clause id="H939B2E266FA54D158020291F48BE0D6E"><enum>(iii)</enum><text>by episodes of care for—</text><subclause id="H370E58FC0D5442BBAF977FCB6EFA295F"><enum>(I)</enum><text>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;</text></subclause><subclause commented="no" display-inline="no-display-inline" id="HC75DA6CF3DC34457BD4FFC1BA5FF55B9"><enum>(II)</enum><text display-inline="yes-display-inline">procedural groupings; and</text></subclause><subclause id="H9711871773F740A2B43A1CFAAC3F5783"><enum>(III)</enum><text>rare disease diagnosis codes;</text></subclause></clause><clause id="HCF14BBA5507A479C880345B8579F42EF"><enum>(iv)</enum><text>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;</text></clause><clause id="H4367A4BFBAB64FC480BF2D19A7C80D35"><enum>(v)</enum><text>by patient high-utilizer or risk status; and</text></clause><clause id="H1981E71A3007497E90B1ADA72E1FC5D4"><enum>(vi)</enum><text>by high and low resource settings by facility and place of service categories, as determined by the Secretary.</text></clause></subparagraph><subparagraph id="H7A5F33BBA44048A581333AE28428DAD1"><enum>(B)</enum><text>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.</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H564D7229D9B34189868A80DDD9DB6B88"><enum>(2)</enum><header display-inline="yes-display-inline">Additional content</header><text display-inline="yes-display-inline">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—</text><subparagraph id="H694B2632EA2842688283F480BE8DE017"><enum>(A)</enum><text>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;</text></subparagraph><subparagraph id="HCE675BB2BE82416592A592C5F9139232"><enum>(B)</enum><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/42/1315">42 U.S.C. 1315</external-xref>) and the models applicable to populations that are not covered under the waiver;</text></subparagraph><subparagraph id="HC4E5C14D6861409B8939E53522F78187"><enum>(C)</enum><text>a comparison of the prescription utilization management tools employed by different Medicaid managed care organizations, pharmacy benefit managers, and related entities within the State;</text></subparagraph><subparagraph id="H0AEB7E9892C34A63AFDB5AEBB8889383"><enum>(D)</enum><text>a comparison of the prescription utilization management tools applicable to each enrollment category under a State Medicaid plan or waiver; and</text></subparagraph><subparagraph id="HA438FE9C17AF42AE8B1694246F211B95"><enum>(E)</enum><text>a comparison of the prescription utilization management tools applicable under the State Medicaid plan or waiver by patient high-utilizer or risk status.</text></subparagraph></paragraph><paragraph commented="no" id="HB2D88A67083146DE8B39DE07AB9DCAA4"><enum>(3)</enum><header>Additional analysis</header><text>To the extent practicable, the Secretary shall include in each report published under subsection (a)—</text><subparagraph commented="no" id="HA3309727547B4C9E9A74DA326F406470"><enum>(A)</enum><text>analyses of national, State, and local patterns of Medicaid population-based prescribing behaviors; and</text></subparagraph><subparagraph commented="no" id="H5DDA8CE5A48E4D3C8CCA86F989F0AE86"><enum>(B)</enum><text>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.</text></subparagraph></paragraph></subsection><subsection id="H7369A06A864944D7929F305A0DAAC321"><enum>(c)</enum><header>Use of T–MSIS data</header><text>Each report required under subsection (a) shall—</text><paragraph id="H346209B39BAE4251AB66B657EF695BC2"><enum>(1)</enum><text>be prepared using data and definitions from the Transformed Medicaid Statistical Information System (<quote>T–MSIS</quote>) data set (or a successor data set) that is not more than 24 months old on the date that the report is published; and</text></paragraph><paragraph id="H353136F69ECE4A4C812EB19D9A654E6B"><enum>(2)</enum><text>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.</text></paragraph></subsection><subsection id="H9F79C4FDF30A4367B2C0B14591C99C8B"><enum>(d)</enum><header>Preparation of report</header><text>Each report required under subsection (a) shall be prepared by the Administrator for the Centers for Medicare &amp; Medicaid Services.</text></subsection><subsection commented="no" display-inline="no-display-inline" id="HE8916006670D4E00B5EF069594B22960"><enum>(e)</enum><header>Appropriation</header><text>For fiscal year 2023 and each fiscal year thereafter, there is appropriated to the Secretary $2,000,000 to carry out this section.</text></subsection></section><section commented="no" id="H05CC3EE5E9F1456DB1B2F6388351CA0A"><enum>306.</enum><header>Risk-sharing value-based payment agreements for covered outpatient drugs under Medicaid</header><subsection id="HE295E6DC136D495D8DD797C77A77C54E"><enum>(a)</enum><header>In general</header><text>Section 1927 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8</external-xref>) is amended by adding at the end the following new subsection:</text><quoted-block act-name="" id="HFA83715A0D5A4F969585EAA2F2C46D13" style="traditional"><subsection id="H34547C7CBEC14DD0A395662E2EE97959"><enum>(l)</enum><header>State option To pay for covered outpatient drugs through risk-Sharing value-Based agreements</header><paragraph id="H81AE45B176414B5CA1BC00A06758A6AC"><enum>(1)</enum><header>In general</header><text>Beginning January 1, 2025, 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.</text></paragraph><paragraph id="H5B71BB1828E8461B9A65B54503866CA4"><enum>(2)</enum><header>Secretarial approval</header><subparagraph id="HEFE4877BDFAF494E953CE4B9F7B8D71F"><enum>(A)</enum><header>In general</header><text>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:</text><clause id="H53FB64F13186463DB9B9732265106E90"><enum>(i)</enum><header>Manufacturer is party to rebate agreement and in compliance with requirements</header><text>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.</text></clause><clause id="H296E1ABA961A49889D358922313C9278"><enum>(ii)</enum><header>No increase to projected net Federal spending</header><subclause id="HCD6B170C30CF46A9A65A38BB36164C25"><enum>(I)</enum><header>In general</header><text>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.</text></subclause><subclause commented="no" id="H599CDAA95B8F49168E741ADF2AD68809"><enum>(II)</enum><header>Net Federal spending defined</header><text>For purposes of this subsection, the term <term>net Federal spending</term> 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.</text></subclause><subclause id="H6196ABABE41C4D1AA6722BC67C364745"><enum>(III)</enum><header>Information</header><text>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.</text></subclause></clause><clause id="H76B702B0DE3C4977954931DFE4AABDEB"><enum>(iii)</enum><header>Launch and list price justifications</header><text>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.</text></clause><clause id="H406F0922B7F344F59AA81C789D05BE3C"><enum>(iv)</enum><header>Confidentiality of information; penalties</header><text>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.</text></clause></subparagraph><subparagraph id="H028EB0369BC1430CB71277F2F25B74E4"><enum>(B)</enum><header>Consideration of State request for approval</header><clause id="HCEE2BBB4C074413CB053DCD07685551A"><enum>(i)</enum><header>In general</header><text>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.</text></clause><clause commented="no" id="H7CFB6521BA3E48EEB24FE5E6338FA943"><enum>(ii)</enum><header>Timing</header><text>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).</text></clause></subparagraph><subparagraph commented="no" id="HB4F57F7489214898B6F333102E671B2C"><enum>(C)</enum><header>Consultation with the Commissioner of Food and Drugs</header><text>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.</text></subparagraph></paragraph><paragraph id="H57F6E3508D2441E7A19D49EFCD116340"><enum>(3)</enum><header>Installment-based payment structure</header><subparagraph id="H8200DE349F584B7B9D6ECC17BF99B78C"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph><subparagraph id="H08F563E0072F48F9B0C3F3DA4ADBEC96"><enum>(B)</enum><header>Requirements for installment payments</header><clause id="HE101C36DA2474029A758CD917D8A8450"><enum>(i)</enum><header>Timing of first payment</header><text>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.</text></clause><clause id="H5026A424304046CA87E52A9A4BB76CD1"><enum>(ii)</enum><header>Length of installment period</header><text>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.</text></clause><clause id="H80C0B0D144724BF09F1F41D018AD1677"><enum>(iii)</enum><header>Nonpayment or reduced payment of installments following a failure to meet clinical parameter</header><text>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—</text><subclause id="H3849E3D9EF044E2DABA460BA657CA386"><enum>(I)</enum><text>the installment payment shall not be made; or</text></subclause><subclause id="H84A06CFA796644B2817F3ABBED6A81CE"><enum>(II)</enum><text>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.</text></subclause></clause></subparagraph></paragraph><paragraph id="H9C1EC994EB3A4D928EE59AF0979A60DB"><enum>(4)</enum><header>Notice of intent</header><subparagraph id="HED289A10A00945D2958EE6C828CC3F31"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph><subparagraph commented="no" id="H1C0AFF248A2741B48779DD3A85B13333"><enum>(B)</enum><header>Treatment of subsequently approved drugs</header><clause commented="no" id="H2D2796B6E8C642C2BDFA618CB384F7FE"><enum>(i)</enum><header>In general</header><text>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, 2025), 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.</text></clause><clause commented="no" id="HFABFD7DECA254A23B3E8167F5C22A079"><enum>(ii)</enum><header>Application to certain subsequently approved drugs</header><text>A drug described in this clause is a covered outpatient drug of a manufacturer—</text><subclause commented="no" id="H3EC0FA7A9607476C8AAF72D76D0DCFC1"><enum>(I)</enum><text>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</text></subclause><subclause commented="no" id="H87067C29F9E142D688FB27B7BBCC1127"><enum>(II)</enum><text>with respect to which, as of January 1, 2025, 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.</text></subclause></clause><clause commented="no" id="HF2BCFD1B4AE84BFDB389750B9F481C06"><enum>(iii)</enum><header>Parallel approval</header><text>The Secretary, in coordination with the Administrator of the Centers for Medicare &amp; 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.</text></clause><clause commented="no" id="H0B3DAB1B643C4B8B841DE6B354CC9B15"><enum>(iv)</enum><header>Rule of construction</header><text>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.</text></clause></subparagraph></paragraph><paragraph id="HD9B94698BD3F42D1A0139D6712128ABF"><enum>(5)</enum><header>Special payment rules</header><subparagraph id="H7477DD15850C41EEB722979FD0876B23"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph><subparagraph id="HA7634D8DE7F9455BAE2F8167F9481E7E"><enum>(B)</enum><header>Death</header><text>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.</text></subparagraph><subparagraph id="H065D3479122C4ACC91C8ECE5CB619970"><enum>(C)</enum><header>Withdrawal of approval</header><text>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.</text></subparagraph><subparagraph id="H62C9D025F26E4B4BB476717C25753BEC"><enum>(D)</enum><header>Alternative arrangement under agreement</header><text>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.</text></subparagraph><subparagraph id="H68EABA3994F7418F8481C6F4D6721DD7"><enum>(E)</enum><header>Guidance</header><text>Not later than January 1, 2025, 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.</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H353EE7074EEE4DE496F1CC73440ABA04"><enum>(6)</enum><header display-inline="yes-display-inline">Treatment of payments under risk-sharing value-based agreements for purposes of average manufacturer price; best price</header><text display-inline="yes-display-inline">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).</text></paragraph><paragraph id="HBB523FCBC65D437980D8C6FFE67FA2DF"><enum>(7)</enum><header>Assessments and report to Congress</header><subparagraph id="H50498A2EB21043F4B498992EE5BF055C"><enum>(A)</enum><header>Assessments</header><clause id="H1F9579D787A047CAA0B293F1768AC29B"><enum>(i)</enum><header>In general</header><text>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.</text></clause><clause commented="no" id="H4186E8581AE448B7A8343ED2F934C252"><enum>(ii)</enum><header>Assessment period</header><text>For purposes of clause (i)—</text><subclause commented="no" id="H3B4FC70BF40D4368A41A98B61B7ABEAC"><enum>(I)</enum><text>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</text></subclause><subclause commented="no" id="HCD4FEA7DA48C406A886CD0B4E4FEC06A"><enum>(II)</enum><text>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.</text></subclause></clause></subparagraph><subparagraph id="H189C969AF2794A8F9382601CF81E8B37"><enum>(B)</enum><header>Results of assessments</header><clause id="H099A8B259E1D4BCD8B2591556BCD6E22"><enum>(i)</enum><header>Termination option</header><text>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.</text></clause><clause id="HDE965640A3134F21A86BFB2C4CC7CDC2"><enum>(ii)</enum><header>Repayment required</header><subclause id="HABC2A100274D41E1B9A673B1F0997F9F"><enum>(I)</enum><header>In general</header><text>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.</text></subclause><subclause id="HEA65CE8F057C4DF1B92DDEAA8473145E"><enum>(II)</enum><header>Termination for failure to pay</header><text>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.</text></subclause><subclause id="H0298DCA9F8774782B88F4CB454A03A92"><enum>(III)</enum><header>Additional penalties</header><text>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—</text><item id="H2ACC91731B5F444F83FCE73FF91496ED"><enum>(aa)</enum><text>suspend or terminate the manufacturer's rebate agreement under this section; and</text></item><item id="H766554DAC68A497A9F4383A97DC77FB9"><enum>(bb)</enum><text>pursue any other remedy that would be available if the manufacturer had failed to pay required rebates under this section.</text></item></subclause></clause></subparagraph><subparagraph id="HC2FE6313FEEE440DA6F531112C1E792C"><enum>(C)</enum><header>Report to Congress</header><text>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—</text><clause id="HEA3A55F540D4421EACF814F21CD99A64"><enum>(i)</enum><text>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;</text></clause><clause id="H62CF0003021344819359EE29997BFE0E"><enum>(ii)</enum><text>an analysis of the impact of such agreements on overall State and Federal spending under this title;</text></clause><clause id="HF0E63E33655648B6A721E3A36E644034"><enum>(iii)</enum><text>an assessment of the impact of such agreements on drug prices, including launch price and price increases; and</text></clause><clause id="HCBF68001B7DD47359A1452592D35EB43"><enum>(iv)</enum><text>such recommendations to Congress as the Secretary deems appropriate.</text></clause></subparagraph></paragraph><paragraph id="H2C38E0FBCC914AA09885B117EA53E2F3"><enum>(8)</enum><header>Guidance and regulations</header><subparagraph id="H46A0C9570B6C425E8B17232600A9C6F0"><enum>(A)</enum><header>In general</header><text>Not later than January 1, 2025, 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.</text></subparagraph><subparagraph id="H66155B8E3B634CF4B013A992077B0AD2"><enum>(B)</enum><header>Model agreements</header><clause id="HEDA2AFA97ADF4F899294578214FC2FBE"><enum>(i)</enum><header>In general</header><text>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).</text></clause><clause id="HCC9D6094F98C48B387105FA9FBFBB51D"><enum>(ii)</enum><header>Confidentiality</header><text>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.</text></clause></subparagraph><subparagraph commented="no" id="HB1DC631FAEA742068BD8CF0402BC9FB3"><enum>(C)</enum><header>OIG consultation</header><clause commented="no" id="HEA5BE80291FA4DA3AA160EDC4DF17A1D"><enum>(i)</enum><header>In general</header><text>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.</text></clause><clause commented="no" id="HF9376E0935F7452699B6DFAE01793975"><enum>(ii)</enum><header>OIG policy updates as necessary</header><text>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.</text></clause></subparagraph></paragraph><paragraph id="HBB1D1CFD99C440C29FCC0BDF26AC3157"><enum>(9)</enum><header>Rules of construction</header><subparagraph id="HC5591ECCECC84441B09CFAFAB1EE88FA"><enum>(A)</enum><header>Modifications</header><text>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.</text></subparagraph><subparagraph id="H6664079472E84D74BB2E84D352DFD11C"><enum>(B)</enum><header>Rebate agreements</header><text>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.</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HF651E70EEDD4419592B7D91FE2C2A87E"><enum>(C)</enum><header display-inline="yes-display-inline">FFP for payments under risk-sharing value-based payment agreements</header><text display-inline="yes-display-inline">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.</text></subparagraph><subparagraph id="H889E2D6DDE5C4E51B8F7CE3A40045798"><enum>(D)</enum><header>Continued application of other provisions</header><text>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.</text></subparagraph></paragraph><paragraph id="H6ABC20B42FE64D15B0C915ED37E89E7F"><enum>(10)</enum><header>Appropriations</header><text>For fiscal year 2023 and each fiscal year thereafter, there are appropriated to the Secretary $5,000,000 for the purpose of carrying out this subsection.</text></paragraph><paragraph id="H255F6CBED4B64554B8D167FAC5ADFB52"><enum>(11)</enum><header>Definitions</header><text>In this subsection:</text><subparagraph id="HF05E3254AAC442DBA4BE59077069E9CB"><enum>(A)</enum><header>Chief Actuary</header><text>The term <term>Chief Actuary</term> means the Chief Actuary of the Centers for Medicare &amp; Medicaid Services.</text></subparagraph><subparagraph id="H63DE7835019547C584D4E6F33DB2385D"><enum>(B)</enum><header>Installment year</header><text>The term <term>installment year</term> 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.</text></subparagraph><subparagraph id="H575859F9ECD0482B801EA3735A71BFE9"><enum>(C)</enum><header>Potentially curative treatment intended for one-time use</header><text>The term <term>potentially curative treatment intended for one-time use</term> means a treatment that consists of the administration of a covered outpatient drug that—</text><clause id="H083E0A264866492E96D681F205DE5B58"><enum>(i)</enum><text>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;</text></clause><clause id="H3452DEF6FB6C476289DE8F9C220CD2BB"><enum>(ii)</enum><text>if administered in accordance with the labeling of such drug, is expected to result in either—</text><subclause id="H79CC6318F58F4FAABC14BC7D32E87460"><enum>(I)</enum><text>the cure of such disease or condition; or</text></subclause><subclause id="H0764799DE83E4839AD5E992D18057E3F"><enum>(II)</enum><text>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</text></subclause></clause><clause id="HA0E8244E5151452D888C292E2D0D137C"><enum>(iii)</enum><text>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.</text></clause></subparagraph><subparagraph id="HE9380A92DD5A458C92E0A0375168BC81"><enum>(D)</enum><header>Relevant clinical parameter</header><text>The term <term>relevant clinical parameter</term> means, with respect to a covered outpatient drug that is the subject of a risk-sharing value-based payment agreement—</text><clause id="H8830DF819CC14263AD8ABAF99F64F3D3"><enum>(i)</enum><text>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—</text><subclause id="H92E01E8443B74F83ADCA512F0EAA051E"><enum>(I)</enum><text>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</text></subclause><subclause id="H14349B9D63F5432B86D79626A8AAD44B"><enum>(II)</enum><text>is required to be achieved (based on observed metrics in patient populations) under the terms of the agreement; or</text></subclause></clause><clause id="HEFE72AC4DE9B4DA2AC9942A89CA346AF"><enum>(ii)</enum><text>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—</text><subclause id="H69205F4A8016409A82AAE5E571D9D361"><enum>(I)</enum><text>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</text></subclause><subclause id="HFE26BC49C6A74B8BBDF5ECF13E0B7BA6"><enum>(II)</enum><text>has been qualified by the Food and Drug Administration.</text></subclause></clause></subparagraph><subparagraph id="HE7CFBF9E25D545EEB2E3F6488A02036E"><enum>(E)</enum><header>Risk-sharing value-based payment agreement</header><text>The term <term>risk-sharing value-based payment agreement</term> means an agreement between a State plan and a manufacturer—</text><clause id="H1B7A83F4CCBD4EC5928C7D0368EA6652"><enum>(i)</enum><text>for the purchase of a covered outpatient drug of the manufacturer that is a potentially curative treatment intended for one-time use;</text></clause><clause id="H838B624B5F3D4CD1A70B9EA445E4296C"><enum>(ii)</enum><text>under which payment for such drug shall be made pursuant to an installment-based payment structure that meets the requirements of paragraph (3);</text></clause><clause id="H6D9CED27761746A5840A96AFBAF076F1"><enum>(iii)</enum><text>which conditions payment on the achievement of at least 2 relevant clinical parameters (as defined in subparagraph (C));</text></clause><clause id="H30F1A0066FF343B7A0A9BE549FC59ADC"><enum>(iv)</enum><text>which provides that—</text><subclause id="HDED55EA1C58D41329F64BCB8E5E40F4B"><enum>(I)</enum><text>the State plan will directly reimburse the manufacturer for the drug; or</text></subclause><subclause id="HE0DADEB9948B457A89B688FF50C09301"><enum>(II)</enum><text>a third party will reimburse the manufacture in a manner approved by the Secretary; and</text></subclause></clause><clause id="HC82962D7A0454FCC830453C07C5916CB"><enum>(v)</enum><text>is approved by the Secretary in accordance with paragraph (2).</text></clause></subparagraph><subparagraph commented="no" id="H3CFF189E860E43CDAE1E757F913C474E"><enum>(F)</enum><header>Total installment year amount</header><text>The term <term>total installment year amount</term> 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—</text><clause commented="no" id="H6AF3554EDB3A4D7D9CB151A8FFC2C69F"><enum>(i)</enum><text>the unit price of the drug charged under the agreement; and</text></clause><clause commented="no" id="HD1B2399FEE5C49B6BA6C90CCF82863A3"><enum>(ii)</enum><text>the number of units of such drug administered under the agreement during such installment year.</text></clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H86B42D71001747D7A4A49C4AA6D3CF43"><enum>(b)</enum><header>Conforming amendments</header><paragraph id="H8D1DA0C166654263AFAFC97455D2A3FC"><enum>(1)</enum><text>Section 1903(i)(10)(A) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396b">42 U.S.C. 1396b(i)(10)(A)</external-xref>) is amended by striking <quote>or unless section 1927(a)(3) applies</quote> and inserting <quote>, 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)</quote>.</text></paragraph><paragraph id="H755FF379AA4E4107918844547478038A"><enum>(2)</enum><text>Section 1927(b) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(b)</external-xref>) is amended—</text><subparagraph id="H767737A736A44C02B1DD7992DC77E6A3"><enum>(A)</enum><text>in paragraph (1)(A), by inserting <quote>(except for drugs for which payment is made by a State under a risk-sharing value-based payment agreement under subsection (l))</quote> after <quote>under the State plan for such period</quote>; and</text></subparagraph><subparagraph commented="no" id="HC450B0C6741C4BE294F903893E18F613"><enum>(B)</enum><text>in paragraph (3)—</text><clause commented="no" id="H4FC618890CED41EA9771F80CBBD3C009"><enum>(i)</enum><text>in subparagraph (C)(i), by inserting <quote>or subsection (l)(2)(A)</quote> after <quote>subparagraph (A)</quote>; and</text></clause><clause commented="no" display-inline="no-display-inline" id="H210CB1C0D3B5444CA1979218DBD646FA"><enum>(ii)</enum><text>in subparagraph (D), in the matter preceding clause (i), by inserting <quote>, under subsection (l)(2)(A),</quote> after <quote>under this paragraph</quote>.</text></clause></subparagraph></paragraph></subsection></section><section id="H9AA3021665D34DCD96F44E3C338863B6"><enum>307.</enum><header>Modification of maximum rebate amount under Medicaid drug rebate program</header><subsection id="HCC54101DE08B42D185E609E3DDCFC2B0"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subparagraph (D) of section 1927(c)(2) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(c)(2)</external-xref>) is amended to read as follows:</text><quoted-block act-name="" id="H8C59CD037ED8475BB0AE97B76EAD044E" style="traditional"><subparagraph id="H654A365264954103B124506382D06A56"><enum>(D)</enum><header>Maximum rebate amount</header><clause id="HB946E45F1A484B3D8191DA2C94789040"><enum>(i)</enum><header>In general</header><text>Except as provided in clause (ii), in no case shall the sum of the amounts applied under paragraph (1)(A)(ii) and this paragraph with respect to each dosage form and strength of a single source drug or an innovator multiple source drug for a rebate period exceed—</text><subclause id="HB0CF5C212928422CA0F6AB146284E95C"><enum>(I)</enum><text>for rebate periods beginning after December 31, 2009, and before September 30, 2025, 100 percent of the average manufacturer price of the drug; and</text></subclause><subclause id="HA11C59DF365F4B4BB9C6ED242014F95C"><enum>(II)</enum><text>for rebate periods beginning on or after October 1, 2025, 125 percent of the average manufacturer price of the drug.</text></subclause></clause><clause id="H3DCC88102F04447F9C3BED48EE67B746"><enum>(ii)</enum><header>No maximum amount for drugs if AMP increases outpace inflation</header><subclause id="H1C0A99F530A64997A7B0455ADAE7865E"><enum>(I)</enum><header>In general</header><text>If the average manufacturer price with respect to each dosage form and strength of a single source drug or an innovator multiple source drug increases on or after October 1, 2024, and such increased average manufacturer price exceeds the inflation-adjusted average manufacturer price determined with respect to such drug under subclause (II) for the rebate period, clause (i) shall not apply and there shall be no limitation on the sum of the amounts applied under paragraph (1)(A)(ii) and this paragraph for the rebate period with respect to each dosage form and strength of the single source drug or innovator multiple source drug.</text></subclause><subclause id="HEF01AE4AA12E4C018E325A12A8895556"><enum>(II)</enum><header>Inflation-adjusted average manufacturer price defined</header><text>In this clause, the term <term>inflation-adjusted average manufacturer price</term> means, with respect to a single source drug or an innovator multiple source drug and a rebate period, the average manufacturer price for each dosage form and strength of the drug for the calendar quarter beginning July 1, 1990 (without regard to whether or not the drug has been sold or transferred to an entity, including a division or subsidiary of the manufacturer, after the first day of such quarter), increased by the percentage by which the consumer price index for all urban consumers (United States city average) for the month before the month in which the rebate period begins exceeds such index for September 1990.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H7EDC810A46AF47EE87E9764F2A8D0ED4"><enum>(b)</enum><header>Treatment of subsequently approved drugs</header><text>Section 1927(c)(2)(B) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(c)(2)(B)</external-xref>) is amended by inserting <quote>and clause (ii)(II) of subparagraph (D)</quote> after <quote>clause (ii)(II) of subparagraph (A)</quote>.</text></subsection><subsection commented="no" id="H2F893E42B51647A2B9F66953E7AA4A85"><enum>(c)</enum><header>Technical amendments</header><text>Section 1927(c)(3)(C)(ii)(IV) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-9">42 U.S.C. 1396r–9(c)(3)(C)(ii)(IV)</external-xref>) is amended—</text><paragraph commented="no" id="H26BD5ED7FF4B4818BB1C7268D404AA25"><enum>(1)</enum><text>by striking <quote>subparagraph (A)</quote> and inserting <quote>paragraph (3)(A)</quote>; and</text></paragraph><paragraph commented="no" id="HA528B1DAA874483E8654110CF5C9DA16"><enum>(2)</enum><text>by striking <quote>this subparagraph</quote> and inserting <quote>paragraph (3)(C)</quote>.</text></paragraph></subsection></section><section id="H31FAF5905AA549D88EB06D861552B229"><enum>308.</enum><header>Applying Medicaid drug rebate requirement to drugs provided as part of outpatient hospital services</header><subsection id="H811731F348EE465C9ED24DFE2DB44FD6"><enum>(a)</enum><header>In general</header><text>Section 1927(k)(3) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(k)(3)</external-xref>) is amended to read as follows:</text><quoted-block display-inline="no-display-inline" id="H43E3C66400244A57A50ED157C5D6B21F" style="OLC"><paragraph commented="no" display-inline="no-display-inline" id="H046462F54D9541C78BA698314D161735"><enum>(3)</enum><header display-inline="yes-display-inline">Limiting definition</header><subparagraph commented="no" display-inline="no-display-inline" id="H13AAA000F0B946C08247E7DEFCC57D63"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>covered outpatient drug</term> 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):</text><clause commented="no" display-inline="no-display-inline" id="H9D16B929BAC047839D1F9BDF8E9B3ECA"><enum>(i)</enum><text>Inpatient hospital services.</text></clause><clause commented="no" display-inline="no-display-inline" id="H3FCB4E2D293B4E86A8E06852950FE7BA"><enum>(ii)</enum><text>Hospice services.</text></clause><clause commented="no" display-inline="no-display-inline" id="HCCF659AA5E474B65B810E9A47DCB715E"><enum>(iii)</enum><text>Dental services, except that drugs for which the State plan authorizes direct reimbursement to the dispensing dentist are covered outpatient drugs.</text></clause><clause commented="no" display-inline="no-display-inline" id="H28B8FF8A2A0A458ABCDB0B475084C632"><enum>(iv)</enum><text>Physicians' services.</text></clause><clause commented="no" display-inline="no-display-inline" id="H112EC8D03EB54FC59B909F8547561FE7"><enum>(v)</enum><text>Outpatient hospital services.</text></clause><clause commented="no" display-inline="no-display-inline" id="H393AF7840D124BEAA5862BC396B044BB"><enum>(vi)</enum><text>Nursing facility services and services provided by an intermediate care facility for the mentally retarded.</text></clause><clause commented="no" display-inline="no-display-inline" id="H16A6A8EC2CFF4C03806A97B5F872623A"><enum>(vii)</enum><text>Other laboratory and x-ray services.</text></clause><clause commented="no" display-inline="no-display-inline" id="HB3CB5A8E023242399EC59D27FB6D1684"><enum>(viii)</enum><text>Renal dialysis.</text></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H7F9F0E541D0C49E6937CD1E079270652"><enum>(B)</enum><header>Other exclusions</header><text>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.</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H9F3515140DE241509372BD82CB9DB545"><enum>(C)</enum><header>State option</header><text>At the option of a State, such term may include any drug, biological product, or insulin 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) (such as a drug, biological product, or insulin being provided as part of a bundled payment).</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H5415E4693BE74FC29A65C45B4880B7EE"><enum>(D)</enum><header>No effect on best price</header><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H6114CC1EE8D94D179059765B01DE372E"><enum>(b)</enum><header>Effective date; implementation guidance</header><paragraph id="H94AC9C8F402C48A39EBC1B10327138DF"><enum>(1)</enum><header>In general</header><text>The amendment made by subsection (a) shall take effect on the date that is 1 year after the date of enactment of this Act.</text></paragraph><paragraph id="H1891F7DB1B3B4403B63CA5D9C3D4A36F"><enum>(2)</enum><header>Implementation and guidance</header><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/42/1396r-8">42 U.S.C. 1396r–8(k)(5)</external-xref>), and other relevant stakeholders, including health care providers, regarding implementation of the amendment made by subsection (a).</text></paragraph></subsection></section></title><title id="H0E3B53CB85804FAE9E38437C580C0AFA"><enum>IV</enum><header>Addressing Intermediaries and Drug Competition</header><section id="HE9DFD9BDBC3A41C9A50BECA0F15747E2" section-type="subsequent-section"><enum>401.</enum><header>Health plan oversight of pharmacy benefit manager services</header><text display-inline="no-display-inline">Subpart II of part A of title XXVII of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/300gg-11">42 U.S.C. 300gg–11 et seq.</external-xref>) is amended by adding at the end the following:</text><quoted-block display-inline="no-display-inline" id="HDE3D2C19F42741E39DCC48B87AEC316D" style="OLC"><section id="HA6AB99CBDFAD4D6384AF7133D02A228F"><enum>2729A.</enum><header>Health plan oversight of pharmacy benefit manager services</header><subsection id="H33154FE6CA044F2B8904CAC4EB670DD8"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">A group health plan or health insurance issuer offering group or individual health insurance coverage or an entity or subsidiary providing pharmacy benefits management services shall not enter into a contract with a drug manufacturer, distributor, wholesaler, subcontractor, rebate aggregator, or any associated third party that limits the disclosure of information to plan sponsors in such a manner that prevents the plan or coverage, or an entity or subsidiary providing pharmacy benefits management services on behalf of a plan or coverage from making the reports described in subsection (b).</text></subsection><subsection id="HF4CFC5C2E8754EF8BA554B7A84C09709"><enum>(b)</enum><header>Reports to group plan sponsors</header><paragraph id="H8B836AFB5F0A4B94B991F2EFCFB520A6"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Beginning with the first plan year that begins after the date of enactment of this section, not less frequently than once every six months, a health insurance issuer offering group health insurance coverage or an entity providing pharmacy benefits management services on behalf of a group health plan shall submit to the self-funded group health plan and at the request of any other group health plan a report in accordance with this subsection and make such report available to the plan sponsor in a machine-readable format. Each such report shall include, with respect to the applicable group health plan or health insurance coverage—</text><subparagraph id="H1BB9E8B8602147659D3C98217D7ED3C8"><enum>(A)</enum><text display-inline="yes-display-inline">information collected from drug manufacturers by such issuer or entity on the total amount of copayment assistance dollars paid, or copayment cards applied, that were funded by the drug manufacturer with respect to the enrollees in such plan or coverage;</text></subparagraph><subparagraph id="H5B2F3DE3836A40479E2C5BD67696CB64"><enum>(B)</enum><text display-inline="yes-display-inline">a list of each covered drug dispensed during the reporting period, including, with respect to each such drug during the reporting period—</text><clause id="H25BDD0526DDE4FCC9C8779865A962AE2"><enum>(i)</enum><text>the brand name, chemical entity, and National Drug Code;</text></clause><clause id="H1481816AA3AD4E548EA7866A70246B83"><enum>(ii)</enum><text>the number of enrollees for whom the drug was filled during the plan year, the total number of prescription fills for the drug (including original prescriptions and refills), and the total number of dosage units of the drug dispensed across the plan year, including whether the dispensing channel was by retail, mail order, or specialty pharmacy;</text></clause><clause id="H58F62E26F32E4F11B5EDD549535296F0"><enum>(iii)</enum><text>the wholesale acquisition cost, listed as cost per days supply and cost per pill, or in the case of a drug in another form, per dose;</text></clause><clause id="HB55B5D54254A482CB105B0EAAD0E95D5"><enum>(iv)</enum><text>the total out-of-pocket spending by enrollees on such drug, including enrollee spending through copayments, coinsurance, and deductibles; and</text></clause><clause id="HE674E13774DE48A1993C6BE9C06CE7F3"><enum>(v)</enum><text>for any drug for which gross spending of the group health plan or health insurance coverage exceeded $10,000 during the reporting period—</text><subclause id="H53981EA14F9C44719D8D44B2C6BEB6D8"><enum>(I)</enum><text>a list of all other available drugs in the same therapeutic category or class, including brand name drugs and biological products and generic drugs or biosimilar biological products that are in the same therapeutic category or class; and</text></subclause><subclause id="H05A243CD731C46A5B303254CC346A04B"><enum>(II)</enum><text>the rationale for preferred formulary placement of a particular drug or drugs in that therapeutic category or class;</text></subclause></clause></subparagraph><subparagraph id="H5CA8ADC0AF67430EBAFB4E2F5EE9A640"><enum>(C)</enum><text>a list of each therapeutic category or class of drugs that were dispensed under the health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic category or class of drugs, during the reporting period—</text><clause id="H77FF33CE4BA14A9AB54F5AACA38DA23C"><enum>(i)</enum><text>total gross spending by the plan, before manufacturer rebates, fees, or other manufacturer remuneration;</text></clause><clause id="HD65CE122DB6B4E56B97EDD89A08463D5"><enum>(ii)</enum><text>the number of enrollees who filled a prescription for a drug in that category or class;</text></clause><clause id="H6D663D45940F4A41978339E541E97BD9"><enum>(iii)</enum><text>if applicable to that category or class, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class;</text></clause><clause id="HCA34CD1E2682475B93B4A0E7B3A82387"><enum>(iv)</enum><text>the total out-of-pocket spending by enrollees, including enrollee spending through copayments, coinsurance, and deductibles; and</text></clause><clause id="H60A1B4AA29874A0F8CE0459CCFCB5D77"><enum>(v)</enum><text>for each therapeutic category or class under which three or more drugs are marketed and available—</text><subclause id="H1895E7D8084F43808418546864B5536C"><enum>(I)</enum><text>the amount received, or expected to be received, from drug manufacturers in rebates, fees, alternative discounts, or other remuneration—</text><item id="HF5358900DD0B4DDC9356E8FDC0EDE230"><enum>(aa)</enum><text>to be paid by drug manufacturers for claims incurred during the reporting period; or</text></item><item id="HF0E2E95516CC4E0AA8E1D727B25FA19A"><enum>(bb)</enum><text>that is related to utilization of drugs, in such therapeutic category or class;</text></item></subclause><subclause id="HCB444ECB243947FB9521A51622BAC8A1"><enum>(II)</enum><text>the total net spending by the health plan or health insurance coverage on that category or class of drugs; and</text></subclause><subclause id="H828621245DB64729861ACABAA5F8092D"><enum>(III)</enum><text>the net price per dosage unit or course of treatment incurred by the health plan or health insurance coverage and its enrollees, after manufacturer rebates, fees, and other remuneration for drugs dispensed within such therapeutic category or class during the reporting period;</text></subclause></clause></subparagraph><subparagraph id="H65C7B95823174223B6C4CDAF9B0BE225"><enum>(D)</enum><text>total gross spending on prescription drugs by the plan or coverage during the reporting period, before rebates and other manufacturer fees or remuneration;</text></subparagraph><subparagraph id="HF525DB155ACA42FC8E75F086AF893C1A"><enum>(E)</enum><text>total amount received, or expected to be received, by the health plan or health insurance coverage in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from the manufacturer or any third party related to utilization of drug or drug spending under that health plan or health insurance coverage during the reporting period;</text></subparagraph><subparagraph id="HB7DB9C044D3C41ABB16862037356A421"><enum>(F)</enum><text>the total net spending on prescription drugs by the health plan or health insurance coverage during the reporting period; and</text></subparagraph><subparagraph id="H76C940DEE0754FD4B0E61FB2931AFACA"><enum>(G)</enum><text>amounts paid directly or indirectly in rebates, fees, or any other type of remuneration to brokers, consultants, advisors, or any other individual or firm who referred the group health plan's or health insurance issuer's business to the pharmacy benefit manager.</text></subparagraph></paragraph><paragraph commented="no" id="H02FFA6ACDF5F4D72A84374473DCB4D6A"><enum>(2)</enum><header>Privacy requirements</header><text>Health insurance issuers offering group health insurance coverage and entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph (1) in a manner consistent with the privacy, security, and breach notification regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (or successor regulations), and shall restrict the use and disclosure of such information according to such privacy regulations.</text></paragraph><paragraph id="H76E7585090084C0FA713F84F26F805DC"><enum>(3)</enum><header>Disclosure and redisclosure</header><subparagraph id="H6845A975E4954642A087BF351EB5EDE1"><enum>(A)</enum><header>Limitation to business associates</header><text>A group health plan receiving a report under paragraph (1) may disclose such information only to business associates of such plan as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations).</text></subparagraph><subparagraph id="H679CEB5D4931429AA316D5855A540159"><enum>(B)</enum><header>Clarification regarding public disclosure of information</header><text>Nothing in this section prevents a health insurance issuer offering group health insurance coverage or an entity providing pharmacy benefits management services on behalf of a group health plan from placing reasonable restrictions on the public disclosure of the information contained in a report described in paragraph (1).</text></subparagraph></paragraph></subsection><subsection id="HBB4B9D0488004903A203496CF939ECBA"><enum>(c)</enum><header>Enforcement</header><paragraph id="HD0B9F23B499841B8802A23B8BC66698B"><enum>(1)</enum><header>In general</header><text>The Secretary, in consultation with the Secretary of Labor and the Secretary of the Treasury, shall enforce this section.</text></paragraph><paragraph id="H5D9D5CDCA7ED47118A5F88EC1B31D476"><enum>(2)</enum><header>Failure to provide timely information</header><text>A health insurance issuer or an entity providing pharmacy benefit management services that violates subsection (a) or fails to provide information required under subsection (b) or a drug manufacturer that fails to provide information under subsection (b)(1)(A), in a timely manner shall be subject to a civil monetary penalty in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported.</text></paragraph><paragraph id="H81D0E556F03E4ECDA696D3D67AFAF640"><enum>(3)</enum><header>False information</header><text>A health insurance issuer, entity providing pharmacy benefit management services, or drug manufacturer that knowingly provides false information under this section shall be subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information. Such civil money penalty shall be in addition to other penalties as may be prescribed by law.</text></paragraph><paragraph id="HCF237E2A8C0D43A8A48B1A33C5803AEE"><enum>(4)</enum><header>Procedure</header><text>The provisions of section 1128A of the Social Security Act, other than subsections (a) and (b) and the first sentence of subsection (c)(1) of such section shall apply to civil monetary penalties under this subsection in the same manner as such provisions apply to a penalty or proceeding under section 1128A of the Social Security Act.</text></paragraph><paragraph id="H3D0959803D0040B8A749E338D83FC0B1"><enum>(5)</enum><header>Safe harbor</header><text>The Secretary may waive penalties under paragraph (2), or extend the period of time for compliance with a requirement of this section, for an entity in violation of this section that has made a good-faith effort to comply with this section.</text></paragraph></subsection><subsection id="HF996FF1E8296421F9A910B167E0007A8"><enum>(d)</enum><header>Rule of construction</header><text>Nothing in this section shall be construed to prohibit entities providing pharmacy benefits management services from retaining bona fide service fees, provided that such fees are transparent to group health plans and health insurance issuers and are not linked directly to the price or formulary placement or position of a drug.</text></subsection><subsection id="H7A188CA1DEA14EB298FD0BFFA0B675F5"><enum>(e)</enum><header>Definitions</header><text>In this section—</text><paragraph commented="no" id="HB4A89735203D4A2A9330A50650EE4186"><enum>(1)</enum><text>the term <term>similarly situated pharmacy</term> means, with respect to a particular pharmacy, another pharmacy that is approximately the same size (as measured by the number of prescription drugs dispensed), and that serves patients in the same geographical area, whether through physical locations or mail order;</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H380B41FAECA84A5B94599DDE9AB8A756"><enum>(2)</enum><text>the term <term>wholesale acquisition cost</term> has the meaning given such term in section 1847A(c)(6)(B) of the Social Security Act; and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HB7CC29D3F2B1437F9A9C2273107728AD"><enum>(3)</enum><text>the term <term>bona fide service fees</term> means fees paid by a manufacturer, customer, or client (other than a group health plan or health insurance issuer) of an entity providing pharmacy benefit management services, to an entity providing pharmacy benefit management services, that represent fair market value for bona fide, itemized services actually performed on behalf of the manufacturer, customer, or client would otherwise perform or contract for in the absence of the service arrangement, without prior consent for any specific arrangements.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H68B9C7E094034D00AA4D4B33B06FCF62"><enum>402.</enum><header>Study of pharmaceutical supply chain intermediaries and merger activity</header><subsection id="HDD6525CD93624795AF01C11EF94BB9AF"><enum>(a)</enum><header>Initial report</header><text>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—</text><paragraph id="H4E4DFB0C21F343FEAB3EB98E14AC0B9C"><enum>(1)</enum><text>addresses at minimum—</text><subparagraph id="HEFEA3AF604D94943A7705CCDDDA4C9DB"><enum>(A)</enum><text>whether pharmacy benefit managers—</text><clause id="HB975A3FEE9D4488E9CBDCC66240FDF52"><enum>(i)</enum><text>charge payers a higher price than the reimbursement rate at which the pharmacy benefit managers reimburse competing pharmacies;</text></clause><clause id="HBC50E0DD84A64537BB920EC1B226FA4D"><enum>(ii)</enum><text display-inline="yes-display-inline">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;</text></clause><clause id="H109EB8D6367A42BAA76467D53A9A7DBC"><enum>(iii)</enum><text>audit or review proprietary data, including acquisition costs, patient information, or dispensing information, of competing pharmacies that can be used for anticompetitive purposes; or</text></clause><clause id="H1BC6A0A002FC47A697BD945C83AD8A2E"><enum>(iv)</enum><text>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);</text></clause></subparagraph><subparagraph id="H4EC8D620831F428098F0DDA71C88E89E"><enum>(B)</enum><text>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</text></subparagraph><subparagraph id="HCC540ABE5C5E45038BC563C5947EED49"><enum>(C)</enum><text>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</text></subparagraph></paragraph><paragraph id="HFBBB7D5099B04DD0A4033EC43F0814D2"><enum>(2)</enum><text>provides—</text><subparagraph id="H3F6B325C0EF3424D90424F1162D6275A"><enum>(A)</enum><text>observations or conclusions drawn from the November 2017 roundtable entitled <quote>Understanding Competition in Prescription Drug Markets: Entry and Supply Chain Dynamics</quote>, and any similar efforts;</text></subparagraph><subparagraph id="H103D0208B37546A2B291C50A07A1B908"><enum>(B)</enum><text>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</text></subparagraph><subparagraph id="H3DB99A4C724E450F922A87F5FEA9BE2C"><enum>(C)</enum><text>policy or legislative recommendations to—</text><clause id="H587506E851E9492CB01BD231F97D2CDC"><enum>(i)</enum><text>improve transparency and competition in the pharmaceutical supply chain;</text></clause><clause id="H66812EB4D2444B6491AA2161AC5E6B46"><enum>(ii)</enum><text>prevent and deter anticompetitive behavior in the pharmaceutical supply chain; and</text></clause><clause id="HE9A46CB13C0347AA9DCEA21A202556A1"><enum>(iii)</enum><text>best ensure that consumers benefit from any cost savings or efficiencies that may result from mergers and consolidations.</text></clause></subparagraph></paragraph></subsection><subsection id="HCD89679DBC384113B082BC9C506A021D"><enum>(b)</enum><header>Interim report</header><text>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.</text></subsection><subsection id="H8048E9B74AD341229F057CE43154771B"><enum>(c)</enum><header>Definitions</header><text>In this section:</text><paragraph id="H48C9AEFB4DD14FBAB8162D73DC940079"><enum>(1)</enum><header>Appropriate committees of Congress</header><text>The term <term>appropriate committees of Congress</term> means—</text><subparagraph id="H698BE4DD72084A6BA9043AC7BAEDB4D1"><enum>(A)</enum><text>the Committee on Energy and Commerce of the House of Representatives;</text></subparagraph><subparagraph id="H7A2B435AD1FD40439C52D2DF60110C6B"><enum>(B)</enum><text>the Committee on the Judiciary of the Senate; and</text></subparagraph><subparagraph id="HB1CC79D45C434A3894890499E0F2B9D7"><enum>(C)</enum><text>the Committee on the Judiciary of the House of Representatives.</text></subparagraph></paragraph><paragraph id="H14E3398C6A6C4888839D40E4080CC648"><enum>(2)</enum><header>Commission</header><text>The term <term>Commission</term> means the Federal Trade Commission.</text></paragraph></subsection></section><section id="H7152A6DC68EB4D3E99C804CAD3C1DE32"><enum>403.</enum><header>Requirement that direct-to-consumer advertisements for prescription drugs and biological products include truthful and non-misleading pricing information</header><text display-inline="no-display-inline">Part A of title XI of the Social Security Act is amended by adding at the end the following new section:</text><quoted-block id="HFC8A1306A2B2455DB2D03E05FB777115" style="OLC"><section id="H101739D1A6774700A0888661EE05086F"><enum>1150D.</enum><header>Requirement that direct-to-consumer advertisements for prescription drugs and biological products include truthful and non-misleading pricing information</header><subsection id="HDCDEC067BCDE4381A6DD65B47D90E170"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subsection><subsection id="H958FFF2B43184479AE76F8F551EAF9AC"><enum>(b)</enum><header>Determination by CMS</header><text>The Secretary, acting through the Administrator of the Centers for Medicare &amp; 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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H063AF4955892447BB0963FDAEB5C3343"><enum>404.</enum><header>Change conditions of first generic exclusivity to spur access and competition</header><text display-inline="no-display-inline">Clause (iv) of section 505(j)(5)(B) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355(j)(5)(B)</external-xref>) is amended—</text><paragraph id="HB9B841A75F4940338A7ABA6BCFD88773"><enum>(1)</enum><text>in subclause (I), after <quote>180 days after the date of the first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant</quote> by inserting <quote>or by an applicant whose application is approved pursuant to subclause (III)</quote>; and</text></paragraph><paragraph id="H7ECC65BEE66F48E4AD370CDA80953BC2"><enum>(2)</enum><text>by adding at the end the following new subclause:</text><quoted-block display-inline="no-display-inline" id="HBB20013711774BE0B4C25BD289D0ECF9" style="OLC"><subclause id="H491DFFF9A1A24001B62C26D6809D4EE5" indent="up2"><enum>(III)</enum><header>Applicant approval</header><text display-inline="yes-display-inline">An application containing a certification described in paragraph (2)(A)(vii)(IV) that is for a drug for which a first applicant has submitted an application containing such a certification can be approved notwithstanding the eligibility of a first applicant for the 180-day exclusivity period described in subclause (II)(aa) if each of the following conditions is met:</text><item id="H367A0077AA58488B838C6D2C0C25A611"><enum>(aa)</enum><text display-inline="yes-display-inline">The approval of such an application could be made effective, but for the eligibility of a first applicant for 180-day exclusivity under this clause.<italic></italic></text></item><item id="HB8A1949A69B642F2B1935988886CC833"><enum>(bb)</enum><text display-inline="yes-display-inline">At least 30 months have passed since the date of submission of an application for the drug by at least one first applicant.</text></item><item id="H1E9D6FCAC599493D91A11F106DFD6008"><enum>(cc)</enum><text display-inline="yes-display-inline">Approval of an application for the drug submitted by at least one first applicant is not precluded under clause (iii)<italic></italic>.</text></item><item id="HC3BF075DB640411BA63AF561D6F52DC1"><enum>(dd)</enum><text>No application for the drug submitted by any first applicant is approved at the time the conditions under items (aa), (bb), and (cc) are all met, regardless of whether such an application is subsequently approved.</text></item></subclause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section><section id="H6316D799224D4209B1E1CDA46060B406"><enum>405.</enum><header>Ending the practice preventing market competition known as <quote>Pay-for-Delay</quote></header><subsection id="idBED515278A7945078EF610B34583DAE4"><enum>(a)</enum><header>Congressional findings and declaration of purposes</header><paragraph id="id8FDCDF678E7B41649B3BEA38B8F6D6A7"><enum>(1)</enum><header>Findings</header><text>Congress finds the following:</text><subparagraph id="id3468D795E7FE427C8B47D53314B851C6"><enum>(A)</enum><text>In 1984, the Drug Price Competition and Patent Term Restoration Act (<external-xref legal-doc="public-law" parsable-cite="pl/98/417">Public Law 98–417</external-xref>) (referred to in this Act as the <quote>1984 Act</quote>), was enacted with the intent of facilitating the early entry of generic drugs while preserving incentives for innovation.</text></subparagraph><subparagraph id="id9C4C1A38D9F74646816106A4182B292D"><enum>(B)</enum><text>Prescription drugs make up approximately 10 percent of the national health care spending.</text></subparagraph><subparagraph id="idEBF270402C9F49CBA981C2F45612DE93"><enum>(C)</enum><text>Initially, the 1984 Act was successful in facilitating generic competition to the benefit of consumers and health care payers, although 88 percent of all prescriptions dispensed in the United States are generic drugs, they account for only 28 percent of all expenditures.</text></subparagraph><subparagraph id="idEAE8AFC00C7345A082A0A285D5824CFE"><enum>(D)</enum><text>Generic drugs cost substantially less than brand name drugs, with discounts off the brand price averaging 80 to 85 percent.</text></subparagraph><subparagraph id="id85240889EC804564A6B53AAE0EE988B6"><enum>(E)</enum><text>Federal dollars currently account for over 40 percent of the $325,000,000,000 spent on retail prescription drugs, and this share is expected to rise to 47 percent by 2025.</text></subparagraph><subparagraph id="id1BB42C18E32B4BF48D20976AD2A86F83"><enum>(F)</enum><clause commented="no" display-inline="yes-display-inline" id="idE7439A948A87434C869CA698611EDB28"><enum>(i)</enum><text>In recent years, the intent of the 1984 Act has been subverted by certain settlement agreements in which brand name companies transfer value to their potential generic competitors to settle claims that the generic company is infringing the branded company’s patents. </text></clause><clause display-inline="no-display-inline" id="id8141C96BAB3C4DF9911E034C372FAE93" indent="up1"><enum>(ii)</enum><text>These <quote>reverse payment</quote> settlement agreements—</text><subclause id="idCE34CFE239104C2C8B782D976B83B378"><enum>(I)</enum><text>allow a branded company to share its monopoly profits with the generic company as a way to protect the branded company’s monopoly; and</text></subclause><subclause id="idE525EC8A21A8483D8712BCF086F10B3D"><enum>(II)</enum><text>have unduly delayed the marketing of low-cost generic drugs contrary to free competition, the interests of consumers, and the principles underlying antitrust law.</text></subclause></clause><clause id="id768E65C9B8044B73A84996F3AF82C457" indent="up1"><enum>(iii)</enum><text>Because of the price disparity between brand name and generic drugs, such agreements are more profitable for both the brand and generic manufacturers than competition and will become increasingly common unless prohibited.</text></clause><clause indent="up1" id="id48B91506448142DC900BA1B48D6D0BD0"><enum>(iv)</enum><text>These agreements result in consumers losing the benefits that the 1984 Act was intended to provide.</text></clause></subparagraph><subparagraph id="id992A246E94BE450D9DF5C00A019D50AD"><enum>(G)</enum><text>In 2010, the Biologics Price Competition and Innovation Act (<external-xref legal-doc="public-law" parsable-cite="pl/111/148">Public Law 111–148</external-xref>) (referred to in this Act as the <quote>BPCIA</quote>), was enacted with the intent of facilitating the early entry of biosimilar and interchangeable follow-on versions of branded biological products while preserving incentives for innovation.</text></subparagraph><subparagraph id="id45328CEDFEDD419E9BDF5D7E76C9EEF1"><enum>(H)</enum><text>Biological drugs play an important role in treating many serious illnesses, from cancers to genetic disorders. They are also expensive, representing more than 40 percent of all prescription drug spending.</text></subparagraph><subparagraph id="idF47F46442D94486388B23BA240CD5130"><enum>(I)</enum><text>Competition from biosimilar and interchangeable biological products promises to lower drug costs and increase patient access to biological medicines. But <quote>reverse payment</quote> settlement agreements also threaten to delay the entry of biosimilar and interchangeable biological products, which would undermine the goals of BPCIA.</text></subparagraph></paragraph><paragraph id="idD473D61D3D5D49878A096BAD467D99E0"><enum>(2)</enum><header>Purposes</header><text>The purposes of this Act are—</text><subparagraph id="idE0A33C8262CB42ECB7EE3F28E78FBA27"><enum>(A)</enum><text>to enhance competition in the pharmaceutical market by stopping anticompetitive agreements between brand name and generic drug and biosimilar biological product manufacturers that limit, delay, or otherwise prevent competition from generic drugs and biosimilar biological products; and</text></subparagraph><subparagraph id="id87D2343B71BF41D19F243F15ED263D3F"><enum>(B)</enum><text>to support the purpose and intent of antitrust law by prohibiting anticompetitive practices in the pharmaceutical industry that harm consumers.</text></subparagraph></paragraph></subsection><subsection id="id4FF043A809414FED85C555070FAACB23"><enum>(b)</enum><header>Unlawful compensation for delay</header><paragraph id="idB646F54728C74809A7EFF68A5AC38C2D"><enum>(1)</enum><header>In general</header><text>The Federal Trade Commission Act (<external-xref legal-doc="usc" parsable-cite="usc/15/44">15 U.S.C. 44 et seq.</external-xref>) is amended by inserting after section 26 (<external-xref legal-doc="usc" parsable-cite="usc/15/57c-2">15 U.S.C. 57c–2</external-xref>) the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id1FD18F941F984FCFA0450C200FA40A8E"><section id="idE869DFFA03004272A529B6BEFA7ECF45" section-type="subsequent-section"><enum>27.</enum><header>Preserving access to affordable generics and biosimilars</header><subsection id="idF7452282484A4DD78F4D0AA648E92FBD"><enum>(a)</enum><header>In general</header><paragraph id="id905FB4A7D2204F368672A04B1B10530B"><enum>(1)</enum><header>Enforcement proceeding</header><text>The Commission may initiate a proceeding to enforce the provisions of this section against the parties to any agreement resolving or settling, on a final or interim basis, a patent claim, in connection with the sale of a drug product or biological product.</text></paragraph><paragraph id="idD7DC393E110942818C59FA1DDBFDA228"><enum>(2)</enum><header>Presumption and violation</header><subparagraph id="id0F213914C9AC46BF9AF6BC1050A1B3B3"><enum>(A)</enum><header>In general</header><text>Subject to subparagraph (B), in such a proceeding, an agreement shall be presumed to have anticompetitive effects and shall be a violation of this section if—</text><clause id="id3DDF36C7DC6A40798734DF1158B70894"><enum>(i)</enum><text>an ANDA filer or a biosimilar biological product application filer receives anything of value, including an exclusive license; and</text></clause><clause id="idDBDE052EFA6344CC88F2B89844562153"><enum>(ii)</enum><text>the ANDA filer or biosimilar biological product application filer agrees to limit or forgo research, development, manufacturing, marketing, or sales of the ANDA product or biosimilar biological product, as applicable, for any period of time.</text></clause></subparagraph><subparagraph id="idB6FC2C3477E441DC8DBB39D278377EAF"><enum>(B)</enum><header>Exception</header><text>Subparagraph (A) shall not apply if the parties to such agreement demonstrate by clear and convincing evidence that—</text><clause id="idCBB7739D147744FD9860FF2201BD3D19"><enum>(i)</enum><text>the value described in subparagraph (A)(i) is compensation solely for other goods or services that the ANDA filer or biosimilar biological product application filer has promised to provide; or</text></clause><clause id="id0CEC4F2B375E4B63A2C160AA16BBCCD0"><enum>(ii)</enum><text>the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement.</text></clause></subparagraph></paragraph></subsection><subsection id="id320542EF143547419EC52D248DC01019"><enum>(b)</enum><header>Limitations</header><text>In determining whether the settling parties have met their burden under subsection (a)(2)(B), the fact finder shall not presume— </text><paragraph id="id3D4D3BF4BEBC40F7B2BE330B85D9959E"><enum>(1)</enum><text>that entry would not have occurred until the expiration of the relevant patent or statutory exclusivity; or</text></paragraph><paragraph id="idFBDE03F39695465F9ECDA53ACEE2E7E4"><enum>(2)</enum><text>that the agreement’s provision for entry of the ANDA product or biosimilar biological product prior to the expiration of the relevant patent or statutory exclusivity means that the agreement is procompetitive.</text></paragraph></subsection><subsection id="id500676D921E74BD0808C04EBA9B80140"><enum>(c)</enum><header>Exclusions</header><text>Nothing in this section shall prohibit a resolution or settlement of a patent infringement claim in which the consideration that the ANDA filer or biosimilar biological product application filer, respectively, receives as part of the resolution or settlement includes only one or more of the following: </text><paragraph id="idE011EA1DB2114D3488F0F63A08F96488"><enum>(1)</enum><text>The right to market and secure final approval in the United States for the ANDA product or biosimilar biological product at a date, whether certain or contingent, prior to the expiration of— </text><subparagraph id="idEE2FF10E7CD04A7D93953C59F1357D65"><enum>(A)</enum><text>any patent that is the basis for the patent infringement claim; or</text></subparagraph><subparagraph id="idF3F1327BEA3B4C5FADBEB9CD393D316E"><enum>(B)</enum><text>any patent right or other statutory exclusivity that would prevent the marketing of such ANDA product or biosimilar biological product.</text></subparagraph></paragraph><paragraph id="id1A22C90F5CED41A7968AE279B4AE0E00"><enum>(2)</enum><text>A payment for reasonable litigation expenses not to exceed—</text><subparagraph id="idA575B158B9624447A191010640A54D07"><enum>(A)</enum><text>for calendar year 2021, $7,500,000; or</text></subparagraph><subparagraph id="id127A7D3B7F494FAAB484043F4B16A9D8"><enum>(B)</enum><text>for calendar year 2022 and each subsequent calendar year, the amount determined for the preceding calendar year adjusted to reflect the percentage increase (if any) in the Producer Price Index for Legal Services published by the Bureau of Labor Statistics of the Department of Labor for the most recent calendar year.</text></subparagraph></paragraph><paragraph id="id9D5AB613BD9540DA974C4F614BDABB57"><enum>(3)</enum><text>A covenant not to sue on any claim that the ANDA product or biosimilar biological product infringes a United States patent.</text></paragraph></subsection><subsection id="id4BFB80C43D484B9893449AA99B1106A7"><enum>(d)</enum><header>Enforcement</header><paragraph id="id569E0282F064423DAB5D468DCBBE8ECF"><enum>(1)</enum><header>Enforcement</header><text>A violation of this section shall be treated as an unfair method of competition under section 5(a)(1).</text></paragraph><paragraph id="idF29CF43CA96842119BE6E27D0010316A"><enum>(2)</enum><header>Judicial review</header><subparagraph id="id1DC2A257CB88436F8257CDF834101A43"><enum>(A)</enum><header>In general</header><text>Any party that is subject to a final order of the Commission, issued in an administrative adjudicative proceeding under the authority of subsection (a)(1), may, within 30 days of the issuance of such order, petition for review of such order in—</text><clause id="id662646AD133846119A79F73AECA7B5D7"><enum>(i)</enum><text>the United States Court of Appeals for the District of Columbia Circuit;</text></clause><clause id="id7BDBF310FD2A4B4296733E19F5617A3F"><enum>(ii)</enum><text>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 holder or biological product license holder is incorporated as of the date that the NDA or biological product license application, as applicable, is filed with the Commissioner of Food and Drugs; or</text></clause><clause id="id11C3F744ACB1409C9B87468D3443177B"><enum>(iii)</enum><text>the United States Court of Appeals for the circuit in which the ultimate parent entity of the ANDA filer or biosimilar biological product application filer is incorporated as of the date that the ANDA or biosimilar biological product application is filed with the Commissioner of Food and Drugs.</text></clause></subparagraph><subparagraph id="id56D07BD6938C4337979C1E47A18B3083"><enum>(B)</enum><header>Treatment of findings</header><text>In a proceeding for judicial review of a final order of the Commission, the findings of the Commission as to the facts, if supported by evidence, shall be conclusive.</text></subparagraph></paragraph></subsection><subsection id="idBED920CAB50A4DA0A16CEB5410761260"><enum>(e)</enum><header>Antitrust laws</header><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/15/12">15 U.S.C. 12(a)</external-xref>), and of section 5 of this Act to the extent that section 5 applies to unfair methods of competition. Nothing in this section shall modify, impair, limit, or supersede the right of an ANDA filer or biosimilar biological product application filer to assert claims or counterclaims against any person, under the antitrust laws or other laws relating to unfair competition.</text></subsection><subsection id="id5A10937786164D6D928BA7C8711D5C6B"><enum>(f)</enum><header>Penalties</header><paragraph id="id6EFE07AAF4164091A0094053D2F5D079"><enum>(1)</enum><header>Forfeiture</header><text>Each party that violates or assists in the violation of this section shall forfeit and pay to the United States a civil penalty sufficient to deter violations of this section, but in no event greater than 3 times the value received by the party that is reasonably attributable to the violation of this section. If no such value has been received by the NDA holder, the biological product license holder, the ANDA filer, or the biosimilar biological product application filer, the penalty to the NDA holder, the biological product license holder, the ANDA filer, or the biosimilar biological product application filer shall be sufficient to deter violations, but in no event shall be greater than 3 times the value given to an ANDA filer or biosimilar biological product application filer reasonably attributable to the violation of this section. Such penalty shall accrue to the United States and may be recovered in a civil action brought by the Commission, in its own name by any of its attorneys designated by it for such purpose, in a district court of the United States against any party that violates this section. In such actions, the United States district courts are empowered to grant mandatory injunctions and such other and further equitable relief as they deem appropriate.</text></paragraph><paragraph id="idEAAA000F4B1D4417ACEC2114A682D015"><enum>(2)</enum><header>Cease and desist</header><subparagraph id="id9B4001AB13A146CFB2B8F1F3FCE3AF64"><enum>(A)</enum><header>In general</header><text>If the Commission has issued a cease and desist order with respect to a party in an administrative adjudicative proceeding under the authority of subsection (a)(1), an action brought pursuant to paragraph (1) may be commenced against such party at any time before the expiration of 1 year after such order becomes final pursuant to section 5(g).</text></subparagraph><subparagraph id="id5A0CBBDCB4D3421EA0140BA09BF6FC92"><enum>(B)</enum><header>Exception</header><text>In an action under subparagraph (A), the findings of the Commission as to the material facts in the administrative adjudicative proceeding with respect to the violation of this section by a party shall be conclusive unless—</text><clause id="id64C2AF5B27204AE7862115155664B850"><enum>(i)</enum><text>the terms of such cease and desist order expressly provide that the Commission’s findings shall not be conclusive; or</text></clause><clause id="id12E6D2C1AF494B75ACD21B5199959A70"><enum>(ii)</enum><text>the order became final by reason of section 5(g)(1), in which case such finding shall be conclusive if supported by evidence.</text></clause></subparagraph></paragraph><paragraph id="id9B533A8662E5453C8FC1F6010B50DAE6"><enum>(3)</enum><header>Civil penalty</header><text>In determining the amount of the civil penalty described in this section, the court shall take into account—</text><subparagraph id="id4F7B141D750447CFA72FB2BC9596EE78"><enum>(A)</enum><text>the nature, circumstances, extent, and gravity of the violation;</text></subparagraph><subparagraph id="id1543A57F21E24D59A44416D5A25294AA"><enum>(B)</enum><text>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 holder, the biological product license holder, the ANDA filer, or the biosimilar biological product application filer, compensation received by the ANDA filer or biosimilar biological product application filer, and the amount of commerce affected; and</text></subparagraph><subparagraph id="id834E715E9EA646E7BB8C1CAAC281FF5B"><enum>(C)</enum><text>other matters that justice requires.</text></subparagraph></paragraph><paragraph id="id3999020F41BE4F2180CF968CF8752125"><enum>(4)</enum><header>Remedies in addition</header><text>Remedies provided in this subsection are in addition to, and not in lieu of, any other remedy provided by Federal law. Nothing in this paragraph shall be construed to affect any authority of the Commission under any other provision of law.</text></paragraph></subsection><subsection id="id3BD69E5185A847B9B7CA3A0C78706334"><enum>(g)</enum><header>Definitions</header><text>In this section: </text><paragraph id="idEE5F9E1A63ED4D11AF5299B2D066E148"><enum>(1)</enum><header>Agreement</header><text>The term <term>agreement</term> means anything that would constitute an agreement under section 1 of the Sherman Act (<external-xref legal-doc="usc" parsable-cite="usc/15/1">15 U.S.C. 1</external-xref>) or section 5 of this Act.</text></paragraph><paragraph id="idC66AE869541C43AD998E05CB96CE4656"><enum>(2)</enum><header>Agreement resolving or settling a patent infringement claim</header><text>The term <term>agreement resolving or settling a patent infringement claim</term> includes any agreement that is entered into within 30 days of the resolution or the settlement of the claim, or any other agreement that is contingent upon, provides a contingent condition for, or is otherwise related to the resolution or settlement of the claim.</text></paragraph><paragraph id="id3FDA277BE1B541709DBF7137F85EB63B"><enum>(3)</enum><header>ANDA</header><text>The term <term>ANDA</term> means an abbreviated new drug application filed under section 505(j) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355(j)</external-xref>) or a new drug application filed under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355(b)(2)</external-xref>).</text></paragraph><paragraph id="idF1B367BEFF734B6581971DAC183A52B7"><enum>(4)</enum><header>ANDA filer</header><text>The term <term>ANDA filer</term> means a party that owns or controls an ANDA filed with the Food and Drug Administration or has the exclusive rights under such ANDA to distribute the ANDA product.</text></paragraph><paragraph id="id343701C33AD94D61A4C885A8AF9951F5"><enum>(5)</enum><header>ANDA product</header><text>The term <term>ANDA product</term> means the product to be manufactured under the ANDA that is the subject of the patent infringement claim.</text></paragraph><paragraph id="id95520EC650D44D21B1B0460AAB4ED2CD"><enum>(6)</enum><header>Biological product</header><text>The term <term>biological product</term> has the meaning given such term in section 351(i)(1) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(i)(1)</external-xref>).</text></paragraph><paragraph id="id3D97B60CA2EC4B2D930E174061405F5D"><enum>(7)</enum><header>Biological product license application</header><text>The term <term>biological product license application</term> means an application under section 351(a) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(a)</external-xref>).</text></paragraph><paragraph id="id72D5024575BA42689D477EF07CB7E8F6"><enum>(8)</enum><header>Biological product license holder</header><text>The term <term>biological product license holder</term> means—</text><subparagraph id="id11E2BEA1A4034C0FAB986D96B809B266"><enum>(A)</enum><text>the holder of an approved biological product license application for a biological product;</text></subparagraph><subparagraph id="id8879BD2472FE4ED68012BF5F7C00F4F8"><enum>(B)</enum><text>a person owning or controlling enforcement of any patents that claim the biological product that is the subject of such approved application; or</text></subparagraph><subparagraph id="id40EC42CA28E04234899D7FA298622EB4"><enum>(C)</enum><text>the predecessors, subsidiaries, divisions, groups, and affiliates controlled by, controlling, or under common control with any of the entities described in subparagraphs (A) and (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.</text></subparagraph></paragraph><paragraph id="id5F8261C714D44E41AC2231AEE2421A29"><enum>(9)</enum><header>Biosimilar biological product</header><text>The term <term>biosimilar biological product</term> means the product to be manufactured under the biosimilar biological product application that is the subject of the patent infringement claim.</text></paragraph><paragraph id="idAFAC57ABD426425D9053C1B2DF82B70D"><enum>(10)</enum><header>Biosimilar biological product application</header><text>The term <term>biosimilar biological product application</term> means an application under section 351(k) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(k)</external-xref>) for licensure of a biological product as biosimilar to, or interchangeable with, a reference product.</text></paragraph><paragraph id="id09F75BD9719E45869C8038412DF977F6"><enum>(11)</enum><header>Biosimilar biological product application filer</header><text>The term <term>biosimilar biological product application filer</term> means a party that owns or controls a biosimilar biological product application filed with the Food and Drug Administration or has the exclusive rights under such application to distribute the biosimilar biological product.</text></paragraph><paragraph id="id8DE6DD46505D4E10AA3F557CC4280F42"><enum>(12)</enum><header>Drug product</header><text>The term <term>drug product</term> has the meaning given such term in section 314.3(b) of title 21, Code of Federal Regulations (or any successor regulation).</text></paragraph><paragraph id="id44C1D93DC7674659B13B588F722AAE74"><enum>(13)</enum><header>Market</header><text>The term <term>market</term> means the promotion, offering for sale, selling, or distribution of a drug product.</text></paragraph><paragraph id="idF7675437B0414EAA90A3BCDB83399D7E"><enum>(14)</enum><header>NDA</header><text>The term <term>NDA</term> means a new drug application filed under section 505(b) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355(b)</external-xref>).</text></paragraph><paragraph id="idF79A554540904A3E8C7212F47E4FB486"><enum>(15)</enum><header>NDA holder</header><text>The term <term>NDA holder</term> means—</text><subparagraph id="id9B200C0915534B34A198132E823720F4"><enum>(A)</enum><text>the holder of an approved NDA application for a drug product;</text></subparagraph><subparagraph id="id664AFE9A16484E15BF44A564A509B128"><enum>(B)</enum><text>a person owning or controlling enforcement of the patent listed in the Approved Drug Products With Therapeutic Equivalence Evaluations (commonly known as the <quote>FDA Orange Book</quote>) in connection with the NDA; or</text></subparagraph><subparagraph id="idAF62A2B7E2C545DE82D7EA7F09ED29DE"><enum>(C)</enum><text>the predecessors, subsidiaries, divisions, groups, and affiliates controlled by, controlling, or under common control with any of the entities described in subparagraphs (A) and (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.</text></subparagraph></paragraph><paragraph id="id1B22567EC41E430CA06560CEF52708ED"><enum>(16)</enum><header>Party</header><text>The term <term>party</term> means any person, partnership, corporation, or other legal entity.</text></paragraph><paragraph id="idF9D516DC796E4CAC85B52C71A009E840"><enum>(17)</enum><header>Patent infringement</header><text>The term <term>patent infringement</term> means infringement of any patent or of any filed patent application, including any extension, reissue, renewal, division, continuation, continuation in part, reexamination, patent term restoration, patents of addition, and extensions thereof.</text></paragraph><paragraph id="idBBC5FCA0DC1E4AF8A700D38EED60B027"><enum>(18)</enum><header>Patent infringement claim</header><text>The term <term>patent infringement claim</term> means any allegation made to an ANDA filer or biosimilar biological product application filer, whether or not included in a complaint filed with a court of law, that its ANDA or ANDA product, or biosimilar biological product license application or biosimilar biological product, may infringe any patent held by, or exclusively licensed to, the NDA holder, biological product license holder, ANDA filer, or biosimilar biological product application filer of the drug product or biological product, as applicable.</text></paragraph><paragraph id="id2F8F577CFFFE4D7B954612BDB7A0B533"><enum>(19)</enum><header>Statutory exclusivity</header><text>The term <term>statutory exclusivity</term> means those prohibitions on the approval of drug applications under clauses (ii) through (iv) of section 505(c)(3)(E) (5- and 3-year data exclusivity), section 527 (orphan drug exclusivity), or section 505A (pediatric exclusivity) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355(c)(3)(E)</external-xref>, 360cc, 355a), or on the licensing of biological product applications under section 351(k)(7) (12-year exclusivity) or paragraph (2) or (3) of section 351(m) (pediatric exclusivity) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262</external-xref>) or under section 527 of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/360cc">21 U.S.C. 360cc</external-xref>) (orphan drug exclusivity).</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="idB1D4E98C13D34EB8843AAE1474A53B9C"><enum>(2)</enum><header>Effective date</header><text>Section 27 of the Federal Trade Commission Act, as added by this section, shall apply to all agreements described in section 27(a)(1) of that Act entered into on or after the date of enactment of this Act.</text></paragraph></subsection><subsection id="idFF0F304D39114C39AE556EAF15A3B74F"><enum>(c)</enum><header>Certification of agreements</header><paragraph id="id6D4A3528E64F41088E0A0F01288DCBDF"><enum>(1)</enum><header>Notice of all agreements</header><text>Section 1111(7) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355</external-xref> note) is amended by inserting <quote>, 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</quote> before the period at the end.</text></paragraph><paragraph id="id92302AC36F6847B8BD764C49C560EAD1"><enum>(2)</enum><header>Certification of agreements</header><text>Section 1112 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355</external-xref> note) is amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id36BA8D956B54442B827C5AF3B33EDA02"><subsection id="idED97CD24A8B0443E9DC171EF64A2CA4F"><enum>(d)</enum><header>Certification</header><text>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), within 30 days after such filing, shall execute and file with the Assistant Attorney General and the Commission a certification as follows: </text><quoted-block style="OLC" display-inline="yes-display-inline" id="id08375677D7414F91B03BEB6E6E11F379"><text>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 subtitle B of title XI of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, with respect to the agreement referenced in this certification—</text><paragraph id="id796A1638785E4135AAD9D57147B90A69"><enum>(1)</enum><text>represent the complete, final, and exclusive agreement between the parties;</text></paragraph><paragraph id="idF7D2AB0CEAE54DC397FD2DE1D19D1BA4"><enum>(2)</enum><text>include any ancillary agreements that are contingent upon, provide a contingent condition for, or are otherwise related to, the referenced agreement; and</text></paragraph><paragraph id="id7AEB2EEF07F74DD083D434ABBB84D6AE"><enum>(3)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id5C3C3650669C42A09B3EB1536AA2424C"><enum>(d)</enum><header>Notification of agreements</header><text>Section 1112 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355</external-xref> note), as amended by section 4(b), is further amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idC4A7340033BC4ED8A1065DCD22234C07"><subsection id="id9F414B6BDFCE4D688CB0D0AE4A7F753E"><enum>(e)</enum><header>Rule of construction</header><paragraph id="id9C5E2360A1464232BE9449CE2D7EE1B1"><enum>(1)</enum><header>In general</header><text>An agreement that is required under subsection (a) or (b) shall include agreements resolving any outstanding disputes, including agreements resolving or settling a Patent Trial and Appeal Board proceeding.</text></paragraph><paragraph id="id5B8E5700F9484D0B969F8E029075E47A"><enum>(2)</enum><header>Definition</header><text>For purposes of subparagraph (A), the term <term>Patent Trial and Appeal Board proceeding</term> means a proceeding conducted by the Patent Trial and Appeal Board of the United States Patent and Trademark Office, including an inter partes review instituted under <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/35/31">chapter 31</external-xref> of title 35, United States Code, a post-grant review instituted under chapter 32 of that title (including a proceeding instituted pursuant to the transitional program for covered business method patents, as described in section 18 of the Leahy-Smith America Invents Act (<external-xref legal-doc="usc" parsable-cite="usc/35/321">35 U.S.C. 321</external-xref> note)), and a derivation proceeding instituted under section 135 of that title.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id40DA47EC7DAB4BDC9E2BA51A2DB11641"><enum>(e)</enum><header>Forfeiture of 180-Day exclusivity period</header><text>Section 505(j)(5)(D)(i)(V) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355(j)(5)(D)(i)(V)</external-xref>) is amended by inserting <quote>section 27 of the Federal Trade Commission Act or</quote> after <quote>that the agreement has violated</quote>.</text></subsection><subsection id="idCAD5A26095D84ED9B20A1C9B4EBCCA8A"><enum>(f)</enum><header>Commission litigation authority</header><text>Section 16(a)(2) of the Federal Trade Commission Act (<external-xref legal-doc="usc" parsable-cite="usc/15/56">15 U.S.C. 56(a)(2)</external-xref>) is amended— </text><paragraph id="id5C071D8FA9954859A90555781D43ABC0"><enum>(1)</enum><text>in subparagraph (D), by striking <quote>or</quote> after the semicolon;</text></paragraph><paragraph id="idEEC65D0713A04EF487480D08F43903D5"><enum>(2)</enum><text>in subparagraph (E), by inserting <quote>or</quote> after the semicolon; and</text></paragraph><paragraph id="id5084021DB5C847C1AFA18B5C24B9682E"><enum>(3)</enum><text>inserting after subparagraph (E) the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id7188420C69F84B81A29FB5CAEAE01F7A"><subparagraph id="idC577CB3BD4934923BB93407217137D55"><enum>(F)</enum><text>under section 27,</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id2E7894792FC44096BF4FD13219793A1B"><enum>(g)</enum><header>Report on additional exclusion</header><paragraph id="idC6D3BBF8C58E40F98EF118E12959FE14"><enum>(1)</enum><header>In general</header><text>Not later than 1 year after the date of enactment of this Act, the Federal Trade Commission shall submit to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives a recommendation, and the Commission’s basis for such recommendation, regarding a potential amendment to include in section 27(c) of the Federal Trade Commission Act (as added by section 3 of this Act) an additional exclusion for consideration granted by an NDA holder to a ANDA filer or by a biological product license holder to a biosimilar biological product application filer as part of the resolution or settlement, a release, waiver, or limitation of a claim for damages or other monetary relief.</text></paragraph><paragraph id="id62952B705EF04A91B9824C79355FA84C"><enum>(2)</enum><header>Definitions</header><text>In this section, the terms <term>ANDA filer</term>, <term>biological product license holder</term>, <term>biosimilar biological product application filer</term>, and <term>NDA holder</term> have the meanings given such terms in section 27(g) of the Federal Trade Commission Act (as added by section 3 of this Act).</text></paragraph></subsection><subsection id="id521997BCF2874F18A2EAF3379D7DE6E1"><enum>(h)</enum><header>Statute of limitations</header><text>The Federal Trade Commission shall commence any enforcement proceeding described in section 27 of the Federal Trade Commission Act, as added by section 3, except for an action described in section 27(f)(2) of the Federal Trade Commission Act, not later than 6 years after the date on which the parties to the agreement file the certification under section 1112(d) of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355</external-xref> note).</text></subsection><subsection id="idAFD37B00AB7941FDB1B0EB5FB81AE5BE"><enum>(i)</enum><header>Severability</header><text>If any provision of this Act, an amendment made by this Act, or the application of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this Act, the amendments made by this Act, and the application of the provisions of such Act or amendments to any person or circumstance shall not be affected.</text></subsection></section><section id="HE3DAA59D3CD24103A4BA56E9E662702B"><enum>406.</enum><header>Empowering the FTC to prevent <quote>product hopping</quote></header><subsection id="H002E4D9B12984FC686CC1C7FF2EF3EB0"><enum>(a)</enum><header>In general</header><text>The Federal Trade Commission Act (<external-xref legal-doc="usc" parsable-cite="usc/15/41">15 U.S.C. 41 et seq.</external-xref>) is amended by inserting after section 26 (<external-xref legal-doc="usc" parsable-cite="usc/15/57c-2">15 U.S.C. 57c–2</external-xref>) the following:</text><quoted-block act-name="" id="H52A32916A1694B5E871275A22FF082E7" style="OLC"><section id="H03FD708ECB22478796C0C3A31D84BE58"><enum>27.</enum><header>Product hopping</header><subsection id="H6C0B1FFC5C5C40AAADDEB15C0F175941"><enum>(a)</enum><header>Definitions</header><text>In this section:</text><paragraph commented="no" display-inline="no-display-inline" id="H413532993AC7496F94A63FCFB152AC20"><enum>(1)</enum><header display-inline="yes-display-inline">Abbreviated new drug application</header><text display-inline="yes-display-inline">The term <term>abbreviated new drug application</term> means an application under subsection (b)(2) or (j) of section 505 of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355</external-xref>).</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H4D7A903FB9E545A8A3C5EDE7810E00F1"><enum>(2)</enum><header>Biosimilar biological product</header><text>The term <term>biosimilar biological product</term> means a biological product licensed under section 351(k) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(k)</external-xref>).</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H12C9B3DB87F74CDC8704F6BE8F891C3F"><enum>(3)</enum><header display-inline="yes-display-inline">Biosimilar biological product license application</header><text display-inline="yes-display-inline">The term <term>biosimilar biological product license application</term> means an application submitted under section 351(k) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(k)</external-xref>).</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HAC6AE45604A54A48A6AF46B79750CD69"><enum>(4)</enum><header display-inline="yes-display-inline">Follow-on product</header><text display-inline="yes-display-inline">The term <term>follow-on product</term>—</text><subparagraph commented="no" display-inline="no-display-inline" id="H1BE46F7E649F435FA2F0A239E417FBEF"><enum>(A)</enum><text display-inline="yes-display-inline">means a drug approved through an application or supplement to an application submitted under section 505(b) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355(b)</external-xref>) or a biological product licensed through an application or supplement to an application submitted under section 351(a) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(a)</external-xref>) for a change, modification, or reformulation to the same manufacturer's previously approved drug or biological product that treats the same medical condition; and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H835767CB45C64140BB17B561B1628838"><enum>(B)</enum><text display-inline="yes-display-inline">excludes such an application or supplement to an application for a change, modification, or reformulation of a drug or biological product that is requested by the Secretary or necessary to comply with law, including sections 505A and 505B of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355a">21 U.S.C. 355a</external-xref>, 355c).</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HDD214D117FE849D194B7FB255D44422C"><enum>(5)</enum><header display-inline="yes-display-inline">Generic drug</header><text display-inline="yes-display-inline">The term <term>generic drug</term> means a drug approved under an application submitted under subsection (b)(2) or (j) of section 505 of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355</external-xref>).</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HD6869F977B16474A9CBD2088D5605561"><enum>(6)</enum><header>Listed drug</header><text>The term <term>listed drug</term> means a drug listed under section 505(j)(7) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355(j)(7)</external-xref>).</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HFD68DDD42EFB41608004196D6E04A25D"><enum>(7)</enum><header>Manufacturer</header><text>The term <term>manufacturer</term> means the holder, licensee, or assignee of—</text><subparagraph commented="no" display-inline="no-display-inline" id="HE5132BABF95940EABF1217187B4BF250"><enum>(A)</enum><text>an approved application for a drug under section 505(c) of the Federal Food, Drug, and Cosmetic Act (<external-xref legal-doc="usc" parsable-cite="usc/21/355">21 U.S.C. 355(c)</external-xref>); or</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H97E13D4F27764393A6A0F7BFD33B61F5"><enum>(B)</enum><text>a biological product license under section 351(a) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(a)</external-xref>).</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H79C3A32250D94E0B8FAE2A939318EA1A"><enum>(8)</enum><header display-inline="yes-display-inline">Reference product</header><text display-inline="yes-display-inline">The term <term>reference product</term> has the meaning given the term in section 351(i) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(i)</external-xref>).</text></paragraph><paragraph id="HCB1F5C685C96498091879E085469A8FB"><enum>(9)</enum><header>Ultimate parent entity</header><text>The term <term>ultimate parent entity</term> has the meaning given the term in section 801.1 of title 16, Code of Federal Regulations, or any successor regulation.</text></paragraph></subsection><subsection id="HE5EB515B4F194F1AACE6DE1F3A09AA2B"><enum>(b)</enum><header>Prohibition on product hopping</header><paragraph id="HA74A3E2ACF1F4D15A6A363AEB0615114"><enum>(1)</enum><header>Prima facie</header><text>Except as provided in paragraph (2), a manufacturer of a reference product or listed drug shall be considered to have engaged in an unfair method of competition in or affecting commerce in violation of section 5(a) if the Commission demonstrates by a preponderance of the evidence in a proceeding initiated by the Commission under subsection (c)(1)(A), or in a suit brought under subparagraph (B) or (C) of subsection (c)(1), that, during the period beginning on the date on which the manufacturer of the reference product or listed drug first receives notice that an applicant has submitted to the Commissioner of Food and Drugs an abbreviated new drug application or biosimilar biological product license application and ending on the date that is 180 days after the date on which that generic drug or biosimilar biological product is first marketed, the manufacturer engaged in either of the following actions:</text><subparagraph id="HC49E3E43704F43A2A824782AB1BB3AA0"><enum>(A)</enum><text>The manufacturer engaged in a hard switch, which shall be established by demonstrating that the manufacturer engaged in either of the following actions:</text><clause id="H128B064AE2B64D4BBEEB17F00E88E991"><enum>(i)</enum><text>Upon the request of the manufacturer of the listed drug or reference product, the Commissioner of Food and Drugs withdrew the approval of the application for the listed drug or reference product or placed the listed drug or reference product on the discontinued products list and the manufacturer marketed or sold a follow-on product.</text></clause><clause id="HB245FF68C3414D589C08EA7086CF27CE"><enum>(ii)</enum><text>The manufacturer of the listed drug or reference product—</text><subclause id="HACF346D4E24545C4B090DBCC09424D18"><enum>(I)</enum><item commented="no" display-inline="yes-display-inline" id="HE4E0DBC190C3453E81C3ADCF14176BEC"><enum>(aa)</enum><text>announced withdrawal of, discontinuance of the manufacture of, or intent to withdraw the application with respect to the drug or reference product in a manner that impedes competition from a generic drug or a biosimilar biological product, as established by objective circumstances; or</text></item><item id="HBE7557B44A604147B85C310EEA08F363" indent="up1"><enum>(bb)</enum><text>destroyed the inventory of the listed drug or reference product in a manner that impedes competition from a generic drug or a biosimilar biological product, which may be established by objective circumstances; and</text></item></subclause><subclause id="H256C4675C1D94399B3583F796DBDE983"><enum>(II)</enum><text>marketed or sold a follow-on product.</text></subclause></clause></subparagraph><subparagraph id="HF136229D717048BCA51903047397EA8E"><enum>(B)</enum><text>The manufacturer engaged in a soft switch, which shall be established by demonstrating that the manufacturer engaged in both of the following actions:</text><clause id="HD4576C3EF29C46DCAEED8EE6A4B0EC43"><enum>(i)</enum><text>The manufacturer took actions with respect to the listed drug or reference product other than those described in subparagraph (A) that unfairly disadvantage the listed drug or reference product relative to the follow-on product described in clause (ii) in a manner that impedes competition from a generic drug or a biosimilar biological product that is highly similar to, and has no clinically meaningful difference with respect to safety, purity, and potency from, the reference product, which may be established by objective circumstances.</text></clause><clause id="HB90FCB96D5EE421D9DD6B93770D2FCEA"><enum>(ii)</enum><text>The manufacturer marketed or sold a follow-on product.</text></clause></subparagraph></paragraph><paragraph id="HACF3022DEE344045B43E5EA5600A5463"><enum>(2)</enum><header>Justification</header><subparagraph id="H5AB926829B594135B6F1AD5B913EB5CC"><enum>(A)</enum><header>In general</header><text>Subject to paragraph (3), the actions described in paragraph (1) by a manufacturer of a listed drug or reference product shall not be considered to be an unfair method of competition in or affecting commerce if—</text><clause id="HD3DDB4D51AE641B8ACEB1AF94EA17E01"><enum>(i)</enum><text>the manufacturer demonstrates to the Commission or a district court of the United States, as applicable, by a preponderance of the evidence in a proceeding initiated by the Commission under subsection (c)(1)(A), or in a suit brought under subparagraph (B) or (C) of subsection (c)(1), that—</text><subclause id="H4C8541579255438794539C14FFDD97DB"><enum>(I)</enum><text>the manufacturer would have taken the actions regardless of whether a generic drug that references the listed drug or biosimilar biological product that references the reference product had already entered the market; and</text></subclause><subclause id="H00C3F6E625F2487BAC49F1006B3558FD"><enum>(II)</enum><item commented="no" display-inline="yes-display-inline" id="H8ECA9288A4D347B4AA34A4746AF6C84E"><enum>(aa)</enum><text>with respect to a hard switch under paragraph (1)(A), the manufacturer took the action for reasons relating to the safety risk to patients of the listed drug or reference product;</text></item><item id="H24386D93A49F4DDB9749F715D0E13F37" indent="up1"><enum>(bb)</enum><text>with respect to an action described in item (aa) or (bb) of paragraph (1)(A)(ii)(I), there is a supply disruption that—</text><subitem id="H73B29022A21D4FF3A9F16B4AE57923E0"><enum>(AA)</enum><text>is outside of the control of the manufacturer;</text></subitem><subitem id="H777D4E38D5804499A63AD5A5424B4833"><enum>(BB)</enum><text>prevents the production or distribution of the applicable listed drug or reference product; and</text></subitem><subitem id="HA3780A5A7B254DFC97BDAD32C303F242"><enum>(CC)</enum><text>cannot be remedied by reasonable efforts; or</text></subitem></item><item id="HDAAC456F90C84550BFA7CD6A211991DE" indent="up1"><enum>(cc)</enum><text>with respect to a soft switch under paragraph (1)(B), the manufacturer had legitimate pro-competitive reasons, apart from the financial effects of reduced competition, to take the action.</text></item></subclause></clause></subparagraph><subparagraph id="H771F1BC117194A059B94BA19AE51DE08"><enum>(B)</enum><header>Rule of construction</header><text>Nothing in subparagraph (A) may be construed to limit the information that the Commission may otherwise obtain in any proceeding or action instituted with respect to a violation of this section.</text></subparagraph></paragraph><paragraph id="H49D6FAB8878F40599C5CD8D62967499D"><enum>(3)</enum><header>Response</header><text>With respect to a justification offered by a manufacturer under paragraph (2), the Commission may—</text><subparagraph id="H4696ECF8E2A24D24A5433B6E7A316969"><enum>(A)</enum><text>rebut any evidence presented by a manufacturer during that justification; or</text></subparagraph><subparagraph id="H762A8720310F4334AA134C04082A923F"><enum>(B)</enum><text>establish by a preponderance of the evidence that, on balance, the pro-competitive benefits from the conduct described in subparagraph (A) or (B) of paragraph (1), as applicable, do not outweigh any anticompetitive effects of the conduct, even in consideration of the justification so offered.</text></subparagraph></paragraph></subsection><subsection id="H9DAE1281BF434D3C8DF61802061B56A4"><enum>(c)</enum><header>Enforcement</header><paragraph id="H9A7C56E5862D4FE4AA6FF874A5659A1E"><enum>(1)</enum><header>In general</header><text>If the Commission has reason to believe that any manufacturer has violated, is violating, or is about to violate this section, the Commission may take any of the following actions:</text><subparagraph id="H70BD7AB143AD414D8B9AA97B366D60C8"><enum>(A)</enum><text>Institute a proceeding—</text><clause id="H7F027343CBA04DBCA7C1C76DF900A5F8"><enum>(i)</enum><text>that, except as provided in paragraph (2), complies with the requirements under section 5(b); and</text></clause><clause id="HE14C342081334E83ADC83132C19C6632"><enum>(ii)</enum><text>in which the Commission may impose on the manufacturer any penalty that the Commission may impose for a violation of section 5.</text></clause></subparagraph><subparagraph id="HEBF238BE176840A3BE95BA33652D2A3A"><enum>(B)</enum><text>In the same manner and to the same extent as provided in section 13(b), bring suit in a district court of the United States to temporarily enjoin the action of the manufacturer.</text></subparagraph><subparagraph id="HA2EEB4351AC14C7DA7DE0547868B092C"><enum>(C)</enum><text>Bring suit in a district court of the United States, in which the Commission may seek—</text><clause id="H308A14A47F81491E94279F7394C4146C"><enum>(i)</enum><text>to permanently enjoin the action of the manufacturer;</text></clause><clause id="HEF7C8070489443BA928A50D5A7E8FF37"><enum>(ii)</enum><text>any of the remedies described in paragraph (3); and</text></clause><clause id="H047BDA422B8B48A1933C3A771D07CA8B"><enum>(iii)</enum><text>any other equitable remedy, including ancillary equitable relief.</text></clause></subparagraph></paragraph><paragraph id="H9BC7ECF231A5408F92DB02A36C5032BE"><enum>(2)</enum><header>Judicial review</header><subparagraph id="HC1F27C672FF84867A5D28A84D3440495"><enum>(A)</enum><header>In general</header><text>Notwithstanding any provision of section 5, any manufacturer that is subject to a final order of the Commission that is issued in a proceeding instituted under paragraph (1)(A) may, not later than 30 days after the date on which the Commission issues the order, petition for review of the order in—</text><clause id="H325DD3CC9CEF46EEA607C2C88DC0C387"><enum>(i)</enum><text>the United States Court of Appeals for the District of Columbia Circuit; or</text></clause><clause id="HD5A338477A50451F918E9247A95C6E0F"><enum>(ii)</enum><text>the court of appeals of the United States for the circuit in which the ultimate parent entity of the manufacturer is incorporated.</text></clause></subparagraph><subparagraph id="HEBB5E15A48C54F8B9B80934F1D15CD21"><enum>(B)</enum><header>Treatment of findings</header><text>In a review of an order issued by the Commission conducted by a court of appeals of the United States under subparagraph (A), the factual findings of the Commission shall be conclusive if those facts are supported by the evidence.</text></subparagraph></paragraph><paragraph id="H8BD74686C4EE4F8E932C639D9208950C"><enum>(3)</enum><header>Equitable remedies</header><subparagraph id="H90BEB99F781247B1A36B8DB1BB1F5AE3"><enum>(A)</enum><header>Disgorgement</header><clause id="H4126456973144A29BA4CD3F1D51E509A"><enum>(i)</enum><header>In general</header><text>In a suit brought under paragraph (1)(C), the Commission may seek, and the court may order, disgorgement of any unjust enrichment that a person obtained as a result of the violation that gives rise to the suit.</text></clause><clause id="HDEE90FEA5149446685DA473990D84B6C"><enum>(ii)</enum><header>Calculation</header><text>Any dis­gorge­ment that is ordered with respect to a person under clause (i) shall be offset by any amount of restitution ordered under subparagraph (B).</text></clause><clause id="HB339705C0C1A45798877899E4E277D79"><enum>(iii)</enum><header>Limitations period</header><text>The Commission may seek disgorgement under this subparagraph not later than 5 years after the latest date on which the person from which the disgorgement is sought receives any unjust enrichment from the effects of the violation that gives rise to the suit in which the Commission seeks the disgorgement.</text></clause></subparagraph><subparagraph id="HCF2F7F0ED00D4C1D99DC00B2C0FAF2E2"><enum>(B)</enum><header>Restitution</header><clause id="H97BAC4A7F87640E78A1ADD90ED340662"><enum>(i)</enum><header>In general</header><text>In a suit brought under paragraph (1)(C), the Commission may seek, and the court may order, restitution with respect to the violation that gives rise to the suit.</text></clause><clause id="H92323785F8854518BC0153801604C796"><enum>(ii)</enum><header>Limitations period</header><text>The Commission may seek restitution under this subparagraph not later than 5 years after the latest date on which the person from which the restitution is sought receives any unjust enrichment from the effects of the violation that gives rise to the suit in which the Commission seeks the restitution.</text></clause></subparagraph></paragraph><paragraph id="H019F5C3485BF498AB63A215C48E67DF5"><enum>(4)</enum><header>Rules of construction</header><text>Nothing in this subsection may be construed as—</text><subparagraph id="H9B0E92F497AE453D962827E50291BD07"><enum>(A)</enum><text>requiring the Commission to bring a suit seeking a temporary injunction under paragraph (1)(B) before bringing a suit seeking a permanent injunction under paragraph (1)(C); or</text></subparagraph><subparagraph id="H890A983AEE4642D2996521840DD76BCE"><enum>(B)</enum><text>affecting any other authority of the Commission under this Act to seek relief or obtain a remedy with respect to a violation of this Act.</text></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H5E52E56E93B84190B10DA5FF08EAF751"><enum>(b)</enum><header>Applicability</header><text>Section 27 of the Federal Trade Commission Act, as added by subsection (a), shall apply with respect to any—</text><paragraph id="H7BF17814C56A44F4B5591714DEBE2FD5"><enum>(1)</enum><text>conduct that occurs on or after the date of enactment of this Act; and</text></paragraph><paragraph id="HF0F3000F179844A6969895009C048AC8"><enum>(2)</enum><text>action or proceeding that is commenced on or after the date of enactment of this Act.</text></paragraph></subsection><subsection id="HA40E9D42AD9E4B1EAAB19158B4BF5C0E"><enum>(c)</enum><header>Antitrust laws</header><text>Nothing in this section, or the amendments made by 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 (<external-xref legal-doc="usc" parsable-cite="usc/15/12">15 U.S.C. 12(a)</external-xref>), and of section 5 of the Federal Trade Commission Act (<external-xref legal-doc="usc" parsable-cite="usc/15/45">15 U.S.C. 45</external-xref>) to the extent that it applies to unfair methods of competition.</text></subsection><subsection id="HE00F7BD47C44444E87A6B086753F06F6"><enum>(d)</enum><header>Rulemaking</header><text>The Federal Trade Commission may issue rules under section 553 of title 5, United States Code, to carry out section 27 of the Federal Trade Commission Act, as added by subsection (a), including by defining any terms used in such section 27 (other than terms that are defined in subsection (a) of such section 27).</text></subsection></section><section id="H69C957D4587A49A2919CE173DA4F3138"><enum>407.</enum><header>Promoting competition by limiting patent thickets</header><subsection id="HDAF22BC2157542ACA4F494495B6AF7A3"><enum>(a)</enum><header>In general</header><text>Section 271(e) of title 35, United States Code, is amended—</text><paragraph id="HBEE281BBFCF04994905F9099A9122F1A"><enum>(1)</enum><text>in paragraph (2)(C), in the flush text following clause (ii), by adding at the end the following: <quote>With respect to a submission described in clause (ii), the act of infringement shall extend to any patent that claims the biological product, a method of using the biological product, or a method or product used to manufacture the biological product.</quote>; and</text></paragraph><paragraph id="H26408FB492C64F10AC7A0044D18452FF"><enum>(2)</enum><text>by adding at the end the following:</text><quoted-block act-name="" display-inline="no-display-inline" id="HE80D354E59AC440FB9C82A640E4184AF" style="OLC"><paragraph id="H2A708371253F4C63AFBBE45DBD7404D7" indent="up1"><enum>(7)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="HA87FCD042C02409DB8B29B80A7CFCF26"><enum>(A)</enum><text>Subject to subparagraphs (C), (D), and (E), if the sponsor of an approved application for a reference product, as defined in section 351(i) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(i)</external-xref>) (referred to in this paragraph as the <quote>reference product sponsor</quote>), brings an action for infringement under this section against an applicant for approval of a biological product under section 351(k) of such Act that references that reference product (referred to in this paragraph as the <quote>subsection (k) applicant</quote>), the reference product sponsor may assert in the action a total of not more than 20 patents of the type described in subparagraph (B), not more than 10 of which shall have issued after the date specified in section 351(l)(7)(A) of such Act.</text></subparagraph><subparagraph id="HC631B8D2072F4A6F8E5A8FA4D8B21803" indent="up1"><enum>(B)</enum><text>The patents described in this subparagraph are patents that satisfy each of the following requirements:</text><clause id="H68ABD7C4323B47C4B4CB3FA5EEA92EB1"><enum>(i)</enum><text>Patents that claim the biological product that is the subject of an application under section 351(k) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(k)</external-xref>) (or a use of that product) or a method or product used in the manufacture of such biological product.</text></clause><clause id="H4B8179D4ECBA45FA8244FA0CA6FDEEAA"><enum>(ii)</enum><text>Patents that are included on the list of patents described in section 351(l)(3)(A) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(l)(3)(A)</external-xref>), including as provided under section 351(l)(7) of such Act.</text></clause><clause id="H911520E159524D6182F36499E575EBF5"><enum>(iii)</enum><text>Patents that—</text><subclause id="H5B787B4227874D55B8D5834ADF7828C1"><enum>(I)</enum><text>have an actual filing date of more than 4 years after the date on which the reference product is approved; or</text></subclause><subclause id="HA4A0AC70CFDD45E9BA166B949FDB9464"><enum>(II)</enum><text>include a claim to a method in a manufacturing process that is not used by the reference product sponsor.</text></subclause></clause></subparagraph><subparagraph id="H2634D68EBC3A4364A91C7F8A2CE5AA49" indent="up1"><enum>(C)</enum><text>The court in which an action described in subparagraph (A) is brought may increase the number of patents limited under that subparagraph—</text><clause id="H0116E54D9A1D4EDA91C1D8B7E174A3AC"><enum>(i)</enum><text>if the request to increase that number is made without undue delay; and</text></clause><clause id="HA1117766F43041C2B8D0557FD8DB64DB"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="HFAEEEAAE30124131878A3642DC05DB7B"><enum>(I)</enum><text>if the interest of justice so requires; or</text></subclause><subclause id="H6499FCD885084FE1A3F366A9E0D6DDC6" indent="up1"><enum>(II)</enum><text>for good cause shown, which—</text><item id="HB20F78292E284FD1AF6456E05239103F"><enum>(aa)</enum><text>shall be established if the subsection (k) applicant fails to provide information required under section 351(l)(2)(A) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(l)(2)(A)</external-xref>) that would enable the reference product sponsor to form a reasonable belief with respect to whether a claim of infringement under this section could reasonably be asserted; and</text></item><item id="HE60BDEB2B0E24FB5A206E8001755F5DD"><enum>(bb)</enum><text>may be established—</text><subitem id="HB996F1B307BE46E7BBFDE940DA84C338"><enum>(AA)</enum><text>if there is a material change to the biological product (or process with respect to the biological product) of the subsection (k) applicant that is the subject of the application;</text></subitem><subitem id="HB6857D1A58C146D6B87F110CAA3987E0"><enum>(BB)</enum><text>if, with respect to a patent on the supplemental list described in section 351(l)(7)(A) of Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(l)(7)(A)</external-xref>), the patent would have issued before the date specified in such section 351(l)(7)(A) but for the failure of the Office to issue the patent or a delay in the issuance of the patent, as described in paragraph (1) of section 154(b) and subject to the limitations under paragraph (2) of such section 154(b); or</text></subitem><subitem id="HF6CDA38999E14E89ADBFB135131D21BC"><enum>(CC)</enum><text>for another reason that shows good cause, as determined appropriate by the court.</text></subitem></item></subclause></clause></subparagraph><subparagraph id="HD55743E88444472CAF5093C0F551CCE9" indent="up1"><enum>(D)</enum><text>In determining whether good cause has been shown for the purposes of subparagraph (C)(ii)(II), a court may consider whether the reference product sponsor has provided a reasonable description of the identity and relevance of any information beyond the subsection (k) application that the court believes is necessary to enable the court to form a belief with respect to whether a claim of infringement under this section could reasonably be asserted.</text></subparagraph><subparagraph id="H42ECBA8FEBDA4B6EA1FE81EEE607F940" indent="up1"><enum>(E)</enum><text>The limitation imposed under subparagraph (A)—</text><clause id="H51568408181D48668D3E20FF5BF884BB"><enum>(i)</enum><text>shall apply only if the subsection (k) applicant completes all actions required under paragraphs (2)(A), (3)(B)(ii), (5), (6)(C)(i), (7), and (8)(A) of section 351(l) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(l)</external-xref>); and</text></clause><clause id="H32F1D414BA44491CA44E3032F9500AF6"><enum>(ii)</enum><text>shall not apply with respect to any patent that claims, with respect to a biological product, a method for using that product in therapy, diagnosis, or prophylaxis, such as an indication or method of treatment or other condition of use.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="HF65DAA9C08254C13AA1085D63DF56C45"><enum>(b)</enum><header>Applicability</header><text>The amendments made by subsection (a) shall apply with respect to an application submitted under section 351(k) of the Public Health Service Act (<external-xref legal-doc="usc" parsable-cite="usc/42/262">42 U.S.C. 262(k)</external-xref>) on or after the date of enactment of this Act.</text></subsection></section></title><title id="H8D6CE2D808BB46F8BA2867F444566128"><enum>V</enum><header>Beneficiary cost sharing fairness</header><section id="HF91C3BF3B57E4ABCAB235AD5F4311C24"><enum>501.</enum><header>Repealing of rule by the Department of Health and Human Services</header><text display-inline="no-display-inline">The final rule of the Department of Health and Human Services titled <quote>Fraud And Abuse; Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals And Creation of New Safe Harbor Protection for Certain Point-of-Sale Reductions in Price on Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager Service Fees; Additional Delayed Effective Date</quote> published on November 30, 2020 (85 Fed. Reg. 76666–76731), shall have no force or effect of law.</text></section><section id="H62592549FAB44C7184E8B939F3337256"><enum>502.</enum><header>Defining cost under prescription drug plans under part D of Medicare</header><text display-inline="no-display-inline">Section 1860D–2(b)(2)(A) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1395w-102">42 U.S.C. 1395w–102(b)(2)(A)</external-xref>) is amended—</text><paragraph id="H15BDA48775564FBBA98104017657F390"><enum>(1)</enum><text>in clause (i), by inserting <quote>of the net costs to the plan, inclusive of all direct and indirect remuneration, including rebates paid by manufacturers to the plan sponsor, either directly or through a pharmacy benefit manager or other third party</quote> before the semicolon; and</text></paragraph><paragraph id="HB367EE2E20C045C5AD4853DF9032939D"><enum>(2)</enum><text>in clause (ii), by inserting <quote>net</quote> before <quote>costs</quote>.</text></paragraph></section></title></legis-body></bill> 

