Rebate by manufacturers for selected drugs and biological products subject to maximum fair price negotiation

(a)

Maintaining payments under part B based on ASP+6

Section 1847A(b)(1)(B) of the Social Security Act (42 U.S.C. 1395w–3a(b)(1)(B)) is amended by striking or in the case of such a drug or biological product that is a selected drug and all that follows through the semicolon and inserting a semicolon.(b)

Rebate by manufacturers for selected drugs and biological products subject to maximum fair price negotiation

(1)

In general

Section 1847A of the Social Security Act (42 U.S.C. 1395w–3a) is amended—(A)by redesignating subsection (j) as subsection (k); and(B)by inserting after subsection (i) the following new subsection:

(j)

Rebate by manufacturers for selected drugs and biological products subject to maximum fair price negotiation

(1)

Requirements

(A)

Secretarial provision of information

Not later than 6 months after the end of each calendar quarter beginning on or after the first day of the initial price applicability period (as defined in section 1191(b)(2)), the Secretary shall, for each selected drug (as defined in section 1192(c)) of each manufacturer with an agreement under section 1193 for which a maximum fair price is in effect and for which payment may be made under this part, report to each manufacturer of such selected drug the following for such calendar quarter during such price applicability period:(i)Information on the total number of units of the billing and payment code for such selected drug furnished under this part during such calendar quarter.(ii)Information on the sum of—(I)the amount (if any) by which—(aa)the ASP+6 payment amount (as defined in paragraph (5)) for such drug and calendar quarter, less the ASP+6 coinsurance amount for such drug and calendar quarter; exceeds(bb)the MFP+6 payment amount (as so defined) for such drug and calendar quarter, less the MFP+6 coinsurance amount for such drug and calendar quarter; and(II)the amount (if any) by which—(aa)the ASP+6 coinsurance amount (as defined in paragraph (5)) for such drug and calendar quarter; exceeds(bb)the MFP+6 coinsurance amount (as so defined) for such drug and calendar quarter.(iii)The rebate amount specified under subparagraph (B) for such drug and calendar quarter.(B)

Manufacturer requirement

For each calendar quarter beginning on or after the first day of the initial price applicability period (as defined in section 1191(b)(2)), the manufacturer of a selected 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 subparagraph (A)(ii) multiplied by the number of units specified in subparagraph (A)(i) for such drug for such calendar quarter. The rebate required under this subparagraph shall be in addition to any other rebates required under this title or title XIX, including the payments required under subsections (h) and (i).(2)

Calculation of beneficiary coinsurance based on mfp+6

(A)

In general

Subject to subparagraph (B), in the case of a selected drug with respect to which a rebate is paid under this subsection—(i)the amount of any coinsurance applicable under this part to an individual to whom such drug is furnished during a calendar quarter shall be equal to the MFP+6 coinsurance amount; and(ii)the amount of such coinsurance for such calendar quarter shall be applied as a percent, as determined by the Secretary, to the payment amount that would otherwise apply under subsection (b)(1)(B).(B)

Clarification regarding application of inflation rebate

If a rebate is required under subsection (i) with respect to a selected drug for a calendar quarter, the lesser of the amount of coinsurance computed under subparagraph (A) or the coinsurance computed under subsection (i)(5) shall apply for such drug and calendar quarter.(3)

Rebate deposits

Amounts paid as rebates under paragraph (1)(B) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under section 1841.(4)

Civil money penalty

The civil money penalty established under paragraph (7) of subsection (i) shall apply to the failure to comply with this subsection in the same manner as such penalty applies to failures to comply with the requirements under paragraph (1)(B) of subsection (i).(5)

Definitions

In this subsection, with respect to a selected drug for a calendar quarter during a price applicability period:(A)

ASP+6 coinsurance amount

The ASP+6 coinsurance amount is equal to 20 percent of the ASP+6 payment amount.(B)

ASP+6 payment amount

The ASP+6 payment amount is equal to 106 percent of the amount determined under paragraph (4) of subsection (b) for such drug during such calendar quarter.(C)

MFP+6 coinsurance amount

The MFP+6 coinsurance amount is equal to 20 percent of the MFP+6 payment amount.(D)

MFP+6 payment amount

The MFP+6 payment amount is equal to 106 percent of the maximum fair price (as defined in section 1191(c)(2)) applicable for such drug during such calendar quarter.(6)

Clarification

Nothing in part E of title XI or this subsection shall be construed to require a manufacturer to provide selected drugs at maximum fair prices other than through the rebate required under this subsection.

(2)

Amounts payable; cost-sharing

Section 1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) is amended—(A)in subparagraph (G), by striking subsection (i)(9) and inserting paragraphs (9) and (11) of subsection (i);(B)in subparagraph (S), by striking subparagraph (EE) and inserting subparagraphs (EE) and (II);(C)by striking and (HH) and inserting (HH); and(D)by inserting before the semicolon at the end the following: , and (II) with respect to a selected drug (as defined in section 1192(c)) that is subject to a rebate under section 1847A(j), the amounts paid shall be equal to the percent of the payment amount otherwise determined under section 1847A(b)(1)(B) that equals the difference between (i) 100 percent, and (ii) the percent applied under section 1847A(j)(2)(A)(ii).(3)

ASC conforming amendments

Section 1833(i) of the Social Security Act (42 U.S.C. 1395l(i)) is amended by adding at the end the following new paragraph:

(11)In the case of a selected drug (as defined in section 1192(c)), subject to a rebate under section 1847A(j) for which payment under this subsection is not packaged into a payment for a service furnished on or after the initial price applicability year for the selected drug under the revised payment system under this subsection, in lieu of calculation of coinsurance and the amount of payment otherwise applicable under this subsection, the provisions of section 1847(j)(2) and paragraph (1)(II) of subsection (a), shall, as determined appropriate by the Secretary, apply under this subsection in the same manner as such provisions of section 1847A(j)(2) and subsection (a) apply under such section and subsection.

(4)

OPPS conforming amendment

Section 1833(t)(8) of the Social Security Act (42 U.S.C. 1395l(t)(8)) is amended by adding at the end the following new subparagraph:

(G)

Selected drugs subject to rebate

In the case of a selected drug (as defined in section 1192(c)), subject to a rebate under section 1847A(j) for which payment under this subsection is not packaged into a payment for a covered OPD service (or group of services) furnished on or after the initial price applicability year for the selected drug, and the payment for such drug is the same as the amount for a calendar quarter under section 1847A(b)(1)(B), under the system under this subsection, in lieu of the calculation of the copayment amount and the amount otherwise applicable under this subsection (other than the application of the limitation described in subparagraph (C)), the provisions of section 1847A(j)(2) and paragraph (1)(II) of subsection (a), shall, as determined by the Secretary apply under this section in the same manner as such provisions of section 1847A(j)(2) and subsection (a) apply under such section and subsection.

(5)

Exclusion of selected drug mfp rebates from asp calculation

Section 1847A(c)(3) of the Social Security Act (42 U.S.C. 1395w–3a(c)(3)) is amended by striking subsection (i) and inserting subsection (i), subsection (j).(6)

Coordination with medicaid rebate information disclosures

Section 1927(b)(3)(D)(i) of the Social Security Act (42 U.S.C. 1396r–8(b)(3)(D)(i)) is amended by striking and the rebate and inserting and the rebates.(7)

Provision of rebates

Section 1193(a) of the Social Security Act (42 U.S.C. 1320f–2(a)) is amended—(A)in paragraph (1), by striking subparagraph (B) and inserting the following:

(B)by paying rebates in accordance with section 1847A(j);

;

(B)in paragraph (2), by striking subparagraph (B) and inserting the following:

(B)by paying rebates in accordance with section 1847A(j);

; and

(C)in paragraph (3), by striking subparagraph (B) and inserting the following:

(B)by paying rebates in accordance with section 1847A(j);

(c)

Conforming amendments

(1)Section 1847A(i)(5) of the Social Security Act (42 U.S.C. 1395w–3a(i)(5)) is amended, in the matter preceding subparagraph (A)—(A)by striking In the case and inserting Subsection to subsection (j)(2)(B), in the case; and(B)by striking (or, in the case of a part B rebatable drug that is a selected drug (as defined in section 1192(c)), the payment amount described in subsection (b)(1)(B) for such drug).(2)Section 1833(a)(1)(EE) of the Social Security Act (42 U.S.C. 1395l(a)(1)(EE)) is amended—(A)by striking (or, in the case of a part B rebatable drug that is a selected drug (as defined in section 1192(c) for which, the payment amount described in section 1847A(b)(1)(B)) for such drug for such quarter; and(B)by striking or section 1847A(b)(1)(B), as applicable,.