Demonstration program to test providing preferential treatment under the Medicare, Medicaid, and CHIP programs for certain drugs and biologicals manufactured in the United States

Part A of title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is amended by inserting after section 1150C the following:

1150D.

Demonstration program to test providing preferential treatment under the Medicare, Medicaid, and CHIP programs for certain drugs and biologicals manufactured in the United States

(a)

In general

Not later than 1 year after the date of enactment of this section, the Secretary shall conduct a demonstration program (in this section referred to as the Program) under which U.S. manufactured drugs are given preference under titles XVIII, XIX, and XXI compared to drugs that are not U.S. manufactured drugs through the use of applicable tools.(b)

Sites

The Program shall be conducted in at least 8 States.(c)

Duration

The Secretary shall conduct the Program for a period of not less than 7 years.(d)

Definitions

In this section:(1)

Applicable drug

The term applicable drug means—(A)a drug that is approved and marketed under section 505(j) of the Federal Food, Drug, and Cosmetic Act; (B)a biological product that is licensed and marketed under section 351(k) of the Public Health Service Act; or(C)a critical drug.(2)

Applicable U.S.-based pharmaceutical company

The term applicable U.S.-based pharmaceutical company means a manufacturer (as defined in section 1860D–14A(g)(5))—(A)that has a manufacturing location in the United States for an applicable drug; (B)beginning 3 years after the date of the implementation of the Program, for which at least 50 percent of the starter products, by weight, for the applicable drugs manufactured by the manufacturer are derived from countries other than covered nations (as defined in section 4872(d)(2) of title 10, United States Code); and (C)that, as determined by the Secretary—(i)maintains an appropriate level of transparency on locations of manufacturing; (ii)maintains an appropriate level of diversity in sourcing; (iii)maintains appropriate levels of inventory and emergency reserves; (iv)has in place an appropriate action plan for increases in demand and for when links in the supply chain break down; and(v)meets any other characteristics the Secretary determines appropriate. (3)

Applicable tools

The term applicable tools means tools determined appropriate by the Secretary, such as—(A)preferential treatment on a formulary;(B)providing lower cost-sharing; (C)waiving rebates under the Medicaid program under title XIX;(D)establishing a Medicare Star Rating under part D of title XVIII; or(E)providing bonus payments to providers of services and suppliers under part B of title XVIII. (4)

Critical drug

In this section, the term critical drug includes the following:(A)A medicine, medical countermeasure, or critical input identified on the list under section 3(c) of Executive Order 13944 of August 6, 2020 (85 Red. Reg 49929; relating to essential medicines, medical Countermeasures, and critical inputs).(B)A drug or biological that—(i)is not described in subparagraph (A);(ii)is approved and marketed under section 505(c) of the Federal Food, Drug, and Cosmetic Act or is licensed and marketed under section 351(a) of the Public Health Service Act (or is an active pharmaceutical ingredient of such a drug or biological); and(iii)the Secretary determines—(I)is—(aa)likely to be needed for use in a public health emergency; or (bb)at high risk of short supply; and(II)has a vulnerable global supply chain.(5)

U.S. manufactured drug

The term U.S. manufactured drug means an applicable drug that is manufactured in the United States by an applicable U.S.-based pharmaceutical company.(e)

Annual report to Congress

Not later than 1 year after the date the Secretary implements the Program, and annually thereafter for as long as the Program is being conducted, the Secretary shall submit to Congress a report on activities under the Program, together with recommendations for such legislation and administrative action as the Secretary determines to be appropriate.(f)

Waivers

The Secretary may waive such provisions of this title and titles XVIII, XIX, and XXI as the Secretary determines necessary in order to implement the Program(g)

Administrative funding

There is authorized to be appropriated to the Secretary such sums as may be necessary for the administrative expenses of carrying out the Program, to remain available until expended.