[Congressional Record Volume 168, Number 133 (Saturday, August 6, 2022)]
[Senate]
[Pages S4376-S4397]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 5484. Mr. GRASSLEY (for himself, Mr. Braun, Mr. Cassidy, Ms. 
Collins, Ms. Murkowski, Mr. Portman, Ms. Ernst, Mr. Daines, Mrs. 
Blackburn, and Mrs. Hyde-Smith) submitted an amendment intended to be 
proposed to amendment SA 5194 proposed by Mr. Schumer to the bill H.R. 
5376, to provide for reconciliation pursuant to title II of S. Con. 
Res. 14; which was ordered to lie on the table; as follows:

        Strike title I of the bill and all that follows through 
     the end of the bill and insert the following:

                           TITLE I--MEDICARE

                           Subtitle A--Part B

     SEC. 101. INCLUSION OF VALUE OF COUPONS IN DETERMINATION OF 
                   AVERAGE SALES PRICE FOR DRUGS AND BIOLOGICALS 
                   UNDER MEDICARE PART B.

       Section 1847A(c) of the Social Security Act (42 U.S.C. 
     1395w-3a(c)) is amended--
       (1) in paragraph (3)--
       (A) by striking ``discounts.--In calculating'' and 
     inserting ``discounts to purchasers and coupons provided to 
     privately insured individuals.--
       ``(A) Discounts to purchasers.--In calculating''; and
       (B) by adding at the end the following new subparagraph:
       ``(B) Coupons provided to reduce cost-sharing.--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)).''; and
       (2) in paragraph (6), by adding at the end the following 
     new subparagraphs:
       ``(J) Value.--The term `value' means, with respect to a 
     coupon (as defined in subparagraph (K)), the difference, if 
     any, between--
       ``(i) 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
       ``(ii) any charge to the patient for the use of such 
     coupon.
       ``(K) Coupon.--The term `coupon' 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.
       ``(L) Drug coupon program.--
       ``(i) In general.--Subject to clause (ii), the term `drug 
     coupon program' means, with respect to a manufacturer, a 
     program through which the manufacturer provides coupons to 
     patients as described in subparagraph (K).
       ``(ii) Exclusions.--Such term does not include--

       ``(I) 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
       ``(II) 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.''.

     SEC. 102. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS DURING 
                   INITIAL PERIOD.

       Section 1847A(c)(4) of the Social Security Act (42 U.S.C. 
     1395w-3a(c)(4)) is amended--
       (1) in each of subparagraphs (A) and (B), by redesignating 
     clauses (i) and (ii) as subclauses (I) and (II), 
     respectively, and moving such subclauses 2 ems to the right;
       (2) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii) and moving such clauses 2 ems to the right;
       (3) by striking ``unavailable.--In the case'' and inserting 
     ``unavailable.--
       ``(A) In general.--Subject to subparagraph (B), in the 
     case''; and
       (4) by adding at the end the following new subparagraph:
       ``(B) Limitation on payment amount for biosimilar 
     biological products during initial period.--In the case of a 
     biosimilar biological product furnished on or after January 
     1, 2023, in lieu of applying subparagraph (A) during the 
     initial period described in such subparagraph with respect to 
     the biosimilar biological product, the amount payable under 
     this section for the biosimilar biological product is the 
     lesser of the following:
       ``(i) The amount determined under clause (ii) of such 
     subparagraph for the biosimilar biological product.
       ``(ii) The amount determined under subsection (b)(1)(B) for 
     the reference biological product.''.

     SEC. 103. TEMPORARY INCREASE IN MEDICARE PART B PAYMENT FOR 
                   BIOSIMILAR BIOLOGICAL PRODUCTS.

       Section 1847A(b)(8) of the Social Security Act (42 U.S.C. 
     1395w-3a(b)(8)) is amended--
       (1) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively, and indenting appropriately;
       (2) by striking ``product.--The amount'' and inserting the 
     following: ``product.--
       ``(A) In general.--Subject to subparagraph (B), the 
     amount''; and
       (3) by adding at the end the following new subparagraph:
       ``(B) Temporary payment increase for biosimilar biological 
     products.--
       ``(i) In general.--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:

       ``(I) The amount specified in subparagraph (A) for such 
     product if clause (ii) of such subparagraph was applied by 
     substituting `8 percent' for `6 percent'.
       ``(II) The amount determined under subsection (b)(1)(B) for 
     the reference biological product.

       ``(ii) Applicable 5-year period.--For purposes of clause 
     (i), the applicable 5-year period for a biosimilar biological 
     product is--

       ``(I) in the case of such a product for which payment was 
     made under this paragraph as of December 31, 2022, the 5-year 
     period beginning on January 1, 2023; and
       ``(II) 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.''.

     SEC. 104. IMPROVEMENTS TO MEDICARE SITE-OF-SERVICE 
                   TRANSPARENCY.

       Section 1834(t) of the Social Security Act (42 U.S.C. 
     1395m(t)) is amended--
       (1) in paragraph (1)--
       (A) in the heading, by striking ``In general'' and 
     inserting ``Site payment'';
       (B) in the matter preceding subparagraph (A)--
       (i) by striking ``or to'' and inserting ``, to'';
       (ii) by inserting ``, or to a physician for services 
     furnished in a physician's office'' after ``surgical 
     center''; and
       (iii) by inserting ``(or 2024 with respect to a physician 
     for services furnished in a physician's office)'' after 
     ``2018''; and
       (C) in subparagraph (A)--
       (i) by striking ``and the'' and inserting ``, the''; and
       (ii) by inserting ``, and the physician fee schedule under 
     section 1848 (with respect to the practice expense component 
     of such payment amount)'' after ``such section'';
       (2) by redesignating paragraphs (2) through (4) and 
     paragraphs (3) through (5), respectively; and
       (3) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Physician payment.--Beginning in 2024, the Secretary 
     may expand the information included on the Internet website 
     described in paragraph (1) to include--
       ``(A) the amount paid to a physician under section 1848 for 
     an item or service for the settings described in paragraph 
     (1); and
       ``(B) the estimated amount of beneficiary liability 
     applicable to the item or service.''.

     SEC. 105. MEDICARE PART B REBATE BY MANUFACTURERS FOR DRUGS 
                   OR BIOLOGICALS WITH PRICES INCREASING FASTER 
                   THAN INFLATION.

       (a) In General.--Section 1847A of the Social Security Act 
     (42 U.S.C. 1395w-3a) is amended--
       (1) by redesignating subsection (h) as subsection (i); and
       (2) by inserting after subsection (g) the following new 
     subsection:
       ``(h) Rebate by Manufacturers for Drugs or Biologicals With 
     Prices Increasing Faster Than Inflation.--
       ``(1) Requirements.--
       ``(A) Secretarial provision of information.--Not later than 
     6 months after the end of each rebate period (as defined in 
     paragraph (2)(A)) beginning on or after January 1, 2024, the 
     Secretary shall, for each rebatable drug (as defined in 
     paragraph (2)(B)), report to each manufacturer of such 
     rebatable drug the following for such rebate period:
       ``(i) 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 rebatable drug and rebate 
     period.
       ``(ii) Information on the amount (if any) of the excess 
     average sales price increase described in subparagraph 
     (A)(ii) of such paragraph for such rebatable drug and rebate 
     period.
       ``(iii) The rebate amount specified under such paragraph 
     for such rebatable drug and rebate period.
       ``(B) Manufacturer rebate.--
       ``(i) In general.--Subject to clause (ii), for each rebate 
     period beginning on or after January 1, 2024, the 
     manufacturer of a rebatable drug shall, for such drug, not 
     later than 30 days after the date of receipt from the 
     Secretary of the information and rebate amount pursuant to 
     subparagraph (A) for such rebate period, provide to the 
     Secretary a rebate that is equal to the amount specified in 
     paragraph (3) for such drug for such rebate period.
       ``(ii) Exemption for shortages.--The Secretary may reduce 
     or waive the rebate under this subparagraph with respect to a 
     rebatable drug that is listed on the drug shortage list 
     maintained by the Food and Drug Administration pursuant to 
     section

[[Page S4377]]

     506E of the Federal Food, Drug, and Cosmetic Act.
       ``(C) Request for reconsideration.--The Secretary shall 
     establish procedures under which a manufacturer of a 
     rebatable drug may request a reconsideration by the Secretary 
     of the rebate amount specified under paragraph (3) for such 
     rebatable drug and rebate period, as reported to the 
     manufacturer pursuant to subparagraph (A)(iii).
       ``(2) Rebate period and rebatable drug defined.--In this 
     subsection:
       ``(A) Rebate period.--The term `rebate period' means a 
     calendar quarter beginning on or after January 1, 2024.
       ``(B) Rebatable drug.--The term `rebatable drug' means a 
     single source drug or biological (other than a biosimilar 
     biological product)--
       ``(i) described in section 1842(o)(1)(C) for which the 
     payment amount is provided under this section; or
       ``(ii) for which payment is made separately under section 
     1833(i) or section 1833(t) and for which the payment amount 
     is calculated based on the payment amount under this section.
       ``(3) Rebate amount.--
       ``(A) In general.--For purposes of paragraph (1)(B), the 
     amount specified in this paragraph for a rebatable drug 
     assigned to a billing and payment code for a rebate period 
     is, subject to paragraph (4), the amount equal to the product 
     of--
       ``(i) subject to subparagraph (B), the total number of 
     units of the billing and payment code for such rebatable drug 
     furnished during the rebate period; and
       ``(ii) the amount (if any) by which--

       ``(I) the amount determined under subsection (b)(4) for 
     such rebatable drug during the rebate period; exceeds
       ``(II) the inflation-adjusted base payment amount 
     determined under subparagraph (C) of this paragraph for such 
     rebatable drug during the rebate period.

       ``(B) Excluded units.--For purposes of subparagraph (A)(i), 
     the total number of units of the billing and payment code for 
     rebatable drugs furnished during a rebate period shall not 
     include units with respect to which the manufacturer provides 
     a discount under the program under section 340B of the Public 
     Health Service Act or a rebate under section 1927.
       ``(C) Determination of inflation-adjusted payment amount.--
     The inflation-adjusted payment amount determined under this 
     subparagraph for a rebatable drug for a rebate period is--
       ``(i) the amount determined under subsection (b)(4) for 
     such rebatable drug in the payment amount benchmark quarter 
     (as defined in subparagraph (D)); increased by
       ``(ii) the percentage by which the rebate period CPI-U (as 
     defined in subparagraph (F)) for the rebate period exceeds 
     the benchmark period CPI-U (as defined in subparagraph (E)).
       ``(D) Payment amount benchmark quarter.--The term `payment 
     amount benchmark quarter' means the calendar quarter 
     beginning July 1, 2021.
       ``(E) Benchmark period cpi-u.--The term `benchmark period 
     CPI-U' means the consumer price index for all urban consumers 
     (United States city average) for July 2021.
       ``(F) Rebate period cpi-u.--The term `rebate period CPI-U' 
     means, with respect to a rebate period, the consumer price 
     index for all urban consumers (United States city average) 
     for the last month of the calendar quarter that is two 
     calendar quarters prior to the rebate period.
       ``(4) Application to new drugs.--In the case of a rebatable 
     drug first approved or licensed by the Food and Drug 
     Administration after July 1, 2021, the following shall apply:
       ``(A) During initial period.--For quarters during the 
     initial period in which the payment amount for such drug is 
     determined using the methodology described in subsection 
     (c)(4)--
       ``(i) clause (ii)(I) of paragraph (3)(A) shall be applied 
     as if the reference to `the amount determined under 
     subsection (b)(4),' were a reference to `the wholesale 
     acquisition cost applicable under subsection (c)(4)';
       ``(ii) clause (i) of paragraph (3)(C) shall be applied--

       ``(I) as if the reference to `the amount determined under 
     subsection (b)(4),' were a reference to `the wholesale 
     acquisition cost applicable under subsection (c)(4)'; and
       ``(II) as if the term `payment amount benchmark quarter' 
     were defined under paragraph (3)(D) as the first full 
     calendar quarter after the day on which the drug was first 
     marketed; and

       ``(iii) clause (ii) of paragraph (3)(C) shall be applied as 
     if the term `benchmark period CPI-U' were defined under 
     paragraph (4)(E) as if the reference to `July 2021' under 
     such paragraph were a reference to `the first month of the 
     first full calendar quarter after the day on which the drug 
     was first marketed'.
       ``(B) After initial period.--For quarters beginning after 
     such initial period--
       ``(i) clause (i) of paragraph (3)(C) shall be applied as if 
     the term `payment amount benchmark quarter' were defined 
     under paragraph (3)(D) as the first full calendar quarter for 
     which the Secretary is able to compute an average sales price 
     for the rebatable drug; and
       ``(ii) clause (ii) of paragraph (3)(C) shall be applied as 
     if the term `benchmark period CPI-U' were defined under 
     paragraph (4)(E) as if the reference to `July 2021' under 
     such paragraph were a reference to `the first month of the 
     first full calendar quarter for which the Secretary is able 
     to compute an average sales price for the rebatable drug'.
       ``(5) 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.
       ``(6) Enforcement.--
       ``(A) Civil money penalty.--
       ``(i) In general.--The Secretary shall impose a civil money 
     penalty on a manufacturer that fails to comply with the 
     requirements under paragraph (1)(B) with respect to providing 
     a rebate for a rebatable drug for a rebate period for each 
     such failure in an amount equal to the sum of--

       ``(I) the rebate amount specified pursuant to paragraph (3) 
     for such drug for such rebate period; and
       ``(II) 25 percent of such amount.

       ``(ii) Application.--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 subparagraph in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A(a).
       ``(B) No payment for manufacturers who fail to pay 
     penalty.--If the manufacturer of a rebatable drug fails to 
     pay a civil money penalty under subparagraph (A) with respect 
     to the failure to provide a rebate for a rebatable drug for a 
     rebate period by a date specified by the Secretary after the 
     imposition of such penalty, no payment shall be available 
     under this part for such rebatable drug for calendar quarters 
     beginning on or after such date until the Secretary 
     determines the manufacturer has paid the penalty due under 
     such subparagraph.''.
       (b) Implementation.--Section 1847A(i) of the Social 
     Security Act (42 U.S.C. 1395w-3(g)), as redesignated by 
     subsection (a) of this section, is amended--
       (1) in paragraph (4), by striking ``and'' at the end;
       (2) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(6) determination of the rebate amount for a rebatable 
     drug under paragraph (3) of subsection (h), including with 
     respect to a new drug pursuant to paragraph (4) of such 
     subsection, including--
       ``(A) a decision by the Secretary with respect to a request 
     for reconsideration under paragraph (1)(C); and
       ``(B) the determination of--
       ``(i) the total number of units of the billing and payment 
     code under paragraph (3)(A)(i); and
       ``(ii) the inflation-adjusted payment amount under 
     paragraph (3)(C).''.
       (c) Conforming Amendment to Part B ASP Calculation.--
     Section 1847A(c)(3) of the Social Security Act (42 U.S.C. 
     1395w-3a(c)(3)) is amended by inserting ``or subsection (h)'' 
     after ``section 1927''.

     SEC. 106. HHS INSPECTOR GENERAL STUDY AND REPORT ON BONA FIDE 
                   SERVICE FEES.

       (a) Study.--The Inspector General of the Department of 
     Health and Human Services (in this section referred to as the 
     ``Inspector General'') shall conduct a study on the effect of 
     the use of bona fide service fee contracting arrangements by 
     drug manufacturers and other entities on Medicare payments 
     for drugs and biologicals furnished under part B of title 
     XVIII of the Social Security Act (42 U.S.C. 1395j et seq.). 
     Such study shall include an analysis of--
       (1) the various types of entities that enter into 
     contracting arrangements that use bona fide service fees, 
     such as group purchasing organizations, wholesalers, 
     providers, and pharmacies;
       (2) the various types of bona fide service fee contracting 
     arrangements used by such entities;
       (3) the types of services that are paid for through such 
     arrangements;
       (4) whether manufacturers define bona fide service fees 
     differently across different entities;
       (5) how such arrangements are structured;
       (6) whether the structure or use of such arrangements has 
     changed over time;
       (7) the extent, if any, to which there is consistency 
     across manufacturers in what they consider to be a bona fide 
     service fee as opposed to a discount or rebate that should be 
     excluded from the determination of average sales price 
     pursuant to the methodology under section 1847A of the Social 
     Security Act (42 U.S.C. 1395w-3a);
       (8) the overall magnitude of bona fide service fees;
       (9) what share of bona fide service fees are paid to 
     various entities;
       (10) how the magnitude of bona fide service fees compares 
     to other fees and rebates that are included in the 
     determination of average sales price;
       (11) whether and, if so, how much, the magnitude of bona 
     fide service fees has grown over time and how such growth 
     compares to growth in the magnitude of other fees and 
     rebates; and
       (12) what share of bona fide service fees are based on a 
     percentage of sales.
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Inspector 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 
     Inspector General determines appropriate.

[[Page S4378]]

  


     SEC. 107. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT FOR DRUGS 
                   AND BIOLOGICALS.

       (a) In General.--Section 1847A of the Social Security Act 
     (42 U.S.C. 1395w-3a) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1), in the matter preceding subparagraph 
     (A), by striking ``paragraph (7)'' and inserting ``paragraphs 
     (7) and (9)''; and
       (B) by adding at the end the following new paragraph:
       ``(9) Maximum add-on payment amount.--
       ``(A) In general.--In determining the payment amount under 
     the provisions of subparagraph (A), (B), or (C) of paragraph 
     (1) of this subsection, subsection (c)(4)(A)(ii), or 
     subsection (d)(3)(C) for a drug or biological furnished on or 
     after January 1, 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.
       ``(B) Applicable add-on payment defined.--In this 
     paragraph, the term `applicable add-on payment' means the 
     following amounts, determined without regard to the 
     application of subparagraph (A):
       ``(i) In the case of a multiple source drug, an amount 
     equal to the difference between--

       ``(I) the amount that would otherwise be applied under 
     paragraph (1)(A); and
       ``(II) the amount that would be applied under such 
     paragraph if `100 percent' were substituted for `106 
     percent'.

       ``(ii) In the case of a single source drug or biological, 
     an amount equal to the difference between--

       ``(I) the amount that would otherwise be applied under 
     paragraph (1)(B); and
       ``(II) the amount that would be applied under such 
     paragraph if `100 percent' were substituted for `106 
     percent'.

       ``(iii) In the case of a biosimilar biological product, the 
     amount otherwise determined under paragraph (8)(B).
       ``(iv) In the case of a drug or biological during the 
     initial period described in subsection (c)(4)(A), an amount 
     equal to the difference between--

       ``(I) the amount that would otherwise be applied under 
     subsection (c)(4)(A)(ii); and
       ``(II) the amount that would be applied under such 
     subsection if `100 percent' were substituted, as applicable, 
     for--

       ``(aa) `103 percent' in subclause (I) of such subsection; 
     or
       ``(bb) any percent in excess of 100 percent applied under 
     subclause (II) of such subsection.
       ``(v) In the case of a drug or biological to which 
     subsection (d)(3)(C) applies, an amount equal to the 
     difference between--

       ``(I) the amount that would otherwise be applied under such 
     subsection; and
       ``(II) the amount that would be applied under such 
     subsection if `100 percent' were substituted, as applicable, 
     for--

       ``(aa) any percent in excess of 100 percent applied under 
     clause (i) of such subsection; or
       ``(bb) `103 percent' in clause (ii) of such subsection.
       ``(C) Maximum add-on payment amount specified.--For 
     purposes of subparagraph (A), the maximum add-on payment 
     amount specified in this subparagraph is--
       ``(i) for each of 2024 through 2031, $1,000; and
       ``(ii) for a subsequent year, the amount specified in this 
     subparagraph for the preceding year increased by the 
     percentage increase in the consumer price index for all urban 
     consumers (all items; United States city average) for the 12-
     month period ending with June of the previous year.
     Any amount determined under this subparagraph that is not a 
     multiple of $10 shall be rounded to the nearest multiple of 
     $10.''; and
       (2) in subsection (c)(4)(A)(ii), by striking ``in the 
     case'' and inserting ``subject to subsection (b)(9), in the 
     case''.
       (b) Conforming Amendments Relating to Separately Payable 
     Drugs.--
       (1) OPPS.--Section 1833(t)(14) of the Social Security Act 
     (42 U.S.C. 1395l(t)(14)) is amended--
       (A) in subparagraph (A)(iii)(II), by inserting ``, subject 
     to subparagraph (I)'' after ``are not available''; and
       (B) by adding at the end the following new subparagraph:
       ``(I) Application of maximum add-on payment for separately 
     payable drugs and biologicals.--In establishing the amount of 
     payment under subparagraph (A) for a specified covered 
     outpatient drug that is furnished as part of a covered OPD 
     service (or group of services) on or after January 1, 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.''.
       (2) ASC.--Section 1833(i)(2)(D) of the Social Security Act 
     (42 U.S.C. 1395l(i)(2)(D)) is amended--
       (A) by moving clause (v) 6 ems to the left;
       (B) by redesignating clause (vi) as clause (vii); and
       (C) by inserting after clause (v) the following new clause:
       ``(vi) If there is a separate payment under the system 
     described in clause (i) for a drug or biological furnished on 
     or after January 1, 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).''.

     SEC. 108. TREATMENT OF DRUG ADMINISTRATION SERVICES FURNISHED 
                   BY CERTAIN EXCEPTED OFF-CAMPUS OUTPATIENT 
                   DEPARTMENTS OF A PROVIDER.

       Section 1833(t)(16) of the Social Security Act (42 U.S.C. 
     1395l(t)(16)) is amended by adding at the end the following 
     new subparagraph:
       ``(G) Special payment rule for drug administration services 
     furnished by an excepted department of a provider.--
       ``(i) In general.--In the case of a covered OPD service 
     that is a drug administration service (as defined by the 
     Secretary) furnished by a department of a provider described 
     in clause (ii) or (iv) of paragraph (21)(B), the payment 
     amount for such service furnished on or after January 1, 
     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)).
       ``(ii) Application without regard to budget neutrality.--
     The reductions made under this subparagraph--

       ``(I) shall not be considered an adjustment under paragraph 
     (2)(E); and
       ``(II) shall not be implemented in a budget neutral 
     manner.''.

     SEC. 109. GAO STUDY AND REPORT ON AVERAGE SALES PRICE.

       (a) Study.--
       (1) In general.--The Comptroller General of the United 
     States (in this section referred to as the ``Comptroller 
     General'') shall conduct a study on spending for applicable 
     drugs under part B of title XVIII of the Social Security Act.
       (2) Applicable drugs defined.--In this section, the term 
     ``applicable drugs'' means drugs and biologicals--
       (A) for which reimbursement under such part B is based on 
     the average sales price of the drug or biological; and
       (B) that account for the largest percentage of total 
     spending on drugs and biologicals under such part B (as 
     determined by the Comptroller General, but in no case less 
     that 25 drugs or biologicals).
       (3) Requirements.--The study under paragraph (1) shall 
     include an analysis of the following:
       (A) The extent to which each applicable drug is paid for--
       (i) under such part B for Medicare beneficiaries; or
       (ii) by private payers in the commercial market.
       (B) Any change in Medicare spending or Medicare beneficiary 
     cost-sharing that would occur if the average sales price of 
     an applicable drug was based solely on payments by private 
     payers in the commercial market.
       (C) The extent to which drug manufacturers provide rebates, 
     discounts, or other price concessions to private payers in 
     the commercial market for applicable drugs, which the 
     manufacturer includes in its average sales price calculation, 
     for--
       (i) formulary placement;
       (ii) utilization management considerations; or
       (iii) other purposes.
       (D) Barriers to drug manufacturers providing such price 
     concessions for applicable drugs.
       (E) Other areas determined appropriate by the Comptroller 
     General.
       (b) Report.--Not later than 2 years after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to Congress a report on the study conducted under subsection 
     (a), together with recommendations for such legislation and 
     administrative action as the Secretary determines 
     appropriate.

     SEC. 110. AUTHORITY TO USE ALTERNATIVE PAYMENT FOR DRUGS AND 
                   BIOLOGICALS TO PREVENT POTENTIAL DRUG 
                   SHORTAGES.

       (a) In General.--Section 1847A(e) of the Social Security 
     Act (42 U.S.C. 1395w-3a(e)) is amended--
       (1) by striking ``Payment in Response to Public Health 
     Emergency.--In the case'' and inserting ``Payments.--
       ``(1) In response to public health emergency.--In the 
     case''; and
       (2) by adding at the end the following new paragraph:
       ``(2) Preventing potential drug shortages.--
       ``(A) In general.--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

[[Page S4379]]

     mitigate a potential shortage of the drug or biological.
       ``(B) Drug or biological described.--For purposes of 
     subparagraph (A), a drug or biological described in this 
     subparagraph is a drug or biological--
       ``(i) 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
       ``(ii) that--

       ``(I) is described in section 506C(a) of such Act;
       ``(II) 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
       ``(III) 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.

       ``(C) Provision of additional information.--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.''.
       (b) Tracking Shortage Drugs Through Claims.--The Secretary 
     of Health and Human Services (referred to in this section as 
     the ``Secretary'') shall establish a mechanism (such as a 
     modifier) for purposes of tracking utilization under title 
     XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) 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 (21 
     U.S.C. 356e).
       (c) HHS Report and Recommendations.--
       (1) In general.--Not later than 18 months after the date of 
     the enactment of this Act, the Secretary shall submit to 
     Congress a report on shortages of drugs within the Medicare 
     program under title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.). The report shall include--
       (A) an analysis of--
       (i) the effect of drug shortages on Medicare beneficiary 
     access, quality, safety, and out-of-pocket costs;
       (ii) the effect of drug shortages on health providers, 
     including hospitals and physicians, across the Medicare 
     program;
       (iii) the current role of the Centers for Medicare & 
     Medicaid Services (CMS) in addressing drug shortages, 
     including CMS's working relationship and communication with 
     other Federal agencies and stakeholders;
       (iv) 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
       (v) payment structures and incentives under parts A, B, C, 
     and D of the Medicare program and their effect, if any, on 
     drug shortages; and
       (B) relevant findings and recommendations to Congress.
       (2) Public availability.--The report under this subsection 
     shall be made available to the public.
       (3) Consultation.--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 (21 
     U.S.C. 356d(a)(1)(A)) in preparing the report under this 
     subsection, as appropriate.

                           Subtitle B--Part D

     SEC. 121. MEDICARE PART D MODERNIZATION REDESIGN.

       (a) Benefit Structure Redesign.--Section 1860D-2(b) of the 
     Social Security Act (42 U.S.C. 1395w-102(b)) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (A), in the matter preceding clause 
     (i), by inserting ``for a year preceding 2025 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 2025 and each subsequent year'' after ``paragraph 
     (3)'';
       (B) in subparagraph (C)--
       (i) in clause (i), in the matter preceding subclause (I), 
     by inserting ``for a year preceding 2025,'' after ``paragraph 
     (4),''; and
       (ii) in clause (ii)(III), by striking ``and each subsequent 
     year'' and inserting ``, 2021, 2022, 2023, and 2024''; and
       (C) in subparagraph (D)--
       (i) in clause (i)--

       (I) in the matter preceding subclause (I), by inserting 
     ``for a year preceding 2025,'' after ``paragraph (4),''; and
       (II) in subclause (I)(bb), by striking ``a year after 
     2018'' and inserting ``each of years 2018 through 2024''; and

       (ii) in clause (ii)(V), by striking ``2019 and each 
     subsequent year'' and inserting ``each of years 2019 through 
     2024'';
       (2) in paragraph (3)(A)--
       (A) in the matter preceding clause (i), by inserting ``for 
     a year preceding 2025,'' after ``and (4),''; and
       (B) in clause (ii), by striking ``for a subsequent year'' 
     and inserting ``for each of years 2007 through 2024'';
       (3) in paragraph (4)--
       (A) in subparagraph (A)--
       (i) in clause (i)--

       (I) by redesignating subclauses (I) and (II) as items (aa) 
     and (bb), respectively, and indenting appropriately;
       (II) in the matter preceding item (aa), as redesignated by 
     subclause (I), by striking ``is equal to the greater of--'' 
     and inserting ``is equal to--
       ``(I) for a year preceding 2025, the greater of--'';
       (III) by striking the period at the end of item (bb), as 
     redesignated by subclause (I), and inserting ``; and''; and
       (IV) by adding at the end the following:
       ``(II) for 2025 and each succeeding year, $0.''; and

       (ii) in clause (ii)--

       (I) by striking ``clause (i)(I)'' and inserting ``clause 
     (i)(I)(aa)''; and
       (II) by adding at the end the following new sentence: ``The 
     Secretary shall continue to calculate the dollar amounts 
     specified in clause (i)(I)(aa), including with the adjustment 
     under this clause, after 2024 for purposes of section 1860D-
     14(a)(1)(D)(iii).'';

       (B) in subparagraph (B)--
       (i) in clause (i)--

       (I) in subclause (V), by striking ``or'' at the end;
       (II) in subclause (VI)--

       (aa) by striking ``for a subsequent year'' and inserting 
     ``for 2021, 2022, 2023, and 2024''; and
       (bb) by striking the period at the end and inserting a 
     semicolon; and

       (III) by adding at the end the following new subclauses:
       ``(VII) for 2025, is equal to $3,100; or
       ``(VIII) for a subsequent year, is equal to the amount 
     specified in this subparagraph for the previous year, 
     increased by the annual percentage increase described in 
     paragraph (6) for the year involved.''; and

       (ii) in clause (ii), by striking ``clause (i)(II)'' and 
     inserting ``clause (i)'';
       (C) in subparagraph (C)(i), by striking ``and for amounts'' 
     and inserting ``and for a year preceding 2025 for amounts''; 
     and
       (D) in subparagraph (E), by striking ``In applying'' and 
     inserting ``For each of 2011 through 2024, in applying''.
       (b) Reduction in Beneficiary Coinsurance.--
       (1) In general.--Section 1860D-2(b)(2)(A) of the Social 
     Security Act (42 U.S.C. 1395w-102(b)(2)(A)), as amended by 
     subsection (a), is amended--
       (A) by redesignating clauses (i) and (ii) as subclauses (I) 
     and (II) and moving such subclauses 2 ems to the right;
       (B) by striking ``25 percent coinsurance.--Subject to'' and 
     inserting ``Coinsurance.--
       ``(i) In general.--Subject to'';
       (C) in each of subclauses (I) and (II), as redesignated by 
     subparagraph (A), by striking ``25 percent'' and inserting 
     ``the applicable percentage (as defined in clause (ii))''; 
     and
       (D) by adding at the end the following new clause:
       ``(ii) Applicable percentage defined.--For purposes of 
     clause (i), the term `applicable percentage' means--

       ``(I) for a year preceding 2025, 25 percent; and
       ``(II) for 2025 and each subsequent year, 20 percent.''.

       (2) Conforming amendment.--Section 1860D-14(a)(2)(D) of the 
     Social Security Act (42 U.S.C. 1395w-114(a)(2)(D)) is amended 
     by striking ``25 percent'' and inserting ``the applicable 
     percentage''.
       (c) Decreasing Reinsurance Payment Amount.--Section 1860D-
     15(b) of the Social Security Act (42 U.S.C. 1395w-115(b)) is 
     amended--
       (1) in paragraph (1)--
       (A) by striking ``equal to 80 percent'' and inserting 
     ``equal to--
       ``(A) for a year preceding 2025, 80 percent'';
       (B) in subparagraph (A), as added by paragraph (1), by 
     striking the period at the end and inserting ``; and''; and
       (C) by adding at the end the following new subparagraph:
       ``(B) for 2025 and each subsequent year, the sum of--
       ``(i) 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
       ``(ii) 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).''; and
       (2) by adding at the end the following new paragraph:
       ``(5) Applicable percentage specified.--For purposes of 
     paragraph (1)(B), the applicable percentage specified in this 
     paragraph is--

[[Page S4380]]

       ``(A) with respect to applicable drugs (as defined in 
     section 1860D-14B(g)(2))--
       ``(i) for 2025, 60 percent;
       ``(ii) for 2026, 40 percent; and
       ``(iii) for 2027 and each subsequent year, 20 percent; and
       ``(B) with respect to covered part D drugs that are not 
     applicable drugs (as so defined)--
       ``(i) for 2025, 80 percent;
       ``(ii) for 2026, 60 percent; and
       ``(iii) for 2027 and each subsequent year, 40 percent.''.
       (d) Manufacturer Discount Program During Initial and 
     Catastrophic Phases of Coverage.--
       (1) In general.--Part D of title XVIII of the Social 
     Security Act is amended by inserting after section 1860D-14A 
     (42 U.S.C. 1495w-114) the following new section:

     ``SEC. 1860D-14B. MANUFACTURER DISCOUNT PROGRAM.

       ``(a) Establishment.--The Secretary shall establish a 
     manufacturer discount program (in this section referred to as 
     the `program'). Under the program, the Secretary shall enter 
     into agreements described in subsection (b) with 
     manufacturers and provide for the performance of the duties 
     described in subsection (c). The Secretary shall establish a 
     model agreement for use under the program by not later than 
     January 1, 2024, in consultation with manufacturers, and 
     allow for comment on such model agreement.
       ``(b) Terms of Agreement.--
       ``(1) In general.--
       ``(A) Agreement.--An agreement under this section shall 
     require the manufacturer to provide applicable beneficiaries 
     access to discounted prices for applicable drugs of the 
     manufacturer that are dispensed on or after January 1, 2025.
       ``(B) Provision of discounted prices at the point-of-
     sale.--The discounted prices described in subparagraph (A) 
     shall be provided to the applicable beneficiary at the 
     pharmacy or by the mail order service at the point-of-sale of 
     an applicable drug.
       ``(2) Provision of appropriate data.--Each manufacturer 
     with an agreement in effect under this section shall collect 
     and have available appropriate data, as determined by the 
     Secretary, to ensure that it can demonstrate to the Secretary 
     compliance with the requirements under the program.
       ``(3) Compliance with requirements for administration of 
     program.--Each manufacturer with an agreement in effect under 
     this section shall comply with requirements imposed by the 
     Secretary or a third party with a contract under subsection 
     (d)(3), as applicable, for purposes of administering the 
     program, including any determination under subparagraph (A) 
     of subsection (c)(1) or procedures established under such 
     subsection (c)(1).
       ``(4) Length of agreement.--
       ``(A) In general.--An agreement under this section shall be 
     effective for an initial period of not less than 12 months 
     and shall be automatically renewed for a period of not less 
     than 1 year unless terminated under subparagraph (B).
       ``(B) Termination.--
       ``(i) By the secretary.--The Secretary may provide for 
     termination of an agreement under this section for a knowing 
     and willful violation of the requirements of the agreement or 
     other good cause shown. Such termination shall not be 
     effective earlier than 30 days after the date of notice to 
     the manufacturer of such termination. The Secretary shall 
     provide, upon request, a manufacturer with a hearing 
     concerning such a termination, and such hearing shall take 
     place prior to the effective date of the termination with 
     sufficient time for such effective date to be repealed if the 
     Secretary determines appropriate.
       ``(ii) By a manufacturer.--A manufacturer may terminate an 
     agreement under this section for any reason. Any such 
     termination shall be effective, with respect to a plan year--

       ``(I) if the termination occurs before January 30 of a plan 
     year, as of the day after the end of the plan year; and
       ``(II) if the termination occurs on or after January 30 of 
     a plan year, as of the day after the end of the succeeding 
     plan year.

       ``(iii) Effectiveness of termination.--Any termination 
     under this subparagraph shall not affect discounts for 
     applicable drugs of the manufacturer that are due under the 
     agreement before the effective date of its termination.
       ``(iv) Notice to third party.--The Secretary shall provide 
     notice of such termination to a third party with a contract 
     under subsection (d)(3) within not less than 30 days before 
     the effective date of such termination.
       ``(5) Effective date of agreement.--An agreement under this 
     section shall take effect on a date determined appropriate by 
     the Secretary, which may be at the start of a calendar 
     quarter.
       ``(c) Duties Described.--The duties described in this 
     subsection are the following:
       ``(1) Administration of program.--Administering the 
     program, including--
       ``(A) the determination of the amount of the discounted 
     price of an applicable drug of a manufacturer;
       ``(B) the establishment of procedures under which 
     discounted prices are provided to applicable beneficiaries at 
     pharmacies or by mail order service at the point-of-sale of 
     an applicable drug;
       ``(C) the establishment of procedures to ensure that, not 
     later than the applicable number of calendar days after the 
     dispensing of an applicable drug by a pharmacy or mail order 
     service, the pharmacy or mail order service is reimbursed for 
     an amount equal to the difference between--
       ``(i) the negotiated price of the applicable drug; and
       ``(ii) the discounted price of the applicable drug;
       ``(D) the establishment of procedures to ensure that the 
     discounted price for an applicable drug under this section is 
     applied before any coverage or financial assistance under 
     other health benefit plans or programs that provide coverage 
     or financial assistance for the purchase or provision of 
     prescription drug coverage on behalf of applicable 
     beneficiaries as the Secretary may specify; and
       ``(E) providing a reasonable dispute resolution mechanism 
     to resolve disagreements between manufacturers, applicable 
     beneficiaries, and the third party with a contract under 
     subsection (d)(3).
       ``(2) Monitoring compliance.--
       ``(A) In general.--The Secretary shall monitor compliance 
     by a manufacturer with the terms of an agreement under this 
     section.
       ``(B) Notification.--If a third party with a contract under 
     subsection (d)(3) determines that the manufacturer is not in 
     compliance with such agreement, the third party shall notify 
     the Secretary of such noncompliance for appropriate 
     enforcement under subsection (e).
       ``(3) Collection of data from prescription drug plans and 
     ma-pd plans.--The Secretary may collect appropriate data from 
     prescription drug plans and MA-PD plans in a timeframe that 
     allows for discounted prices to be provided for applicable 
     drugs under this section.
       ``(d) Administration.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall provide for the implementation of this section, 
     including the performance of the duties described in 
     subsection (c).
       ``(2) Limitation.--In providing for the implementation of 
     this section, the Secretary shall not receive or distribute 
     any funds of a manufacturer under the program.
       ``(3) Contract with third parties.--The Secretary shall 
     enter into a contract with 1 or more third parties to 
     administer the requirements established by the Secretary in 
     order to carry out this section. At a minimum, the contract 
     with a third party under the preceding sentence shall require 
     that the third party--
       ``(A) receive and transmit information between the 
     Secretary, manufacturers, and other individuals or entities 
     the Secretary determines appropriate;
       ``(B) receive, distribute, or facilitate the distribution 
     of funds of manufacturers to appropriate individuals or 
     entities in order to meet the obligations of manufacturers 
     under agreements under this section;
       ``(C) provide adequate and timely information to 
     manufacturers, consistent with the agreement with the 
     manufacturer under this section, as necessary for the 
     manufacturer to fulfill its obligations under this section; 
     and
       ``(D) permit manufacturers to conduct periodic audits, 
     directly or through contracts, of the data and information 
     used by the third party to determine discounts for applicable 
     drugs of the manufacturer under the program.
       ``(4) Performance requirements.--The Secretary shall 
     establish performance requirements for a third party with a 
     contract under paragraph (3) and safeguards to protect the 
     independence and integrity of the activities carried out by 
     the third party under the program under this section.
       ``(5) Administration.--Chapter 35 of title 44, United 
     States Code, shall not apply to the program under this 
     section.
       ``(6) Funding.--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 & Medicaid Services 
     Program Management Account, of $4,000,000 for each of fiscal 
     years 2022 through 2025, to remain available until 
     expended.''.
       ``(e) Enforcement.--
       ``(1) Audits.--Each manufacturer with an agreement in 
     effect under this section shall be subject to periodic audit 
     by the Secretary.
       ``(2) Civil money penalty.--
       ``(A) In general.--The Secretary shall impose a civil money 
     penalty on a manufacturer that fails to provide applicable 
     beneficiaries discounts for applicable drugs of the 
     manufacturer in accordance with such agreement for each such 
     failure in an amount the Secretary determines is commensurate 
     with the sum of--
       ``(i) the amount that the manufacturer would have paid with 
     respect to such discounts under the agreement, which will 
     then be used to pay the discounts which the manufacturer had 
     failed to provide; and
       ``(ii) 25 percent of such amount.
       ``(B) Application.--The provisions of section 1128A (other 
     than subsections (a) and (b)) shall apply to a civil money 
     penalty under this paragraph in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A(a).
       ``(f) Clarification Regarding Availability of Other Covered 
     Part D Drugs.--Nothing in this section shall prevent an 
     applicable beneficiary from purchasing a covered part D drug 
     that is not 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).

[[Page S4381]]

       ``(g) Definitions.--In this section:
       ``(1) Applicable beneficiary.--The term `applicable 
     beneficiary' means an individual who, on the date of 
     dispensing a covered part D drug--
       ``(A) is enrolled in a prescription drug plan or an MA-PD 
     plan;
       ``(B) is not enrolled in a qualified retiree prescription 
     drug plan; and
       ``(C) has incurred costs for covered part D drugs in the 
     year that are above the annual deductible specified in 
     section 1860D-2(b)(1) for such year.
       ``(2) Applicable drug.--The term `applicable drug' means, 
     with respect to an applicable beneficiary, a covered part D 
     drug--
       ``(A) approved under a new drug application under section 
     505(c) of the Federal Food, Drug, and Cosmetic Act or, in the 
     case of a biologic product, licensed under section 351 of the 
     Public Health Service Act (including a product licensed under 
     subsection (k) of such section 351); and
       ``(B)(i) if the PDP sponsor of the prescription drug plan 
     or the MA organization offering the MA-PD plan uses a 
     formulary, which is on the formulary of the prescription drug 
     plan or MA-PD plan that the applicable beneficiary is 
     enrolled in;
       ``(ii) if the PDP sponsor of the prescription drug plan or 
     the MA organization offering the MA-PD plan does not use a 
     formulary, for which benefits are available under the 
     prescription drug plan or MA-PD plan that the applicable 
     beneficiary is enrolled in; or
       ``(iii) is provided through an exception or appeal.
       ``(3) Applicable number of calendar days.--The term 
     `applicable number of calendar days' means--
       ``(A) with respect to claims for reimbursement submitted 
     electronically, 14 days; and
       ``(B) with respect to claims for reimbursement submitted 
     otherwise, 30 days.
       ``(4) Discounted price.--
       ``(A) In general.--The term `discounted price' means--
       ``(i) with respect to an applicable drug dispensed for an 
     applicable beneficiary who has incurred costs that are below 
     the annual out-of-pocket threshold specified in section 
     1860D-2(b)(4)(B) for the year, 93 percent of the negotiated 
     price of the applicable drug of a manufacturer; and
       ``(ii) with respect to an applicable drug dispensed for an 
     applicable beneficiary who has incurred costs for covered 
     part D drugs in the year that are equal to or exceed the 
     annual out-of-pocket threshold specified in section 1860D-
     2(b)(4)(B) for the year, 86 percent of the negotiated price 
     of the applicable drug of a manufacturer.
       ``(B) Clarification.--Nothing in this section shall be 
     construed as affecting the responsibility of an applicable 
     beneficiary for payment of a dispensing fee for an applicable 
     drug.
       ``(C) Clarification for certain claims.--With respect to 
     the amount of the negotiated price of an individual claim for 
     an applicable drug with respect to an applicable beneficiary, 
     the manufacturer of the applicable drug shall provide--
       ``(i) the discounted price under clause (i) of subparagraph 
     (A) only on the portion of the negotiated price of the 
     applicable drug that falls above the deductible specified in 
     section 1860D-2(b)(1) for the year and below the annual out-
     of-pocket threshold specified in section 1860D-2(b)(4)(B) for 
     the year; and
       ``(ii) the discounted price under clause (ii) of 
     subparagraph (A) only on the portion of the negotiated price 
     of the applicable drug that falls at or above such annual 
     out-of-pocket threshold.
       ``(5) Manufacturer.--The term `manufacturer' means any 
     entity which is engaged in the production, preparation, 
     propagation, compounding, conversion, or processing of 
     prescription drug products, either directly or indirectly by 
     extraction from substances of natural origin, or 
     independently by means of chemical synthesis, or by a 
     combination of extraction and chemical synthesis. Such term 
     does not include a wholesale distributor of drugs or a retail 
     pharmacy licensed under State law.
       ``(6) Negotiated price.--The term `negotiated price' has 
     the meaning given such term in section 1860D-2(d)(1)(B), 
     except that such negotiated price shall not include any 
     dispensing fee for the applicable drug.
       ``(7) Qualified retiree prescription drug plan.--The term 
     `qualified retiree prescription drug plan' has the meaning 
     given such term in section 1860D-22(a)(2).''.
       (2) Sunset of medicare coverage gap discount program.--
     Section 1860D-14A of the Social Security Act (42 U.S.C. 1395-
     114a) is amended--
       (A) in subsection (a), in the first sentence, by striking 
     ``The Secretary'' and inserting ``Subject to subsection (h), 
     the Secretary''; and
       (B) by adding at the end the following new subsection:
       ``(h) Sunset of Program.--
       ``(1) In general.--The program shall not apply to 
     applicable drugs dispensed on or after January 1, 2025, and, 
     subject to paragraph (2), agreements under this section shall 
     be terminated as of such date.
       ``(2) Continued application for applicable drugs dispensed 
     prior to sunset.--The provisions of this section (including 
     all responsibilities and duties) shall continue to apply 
     after January 1, 2025, with respect to applicable drugs 
     dispensed prior to such date.''.
       (3) Inclusion of actuarial value of manufacturer discounts 
     in bids.--Section 1860D-11 of the Social Security Act (42 
     U.S.C. 1395w-111) is amended--
       (A) in subsection (b)(2)(C)(iii)--
       (i) by striking ``assumptions regarding the reinsurance'' 
     and inserting ``assumptions regarding--

       ``(I) the reinsurance''; and

       (ii) by adding at the end the following:

       ``(II) for 2025 and each subsequent year, the manufacturer 
     discounts provided under section 1860D-14B subtracted from 
     the actuarial value to produce such bid; and''; and

       (B) in subsection (c)(1)(C)--
       (i) by striking ``an actuarial valuation of the 
     reinsurance'' and inserting ``an actuarial valuation of--
       ``(i) the reinsurance'';
       (ii) in clause (i), as added by clause (i) of this 
     subparagraph, by adding ``and'' at the end; and
       (iii) by adding at the end the following:
       ``(ii) for 2025 and each subsequent year, the manufacturer 
     discounts provided under section 1860D-14B;''.
       (4) Clarification regarding exclusion of manufacturer 
     discounts from troop.--Section 1860D-2(b)(4) of the Social 
     Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
       (A) in subparagraph (C), by inserting ``and subject to 
     subparagraph (F)'' after ``subparagraph (E)''; and
       (B) by adding at the end the following new subparagraph:
       ``(F) Clarification regarding exclusion of manufacturer 
     discounts.--In applying subparagraph (A), incurred costs 
     shall not include any manufacturer discounts provided under 
     section 1860D-14B.''.
       (e) Determination of Allowable Reinsurance Costs.--Section 
     1860D-15(b) of the Social Security Act (42 U.S.C. 1395w-
     115(b)) is amended--
       (1) in paragraph (2)--
       (A) by striking ``costs.--For purposes'' and inserting 
     ``costs.--
       ``(A) In general.--Subject to subparagraph (B), for 
     purposes''; and
       (B) by adding at the end the following new subparagraph:
       ``(B) Inclusion of manufacturer discounts on applicable 
     drugs.--For purposes of applying subparagraph (A), the term 
     `allowable reinsurance costs' shall include the portion of 
     the negotiated price (as defined in section 1860D-14B(g)(6)) 
     of an applicable drug (as defined in section 1860D-14B(g)(2)) 
     that was paid by a manufacturer under the manufacturer 
     discount program under section 1860D-14B.''; and
       (2) in paragraph (3)--
       (A) in the first sentence, by striking ``For purposes'' and 
     inserting ``Subject to paragraph (2)(B), for purposes''; and
       (B) in the second sentence, by inserting ``or, in the case 
     of an applicable drug, by a manufacturer'' after ``by the 
     individual or under the plan''.
       (f) Updating Risk Adjustment Methodologies To Account for 
     Part D Modernization Redesign.--Section 1860D-15(c) of the 
     Social Security Act (42 U.S.C. 1395w-115(c)) is amended by 
     adding at the end the following new paragraph:
       ``(3) Updating risk adjustment methodologies to account for 
     part d modernization redesign.--The Secretary shall update 
     the risk adjustment 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 121 of the Prescription Drug 
     Pricing Reduction Act of 2022.''.
       (g) Conditions for Coverage of Drugs Under This Part.--
     Section 1860D-43 of the Social Security Act (42 U.S.C. 1395w-
     153) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following new paragraphs:
       ``(4) participate in the manufacturer discount program 
     under section 1860D-14B;
       ``(5) have entered into and have in effect an agreement 
     described in subsection (b) of such section 1860D-14B with 
     the Secretary; and
       ``(6) have entered into and have in effect, under terms and 
     conditions specified by the Secretary, a contract with a 
     third party that the Secretary has entered into a contract 
     with under subsection (d)(3) of such section 1860D-14B.'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Effective Date.--Paragraphs (1) through (3) of 
     subsection (a) shall apply to covered part D drugs dispensed 
     under this part on or after January 1, 2011, and before 
     January 1, 2025, and paragraphs (4) through (6) of such 
     subsection shall apply to covered part D drugs dispensed on 
     or after January 1, 2025.''; and
       (3) in subsection (c), by striking paragraph (2) and 
     inserting the following:
       ``(2) the Secretary determines that in the period beginning 
     on January 1, 2011, and ending on December 31, 2011 (with 
     respect to paragraphs (1) through (3) of subsection (a)), or 
     the period beginning on January 1, 2025, and ending December 
     31, 2025 (with respect to paragraphs (4) through (6) of such 
     subsection), there were extenuating circumstances.''.
       (h) Conforming Amendments.--
       (1) Section 1860D-2 of the Social Security Act (42 U.S.C. 
     1395w-102) is amended--
       (A) in subsection (a)(2)(A)(i)(I), by striking ``, or an 
     increase in the initial'' and inserting ``or for a year 
     preceding 2025 an increase in the initial'';

[[Page S4382]]

       (B) in subsection (c)(1)(C)--
       (i) in the subparagraph heading, by striking ``at initial 
     coverage limit''; and
       (ii) by inserting ``for a year preceding 2025 or the annual 
     out-of-pocket threshold specified in subsection (b)(4)(B) for 
     the year for 2025 and each subsequent year'' after 
     ``subsection (b)(3) for the year'' each place it appears; and
       (C) in subsection (d)(1)(A), by striking ``or an initial'' 
     and inserting ``or for a year preceding 2025 an initial''.
       (2) Section 1860D-4(a)(4)(B)(i) of the Social Security Act 
     (42 U.S.C. 1395w-104(a)(4)(B)(i)) is amended by striking 
     ``the initial'' and inserting ``for a year preceding 2025, 
     the initial''.
       (3) Section 1860D-14(a) of the Social Security Act (42 
     U.S.C. 1395w-114(a)) is amended--
       (A) in paragraph (1)--
       (i) in subparagraph (C), by striking ``The continuation'' 
     and inserting ``For a year preceding 2025, the 
     continuation'';
       (ii) in subparagraph (D)(iii), by striking ``1860D-
     2(b)(4)(A)(i)(I)'' and inserting ``1860D-
     2(b)(4)(A)(i)(I)(aa)''; and
       (iii) in subparagraph (E), by striking ``The elimination'' 
     and inserting ``For a year preceding 2025, the elimination''; 
     and
       (B) in paragraph (2)--
       (i) in subparagraph (C), by striking ``The continuation'' 
     and inserting ``For a year preceding 2025, the 
     continuation''; and
       (ii) in subparagraph (E)--

       (I) by inserting ``for a year preceding 2025,'' after 
     ``subsection (c)''; and
       (II) by striking ``1860D-2(b)(4)(A)(i)(I)'' and inserting 
     ``1860D-2(b)(4)(A)(i)(I)(aa)''.

       (4) Section 1860D-21(d)(7) of the Social Security Act (42 
     U.S.C. 1395w-131(d)(7)) is amended by striking ``section 
     1860D-2(b)(B)(4)(B)(i)'' and inserting ``section 1860D-
     2(b)(B)(4)(C)(i)''.
       (5) Section 1860D-22(a)(2)(A) of the Social Security Act 
     (42 U.S.C. 1395w-132(a)(2)(A)) is amended--
       (A) by striking ``the value of any discount'' and inserting 
     the following: ``the value of--
       ``(i) for years prior to 2025, any discount'';
       (B) in clause (i), as inserted by subparagraph (A) of this 
     paragraph, by striking the period at the end and inserting 
     ``; and''; and
       (C) by adding at the end the following new clause:
       ``(ii) for 2025 and each subsequent year, any discount 
     provided pursuant to section 1860D-14B.''.
       (6) Section 1860D-41(a)(6) of the Social Security Act (42 
     U.S.C. 1395w-151(a)(6)) is amended--
       (A) by inserting ``for a year before 2025'' after ``1860D-
     2(b)(3)''; and
       (B) by inserting ``for such year'' before the period.
       (i) Effective Date.--The amendments made by this section 
     shall apply to plan year 2025 and subsequent plan years.

     SEC. 121A. MAXIMUM MONTHLY CAP ON COST-SHARING PAYMENTS UNDER 
                   PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

       (a) In General.--Section 1860D-2(b) of the Social Security 
     Act (42 U.S.C. 1395w-102(b)), as amended by section 121, is 
     amended--
       (1) in paragraph (2)--
       (A) in subparagraph (A), by striking ``and (D)'' and 
     inserting ``, (D), and (E)''; and
       (B) by adding at the end the following new subparagraph:
       ``(E) Maximum monthly cap on cost-sharing payments.--
       ``(i) In general.--For plan years beginning on or after 
     January 1, 2025, 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 provide to any 
     enrollee, including an enrollee who is a subsidy eligible 
     individual (as defined in paragraph (3) of section 1860D-
     14(a)), the option to elect with respect to a plan year to 
     have their monthly cost-sharing payments under the plan 
     capped in accordance with this subparagraph.
       ``(ii) Determination of maximum monthly cap.--For each 
     month in the plan year after an enrollee in a prescription 
     drug plan or an MA-PD plan has made an election pursuant to 
     clause (i), the PDP sponsor or MA organization shall 
     determine a maximum monthly cap (as defined in clause (iv)) 
     for such enrollee.
       ``(iii) Beneficiary monthly payments.--With respect to an 
     enrollee who has made an election pursuant to clause (i), for 
     each month described in clause (ii), the PDP sponsor or MA 
     organization shall bill such enrollee an amount (not to 
     exceed the maximum monthly cap) for the out-of-pocket costs 
     of such enrollee in such month.
       ``(iv) Maximum monthly cap defined.--In this subparagraph, 
     the term `maximum monthly cap' means, with respect to an 
     enrollee--

       ``(I) for the first month in which this subparagraph 
     applies, an amount determined by calculating--

       ``(aa) 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
       ``(bb) the number of months remaining in the plan year; and

       ``(II) for a subsequent month, an amount determined by 
     calculating--

       ``(aa) 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
       ``(bb) the number of months remaining in the plan year.
       ``(v) Additional requirements.--The following requirements 
     shall apply with respect to the option to make an election 
     pursuant to clause (i) under this subparagraph:

       ``(I) Secretarial responsibilities.--The Secretary shall 
     provide information to part D eligible individuals on the 
     option to make such election through educational materials, 
     including through the notices provided under section 1804(a).
       ``(II) Timing of election.--An enrollee in a prescription 
     drug plan or an MA-PD plan may make such an election--

       ``(aa) prior to the beginning of the plan year; or
       ``(bb) in any month during the plan year.

       ``(III) PDP sponsor and ma organization responsibilities.--
     Each PDP sponsor offering a prescription drug plan or MA 
     organization offering an MA-PD plan--

       ``(aa) may not limit the option for an enrollee to make 
     such an election to certain covered part D drugs;
       ``(bb) shall, prior to the plan year, notify prospective 
     enrollees of the option to make such an election in 
     promotional materials;
       ``(cc) shall include information on such option in enrollee 
     educational materials;
       ``(dd) 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 may benefit from making such an election;
       ``(ee) shall provide that a pharmacy, after receiving a 
     notification described in item (dd) with respect to an 
     enrollee, informs the enrollee of such notification;
       ``(ff) shall ensure that such an election by an enrollee 
     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
       ``(gg) 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.

       ``(IV) Failure to pay amount billed.--If an enrollee fails 
     to pay the amount billed for a month as required under this 
     subparagraph, the election of the enrollee pursuant to clause 
     (i) shall be terminated and 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).
       ``(V) Clarification regarding past due amounts.--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.
       ``(VI) Treatment of unsettled balances.--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.''; and

       (2) in paragraph (4)--
       (A) in subparagraph (C), by striking ``and subject to 
     subparagraph (F)'' and inserting ``and subject to 
     subparagraphs (F) and (G)''; and
       (B) by adding at the end the following new subparagraph:
       ``(G) Inclusion of costs paid under maximum monthly cap 
     option.--In applying subparagraph (A), with respect to an 
     enrollee who has made an election pursuant to clause (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.''.
       (b) Application to Alternative Prescription Drug 
     Coverage.--Section 1860D-2(c) of the Social Security Act (42 
     U.S.C. 1395w-102(c)) is amended by adding at the end the 
     following new paragraph:
       ``(4) Same maximum monthly cap on cost-sharing.--For plan 
     years beginning on or after January 1, 2025, the maximum 
     monthly cap on cost-sharing payments under the process 
     provided under subsection (b)(2)(E) shall apply to such 
     coverage.''.

     SEC. 121B. REQUIRING PHARMACY-NEGOTIATED PRICE CONCESSIONS, 
                   PAYMENT, AND FEES TO BE INCLUDED IN NEGOTIATED 
                   PRICES AT THE POINT-OF-SALE UNDER PART D OF THE 
                   MEDICARE PROGRAM.

       Section 1860D-2(d)(1)(B) of the Social Security Act (42 
     U.S.C. 1395w-102(d)(1)(B)) is amended--
       (1) by striking ``prices.--For purposes'' and inserting 
     ``prices.--
       ``(i) In general.--For purposes''; and
       (2) by adding at the end the following new clause:
       ``(ii) Prices negotiated with pharmacy at point-of-sale.--
     For plan years beginning on or after January 1, 2024, a 
     negotiated price for a covered part D drug described in 
     clause (i) shall be the approximate lowest possible 
     reimbursement for such drug negotiated with the pharmacy 
     dispensing such drug, and shall include all contingent and 
     noncontingent price concessions, payments, and fees 
     negotiated with such pharmacy, but shall not include positive 
     incentive payments paid or to be paid to such pharmacy. Such 
     negotiated price shall be provided at the point-of-sale of 
     such drug.''.

     SEC. 122. PUBLIC DISCLOSURE OF DRUG DISCOUNTS AND OTHER 
                   PHARMACY BENEFIT MANAGER (PBM) PROVISIONS.

       (a) Public Disclosure of Drug Discounts.--

[[Page S4383]]

       (1) In general.--Section 1150A of the Social Security Act 
     (42 U.S.C. 1320b-23) is amended--
       (A) in subsection (c), in the matter preceding paragraph 
     (1), by striking ``this section'' and inserting ``subsection 
     (b)(1)''; and
       (B) by adding at the end the following new subsection:
       ``(e) Public Availability of Certain Information.--
       ``(1) In general.--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, 2024, 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.
       ``(2) Lag in data.--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.
       ``(3) Confidentiality.--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.''.
       (2) Effective date.--The amendment made by paragraph (1)(A) 
     shall take effect on January 1, 2024.
       (b) Plan Audit of Pharmacy Benefit Manager Data.--Section 
     1860D-2(d)(3) of the Social Security Act (42 U.S.C. 1395w-
     102(d)(3)) is amended--
       (1) by striking ``Audits.--To protect'' and inserting the 
     following: ``Audits.--
       ``(A) Audits of plans by the secretary.--To protect''; and
       (2) by adding at the end the following new subparagraph:
       ``(B) Audits of pharmacy benefit managers by pdp sponsors 
     and ma organizations.--
       ``(i) In general.--Beginning January 1, 2024, in order to 
     ensure that--

       ``(I) 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
       ``(II) the PDP sponsor and MA organization can account for 
     the cost of each covered part D drug net of all direct and 
     indirect remuneration;

     the PDP sponsor or MA organization shall conduct financial 
     audits.
       ``(ii) Independent third party.--An audit described in 
     clause (i) shall--

       ``(I) be conducted by an independent third party; and
       ``(II) 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.

       ``(iii) Rebate agreements.--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).
       ``(iv) Confidentiality agreements.--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.
       ``(v) Frequency.--A financial audit under clause (i) shall 
     be conducted periodically (but in no case less frequently 
     than once every 2 years).
       ``(vi) Timeframe for pbm to provide information.--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.
       ``(vii) Submission of audit reports to the secretary.--

       ``(I) In general.--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.
       ``(II) Review.--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.
       ``(III) Confidentiality.--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.

       ``(viii) Notice of noncompliance.--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).
       ``(ix) Civil monetary penalties.--

       ``(I) In general.--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.
       ``(II) Procedure.--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.''.

       (c) Disclosure to Pharmacy of Post-Point-of-Sale Pharmacy 
     Price Concessions and Incentive Payments.--Section 1860D-
     2(d)(2) of the Social Security Act (42 U.S.C. 1395w-
     102(d)(2)) is amended--
       (1) by striking ``Disclosure.--A PDP sponsor'' and 
     inserting the following: ``Disclosure.--
       ``(A) To the secretary.--A PDP sponsor''; and
       (2) by adding at the end the following new subparagraph:
       ``(B) To pharmacies.--
       ``(i) In general.--For plan year 2024 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.
       ``(ii) Timing.--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).
       ``(iii) Claim level.--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.''.
       (d) Disclosure of P&T Committee Conflicts of Interest.--
       (1) In general.--Section 1860D-4(b)(3)(A) of the Social 
     Security Act (42 U.S.C. 1395w-104(b)(3)(A)) is amended by 
     adding at the end the following new clause:
       ``(iii) Disclosure of conflicts of interest.--With respect 
     to plan year 2024 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.''.
       (2) Inclusion in bid.--Section 1860D-11(b)(2) of the Social 
     Security Act (42 U.S.C. 1395w-111(b)(2)) is amended--
       (A) by redesignating subparagraph (F) as subparagraph (G); 
     and
       (B) by inserting after subparagraph (E) the following new 
     subparagraph:
       ``(F) P&T committee conflicts of interest.--The information 
     required to be disclosed under section 1860D-
     4(b)(3)(A)(iii).''.
       (e) Information on Direct and Indirect Remuneration 
     Required To Be Included in Bid.--Section 1860D-11(b) of the 
     Social Security Act (42 U.S.C. 1395w-111(b)) is amended--
       (1) in paragraph (1), by adding at the end the following 
     new sentence: ``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.''; and
       (2) in paragraph (2)(C)--
       (A) in clause (iii), by striking ``and'' at the end;
       (B) in clause (iv), by striking the period at the end and 
     inserting the following: ``, and, with respect to plan year 
     2024 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''; and
       (C) by adding at the end the following new clause:
       ``(v) with respect to plan year 2024 and subsequent plan 
     years, actual and projected direct and indirect remuneration, 
     categorized as received from each of the following:

       ``(I) A pharmacy.
       ``(II) A manufacturer.
       ``(III) A pharmacy benefit manager.
       ``(IV) Other entities, as determined by the Secretary.''.

     SEC. 123. PUBLIC DISCLOSURE OF DIRECT AND INDIRECT 
                   REMUNERATION REVIEW AND AUDIT RESULTS.

       Section 1860D-42 of the Social Security Act (42 U.S.C. 
     1395w-152) is amended by adding at the end the following new 
     subsection:
       ``(e) Public Disclosure of Direct and Indirect Remuneration 
     Review and Financial Audit Results.--
       ``(1) Direct and indirect remuneration review results.--
       ``(A) In general.--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 & Medicaid Services information on 
     discrepancies related to summary and detailed direct and 
     indirect remuneration 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:

[[Page S4384]]

       ``(i) The number of potential discrepancies in summary and 
     detailed direct and indirect remuneration identified by the 
     Secretary for PDP sponsors to review.
       ``(ii) The extent to which PDP sponsors resubmitted summary 
     direct and indirect remuneration reports to make changes for 
     previous contract years.
       ``(iii) The extent to which resubmitted summary direct and 
     indirect remuneration reports resulted in an increase or 
     decrease in direct and indirect remuneration in a previous 
     contract year.
       ``(B) Exclusion of certain submissions in calculation.--The 
     Secretary shall exclude any information in direct and 
     indirect remuneration 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).
       ``(2) Financial audit results.--In 2023 and each subsequent 
     year, the Secretary shall make available to the public on the 
     Internet website of the Centers for Medicare & Medicaid 
     Services data on the results of financial audits required 
     under section 1860D-12(b)(3)(C). Information made available 
     under this paragraph shall include the following:
       ``(A) With respect to a year, the number of PDP sponsors 
     that received each of the following (or successor 
     categories), with an indication of the number that pertain to 
     direct and indirect remuneration:
       ``(i) A notice of observations or findings.
       ``(ii) An unqualified audit opinion that renders the audit 
     closed.
       ``(iii) A qualified audit opinion that requires the sponsor 
     to submit a corrective action plan to the Secretary.
       ``(iv) An adverse opinion, with a description of the types 
     of actions that the Secretary takes when issuing an adverse 
     opinion.
       ``(v) A disclaimed opinion.
       ``(B) With respect to a year, the number of PDP sponsors--
       ``(i) that reopened a previously closed reconciliation as a 
     result of an audit, indicating those that pertain to direct 
     and indirect remuneration changes; and
       ``(ii) for which the Secretary recouped a payment or made a 
     payment as a result of a reopening of a previously closed 
     reconciliation, indicating when such recoupment or payment 
     pertains to direct and indirect remuneration.
       ``(3) No identification of specific pdp sponsors.--The 
     information to be made available on the Internet website of 
     the Centers for Medicare & Medicaid Services described in 
     paragraph (1) and paragraph (2) shall not identity the 
     specific PDP sponsor to which any determination or action 
     pertains.
       ``(4) Definition of direct and indirect remuneration.--For 
     purposes of this subsection, the term `direct and indirect 
     remuneration' means direct and indirect remuneration as 
     described in section 423.308 of title 42, Code of Federal 
     Regulations, or any successor regulation.''.

     SEC. 124. IMPROVEMENTS TO PROVISION OF PARTS A AND B CLAIMS 
                   DATA TO PRESCRIPTION DRUG PLANS.

       (a) Data Use.--
       (1) In general.--Paragraph (6) of section 1860D-4(c) of the 
     Social Security Act (42 U.S.C. 1395w-104(c)), as added by 
     section 50354 of division E of the Bipartisan Budget Act of 
     2018 (Public Law 115-123), 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--
       (A) in subparagraph (B)--
       (i) by redesignating clauses (i), (ii), and (iii) as 
     subclauses (I), (II), and (III), respectively, and moving 
     such subclauses 2 ems to the right;
       (ii) by striking ``Purposes.--A PDP sponsor'' and inserting 
     Purposes--
       ``(i) In general.--A PDP sponsor.''; and
       (iii) by adding at the end the following new clause:
       ``(ii) Clarification.--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).''; and
       (B) in subparagraph (C)(i), by striking ``To inform'' and 
     inserting ``Subject to subparagraph (B)(ii), to inform''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to plan years beginning on or after January 1, 
     2024.
       (b) Manner of Provision.--Subparagraph (D) of such 
     paragraph (6) is amended--
       (1) by striking ``described.--The data described in this 
     clause'' and inserting ``described.--
       ``(i) In general.--The data described in this 
     subparagraph''; and
       (2) by adding at the end the following new clause:
       ``(ii) Manner of provision.--

       ``(I) In general.--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.
       ``(II) Implementation.--Notwithstanding any other provision 
     of law, the Secretary may implement this clause by program 
     instruction or otherwise.''.

       (c) Technical Correction.--Such paragraph (6) is 
     redesignated as paragraph (7).

     SEC. 125. MEDICARE PART D REBATE BY MANUFACTURERS FOR CERTAIN 
                   DRUGS WITH PRICES INCREASING FASTER THAN 
                   INFLATION.

       (a) In General.--Subpart 2 of part D of title XVIII of the 
     Social Security Act is amended by inserting after section 
     1860D-14B, as added by section 121, the following new 
     section:

     ``SEC. 1860D-14C. MANUFACTURER REBATE FOR CERTAIN DRUGS WITH 
                   PRICES INCREASING FASTER THAN INFLATION.

       ``(a) Requirements.--
       ``(1) Secretarial provision of information.--
       ``(A) In general.--Subject to subparagraph (B), not later 
     than 6 months after the end of each rebate period (as defined 
     in paragraph (4)(A)) beginning on or after January 1, 2025, 
     the Secretary shall, for each rebatable covered part D drug 
     (as defined in paragraph (4)(B)), report to each manufacturer 
     (as defined in paragraph (4)(C)) of such rebatable covered 
     part D drug the following for the rebate period:
       ``(i) Information on the total number of units (as defined 
     in paragraph (4)(D)) of each dosage form and strength 
     described in paragraph (1)(A) of subsection (b) for such 
     rebatable covered part D drug and rebate period.
       ``(ii) Information on the amount (if any) of the excess 
     price described in paragraph (1)(B) of such subsection for 
     such rebatable covered part D drug and rebate period.
       ``(iii) The rebate amount specified under such subsection 
     for such rebatable covered part D drug and rebate period.
       ``(iv) Other information determined appropriate by the 
     Secretary.
       ``(B) Transition rule for information in 2025.--
     Notwithstanding subparagraph (A), the Secretary may, for each 
     rebatable covered part D drug, delay the timeframe for 
     reporting the information and rebate amount described in 
     clauses (i), (ii), (iii), and (iv) of such subparagraph for 
     rebate periods in 2025 until not later than December 31, 
     2026.
       ``(2) Manufacturer rebate.--
       ``(A) In general.--Subject to subparagraph (B), for each 
     rebate period beginning on or after January 1, 2025, each 
     manufacturer of a rebatable covered part D drug shall, not 
     later than 30 days after the date of receipt from the 
     Secretary of the information and rebate amount pursuant to 
     paragraph (1), provide to the Secretary a rebate that is 
     equal to the amount specified in subsection (b) for such drug 
     for such rebate period.
       ``(B) Exemption for shortages.--The Secretary may reduce or 
     waive the rebate under this paragraph with respect to a 
     rebatable covered part D drug 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.
       ``(3) Request for reconsideration.--The Secretary shall 
     establish procedures under which a manufacturer of a 
     rebatable covered part D drug may request a reconsideration 
     by the Secretary of the rebate amount specified under 
     subsection (b) for such drug and rebate period, as reported 
     to the manufacturer pursuant to paragraph (1). Timing for a 
     reconsideration shall be coordinated with the timing of 
     reconciliation, as described in subsection (b)(6) and as 
     determined appropriate by the Secretary.
       ``(4) Definitions.--In this section:
       ``(A) Rebate period.--
       ``(i) In general.--Subject to clause (ii), the term `rebate 
     period' means, with respect to a year, each of the six month 
     periods that begin on January 1 and July 1 of the year.
       ``(ii) Initial rebate period for subsequently approved 
     drugs.--In the case of a rebatable covered part D drug 
     described in subsection (c), the initial rebate period for 
     which a rebate amount is determined for such rebatable 
     covered part D drug pursuant to such subsection shall be the 
     period beginning with the first month after the last day of 
     the six month period that begins on the day on which the drug 
     was first marketed and ending on the last day of the first 
     full rebate period under clause (i) that follows the last day 
     of such six month period.
       ``(B) Rebatable covered part d drug.--The term `rebatable 
     covered part D drug' means a covered part D drug 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(a) of the Public 
     Health Service Act.
       ``(C) Manufacturer.--The term `manufacturer' has the 
     meaning given such term in section 1860D--14A(g).
       ``(D) Units.--The term `units' means, with respect to a 
     rebatable covered part D drug, the lowest common quantity 
     (such as the number of capsules or tablets, milligrams of 
     molecules, or grams) of such drug dispensed to individuals 
     under this part.
       ``(E) Price.--The term `price' means, with respect to a 
     rebatable covered part D drug, the wholesale acquisition cost 
     (as defined in section 1847A(c)(6)(B)) for such drug.
       ``(b) Rebate Amount.--
       ``(1) In general.--Subject to subsection (e)(2), the amount 
     of the rebate specified in this subsection for a rebate 
     period, with respect to each dosage form and strength of a 
     rebatable covered part D drug, is the amount equal to the 
     product of--
       ``(A) the total number of units of such dosage form and 
     strength for each rebatable covered part D drug during the 
     rebate period; and
       ``(B) the amount (if any) by which--

[[Page S4385]]

       ``(i) the unit-weighted average price for such dosage form 
     and strength of the drug determined under paragraph (2) for 
     the rebate period; exceeds
       ``(ii) the inflation-adjusted price for such dosage form 
     and strength determined under paragraph (3) for the rebate 
     period.
       ``(2) Determination of unit-weighted average price.--
       ``(A) In general.--The unit-weighted average price 
     determined under this paragraph for a rebate period, with 
     respect to each dosage form and strength of a rebatable 
     covered Part D drug, is the sum of the products of--
       ``(i) the weighted average price determined under 
     subparagraph (B) with respect to each package size of such 
     dosage form and strength dispensed during the rebate period; 
     and
       ``(ii) the ratio of--

       ``(I) the total number of units of such package size 
     dispensed during the rebate period; to
       ``(II) the total number of units of such dosage form and 
     strength of such drug dispensed during such rebate period.

       ``(B) Computation of weighted average price.--The weighted 
     average price, with respect to each package size of such 
     dosage form and strength of a rebatable covered part D drug 
     dispensed during a rebate period, is the sum of the products 
     of--
       ``(i) each price, as calculated for a unit of such drug, 
     applicable to each package size of such dosage form and 
     strength of such drug during the rebate period; and
       ``(ii) the ratio of--

       ``(I) the number of days for which each such price is 
     applicable during the rebate period; to
       ``(II) the total number of days in such rebate period.

       ``(3) Determination of inflation-adjusted price.--
       ``(A) In general.--The inflation-adjusted price determined 
     under this paragraph for a rebate period, with respect to 
     each dosage form and strength of a rebatable covered part D 
     drug, is--
       ``(i) the benchmark unit-weighted price determined under 
     subparagraph (B) for the rebate period; increased by
       ``(ii) the percentage by which the rebate period CPI-U (as 
     defined in paragraph (4)) for the rebate period exceeds the 
     benchmark CPI-U (as defined in paragraph (5)).
       ``(B) Determination of benchmark unit-weighted price.--The 
     benchmark unit-weighted price determined under this 
     subparagraph for a rebate period, with respect to each dosage 
     form and strength of a rebatable covered part D drug, is the 
     sum of the products of--
       ``(i) each price, as calculated for a unit of such drug, 
     applicable to each package size of such dosage form and 
     strength of such drug on July 1, 2021; and
       ``(ii) the ratio of--

       ``(I) the total number of units of such package size 
     dispensed on July 1, 2021; to
       ``(II) the total number of units of such dosage form and 
     strength dispensed on July 1, 2021.

       ``(4) Benchmark cpi-u.--The term `benchmark CPI-U' means 
     the consumer price index for all urban consumers (United 
     States city average) for July 2021.
       ``(5) Rebate period cpi-u.--The term `rebate period CPI-U' 
     means, with respect to a rebate period, the consumer price 
     index for all urban consumers (United States city average) 
     for the last month of the rebate period.
       ``(6) Annual reconciliation of rebate amount.--The 
     Secretary shall, on an annual basis, conduct a one-time 
     reconciliation of the rebate amounts owed by a manufacturer 
     under this section based on any changes submitted by a PDP 
     sponsor of a prescription drug plan or an MA organization 
     offering an MA-PD plan to the number of units of a rebatable 
     covered part D drug dispensed during the preceding year. Such 
     reconciliation shall be completed not later than 6 months 
     after the date by which the Secretary reconciles payment for 
     covered part D drugs with PDP sponsors of prescription drug 
     plans or MA organizations offering MA-PD plans.
       ``(c) Treatment of Subsequently Approved Drugs.--Subject to 
     subsection (e)(2), in the case of a rebatable covered part D 
     drug first approved or licensed by the Food and Drug 
     Administration after July 1, 2021--
       ``(1) subparagraph (A)(ii) of subsection (b)(3) shall be 
     applied as if the term `benchmark CPI-U' were defined under 
     subsection (b)(4) as if the reference to `July 2021' under 
     such subsection were a reference to `the first month after 
     the last day of the six month period that begins on the day 
     on which the drug was first marketed'; and
       ``(2) subsection (b)(3) shall be applied by substituting, 
     for the benchmark unit-weighted price otherwise determined 
     under subparagraph (B) of such subsection, the benchmark 
     unit-weighted average price determined under paragraph (3) 
     for the rebate period;
       ``(3) the benchmark unit-weighted average price determined 
     under this paragraph for a rebate period, with respect to 
     each dosage form and strength of a rebatable covered part D 
     drug, is the sum of the products of--
       ``(A) the subsequently rebatable drug weighted average 
     price determined under paragraph (4) with respect to each 
     package size of such dosage form and strength of such drug 
     dispensed during the six month period that begins on the day 
     on which the drug was first marketed; and
       ``(B) the ratio of--
       ``(i) the total number of units of such package size 
     dispensed during the six month period that begins on the day 
     on which the drug was first marketed; to
       ``(ii) the total number of units of such dosage form and 
     strength of such drug dispensed during such six month period; 
     and
       ``(4) the subsequently rebatable drug weighted average 
     price, with respect to each package size of such dosage form 
     and strength of such rebatable covered part D drug dispensed 
     during the six month period that begins on the day on which 
     the drug was first marketed, is the sum of the products of--
       ``(A) each price, as calculated for a unit of such drug, 
     applicable to each package size of such dosage form and 
     strength of such drug during the six month period that begins 
     on the day on which the drug was first marketed; and
       ``(B) the ratio of--
       ``(i) the number of days for which each such price is 
     applicable during such six month period; to
       ``(ii) the total number of days in such six month period.
       ``(d) Rebate Deposits.--Amounts paid as rebates under 
     subsection (b) shall be deposited into the Federal 
     Supplementary Medical Insurance Trust Fund established under 
     section 1841.
       ``(e) Administration.--
       ``(1) Periodic audits.--The Secretary shall permit a 
     manufacturer of a rebatable covered part D drug to conduct 
     periodic audits, directly or through contracts, of the data 
     and information used to determine the rebate amount for such 
     drug under this section.
       ``(2) Special rules for calculation of benchmark unit-
     weighted price and benchmark-unit-weighted average price.--
       ``(A) Benchmark unit-weighted price.--In the case that the 
     benchmark unit-weighted price of a dosage form and strength 
     of a rebatable covered part D drug is determined under 
     subsection (b)(3)(B) to be $0 due to no units of such dosage 
     form and strength of such drug being dispensed on July 1, 
     2021, the Secretary may use a calculation, as determined 
     appropriate by the Secretary, to determine the benchmark-unit 
     weighted price for such dosage form and strength of such drug 
     that is different than the calculation described in such 
     subsection.
       ``(B) Benchmark unit-weighted average price.--In the case 
     that the benchmark unit-weighted average price of a dosage 
     form and strength of a rebatable covered part D drug 
     described under subsection (c) is determined under paragraph 
     (3) of such subsection to be $0 due to no units of such 
     dosage form and strength of such drug being dispensed during 
     the six month period that begins on the day on which the drug 
     was first marketed, the Secretary may use a calculation, as 
     determined appropriate by the Secretary, to determine the 
     benchmark-unit weighted average price for such dosage form 
     and strength of such drug that is different than the 
     calculation described in such paragraph.
       ``(3) Administration.--Chapter 35 of title 44, United 
     States Code, shall not apply to the program under this 
     section.
       ``(4) Judicial review.--There shall be no administrative or 
     judicial review under section 1869, section 1878, or 
     otherwise of the determination of the rebate amount under 
     subsection (b), including with respect to a subsequently 
     approved drug pursuant to subsection (c), including--
       ``(A) the determination of--
       ``(i) the total number of units of each rebatable covered 
     part D drug under subsection (b)(1)(A);
       ``(ii) the unit-weighted average price under subsection 
     (b)(2);
       ``(iii) the inflation-adjusted price under subsection 
     (b)(3);
       ``(iv) the benchmark unit-weighted average price under 
     subsection (c)(3); and
       ``(v) the subsequently rebatable drug weighted average 
     price under subsection (c)(4); and
       ``(B) the application of special rules for calculation of 
     benchmark unit-weighted price and benchmark unit-weighted 
     average price under paragraph (2) of this subsection.
       ``(f) Civil Money Penalty.--
       ``(1) In general.--The Secretary shall impose a civil money 
     penalty on a manufacturer that fails to comply with the 
     requirements under subsection (a)(2) with respect to 
     providing a rebate for a rebatable covered part D drug for a 
     rebate period for each such failure in an amount equal to the 
     sum of--
       ``(A) the rebate amount determined pursuant to subsection 
     (b) for such drug for such rebate period; and
       ``(B) 25 percent of such amount.
       ``(2) Application.--The provisions of section 1128A (other 
     than subsections (a) 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).
       ``(g) Rule of Construction.--Nothing in this section shall 
     be construed as having any effect on--
       ``(1) any formulary design under section 1860D-4(b)(3); or
       ``(2) any discounts provided under the coverage gap 
     discount program under section 1860D-14A or the manufacturer 
     catastrophic discount program under section 1860D-14B.
       ``(h) Rebate Agreement.--
       ``(1) In general.--The Secretary shall enter into 
     agreements described in paragraph (2) with manufacturers.
       ``(2) Terms of agreement.--

[[Page S4386]]

       ``(A) In general.--A rebate agreement under this paragraph 
     shall require the manufacturer to provide to the Secretary 
     rebates required under subsection (a)(2)(A) with respect to a 
     rebate period.
       ``(B) Manufacturer provision of price and drug product 
     information.--Each manufacturer with an agreement in effect 
     under this subsection shall report to the Secretary, with 
     respect to each rebatable covered part D drug of the 
     manufacturer, at a time specified by the Secretary--
       ``(i) for each calendar month under the rebate agreement--

       ``(I) each wholesale acquisition cost (as defined in 
     section 1847A(c)(6)) applicable during the month, applicable 
     to each National Drug Code for the dosage form and strength 
     of such rebatable covered part D drug; and
       ``(II) the number of days with respect to which each 
     wholesale acquisition cost reported was applicable;

       ``(ii) the wholesale acquisition cost (as so defined) 
     applicable on July 1, 2021, applicable to each National Drug 
     Code for the dosage form and strength of such rebatable 
     covered part D drug (or, in the case of a rebatable covered 
     part D drug first approved or licensed by the Food and Drug 
     Administration after July 1, 2021, each wholesale acquisition 
     cost applicable to each National Drug Code of each dosage 
     form and strength of the rebatable covered part D drug of the 
     manufacturer during the six month period that begins on the 
     day on which the drug was first marketed); and
       ``(iii) such other information as the Secretary shall 
     require.
     Information reported under this subparagraph is subject to 
     audit by the Inspector General of the Department of Health 
     and Human Services.
       ``(3) Civil money penalties.--The provisions of 
     subparagraph (C) of section 1927(b)(3) shall apply with 
     respect to information required pursuant to paragraph (2)(B) 
     of this subsection and the failure to provide such 
     information in the same manner and to the same extent as such 
     provisions apply with respect to information required under 
     subparagraph (A) of such section 1927(b)(3) and the failure 
     to provide such information.
       ``(4) Coordination.--The Secretary may coordinate rebate 
     agreements required under this subsection with agreements 
     required under section 1860D-14B.
       ``(i) Funding.--
       ``(1) In general.--There are appropriated to the Secretary, 
     from the Federal Supplementary Medical Insurance Trust Fund 
     established under section 1841--
       ``(A) for each of calendar years 2022 through 2027, 
     $4,000,000; and
       ``(B) for each subsequent calendar year, such sums as are 
     necessary to carry out this section.
       ``(2) Availability.--Amounts appropriated under paragraph 
     (1) shall remain available until expended.''.
       (b) Conforming Amendments.--
       (1) Section 1860D-43 of the Social Security Act (42 U.S.C. 
     1395w-153), as amended by section 121(g), is amended--
       (A) in subsection (a)--
       (i) in paragraph (5), by striking ``and'' at the end;
       (ii) in paragraph (6), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following new paragraph:
       ``(7) have entered into and have in effect an agreement 
     described in section 1860D-14C(h)(2) with the Secretary.'';
       (B) in subsection (b), by striking ``(6)'' and inserting 
     ``(7)''; and
       (C) in subsection (c), by striking ``(6)'' and inserting 
     ``(7)''.
       (2) Section 1927(c)(1)(C)(VI) of the Social Security Act 
     (42 U.S.C. 1396r-8(c)(1)(C)(VI)) is amended--
       (A) by striking ``or any discounts'' and inserting ``any 
     discounts''; and
       (B) by inserting ``, or any rebates under section 1860D-
     14C'' before the period.

     SEC. 126. PROHIBITING BRANDING ON PART D BENEFIT CARDS.

       (a) In General.--Section 1851(j)(2)(B) of the Social 
     Security Act (42 U.S.C. 1395w-21(j)(2)(B)) is amended by 
     striking ``co-branded network provider'' and inserting ``co-
     branded, co-owned, or affiliated network provider, pharmacy, 
     or pharmacy benefit manager''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to plan years beginning on or after January 1, 
     2024.

     SEC. 127. REQUIRING PRESCRIPTION DRUG PLANS AND MA-PD PLANS 
                   TO REPORT POTENTIAL FRAUD, WASTE, AND ABUSE TO 
                   THE SECRETARY OF HHS.

       Section 1860D-4 of the Social Security Act (42 U.S.C. 
     1395w-104) is amended by adding at the end the following new 
     subsection:
       ``(p) Reporting Potential Fraud, Waste, and Abuse.--
     Beginning January 1, 2023, the PDP sponsor of a prescription 
     drug plan shall report to the Secretary, as specified by the 
     Secretary--
       ``(1) any substantiated or suspicious activities (as 
     defined by the Secretary) with respect to the program under 
     this part as it relates to fraud, waste, and abuse; and
       ``(2) any steps made by the PDP sponsor after identifying 
     such activities to take corrective actions.''.

     SEC. 128. ESTABLISHMENT OF PHARMACY QUALITY MEASURES UNDER 
                   MEDICARE PART D.

       Section 1860D-4(c) of the Social Security Act (42 U.S.C. 
     1395w-104(c)), as amended by section 124, is amended by 
     adding at the end the following new paragraph:
       ``(8) Application of pharmacy quality measures.--
       ``(A) In general.--A PDP sponsor that makes incentive 
     payments to a pharmacy or receives price concessions paid by 
     a pharmacy based on quality measures shall, for the purposes 
     of such incentive payments or price concessions with respect 
     to covered part D drugs dispensed by such pharmacy, only use 
     measures--
       ``(i) established or adopted by the Secretary under 
     subparagraph (B), as listed under clause (ii) of such 
     subparagraph; and
       ``(ii) that are relevant to the performance of such 
     pharmacy with respect to areas that the pharmacy can impact.
       ``(B) Standard pharmacy quality measures.--
       ``(i) In general.--Notwithstanding any other provision of 
     law, the Secretary shall establish or adopt quality measures 
     from one or more multi-stakeholder, consensus organizations 
     to be used by a PDP sponsor for the purposes of determining 
     incentive payments and price concessions described in 
     subparagraph (A). Such measures shall be evidence-based and 
     focus on pharmacy performance on patient health outcomes and 
     other areas, as determined by the Secretary, that the 
     pharmacy can impact.
       ``(ii) Maintenance of list.--The Secretary shall maintain a 
     single list of measures established or adopted under this 
     subparagraph.
       ``(C) Effective date.--The requirement under subparagraph 
     (A) shall take effect for plan years beginning on January 1, 
     2024, or such earlier date specified by the Secretary if the 
     Secretary determines there are sufficient measures 
     established or adopted under subparagraph (B) for the 
     purposes of the requirement under subparagraph (A).''.

     SEC. 129. ADDITION OF NEW MEASURES BASED ON ACCESS TO 
                   BIOSIMILAR BIOLOGICAL PRODUCTS TO THE 5-STAR 
                   RATING SYSTEM UNDER MEDICARE ADVANTAGE.

       (a) In General.--Section 1853(o)(4) of the Social Security 
     Act (42 U.S.C. 1395w-23(o)(4)) is amended by adding at the 
     end the following new subparagraph:
       ``(E) Addition of new measures based on access to 
     biosimilar biological products.--
       ``(i) In general.--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:

       ``(I) Coverage.--Assessing whether a biosimilar biological 
     product is on the plan formulary in lieu of or in addition to 
     the reference biological product.
       ``(II) Preferencing.--Assessing tier placement or cost-
     sharing for a biosimilar biological product relative to the 
     reference biological product.
       ``(III) Utilization management tools.--Assessing whether 
     and how utilization management tools are used with respect to 
     a biosimilar biological product relative to the reference 
     biological product.
       ``(IV) Utilization.--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.

       ``(ii) Definitions.--In this subparagraph, the terms 
     `biosimilar biological product' and `reference biological 
     product' have the meaning given those terms in section 
     1847A(c)(6).
       ``(iii) Protecting patient interests.--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.''.
       (b) Clarification Regarding Application to Prescription 
     Drug Plans.--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 (42 U.S.C. 1395w-
     23(o)(4)), 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).

     SEC. 130. FAIRNESS IN THE CALCULATION OF THE PART D PREMIUM.

       (a) In General.--Section 1860D-13(a) of the Social Security 
     Act (42 U.S.C. 1395w-113(a)) is amended--
       (1) in paragraph (3)(A), by striking ``25.5 percent'' and 
     inserting ``the applicable percent (as specified in paragraph 
     (8))''; and
       (2) by adding at the end the following new paragraph:
       ``(8) Applicable percent.--For purposes of paragraph 
     (3)(A), the applicable percent specified in this paragraph 
     is--
       ``(A) for years prior to 2024, 25.5 percent; and
       ``(B) for 2024 and subsequent years, 24.5 percent.''.
       (b) Conforming Amendments.--
       (1) Subsidy.--Section 1860D-15(a) of the Social Security 
     Act (42 U.S.C. 1395w-115(a)) is

[[Page S4387]]

     amended, in the matter preceding paragraph (1), by inserting 
     ``(or, for 2022 and subsequent years, 75.5 percent)'' after 
     ``74.5 percent''.
       (2) Fallback area monthly beneficiary premium.--Section 
     1860D-11(g)(6) of the Social Security Act (42 U.S.C. 1395w-
     111(g)(6)) is amended by striking ``25.5 percent'' and 
     inserting ``the applicable percent (as specified in section 
     1860D-13(a)(8))''.
       (3) Income-related monthly adjustment amount (irmaa).--
     Section 1860D-13(a)(7)(B)(i)(II) of the Social Security Act 
     (42 U.S.C. 1395w-113(a)(7)(B)(i)(II)) is amended by striking 
     ``25.5 percent'' and inserting ``the applicable percent (as 
     specified in paragraph (8))''.

     SEC. 131. HHS STUDY AND REPORT ON THE INFLUENCE OF 
                   PHARMACEUTICAL MANUFACTURER THIRD-PARTY 
                   REIMBURSEMENT HUBS ON HEALTH CARE PROVIDERS WHO 
                   PRESCRIBE THEIR DRUGS AND BIOLOGICALS.

       (a) Study.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') 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.
       (2) Requirements.--The study under paragraph (1) shall 
     include an analysis of the following:
       (A) 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--
       (i) the operations of pharmaceutical manufacturer 
     distribution models that provide reimbursement hub services 
     for health care providers who prescribe the manufacturer's 
     products;
       (ii) Federal laws affecting these pharmaceutical 
     manufacturer distribution models; and
       (iii) 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.
       (B) Other areas determined appropriate by the Secretary.
       (b) Report.--Not later than July 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.
       (c) Consultation.--In conducting the study under subsection 
     (a) and preparing the report under subsection (b), the 
     Secretary shall consult with the Attorney General.

                       Subtitle C--Miscellaneous

     SEC. 141. DRUG MANUFACTURER PRICE TRANSPARENCY.

       Title XI of the Social Security Act (42 U.S.C. 1301 et 
     seq.) is amended by inserting after section 1128K the 
     following new section:

     ``SEC. 1128L. DRUG MANUFACTURER PRICE TRANSPARENCY.

       ``(a) In General.--
       ``(1) Determinations.--Beginning July 1, 2024, the 
     Secretary shall make determinations as to whether a drug is 
     an applicable drug as described in subsection (b).
       ``(2) Required justification.--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).
       ``(b) Applicable Drug Described.--
       ``(1) In general.--An applicable drug is described in this 
     subsection if it meets any of the following at the time of 
     the determination:
       ``(A) Large increase.--The drug (per dose)--
       ``(i) has a wholesale acquisition cost of at least $10; and
       ``(ii) had an increase in the wholesale acquisition cost, 
     with respect to determinations made--

       ``(I) during 2022, of at least 100 percent since the date 
     of the enactment of this section;
       ``(II) during 2023, of at least 100 percent in the 
     preceding 12 months or of at least 150 percent in the 
     preceding 24 months;
       ``(III) during 2024, of at least 100 percent in the 
     preceding 12 months or of at least 200 percent in the 
     preceding 36 months;
       ``(IV) during 2025, of at least 100 percent in the 
     preceding 12 months or of at least 250 percent in the 
     preceding 48 months; or
       ``(V) on or after January 1, 2026, of at least 100 percent 
     in the preceding 12 months or of at least 300 percent in the 
     preceding 60 months.

       ``(B) High spending with increase.--The drug--
       ``(i) 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
       ``(ii) per dose, had an increase in the wholesale 
     acquisition cost, with respect to determinations made--

       ``(I) during 2022, of at least 15 percent since the date of 
     the enactment of this section;
       ``(II) during 2023, of at least 15 percent in the preceding 
     12 months or of at least 20 percent in the preceding 24 
     months;
       ``(III) during 2024, of at least 15 percent in the 
     preceding 12 months or of at least 30 percent in the 
     preceding 36 months;
       ``(IV) during 2025, of at least 15 percent in the preceding 
     12 months or of at least 40 percent in the preceding 48 
     months; or
       ``(V) on or after January 1, 2026, of at least 15 percent 
     in the preceding 12 months or of at least 50 percent in the 
     preceding 60 months.

       ``(C) High launch price for new drugs.--In the case of a 
     drug that is marketed for the first time on or after January 
     1, 2022, 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.
       ``(2) Special rules.--
       ``(A) Authority of secretary to substitute percentages 
     within a de minimis range.--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.
       ``(B) Drugs with high launch prices annually report until a 
     therapeutic equivalent is available.--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.
       ``(3) Dose.--For purposes of applying paragraph (1), the 
     Secretary shall establish a definition of the term `dose'.
       ``(c) Justification Described.--
       ``(1) Increase in wac.--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:
       ``(A) The individual factors that have contributed to the 
     increase in the wholesale acquisition cost.
       ``(B) An explanation of the role of each factor in 
     contributing to such increase.
       ``(C) Total expenditures of the manufacturer on--
       ``(i) materials and manufacturing for such drug;
       ``(ii) acquiring patents and licensing for each drug of the 
     manufacturer; and
       ``(iii) costs to purchase or acquire the drug from another 
     company, if applicable.
       ``(D) The percentage of total expenditures of the 
     manufacturer on research and development for such drug that 
     was derived from Federal funds.
       ``(E) The total expenditures of the manufacturer on 
     research and development for such drug.
       ``(F) The total revenue and net profit generated from the 
     applicable drug for each calendar year since drug approval.
       ``(G) The total expenditures of the manufacturer that are 
     associated with marketing and advertising for the applicable 
     drug.
       ``(H) Additional information specific to the manufacturer 
     of the applicable drug, such as--
       ``(i) the total revenue and net profit of the manufacturer 
     for the period of such increase, as determined by the 
     Secretary;
       ``(ii) metrics used to determine executive compensation;
       ``(iii) any additional information related to drug pricing 
     decisions of the manufacturer, such as total expenditures 
     on--

       ``(I) drug research and development; or
       ``(II) clinical trials on drugs that failed to receive 
     approval by the Food and Drug Administration.

       ``(2) High launch price.--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).
       ``(d) Timing.--
       ``(1) Notification.--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.
       ``(2) Submission of justification.--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).
       ``(3) Posting on internet website.--
       ``(A) In general.--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

[[Page S4388]]

     the Centers for Medicare & 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.
       ``(B) Exclusion of proprietary information.--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).
       ``(e) Exception to Requirement for Submission.--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.
       ``(f) Penalties.--
       ``(1) Failure to submit timely justification.--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.
       ``(2) False information.--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.
       ``(3) Application of procedures.--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.
       ``(g) Definitions.--In this section:
       ``(1) Drug.--The term `drug' 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.
       ``(2) Manufacturer.--The term `manufacturer' has the 
     meaning given that term in section 1847A(c)(6)(A).
       ``(3) Wholesale acquisition cost.--The term `wholesale 
     acquisition cost' has the meaning given that term in section 
     1847A(c)(6)(B).''.

     SEC. 142. STRENGTHENING AND EXPANDING PHARMACY BENEFIT 
                   MANAGERS TRANSPARENCY REQUIREMENTS.

       Section 1150A of the Social Security Act (42 U.S.C. 1320b-
     23), as amended by section 122, is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``or'' at the end;
       (B) in paragraph (2), by striking the comma at the end and 
     inserting ``; or''; and
       (C) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) a State plan under title XIX, including a managed 
     care entity (as defined in section 1932(a)(1)(B)),'';
       (2) in subsection (b)--
       (A) in paragraph (2)--
       (i) by striking ``(excluding bona fide'' and all that 
     follows through ``patient education programs))''; and
       (ii) by striking ``aggregate amount of'' and inserting 
     ``aggregate amount and percentage of'';
       (B) in paragraph (3), by striking ``aggregate amount of'' 
     and inserting ``aggregate amount and percentage (defined as a 
     share of gross drug costs) of''; and
       (C) by adding at the end the following new paragraph:
       ``(4) 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--
       ``(A) PDP sponsors;
       ``(B) qualified health benefit plans;
       ``(C) managed care entities (as defined in section 
     1932(a)(1)(b)); and
       ``(D) drug manufacturers.'';
       (3) in subsection (c), by adding at the end the following 
     new paragraphs:
       ``(5) To States to carry out their administration and 
     oversight of the State plan under title XIX.
       ``(6) To the Federal Trade Commission to carry out section 
     5(a) of the Federal Trade Commission Act (15 U.S.C. 45a) and 
     any other relevant consumer protection or antitrust 
     authorities enforced by such Commission, including reviewing 
     proposed mergers in the prescription drug sector.
       ``(7) To assist the Department of Justice to carry out its 
     antitrust authorities, including reviewing proposed mergers 
     in the prescription drug sector.''; and
       (4) by adding at the end the following new subsection:
       ``(f) Annual OIG Evaluation and Report.--
       ``(1) Analysis.--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--
       ``(A) PBM rebates;
       ``(B) administrative fees;
       ``(C) the difference between what plans pay PBMs and what 
     PBMs pay pharmacies;
       ``(D) generic dispensing rates; and
       ``(E) other areas determined appropriate by the Inspector 
     General.
       ``(2) Report.--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.''.

     SEC. 143. PRESCRIPTION DRUG PRICING DASHBOARDS.

       Part A of title XI of the Social Security Act is amended by 
     adding at the end the following new section:

     ``SEC. 1150D. PRESCRIPTION DRUG PRICING DASHBOARDS.

       ``(a) In General.--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.
       ``(b) Medicare Part B Drug and Biological Dashboard.--
       ``(1) In general.--The dashboard established under 
     subsection (a) for part B of title XVIII shall provide the 
     information described in paragraph (2).
       ``(2) Information described.--The information described in 
     this paragraph is the following information with respect to 
     drug or biologicals covered under such part B:
       ``(A) The brand name and, if applicable, the generic names 
     of the drug or biological.
       ``(B) Consumer-friendly information on the uses and 
     clinical indications of the drug or biological.
       ``(C) The manufacturer or labeler of the drug or 
     biological.
       ``(D) To the extent feasible, the following information:
       ``(i) Average total spending per dosage unit of the drug or 
     biological in the most recent 2 calendar years for which data 
     is available.
       ``(ii) 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--

       ``(I) the preceding calendar year; and
       ``(II) the preceding 5 and 10 calendar years.

       ``(iii) 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.
       ``(iv) Total spending for the drug or biological for the 
     most recent calendar year for which data is available.
       ``(v) The number of beneficiaries receiving the drug or 
     biological in the most recent calendar year for which data is 
     available.
       ``(vi) Average spending on the drug per beneficiary for the 
     most recent calendar year for which data is available.
       ``(E) The average sales price of the drug or biological (as 
     determined under section 1847A) for the most recent quarter.
       ``(F) 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)).
       ``(G) For the most recent calendar year for which data is 
     available--
       ``(i) the 15 drugs and biologicals with the highest total 
     spending under such part; and
       ``(ii) 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.
       ``(H) 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).
       ``(c) Medicare Covered Part D Drug Dashboard.--
       ``(1) In general.--The dashboard established under 
     subsection (a) for part D of title XVIII shall provide the 
     information described in paragraph (2).
       ``(2) Information described.--The information described in 
     this paragraph is the following information with respect to 
     covered part D drugs under such part D:
       ``(A) The information described in subparagraphs (A) 
     through (D) of subsection (b)(2).
       ``(B) 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

[[Page S4389]]

     out-of-pocket costs for subsidy eligible individuals under 
     section 1860D-14.
       ``(C) Information on how to access resources as described 
     in sections 1860D-1(c) and 1851(d).
       ``(D) For the most recent calendar year for which data is 
     available--
       ``(i) the 15 covered part D drugs with the highest total 
     spending under such part; and
       ``(ii) 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.
       ``(E) 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).
       ``(d) Medicaid Covered Outpatient Drug Dashboard.--
       ``(1) In general.--The dashboard established under 
     subsection (a) for title XIX shall provide the information 
     described in paragraph (2).
       ``(2) Information described.--The information described in 
     this paragraph is the following information with respect to 
     covered outpatient drugs under such title:
       ``(A) The information described in subparagraphs (A) 
     through (D) of subsection (b)(2).
       ``(B) For the most recent calendar year for which data is 
     available, the 15 covered outpatient drugs with the highest 
     total spending under such title.
       ``(C) 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).
       ``(e) Data Files.--The Secretary shall make available the 
     underlying data for each dashboard established under 
     subsection (a) in a machine-readable format.''.

     SEC. 144. IMPROVING COORDINATION BETWEEN THE FOOD AND DRUG 
                   ADMINISTRATION AND THE CENTERS FOR MEDICARE & 
                   MEDICAID SERVICES.

       (a) In General.--
       (1) Public meeting.--
       (A) In general.--Not later than 12 months after the date of 
     the enactment of this Act, the Secretary of Health and Human 
     Services (referred to in this section as the ``Secretary'') 
     shall convene a public meeting for the purposes of discussing 
     and providing input on improvements to coordination between 
     the Food and Drug Administration and the Centers for Medicare 
     & Medicaid Services in preparing for the availability of 
     novel medical products described in subsection (c) on the 
     market in the United States.
       (B) Attendees.--The Secretary shall invite the following to 
     the public meeting:
       (i) Representatives of relevant Federal agencies, including 
     representatives from each of the medical product centers 
     within the Food and Drug Administration and representatives 
     from the coding, coverage, and payment offices within the 
     Centers for Medicare & Medicaid Services.
       (ii) Stakeholders with expertise in the research and 
     development of novel medical products, including 
     manufacturers of such products.
       (iii) Representatives of commercial health insurance 
     payers.
       (iv) Stakeholders with expertise in the administration and 
     use of novel medical products, including physicians.
       (v) Stakeholders representing patients and with expertise 
     in the utilization of patient experience data in medical 
     product development.
       (C) Topics.--The public meeting agenda shall include--
       (i) an overview of the types of products and product 
     categories in the drug and medical device development 
     pipeline and the volume of products which may meet the 
     description of a novel medical product under subsection (c);
       (ii) the anticipated expertise necessary to review the 
     safety and effectiveness of such products at the Food and 
     Drug Administration and current gaps in such expertise, if 
     any;
       (iii) the expertise necessary to make coding, coverage, and 
     payment decisions with respect to such products within the 
     Centers for Medicare & Medicaid Services, and current gaps in 
     such expertise, if any;
       (iv) trends in the differences in the data necessary to 
     determine the safety and effectiveness of a novel medical 
     product and the data necessary to determine whether a novel 
     medical product meets the reasonable and necessary 
     requirements for coverage and payment under title XVIII of 
     the Social Security Act pursuant to section 1862(a)(1)(A) of 
     such Act (42 U.S.C. 1395y(a)(1)(A));
       (v) the availability of information for sponsors of such 
     novel medical products to meet each of those requirements; 
     and
       (vi) the coordination of information related to significant 
     clinical improvement over existing therapies for patients 
     between the Food and Drug Administration and the Centers for 
     Medicare & Medicaid Services with respect to novel medical 
     products.
       (D) Trade secrets and confidential information.--Nothing 
     under this section shall be construed as authorizing the 
     Secretary to disclose any information that is a trade secret 
     or confidential information subject to section 552(b)(4) of 
     title 5, United States Code.
       (2) Improving transparency of criteria for medicare 
     coverage.--
       (A) Draft guidance.--Not later than 18 months after the 
     public meeting under paragraph (1), the Secretary shall 
     update the final guidance titled ``National Coverage 
     Determinations with Data Collection as a Condition of 
     Coverage: Coverage with Evidence Development'' to address any 
     opportunities to improve the availability and coordination of 
     information as described in clauses (iv) through (vi) of 
     paragraph (1)(C).
       (B) Final guidance.--Not later than 12 months after issuing 
     draft guidance under subparagraph (A), the Secretary shall 
     finalize the updated guidance to address any such 
     opportunities.
       (b) Report on Coding, Coverage, and Payment Processes Under 
     Medicare for Novel Medical Products.--Not later than 12 
     months after the date of the enactment of this Act, the 
     Secretary shall publish a report on the Internet website of 
     the Department of Health and Human Services regarding 
     processes under the Medicare program under title XVIII of the 
     Social Security Act (42 U.S.C. 1395 et seq.) with respect to 
     the coding, coverage, and payment of novel medical products 
     described in subsection (c). Such report shall include the 
     following:
       (1) A description of challenges in the coding, coverage, 
     and payment processes under the Medicare program for novel 
     medical products.
       (2) Recommendations to--
       (A) incorporate patient experience data (such as the impact 
     of a disease or condition on the lives of patients and 
     patient treatment preferences) into the coverage and payment 
     processes within the Centers for Medicare & Medicaid 
     Services;
       (B) decrease the length of time to make national and local 
     coverage determinations under the Medicare program (as those 
     terms are defined in subparagraphs (A) and (B), respectively, 
     of section 1862(l)(6) of the Social Security Act (42 U.S.C. 
     1395y(l)(6));
       (C) streamline the coverage process under the Medicare 
     program and incorporate input from relevant stakeholders into 
     such coverage determinations; and
       (D) identify potential mechanisms to incorporate novel 
     payment designs similar to those in development in commercial 
     insurance plans and State plans under title XIX of such Act 
     (42 U.S.C. 1396 et seq.) into the Medicare program.
       (c) Novel Medical Products Described.--For purposes of this 
     section, a novel medical product described in this subsection 
     is a drug, including a biological product (including gene and 
     cell therapy), or medical device, that has been designated as 
     a breakthrough therapy under section 506(a) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 356(a)), a 
     breakthrough device under section 515B of such Act (21 U.S.C. 
     360e-3), or a regenerative advanced therapy under section 
     506(g) of such Act (21 U.S.C. 356(g)).

     SEC. 145. PATIENT CONSULTATION IN MEDICARE NATIONAL AND LOCAL 
                   COVERAGE DETERMINATIONS IN ORDER TO MITIGATE 
                   BARRIERS TO INCLUSION OF SUCH PERSPECTIVES.

       Section 1862(l) of the Social Security Act (42 U.S.C. 
     1395y(l)) is amended by adding at the end the following new 
     paragraph:
       ``(7) Patient consultation in national and local coverage 
     determinations.--With respect to national coverage 
     determinations, the Secretary, and with respect to local 
     coverage determinations, the Medicare administrative 
     contractor, may consult with patients and organizations 
     representing patients, including patients with disabilities, 
     in making national and local coverage determinations.''.

     SEC. 146. GAO STUDY ON INCREASES TO MEDICARE AND MEDICAID 
                   SPENDING DUE TO COPAYMENT COUPONS AND OTHER 
                   PATIENT ASSISTANCE PROGRAMS.

       (a) Study.--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:
       (1) The extent to which copayment coupons and other patient 
     assistance programs contribute to inflated prescription drug 
     prices under such programs.
       (2) 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 (42 U.S.C. 1395w-101 et seq.) on utilization of 
     higher-cost brand drugs and lower utilization of generic 
     drugs in that program.
       (3) The extent to which manufacturers report or obtain tax 
     benefits, including deductions of business expenses and 
     charitable contributions, for any of the following:
       (A) Offering copayment coupons or other patient assistance 
     programs.
       (B) Sponsoring manufacturer patient assistance programs.
       (C) Paying for sponsorships at outreach and advocacy events 
     organized by patient assistance programs.
       (4) 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.
       (b) Definitions.--In this section:

[[Page S4390]]

       (1) Independent charity patient assistance program.--The 
     term ``independent charity patient assistance program'' means 
     any organization described in section 501(c)(3) 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.
       (2) Manufacturer.--The term ``manufacturer'' has the 
     meaning given that term in section 1927(k)(5) of the Social 
     Security Act (42 U.S.C. 1396r-8(k)(5)).
       (3) Manufacturer patient assistance program.--The term 
     ``manufacturer patient assistance program'' 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.
       (4) Patient assistance.--The term ``patient assistance'' 
     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.
       (c) Report.--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).

     SEC. 147. MEDPAC REPORT ON SHIFTING COVERAGE OF CERTAIN 
                   MEDICARE PART B DRUGS TO MEDICARE PART D.

       (a) Study.--The Medicare Payment Advisory Commission (in 
     this section referred to as the ``Commission'') shall conduct 
     a study on shifting coverage of certain drugs and biologicals 
     for which payment is currently made under part B of title 
     XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) to 
     part D of such title (42 U.S.C. 1395w-21 et seq.). Such study 
     shall include an analysis of--
       (1) differences in program structures and payment methods 
     for drugs and biologicals covered under such parts B and D, 
     including effects of such a shift on program spending, 
     beneficiary cost-sharing liability, and utilization 
     management techniques for such drugs and biologicals; and
       (2) the feasibility and policy implications of shifting 
     coverage of drugs and biologicals for which payment is 
     currently made under such part B to such part D.
       (b) Report.--
       (1) In general.--Not later than June 30, 2023, the 
     Commission shall submit to Congress a report containing the 
     results of the study conducted under subsection (a).
       (2) Contents.--The report under paragraph (1) shall include 
     information, and recommendations as the Commission deems 
     appropriate, regarding--
       (A) formulary design under such part D;
       (B) the ability of the benefit structure under such part D 
     to control total spending on drugs and biologicals for which 
     payment is currently made under such part B;
       (C) changes to the bid process under such part D, if any, 
     that may be necessary to integrate coverage of such drugs and 
     biologicals into such part D; and
       (D) any other changes to the program that Congress should 
     consider in determining whether to shift coverage of such 
     drugs and biologicals from such part B to such part D.

     SEC. 148. TAKING STEPS TO FULFILL TREATY OBLIGATIONS TO 
                   TRIBAL COMMUNITIES.

       (a) GAO Study.--The Comptroller General shall conduct a 
     study regarding access to, and the cost of, prescription 
     drugs among Indians. The study shall include--
       (1) a review of what Indian health programs pay for 
     prescription drugs on reservations, in urban centers, and in 
     Tribal communities relative to other consumers;
       (2) 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 (42 
     U.S.C. 1396r-8) with prescription drug discounts available to 
     Tribal communities through the purchased/referred care 
     program of the Indian Health Service for physician 
     administered drugs; and
       (3) 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 (42 
     U.S.C. 1395w-101 et seq.) and recommendations to improve 
     enrollment among Indians in that program.
       (b) Report.--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.
       (c) Definitions.--In this section:
       (1) Comptroller general.--The term ``Comptroller General'' 
     means the Comptroller General of the United States.
       (2) Indian; indian health program; indian tribe.--The terms 
     ``Indian'', ``Indian health program'', and ``Indian tribe'' 
     have the meanings given those terms in section 4 of the 
     Indian Health Care Improvement Act (25 U.S.C. 1603).

                TITLE II--MEDICAID DRUG PRICING REFORMS

     SEC. 201. MEDICAID PHARMACY AND THERAPEUTICS COMMITTEE 
                   IMPROVEMENTS.

       (a) In General.--Subparagraph (A) of section 1927(d)(4) of 
     the Social Security Act (42 U.S.C. 1396r-8(d)(4)) is amended 
     to read as follows:
       ``(A)(i) The formulary is developed and reviewed by a 
     pharmacy and therapeutics committee consisting of physicians, 
     pharmacists, and other appropriate individuals appointed by 
     the Governor of the State.
       ``(ii) Subject to clause (vi), the State establishes and 
     implements a conflict of interest policy for the pharmacy and 
     therapeutics committee that--
       ``(I) is publicly accessible;
       ``(II) requires all committee members to complete, on at 
     least an annual basis, a disclosure of relationships, 
     associations, and financial dealings that may affect their 
     independence of judgement in committee matters; and
       ``(III) contains clear processes, such as recusal from 
     voting or discussion, for those members who report a conflict 
     of interest, along with appropriate processes to address any 
     instance where a member fails to report a conflict of 
     interest.
       ``(iii) The membership of the pharmacy and therapeutics 
     committee--
       ``(I) is made publicly available;
       ``(II) is composed of members who are independent and free 
     of any conflict, including with respect to manufacturers, 
     medicaid managed care entities, and pharmacy benefit 
     managers; and
       ``(III) includes at least 1 actively practicing physician 
     and at least 1 actively practicing pharmacist, each of whom 
     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.
       ``(iv) At the option of the State, the State's drug use 
     review board established under subsection (g)(3) may serve as 
     the pharmacy and therapeutics committee provided the State 
     ensures that such board meets the requirements of clauses 
     (ii) and (iii).
       ``(v) The State reviews and has final approval of the 
     formulary established by the pharmacy and therapeutics 
     committee.
       ``(vi) If the Secretary determines it appropriate or 
     necessary based on the findings and recommendations of the 
     Comptroller General of the United States in the report 
     submitted to Congress under section 203 of the Prescription 
     Drug Pricing Reduction Act of 2022, the Secretary shall issue 
     guidance that States must follow for establishing conflict of 
     interest policies for the pharmacy and therapeutics committee 
     in accordance with the requirements of clause (ii), including 
     appropriate standards and requirements for identifying, 
     addressing, and reporting on conflicts of interest.''.
       (b) Application to Medicaid Managed Care Organizations.--
       (1) In general.--Clause (xiii) of section 1903(m)(2)(A) of 
     the Social Security Act (42 U.S.C. 1396b(m)(2)(A)) is 
     amended--
       (A) by striking ``and (III)'' and inserting ``(III)'';
       (B) by striking the period at the end and inserting ``, and 
     (IV) any formulary used by the entity for covered outpatient 
     drugs dispensed to individuals eligible for medical 
     assistance who are enrolled with the entity is developed and 
     reviewed by a pharmacy and therapeutics committee that meets 
     the requirements of clauses (ii) and (iii) of section 
     1927(d)(4)(A).''; and
       (C) by moving the left margin 2 ems to the left.
       (2) Application to pihps and pahps.--Section 1903(m) of the 
     Social Security Act (42 U.S.C. 1396b(m)) is amended by adding 
     at the end the following new paragraph:
       ``(10) No payment shall be made under this title to a State 
     with respect to expenditures incurred by the State for 
     payment for services provided by an other specified entity 
     (as defined in paragraph (9)(D)(iii)) unless such services 
     are provided in accordance with a contract between the State 
     and the entity which satisfies the requirements of paragraph 
     (2)(A)(xiii).''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date that is 1 year after the date 
     of enactment of this Act.

     SEC. 202. IMPROVING REPORTING REQUIREMENTS AND DEVELOPING 
                   STANDARDS FOR THE USE OF DRUG USE REVIEW BOARDS 
                   IN STATE MEDICAID PROGRAMS.

       (a) In General.--Section 1927(g)(3) of the Social Security 
     Act (42 U.S.C. 1396r-8(g)(3)) is amended--
       (1) by amending subparagraph (B) to read as follows:
       ``(B) Membership.--
       ``(i) In general.--The membership of the DUR Board shall 
     include health care professionals who have recognized 
     knowledge and expertise in one or more of the following:

       ``(I) The clinically appropriate prescribing of covered 
     outpatient drugs.
       ``(II) The clinically appropriate dispensing and monitoring 
     of covered outpatient drugs.
       ``(III) Drug use review, evaluation, and intervention.
       ``(IV) Medical quality assurance.

       ``(ii) Membership requirements.--The membership of the DUR 
     Board shall--

       ``(I) be made publicly available;
       ``(II) be composed of members who are independent and free 
     of any conflict, including with respect to manufacturers, 
     medicaid managed care entities, and pharmacy benefit 
     managers;

[[Page S4391]]

       ``(III) be made up of at least \1/3\ but no more than 51 
     percent members who are licensed and actively practicing 
     physicians and at least \1/3\ members who are licensed and 
     actively practicing pharmacists; and
       ``(IV) include at least 1 actively practicing physician and 
     at least 1 actively practicing pharmacist, each of whom 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.

       ``(iii) Conflict of interest policy.--The State shall 
     establish and implement a conflict of interest policy for the 
     DUR Board that--

       ``(I) is publicly accessible;
       ``(II) 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
       ``(III) contains clear processes, such as recusal from 
     voting or discussion, for those members who report a conflict 
     of interest, along with appropriate processes to address any 
     instance where a member fails to report a conflict of 
     interest.''; and

       (2) by adding at the end the following new subparagraph:
       ``(E) DUR board membership reports.--
       ``(i) DUR board reports.--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.
       ``(ii) Inclusion of dur board membership information in 
     state reports.--Each annual State report to the Secretary 
     required under subparagraph (D) shall include--

       ``(I) the number of individuals serving on the State's DUR 
     Board;
       ``(II) the names and professions of the individuals serving 
     on such DUR Board;
       ``(III) 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
       ``(IV) 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).''.

       (b) Managed Care Requirements.--Section 1932(i) of the 
     Social Security Act (42 U.S.C. 1396u-2(i)) is amended--
       (1) by inserting ``and each contract under a State plan 
     with an other specified entity (as defined in section 
     1903(m)(9)(D)(iii))'' after ``under section 1903(m)'';
       (2) by striking ``section 483.3(s)(4)'' and inserting 
     ``section 438.3(s)(4)'';
       (3) by striking ``483.3(s)(5)'' and inserting 
     ``438.3(s)(5)''; and
       (4) by adding at the end the following: ``Such a managed 
     care entity or other specified 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.''.
       (c) Development of National Standards for Medicaid Drug Use 
     Review.--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 (42 U.S.C. 1396r-8(g)) and 
     drug utilization review activities and requirements under 
     section 1932(i) of such Act (42 U.S.C. 1396u-2(i)), for the 
     purpose of aligning review criteria for prospective and 
     retrospective drug use review across all State Medicaid 
     programs.
       (d) CMS Guidance.--Not later than 18 months after the date 
     of enactment of this Act, the Secretary of Health and Human 
     Services shall issue guidance--
       (1) 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 (42 U.S.C. 1396r-8(g)) and 
     drug utilization review activities and requirements under 
     section 1932(i) of such Act (42 U.S.C. 1396u-2(i)) (including 
     with respect to requirements that were in effect before the 
     date of enactment of this Act); and
       (2) describing the actions that the Secretary will take to 
     enforce such requirements.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the date that is 18 months after the 
     date of enactment of this Act.

     SEC. 203. GAO REPORT ON CONFLICTS OF INTEREST IN STATE 
                   MEDICAID PROGRAM DRUG USE REVIEW BOARDS AND 
                   PHARMACY AND THERAPEUTICS (P&T) COMMITTEES.

       (a) Investigation.--The Comptroller General of the United 
     States shall conduct an investigation of potential or 
     existing conflicts of interest among members of State 
     Medicaid program State drug use review boards (in this 
     section referred to as ``DUR Boards'') and pharmacy and 
     therapeutics committees (in this section referred to as ``P&T 
     Committees'').
       (b) Report.--Not later than 24 months after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to Congress a report on the investigation conducted under 
     subsection (a) that includes the following:
       (1) A description outlining how DUR Boards and P&T 
     Committees operate in States, including details with respect 
     to--
       (A) the structure and operation of DUR Boards and statewide 
     P&T Committees;
       (B) States that operate separate P&T Committees for their 
     fee-for-service Medicaid program and their Medicaid managed 
     care organizations or other Medicaid managed care 
     arrangements (including other specified entities (as defined 
     in section 1903(m)(9)(D)(iii) of the Social Security Act (42 
     U.S.C. 1396b(m)(9)(D)(iii)) and collectively referred to in 
     this section as ``Medicaid MCOs''); and
       (C) States that allow Medicaid MCOs to have their own P&T 
     Committees and the extent to which pharmacy benefit managers 
     administer or participate in such P&T Committees.
       (2) A description outlining the differences between DUR 
     Boards established in accordance with section 1927(g)(3) of 
     the Social Security Act (42 U.S.C. 1396r(g)(3)) and P&T 
     Committees.
       (3) A description outlining the tools P&T Committees may 
     use to determine Medicaid drug coverage and utilization 
     management policies.
       (4) An analysis of whether and how States or P&T Committees 
     establish participation and independence requirements for DUR 
     Boards and P&T Committees, including with respect to entities 
     with connections with drug manufacturers, State Medicaid 
     programs, managed care organizations, and other entities or 
     individuals in the pharmaceutical industry.
       (5) A description outlining how States, DUR Boards, or P&T 
     Committees define conflicts of interest.
       (6) A description of how DUR Boards and P&T Committees 
     address conflicts of interest, including who is responsible 
     for implementing such policies.
       (7) A description of the tools, if any, States use to 
     ensure that there are no conflicts of interest on DUR Boards 
     and P&T Committees.
       (8) An analysis of the effectiveness of tools States use to 
     ensure that there are no conflicts of interest on DUR Boards 
     and P&T Committees and, if applicable, recommendations as to 
     how such tools could be improved.
       (9) A review of strategies States may use to guard against 
     conflicts of interest on DUR Boards and P&T Committees and to 
     ensure compliance with the requirements of titles XI and XIX 
     of the Social Security Act (42 U.S.C. 1301 et seq., 1396 et 
     seq.) and access to effective, clinically appropriate, and 
     medically necessary drug treatments for Medicaid 
     beneficiaries, including recommendations for such legislative 
     and administrative actions as the Comptroller General 
     determines appropriate.

     SEC. 204. ENSURING THE ACCURACY OF MANUFACTURER PRICE AND 
                   DRUG PRODUCT INFORMATION UNDER THE MEDICAID 
                   DRUG REBATE PROGRAM.

       (a) Audit of Manufacturer Price and Drug Product 
     Information.--
       (1) In general.--Subparagraph (B) of section 1927(b)(3) of 
     the Social Security Act (42 U.S.C. 1396r-8(b)(3)) is amended 
     to read as follows:
       ``(B) Audits and surveys of manufacturer price and drug 
     product information.--
       ``(i) Audits.--The Secretary shall conduct regular audits 
     of the price and drug product information reported by 
     manufacturers under subparagraph (A) for the most recently 
     ended rebate period to ensure the accuracy and timeliness of 
     such information. In conducting such audits, the Secretary 
     may employ evaluations, surveys, statistical sampling, 
     predictive analytics and other relevant tools and methods.
       ``(ii) Verifications surveys of average manufacturer price 
     and manufacturer's average sales price.--In addition to the 
     audits required under clause (i), the Secretary may survey 
     wholesalers and manufacturers (including manufacturers that 
     directly distribute their covered outpatient drugs (in this 
     subparagraph referred to as `direct sellers')), when 
     necessary, to verify manufacturer prices and manufacturer's 
     average sales prices (including wholesale acquisition cost) 
     to make payment reported under subparagraph (A).
       ``(iii) Penalties.--In addition to other penalties as may 
     be prescribed by law, including under subparagraph (C) of 
     this paragraph, the Secretary may impose a civil monetary 
     penalty in an amount not to exceed $185,000 on an annual 
     basis on a wholesaler, manufacturer, or direct seller, if the 
     wholesaler, manufacturer, or direct seller of a covered 
     outpatient drug refuses a request for information about 
     charges or prices by the Secretary in connection with an 
     audit or survey under this subparagraph or knowingly provides 
     false information. The provisions of section 1128A (other 
     than subsections (a) (with respect to amounts of penalties or 
     additional assessments) and (b)) shall apply to a civil money 
     penalty under this clause in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A(a).
       ``(iv) Reports.--

[[Page S4392]]

       ``(I) Report to congress.--The Secretary shall, not later 
     than 18 months after date of enactment of this subparagraph, 
     submit a report to the Committee on Energy and Commerce of 
     the House of Representatives and the Committee on Finance of 
     the Senate regarding additional regulatory or statutory 
     changes that may be required in order to ensure accurate and 
     timely reporting and oversight of manufacturer price and drug 
     product information, including whether changes should be made 
     to reasonable assumption requirements to ensure such 
     assumptions are reasonable and accurate or whether another 
     methodology for ensuring accurate and timely reporting of 
     price and drug product information should be considered to 
     ensure the integrity of the drug rebate program under this 
     section.
       ``(II) Annual reports.--The Secretary shall, on at least an 
     annual basis, submit a report to the Committee on Energy and 
     Commerce of the House of Representatives and the Committee on 
     Finance of the Senate summarizing the results of the audits 
     and surveys conducted under this subparagraph during the 
     period that is the subject of the report.
       ``(III) Content.--Each report submitted under subclause 
     (II) shall, with respect to the period that is the subject of 
     the report, include summaries of--

       ``(aa) error rates in the price, drug product, and other 
     relevant information supplied by manufacturers under 
     subparagraph (A);
       ``(bb) the timeliness with which manufacturers, 
     wholesalers, and direct sellers provide information required 
     under subparagraph (A) or under clause (i) or (ii) of this 
     subparagraph;
       ``(cc) the number of manufacturers, wholesalers, and direct 
     sellers and drug products audited under this subparagraph;
       ``(dd) the types of price and drug product information 
     reviewed under the audits conducted under this subparagraph;
       ``(ee) the tools and methodologies employed in such audits;
       ``(ff) the findings of such audits, including which 
     manufacturers, if any, were penalized under this 
     subparagraph; and
       ``(gg) such other relevant information as the Secretary 
     shall deem appropriate.

       ``(IV) Protection of information.--In preparing a report 
     required under subclause (II), the Secretary shall redact 
     such proprietary information as the Secretary determines 
     appropriate to prevent disclosure of, and to safeguard, such 
     information.

       ``(v) Appropriations.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to the 
     Secretary $2,000,000 for fiscal year 2022 and each fiscal 
     year thereafter to carry out this subparagraph.''.
       (2) Effective date.--The amendments made by this subsection 
     shall take effect on the first day of the first fiscal 
     quarter that begins after the date of enactment of this Act.
       (b) Increased Penalties for Noncompliance With Reporting 
     Requirements.--
       (1) Increased penalty for failure to provide timely 
     information.--Section 1927(b)(3)(C)(i) of the Social Security 
     Act (42 U.S.C. 1396r-8(b)(3)(C)(i)) is amended by striking 
     ``increased by $10,000 for each day in which such information 
     has not been provided and such amount shall be paid to the 
     Treasury'' and inserting ``, for each covered outpatient drug 
     with respect to which such information is not provided, 
     $50,000 for the first day that such information is not 
     provided on a timely basis and $19,000 for each subsequent 
     day that such information is not provided (with such amounts 
     being paid to the Treasury),''.
       (2) Increased penalty for knowingly reporting false 
     information.--Section 1927(b)(3)(C)(ii) of the Social 
     Security Act (42 U.S.C. 1396r-8(b)(3)(C)(ii)) is amended by 
     striking ``$100,000'' and inserting ``$500,000''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on the first day of the first fiscal 
     quarter that begins after the date of enactment of this Act.
       (c) Rule of Construction.--Nothing in this section or the 
     amendments made by this section shall be construed to affect 
     the application of the Federal Civil Penalties Inflation 
     Adjustment Act of 1990 (28 U.S.C. 2461 note) to any civil 
     penalty amount under section 1927 of the Social Security Act 
     (42 U.S.C. 1396r-8).

     SEC. 205. APPLYING MEDICAID DRUG REBATE REQUIREMENT TO DRUGS 
                   PROVIDED AS PART OF OUTPATIENT HOSPITAL 
                   SERVICES.

       (a) In General.--Section 1927(k)(3) of the Social Security 
     Act (42 U.S.C. 1396r-8(k)(3)) is amended to read as follows:
       ``(3) Limiting definition.--
       ``(A) In general.--The term `covered outpatient drug' does 
     not include any drug, biological product, or insulin provided 
     as part of, or as incident to and in the same setting as, any 
     of the following (and for which payment may be made under 
     this title as part of payment for the following and not as 
     direct reimbursement for the drug):
       ``(i) Inpatient hospital services.
       ``(ii) Hospice services.
       ``(iii) Dental services, except that drugs for which the 
     State plan authorizes direct reimbursement to the dispensing 
     dentist are covered outpatient drugs.
       ``(iv) Physicians' services.
       ``(v) Outpatient hospital services.
       ``(vi) Nursing facility services and services provided by 
     an intermediate care facility for the mentally retarded.
       ``(vii) Other laboratory and x-ray services.
       ``(viii) Renal dialysis.
       ``(B) Other exclusions.--Such term also does not include 
     any such drug or product for which a National Drug Code 
     number is not required by the Food and Drug Administration or 
     a drug or biological used for a medical indication which is 
     not a medically accepted indication.
       ``(C) State option.--At the option of a State, such term 
     may include any drug, biological product, or insulin provided 
     on an outpatient basis as part of, or as incident to and in 
     the same setting as, services 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).
       ``(D) No effect on best price.--Any drug, biological 
     product, or insulin excluded from the definition of such term 
     as a result of this paragraph shall be treated as a covered 
     outpatient drug for purposes of determining the best price 
     (as defined in subsection (c)(1)(C)) for such drug, 
     biological product, or insulin.''.
       (b) Effective Date; Implementation Guidance.--
       (1) In general.--The amendment made by subsection (a) shall 
     take effect on the date that is 1 year after the date of 
     enactment of this Act.
       (2) Implementation and guidance.--Not later than 1 year 
     after the date of enactment of this Act, the Secretary of 
     Health and Human Services shall issue guidance and relevant 
     informational bulletins for States, manufacturers (as defined 
     in section 1927(k)(5) of the Social Security Act (42 U.S.C. 
     1396r-8(k)(5)), and other relevant stakeholders, including 
     health care providers, regarding implementation of the 
     amendment made by subsection (a).

     SEC. 206. IMPROVING TRANSPARENCY AND PREVENTING THE USE OF 
                   ABUSIVE SPREAD PRICING AND RELATED PRACTICES IN 
                   MEDICAID.

       (a) Pass-Through Pricing Required.--
       (1) In general.--Section 1927(e) of the Social Security Act 
     (42 U.S.C. 1396r-8(e)) is amended by adding at the end the 
     following:
       ``(6) Pass-through pricing required.--A contract between 
     the State and a pharmacy benefit manager (referred to in this 
     paragraph as a `PBM'), or a contract between the State and a 
     managed care entity or other specified entity (as such terms 
     are defined in section 1903(m)(9)(D)) that includes 
     provisions making the entity responsible for coverage of 
     covered outpatient drugs dispensed to individuals enrolled 
     with the entity, shall require that payment for such drugs 
     (excluding, at the option of the State, any drug that is 
     subject to an agreement under section 340B of the Public 
     Health Service Act) and related administrative services (as 
     applicable), including payments made by a PBM on behalf of 
     the State or entity, is based on a pass-through pricing model 
     under which--
       ``(A) any payment made by the entity or the PBM (as 
     applicable) for such a drug--
       ``(i) is limited to--

       ``(I) ingredient cost; and
       ``(II) a professional dispensing fee that is not less than 
     the professional dispensing fee that the State plan or waiver 
     would pay if the plan or waiver was making the payment 
     directly;

       ``(ii) is passed through in its entirety by the entity or 
     PBM to the pharmacy that dispenses the drug; and
       ``(iii) is made in a manner that is consistent with section 
     1902(a)(30)(A) and sections 447.512, 447.514, and 447.518 of 
     title 42, Code of Federal Regulations (or any successor 
     regulation) as if such requirements applied directly to the 
     entity or the PBM;
       ``(B) payment to the entity or the PBM (as applicable) for 
     administrative services performed by the entity or PBM is 
     limited to a reasonable administrative fee that covers the 
     reasonable cost of providing such services;
       ``(C) the entity or the PBM (as applicable) shall make 
     available to the State, and the Secretary upon request, all 
     costs and payments related to covered outpatient drugs and 
     accompanying administrative services incurred, received, or 
     made by the entity or the PBM, including ingredient costs, 
     professional dispensing fees, administrative fees, post-sale 
     and post-invoice fees, discounts, or related adjustments such 
     as direct and indirect remuneration fees, and any and all 
     other remuneration; and
       ``(D) any form of spread pricing whereby any amount charged 
     or claimed by the entity or the PBM (as applicable) is in 
     excess of the amount paid to the pharmacies on behalf of the 
     entity, including any post-sale or post-invoice fees, 
     discounts, effective rate contract adjustments, or related 
     adjustments such as direct and indirect remuneration fees or 
     assessments (after allowing for a reasonable administrative 
     fee as described in subparagraph (B)) is not allowable for 
     purposes of claiming Federal matching payments under this 
     title.''.
       (2) Conforming amendment.--Section 1903(m)(2)(A)(xiii) of 
     such Act (42 U.S.C. 1396b(m)(2)(A)(xiii)), as amended by 
     section 201(b)(1), is amended--
       (A) by striking ``and (IV)'' and inserting ``(IV)''; and
       (B) by inserting before the period at the end the 
     following: ``, and (V) pharmacy benefit management services 
     provided by the entity, or provided by a pharmacy benefit 
     manager on behalf of the entity under a contract or other 
     arrangement between the entity and the pharmacy benefit 
     manager, shall

[[Page S4393]]

     comply with the requirements of section 1927(e)(6)''.
       (3) Effective date.--The amendments made by this subsection 
     apply to contracts between States and managed care entities, 
     other specified entities, or pharmacy benefits managers that 
     are entered into or renewed on or after the date that is 18 
     months after the date of enactment of this Act.
       (b) Survey of Retail Prices.--
       (1) In general.--Section 1927(f) of the Social Security Act 
     (42 U.S.C. 1396r-8(f)) is amended--
       (A) by striking ``and'' after the semicolon at the end of 
     paragraph (1)(A)(i) and all that precedes it through ``(1)'' 
     and inserting the following:
       ``(1) Survey of retail prices.--The Secretary shall conduct 
     a survey of retail community drug prices, to include at least 
     the national average drug acquisition cost, as follows:
       ``(A) Use of vendor.--The Secretary may contract services 
     for--
       ``(i) with respect to retail community pharmacies, the 
     determination on a monthly basis of retail survey prices of 
     the national average drug acquisition cost for covered 
     outpatient drugs for such pharmacies, net of all discounts 
     and rebates (to the extent any information with respect to 
     such discounts and rebates is available), the average 
     reimbursement received for such drugs by such pharmacies from 
     all sources of payment, including third parties, and, to the 
     extent available, the usual and customary charges to 
     consumers for such drugs; and'';
       (B) by adding at the end of paragraph (1) the following:
       ``(F) Survey reporting.--In order to meet the requirement 
     of section 1902(a)(54), a State shall require that any retail 
     community pharmacy in the State that receives any payment, 
     administrative fee, discount, or rebate related to the 
     dispensing of covered outpatient drugs to individuals 
     receiving benefits under this title, regardless of whether 
     such payment, fee, discount, or rebate is received from the 
     State or a managed care entity directly or from a pharmacy 
     benefit manager or another entity that has a contract with 
     the State or a managed care entity or other specified entity 
     (as such terms are defined in section 1903(m)(9)(D)), shall 
     respond to surveys of retail prices conducted under this 
     subsection.
       ``(G) Survey information.--Information on retail community 
     prices obtained under this paragraph shall be made publicly 
     available and shall include at least the following:
       ``(i) The monthly response rate of the survey including a 
     list of pharmacies not in compliance with subparagraph (F).
       ``(ii) The sampling frame and number of pharmacies sampled 
     monthly.
       ``(iii) Characteristics of reporting pharmacies, including 
     type (such as independent or chain), geographic or regional 
     location, and dispensing volume.
       ``(iv) Reporting of a separate national average drug 
     acquisition cost for each drug for independent retail 
     pharmacies and chain operated pharmacies.
       ``(v) Information on price concessions including on and off 
     invoice discounts, rebates, and other price concessions.
       ``(vi) Information on average professional dispensing fees 
     paid.
       ``(H) Penalties.--
       ``(i) Failure to provide timely information.--A retail 
     community pharmacy that knowingly fails to respond to a 
     survey conducted under this subsection on a timely basis may 
     be subject to a civil monetary penalty in an amount not to 
     exceed $10,000 for each day in which such information has not 
     been provided.
       ``(ii) False information.--A retail community pharmacy that 
     knowingly provides false information in response to a survey 
     conducted under this subsection may be subject to a civil 
     money penalty in an amount not to exceed $100,000 for each 
     item of false information.
       ``(iii) Other penalties.--Any civil money penalties imposed 
     under this subparagraph shall be in addition to other 
     penalties as may be prescribed by law. The provisions of 
     section 1128A (other than subsections (a) and (b)) shall 
     apply to a civil money penalty under this subparagraph in the 
     same manner as such provisions apply to a penalty or 
     proceeding under section 1128A(a).
       ``(I) Report on specialty drugs and pharmacies.--
       ``(i) In general.--Not later than 18 months after the 
     effective date of this subparagraph, the Secretary shall 
     submit a report to Congress examining specialty drug coverage 
     and reimbursement under this title.
       ``(ii) Content of report.--Such report shall include a 
     description of how State Medicaid programs define specialty 
     drugs, how much State Medicaid programs pay for specialty 
     drugs, how States and managed care plans determine payment 
     for specialty drugs, the settings in which specialty drugs 
     are dispensed (such as retail community pharmacies or 
     specialty pharmacies), whether acquisition costs for 
     specialty drugs are captured in the national average drug 
     acquisition cost survey, and recommendations as to whether 
     specialty pharmacies should be included in the survey of 
     retail prices to ensure national average drug acquisition 
     costs capture drugs sold at specialty pharmacies and how such 
     specialty pharmacies should be defined.'';
       (C) in paragraph (2)--
       (i) in subparagraph (A), by inserting ``, including payment 
     rates under Medicaid managed care plans,'' after ``under this 
     title''; and
       (ii) in subparagraph (B), by inserting ``and the basis for 
     such dispensing fees'' before the semicolon; and
       (D) in paragraph (4), by inserting ``, and $5,000,000 for 
     fiscal year 2023 and each fiscal year thereafter,'' after 
     ``2010''.
       (2) Effective date.--The amendments made by this subsection 
     take effect on the 1st day of the 1st quarter that begins on 
     or after the date that is 18 months after the date of 
     enactment of this Act.
       (c) Manufacturer Reporting of Wholesale Acquisition Cost.--
     Section 1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is 
     amended--
       (1) in subparagraph (A)(i)--
       (A) in subclause (I), by striking ``and'' after the 
     semicolon;
       (B) in subclause (II), by adding ``and'' after the 
     semicolon;
       (C) by moving the left margins of subclause (I) and (II) 2 
     ems to the right; and
       (D) by adding at the end the following:

       ``(III) in the case of rebate periods that begin on or 
     after the date of enactment of this subclause, on the 
     wholesale acquisition cost (as defined in section 
     1847A(c)(6)(B)) for covered outpatient drugs for the rebate 
     period under the agreement (including for all such drugs that 
     are sold under a new drug application approved under section 
     505(c) of the Federal Food, Drug, and Cosmetic Act);''; and

       (2) in subparagraph (D)--
       (A) in the matter preceding clause (i), by inserting ``and 
     clause (viii) of this subparagraph'' after ``1847A'';
       (B) in clause (vi), by striking ``and'' after the comma;
       (C) in clause (vii), by striking the period and inserting 
     ``, and''; and
       (D) by inserting after clause (vii) the following:
       ``(viii) to the Secretary to disclose (through a website 
     accessible to the public) the most recently reported 
     wholesale acquisition cost (as defined in section 
     1847A(c)(6)(B)) for each covered outpatient drug (including 
     for all such drugs that are sold under a new drug application 
     approved under section 505(c) of the Federal Food, Drug, and 
     Cosmetic Act), as reported under subparagraph (A)(i)(III).''.

     SEC. 207. T-MSIS DRUG DATA ANALYTICS REPORTS.

       (a) In General.--Not later than May 1 of each calendar year 
     beginning with calendar year 2023, the Secretary of Health 
     and Human Services (in this section referred to as the 
     ``Secretary'') shall publish on a website of the Centers for 
     Medicare & Medicaid Services that is accessible to the public 
     a report of the most recently available data on patterns 
     related to prescriptions filled by providers and reimbursed 
     under the Medicaid program.
       (b) Content of Report.--
       (1) Required content.--Each report required under 
     subsection (a) for a calendar year shall include the 
     following information with respect to each State (and, to the 
     extent available, with respect to Puerto Rico, the United 
     States Virgin Islands, Guam, the Northern Mariana Islands, 
     and American Samoa):
       (A) A comparison of covered outpatient drug (as defined in 
     section 1927(k)(2) of the Social Security Act (42 U.S.C. 
     1396r-8(k)(2))) prescribing patterns under the State Medicaid 
     plan or waiver of such plan (including drugs prescribed on a 
     fee-for-service basis and drugs prescribed under managed care 
     arrangements under such plan or waiver)--
       (i) across all available forms or models of reimbursement 
     used under the plan or waiver;
       (ii) within specialties and subspecialties, as defined by 
     the Secretary;
       (iii) by episodes of care for--

       (I) each chronic disease category, as defined by the 
     Secretary, that is represented in the 10 conditions that 
     accounted for the greatest share of total spending under the 
     plan or waiver during the year that is the subject of the 
     report;
       (II) procedural groupings; and
       (III) rare disease diagnosis codes (except where the 
     inclusion of such information would jeopardize the privacy of 
     an individual, as determined by the Secretary);

       (iv) by patient demographic characteristics, including race 
     (to the extent that the Secretary determines that there is 
     sufficient data available with respect to such characteristic 
     in a majority of States and that inclusion of such 
     characteristic would not jeopardize the privacy of the 
     individual), gender, and age;
       (v) by patient high-utilizer or risk status; and
       (vi) by high and low resource settings by facility and 
     place of service categories, as determined by the Secretary.
       (B) In the case of medical assistance for covered 
     outpatient drugs (as so defined) provided under a State 
     Medicaid plan or waiver of such plan in a managed care 
     setting, an analysis of the differences in managed care 
     prescribing patterns when a covered outpatient drug is 
     prescribed in a managed care setting as compared to when the 
     drug is prescribed in a fee-for-service setting.
       (2) Additional content.--To the extent available, 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--

[[Page S4394]]

       (A) a description of prescription utilization management 
     tools under State programs to provide long-term services and 
     supports under a State Medicaid plan or a waiver of such 
     plan;
       (B) a comparison of prescription utilization management 
     tools applicable to populations covered under a State 
     Medicaid plan waiver under section 1115 of the Social 
     Security Act (42 U.S.C. 1315) and the models applicable to 
     populations that are not covered under the waiver;
       (C) a comparison of the prescription utilization management 
     tools employed by different Medicaid managed care 
     organizations, pharmacy benefit managers, and related 
     entities within the State;
       (D) a comparison of the prescription utilization management 
     tools applicable to each enrollment category under a State 
     Medicaid plan or waiver; and
       (E) a comparison of the prescription utilization management 
     tools applicable under the State Medicaid plan or waiver by 
     patient high-utilizer or risk status.
       (3) Additional analysis.--To the extent practicable, the 
     Secretary shall include in each report published under 
     subsection (a)--
       (A) analyses of national, State, and local patterns of 
     Medicaid population-based prescribing behaviors (including an 
     analysis of the impact of non-filled prescriptions on 
     identifying such patterns); and
       (B) recommendations for administrative or legislative 
     action to improve the effectiveness of, and reduce costs for, 
     covered outpatient drugs under Medicaid while ensuring timely 
     beneficiary access to medically necessary covered outpatient 
     drugs.
       (c) Use of T-MSIS Data.--Each report required under 
     subsection (a) shall, to the extent practicable--
       (1) be prepared using data and definitions from the 
     Transformed Medicaid Statistical Information System (``T-
     MSIS'') data set (or a successor data set) that is not more 
     than 24 months old on the date that the report is published; 
     and
       (2) as appropriate, include a description with respect to 
     each State of the quality and completeness of the data, as 
     well as any necessary caveats describing the limitations of 
     the data reported to the Secretary by the State that are 
     sufficient to communicate the appropriate uses for the 
     information.
       (d) Preparation of Report.--Each report required under 
     subsection (a) shall be prepared by the Administrator for the 
     Centers for Medicare & Medicaid Services.
       (e) Appropriation.--For fiscal year 2022 and each fiscal 
     year thereafter, there is appropriated to the Secretary 
     $2,000,000 to carry out this section.

     SEC. 208. RISK-SHARING VALUE-BASED PAYMENT AGREEMENTS FOR 
                   COVERED OUTPATIENT DRUGS UNDER MEDICAID.

       (a) In General.--Section 1927 of the Social Security Act 
     (42 U.S.C. 1396r-8) is amended by adding at the end the 
     following new subsection:
       ``(l) State Option To Pay for Covered Outpatient Drugs 
     Through Risk-Sharing Value-Based Agreements.--
       ``(1) In general.--Beginning January 1, 2024, a State shall 
     have the option to pay (whether on a fee-for-service or 
     managed care basis) for covered outpatient drugs that are 
     potentially curative treatments intended for one-time use 
     that are administered to individuals under this title by 
     entering into a risk-sharing value-based payment agreement 
     with the manufacturer of the drug in accordance with the 
     requirements of this subsection.
       ``(2) Secretarial approval.--
       ``(A) In general.--A State shall submit a request to the 
     Secretary to enter into a risk-sharing value-based payment 
     agreement, and the Secretary shall not approve a proposed 
     risk-sharing value-based payment agreement between a State 
     and a manufacturer for payment for a covered outpatient drug 
     of the manufacturer unless the following requirements are 
     met:
       ``(i) Manufacturer has in effect a rebate agreement and is 
     in compliance with all applicable requirements.--The 
     manufacturer has a rebate agreement in effect as required 
     under subsections (a) and (b) of this section and is in 
     compliance with all applicable requirements under this title.
       ``(ii) No expected increase to projected net federal 
     spending.--

       ``(I) In general.--The Chief Actuary certifies that the 
     projected payments for each covered outpatient drug under a 
     proposed risk-sharing value-based payment agreement is not 
     expected to result in greater estimated Federal spending 
     under this title than the net Federal spending that would 
     result in the absence of such agreement.
       ``(II) Net federal spending defined.--For purposes of this 
     subsection, the term `net Federal spending' means the amount 
     of Federal payments the Chief Actuary estimates would be made 
     under this title for administering a covered outpatient drug 
     to an individual eligible for medical assistance under a 
     State plan or a waiver of such plan, reduced by the amount of 
     all rebates the Chief Actuary estimates would be paid with 
     respect to the administering of such drug, including all 
     rebates under this title and any supplemental or other 
     additional rebates, in the absence of such an agreement.
       ``(III) Information.--The Chief Actuary shall make the 
     certifications required under this clause based on the most 
     recently available and reliable drug pricing and product 
     information. The State and manufacturer shall provide the 
     Secretary and the Chief Actuary with all necessary 
     information required to make the estimates needed for such 
     certifications.

       ``(iii) Launch and list price justifications.--The 
     manufacturer submits all relevant information and supporting 
     documentation necessary for pricing decisions as deemed 
     appropriate by the Secretary, which shall be truthful and 
     non-misleading, including manufacturer information and 
     supporting documentation for launch price or list price 
     increases, and any applicable justification required under 
     section 1128L.
       ``(iv) Confidentiality of information; penalties.--The 
     provisions of subparagraphs (C) and (D) of subsection (b)(3) 
     shall apply to a manufacturer that fails to submit the 
     information and documentation required under clauses (ii) and 
     (iii) on a timely basis, or that knowingly provides false or 
     misleading information, in the same manner as such provisions 
     apply to a manufacturer with a rebate agreement under this 
     section.
       ``(B) Consideration of state request for approval.--
       ``(i) In general.--The Secretary shall treat a State 
     request for approval of a risk-sharing value-based payment 
     agreement in the same manner that the Secretary treats a 
     State plan amendment, and subpart B of part 430 of title 42, 
     Code of Federal Regulations, including, subject to clause 
     (ii), the timing requirements of section 430.16 of such title 
     (as in effect on the date of enactment of this subsection), 
     shall apply to a request for approval of a risk-sharing 
     value-based payment agreement in the same manner as such 
     subpart applies to a State plan amendment.
       ``(ii) Timing.--The Secretary shall consult with the 
     Commissioner of Food and Drugs as required under subparagraph 
     (C) and make a determination on whether to approve a request 
     from a State for approval of a proposed risk-sharing value-
     based payment agreement (or request additional information 
     necessary to allow the Secretary to make a determination with 
     respect to such request for approval) within the time period, 
     to the extent practicable, specified in section 430.16 of 
     title 42, Code of Federal Regulations (as in effect on the 
     date of enactment of this subsection), but in no case shall 
     the Secretary take more than 180 days after the receipt of 
     such request for approval or response to such request for 
     additional information to make such a determination (or 
     request additional information).
       ``(C) Consultation with the commissioner of food and 
     drugs.--In considering whether to approve a risk-sharing 
     value-based payment agreement, the Secretary, to the extent 
     necessary, shall consult with the Commissioner of Food and 
     Drugs to determine whether the relevant clinical parameters 
     specified in such agreement are appropriate.
       ``(3) Installment-based payment structure.--
       ``(A) In general.--A risk-sharing value-based payment 
     agreement shall provide for a payment structure under which, 
     for every installment year of the agreement (subject to 
     subparagraph (B)), the State shall pay the total installment 
     year amount in equal installments to be paid at regular 
     intervals over a period of time that shall be specified in 
     the agreement.
       ``(B) Requirements for installment payments.--
       ``(i) Timing of first payment.--The State shall make the 
     first of the installment payments described in subparagraph 
     (A) for an installment year not later than 30 days after the 
     end of such year.
       ``(ii) Length of installment period.--The period of time 
     over which the State shall make the installment payments 
     described in subparagraph (A) for an installment year shall 
     not be longer than 5 years.
       ``(iii) Nonpayment or reduced payment of installments 
     following a failure to meet clinical parameter.--If, prior to 
     the payment date (as specified in the agreement) of any 
     installment payment described in subparagraph (A) or any 
     other alternative date or time frame (as otherwise specified 
     in the agreement), the covered outpatient drug which is 
     subject to the agreement fails to meet a relevant clinical 
     parameter of the agreement, the agreement shall provide 
     that--

       ``(I) the installment payment shall not be made; or
       ``(II) the installment payment shall be reduced by a 
     percentage specified in the agreement that is based on the 
     outcome achieved by the drug relative to the relevant 
     clinical parameter.

       ``(4) Notice of intent.--
       ``(A) In general.--Subject to subparagraph (B), a 
     manufacturer of a covered outpatient drug shall not be 
     eligible to enter into a risk-sharing value-based payment 
     agreement under this subsection with respect to such drug 
     unless the manufacturer notifies the Secretary that the 
     manufacturer is interested in entering into such an agreement 
     with respect to such drug. The decision to submit and timing 
     of a request to enter into a proposed risk-sharing value-
     based payment agreement shall remain solely within the 
     discretion of the State and shall only be effective upon 
     Secretarial approval as required under this subsection.
       ``(B) Treatment of subsequently approved drugs.--
       ``(i) In general.--In the case of a manufacturer of a 
     covered outpatient drug 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 after the 
     date of enactment of this subsection, not

[[Page S4395]]

     more than 90 days after meeting with the Food and Drug 
     Administration following phase II clinical trials for such 
     drug (or, in the case of a drug described in clause (ii), not 
     later than March 31, 2022), the manufacturer must notify the 
     Secretary of the manufacturer's intent to enter into a risk-
     sharing value-based payment agreement under this subsection 
     with respect to such drug. If no such meeting has occurred, 
     the Secretary may use discretion as to whether a potentially 
     curative treatment intended for one-time use may qualify for 
     a risk-sharing value-based payment agreement under this 
     section. A manufacturer notification of interest shall not 
     have any influence on a decision for drug approval by the 
     Food and Drug Administration.
       ``(ii) Application to certain subsequently approved 
     drugs.--A drug described in this clause is a covered 
     outpatient drug of a manufacturer--

       ``(I) that is approved under section 505 of the Federal 
     Food, Drug, and Cosmetic Act or licensed under section 351 of 
     the Public Health Service Act after the date of enactment of 
     this subsection; and
       ``(II) with respect to which, as of January 1, 2024, more 
     than 90 days have passed after the manufacturer's meeting 
     with the Food and Drug Administration following phase II 
     clinical trials for such drug.

       ``(iii) Parallel approval.--The Secretary, in coordination 
     with the Administrator of the Centers for Medicare & Medicaid 
     Services and the Commissioner of Food and Drugs, shall, to 
     the extent practicable, approve a State's request to enter 
     into a proposed risk-sharing value-based payment agreement 
     that otherwise meets the requirements of this subsection at 
     the time that such a drug is approved by the Food and Drug 
     Administration to help provide that no State that wishes to 
     enter into such an agreement is required to pay for the drug 
     in full at one time if the State is seeking to pay over a 
     period of time as outlined in the proposed agreement.
       ``(iv) Rule of construction.--Nothing in this paragraph 
     shall be applied or construed to modify or affect the 
     timeframes or factors involved in the Secretary's 
     determination of whether to approve or license a drug under 
     section 505 of the Federal Food, Drug, and Cosmetic Act or 
     section 351 of the Public Health Service Act.
       ``(5) Special payment rules.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, with respect to an individual who is administered 
     a unit of a covered outpatient drug that is reimbursed under 
     a State plan by a State Medicaid agency under a risk-sharing 
     value-based payment agreement in an installment year, the 
     State shall remain liable to the manufacturer of such drug 
     for payment for such unit without regard to whether the 
     individual remains enrolled in the State plan under this 
     title (or a waiver of such plan) for each installment year 
     for which the State is to make installment payments for 
     covered outpatient drugs purchased under the agreement in 
     such year.
       ``(B) Death.--In the case of an individual described in 
     subparagraph (A) who dies during the period described in such 
     subparagraph, the State plan shall not be liable for any 
     remaining payment for the unit of the covered outpatient drug 
     administered to the individual which is owed under the 
     agreement described in such subparagraph.
       ``(C) Withdrawal of approval.--In the case of a covered 
     outpatient drug that is the subject of a risk-sharing value-
     based payment agreement between a State and a manufacturer 
     under this subsection, including a drug approved in 
     accordance with section 506(c) of the Federal Food, Drug, and 
     Cosmetic Act, and such drug is the subject of an application 
     that has been withdrawn by the Secretary, the State plan 
     shall not be liable for any remaining payment that is owed 
     under the agreement.
       ``(D) Alternative arrangement under agreement.--Subject to 
     approval by the Secretary, the terms of a proposed risk-
     sharing value-based payment agreement submitted for approval 
     by a State may provide that subparagraph (A) shall not apply.
       ``(E) Guidance.--Not later than January 1, 2024, the 
     Secretary shall issue guidance to States establishing a 
     process for States to notify the Secretary when an individual 
     who is administered a unit of a covered outpatient drug that 
     is purchased by a State plan under a risk-sharing value-based 
     payment agreement ceases to be enrolled under the State plan 
     under this title (or a waiver of such plan) or dies before 
     the end of the installment period applicable to such unit 
     under the agreement.
       ``(6) Treatment of payments under risk-sharing value-based 
     agreements for purposes of average manufacturer price; best 
     price.--The Secretary shall treat any payments made to the 
     manufacturer of a covered outpatient drug under a risk-
     sharing value-based payment agreement under this subsection 
     during a rebate period in the same manner that the Secretary 
     treats payments made under a State supplemental rebate 
     agreement under sections 447.504(c)(19) and 447.505(c)(7) of 
     title 42, Code of Federal Regulations (or any successor 
     regulations) for purposes of determining average manufacturer 
     price and best price under this section with respect to the 
     covered outpatient drug and a rebate period and for purposes 
     of offsets required under subsection (b)(1)(B).
       ``(7) Assessments and report to congress.--
       ``(A) Assessments.--
       ``(i) In general.--Not later than 180 days after the end of 
     each assessment period of any risk-sharing value-based 
     payment agreement for a State approved under this subsection, 
     the Secretary shall conduct an evaluation of such agreement 
     which shall include an evaluation by the Chief Actuary to 
     determine whether program spending under the risk-sharing 
     value-based payment agreement aligned with the projections 
     for the agreement made under paragraph (2)(A)(ii), including 
     an assessment of whether actual Federal spending under this 
     title under the agreement was less or more than net Federal 
     spending would have been in the absence of the agreement.
       ``(ii) Assessment period.--For purposes of clause (i)--

       ``(I) the first assessment period for a risk-sharing value-
     based payment agreement shall be the period of time over 
     which payments are scheduled to be made under the agreement 
     for the first 10 individuals who are administered covered 
     outpatient drugs under the agreement except that such period 
     shall not exceed the 5-year period after the date on which 
     the Secretary approves the agreement; and
       ``(II) each subsequent assessment period for a risk-sharing 
     value-based payment agreement shall be the 5-year period 
     following the end of the previous assessment period.

       ``(B) Results of assessments.--
       ``(i) Termination option.--If the Secretary determines as a 
     result of the assessment by the Chief Actuary under 
     subparagraph (A) that the actual Federal spending under this 
     title for any covered outpatient drug that was the subject of 
     the State's risk-sharing value-based payment agreement was 
     greater than the net Federal spending that would have 
     resulted in the absence of the agreement, the Secretary may 
     terminate approval of such agreement and shall immediately 
     conduct an assessment under this paragraph of any other 
     ongoing risk-sharing value-based payment agreement to which 
     the same manufacturer is a party.
       ``(ii) Repayment required.--

       ``(I) In general.--If the Secretary determines as a result 
     of the assessment by the Chief Actuary under subparagraph (A) 
     that the Federal spending under the risk-sharing value-based 
     agreement for a covered outpatient drug that was subject to 
     such agreement was greater than the net Federal spending that 
     would have resulted in the absence of the agreement, the 
     manufacturer shall repay the difference to the State and 
     Federal governments in a timely manner as determined by the 
     Secretary.
       ``(II) Termination for failure to pay.--The failure of a 
     manufacturer to make repayments required under subclause (I) 
     in a timely manner shall result in immediate termination of 
     all risk-sharing value-based agreements to which the 
     manufacturer is a party.
       ``(III) Additional penalties.--In the case of a 
     manufacturer that fails to make repayments required under 
     subclause (I), the Secretary may treat such manufacturer in 
     the same manner as a manufacturer that fails to pay required 
     rebates under this section, and the Secretary may--

       ``(aa) suspend or terminate the manufacturer's rebate 
     agreement under this section; and
       ``(bb) pursue any other remedy that would be available if 
     the manufacturer had failed to pay required rebates under 
     this section.
       ``(C) Report to congress.--Not later than 5 years after the 
     first risk-sharing value-based payment agreement is approved 
     under this subsection, the Secretary shall submit to Congress 
     and make available to the public a report that includes--
       ``(i) an assessment of the impact of risk-sharing value-
     based payment agreements on access for individuals who are 
     eligible for benefits under a State plan or waiver under this 
     title to medically necessary covered outpatient drugs and 
     related treatments;
       ``(ii) an analysis of the impact of such agreements on 
     overall State and Federal spending under this title;
       ``(iii) an assessment of the impact of such agreements on 
     drug prices, including launch price and price increases; and
       ``(iv) such recommendations to Congress as the Secretary 
     deems appropriate.
       ``(8) Guidance and regulations.--
       ``(A) In general.--Not later than January 1, 2024, the 
     Secretary shall issue guidance to States seeking to enter 
     into risk-sharing value-based payment agreements under this 
     subsection that includes a model template for such 
     agreements. The Secretary may issue any additional guidance 
     or promulgate regulations as necessary to implement and 
     enforce the provisions of this subsection.
       ``(B) Model agreements.--
       ``(i) In general.--If a State expresses an interest in 
     pursuing a risk-sharing value-based payment agreement under 
     this subsection with a manufacturer for the purchase of a 
     covered outpatient drug, the Secretary may share with such 
     State any risk-sharing value-based agreement between a State 
     and the manufacturer for the purchase of such drug that has 
     been approved under this subsection. While such shared 
     agreement may serve as a template for a State that wishes to 
     propose, the use of a previously approved agreement shall not 
     affect the submission and approval process for approval of a 
     proposed risk-sharing value-based payment agreement under 
     this subsection, including the requirements under paragraph 
     (2)(A).
       ``(ii) Confidentiality.--In the case of a risk-sharing 
     value-based payment agreement that is disclosed to a State by 
     the Secretary under this subparagraph and that is only in

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     effect with respect to a single State, the confidentiality of 
     information provisions described in subsection (b)(3)(D) 
     shall apply to such information.
       ``(C) OIG consultation.--
       ``(i) In general.--The Secretary shall consult with the 
     Office of the Inspector General of the Department of Health 
     and Human Services to determine whether there are potential 
     program integrity concerns (including issues related to 
     compliance with sections 1128B and 1877) with agreement 
     approvals or templates and address accordingly.
       ``(ii) OIG policy updates as necessary.--The Inspector 
     General of the Department of Health and Human Services shall 
     review and update, as necessary, any policies or guidelines 
     of the Office of the Inspector General of the Department of 
     Human Services (including policies related to the enforcement 
     of section 1128B) to accommodate the use of risk-sharing 
     value-based payment agreements in accordance with this 
     section.
       ``(9) Rules of construction.--
       ``(A) Modifications.--Nothing in this subsection or any 
     regulations promulgated under this subsection shall prohibit 
     a State from requesting a modification from the Secretary to 
     the terms of a risk-sharing value-based payment agreement. A 
     modification that is expected to result in any increase to 
     projected net State or Federal spending under the agreement 
     shall be subject to recertification by the Chief Actuary as 
     described in paragraph (2)(A)(ii) before the modification may 
     be approved.
       ``(B) Rebate agreements.--Nothing in this subsection shall 
     be construed as requiring a State to enter into a risk-
     sharing value-based payment agreement or as limiting or 
     superseding the ability of a State to enter into a 
     supplemental rebate agreement for a covered outpatient drug.
       ``(C) FFP for payments under risk-sharing value-based 
     payment agreements.--Federal financial participation shall be 
     available under this title for any payment made by a State to 
     a manufacturer for a covered outpatient drug under a risk-
     sharing value-based payment agreement in accordance with this 
     subsection, except that no Federal financial participation 
     shall be available for any payment made by a State to a 
     manufacturer under such an agreement on and after the 
     effective date of a disapproval of such agreement by the 
     Secretary.
       ``(D) Continued application of other provisions.--Except as 
     expressly provided in this subsection, nothing in this 
     subsection or in any regulations promulgated under this 
     subsection shall affect the application of any other 
     provision of this Act.
       ``(10) Appropriations.--For fiscal year 2022 and each 
     fiscal year thereafter, there are appropriated to the 
     Secretary $5,000,000 for the purpose of carrying out this 
     subsection.
       ``(11) Definitions.--In this subsection:
       ``(A) Chief actuary.--The term `Chief Actuary' means the 
     Chief Actuary of the Centers for Medicare & Medicaid 
     Services.
       ``(B) Installment year.--The term `installment year' means, 
     with respect to a risk-sharing value-based payment agreement, 
     a 12-month period during which a covered outpatient drug is 
     administered under the agreement.
       ``(C) Potentially curative treatment intended for one-time 
     use.--The term `potentially curative treatment intended for 
     one-time use' means a treatment that consists of the 
     administration of a covered outpatient drug that--
       ``(i) is a form of gene therapy for a rare disease, as 
     defined by the Commissioner of Food and Drugs, designated 
     under section 526 of the Federal Food, Drug, and Cosmetics 
     Act, and approved under section 505 of such Act or licensed 
     under subsection (a) or (k) of section 351 of the Public 
     Health Service Act to treat a serious or life-threatening 
     disease or condition;
       ``(ii) if administered in accordance with the labeling of 
     such drug, is expected to result in either--

       ``(I) the cure of such disease or condition; or
       ``(II) a reduction in the symptoms of such disease or 
     condition to the extent that such disease or condition is not 
     expected to lead to early mortality; and

       ``(iii) is expected to achieve a result described in clause 
     (ii), which may be achieved over an extended period of time, 
     after not more than 3 administrations.
       ``(D) Relevant clinical parameter.--The term `relevant 
     clinical parameter' means, with respect to a covered 
     outpatient drug that is the subject of a risk-sharing value-
     based payment agreement--
       ``(i) a clinical endpoint specified in the drug's labeling 
     or supported by one or more of the compendia described in 
     section 1861(t)(2)(B)(ii)(I) that--

       ``(I) is able to be measured or evaluated on an annual 
     basis for each year of the agreement on an independent basis 
     by a provider or other entity; and
       ``(II) is required to be achieved (based on observed 
     metrics in patient populations) under the terms of the 
     agreement; or

       ``(ii) a surrogate endpoint (as defined in section 
     507(e)(9) of the Federal Food, Drug, and Cosmetic Act), 
     including those developed by patient-focused drug development 
     tools, that--

       ``(I) is able to be measured or evaluated on an annual 
     basis for each year of the agreement on an independent basis 
     by a provider or other entity; and
       ``(II) has been qualified by the Food and Drug 
     Administration.

       ``(E) Risk-sharing value-based payment agreement.--The term 
     `risk-sharing value-based payment agreement' means an 
     agreement between a State plan and a manufacturer--
       ``(i) for the purchase of a covered outpatient drug of the 
     manufacturer that is a potentially curative treatment 
     intended for one-time use;
       ``(ii) under which payment for such drug shall be made 
     pursuant to an installment-based payment structure that meets 
     the requirements of paragraph (3);
       ``(iii) which conditions payment on the achievement of at 
     least 2 relevant clinical parameters (as defined in 
     subparagraph (C));
       ``(iv) which provides that--

       ``(I) the State plan will directly reimburse the 
     manufacturer for the drug; or
       ``(II) a third party will reimburse the manufacture in a 
     manner approved by the Secretary;

       ``(v) is approved by the Secretary in accordance with 
     paragraph (2).
       ``(F) Total installment year amount.--The term `total 
     installment year amount' means, with respect to a risk-
     sharing value-based payment agreement for the purchase of a 
     covered outpatient drug and an installment year, an amount 
     equal to the product of--
       ``(i) the unit price of the drug charged under the 
     agreement; and
       ``(ii) the number of units of such drug administered under 
     the agreement during such installment year.''.
       (b) Conforming Amendments.--
       (1) Section 1903(i)(10)(A) of the Social Security Act (42 
     U.S.C. 1396b(i)(10)(A)) is amended by striking ``or unless 
     section 1927(a)(3) applies'' and inserting ``, section 
     1927(a)(3) applies with respect to such drugs, or such drugs 
     are the subject of a risk-sharing value-based payment 
     agreement under section 1927(l)''.
       (2) Section 1927(b) of the Social Security Act (42 U.S.C. 
     1396r-8(b)) is amended--
       (A) in paragraph (1)(A), by inserting ``but excluding any 
     drugs for which payment is made by a State under a risk-
     sharing value-based payment agreement under subsection (l))'' 
     after ``for coverage of such drugs''; and
       (B) in paragraph (3)--
       (i) in subparagraph (C)(i), by inserting ``or subsection 
     (l)(2)(A)'' after ``subparagraph (A)''; and
       (ii) in subparagraph (D), in the matter preceding clause 
     (i), by inserting ``, under subsection (l)(2)(A),'' after 
     ``under this paragraph''.

     SEC. 209. MODIFICATION OF MAXIMUM REBATE AMOUNT UNDER 
                   MEDICAID DRUG REBATE PROGRAM.

       (a) In General.--Subparagraph (D) of section 1927(c)(2) of 
     the Social Security Act (42 U.S.C. 1396r-8(c)(2)) is amended 
     to read as follows:
       ``(D) Maximum rebate amount.--
       ``(i) In general.--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--

       ``(I) for rebate periods beginning after December 31, 2009, 
     and before September 30, 2024, 100 percent of the average 
     manufacturer price of the drug; and
       ``(II) for rebate periods beginning on or after October 1, 
     2024, 125 percent of the average manufacturer price of the 
     drug.

       ``(ii) No maximum amount for drugs if amp increases outpace 
     inflation.--

       ``(I) In general.--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, 2023, 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, and any subsequent rebate period until 
     the average manufacturer price of the drug is the same or 
     less than the inflation-adjusted average manufacturer price 
     determined with respect to such drug under subclause (II) for 
     the rebate period, with respect to each dosage form and 
     strength of the single source drug or innovator multiple 
     source drug.
       ``(II) Inflation-adjusted average manufacturer price 
     defined.--In this clause, the term `inflation-adjusted 
     average manufacturer price' 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 1st 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.''.

       (b) Treatment of Subsequently Approved Drugs.--Section 
     1927(c)(2)(B) of the Social Security Act (42 U.S.C. 1396r-
     8(c)(2)(B)) is amended by inserting ``and clause (ii)(II) of 
     subparagraph (D)'' after ``clause (ii)(II) of subparagraph 
     (A)''.
       (c) Technical Amendments.--Section 1927(c)(3)(C)(ii)(IV) of 
     the Social Security Act

[[Page S4397]]

     (42 U.S.C. 1396r-9(c)(3)(C)(ii)(IV)) is amended--
       (1) by striking ``subparagraph (A)'' and inserting 
     ``paragraph (3)(A)''; and
       (2) by striking ``this subparagraph'' and inserting 
     ``paragraph (3)(C)''.
                                 ______