[Federal Register Volume 87, Number 198 (Friday, October 14, 2022)]
[Notices]
[Page 62433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22296]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES


Establishment of the Medicare Drug Rebate and Negotiations Group 
Within the Center for Medicare (CM)

AGENCY: Centers for Medicare & Medicaid Services, HHS.

SUMMARY: Establish the Medicare Drug Rebate and Negotiations Group 
within the Center for Medicare (CM) to implement the Drug Price 
Negotiation Program and the Inflation Rebate Program in Medicare Part B 
and Part D as authorized under the Inflation Reduction Act of 2022. CMS 
is responsible for implementing these new programs.

DATES: This reorganization was approved by the Secretary of Health and 
Human Services and takes effect October 8, 2022.

SUPPLEMENTARY INFORMATION: Statement of Organization, Functions, and 
Delegations of Authority Part F of the Statement of Organization, 
Functions, and Delegations of Authority for the Department of Health 
and Human Services, Centers for Medicare & Medicaid Services (CMS) 
(last amended at Federal Register, Vol. 75, No. 56, pp. 14176-14178, 
dated March 24, 2010; Vol. 76, No. 203, pp. 65197-65199, dated October 
20, 2011; Vol. 78, No. 86, p. 26051, dated May 3, 2013; Vol. 79, No. 2, 
pp. 397-398, dated January 3, 2014; and Vol. 84, No. 32, p. 4470, dated 
February 15, 2019) is amended to reflect the establishment of the 
Medicare Drug Rebate and Negotiations Group within the Center for 
Medicare (CM) to implement the Drug Price Negotiation Program and the 
Inflation Rebate Program in Medicare Part B and Part D as authorized 
under the Inflation Reduction Act of 2022. CMS is responsible for 
implementing these new programs.
    Title I, Subtitle B, Part 1, sections 11001-11004, of the Inflation 
Reduction Act of 2022 (IRA) Public Law 117-169 enacted on August 16, 
2022, establishes a new Drug Price Negotiation Program under Medicare 
Part B and Medicare Part D to lower prices for certain high-spend 
single source drugs. Title I, Subtitle B, sections 11101 and 11102 of 
the IRA also enacts a new program to establish Inflation Rebates in 
Medicare Part B and Medicare Part D. CMS is responsible for 
implementing these new programs.
    The work required to implement and administer these new programs 
will be novel and differ significantly from the Medicare functions that 
CMS performs today. Given the unique nature of this new work, there is 
not an existing operating component, group, office or division in CMS 
or CM that performs these actions. Moreover, the scope and complexity 
of these new programs, and the deadlines for implementation, require 
that a new, dedicated organization be established to ensure that CMS is 
able to implement these programs successfully and on time. In order to 
implement and operate these new programs, CMS is creating a new group--
the Medicare Drug Rebate and Negotiations Group--within CM.
    Part F, Section FC. 10 (Organization) is revised as follows:

Center for Medicare, Medicare Drug Rebate and Negotiations Group

    Part F, Section FC. 20 (Functions) for the new organization is as 
follows:

Medicare Drug Rebate and Negotiations Group

    With regard to the Drug Price Negotiation Program, each year, the 
new group will negotiate drug prices with pharmaceutical manufacturers 
for certain Part B and Part D drugs. This will require identifying 
negotiation-eligible drugs, entering into agreements with 
manufacturers, collecting extensive data from manufacturers and other 
sources, calculating ceiling and maximum fair prices, negotiating 
prices with manufacturers, re-negotiating prices as necessary and 
publishing the results of the negotiation. Under the Inflation Rebate 
Program, manufacturers of certain drugs will be required to pay a 
penalty or ``rebate'' if the price of their drug increases faster than 
the rate of inflation. For this program, the new group will need to 
identify the universe of rebatable drugs under Part B and Part D; 
determine which drugs had price increases in excess of inflation; and 
compute, invoice, and collect rebates owed by manufacturers.
    To carry out these functions, the major tasks of the new group will 
include:
     Developing policy, including identifying and vetting 
policy options and preparing policy memoranda, rulemaking and technical 
guidance;
     Briefing policy officials in CMS, U.S. Department of 
Health and Human Services (HHS), and Executive Office of the President 
(EOP);
     Establishing operational processes to collect data from 
manufacturers and other sources;
     Conducting pharmacoeconomic analyses and assessments of 
selected drugs;
     Establishing operational processes to negotiate and re-
negotiate drug prices and conducting those negotiations with 
manufacturers;
     Establishing operational processes to calculate and 
invoice rebates;
     Developing contractual agreements with manufacturers 
necessary to effectuate both programs;
     Monitoring manufacturer compliance with programmatic 
rules;
     Procuring and managing contractors to support these 
functions;
     Conducting stakeholder outreach and educational materials; 
and
     Responding to inquiries from Congress, the press, and 
other external stakeholders.
    Authority: 44 U.S.C. 3101.

    Dated: October 7, 2022.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2022-22296 Filed 10-12-22; 4:15 pm]
BILLING CODE 4120-01-P