,,ii #aacth ,,congress #ast ,session ,s4 #gdj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,april #af1 #bjac ,mr4 ,rockefeller 7for himself1 ,mr4 ,nelson1 ,ms4 ,baldwin1 ,mr4 ,blumenthal1 ,mrs4 ,boxer1 ,mr4 ,brown1 ,mr4 ,durbin1 ,mr4 ,franken1 ,mr4 ,king1 ,ms4 ,klobuchar1 ,mr4 ,leahy1 ,mr4 ,merkley1 ,mr4 ,reed1 ,mr4 ,sanders1 ,mr4 ,schatz1 ,mrs4 ,shaheen1 ,ms4 ,stabenow1 ,mr4 ,udall of ,new ,mexico1 and ,mr4 ,whitehouse7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend title ,,xviii of the ,social ,security ,act to require drug manufacturers to provide drug rebates for drugs dispensed to low-income individuals under the ,medicare prescription drug benefit program4 #a4 ,short title ,this ,act may be cited as the ,medicare ,drug ,savings ,act of #bjac4 #b4 ,requiring drug manufacturers to provide drug rebates for drugs dispensed to low-income individuals 7a7 ,in general ,section #ahfj;,d-#b of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7 is amended-- 7#a7 in subsection 7e77#a71 in the matter preceding subparagraph 7,a71 by inserting and subsection 7f7 after this subsection2 and 7#b7 by adding at the end the following new subsection3 7f7 ,prescription drug rebate agreement for rebate eligible individuals 7#a7 ,requirement 7,a7 ,in general ,for plan years beginning on or after ,january #a1 #bjae1 in this part1 the term covered part ,d drug does not include any drug or biological product that is manufactured by a manufacturer that has not entered into and have in effect a rebate agreement described in paragraph 7#b74 7,b7 #bjad plan year requirement ,any drug or biological product manufactured by a manufacturer that declines to enter into a rebate agreement described in paragraph 7#b7 for the period beginning on ,january #a1 #bjad1 and ending on ,december #ca1 #bjad1 shall not be included as a covered part ,d drug for the subsequent plan year4 7#b7 ,rebate agreement ,a rebate agreement under this subsection shall require the manufacturer to provide to the ,secretary a rebate for each rebate period 7as defined in paragraph 7#f77;,b77 ending after ,december #ca1 #bjac1 in the amount specified in paragraph 7#c7 for any covered part ,d drug of the manufacturer dispensed after ,december #ca1 #bjac1 to any rebate eligible individual 7as defined in paragraph 7#f77;,a77 for which payment was made by a ,,pdp sponsor or ,,ma organization under this part for such period1 including payments passed through the low-income and reinsurance subsidies under sections #ahfj;,d-#ad and #ahfj;,d-#ae7;b71 respectively4 ,such rebate shall be paid by the manufacturer to the ,secretary not later than #cj days after the date of receipt of the information described in section #ahfj;,d-#ab7;b77#g71 including as such section is applied under section #aheg7;f77#c71 or #cj days after the receipt of information under subparagraph 7,d7 of paragraph 7#c71 as determined by the ,secretary4 ,insofar as not inconsistent with this subsection1 the ,secretary shall establish terms and conditions of such agreement relating to compliance1 penalties1 and program evaluations1 investigations1 and audits that are similar to the terms and conditions for rebate agreements under paragraphs 7#c7 and 7#d7 of section #aibg7;b74 7#c7 ,rebate for rebate eligible ,medicare drug plan enrollees 7,a7 ,in general ,the amount of the rebate specified under this paragraph for a manufacturer for a rebate period1 with respect to each dosage form and strength of any covered part ,d drug provided by such manufacturer and dispensed to a rebate eligible individual1 shall be equal to the product of-- 7i7 the total number of units of such dosage form and strength of the drug so provided and dispensed for which payment was made by a ,,pdp sponsor or an ,,ma organization under this part for the rebate period1 including payments passed through the low-income and reinsurance subsidies under sections #ahfj;,d-#ad and #ahfj;,d-#ae7;b71 respectively2 and 7ii7 the amount 7if any7 by which-- 7,i7 the ,medicaid rebate amount 7as defined in subparagraph 7,b77 for such form1 strength1 and period1 exceeds 7,,ii7 the average ,medicare drug program rebate eligible rebate amount 7as defined in subparagraph 7,c77 for such form1 strength1 and period4 7,b7 ,medicaid rebate amount ,for purposes of this paragraph1 the term ,medicaid rebate amount means1 with respect to each dosage form and strength of a covered part ,d drug provided by the manufacturer for a rebate period-- 7i7 in the case of a single source drug or an innovator multiple source drug1 the amount specified in paragraph 7#a77;,a77ii77,,ii7 or 7#b77;,c7 of section #aibg7;c7 plus the amount1 if any1 specified in subparagraph 7,a77ii7 of paragraph 7#b7 of such section1 for such form1 strength1 and period2 or 7ii7 in the case of any other covered outpatient drug1 the amount specified in paragraph 7#c77;,a77i7 of such section for such form1 strength1 and period4 7,c7 ,average ,medicare drug program rebate eligible rebate amount ,for purposes of this subsection1 the term average ,medicare drug program rebate eligible rebate amount means1 with respect to each dosage form and strength of a covered part ,d drug provided by a manufacturer for a rebate period1 the sum1 for all ,,pdp sponsors under part ,d and ,,ma organizations administering an ,,ma-,,pd plan under part ,c1 of-- 7i7 the product1 for each such sponsor or organization1 of-- 7,i7 the sum of all rebates1 discounts1 or other price concessions 7not taking into account any rebate provided under paragraph 7#b7 or any discounts under the program under section #ahfj;,d-#ad;,a7 for such dosage form and strength of the drug dispensed1 calculated on a per-unit basis1 but only to the extent that any such rebate1 discount1 or other price concession applies equally to drugs dispensed to rebate eligible ,medicare drug plan enrollees and drugs dispensed to ,,pdp and ,,ma-,,pd enrollees who are not rebate eligible individuals2 and 7,,ii7 the number of the units of such dosage and strength of the drug dispensed during the rebate period to rebate eligible individuals enrolled in the prescription drug plans administered by the ,,pdp sponsor or the ,,ma-,,pd plans administered by the ,,ma organization2 divided by 7ii7 the total number of units of such dosage and strength of the drug dispensed during the rebate period to rebate eligible individuals enrolled in all prescription drug plans administered by ,,pdp sponsors and all ,,ma-,,pd plans administered by ,,ma organizations4 7,d7 ,use of estimates ,the ,secretary may establish a methodology for estimating the average ,medicare drug program rebate eligible rebate amounts for each rebate period based on bid and utilization information under this part and may use these estimates as the basis for determining the rebates under this section4 ,if the ,secretary elects to estimate the average ,medicare drug program rebate eligible rebate amounts1 the ,secretary shall establish a reconciliation process for adjusting manufacturer rebate payments not later than #c months after the date that manufacturers receive the information collected under section #ahfj;,d-#ab7;b77#g77;,b74 7#d7 ,length of agreement ,the provisions of paragraph 7#d7 of section #aibg7;b7 7other than clauses 7iv7 and 7v7 of subparagraph 7,b77 shall apply to rebate agreements under this subsection in the same manner as such paragraph applies to a rebate agreement under such section4 7#e7 ,other terms and conditions ,the ,secretary shall establish other terms and conditions of the rebate agreement under this subsection1 including terms and conditions related to compliance1 that are consistent with this subsection4 7#f7 ,definitions ,in this subsection and section #ahfj;,d-#ab7;b77#g73 7,a7 ,rebate eligible individual ,the term rebate eligible individual means-- 7i7 a subsidy eligible individual 7as defined in section #ahfj;,d-#ad7;a77#c77;,a772 7ii7 a ,medicaid beneficiary treated as a subsidy eligible individual under clause 7v7 of section #ahfj;,d-#ad7;a77#c77;,b72 and 7iii7 any part ,d eligible individual not described in clause 7i7 or 7ii7 who is determined for purposes of the ,state plan under title ,,xix to be eligible for medical assistance under clause 7i71 7iii71 or 7iv7 of section #aijb7;a77#aj77;,e74 7,b7 ,rebate period ,the term rebate period has the meaning given such term in section #aibg7k77#h74 4 7b7 ,reporting requirement for the determination and payment of rebates by manufacturers related to rebate for rebate eligible ,medicare drug plan enrollees 7#a7 ,requirements for ,,pdp sponsors ,section #ahfj;,d-#ab7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aab7;b77 is amended by adding at the end the following new paragraph3 7#g7 ,reporting requirement for the determination and payment of rebates by manufacturers related to rebate for rebate eligible ,medicare drug plan enrollees 7,a7 ,in general ,for purposes of the rebate under section #ahfj;,d-#b7;f7 for contract years beginning on or after ,january #a1 #bjae1 each contract entered into with a ,,pdp sponsor under this part with respect to a prescription drug plan shall require that the sponsor comply with subparagraphs 7,b7 and 7,c74 7,b7 ,report form and contents ,not later than a date specified by the ,secretary1 a ,,pdp sponsor of a prescription drug plan under this part shall report to each manufacturer-- 7i7 information 7by ,national ,drug ,code number7 on the total number of units of each dosage1 form1 and strength of each drug of such manufacturer dispensed to rebate eligible ,medicare drug plan enrollees under any prescription drug plan operated by the ,,pdp sponsor during the rebate period2 7ii7 information on the price discounts1 price concessions1 and rebates for such drugs for such form1 strength1 and period2 7iii7 information on the extent to which such price discounts1 price concessions1 and rebates apply equally to rebate eligible ,medicare drug plan enrollees and ,,pdp enrollees who are not rebate eligible ,medicare drug plan enrollees2 and 7iv7 any additional information that the ,secretary determines is necessary to enable the ,secretary to calculate the average ,medicare drug program rebate eligible rebate amount 7as defined in paragraph 7#c77;,c7 of such section71 and to determine the amount of the rebate required under this section1 for such form1 strength1 and period4 ,such report shall be in a form consistent with a standard reporting format established by the ,secretary4 7,c7 ,submission to ,secretary ,each ,,pdp sponsor shall promptly transmit a copy of the information reported under subparagraph 7,b7 to the ,secretary for the purpose of audit oversight and evaluation4 7,d7 ,confidentiality of information ,the provisions of subparagraph 7,d7 of section #aibg7;b77#c71 relating to confidentiality of information1 shall apply to information reported by ,,pdp sponsors under this paragraph in the same manner that such provisions apply to information disclosed by manufacturers or wholesalers under such section1 except-- 7i7 that any reference to this section in clause 7i7 of such subparagraph shall be treated as being a reference to this section2 7ii7 the reference to the ,director of the ,congressional ,budget ,office in clause 7iii7 of such subparagraph shall be treated as including a reference to the ,medicare ,payment ,advisory ,commission2 and 7iii7 clause 7iv7 of such subparagraph shall not apply4 7,e7 ,oversight ,information reported under this paragraph may be used by the ,inspector ,general of the ,department of ,health and ,human ,services for the statutorily authorized purposes of audit1 investigation1 and evaluations4 7,f7 ,penalties for failure to provide timely information and provision of false information ,in the case of a ,,pdp sponsor-- 7i7 that fails to provide information required under subparagraph 7,b7 on a timely basis1 the sponsor is subject to a civil money penalty in the amount of #aj1jjj for each day in which such information has not been provided2 or 7ii7 that knowingly 7as defined in section #aabh;,a7i77 provides false information under such subparagraph1 the sponsor is subject to a civil money penalty in an amount not to exceed #ajj1jjj for each item of false information4 ,such civil money penalties are in addition to other penalties as may be prescribed by law4 ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 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 #aabh;,a7a74 4 7#b7 ,application to ,,ma organizations ,section #aheg7;f77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#bg7;f77#c77 is amended by adding at the end the following3 7,d7 ,reporting requirement related to rebate for rebate eligible ,medicare drug plan enrollees ,section #ahfj;,d-#ab7;b77#g74 4 7c7 ,deposit of rebates into ,medicare ,prescription ,drug ,account ,section #ahfj;,d-#af7;c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaf7;c77 is amended by adding at the end the following new paragraph3 7#f7 ,rebate for rebate eligible ,medicare drug plan enrollees ,amounts paid under a rebate agreement under section #ahfj;,d-#b7;f7 shall be deposited into the ,account4 4 7d7 ,exclusion from determination of best price and average manufacturer price under ,medicaid 7#a7 ,exclusion from best price determination ,section #aibg7;c77#a77;,c77ii77,i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;c77#a77;,c77ii77,i77 is amended by inserting and amounts paid under a rebate agreement under section #ahfj;,d-#b7;f7 after this section4 7#b7 ,exclusion from average manufacturer price determination ,section #aibg7k77#a77;,b77i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7k77#a77;,b77i77 is amended-- 7,a7 in subclause 7,,iv71 by striking and after the semicolon2 7,b7 in subclause 7,v71 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following3 7,,vi7 amounts paid under a rebate agreement under section #ahfj;,d-#b7;f74 4