,,ii  #aac? ,,congress  #a/ ,session    
,s4 #gdj  ,,9 ,,! ,,s5ate ,,( ,,!       
,,unit$ ,,/ates  ,april #af1 #bjac ,mr4 
,rockefell] 7= himself1 ,mr4 ,nelson1   
,ms4 ,baldw91 ,mr4 ,blum5?al1 ,mrs4     
,box]1 ,mr4 ,br[n1 ,mr4 ,durb91 ,mr4    
,frank51 ,mr4 ,k+1 ,ms4 ,klobu*>1 ,mr4  
,leahy1 ,mr4 ,m]kley1 ,mr4 ,re$1 ,mr4   
,s&]s1 ,mr4 ,s*atz1 ,mrs4 ,%ahe51 ,ms4  
,/ab5[1 ,mr4 ,udall ( ,new ,mexico1 &   
,mr4 ,:iteh\se7 introduc$ ! foll[+ bill2
 :i* 0 read twice & ref]r$ to !         
,committee on ,f9ance  ,a ,,bill  ,to   
am5d title ,,xviii ( ! ,social ,security
 ,act to require drug manufactur]s to   
provide drug rebates = drugs disp5s$ to 
l[-income individuals "u ! ,m$ic>e      
prescription drug b5efit program4  #a4  
,%ort title ,?is ,act may be cit$ z !   
,m$ic>e ,drug ,sav+s ,act ( #bjac4  #b4 
,requir+ drug manufactur]s to provide   
drug rebates = drugs disp5s$ to         
l[-income individuals  7a7 ,9 g5]al     
,section #ahfj;,d-#b ( ! ,social        
,security ,act 7#db ,u4,s4,c4           

#aciew-#ajb7 is am5d$--  7#a7 9         
subsection 7e77#a71 9 ! matt] prec$+    
subp>agraph 7,a71 by ins]t+ & subsection
 7f7 aft] ?is subsection2 &  7#b7 by    
add+ at ! end ! foll[+ new subsection3  
7f7 ,prescription drug rebate agreem5t =
 rebate eligible individuals  7#a7      
,requirem5t  7,a7 ,9 g5]al ,= plan ye>s 
beg9n+ on or aft] ,janu>y #a1 #bjae1 9  
?is "p1 ! t]m cov]$ "p ,d drug does n   
include any drug or biological product t
 is manufactur$ by a manufactur] t has n
 ent]$ into & h 9 effect a rebate       
agreem5t describ$ 9 p>agraph 7#b74  7,b7
 #bjad plan ye> requirem5t ,any drug or 
biological product manufactur$ by a     
manufactur] t decl9es to ent] into a    
rebate agreem5t describ$ 9 p>agraph 7#b7
 = ! p]iod beg9n+ on ,janu>y #a1 #bjad1 
& end+ on ,decemb] #ca1 #bjad1 %all n be
 includ$ z a cov]$ "p ,d drug = !       
subsequ5t plan ye>4  7#b7 ,rebate       
agreem5t ,a rebate agreem5t "u ?is      
subsection %all require ! manufactur] to
 provide to ! ,secret>y a rebate = ea*  

rebate p]iod 7z def9$ 9 p>agraph        
7#f77;,b77 end+ aft] ,decemb] #ca1      
#bjac1 9 ! am\nt specifi$ 9 p>agraph    
7#c7 = any cov]$ "p ,d drug ( !         
manufactur] disp5s$ aft] ,decemb] #ca1  
#bjac1 to any rebate eligible individual
 7z def9$ 9 p>agraph 7#f77;,a77 = :i*   
paym5t 0 made by a ,,pdp sponsor or ,,ma
 organization "u ?is "p = su* p]iod1    
includ+ paym5ts pass$ ?r\gh ! l[-income 
& re9surance subsidies "u sections      
#ahfj;,d-#ad & #ahfj;,d-#ae7;b71        
respectively4 ,su* rebate %all be paid  
by ! manufactur] to ! ,secret>y n lat]  
?an #cj days aft] ! date ( receipt ( !  
in=mation describ$ 9 section            
#ahfj;,d-#ab7;b77#g71 includ+ z su*     
section is appli$ "u section            
#aheg7;f77#c71 or #cj days aft] !       
receipt ( in=mation "u subp>agraph 7,d7 
( p>agraph 7#c71 z det]m9$ by !         
,secret>y4 ,ins(> z n inconsi/5t ) ?is  
subsection1 ! ,secret>y %all e/abli%    
t]ms & conditions ( su* agreem5t relat+ 
to compliance1 p5alties1 & program      

evaluations1 inve/igations1 & audits t  
are simil> to ! t]ms & conditions =     
rebate agreem5ts "u p>agraphs 7#c7 &    
7#d7 ( section #aibg7;b74  7#c7 ,rebate 
= rebate eligible ,m$ic>e drug plan     
enrollees  7,a7 ,9 g5]al ,! am\nt ( !   
rebate specifi$ "u ?is p>agraph = a     
manufactur] = a rebate p]iod1 ) respect 
to ea* dosage =m & /r5g? ( any cov]$ "p 
,d drug provid$ by su* manufactur] &    
disp5s$ to a rebate eligible individual1
 %all be equal to ! product (--  7i7 !  
total numb] ( units ( su* dosage =m &   
/r5g? ( ! drug s provid$ & disp5s$ = :i*
 paym5t 0 made by a ,,pdp sponsor or an 
,,ma organization "u ?is "p = ! rebate  
p]iod1 includ+ paym5ts pass$ ?r\gh !    
l[-income & re9surance subsidies "u     
sections #ahfj;,d-#ad &                 
#ahfj;,d-#ae7;b71 respectively2 &  7ii7 
! am\nt 7if any7 by :i*--  7,i7 !       
,m$icaid rebate am\nt 7z def9$ 9        
subp>agraph 7,b77 = su* =m1 /r5g?1 &    
p]iod1 exce$s  7,,ii7 ! av]age ,m$ic>e  
drug program rebate eligible rebate     

am\nt 7z def9$ 9 subp>agraph 7,c77 = su*
 =m1 /r5g?1 & p]iod4  7,b7 ,m$icaid     
rebate am\nt ,= purposes ( ?is p>agraph1
 ! t]m ,m$icaid rebate am\nt means1 )   
respect to ea* dosage =m & /r5g? ( a    
cov]$ "p ,d drug provid$ by !           
manufactur] = a rebate p]iod--  7i7 9 ! 
case ( a s+le s\rce drug or an innovator
 multiple s\rce drug1 ! am\nt specifi$ 9
 p>agraph 7#a77;,a77ii77,,ii7 or        
7#b77;,c7 ( section #aibg7;c7 plus !    
am\nt1 if any1 specifi$ 9 subp>agraph   
7,a77ii7 ( p>agraph 7#b7 ( su* section1 
= su* =m1 /r5g?1 & p]iod2 or  7ii7 9 !  
case ( any o!r cov]$ outpati5t drug1 !  
am\nt specifi$ 9 p>agraph 7#c77;,a77i7 (
 su* section = su* =m1 /r5g?1 & p]iod4  
7,c7 ,av]age ,m$ic>e drug program rebate
 eligible rebate am\nt ,= purposes ( ?is
 subsection1 ! t]m av]age ,m$ic>e drug  
program rebate eligible rebate am\nt    
means1 ) respect to ea* dosage =m &     
/r5g? ( a cov]$ "p ,d drug provid$ by a 
manufactur] = a rebate p]iod1 ! sum1 =  
all ,,pdp sponsors "u "p ,d & ,,ma      

organizations adm9i/]+ an ,,ma-,,pd plan
 "u "p ,c1 (--  7i7 ! product1 = ea* su*
 sponsor or organization1 (--  7,i7 !   
sum ( all rebates1 disc\nts1 or o!r     
price concessions 7n tak+ into acc\nt   
any rebate provid$ "u p>agraph 7#b7 or  
any disc\nts "u ! program "u section    
#ahfj;,d-#ad;,a7 = su* dosage =m & /r5g?
 ( ! drug disp5s$1 calculat$ on a       
p]-unit basis1 b only to ! ext5t t any  
su* rebate1 disc\nt1 or o!r price       
concession applies equally to drugs     
disp5s$ to rebate eligible ,m$ic>e drug 
plan enrollees & drugs disp5s$ to ,,pdp 
& ,,ma-,,pd enrollees :o are n rebate   
eligible individuals2 &  7,,ii7 ! numb] 
( ! units ( su* dosage & /r5g? ( ! drug 
disp5s$ dur+ ! rebate p]iod to rebate   
eligible individuals enroll$ 9 !        
prescription drug plans adm9i/]$ by !   
,,pdp sponsor or ! ,,ma-,,pd plans      
adm9i/]$ by ! ,,ma organization2 divid$ 
by  7ii7 ! total numb] ( units ( su*    
dosage & /r5g? ( ! drug disp5s$ dur+ !  
rebate p]iod to rebate eligible         

individuals enroll$ 9 all prescription  
drug plans adm9i/]$ by ,,pdp sponsors & 
all ,,ma-,,pd plans adm9i/]$ by ,,ma    
organizations4  7,d7 ,use ( e/imates ,! 
,secret>y may e/abli% a me?odology =    
e/imat+ ! av]age ,m$ic>e drug program   
rebate eligible rebate am\nts = ea*     
rebate p]iod bas$ on bid & utilization  
in=mation "u ?is "p & may use ^!        
e/imates z ! basis = det]m9+ ! rebates  
"u ?is section4 ,if ! ,secret>y elects  
to e/imate ! av]age ,m$ic>e drug program
 rebate eligible rebate am\nts1 !       
,secret>y %all e/abli% a reconciliation 
process = adju/+ manufactur] rebate     
paym5ts n lat] ?an #c mon?s aft] ! date 
t manufactur]s receive ! in=mation      
collect$ "u section                     
#ahfj;,d-#ab7;b77#g77;,b74  7#d7 ,l5g? (
 agreem5t ,! provisions ( p>agraph 7#d7 
( section #aibg7;b7 7o!r ?an clauses    
7iv7 & 7v7 ( subp>agraph 7,b77 %all     
apply to rebate agreem5ts "u ?is        
subsection 9 ! same mann] z su* p>agraph
 applies to a rebate agreem5t "u su*    

section4  7#e7 ,o!r t]ms & conditions ,!
 ,secret>y %all e/abli% o!r t]ms &      
conditions ( ! rebate agreem5t "u ?is   
subsection1 includ+ t]ms & conditions   
relat$ to compliance1 t are consi/5t )  
?is subsection4  7#f7 ,def9itions ,9 ?is
 subsection & section                   
#ahfj;,d-#ab7;b77#g73  7,a7 ,rebate     
eligible individual ,! t]m rebate       
eligible individual means--  7i7 a      
subsidy eligible individual 7z def9$ 9  
section #ahfj;,d-#ad7;a77#c77;,a772     
7ii7 a ,m$icaid b5efici>y treat$ z a    
subsidy eligible individual "u clause   
7v7 ( section #ahfj;,d-#ad7;a77#c77;,b72
 &  7iii7 any "p ,d eligible individual 
n describ$ 9 clause 7i7 or 7ii7 :o is   
det]m9$ = purposes ( ! ,/ate plan "u    
title ,,xix to be eligible = m$ical     
assi/ance "u clause 7i71 7iii71 or 7iv7 
( section #aijb7;a77#aj77;,e74  7,b7    
,rebate p]iod ,! t]m rebate p]iod has ! 
mean+ giv5 su* t]m 9 section            
#aibg7k77#h74  4  7b7 ,report+          
requirem5t = ! det]m9ation & paym5t (   

rebates by manufactur]s relat$ to rebate
 = rebate eligible ,m$ic>e drug plan    
enrollees  7#a7 ,requirem5ts = ,,pdp    
sponsors ,section #ahfj;,d-#ab7;b7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aab7;b77 is am5d$ by add+ at !  
end ! foll[+ new p>agraph3  7#g7        
,report+ requirem5t = ! det]m9ation &   
paym5t ( rebates by manufactur]s relat$ 
to rebate = rebate eligible ,m$ic>e drug
 plan enrollees  7,a7 ,9 g5]al ,=       
purposes ( ! rebate "u section          
#ahfj;,d-#b7;f7 = contract ye>s beg9n+  
on or aft] ,janu>y #a1 #bjae1 ea*       
contract ent]$ into ) a ,,pdp sponsor "u
 ?is "p ) respect to a prescription drug
 plan %all require t ! sponsor comply ) 
subp>agraphs 7,b7 & 7,c74  7,b7 ,report 
=m & cont5ts ,n lat] ?an a date specifi$
 by ! ,secret>y1 a ,,pdp sponsor ( a    
prescription drug plan "u ?is "p %all   
report to ea* manufactur]--  7i7        
in=mation 7by ,national ,drug ,code     
numb]7 on ! total numb] ( units ( ea*   
dosage1 =m1 & /r5g? ( ea* drug ( su*    

manufactur] disp5s$ to rebate eligible  
,m$ic>e drug plan enrollees "u any      
prescription drug plan op]at$ by ! ,,pdp
 sponsor dur+ ! rebate p]iod2  7ii7     
in=mation on ! price disc\nts1 price    
concessions1 & rebates = su* drugs = su*
 =m1 /r5g?1 & p]iod2  7iii7 in=mation on
 ! ext5t to :i* su* price disc\nts1     
price concessions1 & rebates apply      
equally to rebate eligible ,m$ic>e drug 
plan enrollees & ,,pdp enrollees :o are 
n rebate eligible ,m$ic>e drug plan     
enrollees2 &  7iv7 any additional       
in=mation t ! ,secret>y det]m9es is     
necess>y to enable ! ,secret>y to       
calculate ! av]age ,m$ic>e drug program 
rebate eligible rebate am\nt 7z def9$ 9 
p>agraph 7#c77;,c7 ( su* section71 & to 
det]m9e ! am\nt ( ! rebate requir$ "u   
?is section1 = su* =m1 /r5g?1 & p]iod4  
,su* report %all be 9 a =m consi/5t ) a 
/&>d report+ =mat e/abli%$ by !         
,secret>y4  7,c7 ,submission to         
,secret>y ,ea* ,,pdp sponsor %all       
promptly transmit a copy ( ! in=mation  

report$ "u subp>agraph 7,b7 to !        
,secret>y = ! purpose ( audit ov]sight &
 evaluation4  7,d7 ,confid5tiality (    
in=mation ,! provisions ( subp>agraph   
7,d7 ( section #aibg7;b77#c71 relat+ to 
confid5tiality ( in=mation1 %all apply  
to in=mation report$ by ,,pdp sponsors  
"u ?is p>agraph 9 ! same mann] t su*    
provisions apply to in=mation disclos$  
by manufactur]s or :olesal]s "u su*     
section1 except--  7i7 t any ref]5ce to 
?is section 9 clause 7i7 ( su*          
subp>agraph %all be treat$ z be+ a      
ref]5ce to ?is section2  7ii7 ! ref]5ce 
to ! ,director ( ! ,congressional       
,budget ,(fice 9 clause 7iii7 ( su*     
subp>agraph %all be treat$ z includ+ a  
ref]5ce to ! ,m$ic>e ,paym5t ,advisory  
,commission2 &  7iii7 clause 7iv7 ( su* 
subp>agraph %all n apply4  7,e7         
,ov]sight ,in=mation report$ "u ?is     
p>agraph may be us$ by ! ,inspector     
,g5]al ( ! ,dep>tm5t ( ,heal? & ,human  
,s]vices = ! /atutorily au?oriz$        
purposes ( audit1 inve/igation1 &       

evaluations4  7,f7 ,p5alties = failure  
to provide timely in=mation & provision 
( false in=mation ,9 ! case ( a ,,pdp   
sponsor--  7i7 t fails to provide       
in=mation requir$ "u subp>agraph 7,b7 on
 a timely basis1 ! sponsor is subject to
 a civil money p5alty 9 ! am\nt (       
#aj1jjj = ea* day 9 :i* su* in=mation   
has n be5 provid$2 or  7ii7 t kn[+ly 7z 
def9$ 9 section #aabh;,a7i77 provides   
false in=mation "u su* subp>agraph1 !   
sponsor is subject to a civil money     
p5alty 9 an am\nt n to exce$ #ajj1jjj = 
ea* item ( false in=mation4  ,su* civil 
money p5alties are 9 addition to o!r    
p5alties z may be prescrib$ by law4 ,!  
provisions ( section #aabh;,a 7o!r ?an  
subsections 7a7 & 7b77 %all apply to a  
civil money p5alty "u ?is subp>agraph 9 
! same mann] z su* provisions apply to a
 p5alty or proce$+ "u section           
#aabh;,a7a74  4  7#b7 ,application to   
,,ma organizations ,section             
#aheg7;f77#c7 ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #aciew-#bg7;f77#c77 is  

am5d$ by add+ at ! end ! foll[+3  7,d7  
,report+ requirem5t relat$ to rebate =  
rebate eligible ,m$ic>e drug plan       
enrollees ,section #ahfj;,d-#ab7;b77#g74
  4  7c7 ,deposit ( rebates into ,m$ic>e
 ,prescription ,drug ,acc\nt ,section   
#ahfj;,d-#af7;c7 ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciew-#aaf7;c77 is 
am5d$ by add+ at ! end ! foll[+ new     
p>agraph3  7#f7 ,rebate = rebate        
eligible ,m$ic>e drug plan enrollees    
,am\nts paid "u a rebate agreem5t "u    
section #ahfj;,d-#b7;f7 %all be deposit$
 into ! ,acc\nt4  4  7d7 ,exclusion f   
det]m9ation ( be/ price & av]age        
manufactur] price "u ,m$icaid  7#a7     
,exclusion f be/ price det]m9ation      
,section #aibg7;c77#a77;,c77ii77,i7 ( ! 
,social ,security ,act 7#db ,u4,s4,c4   
#acifr-#h7;c77#a77;,c77ii77,i77 is am5d$
 by ins]t+ & am\nts paid "u a rebate    
agreem5t "u section #ahfj;,d-#b7;f7 aft]
 ?is section4  7#b7 ,exclusion f av]age 
manufactur] price det]m9ation ,section  
#aibg7k77#a77;,b77i7 ( ! ,social        

,security ,act 7#db ,u4,s4,c4           
#acifr-#h7k77#a77;,b77i77 is am5d$--    
7,a7 9 subclause 7,,iv71 by /rik+ & aft]
 ! semicolon2  7,b7 9 subclause 7,v71 by
 /rik+ ! p]iod at ! end & ins]t+ 2 &2 & 
7,c7 by add+ at ! end ! foll[+3  7,,vi7 
am\nts paid "u a rebate agreem5t "u     
section #ahfj;,d-#b7;f74  4