,i  #aae? ,,congress  #b;d ,session  ,h4
 ,r4 #eaej  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,m>* #a1 #bjah,mr4    
,lev9 introduc$ ! foll[+ bill2 :i* 0    
ref]r$ to ! ,committee on ,en]gy &      
,comm]ce1 & 9 addition to ! ,committee  
on ,ways & ,means1 = a p]iod to be      
subsequ5tly det]m9$ by ! ,speak]1 9 ea* 
case = consid]ation ( su* provisions z  
fall )9 ! jurisdiction ( ! committee    
conc]n$  ,a ,,bill  ,to am5d title      
,,xviii ( ! ,social ,security ,act to   
require drug manufactur]s to pay a      
,m$ic>e "p ,b rebate = c]ta9 drugs if ! 
price ( su* drugs increases fa/] ?an    
inflation4  #a4 ,%ort title ,?is ,act   
may be cit$ z ! ,protect+ ,m$ic>e f     
,excessive ,price ,increases ,act (     
#bjah4  #b4 ,m$ic>e "p ,b rebate by     
manufactur]s = c]ta9 drugs ) prices     
increas+ fa/] ?an inflation  7a7 ,9     
g5]al ,section #ahcd ( ! ,social        
,security ,act 7#db ,u4,s4,c4 #aciem7 is
 am5d$ by add+ at ! end ! foll[+ new    
subsection3  7w7 ,no paym5t )\t rebate  

by manufactur]s = s+le s\rce drugs )    
prices increas+ fa/] ?an inflation  7#a7
 ,no paym5t = noncompliant manufactur]s 
,subject to ! subsequ5t p>agraphs ( ?is 
subsection1 no paym5t %all be available 
"u ?is "p = a unit ( a rebatable drug ( 
a manufactur] 7z def9$ 9 section        
#ahdg;,a7c77#f77;,a77 = ea* cal5d> qu>t]
 beg9n+ on or aft] ,july #a1 #bjai1 if  
su* manufactur] has fail$ to comply ) ! 
requirem5t "u p>agraph 7#b77;,b77i7 = ! 
rebate p]iod ) respect to su* cal5d>    
qu>t]4  7#b7 ,requirem5ts  7,a7         
,secret>ial provision ( in=mation ,n    
lat] ?an #f mon?s aft] ! end ( ea*      
rebate p]iod ) respect to a cal5d> qu>t]
 beg9n+ on or aft] ,july #a1 #bjai1 !   
,secret>y %all1 = ea* rebatable drug1   
report to ea* manufactur] ( su*         
rebatable drug--  7i7 in=mation on !    
total numb] ( units describ$ 9          
subp>agraph 7,a77i7 ( p>agraph 7#d7 )   
respect to su* drug & rebate p]iod2     
7ii7 in=mation on ! am\nt 7if any7 ( !  
excess av]age sales price increase      

describ$ 9 subp>agraph 7,a77ii7 ( su*   
p>agraph = su* drug & p]iod2 &  7iii7 ! 
rebate am\nt specifi$ "u su* p>agraph = 
su* rebatable drug & p]iod4  7,b7       
,manufactur] requirem5ts ,! manufactur] 
( a rebatable drug1 = su* drug1 %all    
meet ea* ( ! foll[+ requirem5ts = ea*   
rebate p]iod ) respect to a cal5d> qu>t]
 beg9n+ on or aft] ,july #a1 #bjai3  7i7
 ,rebate paym5t ,! manufactur] %all1 n  
lat] ?an #cj days aft] ! date ( receipt 
( ! in=mation describ$ 9 subp>agraph    
7,a7 f ! ,secret>y1 provide to !        
,secret>y a rebate t is equal to ! am\nt
 specifi$ 9 p>agraph 7#d7 = su* drug =  
su* rebate p]iod4  7ii7 ,report ( ,,asp 
,! manufactur] %all report to !         
,secret>y ! in=mation describ$ 9 section
 #aibg7;b77#c77;,a77iii7 9 a "t & mann] 
consi/5t ) ! report+ "u su* section1    
unless su* in=mation is already report$ 
9 accordance ) section                  
#aibg7;b77#c77;,c74  7#c7 ,rebatable    
drug def9$ ,9 ?is subsection1 ! t]m     
rebatable drug means a drug or          

biological 7z def9$ 9 section           
#ahdg;,a7c77#f77;,d77 paid = "u ?is "p1 
except su* t]m %all n include su* a drug
 or biological--  7,a7 to ! ext5t !     
units ( su* drug or biological are      
furni%$ z "p ( a gr\p+ ( items & s]vices
 & paid = z su* a gr\p+ 9 an ambulatory 
paym5t classification "u section        
#ahcc7t7 or 9 a s+le paym5t "u section  
#ahcc7;i7 7in/ead ( sep>ately payable "u
 su* respective section72  7,b7 to !    
ext5t paym5t = ! units ( su* drug or    
biological is includ$ "u ! s+le paym5t  
sy/em = r5al dialysis s]vices "u section
 #ahha7;b77#ad72  7,c7 to ! ext5t !     
av]age total all[$ *>ges p] ye> p]      
individual t uses su* drug or biological
 are less ?an #ajj2 or  7,d7 t is a     
vacc9e describ$ 9 subp>agraph 7,a7 or   
7,b7 ( section #ahfa7s77#aj74  7#d7     
,rebate am\nt  7,a7 ,9 g5]al ,= purposes
 ( p>agraph 7#b77;,b77i71 ! am\nt       
specifi$ 9 ?is p>agraph = a rebatable   
drug assign$ to a bill+ & paym5t code = 
a rebate p]iod is1 subject to p>agraph  

7#e71 ! am\nt equal to ! product (--    
7i7 ! total numb] ( units = :i* paym5t 0
 made "u ?is "p = su* rebatable drug    
dur+ ! rebate p]iod2 &  7ii7 ! am\nt 7if
 any7 by :i*-- 7,i7 ! applicable        
manufactur]'s av]age sales price 7z     
det]m9$ "u subp>agraph 7,b77 = su*      
rebatable drug = sales t occurr$ two    
qu>t]s prior to ! rebate p]iod2 exce$s  
7,,ii7 ! inflation-adju/$ ,,asp det]m9$ 
"u subp>agraph 7,c7 = su* rebatable drug
 = sales t occurr$ two qu>t]s prior to !
 rebate p]iod4  7,b7 ,det]m9ation (     
applicable manufactur]'s ,,asp ,!       
applicable manufactur]'s av]age sales   
price1 ) respect to a manufactur]1      
det]m9$ "u ?is subp>agraph = a bill+ &  
paym5t code is ! weight$ av]age ( !     
av]age sales prices ( all ( ! rebatable 
drugs ( ! manufactur] id5tifi$ by a     
national drug code assign$ to su* bill+ 
& paym5t code = sales t occurr$ two     
qu>t]s prior to ! rebate p]iod4  7,c7   
,det]m9ation ( inflation-adju/$ ,,asp ,!
 inflation-adju/$ ,,asp det]m9$ "u ?is  

subp>agraph = a rebatable drug = a      
rebate p]iod is--  7i7 ! av]age sales   
price = ! bill+ & paym5t code = all     
units ( su* drug = sales t occurr$ 9 !  
,,asp b5*m>k qu>t] 7z def9$ 9           
subp>agraph 7,e772 increas$ by  7ii7 !  
p]c5tage by :i* ! rebate p]iod ,,cpi-,u 
7z def9$ 9 subp>agraph 7,g7 = ! rebate  
p]iod exce$s ! b5*m>k p]iod ,,cpi-,u 7z 
def9$ 9 subp>agraph 7,f774  7,d7 ,rebate
 p]iod ,= purposes ( ?is subsection1    
subject to p>agraph 7#e77;,e71 ! t]m    
rebate p]iod means1 ) respect to a      
cal5d> qu>t]1 ! p]iod t is #b cal5d>    
qu>t]s prior to su* cal5d> qu>t]4  7,e7 
,,asp b5*m>k qu>t] ,! t]m ,,asp b5*m>k  
qu>t] means ! cal5d> qu>t] beg9n+       
,janu>y #a1 #bjaf4  7,f7 ,b5*m>k p]iod  
,,cpi-,u ,! t]m b5*m>k p]iod ,,cpi-,u   
means ! consum] price index = all urban 
consum]s 7,unit$ ,/ates city av]age7 =  
,janu>y #bjaf4  7,g7 ,rebate p]iod      
,,cpi-,u ,! t]m rebate p]iod ,,cpi-,u   
means1 ) respect to a rebate p]iod1 !   
consum] price index = all urban consum]s

 7,unit$ ,/ates city av]age7 = ! fir/   
mon? ( ! cal5d> qu>t] t is two cal5d>   
qu>t]s prior to ! rebate p]iod4  7#e7   
,special treatm5t ( c]ta9 drugs  7,a7   
,subsequ5tly approv$ drugs ,subject to  
subp>agraph 7,b71 9 ! case ( a s+le     
s\rce rebatable drug fir/ approv$ by !  
,food & ,drug ,adm9i/ration aft] ,janu>y
 #a1 #bjaf1 clause 7i7 ( p>agraph       
7#d77;,c7 %all be appli$ z if ! t]m     
,,asp b5*m>k qu>t] 7 def9$ "u p>agraph  
7#d77;,e7 z ! ?ird full cal5d> qu>t]    
aft] ! day on :i* ! drug 0 fir/ m>ket$ &
 clause 7ii7 ( p>agraph 7#d77;,c7 %all  
be appli$ z if ! t]m b5*m>k p]iod       
,,cpi-,u 7 def9$ "u p>agraph 7#d77;,f7 z
 if ! ref]5ce to ,janu>y #bjaf "u su*   
p>agraph 7 a ref]5ce to ! fir/ mon? ( ! 
?ird full cal5d> qu>t] aft] ! day on :i*
 ! drug 0 fir/ m>ket$4  7,b7 ,special   
rule = new drugs ,9 apply+ ?is          
subsection 9 ! case ( a newly approv$   
s+le s\rce rebatable drug = :i* a paym5t
 & bill+ code has n previ\sly be5       
e/abli%$ ! fir/ cal5d> qu>t] to :i* ?is 

subsection %all apply %all be ! six?    
full cal5d> qu>t] aft] ! day on :i* !   
drug 0 fir/ m>ket$4  7#f7 ,adju/m5t (   
co9surance ,) respect to co9surance "u  
?is "p ) respect to a rebatable drug =  
:i* a rebate is paid "u ?is subsection1 
! ,secret>y %all1 on an annual basis1   
pay ! individual an am\nt z if !        
co9surance = a rebatable drug = :i*     
paym5t is made "u ?is "p = su*          
individual 7 comput$ z if ! paym5t am\nt
 incurr$ "u ?is "p = su* drug 7 ratably 
r$uc$ to reflect ! rebate am\nt "u ?is  
subsection = su* drug4  7#g7 ,rebate    
deposits ,am\nts paid z rebates "u      
p>agraph 7#b77;,b77i7 %all be deposit$  
into ! ,f$]al ,supplem5t>y ,m$ical      
,insurance ,tru/ ,fund e/abli%$ "u      
section #ahda4  7#h7 ,exemptions  7,a7  
,o!r rebates or disc\nts ,! ,secret>y   
%all waive ! rebate "u p>agraph         
7#b77;,b77i7 ) respect to ! units ( a   
rebatable drug ( a manufactur] t is     
furni%$ to an individual1 if su*        
manufactur]1 ) respect to ! furni%+ (   

su* units ( su* drug1 provides =        
disc\nts "u section #cdj;,b ( ! ,public 
,heal? ,s]vice ,act or = rebates "u     
section #aibg4  7,b7 ,%ortages ,!       
,secret>y may r$uce or waive ! rebate "u
 p>agraph 7#b77;,b77i7 ) respect to a   
rebatable drug 9 ! case ( a %ortage (   
su* drug or o!r exig5t circum/ances1 z  
det]m9$ by ! ,secret>y4  7#i7           
,v]ification surveys ,! ,secret>y may   
survey :olesal]s & manufactur]s t       
directly di/ribute rebatable drugs1 :5  
necess>y1 to v]ify ! manufactur]'s      
av]age sales prices 7includ+ :olesale   
acquisition co/7 report$ "u p>agraph    
7#b77;,b77ii74 ,! ,secret>y may impose a
 civil monet>y p5alty 9 an am\nt n to   
exce$ #ajj1jjj on a :olesal] or         
manufactur] t refuses a reque/ =        
in=mation ab\t *>ges or prices by !     
,secret>y 9 connection ) a survey "u ?is
 subp>agraph or kn[+ly provides false   
in=mation4 ,! provisions ( section      
#aabh;,a 7o!r ?an subsections 7a7 7)    
respect to am\nts ( p5alties or         

additional assessm5ts7 & 7b77 %all apply
 to a civil money p5alty "u ?is         
subp>agraph 9 ! same mann] z su*        
provisions apply to a p5alty or proce$+ 
"u section #aabh;,a7a74  7#aj7 ,civil   
monet>y p5alty ,9 lieu ( apply+ p>agraph
 7#a7 = a cal5d> qu>t]1 9 ! case ( a    
manufactur] ( a rebatable drug :o has   
fail$ to comply ) ! requirem5ts "u      
p>agraph 7#b77;,b77i7 = su* drug = !    
rebate p]iod ) respect to su* cal5d>    
qu>t]1 ! ,secret>y may1 pursuant to     
regulations1 impose a civil monet>y     
p5alty on su* manufactur] 9 an am\nt n  
to exce$ #b p]c5t ( ! total exp5ditures 
"u ?is "p = su* drug = su* failure )    
respect to su* drug & qu>t]4 ,!         
provisions ( section #aabh;,a 7o!r ?an  
subsections 7a7 7) respect to am\nts (  
p5alties or additional assessm5ts7 &    
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  7#aa7 ,/udy &  
report  7,a7 ,/udy ,! ,secret>y %all    

conduct a /udy ( ! feasibility ( &      
op]ational issues involv$ ) ! foll[+3   
7i7 ,includ+ multis\rce drugs 7z def9$ 9
 section #ahdg;,a7c77#c77;,c77 9 !      
rebate sy/em "u ?is subsection4  7ii7   
,includ+ drugs & biologicals paid = "u  
,,ma plans "u "p ,c 9 ! rebate sy/em "u 
?is subsection4  7iii7 ,includ+ drugs   
exclud$ "u p>agraph 7#c7 9 ! rebate     
sy/em "u ?is subsection4  7,b7 ,report  
,n lat] ?an #c ye>s aft] ! date ( !     
enactm5t ( ?is subsection1 ! ,secret>y  
%all submit to ,congress a report on !  
/udy conduct$ "u subp>agraph 7,a74      
7#ab7 ,application to multis\rce drugs  
,! ,secret>y may1 bas$ on ! report      
submitt$ "u p>agraph 7#aa7 & pursuant to
 rulemak+1 apply ! provisions ( ?is     
subsection to multis\rce drugs 7z def9$ 
9 section #ahdg;,a7c77#c77;,c774  4  7b7
 ,provid+ ,med,p,a,c access to in=mation
 ,section #aibg7;b77#c77;,d7 ( ! ,social
 ,security ,act is am5d$-- 7#a7 9 clause
 7iv71 by /rik+ at ! end &2  7#b7 9     
clause 7v71 by /rik+ at ! end ! p]iod & 

ins]t+ 1 &2 &  7#c7 by ins]t+ aft]      
clause 7v7 ! foll[+ new clause3  7vi7 to
 p]mit ! ,m$ic>e ,paym5t ,advisory      
,commission to review ! in=mation       
provid$4  4  7c7 ,con=m+ am5dm5t to "p  
,b ,,asp calculation ,section           
#ahdg;,a7c77#c7 ( ! ,social ,security   
,act 7#db ,u4,s4,c4 #aciew-#c;a7c77#c77 
is am5d$ by ins]t+ or section #ahcd7w7  
aft] section #aibg4