,i  #aaf? ,,congress  #a/ ,session  ,h4 
,r4 #c  ,,9 ,,! ,,h\se ,,(              
,,repres5tatives  ,septemb] #ai1        
#bjai,mr4 ,pallone 7= himself1 ,mr4     
,neal1 & ,mr4 ,scott ( ,virg9ia7        
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,en]gy & ,comm]ce1 & 9 
addition to ! ,committees on ,ways &    
,means1 & ,education & ,labor1 = 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       
e/abli% a fair price negotiation        
program1 protect ! ,m$ic>e program f    
excessive price increases1 & e/abli% an 
out-(-pocket maximum = ,m$ic>e "p ,d    
enrollees1 & = o!r purposes4  #a4 ,%ort 
title2 table ( cont5ts  7a7 ,9 g5]al    
,?is ,act may be cit$ z ! ,l[] ,drug    
,co/s ,n[ ,act ( #bjai4  7b7 ,table (   
cont5ts ,! table ( cont5ts is z foll[s3 
,sec4 #a4 ,%ort title2 table ( cont5ts4 
,title ,i--,l[]+ ,prices ,?r\gh ,fair   
,drug ,price ,negotiation ,sec4 #aja4   

,provid+ = l[] prices = c]ta9 high-pric$
 s+le s\rce drugs4 ,sec4 #ajb4 ,select$ 
drug manufactur] excise tax impos$ dur+ 
noncompliance p]iods4 ,title            
,,ii--,m$ic>e ,p>ts ,b & ,d             
,prescription ,drug ,inflation ,rebates 
,sec4 #bja4 ,m$ic>e "p ,b rebate by     
manufactur]s4 ,sec4 #bjb4 ,m$ic>e "p ,d 
rebate by manufactur]s4 ,title          
,,iii--,"p ,d ,improvem5ts & ,maximum   
,out-(-,pocket ,cap = ,m$ic>e           
,b5efici>ies ,sec4 #cja4 ,m$ic>e "p ,d  
b5efit r$esign4  ,i ,l[]+ ,prices ,?r\gh
 ,fair ,drug ,price ,negotiation  #aja4 
,provid+ = l[] prices = c]ta9 high-pric$
 s+le s\rce drugs  7a7 ,program ,to l[] 
prices = c]ta9 high-,pric$ s+le s\rce   
drugs ,title ,,xi ( ! ,social ,security 
,act 7#db ,u4,s4,c4 #acja et seq47 is   
am5d$ by add+ at ! end ! foll[+ new "p3 
,e ,fair ,price ,negotiation ,program to
 ,l[] ,prices = ,c]ta9 ,high-,pric$     
,s+le ,s\rce ,drugs  #aaia4 ,e/abli%m5t 
( program  7a7 ,9 g5]al ,! ,secret>y    
%all e/abli% a ,fair ,price ,negotiation

 ,program 79 ?is "p ref]r$ to z !       
program74 ,"u ! program1 ) respect to   
ea* price applicability p]iod1 !        
,secret>y %all-- 7#a7 publi% a li/ (    
select$ drugs 9 accordance ) section    
#aaib2  7#b7 ent] into agreem5ts )      
manufactur]s ( select$ drugs ) respect  
to su* p]iod1 9 accordance ) section    
#aaic2  7#c7 negotiate &1 if applicable1
 r5egotiate maximum fair prices = su*   
select$ drugs1 9 accordance ) section   
#aaid2 &  7#d7 c>ry out ! adm9i/rative  
duties describ$ 9 section #aaif4  7b7   
,def9itions relat+ to tim+ ,= purposes (
 ?is "p3  7#a7 ,initial price           
applicability ye> ,! t]m initial price  
applicability ye> means a plan ye>      
7beg9n+ ) plan ye> #bjbc7 or1 if agre$  
to 9 an agreem5t "u section #aaic by !  
,secret>y & manufactur] involv$1 a p]iod
 ( m ?an "o plan ye> 7beg9n+ on or aft] 
,janu>y #a1 #bjbc74  7#b7 ,price        
applicability p]iod ,! t]m price        
applicability p]iod means1 ) respect to 
a drug1 ! p]iod beg9n+ ) ! initial price

 applicability ye> ) respect to :i* su* 
drug is a select$ drug & end+ ) ! la/   
plan ye> dur+ :i* ! drug is a select$   
drug4  7#c7 ,select$ drug publication   
date ,! t]m select$ drug publication    
date means1 ) respect to ea* initial    
price applicability ye>1 ,april #ae ( ! 
plan ye> t beg9s #b ye>s prior to su*   
ye>4  7#d7 ,volunt>y negotiation p]iod  
,! t]m volunt>y negotiation p]iod means1
 ) respect to an initial price          
applicability ye> ) respect to a select$
 drug1 ! p]iod--  7,a7 beg9n+ on ! soon]
 (-- 7i7 ! date on :i* ! manufactur] ( !
 drug & ! ,secret>y ent] into an        
agreem5t "u section #aaic ) respect to  
su* drug2 or  7ii7 ,june #ae foll[+ !   
select$ drug publication date ) respect 
to su* select$ drug2 &  7,b7 end+ on    
,m>* #ca ( ! ye> t beg9s "o ye> prior to
 ! initial price applicability ye>4  7c7
 ,o!r def9itions ,= purposes ( ?is "p3  
7#a7 ,fair price eligible individual ,! 
t]m fair price eligible individual      
means1 ) respect to a select$ drug1 an  

individual :o is--  7,a7 enroll$ "u a   
prescription drug plan "u "p ,d ( title 
,,xviii or an ,,ma-,,pd plan "u "p ,c ( 
su* title "u :i* cov]age is provid$ =   
su* drug2  7,b7 enroll$ "u a gr\p heal? 
plan or heal? insurance cov]age (f]$ 9 !
 gr\p or individual m>ket 7z su* t]ms   
are def9$ 9 section #bgia ( ! ,public   
,heal? ,s]vice ,act7 ) respect to :i*   
!re is 9 effect an agreem5t ) !         
,secret>y "u section #aaig ) respect to 
su* select$ drug2 or  7,c7 entitl$ to   
b5efits "u "p ,a ( title ,,xviii or     
enroll$ "u "p ,b ( su* title4  7#b7     
,maximum fair price ,! t]m maximum fair 
price means1 ) respect to a plan ye>    
dur+ a price applicability p]iod & )    
respect to a select$ drug 7z def9$ 9    
section #aaib7;c77 ) respect to su*     
p]iod1 ! price publi%$ pursuant to      
section #aaie 9 ! ,f$]al ,regi/] = su*  
drug & ye>4  7#c7 ,av]age int]national  
m>ket price def9$  7,a7 ,9 g5]al ,! t]ms
 av]age int]national m>ket price & ,,aim
 price mean1 ) respect to a drug1 !     

av]age price 7:i* %all be ! net av]age  
price1 if practicable1 & volume-weight$1
 if practicable7 = any dosage =m & /r5g?
 ( a unit 7z def9$ 9 subp>agraph 7,c77 =
 ! drug = sales ( su* drug1 z comput$ 7z
 ( ! date ( publication ( su* drug z a  
select$ drug "u section #aaib7;a77 9 all
 c\ntries describ$ 9 clause 7ii7 (      
subp>agraph 7,b7 t are applicable       
c\ntries 7z describ$ 9 clause 7i7 ( su* 
subp>agraph7 ) respect to su* drug4     
7,b7 ,applicable c\ntries  7i7 ,9 g5]al 
,= purposes ( subp>agraph 7,a71 a c\ntry
 describ$ 9 clause 7ii7 is an applicable
 c\ntry describ$ 9 ?is clause ) respect 
to a drug if !re is available an av]age 
price = any unit = ! drug = sales ( su* 
drug 9 su* c\ntry4  7ii7 ,c\ntries      
describ$ ,= purposes ( ?is p>agraph1 !  
foll[+ are c\ntries describ$ 9 ?is      
clause3 7,i7 ,au/ralia4  7,,ii7 ,canada4
  7,,iii7 ,france4  7,,iv7 ,g]many4     
7,v7 ,japan4  7,,vi7 ,! ,unit$ ,k+dom4  
7,c7 ,unit ,! t]m unit means1 ) respect 
to a drug1 ! l[e/ id5tifiable quantity  

7su* z a capsule or tablet1 milligram ( 
molecules1 or grams7 ( ! drug t is      
disp5s$4  #aaib4 ,selection (           
negotiation-eligible drugs z select$    
drugs  7a7 ,9 g5]al ,n lat] ?an !       
select$ drug publication date ) respect 
to an initial price applicability ye>1 !
 ,secret>y %all select & publi% 9 !     
,f$]al ,regi/] a li/ (--  7#a7 at lea/  
#be negotiation-eligible drugs describ$ 
9 subp>agraphs 7,a7 & 7,b71 b n         
subp>agraph 7,c71 ( subsection 7d77#a7  
7or1 ) respect to an initial price      
applicability ye> beg9n+ aft] #bjbc1 !  
maximum numb] 7if su* numb] is less ?an 
#be7 ( su* negotiation-eligible drugs = 
! ye>7 ) respect to su* ye>2 &  7#b7 all
 negotiation-eligible drugs describ$ 9  
subp>agraph 7,c7 ( su* subsection )     
respect to su* ye>4  ,ea* drug publi%$  
on ! li/ pursuant to ! previ\s s5t5ce   
%all be subject to ! negotiation process
 "u section #aaid = ! volunt>y          
negotiation p]iod ) respect to su*      
initial price applicability ye> 7& !    

r5egotiation process "u su* section z   
applicable = any subsequ5t ye> dur+ !   
applicable price applicability p]iod74  
,9 apply+ ?is subsection1 any           
negotiation-eligible drug t is select$  
"u ?is subsection = an initial price    
applicability ye> %all n c\nt t[>d !    
requir$ m9imum am\nt ( drugs to be      
select$ "u p>agraph 7#a7 = any subsequ5t
 ye>1 includ+ su* a drug s select$ t is 
subject to r5egotiation "u section      
#aaid4  7b7 ,selection ( drugs ,9 c>ry+ 
out subsection 7a77#a7 ! ,secret>y %all 
select = inclusion on ! publi%$ li/     
describ$ 9 subsection 7a7 ) respect to a
 price applicability p]iod1 !           
negotiation-eligible drugs t ! ,secret>y
 projects w result 9 ! greate/ sav+s to 
! ,f$]al ,gov]nm5t or fair price        
eligible individuals dur+ ! price       
applicability p]iod4 ,9 mak+ ?is        
projection ( sav+s = drugs = :i* !re is 
an ,,aim price = a price applicability  
p]iod1 ! sav+s %all be project$ tak+    
into consid]ation bo? ! volume ( drugs =

 :i* paym5t is made1 to ! ext5t su* data
 is available1 & ! am\nt by :i* ! net   
price = ! drugs exce$s ! ,,aim price = !
 drugs4  7c7 ,select$ drug ,= purposes (
 ?is "p1 ea* drug includ$ on ! li/      
publi%$ "u subsection 7a7 ) respect to  
an initial price applicability ye> %all 
be ref]r$ to z a select$ drug ) respect 
to su* ye> & ea* subsequ5t plan ye>     
beg9n+ be=e ! fir/ plan ye> beg9n+ aft] 
! date on :i* ! ,secret>y det]m9es !    
drug is no long] a qualify+ s+le s\rce  
drug4  7d7 ,negotiation-,eligible drug  
7#a7 ,9 g5]al ,= purposes ( ?is "p1 !   
t]m negotiation-eligible drug means1 )  
respect to ! select$ drug publication   
date ) respect to an initial price      
applicability ye>1 a qualify+ s+le s\rce
 drug1 z def9$ 9 subsection 7e71 t meets
 any ( ! foll[+ crit]ia3  7,a7 ,cov]$ "p
 ,d drugs ,! drug is among ! #abe cov]$ 
"p ,d drugs 7z def9$ 9 section          
#ahfj;,d-#b7;e77 = :i* !re 0 an e/imat$ 
greate/ net sp5d+ "u p>ts ,c & ,d (     
title ,,xviii1 z det]m9$ by ! ,secret>y1

 dur+ ! mo/ rec5t plan ye> prior to su* 
drug publication date = :i* data are    
available4  7,b7 ,o!r drugs ,! drug is  
among ! #abe drugs = :i* !re 0 an       
e/imat$ greate/ net sp5d+ 9 ! ,unit$    
,/ates1 z det]m9$ by ! ,secret>y1 dur+ !
 mo/ rec5t plan ye> prior to su* drug   
publication date = :i* data are         
available4  7,c7 ,insul9 ,! drug is a   
qualify+ s+le s\rce drug describ$ 9     
subsection 7e77#c74  7#b7 ,cl>ification 
,9 det]m9+ :e!r a qualify+ s+le s\rce   
drug satisfies any ( ! crit]ia describ$ 
9 p>agraph 7#a71 ! ,secret>y %all1 to ! 
ext5t practicable1 use data t is        
aggregat$ across /r5g?s & dosage =ms &  
r\tes ( adm9i/ration ( ! drug4  7#c7    
,publication ,n lat] ?an ! select$ drug 
publication date ) respect to an initial
 price applicability ye>1 ! ,secret>y   
%all publi% 9 ! ,f$]al ,regi/] a li/ (  
negotiation-eligible drugs ) respect to 
su* select$ drug publication date4  7e7 
,qualify+ s+le s\rce drug ,= purposes ( 
?is "p1 ! t]m qualify+ s+le s\rce drug  

means any ( ! foll[+3 7#a7 ,drug        
products ,a drug t--  7,a7 is approv$ "u
 section #eje7;c7 ( ! ,f$]al ,food1     
,drug1 & ,cosmetic ,act & cont9ues to be
 m>ket$ pursuant to su* approval2 &     
7,b7 is n ! li/$ drug = any drug t is   
approv$ & cont9ues to be m>ket$ "u      
section #eje7;j7 ( su* ,act4  7#b7      
,biological products ,a biological      
product t-- 7,a7 is lic5s$ "u section   
#cea7;a7 ( ! ,public ,heal? ,s]vice     
,act1 includ+ any product t has be5     
deem$ to be lic5s$ "u section #cea ( su*
 ,act pursuant to section #gjjb7;e77#d7 
( ! ,biologics ,price ,competition &    
,innovation ,act ( #bjji1 & cont9ues to 
be m>ket$ "u section #cea ( su* ,act2 & 
7,b7 is n ! ref]5ce product = any       
biological product t is lic5s$ &        
cont9ues to be m>ket$ "u section #cea7k7
 ( su* ,act4  7#c7 ,insul9 product      
,not)/&+ p>agraphs 7#a7 & 7#b71 any     
insul9 product t is approv$ "u          
subsection 7c7 or 7j7 ( section #eje ( !
 ,f$]al ,food1 ,drug1 & ,cosmetic ,act  

or lic5s$ "u subsection 7a7 or 7k7 (    
section #cea ( ! ,public ,heal? ,s]vice 
,act & cont9ues to be m>ket$ "u su*     
section #eje or #cea4  ,= purposes (    
apply+ p>agraphs 7#a77;,b7 & 7#b77;,b71 
a drug or biological product t is m>ket$
 by ! same sponsor or manufactur] 7or an
 affiliate !re( or a cross-lic5s$       
produc] or di/ributor7 z ! li/$ drug or 
ref]5ce product describ$ 9 su*          
respective p>agraph %all n be tak5 into 
consid]ation4  7f7 ,in=mation on        
int]national drug prices ,= purposes (  
det]m9+ :i* negotiation-eligible drugs  
to select "u subsection 7a7 &1 9 ! case 
( su* drugs t are select$ drugs1 to     
det]m9e ! maximum fair price ( su* drug 
& :e!r su* maximum fair price %\ld be   
r5egotiat$ "u section #aaid1 ! ,secret>y
 %all use data relat+ to ! ,,aim price )
 respect to su* drugs z available or    
provid$ to ! ,secret>y & %all on an     
ongo+ basis reque/ f manufactur]s (     
select$ drugs in=mation on ! ,,aim price
 ( su* drugs4  #aaic4 ,manufactur]      

agreem5ts  7a7 ,9 g5]al ,= purposes (   
section #aaia7;a77#b71 ! ,secret>y %all 
ent] into agreem5ts ) manufactur]s (    
select$ drugs ) respect to a price      
applicability p]iod1 by n lat] ?an ,june
 #ae foll[+ ! select$ drug publication  
date ) respect to su* select$ drug1 "u  
:i*--  7#a7 dur+ ! volunt>y negotiation 
p]iod = ! initial price applicability   
ye> = ! select$ drug1 ! ,secret>y &     
manufactur]1 9 accordance ) section     
#aaid1 negotiate to det]m9e 7&1 by n    
lat] ?an ! la/ date ( su* p]iod & 9     
accordance ) subsection 7c71 agree to7 a
 maximum fair price = ! select$ drug ( !
 manufactur] 9 ord] to provide access to
 su* price--  7,a7 to fair price        
eligible individuals describ$ 9         
subp>agraph 7,a7 or 7,b7 ( section      
#aaia7;c77#a7 furni%$ su* drug dur+1    
subject to subp>agraph 7#b71 ! price    
applicability p]iod2 &  7,b7 to         
hospitals1 physicians1 & o!r provid]s ( 
s]vices & suppli]s ) respect to fair    
price eligible individuals describ$ 9   

subp>agraph 7,c7 ( su* section adm9i/]$ 
su* drug dur+1 subject to subp>agraph   
7#b71 ! price applicability p]iod2  7#b7
 ! ,secret>y & ! manufactur] %all1 9    
accordance ) a process & dur+ a p]iod   
specifi$ by ! ,secret>y pursuant to     
rulemak+1 r5egotiate 7&1 by n lat] ?an !
 la/ date ( su* p]iod & 9 accordance )  
subsection 7c71 agree to7 ! maximum fair
 price = ! drug if ! ,secret>y det]m9es 
t !re is a mat]ial *ange 9 any ( !      
factors describ$ 9 section #aaid7;d7    
relat+ to ! drug1 includ+ *anges 9 !    
,,aim price = ! drug1 9 ord] to provide 
access to su* maximum fair price 7z s   
r5egotiat$7--  7,a7 to fair price       
eligible individuals describ$ 9         
subp>agraph 7,a7 or 7,b7 ( section      
#aaia7;c77#a7 furni%$ su* drug dur+ any 
ye> dur+ ! price applicability p]iod    
7beg9n+ aft] su* r5egotiation7 ) respect
 to su* select$ drug2 &  7,b7 to        
hospitals1 physicians1 & o!r provid]s ( 
s]vices & suppli]s ) respect to fair    
price eligible individuals describ$ 9   

subp>agraph 7,c7 ( su* section adm9i/]$ 
su* drug dur+ any ye> describ$ 9        
subp>agraph 7,a72  7#c7 ! maximum fair  
price 7includ+ z r5egotiat$ pursuant to 
p>agraph 7#b771 ) respect to su* a      
select$ drug1 %all be provid$ to fair   
price eligible individuals describ$ 9   
subp>agraph 7,a7 or 7,b7 ( section      
#aaia7;c77#a7 at ! ph>macy or by ! mail 
ord] s]vice at ! po9t-(-sale ( su* drug2
  7#d7 ! manufactur]1 subject to        
subsection 7c71 submits to ! ,secret>y1 
9 a =m & mann] specifi$ by ! ,secret>y--
  7,a7 = ! volunt>y negotiation p]iod = 
! price applicability p]iod 7&1 if      
applicable1 be=e any p]iod (            
r5egotiation specifi$ pursuant to       
p>agraph 7#b77 ) respect to su* drug all
 in=mation t ! ,secret>y requires to    
c>ry out ! negotiation 7or r5egotiation 
process7 "u ?is "p1 includ+ in=mation   
describ$ 9 section #aaib7;f7 & section  
#aaid7;d77#a72 &  7,b7 on an ongo+      
basis1 in=mation on *anges 9 prices = ! 
drug t w\ld affect ! ,,aim price = !    

drug or o!rwise provide a basis =       
r5egotiation ( ! maximum fair price (   
su* drug pursuant to p>agraph 7#b72     
7#e7 ! manufactur] agrees t 9 ! case !  
select$ drug ( a manufactur] is a drug  
describ$ 9 subsection 7c71 ! manufactur]
 w1 9 accordance ) su* subsection1 make 
any paym5t requir$ "u su* subsection )  
respect to su* drug2 &  7#f7 !          
manufactur] complies ) requirem5ts      
impos$ by ! ,secret>y = purposes (      
adm9i/]+ ! program1 includ+ ) respect to
 ! duties describ$ 9 section #aaif4  7b7
 ,agreem5t 9 effect until drug is no    
long] a select$ drug ,an agreem5t ent]$ 
into "u ?is section %all be effective1 )
 respect to a drug1 until su* drug is no
 long] consid]$ a select$ drug "u       
section #aaib7;c74  7c7 ,special rule = 
c]ta9 select$ drugs )\t ,,aim price     
7#a7 ,9 g5]al ,9 ! case ( a select$ drug
 = :i* !re is no ,,aim price available )
 respect to ! initial price             
applicability ye> = su* drug & = :i* an 
,,aim price becomes available beg9n+ )  

respect to a subsequ5t plan ye> dur+ !  
price applicability p]iod = su* drug1 if
 ! ,secret>y det]m9es t ! am\nt describ$
 9 p>agraph 7#b77;,a7 = su* drug is     
great] ?an ! am\nt describ$ 9 p>agraph  
7#b77;,b7 = su* drug1 !n by n lat] ?an  
"o ye> aft] ! date ( su* det]m9ation1 ! 
manufactur] ( su* select$ drug %all pay 
to ! ,treasury an am\nt equal to !      
diff]5ce betwe5 su* am\nt describ$ 9    
p>agraph 7#b77;,a7 = su* drug & su*     
am\nt describ$ 9 p>agraph 7#b77;,b7 =   
su* drug4  7#b7 ,am\nts describ$  7,a7  
,weight$ av]age price be=e ,,aim price  
available ,= purposes ( p>agraph 7#a71 !
 am\nt describ$ 9 ?is subp>agraph = a   
select$ drug describ$ 9 su* p>agraph1 is
 ! am\nt equal to ! weight$ av]age      
manufactur] price = su* dosage /r5g? &  
=m = ! drug dur+ ! p]iod beg9n+ ) ! fir/
 plan ye> = :i* ! drug is includ$ on !  
li/ ( negotiation-eligible drugs publi%$
 "u section #aaib7;d7 & end+ ) ! la/    
plan ye> dur+ ! price applicability     
p]iod = su* drug ) respect to :i* !re is

 no ,,aim price available = su* drug4   
7,b7 ,am\nt multipli] aft] ,,aim price  
available ,= purposes ( p>agraph 7#a71 !
 am\nt describ$ 9 ?is subp>agraph = a   
select$ drug describ$ 9 su* p>agraph1 is
 ! am\nt equal to #bjj p]c5t ( ! ,,aim  
price = su* drug ) respect to ! fir/    
plan ye> dur+ ! price applicability     
p]iod = su* drug ) respect to :i* !re is
 an ,,aim price available = su* drug4   
7d7 ,confid5tiality ( in=mation         
,in=mation submitt$ to ! ,secret>y "u   
?is "p by a manufactur] ( a select$ drug
 t is propriet>y in=mation ( su*        
manufactur] 7z det]m9$ by ! ,secret>y7  
may be us$ only by ! ,secret>y or       
disclos$ to & us$ by ! ,comptroll]      
,g5]al ( ! ,unit$ ,/ates or ! ,m$ic>e   
,paym5t ,advisory ,commission = purposes
 ( c>ry+ out ?is "p4  7e7 ,regulations  
7#a7 ,9 g5]al ,! ,secret>y %all1        
pursuant to rulemak+1 specify1 9        
accordance ) p>agraph 7#b71 ! in=mation 
t mu/ be submitt$ "u subsection 7a77#d74
  7#b7 ,in=mation specifi$ ,in=mation   

describ$ 9 p>agraph 7#a71 ) respect to a
 select$ drug1 %all include in=mation on
 sales ( ! drug 7by ! manufactur] ( !   
drug or by ano!r entity "u lic5se or o!r
 agreem5t ) ! manufactur]1 ) respect to 
! sales ( su* drug1 reg>dless ( ! "n "u 
:i* ! drug is sold7 9 any =eign c\ntry t
 is "p ( ! ,,aim price4 ,! ,secret>y    
%all v]ify1 to ! ext5t practicable1 su* 
sales f appropriate (ficials ( !        
gov]nm5t ( ! =eign c\ntry involv$4  7f7 
,compliance ) requirem5ts = adm9i/ration
 ( program ,ea* manufactur] ) an        
agreem5t 9 effect "u ?is section %all   
comply ) requirem5ts impos$ by !        
,secret>y or a ?ird p>ty ) a contract "u
 section #aaif7;c77#a71 z applicable1 = 
purposes ( adm9i/]+ ! program4  #aaid4  
,negotiation & r5egotiation process  7a7
 ,9 g5]al ,= purposes ( ?is "p1 "u an   
agreem5t "u section #aaic betwe5 !      
,secret>y & a manufactur] ( a select$   
drug1 ) respect to ! p]iod = :i* su*    
agreem5t is 9 effect & 9 accordance )   
subsections 7b7 & 7c71 ! ,secret>y & !  

manufactur]--  7#a7 %all dur+ ! volunt>y
 negotiation p]iod ) respect to !       
initial price applicability ye> = su*   
drug1 9 accordance ) ?is section1       
negotiate a maximum fair price = su*    
drug = ! purpose describ$ 9 section     
#aaic7;a77#a72 &  7#b7 z applicable     
pursuant to section #aaic7;a77#b7 & 9   
accordance ) ! process specifi$ pursuant
 to su* section1 r5egotiate su* maximum 
fair price = su* drug = ! purpose       
describ$ 9 su* section4  7b7 ,negotiat+ 
me?odology & objective  7#a7 ,9 g5]al ,!
 ,secret>y %all develop & use a consi/5t
 me?odology = negotiations "u subsection
 7a7 t1 9 accordance ) p>agraph 7#b7 &  
subject to p>agraph 7#c71 a*ieves ! l[e/
 maximum fair price = ea* select$ drug  
:ile appropriately rew>d+ innovation4   
7#b7 ,prioritiz+ factors ,9 consid]+ !  
factors describ$ 9 subsection 7d7 9     
negotiat+ 7&1 z applicable1 r5egotiat+7 
! maximum fair price = a select$ drug1 !
 ,secret>y %all1 to ! ext5t practicable1
 consid] all ( ! available factors li/$ 

b %all prioritize ! foll[+ factors3     
7,a7 ,rese>* & developm5t co/s ,! factor
 describ$ 9 p>agraph 7#a77;,a7 (        
subsection 7d74  7,b7 ,m>ket data ,!    
factor describ$ 9 p>agraph 7#a77;,b7 (  
su* subsection4  7,c7 ,unit co/s (      
production & di/ribution ,! factor      
describ$ 9 p>agraph 7#a77;,c7 ( su*     
subsection4  7,d7 ,comp>ison to exi/+   
!rapeutic alt]natives ,! factor describ$
 9 p>agraph 7#b77;,a7 ( su* subsection4 
7#c7 ,requirem5t  7,a7 ,9 g5]al ,9      
negotiat+ ! maximum fair price ( a      
select$ drug1 ) respect to an initial   
price applicability ye> = ! select$     
drug1 &1 z applicable1 9 r5egotiat+ !   
maximum fair price = su* drug1 ) respect
 to a subsequ5t ye> dur+ ! price        
applicability p]iod = su* drug1 9 ! case
 t ! manufactur] ( ! select$ drug (f]s  
"u ! negotiation or r5egotiation1 z     
applicable1 a price = su* drug t is n m 
?an ! t>get price describ$ 9 subp>agraph
 7,b7 = su* drug = ! respective ye>1 !  
,secret>y %all agree "u su* negotiation 

or r5egotiation1 respectively1 to su*   
(f]$ price z ! maximum fair price4  7,b7
 ,t>get price  7i7 ,9 g5]al ,subject to 
clause 7ii71 ! t>get price describ$ 9   
?is subp>agraph = a select$ drug )      
respect to a ye>1 is ! av]age price 7:i*
 %all be ! net av]age price1 if         
practicable1 & volume-weight$1 if       
practicable7 = any dosage =m & /r5g? ( a
 unit = ! drug = sales ( su* drug1 z    
comput$ 9 ! applicable c\ntry describ$ 9
 section #aaia7;c77#c77;,b7 ) respect to
 su* drug t1 ) respect to su* ye>1 has !
 l[e/ av]age price = su* drug z comp>$  
to ! av]age prices 7z s comput$7 = su*  
drug ) respect to su* ye> 9 ! o!r       
applicable c\ntries describ$ 9 su*      
section ) respect to su* drug4  7ii7    
,select$ drugs )\t ,,aim price ,9 apply+
 ?is p>agraph 9 ! case ( negotiat+ !    
maximum fair price ( a select$ drug =   
:i* !re is no ,,aim price available )   
respect to ! initial price applicability
 ye> = su* drug1 or1 z applicable1      
r5egotiat+ ! maximum fair price = su*   

drug ) respect to a subsequ5t ye> dur+ !
 price applicability p]iod = su* drug   
be=e ! fir/ plan ye> = :i* !re is an    
,,aim price available = su* drug1 !     
t>get price describ$ 9 ?is subp>agraph =
 su* drug & respective ye> is ! am\nt t 
is #hj p]c5t ( ! av]age manufactur]     
price = su* drug & ye>4  7#d7 ,annual   
report ,aft] ! completion ( ea* volunt>y
 negotiation p]iod1 ! ,secret>y %all    
submit to ,congress a report on !       
maximum fair prices negotiat$ 7or1 z    
applicable1 r5egotiat$7 = su* p]iod4    
,su* report %all include in=mation on h[
 su* prices s negotiat$ 7or r5egotiat$7 
meet ! requirem5ts ( ?is "p1 includ+ !  
requirem5ts ( ?is subsection4  7c7      
,limitation  7#a7 ,9 g5]al ,subject to  
p>agraph 7#b71 ! maximum fair price     
negotiat$ 7includ+ z r5egotiat$7 "u ?is 
section = a select$ drug1 ) respect to  
ea* plan ye> dur+ a price applicability 
p]iod = su* drug1 %all n exce$ #abj     
p]c5t ( ! ,,aim price applicable to su* 
drug ) respect to su* ye>4  7#b7        

,select$ drugs )\t ,,aim price ,9 ! case
 ( a select$ drug = :i* !re is no ,,aim 
price available ) respect to ! initial  
price applicability ye> = su* drug1 =   
ea* plan ye> dur+ ! price applicability 
p]iod be=e ! fir/ plan ye> = :i* !re is 
an ,,aim price available = su* drug1 !  
maximum fair price negotiat$ 7includ+ z 
r5egotiat$7 "u ?is section = ! select$  
drug %all n exce$ ! am\nt equal to #he  
p]c5t ( ! av]age manufactur] price = !  
drug ) respect to su* ye>4  7d7         
,consid]ations ,= purposes ( negotiat+  
&1 z applicable1 r5egotiat+ 7includ+ =  
purposes ( det]m9+ :e!r to r5egotiate7 !
 maximum fair price ( a select$ drug "u 
?is "p ) ! manufactur] ( ! drug1 !      
,secret>y %all1 consi/5t ) subsection   
7b77#b71 take into consid]ation ! foll[+
 factors3  7#a7 ,manufactur]-specific   
in=mation ,! foll[+ in=mation1 includ+ z
 submitt$ by ! manufactur]3 7,a7 ,rese>*
 & developm5t co/s ( ! manufactur] = !  
drug & ! ext5t to :i* ! manufactur] has 
rec\p$ rese>* & developm5t co/s4  7,b7  

,m>ket data = ! drug1 includ+ !         
di/ribution ( sales across diff]5t      
programs & pur*as]s & project$ future   
rev5ues = ! drug4  7,c7 ,unit co/s (    
production & di/ribution ( ! drug4  7,d7
 ,prior ,f$]al f9ancial support = novel 
!rapeutic discov]y & developm5t )       
respect to ! drug4  7,e7 ,data on pat5t 
& on exi/+ & p5d+ exclusivity = ! drug4 
7,f7 ,national sales data = ! drug4     
7,g7 ,in=mation on cl9ical trials = !   
drug 9 ! ,unit$ ,/ates or 9 applicable  
c\ntries describ$ 9 section             
#aaia7;c77#c77;,b74  7#b7 ,in=mation on 
alt]native products ,! foll[+ in=mation3
 7,a7 ,! ext5t to :i* ! drug repres5ts a
 !rapeutic advance z comp>$ to exi/+    
!rapeutic alt]natives &1 to ! ext5t su* 
in=mation is available1 ! co/s ( su*    
exi/+ !rapeutic alt]natives4  7,b7      
,in=mation on approval by ! ,food &     
,drug ,adm9i/ration ( alt]native drug   
products4  7,c7 ,in=mation on comp>ative
 effectiv5ess analysis = su* products4  
7#c7 ,=eign sales in=mation ,to ! ext5t 

available on a timely basis1 includ+ z  
provid$ by a manufactur] ( ! select$    
drug or o!rwise1 in=mation on sales ( ! 
select$ drug 9 ea* ( ! c\ntries describ$
 9 section #aaia7;c77#c77;,b74  7#d7    
,additional in=mation ,in=mation        
submitt$ to ! ,secret>y1 9 accordance ) 
a process specifi$ by ! ,secret>y1 by   
o!r p>ties t are affect$ by ! e/abli%m5t
 ( a maximum fair price = ! select$     
drug4  7e7 ,reque/ = in=mation ,=       
purposes ( negotiat+ &1 z applicable1   
r5egotiat+ 7includ+ = purposes ( det]m9+
 :e!r to r5egotiate7 ! maximum fair     
price ( a select$ drug "u ?is "p ) !    
manufactur] ( ! drug1 ) respect to a    
price applicability p]iod1 & o!r        
relevant data = purposes ( ?is section--
  7#a7 ! ,secret>y %all1 n lat] ?an !   
select$ drug publication date ) respect 
to ! initial price applicability ye> (  
su* p]iod1 reque/ drug pric+ in=mation f
 ! manufactur] ( su* select$ drug1      
includ+ in=mation describ$ 9 subsection 
7d77#a72 &  7#b7 by n lat] ?an ,octob]  

#a foll[+ ! select$ drug publication    
date1 ! manufactur] ( su* select$ drug  
%all submit to ! ,secret>y su* reque/$  
in=mation 9 su* =m & mann] z ! ,secret>y
 may require4  ,! ,secret>y %all reque/1
 f ! manufactur] or o!rs1 su* additional
 in=mation z may be ne$$ to c>ry out !  
negotiation & r5egotiation process "u   
?is section4  #aaie4 ,publication (     
maximum fair prices  7a7 ,9 g5]al ,)    
respect to an initial price             
applicability ye> & select$ drug )      
respect to su* ye>1 n lat] ?an ,may #a (
 ! plan ye> prior to su* initial price  
applicability ye>1 ! ,secret>y %all     
publi% 9 ! ,f$]al ,regi/] ! maximum fair
 price negotiat$ "u ?is "p ) !          
manufactur] ( su* drug4  7b7 ,updates   
7#a7 ,subsequ5t ye> maximum fair prices 
,= a select$ drug1 = ea* plan ye>       
subsequ5t to ! initial price            
applicability ye> = su* drug ) respect  
to :i* an agreem5t = su* drug is 9      
effect "u section #aaic1 ! ,secret>y    
%all publi% 9 ! ,f$]al ,regi/]--  7,a7  

subject to subp>agraph 7,b71 ! am\nt    
equal to ! maximum fair price publi%$ = 
su* drug = ! previ\s ye>1 increas$ by ! 
annual p]c5tage increase 9 ! consum]    
price index = all urban consum]s 7all   
items2 ,u4,s4 city av]age7 z ( ,septemb]
 ( su* previ\s ye>2 or  7,b7 9 ! case ! 
maximum fair price = su* drug 0         
r5egotiat$1 = ! fir/ ye> = :i* su* price
 z s r5egotiat$ applies1 su* r5egotiat$ 
maximum fair price4  7#b7 ,prices       
negotiat$ aft] deadl9e ,9 ! case ( a    
select$ drug ) respect to an initial    
price applicability ye> = :i* ! maximum 
fair price is det]m9$ "u ?is "p aft] !  
date ( publication "u ?is section1 !    
,secret>y %all publi% su* maximum fair  
price 9 ! ,f$]al ,regi/] by n lat] ?an  
#cj days aft] ! date su* maximum price  
is s det]m9$4  #aaif4 ,adm9i/rative     
duties2 coord9ation provisions  7a7     
,adm9i/rative duties  7#a7 ,9 g5]al ,=  
purposes ( section #aaia1 ! adm9i/rative
 duties describ$ 9 ?is section are !    
foll[+3  7,a7 ,! e/abli%m5t ( proc$ures 

7includ+ ?r\gh agreem5ts ) manufactur]s 
"u ?is "p1 contracts ) prescription drug
 plans "u "p ,d ( title ,,xviii &       
,,ma-,,pd plans "u "p ,c ( su* title1 & 
agreem5ts "u section #aaig ) gr\p heal? 
plans & heal? insurance issu]s ( heal?  
insurance cov]age (f]$ 9 ! individual or
 gr\p m>ket7 "u :i* ! maximum fair price
 = a select$ drug is provid$ to fair    
price eligible individuals describ$ 9   
subp>agraph 7,a7 or 7,b7 ( section      
#aaia7;c77#a7 at ph>macies or by mail   
ord] s]vice at ! po9t-(-sale ( ! drug = 
! applicable price p]iod = su* drug &   
provid+ t su* maximum fair price is us$ 
= det]m9+ co/-%>+ "u su* plans or       
cov]age = ! select$ drug4  7,b7 ,!      
e/abli%m5t ( proc$ures 7includ+ ?r\gh   
agreem5ts ) manufactur]s "u ?is "p &    
contracts ) hospitals1 physicians1 & o!r
 provid]s ( s]vices & suppli]s7 "u :i*1 
9 ! case ( a select$ drug adm9i/]$ by   
su* a hospital1 physician1 or o!r       
provid] ( s]vices or suppli] to fair    
price eligible individuals describ$ 9   

subp>agraph 7,c7 ( section #aaia7;c77#a7
 & if paym5t = su* drug may be made "u  
"p ,a ( title ,,xviii or "p ,b ( su*    
title1 ! maximum fair price = ! select$ 
drug is provid$ to su* hospitals1       
physicians1 & o!r provid]s ( s]vices &  
suppli]s 7z applicable7 & provid+ t su* 
maximum fair price is us$ = det]m9+     
co/-%>+ "u ! respective "p1 = ! select$ 
drug4  7,c7 ,! e/abli%m5t ( proc$ures   
7includ+ ?r\gh agreem5ts & contracts    
describ$ 9 subp>agraphs 7,a7 & 7,b77 to 
ensure t1 n lat] ?an #ij days aft] !    
disp5s+ ( a select$ drug to a fair price
 eligible individual by a ph>macy or    
mail ord] s]vice1 ! ph>macy or mail ord]
 s]vice is reimburs$ = an am\nt equal to
 ! diff]5ce betwe5--  7i7 ! less] (--   
7,i7 ! :olesale acquisition co/ ( !     
drug2  7,,ii7 ! national av]age drug    
acquisition co/ ( ! drug2 &  7,,iii7 any
 o!r simil> det]m9ation ( ph>macy       
acquisition co/s ( ! drug1 z det]m9$ by 
! ,secret>y2 &  7ii7 ! maximum fair     
price = ! drug4  7,d7 ,! e/abli%m5t (   

proc$ures to ensure t ! maximum fair    
price = a select$ drug is appli$ be=e-- 
7i7 any cov]age or f9ancial assi/ance "u
 o!r heal? b5efit plans or programs t   
provide cov]age or f9ancial assi/ance = 
! pur*ase or provision ( prescription   
drug cov]age on behalf ( fair price     
eligible individuals z ! ,secret>y may  
specify2 &  7ii7 any o!r disc\nts4  7,e7
 ,! e/abli%m5t ( proc$ures to ent] into 
appropriate agreem5ts & protocols = !   
ongo+ computation ( ,,aim prices =      
select$ drugs1 includ+1 to ! ext5t      
possible1 to compute ! ,,aim price =    
select$ drugs & includ+ by provid+ t !  
manufactur] ( su* a select$ drug %\ld   
provide in=mation = su* computation n   
lat] ?an #c mon?s aft] ! fir/ date ( !  
volunt>y negotiation p]iod = su* select$
 drug4  7,f7 ,! e/abli%m5t ( proc$ures  
to compute & apply ! maximum fair price 
across diff]5t /r5g?s & dosage =ms ( a  
select$ drug t are n bas$ on ! specific 
=mulation1 dosage or /r5g?1 packag+1 or 
=m ( adm9i/ration4  7,g7 ,! e/abli%m5t (

 proc$ures to negotiate & apply !       
maximum fair price 9 a mann] t does n   
include any disp5s+ or simil> fee4  7,h7
 ,! e/abli%m5t ( proc$ures to c>ry out !
 provisions ( ?is "p ) respect to-- 7i7 
fair price eligible individuals :o are  
enroll$ "u a prescription drug plan "u  
"p ,d ( title ,,xviii or an ,,ma-,,pd   
plan "u "p ,c ( su* title2 &  7ii7 fair 
price eligible individuals :o are       
enroll$ "u a gr\p heal? plan or heal?   
insurance cov]age (f]$ by a heal?       
insurance issu] 9 ! individual or gr\p  
m>ket ) respect to :i* !re is an        
agreem5t 9 effect "u section #aaig4     
7,i7 ,! e/abli%m5t ( a negotiation      
process & r5egotiation process 9        
accordance ) section #aaid1 includ+ a   
process = acquir+ in=mation describ$ 9  
subsection 7d7 ( su* section & det]m9+  
am\nts describ$ 9 subsection 7b7 ( su*  
section4  7,j7 ,! provision ( a         
reasonable dispute resolution me*anism  
to resolve disagreem5ts betwe5          
manufactur]s1 fair price eligible       

individuals1 & ! ?ird p>ty ) a contract 
"u subsection 7c77#a74  7#b7 ,monitor+  
compliance  7,a7 ,9 g5]al ,! ,secret>y  
%all monitor compliance by a manufactur]
 ) ! t]ms ( an agreem5t "u section      
#aaic1 includ+ by e/abli%+ a me*anism   
?r\gh :i* violations ( su* t]ms may be  
report$4  7,b7 ,notification ,if a ?ird 
p>ty ) a contract "u subsection 7c77#a7 
det]m9es t ! manufactur] is n 9         
compliance ) su* agreem5t1 ! ?ird p>ty  
%all notify ! ,secret>y ( su*           
noncompliance = appropriate en=cem5t "u 
section #daib ( ! ,int]nal ,rev5ue ,code
 ( #aihf or section #aaih1 z applicable4
  7b7 ,collection ( data  7#a7 ,f       
prescription drug plans & ,,ma-,,pd     
plans ,! ,secret>y may collect          
appropriate data f prescription drug    
plans "u "p ,d ( title ,,xviii &        
,,ma-,,pd plans "u "p ,c ( su* title 9 a
 timeframe t all[s = maximum fair prices
 to be provid$ "u ?is "p = select$      
drugs4  7#b7 ,f heal? plans ,! ,secret>y
 may collect appropriate data f gr\p    

heal? plans or heal? insurance issu]s   
(f]+ gr\p or individual heal? insurance 
cov]age 9 a timeframe t all[s = maximum 
fair prices to be provid$ "u ?is "p =   
select$ drugs4  7c7 ,contract ) ?ird    
p>ties  7#a7 ,9 g5]al ,! ,secret>y %all 
ent] into a contract ) #a or m ?ird     
p>ties to adm9i/] ! requirem5ts e/abli%$
 by ! ,secret>y 9 ord] to c>ry out ?is  
"p4 ,at a m9imum1 ! contract ) a ?ird   
p>ty "u ! prec$+ s5t5ce %all require t !
 ?ird p>ty--  7,a7 receive & transmit   
in=mation betwe5 ! ,secret>y1           
manufactur]s1 & o!r individuals or      
entities ! ,secret>y det]m9es           
appropriate2  7,b7 receive1 di/ribute1  
or facilitate ! di/ribution ( funds (   
manufactur]s to appropriate individuals 
or entities 9 ord] to meet ! obligations
 ( manufactur]s "u agreem5ts "u ?is "p2 
7,c7 provide adequate & timely in=mation
 to manufactur]s1 consi/5t ) ! agreem5t 
) ! manufactur] "u ?is "p1 z necess>y = 
! manufactur] to fulfill its obligations
 "u ?is "p2 &  7,d7 p]mit manufactur]s  

to conduct p]iodic audits1 directly or  
?r\gh contracts1 ( ! data & in=mation   
us$ by ! ?ird p>ty to det]m9e disc\nts =
 applicable drugs ( ! manufactur] "u !  
program4  7#b7 ,p]=mance requirem5ts ,! 
,secret>y %all e/abli% p]=mance         
requirem5ts = a ?ird p>ty ) a contract  
"u p>agraph 7#a7 & safegu>ds to protect 
! indep5d5ce & integrity ( ! activities 
c>ri$ out by ! ?ird p>ty "u ! program "u
 ?is "p4  7d7 ,coord9ation ) #cdj;,b    
program ,9 ! case ( a manufactur] ( a   
select$ drug1 ) respect to an initial   
price applicability ye>1 = ea* ye> )    
respect to :i* a maximum fair price is  
appli$ "u ?is "p = su* drug1 su* drug   
%all n be consid]$ a cov]$ outpati5t    
drug subject to an agreem5t "u section  
#cdj;,b ( ! ,public ,heal? ,s]vice ,act4
  #aaig4 ,volunt>y p>ticipation by o!r  
heal? plans  7a7 ,9 g5]al ,"u ! program 
"u ?is "p ! ,secret>y %all be treat$ z  
hav+ 9 effect an agreem5t ) a gr\p heal?
 plan or heal? insurance issu] (f]+     
heal? insurance cov]age 7z su* t]ms are 

def9$ 9 section #bgia ( ! ,public ,heal?
 ,s]vice ,act71 except 9 ! case t su* a 
plan or issu] affirmatively elects n to 
p>ticipate "u ! program1 ?r\gh a process
 specifi$ by ! ,secret>y1 ) respect to a
 price applicability p]iod & a select$  
drug ) respect to su* p]iod ) respect to
 :i* cov]age is provid$ "u su* plan or  
cov]age4  7b7 ,publication ( election ,)
 respect to ea* price applicability     
p]iod & ea* select$ drug ) respect to   
su* p]iod1 ! ,secret>y & ! ,secret>y (  
,labor & ! ,secret>y ( ! ,treasury1 z   
applicable1 %all make public a li/ ( ea*
 gr\p heal? plan & ea* issu] ( heal?    
insurance cov]age1 ) respect to :i*     
cov]age is provid$ "u su* plan or       
cov]age = su* drug1 t has elect$ "u     
subsection 7a7 n to p>ticipate "u !     
program ) respect to su* p]iod & drug4  
#aaih4 ,civil monet>y p5alty  7a7       
,violations relat+ ,to (f]+ ( maximum   
fair price ,any manufactur] ( a select$ 
drug t has ent]$ into an agreem5t "u    
section #aaic1 ) respect to a plan ye>  

dur+ ! price applicability p]iod = su*  
drug1 t does n provide access to a price
 t is n m ?an ! maximum fair price 7or a
 less] price7 = su* drug = su* ye>--    
7#a7 to a fair price eligible individual
 describ$ 9 subp>agraph 7,a7 or 7,b7 (  
section #aaia7;c77#a7 furni%$ su* drug  
dur+ su* ye>2 or  7#b7 to a hospital1   
physician1 or o!r provid] ( s]vices or  
suppli] ) respect to fair price eligible
 individuals describ$ 9 subp>agraph 7,c7
 ( su* section adm9i/]$ su* drug dur+   
su* ye>2  %all be subject to a civil    
monet>y p5alty equal to t5 times ! am\nt
 equal to ! diff]5ce betwe5 ! price =   
su* drug made available by su*          
manufactur] ) respect to su* individual 
or hospital1 physician1 provid]1 or     
suppli] & ! maximum fair price = su*    
drug = su* ye>4  7b7 ,violations ( c]ta9
 t]ms ( agreem5t ,any manufactur] ( a   
select$ drug t has ent]$ into an        
agreem5t "u section #aaic1 ) respect to 
a plan ye> dur+ ! price applicability   
p]iod = su* drug1 t is 9 violation ( a  

requirem5t impos$ pursuant to section   
#aaic7;a77#f7 %all be subject to a civil
 monet>y p5alty ( n m ?an #a1jjj1jjj =  
ea* su* violation4  7c7 ,application ,! 
provisions ( section #aabh;,a 7o!r ?an  
subsections 7a7 & 7b77 %all apply to a  
civil monet>y p5alty "u ?is section 9 ! 
same mann] z su* provisions apply to a  
p5alty or proce$+ "u section            
#aabh;,a7a74  #aaii4 ,miscellane\s      
provisions  7a7 ,pap]work ,r$uction ,act
 ,*apt] #ce ( title #dd1 ,unit$ ,/ates  
,code1 %all n apply to data collect$ "u 
?is "p4  7b7 ,national ,academy (       
,m$ic9e /udy ,n lat] ?an ,decemb] #ca1  
#bjbe1 ! ,national ,academy ( ,m$ic9e   
%all conduct a /udy1 & submit to        
,congress a report1 on recomm5dations = 
improvem5ts to ! program "u ?is "p1     
includ+ ! det]m9ation ( ! limits appli$ 
"u section #aaid7;c74  7c7 ,med,p,a,c   
/udy ,n lat] ?an ,decemb] #ca1 #bjbe1 ! 
,m$ic>e ,paym5t ,advisory ,commission   
%all conduct a /udy1 & submit to        
,congress a report1 on ! program "u ?is 

"p ) respect to ! ,m$ic>e program "u    
title ,,xviii1 includ+ ) respect to !   
effect ( ! program on individuals       
entitl$ to b5efits or enroll$ "u su*    
title4  7d7 ,limitation on judicial     
review ,! foll[+ %all n be subject to   
judicial review3 7#a7 ,! selection (    
drugs = publication "u section          
#aaib7;a74  7#b7 ,! det]m9ation ( :e!r a
 drug is a negotiation-eligible drug "u 
section #aaib7;d74  7#c7 ,! det]m9ation 
( ! maximum fair price ( a select$ drug 
"u section #aaid4  7#d7 ,! det]m9ation (
 units ( a drug = purposes ( section    
#aaia7;c77#c74  7e7 ,coord9ation ,9     
c>ry+ out ?is "p ) respect to gr\p heal?
 plans or heal? insurance cov]age (f]$ 9
 ! gr\p m>ket t are subject to ov]sight 
by ! ,secret>y ( ,labor or ! ,secret>y (
 ! ,treasury1 ! ,secret>y ( ,heal? &    
,human ,s]vices %all coord9ate ) su*    
respective ,secret>y4  7f7 ,data %>+ ,! 
,secret>y %all %>e ) ! ,secret>y ( !    
,treasury su* in=mation z is necess>y to
 det]m9e ! tax impos$ by section #daib (

 ! ,int]nal ,rev5ue ,code ( #aihf4  4   
7b7 ,application ( maximum fair prices &
 con=m+ am5dm5ts  7#a7 ,"u ,m$ic>e      
prescription drug program  7,a7         
,exception to non-int]f]5ce ,section    
#ahfj;,d-#aa7;i7 ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciew-#aaa7;i77 is 
am5d$ by ins]t+ 1 except z provid$ "u "p
 ,e ( title ,,xi1 aft] ! ,secret>y4     
7,b7 ,application z negotiat$ price     
,section #ahfj;,d-#b7;d77#a7 ( ! ,social
 ,security ,act 7#db ,u4,s4,c4          
#aciew-#ajb7;d77#a77 is am5d$--  7i7 9  
subp>agraph 7,b71 by ins]t+ 1 subject to
 subp>agraph 7,d71 aft] negotiat$       
prices2 &  7ii7 by add+ at ! end !      
foll[+ new subp>agraph3  7,d7           
,application ( maximum fair price =     
select$ drugs ,9 apply+ ?is section1 9 !
 case ( a cov]$ "p ,d drug t is a       
select$ drug 7z def9$ 9 section         
#aaib7;c771 ) respect to a price        
applicability p]iod 7z def9$ 9 section  
#aaia7;b77#b771 ! negotiat$ price       
describ$ 9 ?is subsection %all be !     

maximum fair price 7z def9$ 9 section   
#aaia7;c77#b77 = su* drug & = ea* plan  
ye> dur+ su* p]iod4  4  7,c7 ,in=mation 
f prescription drug plans & ,,ma-,,pd   
plans requir$  7i7 ,prescription drug   
plans ,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#h7        
,provision ( in=mation relat$ to maximum
 fair prices ,ea* contract ent]$ into ) 
a ,,pdp sponsor "u ?is "p ) respect to a
 prescription drug plan (f]$ by su*     
sponsor %all require ! sponsor to       
provide in=mation to ! ,secret>y z      
reque/$ by ! ,secret>y 9 accordance )   
section #aaif7;b74  4  7ii7 ,,ma-,,pd   
plans ,section #aheg7;f77#c7 ( ! ,social
 ,security ,act 7#db ,u4,s4,c4          
#aciew-#bg7;f77#c77 is am5d$ by add+ at 
! end ! foll[+ new subp>agraph3  7,e7   
,provision ( in=mation relat$ to maximum
 fair prices ,section                   
#ahfj;,d-#ab7;b77#h74  4  7#b7 ,"u gr\p 
heal? plans & heal? insurance cov]age   

7,a7 ,,phsa ,"p ,a ( title ,,xxvii ( !  
,public ,heal? ,s]vice ,act is am5d$ by 
ins]t+ aft] section #bgbi ! foll[+ new  
section3  #bgbi;,a4 ,fair ,price ,drug  
,negotiation ,program & application (   
maximum fair prices  7a7 ,9 g5]al ,9 !  
case ( a gr\p heal? plan or heal?       
insurance issu] (f]+ heal? insurance    
cov]age t is treat$ "u section #aaig ( !
 ,social ,security ,act z hav+ 9 effect 
an agreem5t ) ! ,secret>y "u ! ,fair    
,price ,drug ,negotiation ,program "u "p
 ,e ( title ,,xi ( su* ,act1 ) respect  
to a price applicability p]iod 7z def9$ 
9 section #aaia7;b7 ( su* ,act7 & a     
select$ drug 7z def9$ 9 section         
#aaib7;c7 ( su* ,act7 ) respect to su*  
p]iod ) respect to :i* cov]age is       
provid$ "u su* plan or cov]age--  7#a7 !
 provisions ( su* "p %all apply to !    
plans or cov]age (f]$ by su* plan or    
issu]1 & to ! individuals enroll$ "u su*
 plans or cov]age1 dur+ su* p]iod1 )    
respect to su* select$ drug1 9 ! same   
mann] z su* provisions apply to         

prescription drug plans & ,,ma-,,pd     
plans1 & to individuals enroll$ "u su*  
prescription drug plans & ,,ma-,,pd     
plans2  7#b7 ! plan or issu] %all apply 
any co/-%>+ responsibilities "u su* plan
 or cov]age1 ) respect to su* select$   
drug1 by sub/itut+ ! maximum fair price 
negotiat$ "u su* "p = su* drug 9 lieu ( 
! contract$ rate "u su* plan or cov]age 
= su* select$ drug2 &  7#c7 ! ,secret>y 
%all apply ! provisions ( su* "p to su* 
plan1 issu]1 & cov]age1 & su*           
individuals s enroll$ 9 su* plans4  7b7 
,notification reg>d+ nonp>ticipation 9  
,fair ,drug ,price ,negotiation ,program
 ,a gr\p heal? plan or a heal? insurance
 issu] (f]+ gr\p or individual heal?    
insurance cov]age %all publicly disclose
 9 a mann] & 9 accordance ) a process   
specifi$ by ! ,secret>y any election    
made "u section #aaig ( ! ,social       
,security ,act by ! plan or issu] to n  
p>ticipate 9 ! ,fair ,drug ,price       
,negotiation ,program "u "p ,e ( title  
,,xi ( su* ,act ) respect to a select$  

drug 7z def9$ 9 section #aaib7;c7 ( su* 
,act7 = :i* cov]age is provid$ "u su*   
plan or cov]age be=e ! beg9n+ ( ! plan  
ye> = :i* su* election 0 made4  4  7,b7 
,,erisa  7i7 ,9 g5]al ,subp>t ,b ( "p #g
 ( subtitle ,b ( title ,i ( ! ,employee 
,retirem5t ,income ,security ,act (     
#aigd 7#bi ,u4,s4,c4 #aaha et4 seq47 is 
am5d$ by add+ at ! end ! foll[+ new     
section3  #gaf4 ,fair ,price ,drug      
,negotiation ,program & application (   
maximum fair prices  7a7 ,9 g5]al ,9 !  
case ( a gr\p heal? plan or heal?       
insurance issu] (f]+ gr\p heal?         
insurance cov]age t is treat$ "u section
 #aaig ( ! ,social ,security ,act z hav+
 9 effect an agreem5t ) ! ,secret>y "u !
 ,fair ,price ,drug ,negotiation        
,program "u "p ,e ( title ,,xi ( su*    
,act1 ) respect to a price applicability
 p]iod 7z def9$ 9 section #aaia7;b7 (   
su* ,act7 & a select$ drug 7z def9$ 9   
section #aaib7;c7 ( su* ,act7 ) respect 
to su* p]iod ) respect to :i* cov]age is
 provid$ "u su* plan or cov]age--  7#a7 

! provisions ( su* "p %all apply to !   
plans or cov]age (f]$ by su* plan or    
issu]1 & to ! individuals enroll$ "u su*
 plans or cov]age1 dur+ su* p]iod1 )    
respect to su* select$ drug1 9 ! same   
mann] z su* provisions apply to         
prescription drug plans & ,,ma-,,pd     
plans1 & to individuals enroll$ "u su*  
prescription drug plans & ,,ma-,,pd     
plans2  7#b7 ! plan or issu] %all apply 
any co/-%>+ responsibilities "u su* plan
 or cov]age1 ) respect to su* select$   
drug1 by sub/itut+ ! maximum fair price 
negotiat$ "u su* "p = su* drug 9 lieu ( 
! contract$ rate "u su* plan or cov]age 
= su* select$ drug2 &  7#c7 ! ,secret>y 
%all apply ! provisions ( su* "p to su* 
plan1 issu]1 & cov]age1 & su*           
individuals s enroll$ 9 su* plans4  7b7 
,notification reg>d+ nonp>ticipation 9  
,fair ,drug ,price ,negotiation ,program
 ,a gr\p heal? plan or a heal? insurance
 issu] (f]+ gr\p heal? insurance cov]age
 %all publicly disclose 9 a mann] & 9   
accordance ) a process specifi$ by !    

,secret>y any election made "u section  
#aaig ( ! ,social ,security ,act by !   
plan or issu] to n p>ticipate 9 ! ,fair 
,drug ,price ,negotiation ,program "u "p
 ,e ( title ,,xi ( su* ,act ) respect to
 a select$ drug 7z def9$ 9 section      
#aaib7;c7 ( su* ,act7 = :i* cov]age is  
provid$ "u su* plan or cov]age be=e !   
beg9n+ ( ! plan ye> = :i* su* election 0
 made4  4  7ii7 ,cl]ical am5dm5t ,!     
table ( sections = "p #g ( subtitle ,b (
 title ,i ( ! ,employee ,retirem5t      
,income ,security ,act ( #aigd is am5d$ 
by add+ at ! end ! foll[+3  ,sec4 #gaf4 
,fair ,price ,drug ,negotiation ,program
 & application ( maximum fair prices4  4
  7,c7 ,,irc  7i7 ,9 g5]al ,sub*apt] ,b 
( *apt] #ajj ( ! ,int]nal ,rev5ue ,code 
( #aihf is am5d$ by add+ at ! end !     
foll[+ new section3  #ihaf4 ,fair ,price
 ,drug ,negotiation ,program &          
application ( maximum fair prices  7a7  
,9 g5]al ,9 ! case ( a gr\p heal? plan t
 is treat$ "u section #aaig ( ! ,social 
,security ,act z hav+ 9 effect an       

agreem5t ) ! ,secret>y "u ! ,fair ,price
 ,drug ,negotiation ,program "u "p ,e ( 
title ,,xi ( su* ,act1 ) respect to a   
price applicability p]iod 7z def9$ 9    
section #aaia7;b7 ( su* ,act7 & a       
select$ drug 7z def9$ 9 section         
#aaib7;c7 ( su* ,act7 ) respect to su*  
p]iod ) respect to :i* cov]age is       
provid$ "u su* plan--  7#a7 ! provisions
 ( su* "p %all apply to ! plans (f]$ by 
su* plan1 & to ! individuals enroll$ "u 
su* plans1 dur+ su* p]iod1 ) respect to 
su* select$ drug1 9 ! same mann] z su*  
provisions apply to prescription drug   
plans & ,,ma-,,pd plans1 & to           
individuals enroll$ "u su* prescription 
drug plans & ,,ma-,,pd plans2  7#b7 !   
plan %all apply any co/-%>+             
responsibilities "u su* plan1 ) respect 
to su* select$ drug1 by sub/itut+ !     
maximum fair price negotiat$ "u su* "p =
 su* drug 9 lieu ( ! contract$ rate "u  
su* plan = su* select$ drug2 &  7#c7 !  
,secret>y %all apply ! provisions ( su* 
"p to su* plan & su* individuals s      

enroll$ 9 su* plan4  7b7 ,notification  
reg>d+ nonp>ticipation 9 ,fair ,drug    
,price ,negotiation ,program ,a gr\p    
heal? plan %all publicly disclose 9 a   
mann] & 9 accordance ) a process        
specifi$ by ! ,secret>y any election    
made "u section #aaig ( ! ,social       
,security ,act by ! plan to n p>ticipate
 9 ! ,fair ,drug ,price ,negotiation    
,program "u "p ,e ( title ,,xi ( su*    
,act ) respect to a select$ drug 7z     
def9$ 9 section #aaib7;c7 ( su* ,act7 = 
:i* cov]age is provid$ "u su* plan be=e 
! beg9n+ ( ! plan ye> = :i* su* election
 0 made4  4  7ii7 ,cl]ical am5dm5t ,!   
table ( sections = sub*apt] ,b ( *apt]  
#ajj ( su* ,code is am5d$ by add+ at !  
end ! foll[+ new item3  ,sec4 #ihaf4    
,fair ,price ,drug ,negotiation ,program
 & application ( maximum fair prices4  4
  #ajb4 ,select$ drug manufactur] excise
 tax impos$ dur+ noncompliance p]iods   
7a7 ,9 g5]al ,sub*apt] ,e ( *apt] #cb ( 
! ,int]nal ,rev5ue ,code ( #aihf is     
am5d$ by add+ at ! end ! foll[+ new     

section3  #daib4 ,select$ drugs dur+    
noncompliance p]iods  7a7 ,9 g5]al ,!re 
is h]eby impos$ on ! sale by !          
manufactur]1 produc]1 or import] ( any  
select$ drug dur+ a day describ$ 9      
subsection 7b7 a tax 9 an am\nt su* t ! 
applicable p]c5tage is equal to ! ratio 
(--  7#a7 su* tax1 divid$ by  7#b7 ! sum
 ( su* tax & ! price = :i* s sold4  7b7 
,noncompliance p]iods ,a day is describ$
 9 ?is subsection ) respect to a select$
 drug if x is a day dur+ "o ( ! foll[+  
p]iods3  7#a7 ,! p]iod beg9n+ on ! ,june
 #af? imm$iately foll[+ ! select$ drug  
publication date & end+ on ! fir/ date  
dur+ :i* ! manufactur] ( ! drug has 9   
place an agreem5t describ$ 9 subsection 
7a7 ( section #aaic ( ! ,social         
,security ,act ) respect to su* drug4   
7#b7 ,! p]iod beg9n+ on ! ,april #a/    
imm$iately foll[+ ! ,june #af? describ$ 
9 p>agraph 7#a7 & end+ on ! fir/ date   
dur+ :i* ! manufactur] ( ! drug has     
agre$ to a maximum fair price "u su*    
agreem5t4  7#c7 ,9 ! case ( a select$   

drug ) respect to :i* ! ,secret>y (     
,heal? & ,human ,s]vices has specifi$ a 
r5egotiation p]iod "u su* agreem5t1 !   
p]iod beg9n+ on ! fir/ date aft] ! la/  
date ( su* r5egotiation p]iod & end+ on 
! fir/ date dur+ :i* ! manufactur] ( !  
drug has agre$ to a r5egotiat$ maximum  
fair price "u su* agreem5t4  7#d7 ,)    
respect to in=mation t is requir$ to be 
submitt$ to ! ,secret>y ( ,heal? &      
,human ,s]vices "u su* agreem5t1 ! p]iod
 beg9n+ on ! date on :i* su* ,secret>y  
c]tifies t su* in=mation is ov]due &    
end+ on ! date t su* in=mation is s     
submitt$4  7#e7 ,9 ! case ( a select$   
drug ) respect to :i* a paym5t is due "u
 subsection 7c7 ( su* section #aaic1 !  
p]iod beg9n+ on ! date on :i* !         
,secret>y ( ,heal? & ,human ,s]vices    
c]tifies t su* paym5t is ov]due & end+  
on ! date t su* paym5t is made 9 full4  
7c7 ,applicable p]c5tage ,! t]m         
applicable p]c5tage means-- 7#a7 9 !    
case ( sales ( a select$ drug dur+ !    
fir/ #ij days describ$ 9 subsection 7b7 

) respect to su* drug1 #fe p]c5t1  7#b7 
9 ! case ( sales ( su* drug dur+ ! #ia/ 
day ?r\gh ! #ahj? day describ$ 9        
subsection 7b7 ) respect to su* drug1   
#ge p]c5t1  7#c7 9 ! case ( sales ( su* 
drug dur+ ! #aha/ day ?r\gh ! #bgj? day 
describ$ 9 subsection 7b7 ) respect to  
su* drug1 #he p]c5t1 &  7#d7 9 ! case ( 
sales ( su* drug dur+ any subsequ5t day1
 #ie p]c5t4  7d7 ,def9itions ,! t]ms    
select$ drug publication date & maximum 
fair price h ! mean+ giv5 su* t]ms 9    
section #aaia ( ! ,social ,security ,act
 & ! t]m select$ drug has ! mean+ giv5  
su* t]m 9 section #aaib ( su* ,act4  7e7
 ,anti-,abuse rule ,9 ! case ( a sale   
:i* 0 tim$ = ! purpose ( avoid+ ! tax   
impos$ by ?is section1 ! ,secret>y may  
treat su* sale z occurr+ dur+ a day     
describ$ 9 subsection 7b74  4  7b7 ,no  
d$uction = excise tax paym5ts ,section  
#bge ( ! ,int]nal ,rev5ue ,code ( #aihf 
is am5d$ by add+ or by section #daib    
be=e ! p]iod at ! end ( subsection      
7a77#f74  7c7 ,con=m+ am5dm5ts  7#a7    

,section #dbba7;a7 ( ! ,int]nal ,rev5ue 
,code ( #aihf is am5d$ by ins]t+ or     
#daib aft] section #daia4  7#b7 ,section
 #fdaf7;b77#b7 ( su* ,code is am5d$ by  
ins]t+ or #daib aft] section #daia4  7d7
 ,cl]ical am5dm5ts  7#a7 ,! head+ (     
sub*apt] ,e ( *apt] #cb ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by /rik+ 
,m$ical devices & ins]t+ ,o!r m$ical    
products4  7#b7 ,! table ( sub*apt]s =  
*apt] #cb ( su* ,code is am5d$ by /rik+ 
! item relat+ to sub*apt] ,e & ins]t+ ! 
foll[+ new item3  ,sub*apt] ,e4 ,o!r    
m$ical products  4  7#c7 ,! table (     
sections = sub*apt] ,e ( *apt] #cb ( su*
 ,code is am5d$ by add+ at ! end !      
foll[+ new item3  ,sec4 #daib4 ,select$ 
drugs dur+ noncompliance p]iods4  4  7e7
 ,effective date ,! am5dm5ts made by ?is
 section %all apply to sales aft] ! date
 ( ! enactm5t ( ?is ,act4  ,,ii ,m$ic>e 
,p>ts ,b & ,d ,prescription ,drug       
,inflation ,rebates  #bja4 ,m$ic>e "p ,b
 rebate by manufactur]s  7a7 ,9 g5]al   
,section #ahcd ( ! ,social ,security    

,act 7#db ,u4,s4,c4 #aciem7 is am5d$ by 
add+ at ! end ! foll[+ new subsection3  
7x7 ,rebate by manufactur]s = s+le s\rce
 drugs ) prices increas+ fa/] ?an       
inflation  7#a7 ,requirem5ts  7,a7      
,secret>ial provision ( in=mation ,n    
lat] ?an #f mon?s aft] ! end ( ea*      
cal5d> qu>t] beg9n+ on or aft] ,july #a1
 #bjba1 ! ,secret>y %all1 = ea* "p ,b   
rebatable drug1 report to ea*           
manufactur] ( su* "p ,b rebatable drug !
 foll[+ = su* cal5d> qu>t]3  7i7        
,in=mation on ! total numb] ( bill+     
units describ$ 9 subp>agraph 7,a77i7 (  
p>agraph 7#c7 ) respect to su* drug &   
cal5d> qu>t]4  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 &    
cal5d> qu>t]4  7iii7 ,! rebate am\nt    
specifi$ "u su* p>agraph = su* "p ,b    
rebatable drug & cal5d> qu>t]4  7,b7    
,manufactur] requirem5t ,= ea* cal5d>   
qu>t] beg9n+ on or aft] ,july #a1 #bjba1
 ! manufactur] ( a "p ,b rebatable drug 

%all1 = su* drug1 n lat] ?an #cj days   
aft] ! date ( receipt f ! ,secret>y ( ! 
in=mation describ$ 9 subp>agraph 7,a7 = 
su* cal5d> qu>t]1 provide to ! ,secret>y
 a rebate t is equal to ! am\nt specifi$
 9 p>agraph 7#c7 = su* drug = su* cal5d>
 qu>t]4  7#b7 ,"p ,b rebatable drug     
def9$  7,a7 ,9 g5]al ,9 ?is subsection1 
! t]m "p ,b rebatable drug means a s+le 
s\rce drug or biological 7z def9$ 9     
subp>agraph 7,d7 ( section              
#ahdg;,a7c77#f771 includ+ a biosimil>   
biological product 7z def9$ 9           
subp>agraph 7,h7 ( su* section71 paid = 
"u ?is "p1 except su* t]m %all n include
 su* a drug or biological--  7i7 if !   
av]age total all[$ *>ges = a ye> p]     
individual t uses su* a drug or         
biological1 z det]m9$ by ! ,secret>y1   
are less ?an1 subject to subp>agraph    
7,b71 #ajj2 or  7ii7 t is a vacc9e      
describ$ 9 subp>agraph 7,a7 or 7,b7 (   
section #ahfa7s77#aj74  7,b7 ,increase  
,! doll> am\nt appli$ "u subp>agraph    
7,a77i7--  7i7 = #bjbb1 %all be ! doll> 

am\nt specifi$ "u su* subp>agraph =     
#bjba1 increas$ by ! p]c5tage increase 9
 ! consum] price index = all urban      
consum]s 7,unit$ ,/ates city av]age7 z (
 ! fir/ qu>t] ( ! previ\s ye>2 &  7ii7 =
 a subsequ5t ye>1 %all be ! doll> am\nt 
specifi$ 9 ?is clause 7or clause 7i77 = 
! previ\s ye>1 increas$ by ! p]c5tage   
increase 9 ! consum] price index = all  
urban consum]s 7,unit$ ,/ates city      
av]age7 z ( ! fir/ qu>t] ( ! previ\s    
ye>4  ,any doll> am\nt specifi$ "u ?is  
subp>agraph t is n a multiple ( #aj %all
 be r\nd$ to ! ne>e/ multiple ( #aj4    
7#c7 ,rebate am\nt  7,a7 ,9 g5]al ,=    
purposes ( p>agraph 7#a77;,b71 ! am\nt  
specifi$ 9 ?is p>agraph = a "p ,b       
rebatable drug assign$ to a bill+ &     
paym5t code = a cal5d> qu>t] is1 subject
 to p>agraph 7#d71 ! am\nt equal to !   
product (--  7i7 subject to subp>agraph 
7,b71 ! total numb] ( bill+ units1 z    
describ$ 9 section #ahdg;,a7b77#f77;,b71
 = su* "p ,b rebatable drug furni%$ "u  
?is "p dur+ ! cal5d> qu>t]2 &  7ii7 !   

am\nt 7if any7 by :i*-- 7,i7 ! paym5t   
am\nt "u subp>agraph 7,b7 or 7,c7 (     
section #ahdg;,a7b77#a71 z applicable1 =
 su* "p ,b rebatable drug dur+ ! cal5d> 
qu>t]2 exce$s  7,,ii7 ! inflation-adju/$
 paym5t am\nt det]m9$ "u subp>agraph    
7,c7 = su* "p ,b rebatable drug dur+ !  
cal5d> qu>t]4  7,b7 ,exclud$ units ,=   
purposes ( subp>agraph 7,a77i71 ! total 
numb] ( bill+ units = "p ,b rebatable   
drugs furni%$ dur+ a cal5d> qu>t] %all n
 include--  7i7 units packag$ into !    
paym5t = a relat$ proc$ure or s]vice "u 
section #ahcc7t7 or "u section #ahcc7;i7
 7in/ead ( sep>ately payable "u su*     
respective section72  7ii7 units includ$
 "u ! s+le paym5t sy/em = r5al dialysis 
s]vices "u section #ahha7;b77#ad72 or   
7iii7 units ( a "p ,b 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,c7    

,det]m9ation ( inflation-adju/$ paym5t  
am\nt ,! inflation-adju/$ paym5t am\nt  
det]m9$ "u ?is subp>agraph = a "p ,b    
rebatable drug = a cal5d> qu>t] is--    
7i7 ! paym5t am\nt = ! bill+ & paym5t   
code = su* drug 9 ! paym5t am\nt b5*m>k 
qu>t] 7z def9$ 9 subp>agraph 7,d772     
increas$ by  7ii7 ! p]c5tage by :i* !   
rebate p]iod ,,cpi-,u 7z def9$ 9        
subp>agraph 7,f77 = ! cal5d> qu>t]      
exce$s ! b5*m>k p]iod ,,cpi-,u 7z def9$ 
9 subp>agraph 7,e774  7,d7 ,paym5t am\nt
 b5*m>k qu>t] ,! t]m paym5t am\nt b5*m>k
 qu>t] means ! cal5d> qu>t] beg9n+      
,janu>y #a1 #bjaf4  7,e7 ,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 =  
,july #bjae4  7,f7 ,rebate p]iod        
,,cpi-,u ,! t]m rebate p]iod ,,cpi-,u   
means1 ) respect to a cal5d> qu>t]      
describ$ 9 subp>agraph 7,c71 ! great] ( 
! b5*m>k p]iod ,,cpi-,u & ! 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 su* describ$ cal5d> qu>t]4     
7#d7 ,special treatm5t ( c]ta9 drugs &  
exemption  7,a7 ,subsequ5tly approv$    
drugs ,subject to subp>agraph 7,b71 9 ! 
case ( a "p ,b rebatable drug fir/      
approv$ by ! ,food & ,drug ,adm9i/ration
 aft] ,july #a1 #bjae1 clause 7i7 (     
p>agraph 7#c77;,c7 %all be appli$ z if !
 t]m paym5t am\nt b5*m>k qu>t] 7 def9$  
"u p>agraph 7#c77;,d7 z ! ?ird full     
cal5d> qu>t] aft] ! day on :i* ! drug 0 
fir/ m>ket$ & clause 7ii7 ( p>agraph    
7#c77;,c7 %all be appli$ z if ! t]m     
b5*m>k p]iod ,,cpi-,u 7 def9$ "u        
p>agraph 7#c77;,e7 z if ! ref]5ce to    
,july #bjae "u su* p>agraph 7 a ref]5ce 
to ! fir/ mon? ( ! fir/ full cal5d>     
qu>t] aft] ! day on :i* ! drug 0 fir/   
m>ket$4  7,b7 ,timel9e = provision (    
rebates = new drugs ,9 ! case ( a "p ,b 
rebatable drug fir/ approv$ by ! ,food &
 ,drug ,adm9i/ration aft] ,july #a1     
#bjae1 clause 7i7 ( p>agraph 7#a77;,b7  
%all be appli$ z if ! ref]5ce to ,july  

#a1 #bjba "u su* p>agraph 7 a ref]5ce to
 ! lat] ( ! #f? full cal5d> qu>t] aft] !
 day on :i* ! drug 0 fir/ m>ket$ or     
,july #a1 #bjba4  7,c7 ,exemption =     
%ortages ,! ,secret>y may r$uce or waive
 ! rebate "u p>agraph 7#a77;,b7 )       
respect to a "p ,b rebatable drug t     
appe>s on ! drug %ortage li/ 9 effect "u
 section #ejf7;e7 ( ! ,f$]al ,food1     
,drug1 & ,cosmetic ,act or 9 ! case (   
o!r exig5t circum/ances1 z det]m9$ by ! 
,secret>y4  7,d7 ,select$ drugs ,9 !    
case ( a "p ,b rebatable drug t is a    
select$ drug 7z def9$ 9 section         
#aaib7;c771 = ea* applicable ye> beg9n+ 
aft] ! price applicability p]iod 7z     
def9$ 9 section #aaia7;b77#b7 ) respect 
to su* drug1 clause 7i7 ( p>agraph      
7#c77;,c7 %all be appli$ z if ! t]m     
paym5t am\nt b5*m>k qu>t] 7 def9$ "u    
p>agraph 7#c77;,d7 z ! cal5d> qu>t]     
beg9n+ ,janu>y #a ( ! la/ ye> beg9n+    
dur+ su* price applicability p]iod )    
respect to su* select$ drug & clause    
7ii7 ( p>agraph 7#c77;,c7 %all be appli$

 z if ! t]m b5*m>k p]iod ,,cpi-,u 7     
def9$ "u p>agraph 7#c77;,e7 z if !      
ref]5ce to ,july #bjae "u su* p>agraph 7
 a ref]5ce to ! ,july ( ! ye> prec$+ su*
 la/ ye>4  7#e7 ,application to         
b5efici>y co9surance ,9 ! case ( a "p ,b
 rebatable drug = :i* a rebate is       
payable "u ?is subsection-- 7,a7 9      
comput+ ! am\nt ( any co9surance        
applicable "u ?is title to an individual
 ) respect to su* drug1 ! computation ( 
su* co9surance %all be bas$ on !        
inflation-adju/$ paym5t am\nt det]m9$ "u
 p>agraph 7#c77;,c7 = su* "p ,b         
rebatable drug2 &  7,b7 ! am\nt ( su*   
co9surance is equal to #bj p]c5t ( su*  
inflation-adju/$ paym5t am\nt s det]m9$4
  7#f7 ,rebate deposits ,am\nts paid z  
rebates "u p>agraph 7#a77;,b7 %all be   
deposit$ into ! ,f$]al ,supplem5t>y     
,m$ical ,insurance ,tru/ ,fund e/abli%$ 
"u section #ahda4  7#g7 ,civil money    
p5alty ,if a manufactur] ( a "p ,b      
rebatable drug has fail$ to comply ) !  
requirem5ts "u p>agraph 7#a77;,b7 = su* 

drug = a cal5d> qu>t]1 ! manufactur]    
%all be subject to1 9 accordance ) a    
process e/abli%$ by ! ,secret>y pursuant
 to regulations1 a civil money p5alty 9 
an am\nt equal to at lea/ #abe p]c5t ( !
 am\nt specifi$ 9 p>agraph 7#c7 = su*   
drug = su* cal5d> 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 p>agraph
 9 ! same mann] z su* provisions apply  
to a p5alty or proce$+ "u section       
#aabh;,a7a74  7#h7 ,/udy & report  7,a7 
,/udy ,! ,secret>y %all conduct a /udy (
 ! feasibility ( & op]ational issues    
involv$ ) ! foll[+3  7i7 ,includ+       
multiple s\rce drugs 7z def9$ 9 section 
#ahdg;,a7c77#f77;,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#b77;,a7 & bill+ units ( drugs exclud$
 "u p>agraph 7#c77;,b7 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#i7 ,application
 to multiple s\rce drugs ,! ,secret>y   
may1 bas$ on ! report submitt$ "u       
p>agraph 7#h7 & pursuant to rulemak+1   
apply ! provisions ( ?is subsection to  
multiple s\rce drugs 7z def9$ 9 section 
#ahdg;,a7c77#f77;,c771 includ+1 =       
purposes ( det]m9+ ! rebate am\nt "u    
p>agraph 7#c71 by calculat+             
manufactur]-specific av]age sales prices
 = ! b5*m>k p]iod & ! rebate p]iod4  4  
7b7 ,am\nts payable2 co/-,%>+ ,section  
#ahcc7;a7 ( ! ,social ,security ,act is 
am5d$-- 7#a7 9 p>agraph 7#a7--  7,a7 9  
subp>agraph 7,s71 by /rik+ ) respect to 
& ins]t+ subject to subp>agraph 7,,dd71 
) respect to2  7,b7 by /rik+ & 7,,cc7 & 
ins]t+ 7,,cc72 &  7,c7 by ins]t+ be=e ! 
semicolon at ! end ! foll[+3 1 & 7,,dd7 
) respect to a "p ,b rebatable drug 7z  
def9$ 9 p>agraph 7#b7 ( section         

#ahcd7x77 = :i* a rebate is payable "u  
su* section1 ! am\nts paid %all be !    
diff]5ce betwe5 7i7 ! paym5t am\nt "u   
p>agraph 7#c77;,a77ii77,i7 ( su* section
 = su* drug1 & 7ii7 #bj p]c5t ( !       
inflation-adju/$ paym5t am\nt "u        
p>agraph 7#c77;,a77ii77,,ii7 ( su*      
section = su* drug2 &  7#b7 by add+ at !
 end ( ! flu% left matt] foll[+ p>agraph
 7#i71 ! foll[+3 ,= purposes ( apply+   
p>agraph 7#a77;,,dd7 & section          
#ahcd7x77#e71 ! ,secret>y %all make su* 
e/imates & use su* data z ! ,secret>y   
det]m9es appropriate4 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 #ahcd7x7 aft] section #aibg4 
#bjb4 ,m$ic>e "p ,d rebate by           
manufactur]s ,"p ,d ( title ,,xviii ( ! 
,social ,security ,act is am5d$ by      
ins]t+ aft] section #ahfj;,d-#ad;,a 7#db
 ,u4,s4,c4 #aciew-#aad;a7 ! foll[+ new  
section3  #ahfj;,d-#ad;,b4 ,manufactur] 

rebate = c]ta9 drugs ) prices increas+  
fa/] ?an inflation  7a7 ,9 g5]al        
,subject to ! provisions ( ?is section1 
9 ord] = cov]age to be available "u ?is 
"p = a "p ,d rebatable drug ( a         
manufactur] disp5s$ dur+ an applicable  
ye>1 ! manufactur] mu/ h ent]$ into & h 
9 effect an agreem5t describ$ 9         
subsection 7b74 ,= purposes ( ?is       
section ! t]m applicable ye> means a ye>
 beg9n+ ) #bjbb4  7b7 ,agreem5ts  7#a7  
,t]ms ( agreem5t ,an agreem5t describ$ 9
 ?is subsection1 ) respect to a         
manufactur] ( a "p ,d rebatable drug1 is
 an agreem5t "u :i* ! foll[+ applies3   
7,a7 ,secret>ial provision ( in=mation  
,n lat] ?an #i mon?s aft] ! end ( ea*   
applicable ye> ) respect to :i* !       
agreem5t is 9 effect1 ! ,secret>y1 = !  
"p ,d rebatable drug ( ! manufactur]1   
reports to ! manufactur] ! foll[+ = su* 
ye>3  7i7 ,in=mation on ! total units 7z
 def9$ 9 subsection 7g77#b77 disp5s$ =  
ea* dosage =m & /r5g? ) respect to su*  
"p ,d rebatable drug & ye>4  7ii7       

,in=mation on ! am\nt 7if any7 ( !      
excess av]age manufactur] price increase
 describ$ 9 subsection 7c77#a77;,b7 =   
ea* dosage =m & /r5g? ) respect to su*  
drug & ye>4  7iii7 ,! rebate am\nt      
specifi$ "u subsection 7c7 = ea* dosage 
=m & /r5g? ) respect to su* drug & ye>4 
7,b7 ,manufactur] requirem5ts ,= ea*    
applicable ye> ) respect to :i* !       
agreem5t is 9 effect1 ! manufactur] ( ! 
"p ,d rebatable drug1 = ea* dosage =m & 
/r5g? ) respect to su* drug1 n lat] ?an 
#cj days aft] ! date ( receipt f !      
,secret>y ( ! in=mation describ$ 9      
subp>agraph 7,a7 = su* ye>1 provides to 
! ,secret>y a rebate t is equal to !    
am\nt specifi$ 9 subsection 7c7 = su*   
dosage =m & /r5g? ) respect to su* drug 
= su* ye>4  7#b7 ,l5g? ( agreem5t  7,a7 
,9 g5]al ,an agreem5t "u ?is section1 ) 
respect to a "p ,d rebatable drug1 %all 
be effective = an initial p]iod ( n less
 ?an "o ye> & %all be automatically     
r5ew$ = a p]iod ( n less ?an "o ye>     
unless t]m9at$ "u subp>agraph 7,b74     

7,b7 ,t]m9ation  7i7 ,by ,secret>y ,!   
,secret>y may provide = t]m9ation ( an  
agreem5t "u ?is section = violation ( ! 
requirem5ts ( ! agreem5t or o!r good    
cause %[n4 ,su* t]m9ation %all n be     
effective e>li] ?an #fj days aft] ! date
 ( notice ( su* t]m9ation4 ,! ,secret>y 
%all provide1 ^u reque/1 a manufactur] )
 a he>+ conc]n+ su* a t]m9ation1 b su*  
he>+ %all n delay ! effective date ( !  
t]m9ation4  7ii7 ,by a manufactur] ,a   
manufactur] may t]m9ate an agreem5t "u  
?is section = any reason4 ,any su*      
t]m9ation %all n be effective until !   
ye> beg9n+ at lea/ #fj days aft] ! date 
! manufactur] provides notice to !      
,secret>y4  7,c7 ,effectiv5ess (        
t]m9ation ,any t]m9ation "u ?is p>agraph
 %all n affect rebates due "u ! agreem5t
 "u ?is section be=e ! effective date ( 
its t]m9ation4  7,d7 ,delay be=e re5try 
,9 ! case ( any agreem5t "u ?is section 
) a manufactur] :i* is t]m9at$ 9 a plan 
ye>1 ano!r su* agreem5t ) ! manufactur] 
7or a successor manufactur]7 may n be   

ent]$ into be=e ! subsequ5t plan ye>1   
unless ! ,secret>y f9ds good cause = an 
e>li] re9/atem5t ( su* an agreem5t4     
7#c7 ,in=mation ,= purposes ( c>ry+ out 
?is section1 ! ,secret>y %all use       
in=mation submitt$ by manufactur]s "u   
section #aibg7;b77#c74  7c7 ,rebate     
am\nt  7#a7 ,9 g5]al ,= purposes ( ?is  
section1 ! am\nt specifi$ 9 ?is         
subsection = a dosage =m & /r5g? )      
respect to a "p ,d rebatable drug &     
applicable ye> is1 subject to           
subp>agraphs 7,b7 & 7,c7 ( p>agraph     
7#c71 ! am\nt equal to ! product (--    
7,a7 ! total av]age numb] ( units       
weight$ by1 & disp5s$ =1 su* dosage =m &
 /r5g? ) respect to su* "p ,d rebatable 
drug & ye>2 &  7,b7 ! am\nt 7if any7 by 
:i*-- 7i7 ! av]age manufactur] price 7z 
def9$ 9 subsection 7g77 paid = su*      
dosage =m & /r5g? ) respect to su* "p ,d
 rebatable drug dur+ ! ye>2 exce$s  7ii7
 ! inflation-adju/$ paym5t am\nt det]m9$
 "u p>agraph 7#b7 = su* dosage =m &     
/r5g? ) respect to su* "p ,d rebatable  

drug dur+ ! ye>4  7#b7 ,det]m9ation (   
inflation-adju/$ paym5t am\nt ,!        
inflation-adju/$ paym5t am\nt det]m9$ "u
 ?is p>agraph = a dosage =m & /r5g? )   
respect to a "p ,d rebatable drug = an  
applicable ye>1 subject to subp>agraphs 
7,a7 & 7,d7 ( p>agraph 7#c71 is--  7,a7 
! av]age manufactur] price paid = su*   
dosage =m & /r5g? ) respect to su* drug 
9 ! paym5t am\nt b5*m>k ye> 7z def9$ 9  
subsection 7g77#c772 increas$ by  7,b7 !
 p]c5tage by :i* ! rebate p]iod ,,cpi-,u
 7z def9$ 9 subsection 7g77#e77 = !     
applicable ye> exce$s ! b5*m>k p]iod    
,,cpi-,u 7z def9$ 9 subsection 7g77#d774
  7#c7 ,special treatm5t ( c]ta9 drugs &
 exemption  7,a7 ,subsequ5tly approv$   
drugs ,9 ! case ( a "p ,d rebatable drug
 fir/ approv$ by ! ,food & ,drug        
,adm9i/ration aft] ,janu>y #a1 #bjaf1   
subp>agraph 7,a7 ( p>agraph 7#b7 %all be
 appli$ z if ! t]m paym5t am\nt b5*m>k  
ye> 7 def9$ "u subsection 7g77#c7 z !   
fir/ ye> beg9n+ aft] ! day on :i* ! drug
 0 fir/ m>ket$ & subp>agraph 7,b7 (     

p>agraph 7#b7 %all be appli$ z if ! t]m 
b5*m>k p]iod ,,cpi-,u 7 def9$ "u        
subsection 7g77#d7 z if ! ref]5ce to    
,janu>y #bjaf "u su* subsection 7 a     
ref]5ce to ,janu>y ( ! fir/ ye> beg9n+  
aft] ! date on :i* ! drug 0 fir/ m>ket$ 
by any manufactur]4  7,b7 ,exemption =  
%ortages ,! ,secret>y may r$uce or waive
 ! rebate "u p>agraph 7#a7 ) respect to 
a "p ,d rebatable drug 9 ! case ( a     
%ortage ( su* drug or o!r exig5t        
circum/ances1 z det]m9$ by ! ,secret>y4 
7,c7 ,treatm5t ( new =mulations  7i7 ,9 
g5]al ,9 ! case ( a "p ,d rebatable drug
 t is a l9e ext5sion ( a s+le s\rce drug
 or an innovator multiple s\rce drug t  
is an oral solid dosage =m1 ! ,secret>y 
%all e/abli% a =mula = det]m9+ ! am\nt  
specifi$ 9 ?is subsection ) respect to  
su* "p ,d rebatable drug & an applicable
 ye> ) consid]ation ( ! s+le s\rce drug 
or an innovator multiple s\rce drug4    
7ii7 ,l9e ext5sion def9$ ,9 ?is         
subp>agraph1 ! t]m l9e ext5sion means1 )
 respect to a "p ,d rebatable drug1 a   

new =mulation ( ! drug 7z det]m9$ by !  
,secret>y71 su* z an ext5d$ release     
=mulation1 b does n include an          
abuse-det]r5t =mulation ( ! drug 7z     
det]m9$ by ! ,secret>y71 reg>dless (    
:e!r su* abuse-det]r5t =mulation is an  
ext5d$ release =mulation4  7,d7 ,select$
 drugs ,9 ! case ( a "p ,d rebatable    
drug t is a select$ drug 7z def9$ 9     
section #aaib7;c771 = ea* applicable ye>
 beg9n+ aft] ! price applicability p]iod
 7z def9$ 9 section #aaia7;b77#b7 )     
respect to su* drug1 subp>agraph 7,a7 ( 
p>agraph 7#b7 %all be appli$ z if ! t]m 
paym5t am\nt b5*m>k ye> 7 def9$ "u      
subsection 7g77#c7 z ! la/ ye> beg9n+   
dur+ su* price applicability p]iod )    
respect to su* select$ drug &           
subp>agraph 7,b7 ( p>agraph 7#b7 %all be
 appli$ z if ! t]m b5*m>k p]iod ,,cpi-,u
 7 def9$ "u subsection 7g77#d7 z if !   
ref]5ce to ,janu>y #bjaf "u su*         
subsection 7 a ref]5ce to ,janu>y ( !   
la/ ye> beg9n+ dur+ su* price           
applicability p]iod ) respect to su*    

drug4  7d7 ,rebate deposits ,am\nts paid
 z rebates "u subsection 7c7 %all be    
deposit$ into ! ,m$ic>e ,prescription   
,drug ,acc\nt 9 ! ,f$]al ,supplem5t>y   
,m$ical ,insurance ,tru/ ,fund e/abli%$ 
"u section #ahda4  7e7 ,civil money     
p5alty ,9 ! case ( a manufactur] ( a "p 
,d rebatable drug ) an agreem5t 9 effect
 "u ?is section :o has fail$ to comply )
 ! t]ms ( ! agreem5t "u subsection      
7b77#a77;,b7 ) respect to su* drug = an 
applicable ye>1 ! ,secret>y may impose a
 civil money p5alty on su* manufactur] 9
 an am\nt equal to #abe p]c5t ( ! am\nt 
specifi$ 9 subsection 7c7 = su* drug =  
su* ye>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         
subsection 9 ! same mann] z su*         
provisions apply to a p5alty or proce$+ 
"u section #aabh;,a7a74  7f7 ,judicial  
review ,!re %all be no judicial review (
 ! foll[+3 7#a7 ,! det]m9ation ( units  

"u ?is section4  7#b7 ,! det]m9ation (  
:e!r a drug is a "p ,d rebatable drug "u
 ?is section4  7#c7 ,! calculation ( !  
rebate am\nt "u ?is section4  7g7       
,def9itions ,9 ?is section3 7#a7 ,"p ,d 
rebatable drug def9$  7,a7 ,9 g5]al ,!  
t]m "p ,d rebatable drug means a drug or
 biological t w\ld 7)\t application (   
?is section7 be a cov]$ "p ,d drug1     
except su* t]m %all1 ) respect to an    
applicable ye>1 n include su* a drug or 
biological if ! av]age total co/ "u a   
prescription drug plan "u ?is "p or     
,,ma-,,pd plan "u "p ,c = su* ye> p]    
individual :o uses su* a drug or        
biological1 z det]m9$ by ! ,secret>y1   
are less ?an1 subject to subp>agraph    
7,b71 #ajj1 z det]m9$ by ! ,secret>y us+
 ! mo/ rec5t data available or1 if data 
is n available1 z e/imat$ by !          
,secret>y4  7,b7 ,increase ,! doll>     
am\nt appli$ "u subp>agraph 7,a7-- 7i7 =
 #bjbc1 %all be ! doll> am\nt specifi$  
"u su* subp>agraph = #bjbb1 increas$ by 
! p]c5tage increase 9 ! consum] price   

index = all urban consum]s 7,unit$      
,/ates city av]age7 z ( ,janu>y ( #bjbb2
 &  7ii7 = a subsequ5t ye>1 %all be !   
doll> am\nt specifi$ 9 ?is subp>agraph  
7or subp>agraph 7,a77 = ! previ\s ye>1  
increas$ by ! p]c5tage increase 9 !     
consum] price index = all urban consum]s
 7,unit$ ,/ates city av]age7 z ( ,janu>y
 ( ! previ\s ye>4  ,any doll> am\nt     
specifi$ "u ?is subp>agraph t is n a    
multiple ( #aj %all be r\nd$ to ! ne>e/ 
multiple ( #aj4  7#b7 ,unit def9$ ,! t]m
 unit means1 ) respect to a "p ,d       
rebatable drug1 ! l[e/ id5tifiable      
quantity 7su* z a capsule or tablet1    
milligram ( molecules1 or grams7 ( ! "p 
,d rebatable drug t is disp5s$ to       
individuals enroll$ "u a prescription   
drug plan "u ?is "p or an ,,ma-,,pd plan
 "u "p ,c4  7#c7 ,paym5t am\nt b5*m>k   
ye> ,! t]m paym5t am\nt b5*m>k ye> means
 ! ye> beg9n+ ,janu>y #a1 #bjaf4  7#d7  
,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#e7 ,rebate p]iod ,,cpi-,u ,! t]m      
rebate p]iod ,,cpi-,u means1 ) respect  
to an applicable ye>1 ! consum] price   
index = all urban consum]s 7,unit$      
,/ates city av]age7 = ,janu>y ( su* ye>4
  7#f7 ,av]age manufactur] price ,! t]m 
av]age manufactur] price has ! mean+1 ) 
respect to a "p ,d rebatable drug ( a   
manufactur] = an applicable ye>1 giv5   
su* t]m 9 section #aibg7k77#a71 )       
respect to a cov]$ outpati5t drug ( a   
manufactur] = a rebate p]iod "u section 
#aibg4 ,= purposes ( apply+ ! previ\s   
s5t5ce1 ) respect to a "p ,d rebatable  
drug ( a manufactur] & an applicable    
ye>1 ! ,secret>y %all use ! in=mation ) 
respect to ! av]age manufactur] price = 
su* drug report$ by ! manufactur] "u    
section #aibg7;b77#c7 ) respect to ea* (
 ! qu>t]s 9 ! applicable ye> & calculate
 an annual av]age manufactur] price =   
su* applicable ye> z ! av]age ( su*     
av]age manufactur] prices = ea* su*     
qu>t]1 weight$ by units ( su* drug sold 

or disp5s$ ) respect to su* applicable  
ye>4  4  ,,iii ,"p ,d ,improvem5ts &    
,maximum ,out-(-,pocket ,cap = ,m$ic>e  
,b5efici>ies  #cja4 ,m$ic>e "p ,d b5efit
 r$esign  7a7 ,b5efit /ructure r$esign  
,section #ahfj;,d-#b7;b7 ( ! ,social    
,security ,act 7#db ,u4,s4,c4           
#aciew-#ajb7;b77 is am5d$-- 7#a7 9      
p>agraph 7#b7--  7,a7 9 subp>agraph     
7,a71 9 ! matt] prec$+ clause 7i71 by   
ins]t+ = a ye> prec$+ #bjbb & = co/s    
above ! annual d$uctible specifi$ 9     
p>agraph 7#a7 & up to ! annual          
out-(-pocket ?re%old specifi$ 9 p>agraph
 7#d77;,b7 = #bjbb & ea* subsequ5t ye>  
aft] p>agraph 7#c72  7,b7 9 subp>agraph 
7,c7-- 7i7 9 clause 7i71 9 ! matt]      
prec$+ subclause 7,i71 by ins]t+ = a ye>
 prec$+ #bjbb1 aft] p>agraph 7#d712 &   
7ii7 9 clause 7ii77,,iii71 by /rik+ &   
ea* subsequ5t ye> & ins]t+ & #bjba2 &   
7,c7 9 subp>agraph 7,d7--  7i7 9 clause 
7i7-- 7,i7 9 ! matt] prec$+ subclause   
7,i71 by ins]t+ = a ye> prec$+ #bjbb1   
aft] p>agraph 7#d712 &  7,,ii7 9        

subclause 7,i77bb71 by /rik+ a ye> aft] 
#bjah & ins]t+ ea* ( ye>s #bjah ?r\gh   
#bjba2 &  7ii7 9 clause 7ii77,v71 by    
/rik+ #bjai & ea* subsequ5t ye> & ins]t+
 ea* ( ye>s #bjai ?r\gh #bjba2  7#b7 9  
p>agraph 7#c77;,a7-- 7,a7 9 ! matt]     
prec$+ clause 7i71 by ins]t+ = a ye>    
prec$+ #bjbb1 aft] & 7#d712 &  7,b7 9   
clause 7ii71 by /rik+ = a subsequ5t ye> 
& ins]t+ = ea* ( ye>s #bjjg ?r\gh #bjba2
 &  7#c7 9 p>agraph 7#d7--  7,a7 9      
subp>agraph 7,a7-- 7i7 9 clause 7i7--   
7,i7 by r$esignat+ subclauses 7,i7 &    
7,,ii7 z items 7aa7 & 7bb71             
respectively1 & mov+ ! m>g9 ( ea* su*   
r$esignat$ item #b ems to ! "r2  7,,ii7 
9 ! matt] prec$+ item 7aa71 z r$esignat$
 by subclause 7,i71 by /rik+ is equal to
 ! great] (-- & ins]t+ 8is equal to--   
7,i7 = a ye> prec$+ #bjbb1 ! great] (-- 
2  7,,iii7 by /rik+ ! p]iod at ! end (  
item 7bb71 z r$esignat$ by subclause    
7,i71 & ins]t+ 2 &2 &  7,,iv7 by add+ at
 ! end ! foll[+3  7,,ii7 = #bjbb & ea*  
succe$+ ye>1 #j4  2 &  7ii7 9 clause    

7ii7--  7,i7 by /rik+ clause 7i77,i7 &  
ins]t+ clause 7i77,i77aa72 &  7,,ii7 by 
add+ at ! end ! foll[+ new s5t5ce3 ,!   
,secret>y %all cont9ue to calculate !   
doll> am\nts specifi$ 9 clause          
7i77,i77aa71 includ+ ) ! adju/m5t "u ?is
 clause1 aft] #bjba = purposes ( section
 #ahfj;,d-#ad7;a77#a77;,d77iii742  7,b7 
9 subp>agraph 7,b7-- 7i7 9 clause 7i7-- 
7,i7 9 subclause 7,v71 by /rik+ or at ! 
end2  7,,ii7 9 subclause 7,,vi7--  7aa7 
by /rik+ = a subsequ5t ye> & ins]t+ =   
#bjba2 &  7bb7 by /rik+ ! p]iod at ! end
 & ins]t+ a semicolon2 &  7,,iii7 by    
add+ at ! end ! foll[+ new subclauses3  
7,,vii7 = #bjbb1 is equal to #b1jjj2 or 
7,,viii7 = a subsequ5t ye>1 is equal to 
! am\nt specifi$ 9 ?is subp>agraph = !  
previ\s ye>1 increas$ by ! annual       
p]c5tage increase describ$ 9 p>agraph   
7#f7 = ! ye> involv$4  2 &  7ii7 9      
clause 7ii71 by /rik+ clause 7i77,,ii7 &
 ins]t+ clause 7i72  7,c7 9 subp>agraph 
7,c77i71 by /rik+ & = am\nts & ins]t+ &1
 = a ye> prec$+ #bjbb1 = am\nts2 &  7,d7

 9 subp>agraph 7,e71 by /rik+ ,9 apply+ 
& ins]t+ ,= ea* ( ye>s #bjaa ?r\gh      
#bjba1 9 apply+4  7b7 ,decreas+         
re9surance paym5t am\nt ,section        
#ahfj;,d-#ae7;b77#a7 ( ! ,social        
,security ,act 7#db ,u4,s4,c4           
#aciew-#aae7;b77#a77 is am5d$ by ins]t+ 
aft] #hj p]c5t ! foll[+3 7or1 ) respect 
to a cov]age ye> aft] #bjba1 #bj p]c5t74
  7c7 ,manufactur] disc\nt program  7#a7
 ,9 g5]al ,"p ,d ( title ,,xviii ( !    
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aja et seq471 z am5d$ by section
 #bjb1 is fur!r am5d$ by ins]t+ aft]    
section #ahfj;,d-#ad;,b ! foll[+ new    
section3  #ahfj;,d-#ad;,c4 ,manufactur] 
disc\nt program  7a7 ,e/abli%m5t ,!     
,secret>y %all e/abli% a manufactur]    
disc\nt program 79 ?is section ref]r$ to
 z ! program74 ,"u ! program1 !         
,secret>y %all ent] into agreem5ts      
describ$ 9 subsection 7b7 ) manufactur]s
 & provide = ! p]=mance ( ! duties      
describ$ 9 subsection 7c74 ,! ,secret>y 
%all e/abli% a model agreem5t = use "u !

 program by n lat] ?an ,janu>y #a1      
#bjba1 9 consultation ) manufactur]s1 & 
all[ = comm5t on su* model agreem5t4    
7b7 ,t]ms ( agreem5t  7#a7 ,9 g5]al     
7,a7 ,agreem5t ,an agreem5t "u ?is      
section %all require ! manufactur] to   
provide applicable b5efici>ies access to
 disc\nt$ prices = applicable drugs ( ! 
manufactur] t are disp5s$ on or aft]    
,janu>y #a1 #bjbb4  7,b7 ,provision (   
disc\nt$ prices at ! po9t-(-sale ,!     
disc\nt$ prices describ$ 9 subp>agraph  
7,a7 %all be provid$ to ! applicable    
b5efici>y at ! ph>macy or by ! mail ord]
 s]vice at ! po9t-(-sale ( an applicable
 drug4  7,c7 ,tim+ ( agreem5t  7i7      
,special rule = #bjbb ,9 ord] = an      
agreem5t ) a manufactur] to be 9 effect 
"u ?is section ) respect to ! p]iod     
beg9n+ on ,janu>y #a1 #bjbb1 & end+ on  
,decemb] #ca1 #bjbb1 ! manufactur] %all 
ent] into su* agreem5t n lat] ?an #cj   
days aft] ! date ( ! e/abli%m5t ( a     
model agreem5t "u subsection 7a74  7ii7 
#bjbc & subsequ5t ye>s ,9 ord] = an     

agreem5t ) a manufactur] to be 9 effect 
"u ?is section ) respect to plan ye>    
#bjbc or a subsequ5t plan ye>1 !        
manufactur] %all ent] into su* agreem5t 
7or su* agreem5t %all be r5ew$ "u       
p>agraph 7#d77;,a77 n lat] ?an ,janu>y  
#cj ( ! prec$+ ye>4  7#b7 ,provision (  
appropriate data ,ea* manufactur] ) an  
agreem5t 9 effect "u ?is section %all   
collect & h available appropriate data1 
z det]m9$ by ! ,secret>y1 to ensure t x 
c demon/rate to ! ,secret>y compliance )
 ! requirem5ts "u ! program4  7#c7      
,compliance ) requirem5ts = adm9i/ration
 ( program ,ea* manufactur] ) an        
agreem5t 9 effect "u ?is section %all   
comply ) requirem5ts impos$ by !        
,secret>y or a ?ird p>ty ) a contract "u
 subsection 7d77#c71 z applicable1 =    
purposes ( adm9i/]+ ! program1 includ+  
any det]m9ation "u subp>agraph 7,a7 (   
subsection 7c77#a7 or proc$ures e/abli%$
 "u su* subsection 7c77#a74  7#d7 ,l5g? 
( agreem5t  7,a7 ,9 g5]al ,an agreem5t  
"u ?is section %all be effective = an   

initial p]iod ( n less ?an #ab mon?s &  
%all be automatically r5ew$ = a p]iod ( 
n less ?an #a ye> unless t]m9at$ "u     
subp>agraph 7,b74  7,b7 ,t]m9ation  7i7 
,by ! ,secret>y ,! ,secret>y may provide
 = t]m9ation ( an agreem5t "u ?is       
section = a kn[+ & willful violation ( !
 requirem5ts ( ! agreem5t or o!r good   
cause %[n4 ,su* t]m9ation %all n be     
effective e>li] ?an #cj days aft] ! date
 ( notice to ! manufactur] ( su*        
t]m9ation4 ,! ,secret>y %all provide1 ^u
 reque/1 a manufactur] ) a he>+ conc]n+ 
su* a t]m9ation1 & su* he>+ %all take   
place prior to ! effective date ( !     
t]m9ation ) suffici5t "t = su* effective
 date to be repeal$ if ! ,secret>y      
det]m9es appropriate4  7ii7 ,by a       
manufactur] ,a manufactur] may t]m9ate  
an agreem5t "u ?is section = any reason4
 ,any su* t]m9ation %all be effective1 )
 respect to a plan ye>--  7,i7 if !     
t]m9ation occurs be=e ,janu>y #cj ( a   
plan ye>1 z ( ! day aft] ! end ( ! plan 
ye>2 &  7,,ii7 if ! t]m9ation occurs on 

or aft] ,janu>y #cj ( a plan ye>1 z ( ! 
day aft] ! end ( ! succe$+ plan ye>4    
7iii7 ,effectiv5ess ( t]m9ation ,any    
t]m9ation "u ?is subp>agraph %all n     
affect disc\nts = applicable drugs ( !  
manufactur] t are due "u ! agreem5t be=e
 ! effective date ( its t]m9ation4  7iv7
 ,notice to ?ird p>ty ,! ,secret>y %all 
provide notice ( su* t]m9ation to a ?ird
 p>ty ) a contract "u subsection 7d77#c7
 )9 n less ?an #cj days be=e ! effective
 date ( su* t]m9ation4  7c7 ,duties     
describ$ ,! duties describ$ 9 ?is       
subsection are ! foll[+3 7#a7           
,adm9i/ration ( program ,adm9i/]+ !     
program1 includ+--  7,a7 ! det]m9ation (
 ! am\nt ( ! disc\nt$ price ( an        
applicable drug ( a manufactur]2  7,b7 !
 e/abli%m5t ( proc$ures "u :i* disc\nt$ 
prices are provid$ to applicable        
b5efici>ies at ph>macies or by mail ord]
 s]vice at ! po9t-(-sale ( an applicable
 drug2  7,c7 ! e/abli%m5t ( proc$ures to
 ensure t1 n lat] ?an ! applicable numb]
 ( cal5d> days aft] ! disp5s+ ( an      

applicable drug by a ph>macy or mail    
ord] s]vice1 ! ph>macy or mail ord]     
s]vice is reimburs$ = an am\nt equal to 
! diff]5ce betwe5--  7i7 ! negotiat$    
price ( ! applicable drug2 &  7ii7 !    
disc\nt$ price ( ! applicable drug2     
7,d7 ! e/abli%m5t ( proc$ures to ensure 
t ! disc\nt$ price = an applicable drug 
"u ?is section is appli$ be=e any       
cov]age or f9ancial assi/ance "u o!r    
heal? b5efit plans or programs t provide
 cov]age or f9ancial assi/ance = !      
pur*ase or provision ( prescription drug
 cov]age on behalf ( applicable         
b5efici>ies z ! ,secret>y may specify2 &
  7,e7 provid+ a reasonable dispute     
resolution me*anism to resolve          
disagreem5ts betwe5 manufactur]s1       
applicable b5efici>ies1 & ! ?ird p>ty ) 
a contract "u subsection 7d77#c74  7#b7 
,monitor+ compliance  7,a7 ,9 g5]al ,!  
,secret>y %all monitor compliance by a  
manufactur] ) ! t]ms ( an agreem5t "u   
?is section4  7,b7 ,notification ,if a  
?ird p>ty ) a contract "u subsection    

7d77#c7 det]m9es t ! manufactur] is n 9 
compliance ) su* agreem5t1 ! ?ird p>ty  
%all notify ! ,secret>y ( su*           
noncompliance = appropriate en=cem5t "u 
subsection 7e74  7#c7 ,collection ( data
 f prescription drug plans & ,,ma-,,pd  
plans ,! ,secret>y may collect          
appropriate data f prescription drug    
plans & ,,ma-,,pd plans 9 a timeframe t 
all[s = disc\nt$ prices to be provid$ = 
applicable drugs "u ?is section4  7d7   
,adm9i/ration  7#a7 ,9 g5]al ,subject to
 p>agraph 7#b71 ! ,secret>y %all provide
 = ! implem5tation ( ?is section1       
includ+ ! p]=mance ( ! duties describ$ 9
 subsection 7c74  7#b7 ,limitation ,9   
provid+ = ! implem5tation ( ?is section1
 ! ,secret>y %all n receive or di/ribute
 any funds ( a manufactur] "u ! program4
  7#c7 ,contract ) ?ird p>ties ,!       
,secret>y %all ent] into a contract ) #a
 or m ?ird p>ties to adm9i/] !          
requirem5ts e/abli%$ by ! ,secret>y 9   
ord] to c>ry out ?is section4 ,at a     
m9imum1 ! contract ) a ?ird p>ty "u !   

prec$+ s5t5ce %all require t ! ?ird     
p>ty--  7,a7 receive & transmit         
in=mation betwe5 ! ,secret>y1           
manufactur]s1 & o!r individuals or      
entities ! ,secret>y det]m9es           
appropriate2  7,b7 receive1 di/ribute1  
or facilitate ! di/ribution ( funds (   
manufactur]s to appropriate individuals 
or entities 9 ord] to meet ! obligations
 ( manufactur]s "u agreem5ts "u ?is     
section2  7,c7 provide adequate & timely
 in=mation to manufactur]s1 consi/5t ) !
 agreem5t ) ! manufactur] "u ?is        
section1 z necess>y = ! manufactur] to  
fulfill its obligations "u ?is section2 
&  7,d7 p]mit manufactur]s to conduct   
p]iodic audits1 directly or ?r\gh       
contracts1 ( ! data & in=mation us$ by !
 ?ird p>ty to det]m9e disc\nts =        
applicable drugs ( ! manufactur] "u !   
program4  7#d7 ,p]=mance requirem5ts ,! 
,secret>y %all e/abli% p]=mance         
requirem5ts = a ?ird p>ty ) a contract  
"u p>agraph 7#c7 & safegu>ds to protect 
! indep5d5ce & integrity ( ! activities 

c>ri$ out by ! ?ird p>ty "u ! program "u
 ?is section4  7#e7 ,implem5tation ,!   
,secret>y may implem5t ! program "u ?is 
section by program in/ruction or        
o!rwise4  7#f7 ,adm9i/ration ,*apt] #ce 
( title #dd1 ,unit$ ,/ates ,code1 %all n
 apply to ! program "u ?is section4  7e7
 ,en=cem5t  7#a7 ,audits ,ea*           
manufactur] ) an agreem5t 9 effect "u   
?is section %all be subject to p]iodic  
audit by ! ,secret>y4  7#b7 ,civil money
 p5alty  7,a7 ,9 g5]al ,! ,secret>y may 
impose a civil money p5alty on a        
manufactur] t fails to provide          
applicable b5efici>ies disc\nts =       
applicable drugs ( ! manufactur] 9      
accordance ) su* agreem5t = ea* su*     
failure 9 an am\nt ! ,secret>y det]m9es 
is comm5surate ) ! sum (--  7i7 ! am\nt 
t ! manufactur] w\ld h paid ) respect to
 su* disc\nts "u ! agreem5t1 :i* w !n be
 us$ to pay ! disc\nts :i* ! manufactur]
 _h fail$ to provide2 &  7ii7 #be p]c5t 
( su* am\nt4  7,b7 ,application ,!      
provisions ( section #aabh;,a 7o!r ?an  

subsections 7a7 & 7b77 %all apply to a  
civil money p5alty "u ?is p>agraph 9 !  
same mann] z su* provisions apply to a  
p5alty or proce$+ "u section            
#aabh;,a7a74  7f7 ,cl>ification reg>d+  
availability ( o!r cov]$ "p ,d drugs    
,no?+ 9 ?is section %all prev5t an      
applicable b5efici>y f pur*as+ a cov]$  
"p ,d drug t is n an applicable drug    
7includ+ a g5]ic drug or a drug t is n  
on ! =mul>y ( ! prescription drug plan  
or ,,ma-,,pd plan t ! applicable        
b5efici>y is enroll$ 974  7g7           
,def9itions ,9 ?is section3 7#a7        
,applicable b5efici>y ,! t]m applicable 
b5efici>y means an individual :o1 on !  
date ( disp5s+ a cov]$ "p ,d drug--     
7,a7 is enroll$ 9 a prescription drug   
plan or an ,,ma-,,pd plan2  7,b7 is n   
enroll$ 9 a qualifi$ retiree            
prescription drug plan2 &  7,c7 has     
incurr$ co/s = cov]$ "p ,d drugs 9 ! ye>
 t are equal to or exce$ ! annual       
d$uctible specifi$ 9 section            
#ahfj;,d-#b7;b77#a7 = su* ye>4  7#b7    

,applicable drug ,! t]m applicable drug1
 ) respect to an applicable b5efici>y-- 
7,a7 means a cov]$ "p ,d drug--  7i7    
approv$ "u a new drug application "u    
section #eje7;b7 ( ! ,f$]al ,food1      
,drug1 & ,cosmetic ,act or1 9 ! case ( a
 biologic product1 lic5s$ "u section    
#cea ( ! ,public ,heal? ,s]vice ,act2 & 
7ii7  7,i7 if ! ,,pdp sponsor ( !       
prescription drug plan or ! ,,ma        
organization (f]+ ! ,,ma-,,pd plan uses 
a =mul>y1 :i* is on ! =mul>y ( !        
prescription drug plan or ,,ma-,,pd plan
 t ! applicable b5efici>y is enroll$ 92 
7,,ii7 if ! ,,pdp sponsor ( !           
prescription drug plan or ! ,,ma        
organization (f]+ ! ,,ma-,,pd plan does 
n use a =mul>y1 = :i* b5efits are       
available "u ! prescription drug plan or
 ,,ma-,,pd plan t ! applicable b5efici>y
 is enroll$ 92 or  7,,iii7 is provid$   
?r\gh an exception or appeal2 &  7,b7   
does n include a select$ drug 7z def9$ 9
 section #aaib7;c77 dur+ a price        
applicability p]iod 7z def9$ 9 section  

#aaia7;b77#b77 ) respect to su* drug4   
7#c7 ,applicable numb] ( cal5d> days ,! 
t]m applicable numb] ( cal5d> days      
means-- 7,a7 ) respect to claims =      
reimbursem5t submitt$ electronically1   
#ad days2 &  7,b7 ) respect to claims = 
reimbursem5t submitt$ o!rwise1 #cj days4
  7#d7 ,disc\nt$ price  7,a7 ,9 g5]al ,!
 t]m disc\nt$ price means1 ) respect to 
an applicable drug ( a manufactur]      
furni%$ dur+ a ye> to an applicable     
b5efici>y--  7i7 :o has n incurr$ co/s =
 cov]$ "p ,d drugs 9 ! ye> t are equal  
to or exce$ ! annual out-(-pocket       
?re%old specifi$ 9 section              
#ahfj;,d-#b7;b77#d77;,b77i7 = ! ye>1 #ij
 p]c5t ( ! negotiat$ price ( su* drug2 &
  7ii7 :o has incurr$ su* co/s 9 ! ye> t
 are equal to or exce$ su* ?re%old = !  
ye>1 #gj p]c5t ( ! negotiat$ price ( su*
 drug4  7,b7 ,cl>ification ,no?+ 9 ?is  
section %all be con/ru$ z affect+ !     
responsibility ( an applicable b5efici>y
 = paym5t ( a disp5s+ fee = an          
applicable drug4  7,c7 ,special case =  

c]ta9 claims  7i7 ,claims spann+        
d$uctible ,9 ! case :]e ! entire am\nt (
 ! negotiat$ price ( an individual claim
 = an applicable drug ) respect to an   
applicable b5efici>y does n fall at or  
above ! annual d$uctible specifi$ 9     
section #ahfj;,d-#b7;b77#a7 = ! ye>1 !  
manufactur] ( ! applicable drug %all    
provide ! disc\nt$ price "u ?is section 
on only ! portion ( ! negotiat$ price ( 
! applicable drug t falls at or above   
su* annual d$uctible4  7ii7 ,claims     
spann+ out-(-pocket ?re%old ,9 ! case   
:]e ! entire am\nt ( ! negotiat$ price (
 an individual claim = an applicable    
drug ) respect to an applicable         
b5efici>y does n fall entirely bel[ or  
entirely above ! annual out-(-pocket    
?re%old specifi$ 9 section              
#ahfj;,d-#b7;b77#d77;,b77i7 = ! ye>1 !  
manufactur] ( ! applicable drug %all    
provide ! disc\nt$ price--  7,i7 9      
accordance ) subp>agraph 7,a77i7 on !   
portion ( ! negotiat$ price ( !         
applicable drug t falls bel[ su*        

?re%old2 &  7,,ii7 9 accordance )       
subp>agraph 7,a77ii7 on ! portion ( su* 
price ( su* drug t falls at or above su*
 ?re%old4  7#e7 ,manufactur] ,! t]m     
manufactur] means any entity :i* is     
engag$ 9 ! production1 prep>ation1      
propagation1 comp\nd+1 conv]sion1 or    
process+ ( prescription drug products1  
ei!r directly or indirectly by          
extraction f sub/ances ( natural orig91 
or indep5d5tly by means ( *emical       
syn!sis1 or by a comb9ation ( extraction
 & *emical syn!sis4 ,su* t]m does n     
include a :olesale di/ributor ( drugs or
 a retail ph>macy lic5s$ "u ,/ate law4  
7#f7 ,negotiat$ price ,! t]m negotiat$  
price has ! mean+ giv5 su* t]m 9 section
 #dbc4ajj ( title #db1 ,code ( ,f$]al   
,regulations 7z 9 effect on ! date (    
enactm5t ( section #ahfj;,d-#ad;,a71    
except t su* negotiat$ price %all n     
include any disp5s+ fee = ! applicable  
drug4  7#g7 ,qualifi$ retiree           
prescription drug plan ,! t]m qualifi$  
retiree prescription drug plan has !    

mean+ giv5 su* t]m 9 section            
#ahfj;,d-#bb7;a77#b74  4  7#b7 ,sunset (
 ,m$ic>e cov]age gap disc\nt program    
,section #ahfj;,d-#ad;,a ( ! ,social    
,security ,act 7#db ,u4,s4,c4           
#acie-aad;a7 is am5d$--  7,a7 9         
subsection 7a71 9 ! fir/ s5t5ce1 by     
/rik+ ,! ,secret>y & ins]t+ ,subject to 
subsection 7h71 ! ,secret>y2 &  7,b7 by 
add+ at ! end ! foll[+ new subsection3  
7h7 ,sunset ( program  7#a7 ,9 g5]al ,! 
program %all n apply ) respect to       
applicable drugs disp5s$ on or aft]     
,janu>y #a1 #bjbb1 &1 subject to        
p>agraph 7#b71 agreem5ts "u ?is section 
%all be t]m9at$ z ( su* date4  7#b7     
,cont9u$ application = applicable drugs 
disp5s$ prior to sunset ,! provisions ( 
?is section 7includ+ all                
responsibilities & duties7 %all cont9ue 
to apply aft] ,janu>y #a1 #bjbb1 )      
respect to applicable drugs disp5s$     
prior to su* date4  4  7#c7 ,inclusion (
 actu>ial value ( manufactur] disc\nts 9
 bids ,section #ahfj;,d-#aa ( ! ,social 

,security ,act 7#db ,u4,s4,c4           
#aciew-#aaa7 is am5d$-- 7,a7 9          
subsection 7b77#b77;,c77iii7--  7i7 by  
/rik+ assumptions reg>d+ ! re9surance an
 ins]t+ 8assumptions reg>d+--  7,i7 !   
re9surance  2 &  7ii7 by add+ at ! end !
 foll[+3  7,,ii7 = #bjbb & ea* subsequ5t
 ye>1 ! manufactur] disc\nts provid$ "u 
section #ahfj;,d-#ad;,c subtract$ f !   
actu>ial value to produce su* bid2 &  2 
&  7,b7 9 subsection 7c77#a77;,c7-- 7i7 
by /rik+ an actu>ial valuation ( !      
re9surance & ins]t+ 8an actu>ial        
valuation (--  7i7 ! re9surance  2  7ii7
 9 clause 7i71 z ins]t$ by clause 7i7 ( 
?is subp>agraph1 by add+ & at ! end2 &  
7iii7 by add+ at ! end ! foll[+3  7ii7 =
 #bjbb & ea* subsequ5t ye>1 !           
manufactur] disc\nts provid$ "u section 
#ahfj;,d-#ad;,c2  4  7d7 ,con=m+        
am5dm5ts  7#a7 ,section #ahfj;,d-#b ( ! 
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#ajb7 is am5d$-- 7,a7 9          
subsection 7a77#b77;,a77i77,i71 by /rik+
 1 or an increase 9 ! initial & ins]t+  

or1 = a ye> prec$+ #bjbb1 an increase 9 
! initial2  7,b7 9 subsection           
7c77#a77;,c7-- 7i7 9 ! subp>agraph      
head+1 by /rik+ at initial cov]age      
limit2 &  7ii7 by ins]t+ = a ye> prec$+ 
#bjbb or ! annual out-(-pocket ?re%old  
specifi$ 9 subsection 7b77#d77;,b7 = !  
ye> = #bjbb & ea* subsequ5t ye> aft]    
subsection 7b77#c7 = ! ye> ea* place x  
appe>s2 &  7,c7 9 subsection            
7d77#a77;,a71 by /rik+ or an initial &  
ins]t+ or1 = a ye> prec$+ #bjbb1 an     
initial4  7#b7 ,section                 
#ahfj;,d-#d7;a77#d77;,b77i7 ( ! ,social 
,security ,act 7#db ,u4,s4,c4           
#aciew-#ajd7;a77#d77;,b77 is am5d$ by   
/rik+ ! initial & ins]t+ = a ye> prec$+ 
#bjbb1 ! initial4  7#c7 ,section        
#ahfj;,d-#ad7;a7 ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciew-#aad7;a77 is 
am5d$-- 7,a7 9 p>agraph 7#a7--  7i7 9   
subp>agraph 7,c71 by /rik+ ,!           
cont9uation & ins]t+ ,= a ye> prec$+    
#bjbb1 ! cont9uation2  7ii7 9           
subp>agraph 7,d77iii71 by /rik+         

#ahfj;,d-#b7;b77#d77;,a77i77,i7 & ins]t+
 #ahfj;,d-#b7;b77#d77;,a77i77,i77aa72 & 
7iii7 9 subp>agraph 7,e71 by /rik+ ,!   
elim9ation & ins]t+ ,= a ye> prec$+     
#bjbb1 ! elim9ation2 &  7,b7 9 p>agraph 
7#b7--  7i7 9 subp>agraph 7,c71 by /rik+
 ,! cont9uation & ins]t+ ,= a ye> prec$+
 #bjbb1 ! cont9uation2 &  7ii7 9        
subp>agraph 7,e7--  7,i7 by ins]t+ = a  
ye> prec$+ #bjbb1 aft] subsection 7c72 &
  7,,ii7 by /rik+                       
#ahfj;,d-#b7;b77#d77;,a77i77,i7 & ins]t+
 #ahfj;,d-#b7;b77#d77;,a77i77,i77aa74   
7#d7 ,section #ahfj;,d-#ba7;d77#g7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aca7;d77#g77 is am5d$ by /rik+  
section #ahfj;,d-#b7;b77#d77;,b77i7 &   
ins]t+ section                          
#ahfj;,d-#b7;b77#d77;,c77i74  7#e7      
,section #ahfj;,d-#bb7;a77#b77;,a7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#acb7;a77#b77;,a77 is am5d$--    
7,a7 by /rik+ ! value ( any disc\nt &   
ins]t+ ! foll[+3  ! value (-- 7i7 = ye>s
 prior to #bjbb1 any disc\nt  4  7,b7 9 

clause 7i71 z ins]t$ by subp>agraph 7,a7
 ( ?is p>agraph1 by /rik+ ! p]iod at !  
end & ins]t+ 2 &2 &  7,c7 by add+ at !  
end ! foll[+ new clause3  7ii7 = #bjbb &
 ea* subsequ5t ye>1 any disc\nt provid$ 
pursuant to section #ahfj;,d-#ad;,c4  4 
7#f7 ,section #ahfj;,d-#da7;a77#f7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aea7;a77#f77 is am5d$-- 7,a7 by 
ins]t+ = a ye> be=e #bjbb aft]          
#ahfj;,d-#b7;b77#c72 &  7,b7 by ins]t+ =
 su* ye> be=e ! p]iod4  7#g7 ,p>agraph  
7#a7 ( section #ahfj;,d-#dc7;a7 ( !     
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aec7;a77 is am5d$ to read z     
foll[s3  7#a7 p>ticipate 9-- 7,a7 =     
#bjaa ?r\gh #bjba1 ! ,m$ic>e cov]age gap
 disc\nt program "u section             
#ahfj;,d-#ad;,a2 &  7,b7 = #bjbb & ea*  
subsequ5t ye>1 ! manufactur] disc\nt    
program "u section #ahfj;,d-#ad;,c2  4  
7e7 ,effective date ,! am5dm5ts made by 
?is section %all apply ) respect to plan
 ye> #bjbb & subsequ5t plan ye>s4