,,ib ,union ,calendar ,no4 #bfd #aafth ,,congress #ast ,session ,h4 ,r4 #c ,report ,no4 #aaf-cbd1 ,parts ,i1 ,,ii and ,,iii ,,in ,,the ,,house ,,of ,,representatives ,september #ai1 #bjai ,mr4 ,pallone 7for himself1 ,mr4 ,neal1 and ,mr4 ,scott of ,virginia7 introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce1 and in addition to the ,committees on ,ways and ,means1 and ,education and ,labor1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,december #f1 #bjai ,reported from the ,committee on ,energy and ,commerce with an amendment ,strike out all after the enacting clause and insert the part printed in italic ,december #f1 #bjai ,reported from the ,committee on ,ways and ,means with an amendment ,strike out all after the enacting clause and insert the part printed in boldface roman ,december #f1 #bjai ,referral to the ,committee on ,education and ,labor extended for a period ending not later than ,december #i1 #bjai ,december #i1 #bjai ,additional sponsors3 ,mr4 ,larson of ,connecticut1 ,ms4 ,kuster of ,new ,hampshire1 ,ms4 ,de,gette1 ,mr4 ,rush1 ,ms4 ,shalala1 ,mr4 ,ryan1 ,mr4 ,morelle1 ,mr4 ,sablan1 ,mr4 ,case1 ,mr4 ,engel1 ,ms4 ,castor of ,florida1 ,ms4 ,frankel1 ,mr4 ,evans1 ,mr4 ,courtney1 ,mr4 ,norcross1 ,ms4 ,moore1 ,mr4 ,kildee1 ,ms4 ,norton1 ,mr4 ,mc,govern1 ,mr4 ,visclosky1 ,mr4 ,carbajal1 ,mr4 ,pappas1 ,ms4 ,bonamici1 ,ms4 ,hill of ,california1 ,mrs4 ,hayes1 ,mr4 ,cartwright1 ,mr4 ,mc,nerney1 ,ms4 ,blunt ,rochester1 ,mr4 ,kim1 ,mr4 ,trone1 ,mr4 ,allred1 ,mr4 ,rose of ,new ,york1 ,mr4 ,thompson of ,california1 ,ms4 ,meng1 ,mr4 ,cohen1 ,mr4 ,suozzi1 ,ms4 ,wild1 ,ms4 ,eshoo1 ,mr4 ,soto1 ,mr4 ,horsford1 ,mr4 ,vela1 ,mrs4 ,beatty1 ,ms4 ,wasserman ,schultz1 ,mr4 ,keating1 ,mr4 ,golden1 ,mr4 ,schiff1 ,ms4 ,craig1 ,mr4 ,welch1 ,mr4 ,michael ,f4 ,doyle of ,pennsylvania1 ,ms4 ,garcia of ,texas1 ,mr4 ,danny ,k4 ,davis of ,illinois1 ,mr4 ,ruiz1 ,ms4 ,matsui1 ,ms4 ,slotkin1 ,ms4 ,wilson of ,florida1 ,mr4 ,loebsack1 ,mr4 ,crist1 ,mrs4 ,bustos1 ,ms4 ,mucarsel-,powell1 ,mr4 ,casten of ,illinois1 ,ms4 ,schrier1 ,mr4 ,cuellar1 ,ms4 ,wexton1 ,mr4 ,cleaver1 ,ms4 ,schakowsky1 ,mr4 ,sarbanes1 ,mr4 ,sean ,patrick ,maloney of ,new ,york1 ,mr4 ,lawson of ,florida1 ,mr4 ,phillips1 ,mr4 ,schneider1 ,mr4 ,meeks1 ,mr4 ,espaillat1 ,mr4 ,lynch1 ,mr4 ,higgins of ,new ,york1 ,mr4 ,langevin1 ,ms4 ,judy ,chu of ,california1 ,ms4 ,stevens1 ,mr4 ,perlmutter1 ,ms4 ,davids of ,kansas1 ,mrs4 ,axne1 ,mr4 ,hastings1 ,mr4 ,beyer1 ,mrs4 ,lowey1 ,mr4 ,mc,eachin1 ,mrs4 ,torres of ,california1 ,mr4 ,payne1 ,ms4 ,scanlon1 ,mr4 ,deutch1 ,mr4 ,yarmuth1 ,ms4 ,spanberger1 ,mr4 ,jeffries1 ,mrs4 ,mc,bath1 ,mrs4 ,dingell1 ,ms4 ,finkenauer1 ,mr4 ,garamendi1 ,ms4 ,mc,collum1 ,mr4 ,veasey1 ,mr4 ,castro of ,texas1 ,mr4 ,gonzalez of ,texas1 ,ms4 ,bass1 ,mr4 ,bishop of ,georgia1 ,mr4 ,smith of ,washington1 ,mr4 ,lowenthal1 and ,mrs4 ,fletcher ,december #i1 #bjai ,reported from the ,committee on ,education and ,labor with an amendment2 committed to the ,committee of the ,whole ,house on the ,state of the ,union and ordered to be printed ,strike out all after the enacting clause and insert the part printed in boldface italic ,for text of introduced bill1 see copy of bill as introduced on ,september #ai1 #bjai ,a ,,bill ,to establish a fair price negotiation program1 protect the ,medicare program from excessive price increases1 and establish an out-of-pocket maximum for ,medicare part ,d enrollees1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,in general ,this ,act may be cited as the ,lower ,drug ,costs ,now ,act of #bjai4 7b7 ,table of contents ,the table of contents is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,title ,i--,lowering ,prices ,through ,fair ,drug ,price ,negotiation ,sec4 #aja4 ,providing for lower prices for certain high-priced single source drugs4 ,sec4 #ajb4 ,selected drug manufacturer excise tax imposed during noncompliance periods4 ,title ,,ii--,medicare ,parts ,b and ,d ,prescription ,drug ,inflation ,rebates ,sec4 #bja4 ,medicare part ,b rebate by manufacturers4 ,sec4 #bjb4 ,medicare part ,d rebate by manufacturers4 ,title ,,iii--,part ,d ,improvements and ,maximum ,out-of-,pocket ,cap for ,medicare ,beneficiaries ,sec4 #cja4 ,medicare part ,d benefit redesign4 ,sec4 #cjb4 ,allowing certain enrollees of prescription drugs plans and ,,ma-,,pd plans under ,medicare program to spread out cost-sharing under certain circumstances4 ,sec4 #cjc4 ,establishment of pharmacy quality measures under ,medicare part ,d4 ,title ,,iv--,prescription ,drug ,policies for ,low-,income ,individuals ,sec4 #dja4 ,adjustments to ,medicare part ,d cost-sharing reductions for low-income individuals4 ,sec4 #djb4 ,dissemination to ,medicare part ,d subsidy eligible individuals of information comparing premiums of certain prescription drug plans4 ,sec4 #djc4 ,providing for intelligent assignment of certain subsidy eligible individuals auto-enrolled under ,medicare prescription drug plans and ,,ma-,,pd plans4 ,sec4 #djd4 ,expanding eligibility for low-income subsidies under part ,d of the ,medicare program4 ,sec4 #dje4 ,automatic eligibility of certain low-income territorial residents for premium and cost-sharing subsidies under the ,medicare program2 ,sunset of enhanced allotment program4 ,sec4 #djf4 ,automatic qualification of certain ,medicaid beneficiaries for premium and cost-sharing subsidies under part ,d of the ,medicare program4 ,sec4 #djg4 ,eliminating the resource requirement with respect to subsidy eligible individuals under part ,d of the ,medicare program4 ,title ,v--,drug ,price ,transparency ,sec4 #eja4 ,drug price transparency4 ,title ,,vi--,miscellaneous ,sec4 #fja4 ,temporary increase in ,medicare part ,b payment for certain biosimilar biological products4 ,i ,lowering ,prices ,through ,fair ,drug ,price ,negotiation #aja4 ,providing for lower prices for certain high-pricesectiond single source drugs 7a7 ,program ,to lower prices for certain high-,priced single source drugs ,title ,,xi of the ,social ,security ,act 7#db ,u4,s4,c4 #acja et seq47 is amended by adding at the end the following new part3 ,e ,fair ,price ,negotiation ,program to ,lower ,prices for ,certain ,high-,priced ,single ,source ,drugs #aaia4 ,establishment of program 7a7 ,in general ,the ,secretary shall establish a ,fair ,price ,negotiation ,program 7in this part referred to as the program74 ,under the program1 with respect to each price applicability period1 the ,secretary shall-- 7#a7 publish a list of selected drugs in accordance with section #aaib2 7#b7 enter into agreements with manufacturers of selected drugs with respect to such period1 in accordance with section #aaic2 7#c7 negotiate and1 if applicable1 renegotiate maximum fair prices for such selected drugs1 in accordance with section #aaid2 and 7#d7 carry out the administrative duties described in section #aaif4 7b7 ,definitions relating to timing ,for purposes of this part3 7#a7 ,initial price applicability year ,the term initial price applicability year means a plan year 7beginning with plan year #bjbc7 or1 if agreed to in an agreement under section #aaic by the ,secretary and manufacturer involved1 a period of more than one plan year 7beginning on or after ,january #a1 #bjbc74 7#b7 ,price applicability period ,the term price applicability period means1 with respect to a drug1 the period beginning with the initial price applicability year with respect to which such drug is a selected drug and ending with the last plan year during which the drug is a selected drug4 7#c7 ,selected drug publication date ,the term selected drug publication date means1 with respect to each initial price applicability year1 ,april #ae of the plan year that begins #b years prior to such year4 7#d7 ,voluntary negotiation period ,the term voluntary negotiation period means1 with respect to an initial price applicability year with respect to a selected drug1 the period-- 7,a7 beginning on the sooner of-- 7i7 the date on which the manufacturer of the drug and the ,secretary enter into an agreement under section #aaic with respect to such drug2 or 7ii7 ,june #ae following the selected drug publication date with respect to such selected drug2 and 7,b7 ending on ,march #ca of the year that begins one year prior to the initial price applicability year4 7c7 ,other definitions ,for purposes of this part3 7#a7 ,fair price eligible individual ,the term fair price eligible individual means1 with respect to a selected drug-- 7,a7 in the case such drug is furnished or dispensed to the individual at a pharmacy or by a mail order service-- 7i7 an individual who is enrolled under a prescription drug plan under part ,d of title ,,xviii or an ,,ma-,,pd plan under part ,c of such title under which coverage is provided for such drug2 and 7ii7 an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market 7as such terms are defined in section #bgia of the ,public ,health ,service ,act7 with respect to which there is in effect an agreement with the ,secretary under section #aaig with respect to such selected drug as so furnished or dispensed2 and 7,b7 in the case such drug is furnished or administered to the individual by a hospital1 physician1 or other provider of services or supplier-- 7i7 an individual who is entitled to benefits under part ,a of title ,,xviii or enrolled under part ,b of such title if such selected drug is covered under the respective part2 and 7ii7 an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market 7as such terms are defined in section #bgia of the ,public ,health ,service ,act7 with respect to which there is in effect an agreement with the ,secretary under section #aaig with respect to such selected drug as so furnished or administered4 7#b7 ,maximum fair price ,the term maximum fair price means1 with respect to a plan year during a price applicability period and with respect to a selected drug 7as defined in section #aaib7;c77 with respect to such period1 the price published pursuant to section #aaie in the ,federal ,register for such drug and year4 7#c7 ,average international market price defined 7,a7 ,in general ,the terms average international market price and ,,aim price mean1 with respect to a drug1 the average price 7which shall be the net average price1 if practicable1 and volume-weighted1 if practicable7 for a unit 7as defined in paragraph 7#d77 of the drug for sales of such drug 7calculated across different dosage forms and strengths of the drug and not based on the specific formulation or package size or package type71 as computed 7as of the date of publication of such drug as a selected drug under section #aaib7;a77 in all countries described in clause 7ii7 of subparagraph 7,b7 that are applicable countries 7as described in clause 7i7 of such subparagraph7 with respect to such drug4 7,b7 ,applicable countries 7i7 ,in general ,for purposes of subparagraph 7,a71 a country described in clause 7ii7 is an applicable country described in this clause with respect to a drug if there is available an average price for any unit for the drug for sales of such drug in such country4 7ii7 ,countries described ,for purposes of this paragraph1 the following are countries described in this clause3 7,i7 ,australia4 7,,ii7 ,canada4 7,,iii7 ,france4 7,,iv7 ,germany4 7,v7 ,japan4 7,,vi7 ,the ,united ,kingdom4 7#d7 ,unit ,the term unit means1 with respect to a drug1 the lowest identifiable quantity 7such as a capsule or tablet1 milligram of molecules1 or grams7 of the drug that is dispensed4 #aaib4 ,selection of negotiation-eligible drugs as selected drugs 7a7 ,in general ,not later than the selected drug publication date with respect to an initial price applicability year1 the ,secretary shall select and publish in the ,federal ,register a list of-- 7#a7 7,a7 with respect to an initial price applicability year during the period beginning with #bjbc and ending with #bjbg1 at least #be negotiation-eligible drugs described in subparagraphs 7,a7 and 7,b71 but not subparagraph 7,c71 of subsection 7d77#a7 7or1 with respect to an initial price applicability year during such period beginning after #bjbc1 the maximum number 7if such number is less than #be7 of such negotiation-eligible drugs for the year7 with respect to such year2 7,b7 with respect to an initial price applicability year during the period beginning with #bjbh and ending with #bjcb1 at least #cj negotiation-eligible drugs described in subparagraphs 7,a7 and 7,b71 but not subparagraph 7,c71 of subsection 7d77#a7 7or1 with respect to an initial price applicability year during such period1 the maximum number 7if such number is less than #cj7 of such negotiation-eligible drugs for the year7 with respect to such year2 and 7,c7 with respect to an initial price applicability year beginning after #bjcb1 at least #ce negotiation-eligible drugs described in subparagraphs 7,a7 and 7,b71 but not subparagraph 7,c71 of subsection 7d77#a7 7or1 with respect to an initial price applicability year during such period1 the maximum number 7if such number is less than #ce7 of such negotiation-eligible drugs for the year7 with respect to such year2 7#b7 all negotiation-eligible drugs described in subparagraph 7,c7 of such subsection with respect to such year2 and 7#c7 all new-entrant negotiation-eligible drugs 7as defined in subsection 7g77#a77 with respect to such year4 ,each drug published on the list pursuant to the previous sentence shall be subject to the negotiation process under section #aaid for the voluntary negotiation period with respect to such initial price applicability year 7and the renegotiation process under such section as applicable for any subsequent year during the applicable price applicability period74 ,in applying this subsection1 any negotiation-eligible drug that is selected under this subsection for an initial price applicability year shall not count toward the required minimum amount of drugs to be selected under paragraph 7#a7 for any subsequent year1 including such a drug so selected that is subject to renegotiation under section #aaid4 7b7 ,selection of drugs ,in carrying out subsection 7a77#a7 the ,secretary shall select for inclusion on the published list described in subsection 7a7 with respect to a price applicability period1 the negotiation-eligible drugs that the ,secretary projects will result in the greatest savings to the ,federal ,government or fair price eligible individuals during the price applicability period4 ,in making this projection of savings for drugs for which there is an ,,aim price for a price applicability period1 the savings shall be projected across different dosage forms and strengths of the drugs and not based on the specific formulation or package size or package type of the drugs1 taking into consideration both the volume of drugs for which payment is made1 to the extent such data is available1 and the amount by which the net price for the drugs exceeds the ,,aim price for the drugs4 7c7 ,selected drug ,for purposes of this part1 each drug included on the list published under subsection 7a7 with respect to an initial price applicability year shall be referred to as a selected drug with respect to such year and each subsequent plan year beginning before the first plan year beginning after the date on which the ,secretary determines two or more drug products-- 7#a7 are approved or licensed 7as applicable7-- 7,a7 under section #eje7;j7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act using such drug as the listed drug2 or 7,b7 under section #cea7k7 of the ,public ,health ,service ,act using such drug as the reference product2 and 7#b7 continue to be marketed4 7d7 ,negotiation-,eligible drug 7#a7 ,in general ,for purposes of this part1 the term negotiation-eligible drug means1 with respect to the selected drug publication date with respect to an initial price applicability year1 a qualifying single source drug1 as defined in subsection 7e71 that meets any of the following criteria3 7,a7 ,covered part ,d drugs ,the drug is among the #abe covered part ,d drugs 7as defined in section #ahfj;,d-#b7;e77 for which there was an estimated greatest net spending under parts ,c and ,d of title ,,xviii1 as determined by the ,secretary1 during the most recent plan year prior to such drug publication date for which data are available4 7,b7 ,other drugs ,the drug is among the #abe drugs for which there was an estimated greatest net spending in the ,united ,states 7including the #ej ,states1 the ,district of ,columbia1 and the territories of the ,united ,states71 as determined by the ,secretary1 during the most recent plan year prior to such drug publication date for which data are available4 7,c7 ,insulin ,the drug is a qualifying single source drug described in subsection 7e77#c74 7#b7 ,clarification ,in determining whether a qualifying single source drug satisfies any of the criteria described in paragraph 7#a71 the ,secretary shall1 to the extent practicable1 use data that is aggregated across dosage forms and strengths of the drug and not based on the specific formulation or package size or package type of the drug4 7#c7 ,publication ,not later than the selected drug publication date with respect to an initial price applicability year1 the ,secretary shall publish in the ,federal ,register a list of negotiation-eligible drugs with respect to such selected drug publication date4 7e7 ,qualifying single source drug ,for purposes of this part1 the term qualifying single source drug means any of the following3 7#a7 ,drug products ,a drug that-- 7,a7 is approved under section #eje7;c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act and continues to be marketed pursuant to such approval2 and 7,b7 is not the listed drug for any drug that is approved and continues to be marketed under section #eje7;j7 of such ,act4 7#b7 ,biological products ,a biological product that-- 7,a7 is licensed under section #cea7;a7 of the ,public ,health ,service ,act1 including any product that has been deemed to be licensed under section #cea of such ,act pursuant to section #gjjb7;e77#d7 of the ,biologics ,price ,competition and ,innovation ,act of #bjji1 and continues to be marketed under section #cea of such ,act2 and 7,b7 is not the reference product for any biological product that is licensed and continues to be marketed under section #cea7k7 of such ,act4 7#c7 ,insulin product ,notwithstanding paragraphs 7#a7 and 7#b71 any insulin product that is approved under subsection 7c7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under subsection 7a7 or 7k7 of section #cea of the ,public ,health ,service ,act and continues to be marketed under such section #eje or #cea1 including any insulin product that has been deemed to be licensed under section #cea7;a7 of the ,public ,health ,service ,act pursuant to section #gjjb7;e77#d7 of the ,biologics ,price ,competition and ,innovation ,act of #bjji and continues to be marketed pursuant to such licensure4 ,for purposes of applying paragraphs 7#a7 and 7#b71 a drug or biological product that is marketed by the same sponsor or manufacturer 7or an affiliate thereof or a cross-licensed producer or distributor7 as the listed drug or reference product described in such respective paragraph shall not be taken into consideration4 7f7 ,information on international drug prices ,for purposes of determining which negotiation-eligible drugs to select under subsection 7a7 and1 in the case of such drugs that are selected drugs1 to determine the maximum fair price for such a drug and whether such maximum fair price should be renegotiated under section #aaid1 the ,secretary shall use data relating to the ,,aim price with respect to such drug as available or provided to the ,secretary and shall on an ongoing basis request from manufacturers of selected drugs information on the ,,aim price of such a drug4 7g7 ,new-entrant negotiation-eligible drugs 7#a7 ,in general ,for purposes of this part1 the term new-entrant negotiation-eligible drug means1 with respect to the selected drug publication date with respect to an initial price applicability year1 a qualifying single source drug-- 7,a7 that is first approved or licensed1 as described in paragraph 7#a71 7#b71 or 7#c7 of subsection 7e71 as applicable1 during the year preceding such selected drug publication date2 and 7,b7 that the ,secretary determines under paragraph 7#b7 is likely to be a negotiation-eligible drug with respect to the subsequent selected drug publication date4 7#b7 ,determination ,in the case of a qualifying single source drug that meets the criteria described in subparagraphs 7,a7 and 7,b7 of paragraph 7#a71 with respect to an initial price applicability year1 if the wholesale acquisition cost at which such drug is first marketed in the ,united ,states is equal to or greater than the median household income 7as determined according to the most recent data collected by the ,united ,states ,census ,bureau71 the ,secretary shall determine before the selected drug publication date with respect to the initial price applicability year1 if the drug is likely to be included as a negotiation-eligible drug with respect to the subsequent selected drug publication date1 based on the projected spending under title ,,xviii or in the ,united ,states on such drug4 ,for purposes of this paragraph the term ,united ,states includes the #ej ,states1 the ,district of ,columbia1 and the territories of the ,united ,states4 #aaic4 ,manufacturer agreements 7a7 ,in general ,for purposes of section #aaia7;a77#b71 the ,secretary shall enter into agreements with manufacturers of selected drugs with respect to a price applicability period1 by not later than ,june #ae following the selected drug publication date with respect to such selected drug1 under which-- 7#a7 during the voluntary negotiation period for the initial price applicability year for the selected drug1 the ,secretary and manufacturer1 in accordance with section #aaid1 negotiate to determine 7and1 by not later than the last date of such period and in accordance with subsection 7c71 agree to7 a maximum fair price for such selected drug of the manufacturer in order to provide access to such price-- 7,a7 to fair price eligible individuals who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a7 and are furnished or dispensed such drug during1 subject to subparagraph 7#b71 the price applicability period2 and 7,b7 to hospitals1 physicians1 and other providers of services and suppliers with respect to fair price eligible individuals who with respect to such drug are described in subparagraph 7,b7 of such section and are furnished or administered such drug during1 subject to subparagraph 7#b71 the price applicability period2 7#b7 the ,secretary and the manufacturer shall1 in accordance with a process and during a period specified by the ,secretary pursuant to rulemaking1 renegotiate 7and1 by not later than the last date of such period and in accordance with subsection 7c71 agree to7 the maximum fair price for such drug if the ,secretary determines that there is a material change in any of the factors described in section #aaid7;d7 relating to the drug1 including changes in the ,,aim price for such drug1 in order to provide access to such maximum fair price 7as so renegotiated7-- 7,a7 to fair price eligible individuals who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a7 and are furnished or dispensed such drug during any year during the price applicability period 7beginning after such renegotiation7 with respect to such selected drug2 and 7,b7 to hospitals1 physicians1 and other providers of services and suppliers with respect to fair price eligible individuals who with respect to such drug are described in subparagraph 7,b7 of such section and are furnished or administered such drug during any year described in subparagraph 7,a72 7#c7 the maximum fair price 7including as renegotiated pursuant to paragraph 7#b771 with respect to such a selected drug1 shall be provided to fair price eligible individuals1 who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a71 at the pharmacy or by a mail order service at the point-of-sale of such drug2 7#d7 the manufacturer1 subject to subsection 7d71 submits to the ,secretary1 in a form and manner specified by the ,secretary-- 7,a7 for the voluntary negotiation period for the price applicability period 7and1 if applicable1 before any period of renegotiation specified pursuant to paragraph 7#b77 with respect to such drug all information that the ,secretary requires to carry out the negotiation 7or renegotiation process7 under this part1 including information described in section #aaib7;f7 and section #aaid7;d77#a72 and 7,b7 on an ongoing basis1 information on changes in prices for such drug that would affect the ,,aim price for such drug or otherwise provide a basis for renegotiation of the maximum fair price for such drug pursuant to paragraph 7#b72 7#e7 the manufacturer agrees that in the case the selected drug of a manufacturer is a drug described in subsection 7c71 the manufacturer will1 in accordance with such subsection1 make any payment required under such subsection with respect to such drug2 and 7#f7 the manufacturer complies with requirements imposed by the ,secretary for purposes of administering the program1 including with respect to the duties described in section #aaif4 7b7 ,agreement in effect until drug is no longer a selected drug ,an agreement entered into under this section shall be effective1 with respect to a drug1 until such drug is no longer considered a selected drug under section #aaib7;c74 7c7 ,special rule for certain selected drugs without ,,aim price 7#a7 ,in general ,in the case of a selected drug for which there is no ,,aim price available with respect to the initial price applicability year for such drug and for which an ,,aim price becomes available beginning with respect to a subsequent plan year during the price applicability period for such drug1 if the ,secretary determines that the amount described in paragraph 7#b77;,a7 for a unit of such drug is greater than the amount described in paragraph 7#b77;,b7 for a unit of such drug1 then by not later than one year after the date of such determination1 the manufacturer of such selected drug shall pay to the ,treasury an amount equal to the product of-- 7,a7 the difference between such amount described in paragraph 7#b77;,a7 for a unit of such drug and such amount described in paragraph 7#b77;,b7 for a unit of such drug2 and 7,b7 the number of units of such drug sold in the ,united ,states1 including the #ej ,states1 the ,district of ,columbia1 and the territories of the ,united ,states1 during the period described in paragraph 7#b77;,b74 7#b7 ,amounts described 7,a7 ,weighted average price before ,,aim price available ,for purposes of paragraph 7#a71 the amount described in this subparagraph for a selected drug described in such paragraph1 is the amount equal to the weighted average manufacturer price 7as defined in section #aibg7k77#a77 for such dosage strength and form for the drug during the period beginning with the first plan year for which the drug is included on the list of negotiation-eligible drugs published under section #aaib7;d7 and ending with the last plan year during the price applicability period for such drug with respect to which there is no ,,aim price available for such drug4 7,b7 ,amount multiplier after ,,aim price available ,for purposes of paragraph 7#a71 the amount described in this subparagraph for a selected drug described in such paragraph1 is the amount equal to #bjj percent of the ,,aim price for such drug with respect to the first plan year during the price applicability period for such drug with respect to which there is an ,,aim price available for such drug4 7d7 ,confidentiality of information ,information submitted to the ,secretary under this part by a manufacturer of a selected drug that is proprietary information of such manufacturer 7as determined by the ,secretary7 may be used only by the ,secretary or disclosed to and used by the ,comptroller ,general of the ,united ,states or the ,medicare ,payment ,advisory ,commission for purposes of carrying out this part4 7e7 ,regulations 7#a7 ,in general ,the ,secretary shall1 pursuant to rulemaking1 specify1 in accordance with paragraph 7#b71 the information that must be submitted under subsection 7a77#d74 7#b7 ,information specified ,information described in paragraph 7#a71 with respect to a selected drug1 shall include information on sales of the drug 7by the manufacturer of the drug or by another entity under license or other agreement with the manufacturer1 with respect to the sales of such drug1 regardless of the name under which the drug is sold7 in any foreign country that is part of the ,,aim price4 ,the ,secretary shall verify1 to the extent practicable1 such sales from appropriate officials of the government of the foreign country involved4 7f7 ,compliance with requirements for administration of program ,each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the ,secretary or a third party with a contract under section #aaif7;c77#a71 as applicable1 for purposes of administering the program4 #aaid4 ,negotiation and renegotiation process 7a7 ,in general ,for purposes of this part1 under an agreement under section #aaic between the ,secretary and a manufacturer of a selected drug1 with respect to the period for which such agreement is in effect and in accordance with subsections 7b7 and 7c71 the ,secretary and the manufacturer-- 7#a7 shall during the voluntary negotiation period with respect to the initial price applicability year for such drug1 in accordance with this section1 negotiate a maximum fair price for such drug for the purpose described in section #aaic7;a77#a72 and 7#b7 as applicable pursuant to section #aaic7;a77#b7 and in accordance with the process specified pursuant to such section1 renegotiate such maximum fair price for such drug for the purpose described in such section4 7b7 ,negotiating methodology and objective 7#a7 ,in general ,the ,secretary shall develop and use a consistent methodology for negotiations under subsection 7a7 that1 in accordance with paragraph 7#b7 and subject to paragraph 7#c71 achieves the lowest maximum fair price for each selected drug while appropriately rewarding innovation4 7#b7 ,prioritizing factors ,in considering the factors described in subsection 7d7 in negotiating 7and1 as applicable1 renegotiating7 the maximum fair price for a selected drug1 the ,secretary shall1 to the extent practicable1 consider all of the available factors listed but shall prioritize the following factors3 7,a7 ,research and development costs ,the factor described in paragraph 7#a77;,a7 of subsection 7d74 7,b7 ,market data ,the factor described in paragraph 7#a77;,b7 of such subsection4 7,c7 ,unit costs of production and distribution ,the factor described in paragraph 7#a77;,c7 of such subsection4 7,d7 ,comparison to existing therapeutic alternatives ,the factor described in paragraph 7#b77;,a7 of such subsection4 7#c7 ,requirement 7,a7 ,in general ,in negotiating the maximum fair price of a selected drug1 with respect to an initial price applicability year for the selected drug1 and1 as applicable1 in renegotiating the maximum fair price for such drug1 with respect to a subsequent year during the price applicability period for such drug1 in the case that the manufacturer of the selected drug offers under the negotiation or renegotiation1 as applicable1 a price for such drug that is not more than the target price described in subparagraph 7,b7 for such drug for the respective year1 the ,secretary shall agree under such negotiation or renegotiation1 respectively1 to such offered price as the maximum fair price4 7,b7 ,target price 7i7 ,in general ,subject to clause 7ii71 the target price described in this subparagraph for a selected drug with respect to a year1 is the average price 7which shall be the net average price1 if practicable1 and volume-weighted1 if practicable7 for a unit of such drug for sales of such drug1 as computed 7across different dosage forms and strengths of the drug and not based on the specific formulation or package size or package type of the drug7 in the applicable country described in section #aaia7;c77#c77;,b7 with respect to such drug that1 with respect to such year1 has the lowest average price for such drug as compared to the average prices 7as so computed7 of such drug with respect to such year in the other applicable countries described in such section with respect to such drug4 7ii7 ,selected drugs without ,,aim price ,in applying this paragraph in the case of negotiating the maximum fair price of a selected drug for which there is no ,,aim price available with respect to the initial price applicability year for such drug1 or1 as applicable1 renegotiating the maximum fair price for such drug with respect to a subsequent year during the price applicability period for such drug before the first plan year for which there is an ,,aim price available for such drug1 the target price described in this subparagraph for such drug and respective year is the amount that is #hj percent of the average manufacturer price 7as defined in section #aibg7k77#a77 for such drug and year4 7#d7 ,annual report ,after the completion of each voluntary negotiation period1 the ,secretary shall submit to ,congress a report on the maximum fair prices negotiated 7or1 as applicable1 renegotiated7 for such period4 ,such report shall include information on how such prices so negotiated 7or renegotiated7 meet the requirements of this part1 including the requirements of this subsection4 7c7 ,limitation 7#a7 ,in general ,subject to paragraph 7#b71 the maximum fair price negotiated 7including as renegotiated7 under this section for a selected drug1 with respect to each plan year during a price applicability period for such drug1 shall not exceed #abj percent of the ,,aim price applicable to such drug with respect to such year4 7#b7 ,selected drugs without ,,aim price ,in the case of a selected drug for which there is no ,,aim price available with respect to the initial price applicability year for such drug1 for each plan year during the price applicability period before the first plan year for which there is an ,,aim price available for such drug1 the maximum fair price negotiated 7including as renegotiated7 under this section for the selected drug shall not exceed the amount equal to #he percent of the average manufacturer price for the drug with respect to such year4 7d7 ,considerations ,for purposes of negotiating and1 as applicable1 renegotiating 7including for purposes of determining whether to renegotiate7 the maximum fair price of a selected drug under this part with the manufacturer of the drug1 the ,secretary shall1 consistent with subsection 7b77#b71 take into consideration the following factors3 7#a7 ,manufacturer-specific information ,the following information1 including as submitted by the manufacturer3 7,a7 ,research and development costs of the manufacturer for the drug and the extent to which the manufacturer has recouped research and development costs4 7,b7 ,market data for the drug1 including the distribution of sales across different programs and purchasers and projected future revenues for the drug4 7,c7 ,unit costs of production and distribution of the drug4 7,d7 ,prior ,federal financial support for novel therapeutic discovery and development with respect to the drug4 7,e7 ,data on patents and on existing and pending exclusivity for the drug4 7,f7 ,national sales data for the drug4 7,g7 ,information on clinical trials for the drug in the ,united ,states or in applicable countries described in section #aaia7;c77#c77;,b74 7#b7 ,information on alternative products ,the following information3 7,a7 ,the extent to which the drug represents a therapeutic advance as compared to existing therapeutic alternatives and1 to the extent such information is available1 the costs of such existing therapeutic alternatives4 7,b7 ,information on approval by the ,food and ,drug ,administration of alternative drug products4 7,c7 ,information on comparative effectiveness analysis for such products1 taking into consideration the effects of such products on specific populations1 such as individuals with disabilities1 the elderly1 terminally ill1 children1 and other patient populations4 ,in considering information described in subparagraph 7,c71 the ,secretary shall not use evidence or findings from comparative clinical effectiveness research in a manner that treats extending the life of an elderly1 disabled1 or terminally ill individual as of lower value than extending the life of an individual who is younger1 nondisabled1 or not terminally ill4 ,nothing in the previous sentence shall affect the application or consideration of an ,,aim price for a selected drug4 7#c7 ,foreign sales information ,to the extent available on a timely basis1 including as provided by a manufacturer of the selected drug or otherwise1 information on sales of the selected drug in each of the countries described in section #aaia7;c77#c77;,b74 7#d7 ,additional information ,information submitted to the ,secretary1 in accordance with a process specified by the ,secretary1 by other parties that are affected by the establishment of a maximum fair price for the selected drug4 7e7 ,request for information ,for purposes of negotiating and1 as applicable1 renegotiating 7including for purposes of determining whether to renegotiate7 the maximum fair price of a selected drug under this part with the manufacturer of the drug1 with respect to a price applicability period1 and other relevant data for purposes of this section-- 7#a7 the ,secretary shall1 not later than the selected drug publication date with respect to the initial price applicability year of such period1 request drug pricing information from the manufacturer of such selected drug1 including information described in subsection 7d77#a72 and 7#b7 by not later than ,october #a following the selected drug publication date1 the manufacturer of such selected drug shall submit to the ,secretary such requested information in such form and manner as the ,secretary may require4 ,the ,secretary shall request1 from the manufacturer or others1 such additional information as may be needed to carry out the negotiation and renegotiation process under this section4 #aaie4 ,publication of maximum fair prices 7a7 ,in general ,with respect to an initial price applicability year and selected drug with respect to such year1 not later than ,april #a of the plan year prior to such initial price applicability year1 the ,secretary shall publish in the ,federal ,register the maximum fair price for such drug negotiated under this part with the manufacturer of such drug4 7b7 ,updates 7#a7 ,subsequent year maximum fair prices ,for a selected drug1 for each plan year subsequent to the initial price applicability year for such drug with respect to which an agreement for such drug is in effect under section #aaic1 the ,secretary shall publish in the ,federal ,register-- 7,a7 subject to subparagraph 7,b71 the amount equal to the maximum fair price published for such drug for the previous year1 increased by the annual percentage increase in the consumer price index for all urban consumers 7all items2 ,u4,s4 city average7 as of ,september of such previous year2 or 7,b7 in the case the maximum fair price for such drug was renegotiated1 for the first year for which such price as so renegotiated applies1 such renegotiated maximum fair price4 7#b7 ,prices negotiated after deadline ,in the case of a selected drug with respect to an initial price applicability year for which the maximum fair price is determined under this part after the date of publication under this section1 the ,secretary shall publish such maximum fair price in the ,federal ,register by not later than #cj days after the date such maximum price is so determined4 #aaif4 ,administrative duties2 coordination provisions 7a7 ,administrative duties 7#a7 ,in general ,for purposes of section #aaia1 the administrative duties described in this section are the following3 7,a7 ,the establishment of procedures 7including through agreements with manufacturers under this part1 contracts with prescription drug plans under part ,d of title ,,xviii and ,,ma-,,pd plans under part ,c of such title1 and agreements under section #aaig with group health plans and health insurance issuers of health insurance coverage offered in the individual or group market7 under which the maximum fair price for a selected drug is provided to fair price eligible individuals1 who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a71 at pharmacies or by mail order service at the point-of-sale of the drug for the applicable price period for such drug and providing that such maximum fair price is used for determining cost-sharing under such plans or coverage for the selected drug4 7,b7 ,the establishment of procedures 7including through agreements with manufacturers under this part and contracts with hospitals1 physicians1 and other providers of services and suppliers and agreements under section #aaig with group health plans and health insurance issuers of health insurance coverage offered in the individual or group market7 under which1 in the case of a selected drug furnished or administered by such a hospital1 physician1 or other provider of services or supplier to fair price eligible individuals 7who with respect to such drug are described in subparagraph 7,b7 of section #aaia7;c77#a771 the maximum fair price for the selected drug is provided to such hospitals1 physicians1 and other providers of services and suppliers 7as applicable7 with respect to such individuals and providing that such maximum fair price is used for determining cost-sharing under the respective part1 plan1 or coverage for the selected drug4 7,c7 ,the establishment of procedures 7including through agreements and contracts described in subparagraphs 7,a7 and 7,b77 to ensure that1 not later than #ij days after the dispensing of a selected drug to a fair price eligible individual by a pharmacy or mail order service1 the pharmacy or mail order service is reimbursed for an amount equal to the difference between-- 7i7 the lesser of-- 7,i7 the wholesale acquisition cost of the drug2 7,,ii7 the national average drug acquisition cost of the drug2 and 7,,iii7 any other similar determination of pharmacy acquisition costs of the drug1 as determined by the ,secretary2 and 7ii7 the maximum fair price for the drug4 7,d7 ,the establishment of procedures to ensure that the maximum fair price for a selected drug is applied before-- 7i7 any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of fair price eligible individuals as the ,secretary may specify2 and 7ii7 any other discounts4 7,e7 ,the establishment of procedures to enter into appropriate agreements and protocols for the ongoing computation of ,,aim prices for selected drugs1 including1 to the extent possible1 to compute the ,,aim price for selected drugs and including by providing that the manufacturer of such a selected drug should provide information for such computation not later than #c months after the first date of the voluntary negotiation period for such selected drug4 7,f7 ,the establishment of procedures to compute and apply the maximum fair price across different strengths and dosage forms of a selected drug and not based on the specific formulation or package size or package type of the drug4 7,g7 ,the establishment of procedures to negotiate and apply the maximum fair price in a manner that does not include any dispensing or similar fee4 7,h7 ,the establishment of procedures to carry out the provisions of this part1 as applicable1 with respect to-- 7i7 fair price eligible individuals who are enrolled under a prescription drug plan under part ,d of title ,,xviii or an ,,ma-,,pd plan under part ,c of such title2 7ii7 fair price eligible individuals who are enrolled under a group health plan or health insurance coverage offered by a health insurance issuer in the individual or group market with respect to which there is an agreement in effect under section #aaig2 and 7iii7 fair price eligible individuals who are entitled to benefits under part ,a of title ,,xviii or enrolled under part ,b of such title4 7,i7 ,the establishment of a negotiation process and renegotiation process in accordance with section #aaid1 including a process for acquiring information described in subsection 7d7 of such section and determining amounts described in subsection 7b7 of such section4 7,j7 ,the provision of a reasonable dispute resolution mechanism to resolve disagreements between manufacturers1 fair price eligible individuals1 and the third party with a contract under subsection 7c77#a74 7#b7 ,monitoring compliance 7,a7 ,in general ,the ,secretary shall monitor compliance by a manufacturer with the terms of an agreement under section #aaic1 including by establishing a mechanism through which violations of such terms may be reported4 7,b7 ,notification ,if a third party with a contract under subsection 7c77#a7 determines that the manufacturer is not in compliance with such agreement1 the third party shall notify the ,secretary of such noncompliance for appropriate enforcement under section #daib of the ,internal ,revenue ,code of #aihf or section #aaih1 as applicable4 7b7 ,collection of data 7#a7 ,from prescription drug plans and ,,ma-,,pd plans ,the ,secretary may collect appropriate data from prescription drug plans under part ,d of title ,,xviii and ,,ma-,,pd plans under part ,c of such title in a timeframe that allows for maximum fair prices to be provided under this part for selected drugs4 7#b7 ,from health plans ,the ,secretary may collect appropriate data from group health plans or health insurance issuers offering group or individual health insurance coverage in a timeframe that allows for maximum fair prices to be provided under this part for selected drugs4 7c7 ,contract with third parties 7#a7 ,in general ,the ,secretary may enter into a contract with #a or more third parties to administer the requirements established by the ,secretary in order to carry out this part4 ,at a minimum1 the contract with a third party under the preceding sentence shall require that the third party-- 7,a7 receive and transmit information between the ,secretary1 manufacturers1 and other individuals or entities the ,secretary determines appropriate2 7,b7 receive1 distribute1 or facilitate the distribution of funds of manufacturers to appropriate individuals or entities in order to meet the obligations of manufacturers under agreements under this part2 7,c7 provide adequate and timely information to manufacturers1 consistent with the agreement with the manufacturer under this part1 as necessary for the manufacturer to fulfill its obligations under this part2 and 7,d7 permit manufacturers to conduct periodic audits1 directly or through contracts1 of the data and information used by the third party to determine discounts for applicable drugs of the manufacturer under the program4 7#b7 ,performance requirements ,the ,secretary shall establish performance requirements for a third party with a contract under paragraph 7#a7 and safeguards to protect the independence and integrity of the activities carried out by the third party under the program under this part4 #aaig4 ,voluntary participation by other health plans 7a7 ,agreement to participate under program 7#a7 ,in general ,subject to paragraph 7#b71 under the program under this part the ,secretary shall be treated as having in effect an agreement with a group health plan or health insurance issuer offering health insurance coverage 7as such terms are defined in section #bgia of the ,public ,health ,service ,act71 with respect to a price applicability period and a selected drug with respect to such period-- 7,a7 with respect to such selected drug furnished or dispensed at a pharmacy or by mail order service if coverage is provided under such plan or coverage during such period for such selected drug as so furnished or dispensed2 and 7,b7 with respect to such selected drug furnished or administered by a hospital1 physician1 or other provider of services or supplier if coverage is provided under such plan or coverage during such period for such selected drug as so furnished or administered4 7#b7 ,opting out of agreement ,the ,secretary shall not be treated as having in effect an agreement under the program under this part with a group health plan or health insurance issuer offering health insurance coverage with respect to a price applicability period and a selected drug with respect to such period if such a plan or issuer affirmatively elects1 through a process specified by the ,secretary1 not to participate under the program with respect to such period and drug4 7b7 ,publication of election ,with respect to each price applicability period and each selected drug with respect to such period1 the ,secretary and the ,secretary of ,labor and the ,secretary of the ,treasury1 as applicable1 shall make public a list of each group health plan and each issuer of health insurance coverage1 with respect to which coverage is provided under such plan or coverage for such drug1 that has elected under subsection 7a7 not to participate under the program with respect to such period and drug4 #aaih4 ,civil monetary penalty 7a7 ,violations relating ,to offering of maximum fair price ,any manufacturer of a selected drug that has entered into an agreement under section #aaic1 with respect to a plan year during the price applicability period for such drug1 that does not provide access to a price that is not more than the maximum fair price 7or a lesser price7 for such drug for such year-- 7#a7 to a fair price eligible individual who with respect to such drug is described in subparagraph 7,a7 of section #aaia7;c77#a7 and who is furnished or dispensed such drug during such year2 or 7#b7 to a hospital1 physician1 or other provider of services or supplier with respect to fair price eligible individuals who with respect to such drug is described in subparagraph 7,b7 of such section and is furnished or administered such drug by such hospital1 physician1 or provider or supplier during such year2 shall be subject to a civil monetary penalty equal to ten times the amount equal to the difference between the price for such drug made available for such year by such manufacturer with respect to such individual or hospital1 physician1 provider1 or supplier and the maximum fair price for such drug for such year4 7b7 ,violations of certain terms of agreement ,any manufacturer of a selected drug that has entered into an agreement under section #aaic1 with respect to a plan year during the price applicability period for such drug1 that is in violation of a requirement imposed pursuant to section #aaic7;a77#f7 shall be subject to a civil monetary penalty of not more than #a1jjj1jjj for each such violation4 7c7 ,application ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil monetary penalty under this section in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 #aaii4 ,miscellaneous provisions 7a7 ,paperwork ,reduction ,act ,chapter #ce of title #dd1 ,united ,states ,code1 shall not apply to data collected under this part4 7b7 ,national ,academy of ,medicine study ,not later than ,december #ca1 #bjbe1 the ,national ,academy of ,medicine shall conduct a study1 and submit to ,congress a report1 on recommendations for improvements to the program under this part1 including the determination of the limits applied under section #aaid7;c74 7c7 ,med,p,a,c study ,not later than ,december #ca1 #bjbe1 the ,medicare ,payment ,advisory ,commission shall conduct a study1 and submit to ,congress a report1 on the program under this part with respect to the ,medicare program under title ,,xviii1 including with respect to the effect of the program on individuals entitled to benefits or enrolled under such title4 7d7 ,limitation on judicial review ,the following shall not be subject to judicial review3 7#a7 ,the selection of drugs for publication under section #aaib7;a74 7#b7 ,the determination of whether a drug is a negotiation-eligible drug under section #aaib7;d74 7#c7 ,the determination of the maximum fair price of a selected drug under section #aaid4 7#d7 ,the determination of units of a drug for purposes of section #aaia7;c77#c74 7e7 ,coordination ,in carrying out this part with respect to group health plans or health insurance coverage offered in the group market that are subject to oversight by the ,secretary of ,labor or the ,secretary of the ,treasury1 the ,secretary of ,health and ,human ,services shall coordinate with such respective ,secretary4 7f7 ,data sharing ,the ,secretary shall share with the ,secretary of the ,treasury such information as is necessary to determine the tax imposed by section #daib of the ,internal ,revenue ,code of #aihf4 4 7b7 ,application of maximum fair prices and conforming amendments 7#a7 ,under ,medicare 7,a7 ,application to payments under part ,b ,section #ahdg;,a7b77#a77;,b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7b77#a77;,b77 is amended by inserting or in the case of such a drug or biological that is a selected drug 7as defined in section #aaib7;c771 with respect to a price applicability period 7as defined in section #aaia7;b77#b771 #ajf percent of the maximum fair price 7as defined in section #aaia7;c77#b7 applicable for such drug and a plan year during such period after paragraph 7#d74 7,b7 ,exception to part ,d non-interference ,section #ahfj;,d-#aa7;i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7;i77 is amended by inserting 1 except as provided under part ,e of title ,,xi after the ,secretary4 7,c7 ,application as negotiated price under part ,d ,section #ahfj;,d-#b7;d77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;d77#a77 is amended-- 7i7 in subparagraph 7,b71 by inserting 1 subject to subparagraph 7,d71 after negotiated prices2 and 7ii7 by adding at the end the following new subparagraph3 7,d7 ,application of maximum fair price for selected drugs ,in applying this section1 in the case of a covered part ,d drug that is a selected drug 7as defined in section #aaib7;c771 with respect to a price applicability period 7as defined in section #aaia7;b77#b771 the negotiated prices used for payment 7as described in this subsection7 shall be the maximum fair price 7as defined in section #aaia7;c77#b77 for such drug and for each plan year during such period4 4 7,d7 ,information from prescription drug plans and ,,ma-,,pd plans required 7i7 ,prescription drug plans ,section #ahfj;,d-#ab7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aab7;b77 is amended by adding at the end the following new paragraph3 7#h7 ,provision of information related to maximum fair prices ,each contract entered into with a ,,pdp sponsor under this part with respect to a prescription drug plan offered by such sponsor shall require the sponsor to provide information to the ,secretary as requested by the ,secretary in accordance with section #aaif7;b74 4 7ii7 ,,ma-,,pd plans ,section #aheg7;f77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#bg7;f77#c77 is amended by adding at the end the following new subparagraph3 7,e7 ,provision of information related to maximum fair prices ,section #ahfj;,d-#ab7;b77#h74 4 7#b7 ,under group health plans and health insurance coverage 7,a7 ,,phsa ,part ,a of title ,,xxvii of the ,public ,health ,service ,act is amended by inserting after section #bgbi the following new section3 #bgbi;,a4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices 7a7 ,in general ,in the case of a group health plan or health insurance issuer offering health insurance coverage that is treated under section #aaig of the ,social ,security ,act as having in effect an agreement with the ,secretary under the ,fair ,price ,drug ,negotiation ,program under part ,e of title ,,xi of such ,act1 with respect to a price applicability period 7as defined in section #aaia7;b7 of such ,act7 and a selected drug 7as defined in section #aaib7;c7 of such ,act7 with respect to such period with respect to which coverage is provided under such plan or coverage-- 7#a7 the provisions of such part shall apply-- 7,a7 if coverage of such selected drug is provided under such plan or coverage if the drug is furnished or dispensed at a pharmacy or by a mail order service1 to the plans or coverage offered by such plan or issuer1 and to the individuals enrolled under such plans or coverage1 during such period1 with respect to such selected drug1 in the same manner as such provisions apply to prescription drug plans and ,,ma-,,pd plans1 and to individuals enrolled under such prescription drug plans and ,,ma-,,pd plans during such period2 and 7,b7 if coverage of such selected drug is provided under such plan or coverage if the drug is furnished or administered by a hospital1 physician1 or other provider of services or supplier1 to the plans or coverage offered by such plan or issuers1 to the individuals enrolled under such plans or coverage1 and to hospitals1 physicians1 and other providers of services and suppliers during such period1 with respect to such drug in the same manner as such provisions apply to the ,secretary1 to individuals entitled to benefits under part ,a of title ,,xviii or enrolled under part ,b of such title1 and to hospitals1 physicians1 and other providers and suppliers participating under title ,,xviii during such period2 7#b7 the plan or issuer shall apply any cost-sharing responsibilities under such plan or coverage1 with respect to such selected drug1 by substituting an amount not more than the maximum fair price negotiated under such part ,e of title ,,xi for such drug in lieu of the drug price upon which the cost-sharing would have otherwise applied2 and 7#c7 the ,secretary shall apply the provisions of such part ,e to such plan1 issuer1 and coverage1 such individuals so enrolled in such plans and coverage1 and such hospitals1 physicians1 and other providers and suppliers participating in such plans and coverage4 7b7 ,notification regarding nonparticipation in ,fair ,drug ,price ,negotiation ,program ,a group health plan or a health insurance issuer offering group or individual health insurance coverage shall publicly disclose in a manner and in accordance with a process specified by the ,secretary any election made under section #aaig of the ,social ,security ,act by the plan or issuer to not participate in the ,fair ,drug ,price ,negotiation ,program under part ,e of title ,,xi of such ,act with respect to a selected drug 7as defined in section #aaib7;c7 of such ,act7 for which coverage is provided under such plan or coverage before the beginning of the plan year for which such election was made4 4 7,b7 ,,erisa 7i7 ,in general ,subpart ,b of part #g of subtitle ,b of title ,i of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aaha et4 seq47 is amended by adding at the end the following new section3 #gaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices 7a7 ,in general ,in the case of a group health plan or health insurance issuer offering group health insurance coverage that is treated under section #aaig of the ,social ,security ,act as having in effect an agreement with the ,secretary under the ,fair ,price ,drug ,negotiation ,program under part ,e of title ,,xi of such ,act1 with respect to a price applicability period 7as defined in section #aaia7;b7 of such ,act7 and a selected drug 7as defined in section #aaib7;c7 of such ,act7 with respect to such period with respect to which coverage is provided under such plan or coverage-- 7#a7 the provisions of such part shall apply to the plans or coverage offered by such plan or issuer1 and to the individuals enrolled under such plans or coverage1 during such period1 with respect to such selected drug1 in the same manner as such provisions apply to prescription drug plans and ,,ma-,,pd plans1 and to individuals enrolled under such prescription drug plans and ,,ma-,,pd plans2 7#b7 the plan or issuer shall apply any cost-sharing responsibilities under such plan or coverage1 with respect to such selected drug1 by substituting the maximum fair price negotiated under such part for such drug in lieu of the contracted rate under such plan or coverage for such selected drug2 and 7#c7 the ,secretary shall apply the provisions of such part to such plan1 issuer1 and coverage1 and such individuals so enrolled in such plans4 7b7 ,notification regarding nonparticipation in ,fair ,drug ,price ,negotiation ,program ,a group health plan or a health insurance issuer offering group health insurance coverage shall publicly disclose in a manner and in accordance with a process specified by the ,secretary any election made under section #aaig of the ,social ,security ,act by the plan or issuer to not participate in the ,fair ,drug ,price ,negotiation ,program under part ,e of title ,,xi of such ,act with respect to a selected drug 7as defined in section #aaib7;c7 of such ,act7 for which coverage is provided under such plan or coverage before the beginning of the plan year for which such election was made4 4 7ii7 ,clerical amendment ,the table of sections for subpart ,b of part #g of subtitle ,b of title ,i of the ,employee ,retirement ,income ,security ,act of #aigd is amended by adding at the end the following3 ,sec4 #gaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices4 4 7,c7 ,,irc 7i7 ,in general ,subchapter ,b of chapter #ajj of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #ihaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices 7a7 ,in general ,in the case of a group health plan that is treated under section #aaig of the ,social ,security ,act as having in effect an agreement with the ,secretary under the ,fair ,price ,drug ,negotiation ,program under part ,e of title ,,xi of such ,act1 with respect to a price applicability period 7as defined in section #aaia7;b7 of such ,act7 and a selected drug 7as defined in section #aaib7;c7 of such ,act7 with respect to such period with respect to which coverage is provided under such plan-- 7#a7 the provisions of such part shall apply to the plans offered by such plan1 and to the individuals enrolled under such plans1 during such period1 with respect to such selected drug1 in the same manner as such provisions apply to prescription drug plans and ,,ma-,,pd plans1 and to individuals enrolled under such prescription drug plans and ,,ma-,,pd plans2 7#b7 the plan shall apply any cost-sharing responsibilities under such plan1 with respect to such selected drug1 by substituting the maximum fair price negotiated under such part for such drug in lieu of the contracted rate under such plan for such selected drug2 and 7#c7 the ,secretary shall apply the provisions of such part to such plan and such individuals so enrolled in such plan4 7b7 ,notification regarding nonparticipation in ,fair ,drug ,price ,negotiation ,program ,a group health plan shall publicly disclose in a manner and in accordance with a process specified by the ,secretary any election made under section #aaig of the ,social ,security ,act by the plan to not participate in the ,fair ,drug ,price ,negotiation ,program under part ,e of title ,,xi of such ,act with respect to a selected drug 7as defined in section #aaib7;c7 of such ,act7 for which coverage is provided under such plan before the beginning of the plan year for which such election was made4 4 7ii7 ,clerical amendment ,the table of sections for subchapter ,b of chapter #ajj of such ,code is amended by adding at the end the following new item3 ,sec4 #ihaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices4 4 #ajb4 ,selected drug manufacturer excise tax imposed during noncompliance periods 7a7 ,in general ,subchapter ,e of chapter #cb of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #daib4 ,selected drugs during noncompliance periods 7a7 ,in general ,there is hereby imposed on the sale by the manufacturer1 producer1 or importer of any selected drug during a day described in subsection 7b7 a tax in an amount such that the applicable percentage is equal to the ratio of-- 7#a7 such tax1 divided by 7#b7 the sum of such tax and the price for which so sold4 7b7 ,noncompliance periods ,a day is described in this subsection with respect to a selected drug if it is a day during one of the following periods3 7#a7 ,the period beginning on the ,june #afth immediately following the selected drug publication date and ending on the first date during which the manufacturer of the drug has in place an agreement described in subsection 7a7 of section #aaic of the ,social ,security ,act with respect to such drug4 7#b7 ,the period beginning on the ,april #ast immediately following the ,june #afth described in paragraph 7#a7 and ending on the first date during which the manufacturer of the drug has agreed to a maximum fair price under such agreement4 7#c7 ,in the case of a selected drug with respect to which the ,secretary of ,health and ,human ,services has specified a renegotiation period under such agreement1 the period beginning on the first date after the last date of such renegotiation period and ending on the first date during which the manufacturer of the drug has agreed to a renegotiated maximum fair price under such agreement4 7#d7 ,with respect to information that is required to be submitted to the ,secretary of ,health and ,human ,services under such agreement1 the period beginning on the date on which such ,secretary certifies that such information is overdue and ending on the date that such information is so submitted4 7#e7 ,in the case of a selected drug with respect to which a payment is due under subsection 7c7 of such section #aaic1 the period beginning on the date on which the ,secretary of ,health and ,human ,services certifies that such payment is overdue and ending on the date that such payment is made in full4 7c7 ,applicable percentage ,the term applicable percentage means-- 7#a7 in the case of sales of a selected drug during the first #ij days described in subsection 7b7 with respect to such drug1 #fe percent1 7#b7 in the case of sales of such drug during the #iast day through the #ahjth day described in subsection 7b7 with respect to such drug1 #ge percent1 7#c7 in the case of sales of such drug during the #ahast day through the #bgjth day described in subsection 7b7 with respect to such drug1 #he percent1 and 7#d7 in the case of sales of such drug during any subsequent day1 #ie percent4 7d7 ,definitions ,the terms selected drug publication date and maximum fair price have the meaning given such terms in section #aaia of the ,social ,security ,act and the term selected drug has the meaning given such term in section #aaib of such ,act4 7e7 ,anti-,abuse rule ,in the case of a sale which was timed for the purpose of avoiding the tax imposed by this section1 the ,secretary may treat such sale as occurring during a day described in subsection 7b74 4 7b7 ,no deduction for excise tax payments ,section #bge of the ,internal ,revenue ,code of #aihf is amended by adding or by section #daib before the period at the end of subsection 7a77#f74 7c7 ,conforming amendments 7#a7 ,section #dbba7;a7 of the ,internal ,revenue ,code of #aihf is amended by inserting or #daib after section #daia4 7#b7 ,section #fdaf7;b77#b7 of such ,code is amended by inserting or #daib after section #daia4 7d7 ,clerical amendments 7#a7 ,the heading of subchapter ,e of chapter #cb of the ,internal ,revenue ,code of #aihf is amended by striking ,medical devices and inserting ,other medical products4 7#b7 ,the table of subchapters for chapter #cb of such ,code is amended by striking the item relating to subchapter ,e and inserting the following new item3 ,subchapter ,e4 ,other medical products 4 7#c7 ,the table of sections for subchapter ,e of chapter #cb of such ,code is amended by adding at the end the following new item3 ,sec4 #daib4 ,selected drugs during noncompliance periods4 4 7e7 ,effective date ,the amendments made by this section shall apply to sales after the date of the enactment of this ,act4 ,,ii ,medicare ,parts ,b and ,d ,prescription ,drug ,inflation ,rebates #bja4 ,medicare part ,b rebate by manufacturers 7a7 ,in general ,section #ahcd of the ,social ,security ,act 7#db ,u4,s4,c4 #aciem7 is amended by adding at the end the following new subsection3 7x7 ,rebate by manufacturers for single source drugs with prices increasing faster than inflation 7#a7 ,requirements 7,a7 ,secretarial provision of information ,not later than #f months after the end of each calendar quarter beginning on or after ,july #a1 #bjba1 the ,secretary shall1 for each part ,b rebatable drug1 report to each manufacturer of such part ,b rebatable drug the following for such calendar quarter3 7i7 ,information on the total number of units of the billing and payment code described in subparagraph 7,a77i7 of paragraph 7#c7 with respect to such drug and calendar quarter4 7ii7 ,information on the amount 7if any7 of the excess average sales price increase described in subparagraph 7,a77ii7 of such paragraph for such drug and calendar quarter4 7iii7 ,the rebate amount specified under such paragraph for such part ,b rebatable drug and calendar quarter4 7,b7 ,manufacturer requirement ,for each calendar quarter beginning on or after ,july #a1 #bjba1 the manufacturer of a part ,b rebatable drug shall1 for such drug1 not later than #cj days after the date of receipt from the ,secretary of the information described in subparagraph 7,a7 for such calendar quarter1 provide to the ,secretary a rebate that is equal to the amount specified in paragraph 7#c7 for such drug for such calendar quarter4 7#b7 ,part ,b rebatable drug defined 7,a7 ,in general ,in this subsection1 the term part ,b rebatable drug means a single source drug or biological 7as defined in subparagraph 7,d7 of section #ahdg;,a7c77#f771 including a biosimilar biological product 7as defined in subparagraph 7,h7 of such section71 paid for under this part1 except such term shall not include such a drug or biological-- 7i7 if the average total allowed charges for a year per individual that uses such a drug or biological1 as determined by the ,secretary1 are less than1 subject to subparagraph 7,b71 #ajj2 or 7ii7 that is a vaccine described in subparagraph 7,a7 or 7,b7 of section #ahfa7s77#aj74 7,b7 ,increase ,the dollar amount applied under subparagraph 7,a77i7-- 7i7 for #bjbb1 shall be the dollar amount specified under such subparagraph for #bjba1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 for the #ab month period ending with ,june of the previous year2 and 7ii7 for a subsequent year1 shall be the dollar amount specified in this clause 7or clause 7i77 for the previous year1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 for the #ab month period ending with ,june of the previous year4 ,any dollar amount specified under this subparagraph that is not a multiple of #aj shall be rounded to the nearest multiple of #aj4 7#c7 ,rebate amount 7,a7 ,in general ,for purposes of paragraph 7#a71 the amount specified in this paragraph for a part ,b rebatable drug assigned to a billing and payment code for a calendar quarter is1 subject to paragraph 7#d71 the amount equal to the product of-- 7i7 subject to subparagraph 7,b71 the total number of units of the billing and payment code for such part ,b rebatable drug furnished under this part during the calendar quarter2 and 7ii7 the amount 7if any7 by which-- 7,i7 the payment amount under subparagraph 7,b7 or 7,c7 of section #ahdg;,a7b77#a71 as applicable1 for such part ,b rebatable drug during the calendar quarter2 exceeds 7,,ii7 the inflation-adjusted payment amount determined under subparagraph 7,c7 for such part ,b rebatable drug during the calendar quarter4 7,b7 ,excluded units ,for purposes of subparagraph 7,a77i71 the total number of units of the billing and payment code for each part ,b rebatable drug furnished during a calendar quarter shall not include-- 7i7 units packaged into the payment for a procedure or service under section #ahcc7t7 or under section #ahcc7;i7 7instead of separately payable under such respective section72 7ii7 units included under the single payment system for renal dialysis services under section #ahha7;b77#ad72 or 7iii7 units of a part ,b rebatable drug of a manufacturer furnished to an individual1 if such manufacturer1 with respect to the furnishing of such units of such drug1 provides for discounts under section #cdj;,b of the ,public ,health ,service ,act or for rebates under section #aibg4 7,c7 ,determination of inflation-adjusted payment amount ,the inflation-adjusted payment amount determined under this subparagraph for a part ,b rebatable drug for a calendar quarter is-- 7i7 the payment amount for the billing and payment code for such drug in the payment amount benchmark quarter 7as defined in subparagraph 7,d772 increased by 7ii7 the percentage by which the rebate period ,,cpi-,u 7as defined in subparagraph 7,f77 for the calendar quarter exceeds the benchmark period ,,cpi-,u 7as defined in subparagraph 7,e774 7,d7 ,payment amount benchmark quarter ,the term payment amount benchmark quarter means the calendar quarter beginning ,january #a1 #bjaf4 7,e7 ,benchmark period ,,cpi-,u ,the term benchmark period ,,cpi-,u means the consumer price index for all urban consumers 7,united ,states city average7 for ,july #bjae4 7,f7 ,rebate period ,,cpi-,u ,the term rebate period ,,cpi-,u means1 with respect to a calendar quarter described in subparagraph 7,c71 the greater of the benchmark period ,,cpi-,u and the consumer price index for all urban consumers 7,united ,states city average7 for the first month of the calendar quarter that is two calendar quarters prior to such described calendar quarter4 7#d7 ,special treatment of certain drugs and exemption 7,a7 ,subsequently approved drugs ,subject to subparagraph 7,b71 in the case of a part ,b rebatable drug first approved or licensed by the ,food and ,drug ,administration after ,july #a1 #bjae1 clause 7i7 of paragraph 7#c77;,c7 shall be applied as if the term payment amount benchmark quarter were defined under paragraph 7#c77;,d7 as the third full calendar quarter after the day on which the drug was first marketed and clause 7ii7 of paragraph 7#c77;,c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under paragraph 7#c77;,e7 as if the reference to ,july #bjae under such paragraph were a reference to the first month of the first full calendar quarter after the day on which the drug was first marketed4 7,b7 ,timeline for provision of rebates for subsequently approved drugs ,in the case of a part ,b rebatable drug first approved or licensed by the ,food and ,drug ,administration after ,july #a1 #bjae1 paragraph 7#a77;,b7 shall be applied as if the reference to ,july #a1 #bjba under such paragraph were a reference to the later of the #fth full calendar quarter after the day on which the drug was first marketed or ,july #a1 #bjba4 7,c7 ,exemption for shortages ,the ,secretary may reduce or waive the rebate amount under paragraph 7#a77;,b7 with respect to a part ,b rebatable drug that is described as currently in shortage on the shortage list in effect under section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act or in the case of other exigent circumstances1 as determined by the ,secretary4 7,d7 ,selected drugs ,in the case of a part ,b rebatable drug that is a selected drug 7as defined in section #aaib7;c77 for a price applicability period 7as defined in section #aaia7;b77#b77 and is determined 7pursuant to such section #aaib7;c77 to no longer be a selected drug1 for each applicable year beginning after the price applicability period with respect to such drug1 clause 7i7 of paragraph 7#c77;,c7 shall be applied as if the term payment amount benchmark quarter were defined under paragraph 7#c77;,d7 as the calendar quarter beginning ,january #a of the last year beginning during such price applicability period with respect to such selected drug and clause 7ii7 of paragraph 7#c77;,c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under paragraph 7#c77;,e7 as if the reference to ,july #bjae under such paragraph were a reference to the ,july of the year preceding such last year4 7#e7 ,application to beneficiary coinsurance ,in the case of a part ,b rebatable drug1 if the payment amount for a quarter exceeds the inflation adjusted payment for such quarter-- 7,a7 in computing the amount of any coinsurance applicable under this title to an individual with respect to such drug1 the computation of such coinsurance shall be based on the inflation-adjusted payment amount determined under paragraph 7#c77;,c7 for such part ,b rebatable drug2 and 7,b7 the amount of such coinsurance is equal to #bj percent of such inflation-adjusted payment amount so determined4 7#f7 ,rebate deposits ,amounts paid as rebates under paragraph 7#a77;,b7 shall be deposited into the ,federal ,supplementary ,medical ,insurance ,trust ,fund established under section #ahda4 7#g7 ,civil money penalty ,if a manufacturer of a part ,b rebatable drug has failed to comply with the requirements under paragraph 7#a77;,b7 for such drug for a calendar quarter1 the manufacturer shall be subject to1 in accordance with a process established by the ,secretary pursuant to regulations1 a civil money penalty in an amount equal to at least #abe percent of the amount specified in paragraph 7#c7 for such drug for such calendar quarter4 ,the provisions of section #aabh;,a 7other than subsections 7a7 7with respect to amounts of penalties or additional assessments7 and 7b77 shall apply to a civil money penalty under this paragraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7#h7 ,study and report 7,a7 ,study ,the ,secretary shall conduct a study of the feasibility of and operational issues involved with the following3 7i7 ,including multiple source drugs 7as defined in section #ahdg;,a7c77#f77;,c77 in the rebate system under this subsection4 7ii7 ,including drugs and biologicals paid for under ,,ma plans under part ,c in the rebate system under this subsection4 7iii7 ,including drugs excluded under paragraph 7#b77;,a7 and units of the billing and payment code of the drugs excluded under paragraph 7#c77;,b7 in the rebate system under this subsection4 7,b7 ,report ,not later than #c years after the date of the enactment of this subsection1 the ,secretary shall submit to ,congress a report on the study conducted under subparagraph 7,a74 7#i7 ,application to multiple source drugs ,the ,secretary may1 based on the report submitted under paragraph 7#h7 and pursuant to rulemaking1 apply the provisions of this subsection to multiple source drugs 7as defined in section #ahdg;,a7c77#f77;,c771 including1 for purposes of determining the rebate amount under paragraph 7#c71 by calculating manufacturer-specific average sales prices for the benchmark period and the rebate period4 4 7b7 ,amounts payable2 cost-,sharing ,section #ahcc of the ,social ,security ,act 7#db ,u4,s4,c4 #aciel7 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#a7-- 7i7 in subparagraph 7,s71 by striking with respect to and inserting subject to subparagraph 7,,dd71 with respect to2 7ii7 by striking and 7,,cc7 and inserting 7,,cc72 and 7iii7 by inserting before the semicolon at the end the following3 1 and 7,,dd7 with respect to a part ,b rebatable drug 7as defined in paragraph 7#b7 of section #ahcd7x77 for which the payment amount for a calendar quarter under paragraph 7#c77;,a77ii77,i7 of such section for such quarter exceeds the inflation adjusted payment under paragraph 7#c77;,a77ii77,,ii7 of such section for such quarter1 the amounts paid shall be the difference between 7i7 the payment amount under paragraph 7#c77;,a77ii77,i7 of such section for such drug1 and 7ii7 #bj percent of the inflation-adjusted payment amount under paragraph 7#c77;,a77ii77,,ii7 of such section for such drug2 7,b7 in paragraph 7#d71 by inserting subject to paragraph 7#a77;,,dd71 before the applicable amount2 and 7,c7 by adding at the end of the flush left matter following paragraph 7#i71 the following3 ,for purposes of applying paragraph 7#a77;,,dd71 subsection 7t77#bc71 and section #ahcd7x77#e71 the ,secretary shall make such estimates and use such data as the ,secretary determines appropriate1 and notwithstanding any other provision of law1 may do so by program instruction or otherwise4 2 7#b7 in subsection 7t71 by adding at the end the following new paragraph3 7#bc7 ,part ,b rebatable drugs ,the amount of payment under this subsection for a part ,b rebatable drug 7as defined in paragraph 7#b7 of section #ahcd7x77 for which the payment amount for a calendar quarter under paragraph 7#c77;,a77ii77,i7 of such section for such quarter exceeds the inflation adjusted payment under paragraph 7#c77;,a77ii77,,ii7 of such section for such quarter and that is furnished as part of a covered ,,opd service 7or group of services71 shall be the difference between-- 7,a7 the payment under paragraph 7#c77;,a77ii77,i7 of such section for such drug2 and 7,b7 #bj percent of the inflation-adjusted payment amount under paragraph 7#c77;,a77ii77,,ii7 of such section for such drug4 4 7c7 ,conforming amendment to part ,b ,,asp calculation ,section #ahdg;,a7c77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7c77#c77 is amended by inserting or section #ahcd7x7 after section #aibg4 #bjb4 ,medicare part ,d rebate by manufacturers ,part ,d of title ,,xviii of the ,social ,security ,act is amended by inserting after section #ahfj;,d-#ad;,a 7#db ,u4,s4,c4 #aciew-#aad;a7 the following new section3 #ahfj;,d-#ad;,b4 ,manufacturer rebate for certain drugs with prices increasing faster than inflation 7a7 ,in general 7#a7 ,in general ,subject to the provisions of this section1 in order for coverage to be available under this part for a part ,d rebatable drug 7as defined in subsection 7h77#a77 of a manufacturer 7as defined in section #aibg7k77#e77 dispensed during an applicable year1 the manufacturer must have entered into and have in effect an agreement described in subsection 7b74 7#b7 ,authorizing ,coverage for ,drugs ,not ,covered ,under ,agreements ,paragraph 7#a7 shall not apply to the dispensing of a covered part ,d drug if-- 7,a7 the ,secretary has made a determination that the availability of the drug is essential to the health of beneficiaries under this part2 or 7,b7 the ,secretary determines that in a specified period 7as specified by the ,secretary71 there were extenuating circumstances4 7#c7 ,applicable year ,for purposes of this section the term applicable year means a year beginning with #bjbb4 7b7 ,agreements 7#a7 ,terms of agreement ,an agreement described in this subsection1 with respect to a manufacturer of a part ,d rebatable drug1 is an agreement under which the following shall apply3 7,a7 ,secretarial provision of information ,not later than #i months after the end of each applicable year with respect to which the agreement is in effect1 the ,secretary1 for each part ,d rebatable drug of the manufacturer1 shall report to the manufacturer the following for such year3 7i7 ,information on the total number of units 7as defined in subsection 7h77#b77 for each dosage form and strength with respect to such part ,d rebatable drug and year4 7ii7 ,information on the amount 7if any7 of the excess average manufacturer price increase described in subsection 7c77#a77;,b7 for each dosage form and strength with respect to such drug and year4 7iii7 ,the rebate amount specified under subsection 7c7 for each dosage form and strength with respect to such drug and year4 7,b7 ,manufacturer requirements ,for each applicable year with respect to which the agreement is in effect1 the manufacturer of the part ,d rebatable drug1 for each dosage form and strength with respect to such drug1 not later than #cj days after the date of receipt from the ,secretary of the information described in subparagraph 7,a7 for such year1 shall provide to the ,secretary a rebate that is equal to the amount specified in subsection 7c7 for such dosage form and strength with respect to such drug for such year4 7#b7 ,length of agreement 7,a7 ,in general ,an agreement under this section1 with respect to a part ,d rebatable drug1 shall be effective for an initial period of not less than one year and shall be automatically renewed for a period of not less than one year unless terminated under subparagraph 7,b74 7,b7 ,termination 7i7 ,by ,secretary ,the ,secretary may provide for termination of an agreement under this section for violation of the requirements of the agreement or other good cause shown4 ,such termination shall not be effective earlier than #cj days after the date of notice of such termination4 ,the ,secretary shall provide1 upon request1 a manufacturer with a hearing concerning such a termination1 but such hearing shall not delay the effective date of the termination4 7ii7 ,by a manufacturer ,a manufacturer may terminate an agreement under this section for any reason4 ,any such termination shall be effective1 with respect to a plan year-- 7,i7 if the termination occurs before ,january #cj of the plan year1 as of the day after the end of the plan year2 and 7,,ii7 if the termination occurs on or after ,january #cj of the plan year1 as of the day after the end of the succeeding plan year4 7,c7 ,effectiveness of termination ,any termination under this paragraph shall not affect rebates due under the agreement under this section before the effective date of its termination4 7,d7 ,delay before reentry ,in the case of any agreement under this section with a manufacturer that is terminated in a plan year1 the ,secretary may not enter into another such agreement with the manufacturer 7or a successor manufacturer7 before the subsequent plan year1 unless the ,secretary finds good cause for an earlier reinstatement of such an agreement4 7c7 ,rebate amount 7#a7 ,in general ,for purposes of this section1 the amount specified in this subsection for a dosage form and strength with respect to a part ,d rebatable drug and applicable year is1 subject to subparagraphs 7,b7 and 7,c7 of paragraph 7#e71 the amount equal to the product of-- 7,a7 the total number of units of such dosage form and strength with respect to such part ,d rebatable drug and year2 and 7,b7 the amount 7if any7 by which-- 7i7 the annual manufacturer price 7as determined in paragraph 7#b77 paid for such dosage form and strength with respect to such part ,d rebatable drug for the year2 exceeds 7ii7 the inflation-adjusted payment amount determined under paragraph 7#c7 for such dosage form and strength with respect to such part ,d rebatable drug for the year4 7#b7 ,determination of annual manufacturer price ,the annual manufacturer price determined under this paragraph for a dosage form and strength1 with respect to a part ,d rebatable drug and an applicable year1 is the sum of the products of-- 7,a7 the average manufacturer price 7as defined in subsection 7h77#f77 of such dosage form and strength1 as calculated for a unit of such drug1 with respect to each of the calendar quarters of such year2 and 7,b7 the ratio of-- 7i7 the total number of units of such dosage form and strength dispensed during each such calendar quarter of such year2 to 7ii7 the total number of units of such dosage form and strength dispensed during such year4 7#c7 ,determination of inflation-adjusted payment amount ,the inflation-adjusted payment amount determined under this paragraph for a dosage form and strength with respect to a part ,d rebatable drug for an applicable year1 subject to subparagraphs 7,a7 and 7,d7 of paragraph 7#e71 is-- 7,a7 the benchmark year manufacturer price determined under paragraph 7#d7 for such dosage form and strength with respect to such drug and an applicable year2 increased by 7,b7 the percentage by which the applicable year ,,cpi-,u 7as defined in subsection 7h77#e77 for the applicable year exceeds the benchmark period ,,cpi-,u 7as defined in subsection 7h77#d774 7#d7 ,determination of benchmark year manufacturer price ,the benchmark year manufacturer price determined under this paragraph for a dosage form and strength1 with respect to a part ,d rebatable drug and an applicable year1 is the sum of the products of-- 7,a7 the average manufacturer price 7as defined in subsection 7h77#f77 of such dosage form and strength1 as calculated for a unit of such drug1 with respect to each calendar quarter of the payment amount benchmark year 7as defined in subsection 7h77#c772 and 7,b7 the ratio of-- 7i7 the total number of units of such dosage form and strength dispensed during such calendar quarter of the payment amount benchmark year2 to 7ii7 the total number of units of such dosage form and strength dispensed during the payment amount benchmark year4 7#e7 ,special treatment of certain drugs and exemption 7,a7 ,subsequently approved drugs ,in the case of a part ,d rebatable drug first approved or licensed by the ,food and ,drug ,administration after ,january #a1 #bjaf1 subparagraphs 7,a7 and 7,b7 of paragraph 7#d7 shall be applied as if the term payment amount benchmark year were defined under subsection 7h77#c7 as the first calendar year beginning after the day on which the drug was first marketed by any manufacturer and subparagraph 7,b7 of paragraph 7#c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under subsection 7h77#d7 as if the reference to ,january #bjaf under such subsection were a reference to ,january of the first year beginning after the date on which the drug was first marketed by any manufacturer4 7,b7 ,exemption for shortages ,the ,secretary may reduce or waive the rebate under paragraph 7#a7 with respect to a part ,d rebatable drug that is described as currently in shortage on the shortage list in effect under section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act or in the case of other exigent circumstances1 as determined by the ,secretary4 7,c7 ,treatment of new formulations 7i7 ,in general ,in the case of a part ,d rebatable drug that is a line extension of a part ,d rebatable drug that is an oral solid dosage form1 the ,secretary shall establish a formula for determining the amount specified in this subsection with respect to such part ,d rebatable drug and an applicable year with consideration of the original part ,d rebatable drug4 7ii7 ,line extension defined ,in this subparagraph1 the term line extension means1 with respect to a part ,d rebatable drug1 a new formulation of the drug 7as determined by the ,secretary71 such as an extended release formulation1 but does not include an abuse-deterrent formulation of the drug 7as determined by the ,secretary71 regardless of whether such abuse-deterrent formulation is an extended release formulation4 7,d7 ,selected drugs ,in the case of a part ,d rebatable drug that is a selected drug 7as defined in section #aaib7;c77 for a price applicability period 7as defined in section #aaia7;b77#b77 and is determined 7pursuant to such section #aaib7;c77 to no longer be a selected drug1 for each applicable year beginning after the price applicability period with respect to such drug1 subparagraphs 7,a7 and 7,b7 of paragraph 7#d7 shall be applied as if the term payment amount benchmark year were defined under subsection 7h77#c7 as the last year beginning during such price applicability period with respect to such selected drug and subparagraph 7,b7 of paragraph 7#c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under subsection 7h77#d7 as if the reference to ,january #bjaf under such subsection were a reference to ,january of the last year beginning during such price applicability period with respect to such drug4 7d7 ,rebate deposits ,amounts paid as rebates under subsection 7c7 shall be deposited into the ,medicare ,prescription ,drug ,account in the ,federal ,supplementary ,medical ,insurance ,trust ,fund established under section #ahda4 7e7 ,information ,for purposes of carrying out this section1 the ,secretary shall use information submitted by manufacturers under section #aibg7;b77#c74 7f7 ,civil money penalty ,in the case of a manufacturer of a part ,d rebatable drug with an agreement in effect under this section who has failed to comply with the terms of the agreement under subsection 7b77#a77;,b7 with respect to such drug for an applicable year1 the ,secretary may impose a civil money penalty on such manufacturer in an amount equal to #abe percent of the amount specified in subsection 7c7 for such drug for such year4 ,the provisions of section #aabh;,a 7other than subsections 7a7 7with respect to amounts of penalties or additional assessments7 and 7b77 shall apply to a civil money penalty under this subsection in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7g7 ,judicial review ,there shall be no judicial review of the following3 7#a7 ,the determination of units under this section4 7#b7 ,the determination of whether a drug is a part ,d rebatable drug under this section4 7#c7 ,the calculation of the rebate amount under this section4 7h7 ,definitions ,in this section3 7#a7 ,part ,d rebatable drug defined 7,a7 ,in general ,the term part ,d rebatable drug means a drug or biological that would 7without application of this section7 be a covered part ,d drug1 except such term shall1 with respect to an applicable year1 not include such a drug or biological if the average annual total cost under this part for such year per individual who uses such a drug or biological1 as determined by the ,secretary1 is less than1 subject to subparagraph 7,b71 #ajj1 as determined by the ,secretary using the most recent data available or1 if data is not available1 as estimated by the ,secretary4 7,b7 ,increase ,the dollar amount applied under subparagraph 7,a7-- 7i7 for #bjbc1 shall be the dollar amount specified under such subparagraph for #bjbb1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 for the #ab-month period beginning with ,january of #bjbb2 and 7ii7 for a subsequent year1 shall be the dollar amount specified in this subparagraph 7or subparagraph 7,a77 for the previous year1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 for the #ab-month period beginning with ,january of the previous year4 ,any dollar amount specified under this subparagraph that is not a multiple of #aj shall be rounded to the nearest multiple of #aj4 7#b7 ,unit defined ,the term unit means1 with respect to a part ,d rebatable drug1 the lowest identifiable quantity 7such as a capsule or tablet1 milligram of molecules1 or grams7 of the part ,d rebatable drug that is dispensed to individuals under this part4 7#c7 ,payment amount benchmark year ,the term payment amount benchmark year means the year beginning ,january #a1 #bjaf4 7#d7 ,benchmark period ,,cpi-,u ,the term benchmark period ,,cpi-,u means the consumer price index for all urban consumers 7,united ,states city average7 for ,january #bjaf4 7#e7 ,applicable year ,,cpi-,u ,the term applicable year ,,cpi-,u means1 with respect to an applicable year1 the consumer price index for all urban consumers 7,united ,states city average7 for ,january of such year4 7#f7 ,average manufacturer price ,the term average manufacturer price has the meaning1 with respect to a part ,d rebatable drug of a manufacturer1 given such term in section #aibg7k77#a71 with respect to a covered outpatient drug of a manufacturer for a rebate period under section #aibg4 4 ,,iii ,part ,d ,improvements and ,maximum ,out-of-,pocket ,cap for ,medicare ,beneficiaries #cja4 ,medicare part ,d benefit redesign 7a7 ,benefit structure redesign ,section #ahfj;,d-#b7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77 is amended-- 7#a7 in paragraph 7#b7-- 7,a7 in subparagraph 7,a71 in the matter preceding clause 7i71 by inserting for a year preceding #bjbb and for costs above the annual deductible specified in paragraph 7#a7 and up to the annual out-of-pocket threshold specified in paragraph 7#d77;,b7 for #bjbb and each subsequent year after paragraph 7#c72 7,b7 in subparagraph 7,c7-- 7i7 in clause 7i71 in the matter preceding subclause 7,i71 by inserting for a year preceding #bjbb1 after paragraph 7#d712 and 7ii7 in clause 7ii77,,iii71 by striking and each subsequent year and inserting and #bjba2 and 7,c7 in subparagraph 7,d7-- 7i7 in clause 7i7-- 7,i7 in the matter preceding subclause 7,i71 by inserting for a year preceding #bjbb1 after paragraph 7#d712 and 7,,ii7 in subclause 7,i77bb71 by striking a year after #bjah and inserting each of years #bjah through #bjba2 and 7ii7 in clause 7ii77,v71 by striking #bjai and each subsequent year and inserting each of years #bjai through #bjba2 7#b7 in paragraph 7#c77;,a7-- 7,a7 in the matter preceding clause 7i71 by inserting for a year preceding #bjbb1 after and 7#d712 and 7,b7 in clause 7ii71 by striking for a subsequent year and inserting for each of years #bjjg through #bjba2 and 7#c7 in paragraph 7#d7-- 7,a7 in subparagraph 7,a7-- 7i7 in clause 7i7-- 7,i7 by redesignating subclauses 7,i7 and 7,,ii7 as items 7aa7 and 7bb71 respectively1 and moving the margin of each such redesignated item #b ems to the right2 7,,ii7 in the matter preceding item 7aa71 as redesignated by subclause 7,i71 by striking is equal to the greater of-- and inserting 8is equal to-- 7,i7 for a year preceding #bjbb1 the greater of-- 2 7,,iii7 by striking the period at the end of item 7bb71 as redesignated by subclause 7,i71 and inserting 2 and2 and 7,,iv7 by adding at the end the following3 7,,ii7 for #bjbb and each succeeding year1 #j4 2 and 7ii7 in clause 7ii71 by striking clause 7i77,i7 and inserting clause 7i77,i77aa72 7,b7 in subparagraph 7,b7-- 7i7 in clause 7i7-- 7,i7 in subclause 7,v71 by striking or at the end2 7,,ii7 in subclause 7,,vi7-- 7aa7 by striking for a subsequent year and inserting for #bjba2 and 7bb7 by striking the period at the end and inserting a semicolon2 and 7,,iii7 by adding at the end the following new subclauses3 7,,vii7 for #bjbb1 is equal to #b1jjj2 or 7,,viii7 for a subsequent year1 is equal to the amount specified in this subparagraph for the previous year1 increased by the annual percentage increase described in paragraph 7#f7 for the year involved4 2 and 7ii7 in clause 7ii71 by striking clause 7i77,,ii7 and inserting clause 7i72 7,c7 in subparagraph 7,c77i71 by striking and for amounts and inserting and1 for a year preceding #bjbb1 for amounts2 and 7,d7 in subparagraph 7,e71 by striking ,in applying and inserting ,for each of years #bjaa through #bjba1 in applying4 7b7 ,decreasing reinsurance payment amount ,section #ahfj;,d-#ae7;b77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;b77#a77 is amended by inserting after #hj percent the following3 7or1 with respect to a coverage year after #bjba1 #bj percent74 7c7 ,manufacturer discount program 7#a7 ,in general ,part ,d of title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aja et seq471 as amended by section #bjb1 is further amended by inserting after section #ahfj;,d-#ad;,b the following new section3 #ahfj;,d-#ad;,c4 ,manufacturer discount program 7a7 ,establishment ,the ,secretary shall establish a manufacturer discount program 7in this section referred to as the program74 ,under the program1 the ,secretary shall enter into agreements described in subsection 7b7 with manufacturers and provide for the performance of the duties described in subsection 7c74 ,the ,secretary shall establish a model agreement for use under the program by not later than ,january #a1 #bjba1 in consultation with manufacturers1 and allow for comment on such model agreement4 7b7 ,terms of agreement 7#a7 ,in general 7,a7 ,agreement ,an agreement under this section shall require the manufacturer to provide applicable beneficiaries access to discounted prices for applicable drugs of the manufacturer that are dispensed on or after ,january #a1 #bjbb4 7,b7 ,provision of discounted prices at the point-of-sale ,the discounted prices described in subparagraph 7,a7 shall be provided to the applicable beneficiary at the pharmacy or by the mail order service at the point-of-sale of an applicable drug4 7,c7 ,timing of agreement 7i7 ,special rule for #bjbb ,in order for an agreement with a manufacturer to be in effect under this section with respect to the period beginning on ,january #a1 #bjbb1 and ending on ,december #ca1 #bjbb1 the manufacturer shall enter into such agreement not later than #cj days after the date of the establishment of a model agreement under subsection 7a74 7ii7 #bjbc and subsequent years ,in order for an agreement with a manufacturer to be in effect under this section with respect to plan year #bjbc or a subsequent plan year1 the manufacturer shall enter into such agreement 7or such agreement shall be renewed under paragraph 7#d77;,a77 not later than ,january #cj of the preceding year4 7#b7 ,provision of appropriate data ,each manufacturer with an agreement in effect under this section shall collect and have available appropriate data1 as determined by the ,secretary1 to ensure that it can demonstrate to the ,secretary compliance with the requirements under the program4 7#c7 ,compliance with requirements for administration of program ,each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the ,secretary or a third party with a contract under subsection 7d77#c71 as applicable1 for purposes of administering the program1 including any determination under subparagraph 7,a7 of subsection 7c77#a7 or procedures established under such subsection 7c77#a74 7#d7 ,length of agreement 7,a7 ,in general ,an agreement under this section shall be effective for an initial period of not less than #ab months and shall be automatically renewed for a period of not less than #a year unless terminated under subparagraph 7,b74 7,b7 ,termination 7i7 ,by the ,secretary ,the ,secretary may provide for termination of an agreement under this section for a knowing and willful violation of the requirements of the agreement or other good cause shown4 ,such termination shall not be effective earlier than #cj days after the date of notice to the manufacturer of such termination4 ,the ,secretary shall provide1 upon request1 a manufacturer with a hearing concerning such a termination1 and such hearing shall take place prior to the effective date of the termination with sufficient time for such effective date to be repealed if the ,secretary determines appropriate4 7ii7 ,by a manufacturer ,a manufacturer may terminate an agreement under this section for any reason4 ,any such termination shall be effective1 with respect to a plan year-- 7,i7 if the termination occurs before ,january #cj of a plan year1 as of the day after the end of the plan year2 and 7,,ii7 if the termination occurs on or after ,january #cj of a plan year1 as of the day after the end of the succeeding plan year4 7iii7 ,effectiveness of termination ,any termination under this subparagraph shall not affect discounts for applicable drugs of the manufacturer that are due under the agreement before the effective date of its termination4 7iv7 ,notice to third party ,the ,secretary shall provide notice of such termination to a third party with a contract under subsection 7d77#c7 within not less than #cj days before the effective date of such termination4 7c7 ,duties described ,the duties described in this subsection are the following3 7#a7 ,administration of program ,administering the program1 including-- 7,a7 the determination of the amount of the discounted price of an applicable drug of a manufacturer2 7,b7 the establishment of procedures under which discounted prices are provided to applicable beneficiaries at pharmacies or by mail order service at the point-of-sale of an applicable drug2 7,c7 the establishment of procedures to ensure that1 not later than the applicable number of calendar days after the dispensing of an applicable drug by a pharmacy or mail order service1 the pharmacy or mail order service is reimbursed for an amount equal to the difference between-- 7i7 the negotiated price of the applicable drug2 and 7ii7 the discounted price of the applicable drug2 7,d7 the establishment of procedures to ensure that the discounted price for an applicable drug under this section is applied before any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of applicable beneficiaries as the ,secretary may specify2 and 7,e7 providing a reasonable dispute resolution mechanism to resolve disagreements between manufacturers1 applicable beneficiaries1 and the third party with a contract under subsection 7d77#c74 7#b7 ,monitoring compliance 7,a7 ,in general ,the ,secretary shall monitor compliance by a manufacturer with the terms of an agreement under this section4 7,b7 ,notification ,if a third party with a contract under subsection 7d77#c7 determines that the manufacturer is not in compliance with such agreement1 the third party shall notify the ,secretary of such noncompliance for appropriate enforcement under subsection 7e74 7#c7 ,collection of data from prescription drug plans and ,,ma-,,pd plans ,the ,secretary may collect appropriate data from prescription drug plans and ,,ma-,,pd plans in a timeframe that allows for discounted prices to be provided for applicable drugs under this section4 7d7 ,administration 7#a7 ,in general ,subject to paragraph 7#b71 the ,secretary shall provide for the implementation of this section1 including the performance of the duties described in subsection 7c74 7#b7 ,limitation ,in providing for the implementation of this section1 the ,secretary shall not receive or distribute any funds of a manufacturer under the program4 7#c7 ,contract with third parties ,the ,secretary shall enter into a contract with #a or more third parties to administer the requirements established by the ,secretary in order to carry out this section4 ,at a minimum1 the contract with a third party under the preceding sentence shall require that the third party-- 7,a7 receive and transmit information between the ,secretary1 manufacturers1 and other individuals or entities the ,secretary determines appropriate2 7,b7 receive1 distribute1 or facilitate the distribution of funds of manufacturers to appropriate individuals or entities in order to meet the obligations of manufacturers under agreements under this section2 7,c7 provide adequate and timely information to manufacturers1 consistent with the agreement with the manufacturer under this section1 as necessary for the manufacturer to fulfill its obligations under this section2 and 7,d7 permit manufacturers to conduct periodic audits1 directly or through contracts1 of the data and information used by the third party to determine discounts for applicable drugs of the manufacturer under the program4 7#d7 ,performance requirements ,the ,secretary shall establish performance requirements for a third party with a contract under paragraph 7#c7 and safeguards to protect the independence and integrity of the activities carried out by the third party under the program under this section4 7#e7 ,implementation ,notwithstanding any other provision of law1 the ,secretary may implement the program under this section by program instruction or otherwise4 7#f7 ,administration ,chapter #ce of title #dd1 ,united ,states ,code1 shall not apply to the program under this section4 7e7 ,enforcement 7#a7 ,audits ,each manufacturer with an agreement in effect under this section shall be subject to periodic audit by the ,secretary4 7#b7 ,civil money penalty 7,a7 ,in general ,the ,secretary may impose a civil money penalty on a manufacturer that fails to provide applicable beneficiaries discounts for applicable drugs of the manufacturer in accordance with such agreement for each such failure in an amount the ,secretary determines is equal to the sum of-- 7i7 the amount that the manufacturer would have paid with respect to such discounts under the agreement1 which will then be used to pay the discounts which the manufacturer had failed to provide2 and 7ii7 #be percent of such amount4 7,b7 ,application ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil money penalty under this paragraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7f7 ,clarification regarding availability of other covered part ,d drugs ,nothing in this section shall prevent an applicable beneficiary from purchasing a covered part ,d drug that is not an applicable drug 7including a generic drug or a drug that is not on the formulary of the prescription drug plan or ,,ma-,,pd plan that the applicable beneficiary is enrolled in74 7g7 ,definitions ,in this section3 7#a7 ,applicable beneficiary ,the term applicable beneficiary means an individual who1 on the date of dispensing a covered part ,d drug-- 7,a7 is enrolled in a prescription drug plan or an ,,ma-,,pd plan2 7,b7 is not enrolled in a qualified retiree prescription drug plan2 and 7,c7 has incurred costs for covered part ,d drugs in the year that are equal to or exceed the annual deductible specified in section #ahfj;,d-#b7;b77#a7 for such year4 7#b7 ,applicable drug ,the term applicable drug1 with respect to an applicable beneficiary-- 7,a7 means a covered part ,d drug-- 7i7 approved under a new drug application under section #eje7;c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act or1 in the case of a biologic product1 licensed under section #cea of the ,public ,health ,service ,act2 and 7ii7 7,i7 if the ,,pdp sponsor of the prescription drug plan or the ,,ma organization offering the ,,ma-,,pd plan uses a formulary1 which is on the formulary of the prescription drug plan or ,,ma-,,pd plan that the applicable beneficiary is enrolled in2 7,,ii7 if the ,,pdp sponsor of the prescription drug plan or the ,,ma organization offering the ,,ma-,,pd plan does not use a formulary1 for which benefits are available under the prescription drug plan or ,,ma-,,pd plan that the applicable beneficiary is enrolled in2 or 7,,iii7 is provided through an exception or appeal2 and 7,b7 does not include a selected drug 7as defined in section #aaib7;c77 during a price applicability period 7as defined in section #aaia7;b77#b77 with respect to such drug4 7#c7 ,applicable number of calendar days ,the term applicable number of calendar days means-- 7,a7 with respect to claims for reimbursement submitted electronically1 #ad days2 and 7,b7 with respect to claims for reimbursement submitted otherwise1 #cj days4 7#d7 ,discounted price 7,a7 ,in general ,the term discounted price means1 with respect to an applicable drug of a manufacturer furnished during a year to an applicable beneficiary-- 7i7 who has not incurred costs for covered part ,d drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b77i7 for the year1 #ij percent of the negotiated price of such drug2 and 7ii7 who has incurred such costs in the year that are equal to or exceed such threshold for the year1 #gj percent of the negotiated price of such drug4 7,b7 ,clarification ,nothing in this section shall be construed as affecting the responsibility of an applicable beneficiary for payment of a dispensing fee for an applicable drug4 7,c7 ,special case for certain claims 7i7 ,claims spanning deductible ,in the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall at or above the annual deductible specified in section #ahfj;,d-#b7;b77#a7 for the year1 the manufacturer of the applicable drug shall provide the discounted price under this section on only the portion of the negotiated price of the applicable drug that falls at or above such annual deductible4 7ii7 ,claims spanning out-of-pocket threshold ,in the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall entirely below or entirely above the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b77i7 for the year1 the manufacturer of the applicable drug shall provide the discounted price-- 7,i7 in accordance with subparagraph 7,a77i7 on the portion of the negotiated price of the applicable drug that falls below such threshold2 and 7,,ii7 in accordance with subparagraph 7,a77ii7 on the portion of such price of such drug that falls at or above such threshold4 7#e7 ,manufacturer ,the term manufacturer means any entity which is engaged in the production1 preparation1 propagation1 compounding1 conversion1 or processing of prescription drug products1 either directly or indirectly by extraction from substances of natural origin1 or independently by means of chemical synthesis1 or by a combination of extraction and chemical synthesis4 ,such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under ,state law4 7#f7 ,negotiated price ,the term negotiated price has the meaning given such term in section #dbc4ajj of title #db1 ,code of ,federal ,regulations 7or any successor regulation71 except that such negotiated price shall not include any dispensing fee for the applicable drug4 7#g7 ,qualified retiree prescription drug plan ,the term qualified retiree prescription drug plan has the meaning given such term in section #ahfj;,d-#bb7;a77#b74 4 7#b7 ,sunset of ,medicare coverage gap discount program ,section #ahfj;,d-#ad;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #acie-aad;a7 is amended-- 7,a7 in subsection 7a71 in the first sentence1 by striking ,the ,secretary and inserting ,subject to subsection 7h71 the ,secretary2 and 7,b7 by adding at the end the following new subsection3 7h7 ,sunset of program 7#a7 ,in general ,the program shall not apply with respect to applicable drugs dispensed on or after ,january #a1 #bjbb1 and1 subject to paragraph 7#b71 agreements under this section shall be terminated as of such date4 7#b7 ,continued application for applicable drugs dispensed prior to sunset ,the provisions of this section 7including all responsibilities and duties7 shall continue to apply after ,january #a1 #bjbb1 with respect to applicable drugs dispensed prior to such date4 4 7#c7 ,inclusion of actuarial value of manufacturer discounts in bids ,section #ahfj;,d-#aa of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7 is amended-- 7,a7 in subsection 7b77#b77;,c77iii7-- 7i7 by striking assumptions regarding the reinsurance and inserting 8assumptions regarding-- 7,i7 the reinsurance 2 and 7ii7 by adding at the end the following3 7,,ii7 for #bjbb and each subsequent year1 the manufacturer discounts provided under section #ahfj;,d-#ad;,c subtracted from the actuarial value to produce such bid2 and 2 and 7,b7 in subsection 7c77#a77;,c7-- 7i7 by striking an actuarial valuation of the reinsurance and inserting 8an actuarial valuation of-- 7i7 the reinsurance 2 7ii7 in clause 7i71 as inserted by clause 7i7 of this subparagraph1 by adding and at the end2 and 7iii7 by adding at the end the following3 7ii7 for #bjbb and each subsequent year1 the manufacturer discounts provided under section #ahfj;,d-#ad;,c2 4 7d7 ,conforming amendments 7#a7 ,section #ahfj;,d-#b of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7 is amended-- 7,a7 in subsection 7a77#b77;,a77i77,i71 by striking 1 or an increase in the initial and inserting or1 for a year preceding #bjbb1 an increase in the initial2 7,b7 in subsection 7c77#a77;,c7-- 7i7 in the subparagraph heading1 by striking at initial coverage limit2 and 7ii7 by inserting for a year preceding #bjbb or the annual out-of-pocket threshold specified in subsection 7b77#d77;,b7 for the year for #bjbb and each subsequent year after subsection 7b77#c7 for the year each place it appears2 and 7,c7 in subsection 7d77#a77;,a71 by striking or an initial and inserting or1 for a year preceding #bjbb1 an initial4 7#b7 ,section #ahfj;,d-#d7;a77#d77;,b77i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd7;a77#d77;,b77i77 is amended by striking the initial and inserting for a year preceding #bjbb1 the initial4 7#c7 ,section #ahfj;,d-#ad7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77 is amended-- 7,a7 in paragraph 7#a7-- 7i7 in subparagraph 7,c71 by striking ,the continuation and inserting ,for a year preceding #bjbb1 the continuation2 7ii7 in subparagraph 7,d77iii71 by striking #ahfj;,d-#b7;b77#d77;,a77i77,i7 and inserting #ahfj;,d-#b7;b77#d77;,a77i77,i77aa72 and 7iii7 in subparagraph 7,e71 by striking ,the elimination and inserting ,for a year preceding #bjbb1 the elimination2 and 7,b7 in paragraph 7#b7-- 7i7 in subparagraph 7,c71 by striking ,the continuation and inserting ,for a year preceding #bjbb1 the continuation2 and 7ii7 in subparagraph 7,e71 by striking #ahfj;,d-#b7;b77#d77;,a77i77,i7 and inserting #ahfj;,d-#b7;b77#d77;,a77i77,i77aa74 7#d7 ,section #ahfj;,d-#ba7;d77#g7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aca7;d77#g77 is amended by striking section #ahfj;,d-#b7;b77#d77;,b77i7 and inserting section #ahfj;,d-#b7;b77#d77;,c77i74 7#e7 ,section #ahfj;,d-#bb7;a77#b77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#acb7;a77#b77;,a77 is amended-- 7,a7 by striking the value of any discount and inserting the following3 the value of-- 7i7 for years prior to #bjbb1 any discount 2 7,b7 in clause 7i71 as inserted by subparagraph 7,a7 of this paragraph1 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following new clause3 7ii7 for #bjbb and each subsequent year1 any discount provided pursuant to section #ahfj;,d-#ad;,c4 4 7#f7 ,section #ahfj;,d-#da7;a77#f7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aea7;a77#f77 is amended-- 7,a7 by inserting for a year before #bjbb after #ahfj;,d-#b7;b77#c72 and 7,b7 by inserting for such year before the period4 7#g7 ,section #ahfj;,d-#dc of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aec7 is amended-- 7,a7 in subsection 7a7-- 7i7 by striking paragraph 7#a7 and inserting the following3 7#a7 participate in-- 7,a7 for #bjaa through #bjba1 the ,medicare coverage gap discount program under section #ahfj;,d-#ad;,a2 and 7,b7 for #bjbb and each subsequent year1 the manufacturer discount program under section #ahfj;,d-#ad;,c2 2 7ii7 by striking paragraph 7#b7 and inserting the following3 7#b7 have entered into and have in effect-- 7,a7 for #bjaa through #bjba1 an agreement described in subsection 7b7 of section #ahfj;,d-#ad;,a with the ,secretary2 and 7,b7 for #bjbb and each subsequent year1 an agreement described in subsection 7b7 of section #ahfj;,d-#ad;,c with the ,secretary2 and 2 and 7iii7 by striking paragraph 7#c7 and inserting the following3 7#c7 have entered into and have in effect1 under terms and conditions specified by the ,secretary-- 7,a7 for #bjaa through #bjba1 a contract with a third party that the ,secretary has entered into a contract with under subsection 7d77#c7 of section #ahfj;,d-#ad;,a2 and 7,b7 for #bjbb and each subsequent year1 a contract with a third party that the ,secretary has entered into a contract with under subsection 7d77#c7 of section #ahfj;,d-#ad;,c4 2 and 7,b7 by striking subsection 7b7 and inserting the following3 7b7 ,effective date ,paragraphs 7#a77;,a71 7#b77;,a71 and 7#c77;,a7 of subsection 7a7 shall apply to covered part ,d drugs dispensed under this part on or after ,january #a1 #bjaa1 and before ,january #a1 #bjbb1 and paragraphs 7#a77;,b71 7#b77;,b71 and 7#c77;,b7 of such subsection shall apply to covered part ,d drugs dispensed under this part on or after ,january #a1 #bjbb4 4 7e7 ,effective date ,the amendments made by this section shall apply with respect to plan year #bjbb and subsequent plan years4 #cjb4 ,allowing certain enrollees of prescription drugs plans and ,,ma-,,pd plans under ,medicare program to spread out cost-sharing under certain circumstances ,section #ahfj;,d-#b7;b77#b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77#b771 as amended by section #cja1 is further amended-- 7#a7 in subparagraph 7,a71 by striking ,subject to subparagraphs 7,c7 and 7,d7 and inserting ,subject to subparagraphs 7,c71 7,d71 and 7,e72 and 7#b7 by adding at the end the following new subparagraph3 7,e7 ,enrollee option regarding spreading cost-sharing ,the ,secretary shall establish by regulation a process under which1 with respect to plan year #bjbb and subsequent plan years1 a prescription drug plan or an ,,ma-,,pd plan shall1 in the case of a part ,d eligible individual enrolled with such plan for such plan year who is not a subsidy eligible individual 7as defined in section #ahfj;,d-#ad7;a77#c77 and with respect to whom the plan projects that the dispensing of the first fill of a covered part ,d drug to such individual will result in the individual incurring costs that are equal to or above the annual out-of-pocket threshold specified in paragraph 7#d77;,b7 for such plan year1 provide such individual with the option to make the coinsurance payment required under subparagraph 7,a7 7for the portion of such costs that are not above such annual out-of-pocket threshold7 in the form of periodic installments over the remainder of such plan year4 4 #cjc4 ,establishment of pharmacy quality measures under ,medicare part ,d ,section #ahfj;,d-#d7;c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd7;c77 is amended-- 7#a7 by redesignating the paragraph 7#f71 as added by section #ejced of division ,e of the ,bipartisan ,budget ,act of #bjah 7,public ,law #aae-abc71 as paragraph 7#g72 and 7#b7 by adding at the end the following new paragraph3 7#h7 ,application of pharmacy quality measures 7,a7 ,in general ,a ,,pdp sponsor that implements incentive payments to a pharmacy or price concessions paid by a pharmacy based on quality measures shall use measures established or approved by the ,secretary under subparagraph 7,b7 with respect to payment for covered part ,d drugs dispensed by such pharmacy4 7,b7 ,standard pharmacy quality measures ,the ,secretary shall establish or approve standard quality measures from a consensus and evidence-based organization for payments described in subparagraph 7,a74 ,such measures shall focus on patient health outcomes and be based on proven criteria measuring pharmacy performance4 7,c7 ,effective date ,the requirement under subparagraph 7,a7 shall take effect for plan years beginning on or after ,january #a1 #bjba1 or such earlier date specified by the ,secretary if the ,secretary determines there are sufficient measures established or approved under subparagraph 7,b7 to meet the requirement under subparagraph 7,a74 4 ,,iv ,prescription ,drug ,policies for ,low-,income ,individuals #dja4 ,adjustments to ,medicare part ,d cost-sharing reductions for low-income individuals ,section #ahfj;,d-#ad7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a771 as amended by section #cja7;d71 is further amended-- 7#a7 in paragraph 7#a7-- 7,a7 in subparagraph 7,d7-- 7i7 in clause 7ii7-- 7,i7 by striking that does not exceed #a for and all that follows through the period at the end and inserting that does not exceed-- 7,i7 for plan years before plan year #bjba-- 7aa7 for a generic drug or a preferred drug that is a multiple source drug 7as defined in section #aibg7k77#g77;,a77i771 #a or1 if less1 the copayment amount applicable to an individual under clause 7iii72 and 7bb7 for any other drug1 #c or1 if less1 the copayment amount applicable to an individual under clause 7iii72 and 2 and 7,,ii7 by adding at the end the following new subclauses3 7,,ii7 for plan year #bjba-- 7aa7 for a generic drug1 #j2 and 7bb7 for any other drug1 the dollar amount applied under this clause 7after application of paragraph 7#d77;,a77 for plan year #bjbj for a drug described in subclause 7,i77bb72 and 7,,iii7 for a subsequent year1 the dollar amount applied under this clause for the previous year for the drug1 increased by the annual percentage increase in the consumer price index 7all items2 ,u4,s4 city average7 as of ,september of such previous year4 2 and 7ii7 in clause 7iii7-- 7,i7 by striking does not exceed the copayment amount specified under and inserting does not exceed-- 7,i7 for plan years beginning before plan year #bjba1 the copayment amount specified under 2 7,,ii7 by striking the period at the end and inserting 2 and2 and 7,,iii7 by adding at the end the following new subclause3 7,,ii7 for plan year #bjba and each subsequent plan year1 the copayment amount applied under clause 7ii7 for the drug and year involved4 2 and 7,b7 by adding at the end the following new subparagraph3 7,f7 ,rounding ,any amount established under clause 7ii7 of subparagraph 7,d71 including as applied under clause 7iii7 of such subparagraph or paragraph 7#b77;,d71 that is based on an increase of #c1 that is not a multiple of #e cents or #aj cents1 respectively1 shall be rounded to the nearest multiple of #e cents or #aj cents1 respectively4 2 7#b7 in paragraph 7#b7-- 7,a7 in subparagraph 7,d7-- 7i7 by striking of coinsurance of and inserting of-- 7i7 for plan years before plan year #bjba1 coinsurance of 2 7ii7 by striking the period at the end and inserting 2 and2 and 7iii7 by adding at the end the following new clause3 7ii7 for plan year #bjba and each subsequent plan year1 a copayment amount that does not exceed the copayment amount applied under paragraph 7#a77;,d77ii7 for the drug and year involved4 2 and 7,b7 in subparagraph 7,e7-- 7i7 by striking subsection 7c71 the substitution for and inserting subsection 7c7-- 7i7 for plan years before plan year #bjba1 the substitution for 2 7ii7 by striking the period at the end and inserting 2 and2 and 7iii7 by adding at the end the following new clause3 7ii7 for plan year #bjba1 the elimination of any cost-sharing imposed under section #ahfj;,d-#b7;b77#d77;,a74 2 and 7#c7 in paragraph 7#d77;,a77ii71 by inserting 7before #bjba7 after subsequent year4 #djb4 ,dissemination to ,medicare part ,d subsidy eligible individuals of information comparing premiums of certain prescription drug plans ,section #ahfj;,d-#a7;c77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aja7;c77#c77 is amended by adding at the end the following new subparagraph3 7,c7 ,information on premiums for subsidy eligible individuals 7i7 ,in general ,for plan year #bjbb and each subsequent plan year1 the ,secretary shall disseminate to each subsidy eligible individual 7as defined in section #ahfj;,d-#ad7;a77#c77 information under this paragraph comparing premiums that would apply to such individual for prescription drug coverage under ,,lis benchmark plans1 including1 in the case of an individual enrolled in a prescription drug plan under this part1 information that compares the premium that would apply if such individual were to remain enrolled in such plan to premiums that would apply if the individual were to enroll in other ,,lis benchmark plans4 7ii7 ,,lis benchmark plan ,for purposes of clause 7i71 the term ,,lis benchmark plan means1 with respect to an individual1 a prescription drug plan under this part that is offered in the region in which the individual resides and-- 7,i7 that provides for a premium that is not more than the low-income benchmark premium amount 7as defined in section #ahfj;,d-#ad7;b77#b77 for such region2 or 7,,ii7 with respect to which the premium would be waived as de minimis pursuant to section #ahfj;,d-#ad7;a77#e7 for such individual4 4 #djc4 ,providing for intelligent assignment of certain subsidy eligible individuals auto-enrolled under ,medicare prescription drug plans and ,,ma-,,pd plans 7a7 ,in general ,section #ahfj;,d-#a7;b77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aja7;b77#a77 is amended-- 7#a7 in subparagraph 7,c7-- 7,a7 by inserting after ,,pdp region the following3 or through use of an intelligent assignment process that is designed to maximize the access of such individual to necessary prescription drugs while minimizing costs to such individual and to the program under this part to the greatest extent possible4 ,in the case the ,secretary enrolls such individuals through use of an intelligent assignment process1 such process shall take into account the extent to which prescription drugs necessary for the individual are covered in the case of a ,,pdp sponsor of a prescription drug plan that uses a formulary1 the use of prior authorization or other restrictions on access to coverage of such prescription drugs by such a sponsor1 and the overall quality of a prescription drug plan as measured by quality ratings established by the ,secretary2 and 7,b7 by striking ,nothing in the previous sentence and inserting ,nothing in this subparagraph2 and 7#b7 in subparagraph 7,d7-- 7,a7 by inserting after ,,pdp region the following3 or through use of an intelligent assignment process that is designed to maximize the access of such individual to necessary prescription drugs while minimizing costs to such individual and to the program under this part to the greatest extent possible4 ,in the case the ,secretary enrolls such individuals through use of an intelligent assignment process1 such process shall take into account the extent to which prescription drugs necessary for the individual are covered in the case of a ,,pdp sponsor of a prescription drug plan that uses a formulary1 the use of prior authorization or other restrictions on access to coverage of such prescription drugs by such a sponsor1 and the overall quality of a prescription drug plan as measured by quality ratings established by the ,secretary2 and 7,b7 by striking ,nothing in the previous sentence and inserting ,nothing in this subparagraph4 7b7 ,effective date ,the amendments made by subsection 7a7 shall apply with respect to plan years beginning with plan year #bjbb4 #djd4 ,expanding eligibility for low-income subsidies under part ,d of the ,medicare program ,section #ahfj;,d-#ad7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a771 as amended by sections #cja7;d7 and #dja1 is further amended-- 7#a7 in the subsection heading1 by striking individuals and all that follows through line and inserting certain individuals2 7#b7 in paragraph 7#a7-- 7,a7 by striking the paragraph heading and inserting ,individuals with certain low incomes2 and 7,b7 in the matter preceding subparagraph 7,a71 by inserting 7or1 with respect to a plan year beginning on or after ,january #a1 #bjbb1 #aej percent7 after #ace percent2 7#c7 in paragraph 7#b7-- 7,a7 by striking the paragraph heading and inserting ,other low-income individuals2 and 7,b7 in subparagraph 7,a7-- 7i7 by inserting 7or1 with respect to a plan year beginning on or after ,january #a1 #bjbb1 #aej percent7 after #ace percent2 and 7ii7 by inserting 7or1 with respect to a plan year beginning on or after ,january #a1 #bjbb1 #bjj percent7 after #aej percent2 and 7#d7 in paragraph 7#c77;,a77ii71 by inserting 7or1 with respect to a plan year beginning on or after ,january #a1 #bjbb1 #bjj percent7 after #aej percent4 #dje4 ,automatic eligibility of certain low-income territorial residents for premium and cost-sharing subsidies under the ,medicare program2 ,sunset of enhanced allotment program 7a7 ,automatic eligibility of certain low-,income territorial residents for premium and cost-,sharing subsidies under the ,medicare program 7#a7 ,in general ,section #ahfj;,d-#ad7;a77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77#c77 is amended-- 7,a7 in subparagraph 7,b77v7-- 7i7 in subclause 7,i71 by striking and at the end2 7ii7 in subclause 7,,ii71 by striking the period and inserting 2 and2 and 7iii7 by inserting after subclause 7,,ii7 the following new subclause3 7,,iii7 with respect to plan years beginning on or after ,january #a1 #bjba1 shall provide that any part ,d eligible individual who is enrolled for medical assistance under the ,state ,medicaid plan of a territory 7as defined in section #aice7;f77 under title ,,xix 7or a waiver of such a plan7 shall be treated as a subsidy eligible individual described in paragraph 7#a74 2 and 7,b7 in subparagraph 7,f71 by adding at the end the following new sentence3 ,the previous sentence shall not apply with respect to eligibility determinations for premium and cost-sharing subsidies under this section made on or after ,january #a1 #bjba44 7#b7 ,conforming amendment ,section #ahfj;,d-#ca7;j77#b77;,d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ada7;j77#b77;,d77 is amended by adding at the end the following new sentence3 ,the previous sentence shall not apply with respect to amounts made available to a ,state under this paragraph on or after ,january #a1 #bjba44 7b7 ,sunset of enhanced allotment program 7#a7 ,in general ,section #aice7;e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifu-#e7;e77 is amended-- 7,a7 in paragraph 7#a77;,a71 by inserting after such ,state the following3 before ,january #a1 #bjba2 and 7,b7 in paragraph 7#c7-- 7i7 in subparagraph 7,a71 in the matter preceding clause 7i71 by inserting after a year the following3 7before #bjba72 and 7ii7 in subparagraph 7,b77iii71 by striking a subsequent year and inserting each of fiscal years #bjjh through #bjbj4 7#b7 ,territory defined ,section #aice of the ,social ,security ,act 7#db ,u4,s4,c4 #acifu-#e7 is amended by adding at the end the following new subsection3 7f7 ,territory defined ,in this section1 the term territory means ,puerto ,rico1 the ,virgin ,islands1 ,guam1 the ,northern ,mariana ,islands1 and ,american ,samoa4 4 #djf4 ,automatic qualification of certain ,medicaid beneficiaries for premium and cost-sharing subsidies under part ,d of the ,medicare program ,clause 7v7 of section #ahfj;,d-#ad7;a77#c77;,b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77#c77;,b771 as amended by section #dje1 is further amended-- 7#a7 in subclause 7,,ii71 by striking and at the end2 7#b7 in subclause 7,,iii71 by striking the period and inserting 2 and2 and 7#c7 by inserting after subclause 7,,iii7 the following new subclause3 7,,iv7 with respect to plan years beginning on or after ,january #a1 #bjbb1 shall1 notwithstanding the preceding clauses of this subparagraph1 provide that any part ,d eligible individual not described in subclause 7,i71 7,,ii71 or 7,,iii7 who is enrolled1 as of the day before the date on which such individual attains the age of #fe1 for medical assistance under a ,state plan under title ,,xix 7or a waiver of such plan7 pursuant to clause 7i77,,viii7 or 7ii77,,xx7 of section #aijb7;a77#aj77;,a71 and who has income below #bjj percent of the poverty line applicable to a family of the size involved1 shall be treated as a subsidy eligible individual described in paragraph 7#a7 for a limited period of time1 as specified by the ,secretary4 4 #djg4 ,eliminating the resource requirement with respect to subsidy eligible individuals under part ,d of the ,medicare program ,section #ahfj;,d-#ad7;a77#c77;,a77iii7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77#c77;,a77iii77 is amended by inserting in the case of a plan year beginning before ,january #a1 #bjbb1 before meets4 ,v ,drug ,price ,transparency #eja4 ,drug price transparency ,part ,a of title ,,xi of the ,social ,security ,act is amended by adding at the end the following new sections3 #aaej;,c4 ,reporting on drug prices 7a7 ,definitions ,in this section3 7#a7 ,manufacturer ,the term manufacturer means the person-- 7,a7 that holds the application for a drug approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under section #cea of the ,public ,health ,service ,act2 or 7,b7 who is responsible for setting the wholesale acquisition cost for the drug4 7#b7 ,qualifying drug ,the term qualifying drug means any drug that is approved under subsection 7c7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under subsection 7a7 or 7k7 of section #cea of the ,public ,health ,service ,act-- 7,a7 that has a wholesale acquisition cost of #ajj or more1 adjusted for inflation occurring after the date of enactment of this section1 for a month's supply or a typical course of treatment that lasts less than a month1 and is-- 7i7 subject to section #ejc7;b77#a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act2 and 7ii7 not a preventative vaccine2 and 7,b7 for which1 during the previous calendar year1 at least #a dollar of the total amount of sales were for individuals enrolled under the ,medicare program under title ,,xviii or under a ,state ,medicaid plan under title ,,xix or under a waiver of such plan4 7#c7 ,wholesale acquisition cost ,the term wholesale acquisition cost has the meaning given that term in section #ahdg;,a7c77#f77;,b74 7b7 ,report 7#a7 ,report required ,the manufacturer of a qualifying drug shall submit a report to the ,secretary if1 with respect to the qualifying drug-- 7,a7 there is an increase in the price of the qualifying drug that results in an increase in the wholesale acquisition cost of that drug that is equal to-- 7i7 #aj percent or more within a #ab-month period beginning on or after ,january #a1 #bjai2 or 7ii7 #be percent or more within a #cf-month period beginning on or after ,january #a1 #bjai2 or 7,b7 the estimated price of the qualifying drug or spending per individual or per user of such drug 7as estimated by the ,secretary7 for the applicable year 7or per course of treatment in such applicable year as determined by the ,secretary7 is at least #bf1jjj beginning on or after ,january #a1 #bjba4 7#b7 ,report deadline ,each report described in paragraph 7#a7 shall be submitted to the ,secretary-- 7,a7 in the case of a report with respect to an increase in the price of a qualifying drug that occurs during the period beginning on ,january #a1 #bjai1 and ending on the day that is #fj days after the date of the enactment of this section1 not later than #ij days after such date of enactment2 7,b7 in the case of a report with respect to an increase in the price of a qualifying drug that occurs after the period described in subparagraph 7,a71 not later than #cj days prior to the planned effective date of such price increase for such qualifying drug2 and 7,c7 in the case of a report with respect to a qualifying drug that meets the criteria under paragraph 7#a77;,b71 not later than #cj days after such drug meets such criteria4 7c7 ,contents ,a report under subsection 7b71 consistent with the standard for disclosures described in section #bac4c7;d7 of title #ab1 ,code of ,federal ,regulations 7as in effect on the date of enactment of this section71 shall1 at a minimum1 include-- 7#a7 with respect to the qualifying drug-- 7,a7 the percentage by which the manufacturer will raise the wholesale acquisition cost of the drug within the #ab-month period or #cf-month period as described in subsection 7b77#a77;,a77i7 or 7b77#a77;,a77ii71 and the effective date of such price increase or the cost associated with a qualifying drug if such drug meets the criteria under subsection 7b77#a77;,b7 and the effective date at which such drug meets such criteria2 7,b7 an explanation for1 and description of1 each price increase for such drug that will occur during the #ab-month period or the #cf-month period described in subsection 7b77#a77;,a77i7 or 7b77#a77;,a77ii71 as applicable2 7,c7 an explanation for1 and description of1 the cost associated with a qualifying drug if such drug meets the criteria under subsection 7b77#a77;,b71 as applicable2 7,d7 if known and different from the manufacturer of the qualifying drug1 the identity of-- 7i7 the sponsor or sponsors of any investigational new drug applications under section #eje7;i7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act for clinical investigations with respect to such drug1 for which the full reports are submitted as part of the application-- 7,i7 for approval of the drug under section #eje of such ,act2 or 7,,ii7 for licensure of the drug under section #cea of the ,pubic ,health ,service ,act2 and 7ii7 the sponsor of an application for the drug approved under such section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under section #cea of the ,public ,health ,service ,act2 7,e7 a description of the history of the manufacturer's price increases for the drug since the approval of the application for the drug under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or the issuance of the license for the drug under section #cea of the ,public ,health ,service ,act1 or since the manufacturer acquired such approved application or license1 if applicable2 7,f7 the current wholesale acquisition cost of the drug2 7,g7 the total expenditures of the manufacturer on-- 7i7 materials and manufacturing for such drug2 7ii7 acquiring patents and licensing for such drug2 and 7iii7 purchasing or acquiring such drug from another manufacturer1 if applicable2 7,h7 the percentage of total expenditures of the manufacturer on research and development for such drug that was derived from ,federal funds2 7,i7 the total expenditures of the manufacturer on research and development for such drug that is necessary to demonstrate that it meets applicable statutory standards for approval under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensure under section #cea of the ,public ,health ,service ,act1 as applicable2 7,j7 the total expenditures of the manufacturer on pursuing new or expanded indications or dosage changes for such drug under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or section #cea of the ,public ,health ,service ,act2 7,k7 the total expenditures of the manufacturer on carrying out postmarket requirements related to such drug1 including under section #eje7o77#c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act2 7,l7 the total revenue and the net profit generated from the qualifying drug for each calendar year since the approval of the application for the drug under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or the issuance of the license for the drug under section #cea of the ,public ,health ,service ,act1 or since the manufacturer acquired such approved application or license2 and 7,m7 the total costs associated with marketing and advertising for the qualifying drug2 7#b7 with respect to the manufacturer-- 7,a7 the total revenue and the net profit of the manufacturer for each of the #ab-month period described in subsection 7b77#a77;,a77i7 or the #cf-month period described in subsection 7b77#a77;,a77ii71 as applicable2 7,b7 all stock-based performance metrics used by the manufacturer to determine executive compensation for each of the #ab-month periods described in subsection 7b77#a77;,a77i7 or the #cf-month periods described in subsection 7b77#a77;,a77ii71 as applicable2 and 7,c7 any additional information the manufacturer chooses to provide related to drug pricing decisions1 such as total expenditures on-- 7i7 drug research and development2 or 7ii7 clinical trials1 including on drugs that failed to receive approval by the ,food and ,drug ,administration2 and 7#c7 such other related information as the ,secretary considers appropriate and as specified by the ,secretary4 7d7 ,information provided ,the manufacturer of a qualifying drug that is required to submit a report under subsection 7b71 shall ensure that such report and any explanation for1 and description of1 each price increase described in subsection 7c77#a7 shall be truthful1 not misleading1 and accurate4 7e7 ,civil monetary penalty ,any manufacturer of a qualifying drug that fails to submit a report for the drug as required by this section1 following notification by the ,secretary to the manufacturer that the manufacturer is not in compliance with this section1 shall be subject to a civil monetary penalty of #ge1jjj for each day on which the violation continues4 7f7 ,false information ,any manufacturer that submits a report for a drug as required by this section that knowingly provides false information in such report is subject to a civil monetary penalty in an amount not to exceed #ajj1jjj for each item of false information4 7g7 ,public posting 7#a7 ,in general ,subject to paragraph 7#d71 the ,secretary shall post each report submitted under subsection 7b7 on the public website of the ,department of ,health and ,human ,services the day the price increase of a qualifying drug is scheduled to go into effect4 7#b7 ,format ,in developing the format in which reports will be publicly posted under paragraph 7#a71 the ,secretary shall consult with stakeholders1 including beneficiary groups1 and shall seek feedback from consumer advocates and readability experts on the format and presentation of the content of such reports to ensure that such reports are-- 7,a7 user-friendly to the public2 and 7,b7 written in plain language that consumers can readily understand4 7#c7 ,list ,in addition to the reports submitted under subsection 7b71 the ,secretary shall also post a list of each qualifying drug with respect to which the manufacturer was required to submit such a report in the preceding year and whether such manufacturer was required to submit such report based on a qualifying price increase or whether such drug meets the criteria under subsection 7b77#a77;,b74 7#d7 ,protected information ,in carrying out this section1 the ,secretary shall enforce applicable law concerning the protection of confidential commercial information and trade secrets4 #aaej;,d4 ,annual report to ,congress 7a7 ,in ,general ,subject to subsection 7b71 the ,secretary shall submit to the ,committees on ,energy and ,commerce and ,ways and ,means of the ,house of ,representatives and the ,committees on ,health1 ,education1 ,labor1 and ,pensions and ,finance of the ,senate1 and post on the public website of the ,department of ,health and ,human ,services in a way that is user-friendly to the public and written in plain language that consumers can readily understand1 an annual report-- 7#a7 summarizing the information reported pursuant to section #aaej;,c2 7#b7 including copies of the reports and supporting detailed economic analyses submitted pursuant to such section2 7#c7 detailing the costs and expenditures incurred by the ,department of ,health and ,human ,services in carrying out section #aaej;,c2 and 7#d7 explaining how the ,department of ,health and ,human ,services is improving consumer and provider information about drug value and drug price transparency4 7b7 ,protected information ,in carrying out this section1 the ,secretary shall enforce applicable law concerning the protection of confidential commercial information and trade secrets4 4 ,,vi ,miscellaneous #fja4 ,temporary increase in ,medicare part ,b payment for certain biosimilar biological products ,section #ahdg;,a7b77#h7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7b77#h77 is amended-- 7#a7 by redesignating subparagraphs 7,a7 and 7,b7 as clauses 7i7 and 7ii71 respectively1 and moving the margin of each such redesignated clause #b ems to the right2 7#b7 by striking product4--,the amount and inserting the following3 8product4-- 7,a7 ,in general ,subject to subparagraph 7,b71 the amount 2 and 7#c7 by adding at the end the following new subparagraph3 7,b7 ,temporary payment increase 7i7 ,in general ,in the case of a qualifying biosimilar biological product that is furnished during the applicable #e-year period for such product1 the amount specified in this paragraph for such product with respect to such period is the sum determined under subparagraph 7,a71 except that clause 7ii7 of such subparagraph shall be applied by substituting #h percent for #f percent4 7ii7 ,applicable #e-year period ,for purposes of clause 7i71 the applicable #e-year period for a biosimilar biological product is-- 7,i7 in the case of such a product for which payment was made under this paragraph as of ,december #ca1 #bjai1 the #e-year period beginning on ,january #a1 #bjbj2 and 7,,ii7 in the case of such a product for which payment is first made under this paragraph during a calendar quarter during the period beginning ,january #a1 #bjbj1 and ending ,december #ca1 #bjbd1 the #e-year period beginning on the first day of such calendar quarter during which such payment is first made4 7iii7 ,qualifying biosimilar biological product defined ,for purposes of this subparagraph1 the term qualifying biosimilar biological product means a biosimilar biological product described in paragraph 7#a77;,c7 with respect to which-- 7,i7 in the case of a product described in clause 7ii77,i71 the average sales price is not more than the average sales price for the reference biological product2 and 7,,ii7 in the case of a product described in clause 7ii77,,ii71 the wholesale acquisition cost is not more than the wholesale acquisition cost for the reference biological product4 4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,elijah ,e4 ,cummings ,lower ,drug ,costs ,now ,act4 7b7 ,table of contents ,the table of contents is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,title ,i--,lowering ,prices ,through ,fair ,drug ,price ,negotiation ,sec4 #aja4 ,providing for lower prices for certain high-priced single source drugs4 ,sec4 #ajb4 ,selected drug manufacturer excise tax imposed during noncompliance periods4 ,title ,,ii--,medicare ,parts ,b and ,d ,prescription ,drug ,inflation ,rebates ,sec4 #bja4 ,medicare part ,b rebate by manufacturers4 ,sec4 #bjb4 ,medicare part ,d rebate by manufacturers4 ,title ,,iii--,part ,d ,improvements and ,maximum ,out-of-,pocket ,cap for ,medicare ,beneficiaries ,sec4 #cja4 ,medicare part ,d benefit redesign4 ,sec4 #cjb4 ,allowing certain enrollees of prescription drugs plans and ,,ma-,,pd plans under ,medicare program to spread out cost-sharing under certain circumstances4 ,sec4 #cjc4 ,establishment of pharmacy quality measures under ,medicare part ,d4 ,title ,,iv--,prescription ,drug ,policies for ,low-,income ,individuals ,sec4 #dja4 ,adjustments to ,medicare part ,d cost-sharing reductions for low-income individuals4 ,sec4 #djb4 ,dissemination to ,medicare part ,d subsidy eligible individuals of information comparing premiums of certain prescription drug plans4 ,sec4 #djc4 ,providing for intelligent assignment of certain subsidy eligible individuals auto-enrolled under ,medicare prescription drug plans and ,,ma-,,pd plans4 ,sec4 #djd4 ,expanding eligibility for low-income subsidies under part ,d of the ,medicare program4 ,sec4 #dje4 ,automatic eligibility of certain low-income territorial residents for premium and cost-sharing subsidies under the ,medicare program2 ,sunset of enhanced allotment program4 ,sec4 #djf4 ,automatic qualification of certain ,medicaid beneficiaries for premium and cost-sharing subsidies under part ,d of the ,medicare program4 ,sec4 #djg4 ,eliminating the resource requirement with respect to subsidy eligible individuals under part ,d of the ,medicare program4 ,sec4 #djh4 ,providing for certain rules regarding the treatment of eligible retirement plans in determining the eligibility of individuals for premium and cost-sharing subsidies under part ,d of the ,medicare program4 ,title ,v--,drug ,price ,transparency ,sec4 #eja4 ,drug price transparency4 ,i ,lowering ,prices ,through ,fair ,drug ,price ,negotiation #aja4 ,providing for lower prices for certain high-priced single source drugs 7a7 ,program ,to lower prices for certain high-,priced single source drugs ,title ,,xi of the ,social ,security ,act 7#db ,u4,s4,c4 #acja et seq47 is amended by adding at the end the following new part3 ,e ,fair ,price ,negotiation ,program to ,lower ,prices for ,certain ,high-,priced ,single ,source ,drugs #aaia4 ,establishment of program 7a7 ,in general ,the ,secretary shall establish a ,fair ,price ,negotiation ,program 7in this part referred to as the program74 ,under the program1 with respect to each price applicability period1 the ,secretary shall-- 7#a7 publish a list of selected drugs in accordance with section #aaib2 7#b7 enter into agreements with manufacturers of selected drugs with respect to such period1 in accordance with section #aaic2 7#c7 negotiate and1 if applicable1 renegotiate maximum fair prices for such selected drugs1 in accordance with section #aaid2 and 7#d7 carry out the administrative duties described in section #aaif4 7b7 ,definitions relating to timing ,for purposes of this part3 7#a7 ,initial price applicability year ,the term initial price applicability year means a plan year 7beginning with plan year #bjbc7 or1 if agreed to in an agreement under section #aaic by the ,secretary and manufacturer involved1 a period of more than one plan year 7beginning on or after ,january #a1 #bjbc74 7#b7 ,price applicability period ,the term price applicability period means1 with respect to a drug1 the period beginning with the initial price applicability year with respect to which such drug is a selected drug and ending with the last plan year during which the drug is a selected drug4 7#c7 ,selected drug publication date ,the term selected drug publication date means1 with respect to each initial price applicability year1 ,april #ae of the plan year that begins #b years prior to such year4 7#d7 ,voluntary negotiation period ,the term voluntary negotiation period means1 with respect to an initial price applicability year with respect to a selected drug1 the period-- 7,a7 beginning on the sooner of-- 7i7 the date on which the manufacturer of the drug and the ,secretary enter into an agreement under section #aaic with respect to such drug2 or 7ii7 ,june #ae following the selected drug publication date with respect to such selected drug2 and 7,b7 ending on ,march #ca of the year that begins one year prior to the initial price applicability year4 7c7 ,other definitions ,for purposes of this part3 7#a7 ,fair price eligible individual ,the term fair price eligible individual means1 with respect to a selected drug-- 7,a7 in the case such drug is furnished or dispensed to the individual at a pharmacy or by a mail order service-- 7i7 an individual who is enrolled under a prescription drug plan under part ,d of title ,,xviii or an ,,ma-,,pd plan under part ,c of such title under which coverage is provided for such drug2 and 7ii7 an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market 7as such terms are defined in section #bgia of the ,public ,health ,service ,act7 with respect to which there is in effect an agreement with the ,secretary under section #aaig with respect to such selected drug as so furnished or dispensed2 and 7,b7 in the case such drug is furnished or administered to the individual by a hospital1 physician1 or other provider of services or supplier-- 7i7 an individual who is entitled to benefits under part ,a of title ,,xviii or enrolled under part ,b of such title if such selected drug is covered under the respective part2 and 7ii7 an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market 7as such terms are defined in section #bgia of the ,public ,health ,service ,act7 with respect to which there is in effect an agreement with the ,secretary under section #aaig with respect to such selected drug as so furnished or administered4 7#b7 ,maximum fair price ,the term maximum fair price means1 with respect to a plan year during a price applicability period and with respect to a selected drug 7as defined in section #aaib7;c77 with respect to such period1 the price published pursuant to section #aaie in the ,federal ,register for such drug and year4 7#c7 ,average international market price defined 7,a7 ,in general ,the terms average international market price and ,,aim price mean1 with respect to a drug1 the average price 7which shall be the net average price1 if practicable1 and volume-weighted1 if practicable7 for a unit 7as defined in paragraph 7#d77 of the drug for sales of such drug 7calculated across different dosage forms and strengths of the drug and not based on the specific formulation or package size or package type71 as computed 7as of the date of publication of such drug as a selected drug under section #aaib7;a77 in all countries described in clause 7ii7 of subparagraph 7,b7 that are applicable countries 7as described in clause 7i7 of such subparagraph7 with respect to such drug4 7,b7 ,applicable countries 7i7 ,in general ,for purposes of subparagraph 7,a71 a country described in clause 7ii7 is an applicable country described in this clause with respect to a drug if there is available an average price for any unit for the drug for sales of such drug in such country4 7ii7 ,countries described ,for purposes of this paragraph1 the following are countries described in this clause3 7,i7 ,australia4 7,,ii7 ,canada4 7,,iii7 ,france4 7,,iv7 ,germany4 7,v7 ,japan4 7,,vi7 ,the ,united ,kingdom4 7#d7 ,unit ,the term unit means1 with respect to a drug1 the lowest identifiable quantity 7such as a capsule or tablet1 milligram of molecules1 or grams7 of the drug that is dispensed4 #aaib4 ,selection of negotiation-eligible drugs as selected drugs 7a7 ,in general ,not later than the selected drug publication date with respect to an initial price applicability year1 the ,secretary shall select and publish in the ,federal ,register a list of-- 7#a7 7,a7 with respect to an initial price applicability year during the period beginning with #bjbc and ending with #bjbg1 at least #be negotiation-eligible drugs described in subparagraphs 7,a7 and 7,b71 but not subparagraph 7,c71 of subsection 7d77#a7 7or1 with respect to an initial price applicability year during such period beginning after #bjbc1 the maximum number 7if such number is less than #be7 of such negotiation-eligible drugs for the year7 with respect to such year2 7,b7 with respect to an initial price applicability year during the period beginning with #bjbh and ending with #bjcb1 at least #cj negotiation-eligible drugs described in subparagraphs 7,a7 and 7,b71 but not subparagraph 7,c71 of subsection 7d77#a7 7or1 with respect to an initial price applicability year during such period1 the maximum number 7if such number is less than #cj7 of such negotiation-eligible drugs for the year7 with respect to such year2 and 7,c7 with respect to an initial price applicability year beginning after #bjcb1 at least #ce negotiation-eligible drugs described in subparagraphs 7,a7 and 7,b71 but not subparagraph 7,c71 of subsection 7d77#a7 7or1 with respect to an initial price applicability year during such period1 the maximum number 7if such number is less than #ce7 of such negotiation-eligible drugs for the year7 with respect to such year2 7#b7 all negotiation-eligible drugs described in subparagraph 7,c7 of such subsection with respect to such year2 and 7#c7 all new-entrant negotiation-eligible drugs 7as defined in subsection 7g77#a77 with respect to such year4 ,each drug published on the list pursuant to the previous sentence shall be subject to the negotiation process under section #aaid for the voluntary negotiation period with respect to such initial price applicability year 7and the renegotiation process under such section as applicable for any subsequent year during the applicable price applicability period74 ,in applying this subsection1 any negotiation-eligible drug that is selected under this subsection for an initial price applicability year shall not count toward the required minimum amount of drugs to be selected under paragraph 7#a7 for any subsequent year1 including such a drug so selected that is subject to renegotiation under section #aaid4 7b7 ,selection of drugs ,in carrying out subsection 7a77#a7 the ,secretary shall select for inclusion on the published list described in subsection 7a7 with respect to a price applicability period1 the negotiation-eligible drugs that the ,secretary projects will result in the greatest savings to the ,federal ,government or fair price eligible individuals during the price applicability period4 ,in making this projection of savings for drugs for which there is an ,,aim price for a price applicability period1 the savings shall be projected across different dosage forms and strengths of the drugs and not based on the specific formulation or package size or package type of the drugs1 taking into consideration both the volume of drugs for which payment is made1 to the extent such data is available1 and the amount by which the net price for the drugs exceeds the ,,aim price for the drugs4 7c7 ,selected drug ,for purposes of this part1 each drug included on the list published under subsection 7a7 with respect to an initial price applicability year shall be referred to as a selected drug with respect to such year and each subsequent plan year beginning before the first plan year beginning after the date on which the ,secretary determines two or more drug products-- 7#a7 are approved or licensed 7as applicable7-- 7,a7 under section #eje7;j7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act using such drug as the listed drug2 or 7,b7 under section #cea7k7 of the ,public ,health ,service ,act using such drug as the reference product2 and 7#b7 continue to be marketed4 7d7 ,negotiation-,eligible drug 7#a7 ,in general ,for purposes of this part1 the term negotiation-eligible drug means1 with respect to the selected drug publication date with respect to an initial price applicability year1 a qualifying single source drug1 as defined in subsection 7e71 that meets any of the following criteria3 7,a7 ,covered part ,d drugs ,the drug is among the #abe covered part ,d drugs 7as defined in section #ahfj;,d-#b7;e77 for which there was an estimated greatest net spending under parts ,c and ,d of title ,,xviii1 as determined by the ,secretary1 during the most recent plan year prior to such drug publication date for which data are available4 7,b7 ,other drugs ,the drug is among the #abe drugs for which there was an estimated greatest net spending in the ,united ,states 7including the #ej ,states1 the ,district of ,columbia1 and the territories of the ,united ,states71 as determined by the ,secretary1 during the most recent plan year prior to such drug publication date for which data are available4 7,c7 ,insulin ,the drug is a qualifying single source drug described in subsection 7e77#c74 7#b7 ,clarification ,in determining whether a qualifying single source drug satisfies any of the criteria described in paragraph 7#a71 the ,secretary shall1 to the extent practicable1 use data that is aggregated across dosage forms and strengths of the drug and not based on the specific formulation or package size or package type of the drug4 7#c7 ,publication ,not later than the selected drug publication date with respect to an initial price applicability year1 the ,secretary shall publish in the ,federal ,register a list of negotiation-eligible drugs with respect to such selected drug publication date4 7e7 ,qualifying single source drug ,for purposes of this part1 the term qualifying single source drug means any of the following3 7#a7 ,drug products ,a drug that-- 7,a7 is approved under section #eje7;c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act and continues to be marketed pursuant to such approval2 and 7,b7 is not the listed drug for any drug that is approved and continues to be marketed under section #eje7;j7 of such ,act4 7#b7 ,biological products ,a biological product that-- 7,a7 is licensed under section #cea7;a7 of the ,public ,health ,service ,act1 including any product that has been deemed to be licensed under section #cea of such ,act pursuant to section #gjjb7;e77#d7 of the ,biologics ,price ,competition and ,innovation ,act of #bjji1 and continues to be marketed under section #cea of such ,act2 and 7,b7 is not the reference product for any biological product that is licensed and continues to be marketed under section #cea7k7 of such ,act4 7#c7 ,insulin product ,notwithstanding paragraphs 7#a7 and 7#b71 any insulin product that is approved under subsection 7c7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under subsection 7a7 or 7k7 of section #cea of the ,public ,health ,service ,act and continues to be marketed under such section #eje or #cea1 including any insulin product that has been deemed to be licensed under section #cea7;a7 of the ,public ,health ,service ,act pursuant to section #gjjb7;e77#d7 of the ,biologics ,price ,competition and ,innovation ,act of #bjji and continues to be marketed pursuant to such licensure4 ,for purposes of applying paragraphs 7#a7 and 7#b71 a drug or biological product that is marketed by the same sponsor or manufacturer 7or an affiliate thereof or a cross-licensed producer or distributor7 as the listed drug or reference product described in such respective paragraph shall not be taken into consideration4 7f7 ,information on international drug prices ,for purposes of determining which negotiation-eligible drugs to select under subsection 7a7 and1 in the case of such drugs that are selected drugs1 to determine the maximum fair price for such a drug and whether such maximum fair price should be renegotiated under section #aaid1 the ,secretary shall use data relating to the ,,aim price with respect to such drug as available or provided to the ,secretary and shall on an ongoing basis request from manufacturers of selected drugs information on the ,,aim price of such a drug4 7g7 ,new-entrant negotiation-eligible drugs 7#a7 ,in general ,for purposes of this part1 the term new-entrant negotiation-eligible drug means1 with respect to the selected drug publication date with respect to an initial price applicability year1 a qualifying single source drug-- 7,a7 that is first approved or licensed1 as described in paragraph 7#a71 7#b71 or 7#c7 of subsection 7e71 as applicable1 during the year preceding such selected drug publication date2 and 7,b7 that the ,secretary determines under paragraph 7#b7 is likely to be included as a negotiation-eligible drug with respect to the subsequent selected drug publication date4 7#b7 ,determination ,in the case of a qualifying single source drug that meets the criteria described in subparagraph 7,a7 of paragraph 7#a71 with respect to an initial price applicability year1 if the wholesale acquisition cost at which such drug is first marketed in the ,united ,states is equal to or greater than the median household income 7as determined according to the most recent data collected by the ,united ,states ,census ,bureau71 the ,secretary shall determine before the selected drug publication date with respect to the initial price applicability year1 if the drug is likely to be included as a negotiation-eligible drug with respect to the subsequent selected drug publication date1 based on the projected spending under title ,,xviii or in the ,united ,states on such drug4 ,for purposes of this paragraph the term ,united ,states includes the #ej ,states1 the ,district of ,columbia1 and the territories of the ,united ,states4 #aaic4 ,manufacturer agreements 7a7 ,in general ,for purposes of section #aaia7;a77#b71 the ,secretary shall enter into agreements with manufacturers of selected drugs with respect to a price applicability period1 by not later than ,june #ae following the selected drug publication date with respect to such selected drug1 under which-- 7#a7 during the voluntary negotiation period for the initial price applicability year for the selected drug1 the ,secretary and manufacturer1 in accordance with section #aaid1 negotiate to determine 7and1 by not later than the last date of such period and in accordance with subsection 7c71 agree to7 a maximum fair price for such selected drug of the manufacturer in order to provide access to such price-- 7,a7 to fair price eligible individuals who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a7 and are furnished or dispensed such drug during1 subject to subparagraph 7#b71 the price applicability period2 and 7,b7 to hospitals1 physicians1 and other providers of services and suppliers with respect to fair price eligible individuals who with respect to such drug are described in subparagraph 7,b7 of such section and are furnished or administered such drug during1 subject to subparagraph 7#b71 the price applicability period2 7#b7 the ,secretary and the manufacturer shall1 in accordance with a process and during a period specified by the ,secretary pursuant to rulemaking1 renegotiate 7and1 by not later than the last date of such period and in accordance with subsection 7c71 agree to7 the maximum fair price for such drug if the ,secretary determines that there is a material change in any of the factors described in section #aaid7;d7 relating to the drug1 including changes in the ,,aim price for such drug1 in order to provide access to such maximum fair price 7as so renegotiated7-- 7,a7 to fair price eligible individuals who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a7 and are furnished or dispensed such drug during any year during the price applicability period 7beginning after such renegotiation7 with respect to such selected drug2 and 7,b7 to hospitals1 physicians1 and other providers of services and suppliers with respect to fair price eligible individuals who with respect to such drug are described in subparagraph 7,b7 of such section and are furnished or administered such drug during any year described in subparagraph 7,a72 7#c7 the maximum fair price 7including as renegotiated pursuant to paragraph 7#b771 with respect to such a selected drug1 shall be provided to fair price eligible individuals1 who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a71 at the pharmacy or by a mail order service at the point-of-sale of such drug2 7#d7 the manufacturer1 subject to subsection 7d71 submits to the ,secretary1 in a form and manner specified by the ,secretary-- 7,a7 for the voluntary negotiation period for the price applicability period 7and1 if applicable1 before any period of renegotiation specified pursuant to paragraph 7#b77 with respect to such drug all information that the ,secretary requires to carry out the negotiation 7or renegotiation process7 under this part1 including information described in section #aaib7;f7 and section #aaid7;d77#a72 and 7,b7 on an ongoing basis1 information on changes in prices for such drug that would affect the ,,aim price for such drug or otherwise provide a basis for renegotiation of the maximum fair price for such drug pursuant to paragraph 7#b72 7#e7 the manufacturer agrees that in the case the selected drug of a manufacturer is a drug described in subsection 7c71 the manufacturer will1 in accordance with such subsection1 make any payment required under such subsection with respect to such drug2 and 7#f7 the manufacturer complies with requirements imposed by the ,secretary for purposes of administering the program1 including with respect to the duties described in section #aaif4 7b7 ,agreement in effect until drug is no longer a selected drug ,an agreement entered into under this section shall be effective1 with respect to a drug1 until such drug is no longer considered a selected drug under section #aaib7;c74 7c7 ,special rule for certain selected drugs without ,,aim price 7#a7 ,in general ,in the case of a selected drug for which there is no ,,aim price available with respect to the initial price applicability year for such drug and for which an ,,aim price becomes available beginning with respect to a subsequent plan year during the price applicability period for such drug1 if the ,secretary determines that the amount described in paragraph 7#b77;,a7 for a unit of such drug is greater than the amount described in paragraph 7#b77;,b7 for a unit of such drug1 then by not later than one year after the date of such determination1 the manufacturer of such selected drug shall pay to the ,treasury an amount equal to the product of-- 7,a7 the difference between such amount described in paragraph 7#b77;,a7 for a unit of such drug and such amount described in paragraph 7#b77;,b7 for a unit of such drug2 and 7,b7 the number of units of such drug sold in the ,united ,states1 including the #ej ,states1 the ,district of ,columbia1 and the territories of the ,united ,states1 during the period described in paragraph 7#b77;,b74 7#b7 ,amounts described 7,a7 ,weighted average price before ,,aim price available ,for purposes of paragraph 7#a71 the amount described in this subparagraph for a selected drug described in such paragraph1 is the amount equal to the weighted average manufacturer price 7as defined in section #aibg7k77#a77 for such dosage strength and form for the drug during the period beginning with the first plan year for which the drug is included on the list of negotiation-eligible drugs published under section #aaib7;d7 and ending with the last plan year during the price applicability period for such drug with respect to which there is no ,,aim price available for such drug4 7,b7 ,amount multiplier after ,,aim price available ,for purposes of paragraph 7#a71 the amount described in this subparagraph for a selected drug described in such paragraph1 is the amount equal to #bjj percent of the ,,aim price for such drug with respect to the first plan year during the price applicability period for such drug with respect to which there is an ,,aim price available for such drug4 7d7 ,confidentiality of information ,information submitted to the ,secretary under this part by a manufacturer of a selected drug that is proprietary information of such manufacturer 7as determined by the ,secretary7 may be used only by the ,secretary or disclosed to and used by the ,comptroller ,general of the ,united ,states or the ,medicare ,payment ,advisory ,commission for purposes of carrying out this part4 7e7 ,regulations 7#a7 ,in general ,the ,secretary shall1 pursuant to rulemaking1 specify1 in accordance with paragraph 7#b71 the information that must be submitted under subsection 7a77#d74 7#b7 ,information specified ,information described in paragraph 7#a71 with respect to a selected drug1 shall include information on sales of the drug 7by the manufacturer of the drug or by another entity under license or other agreement with the manufacturer1 with respect to the sales of such drug1 regardless of the name under which the drug is sold7 in any foreign country that is part of the ,,aim price4 ,the ,secretary shall verify1 to the extent practicable1 such sales from appropriate officials of the government of the foreign country involved4 7f7 ,compliance with requirements for administration of program ,each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the ,secretary or a third party with a contract under section #aaif7;c77#a71 as applicable1 for purposes of administering the program4 #aaid4 ,negotiation and renegotiation process 7a7 ,in general ,for purposes of this part1 under an agreement under section #aaic between the ,secretary and a manufacturer of a selected drug1 with respect to the period for which such agreement is in effect and in accordance with subsections 7b7 and 7c71 the ,secretary and the manufacturer-- 7#a7 shall during the voluntary negotiation period with respect to the initial price applicability year for such drug1 in accordance with this section1 negotiate a maximum fair price for such drug for the purpose described in section #aaic7;a77#a72 and 7#b7 as applicable pursuant to section #aaic7;a77#b7 and in accordance with the process specified pursuant to such section1 renegotiate such maximum fair price for such drug for the purpose described in such section4 7b7 ,negotiating methodology and objective 7#a7 ,in general ,the ,secretary shall develop and use a consistent methodology for negotiations under subsection 7a7 that1 in accordance with paragraph 7#b7 and subject to paragraph 7#c71 achieves the lowest maximum fair price for each selected drug while appropriately rewarding innovation4 7#b7 ,prioritizing factors ,in considering the factors described in subsection 7d7 in negotiating 7and1 as applicable1 renegotiating7 the maximum fair price for a selected drug1 the ,secretary shall1 to the extent practicable1 consider all of the available factors listed but shall prioritize the following factors3 7,a7 ,research and development costs ,the factor described in paragraph 7#a77;,a7 of subsection 7d74 7,b7 ,market data ,the factor described in paragraph 7#a77;,b7 of such subsection4 7,c7 ,unit costs of production and distribution ,the factor described in paragraph 7#a77;,c7 of such subsection4 7,d7 ,comparison to existing therapeutic alternatives ,the factor described in paragraph 7#b77;,a7 of such subsection4 7#c7 ,requirement 7,a7 ,in general ,in negotiating the maximum fair price of a selected drug1 with respect to an initial price applicability year for the selected drug1 and1 as applicable1 in renegotiating the maximum fair price for such drug1 with respect to a subsequent year during the price applicability period for such drug1 in the case that the manufacturer of the selected drug offers under the negotiation or renegotiation1 as applicable1 a price for such drug that is not more than the target price described in subparagraph 7,b7 for such drug for the respective year1 the ,secretary shall agree under such negotiation or renegotiation1 respectively1 to such offered price as the maximum fair price4 7,b7 ,target price 7i7 ,in general ,subject to clause 7ii71 the target price described in this subparagraph for a selected drug with respect to a year1 is the average price 7which shall be the net average price1 if practicable1 and volume-weighted1 if practicable7 for a unit of such drug for sales of such drug1 as computed 7across different dosage forms and strengths of the drug and not based on the specific formulation or package size or package type of the drug7 in the applicable country described in section #aaia7;c77#c77;,b7 with respect to such drug that1 with respect to such year1 has the lowest average price for such drug as compared to the average prices 7as so computed7 of such drug with respect to such year in the other applicable countries described in such section with respect to such drug4 7ii7 ,selected drugs without ,,aim price ,in applying this paragraph in the case of negotiating the maximum fair price of a selected drug for which there is no ,,aim price available with respect to the initial price applicability year for such drug1 or1 as applicable1 renegotiating the maximum fair price for such drug with respect to a subsequent year during the price applicability period for such drug before the first plan year for which there is an ,,aim price available for such drug1 the target price described in this subparagraph for such drug and respective year is the amount that is #hj percent of the average manufacturer price 7as defined in section #aibg7k77#a77 for such drug and year4 7#d7 ,annual report ,after the completion of each voluntary negotiation period1 the ,secretary shall submit to ,congress a report on the maximum fair prices negotiated 7or1 as applicable1 renegotiated7 for such period4 ,such report shall include information on how such prices so negotiated 7or renegotiated7 meet the requirements of this part1 including the requirements of this subsection4 7c7 ,limitation 7#a7 ,in general ,subject to paragraph 7#b71 the maximum fair price negotiated 7including as renegotiated7 under this section for a selected drug1 with respect to each plan year during a price applicability period for such drug1 shall not exceed #abj percent of the ,,aim price applicable to such drug with respect to such year4 7#b7 ,selected drugs without ,,aim price ,in the case of a selected drug for which there is no ,,aim price available with respect to the initial price applicability year for such drug1 for each plan year during the price applicability period before the first plan year for which there is an ,,aim price available for such drug1 the maximum fair price negotiated 7including as renegotiated7 under this section for the selected drug shall not exceed the amount equal to #he percent of the average manufacturer price for the drug with respect to such year4 7d7 ,considerations ,for purposes of negotiating and1 as applicable1 renegotiating 7including for purposes of determining whether to renegotiate7 the maximum fair price of a selected drug under this part with the manufacturer of the drug1 the ,secretary shall1 consistent with subsection 7b77#b71 take into consideration the following factors3 7#a7 ,manufacturer-specific information ,the following information1 including as submitted by the manufacturer3 7,a7 ,research and development costs of the manufacturer for the drug and the extent to which the manufacturer has recouped research and development costs4 7,b7 ,market data for the drug1 including the distribution of sales across different programs and purchasers and projected future revenues for the drug4 7,c7 ,unit costs of production and distribution of the drug4 7,d7 ,prior ,federal financial support for novel therapeutic discovery and development with respect to the drug4 7,e7 ,data on patents and on existing and pending exclusivity for the drug4 7,f7 ,national sales data for the drug4 7,g7 ,information on clinical trials for the drug in the ,united ,states or in applicable countries described in section #aaia7;c77#c77;,b74 7#b7 ,information on alternative products ,the following information3 7,a7 ,the extent to which the drug represents a therapeutic advance as compared to existing therapeutic alternatives and1 to the extent such information is available1 the costs of such existing therapeutic alternatives4 7,b7 ,information on approval by the ,food and ,drug ,administration of alternative drug products4 7,c7 ,information on comparative effectiveness analysis for such products1 taking into consideration the effects of such products on specific populations1 such as individuals with disabilities1 the elderly1 terminally ill1 children1 and other patient populations4 ,in considering information described in subparagraph 7,c71 the ,secretary shall not use evidence or findings from comparative clinical effectiveness research in a manner that treats extending the life of an elderly1 disabled1 or terminally ill individual as of lower value than extending the life of an individual who is younger1 nondisabled1 or not terminally ill4 ,nothing in the previous sentence shall affect the application or consideration of an ,,aim price for a selected drug4 7#c7 ,foreign sales information ,to the extent available on a timely basis1 including as provided by a manufacturer of the selected drug or otherwise1 information on sales of the selected drug in each of the countries described in section #aaia7;c77#c77;,b74 7#d7 ,additional information ,information submitted to the ,secretary1 in accordance with a process specified by the ,secretary1 by other parties that are affected by the establishment of a maximum fair price for the selected drug4 7e7 ,request for information ,for purposes of negotiating and1 as applicable1 renegotiating 7including for purposes of determining whether to renegotiate7 the maximum fair price of a selected drug under this part with the manufacturer of the drug1 with respect to a price applicability period1 and other relevant data for purposes of this section-- 7#a7 the ,secretary shall1 not later than the selected drug publication date with respect to the initial price applicability year of such period1 request drug pricing information from the manufacturer of such selected drug1 including information described in subsection 7d77#a72 and 7#b7 by not later than ,october #a following the selected drug publication date1 the manufacturer of such selected drug shall submit to the ,secretary such requested information in such form and manner as the ,secretary may require4 ,the ,secretary shall request1 from the manufacturer or others1 such additional information as may be needed to carry out the negotiation and renegotiation process under this section4 #aaie4 ,publication of maximum fair prices 7a7 ,in general ,with respect to an initial price applicability year and selected drug with respect to such year1 not later than ,april #a of the plan year prior to such initial price applicability year1 the ,secretary shall publish in the ,federal ,register the maximum fair price for such drug negotiated under this part with the manufacturer of such drug4 7b7 ,updates 7#a7 ,subsequent year maximum fair prices ,for a selected drug1 for each plan year subsequent to the initial price applicability year for such drug with respect to which an agreement for such drug is in effect under section #aaic1 the ,secretary shall publish in the ,federal ,register-- 7,a7 subject to subparagraph 7,b71 the amount equal to the maximum fair price published for such drug for the previous year1 increased by the annual percentage increase in the consumer price index for all urban consumers 7all items2 ,u4,s4 city average7 as of ,september of such previous year2 or 7,b7 in the case the maximum fair price for such drug was renegotiated1 for the first year for which such price as so renegotiated applies1 such renegotiated maximum fair price4 7#b7 ,prices negotiated after deadline ,in the case of a selected drug with respect to an initial price applicability year for which the maximum fair price is determined under this part after the date of publication under this section1 the ,secretary shall publish such maximum fair price in the ,federal ,register by not later than #cj days after the date such maximum price is so determined4 #aaif4 ,administrative duties2 coordination provisions 7a7 ,administrative duties 7#a7 ,in general ,for purposes of section #aaia1 the administrative duties described in this section are the following3 7,a7 ,the establishment of procedures 7including through agreements with manufacturers under this part1 contracts with prescription drug plans under part ,d of title ,,xviii and ,,ma-,,pd plans under part ,c of such title1 and agreements under section #aaig with group health plans and health insurance issuers of health insurance coverage offered in the individual or group market7 under which the maximum fair price for a selected drug is provided to fair price eligible individuals1 who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a71 at pharmacies or by mail order service at the point-of-sale of the drug for the applicable price period for such drug and providing that such maximum fair price is used for determining cost-sharing under such plans or coverage for the selected drug4 7,b7 ,the establishment of procedures 7including through agreements with manufacturers under this part and contracts with hospitals1 physicians1 and other providers of services and suppliers and agreements under section #aaig with group health plans and health insurance issuers of health insurance coverage offered in the individual or group market7 under which1 in the case of a selected drug furnished or administered by such a hospital1 physician1 or other provider of services or supplier to fair price eligible individuals 7who with respect to such drug are described in subparagraph 7,b7 of section #aaia7;c77#a771 the maximum fair price for the selected drug is provided to such hospitals1 physicians1 and other providers of services and suppliers 7as applicable7 with respect to such individuals and providing that such maximum fair price is used for determining cost-sharing under the respective part1 plan1 or coverage for the selected drug4 7,c7 ,the establishment of procedures 7including through agreements and contracts described in subparagraphs 7,a7 and 7,b77 to ensure that1 not later than #ij days after the dispensing of a selected drug to a fair price eligible individual by a pharmacy or mail order service1 the pharmacy or mail order service is reimbursed for an amount equal to the difference between-- 7i7 the lesser of-- 7,i7 the wholesale acquisition cost of the drug2 7,,ii7 the national average drug acquisition cost of the drug2 and 7,,iii7 any other similar determination of pharmacy acquisition costs of the drug1 as determined by the ,secretary2 and 7ii7 the maximum fair price for the drug4 7,d7 ,the establishment of procedures to ensure that the maximum fair price for a selected drug is applied before-- 7i7 any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of fair price eligible individuals as the ,secretary may specify2 and 7ii7 any other discounts4 7,e7 ,the establishment of procedures to enter into appropriate agreements and protocols for the ongoing computation of ,,aim prices for selected drugs1 including1 to the extent possible1 to compute the ,,aim price for selected drugs and including by providing that the manufacturer of such a selected drug should provide information for such computation not later than #c months after the first date of the voluntary negotiation period for such selected drug4 7,f7 ,the establishment of procedures to compute and apply the maximum fair price across different strengths and dosage forms of a selected drug and not based on the specific formulation or package size or package type of the drug4 7,g7 ,the establishment of procedures to negotiate and apply the maximum fair price in a manner that does not include any dispensing or similar fee4 7,h7 ,the establishment of procedures to carry out the provisions of this part1 as applicable1 with respect to-- 7i7 fair price eligible individuals who are enrolled under a prescription drug plan under part ,d of title ,,xviii or an ,,ma-,,pd plan under part ,c of such title2 7ii7 fair price eligible individuals who are enrolled under a group health plan or health insurance coverage offered by a health insurance issuer in the individual or group market with respect to which there is an agreement in effect under section #aaig2 and 7iii7 fair price eligible individuals who are entitled to benefits under part ,a of title ,,xviii or enrolled under part ,b of such title4 7,i7 ,the establishment of a negotiation process and renegotiation process in accordance with section #aaid1 including a process for acquiring information described in subsection 7d7 of such section and determining amounts described in subsection 7b7 of such section4 7,j7 ,the provision of a reasonable dispute resolution mechanism to resolve disagreements between manufacturers1 fair price eligible individuals1 and the third party with a contract under subsection 7c77#a74 7#b7 ,monitoring compliance 7,a7 ,in general ,the ,secretary shall monitor compliance by a manufacturer with the terms of an agreement under section #aaic1 including by establishing a mechanism through which violations of such terms may be reported4 7,b7 ,notification ,if a third party with a contract under subsection 7c77#a7 determines that the manufacturer is not in compliance with such agreement1 the third party shall notify the ,secretary of such noncompliance for appropriate enforcement under section #daib of the ,internal ,revenue ,code of #aihf or section #aaih1 as applicable4 7b7 ,collection of data 7#a7 ,from prescription drug plans and ,,ma-,,pd plans ,the ,secretary may collect appropriate data from prescription drug plans under part ,d of title ,,xviii and ,,ma-,,pd plans under part ,c of such title in a timeframe that allows for maximum fair prices to be provided under this part for selected drugs4 7#b7 ,from health plans ,the ,secretary may collect appropriate data from group health plans or health insurance issuers offering group or individual health insurance coverage in a timeframe that allows for maximum fair prices to be provided under this part for selected drugs4 7c7 ,contract with third parties 7#a7 ,in general ,the ,secretary may enter into a contract with #a or more third parties to administer the requirements established by the ,secretary in order to carry out this part4 ,at a minimum1 the contract with a third party under the preceding sentence shall require that the third party-- 7,a7 receive and transmit information between the ,secretary1 manufacturers1 and other individuals or entities the ,secretary determines appropriate2 7,b7 receive1 distribute1 or facilitate the distribution of funds of manufacturers to appropriate individuals or entities in order to meet the obligations of manufacturers under agreements under this part2 7,c7 provide adequate and timely information to manufacturers1 consistent with the agreement with the manufacturer under this part1 as necessary for the manufacturer to fulfill its obligations under this part2 and 7,d7 permit manufacturers to conduct periodic audits1 directly or through contracts1 of the data and information used by the third party to determine discounts for applicable drugs of the manufacturer under the program4 7#b7 ,performance requirements ,the ,secretary shall establish performance requirements for a third party with a contract under paragraph 7#a7 and safeguards to protect the independence and integrity of the activities carried out by the third party under the program under this part4 #aaig4 ,voluntary participation by other health plans 7a7 ,agreement to participate under program 7#a7 ,in general ,subject to paragraph 7#b71 under the program under this part the ,secretary shall be treated as having in effect an agreement with a group health plan or health insurance issuer offering health insurance coverage 7as such terms are defined in section #bgia of the ,public ,health ,service ,act71 with respect to a price applicability period and a selected drug with respect to such period-- 7,a7 with respect to such selected drug furnished or dispensed at a pharmacy or by mail order service if coverage is provided under such plan or coverage during such period for such selected drug as so furnished or dispensed2 and 7,b7 with respect to such selected drug furnished or administered by a hospital1 physician1 or other provider of services or supplier if coverage is provided under such plan or coverage during such period for such selected drug as so furnished or administered4 7#b7 ,opting out of agreement ,the ,secretary shall not be treated as having in effect an agreement under the program under this part with a group health plan or health insurance issuer offering health insurance coverage with respect to a price applicability period and a selected drug with respect to such period if such a plan or issuer affirmatively elects1 through a process specified by the ,secretary1 not to participate under the program with respect to such period and drug4 7b7 ,publication of election ,with respect to each price applicability period and each selected drug with respect to such period1 the ,secretary and the ,secretary of ,labor and the ,secretary of the ,treasury1 as applicable1 shall make public a list of each group health plan and each issuer of health insurance coverage1 with respect to which coverage is provided under such plan or coverage for such drug1 that has elected under subsection 7a7 not to participate under the program with respect to such period and drug4 #aaih4 ,civil monetary penalty 7a7 ,violations relating ,to offering of maximum fair price ,any manufacturer of a selected drug that has entered into an agreement under section #aaic1 with respect to a plan year during the price applicability period for such drug1 that does not provide access to a price that is not more than the maximum fair price 7or a lesser price7 for such drug for such year-- 7#a7 to a fair price eligible individual who with respect to such drug is described in subparagraph 7,a7 of section #aaia7;c77#a7 and who is furnished or dispensed such drug during such year2 or 7#b7 to a hospital1 physician1 or other provider of services or supplier with respect to fair price eligible individuals who with respect to such drug is described in subparagraph 7,b7 of such section and is furnished or administered such drug by such hospital1 physician1 or provider or supplier during such year2 shall be subject to a civil monetary penalty equal to ten times the amount equal to the difference between the price for such drug made available for such year by such manufacturer with respect to such individual or hospital1 physician1 provider1 or supplier and the maximum fair price for such drug for such year4 7b7 ,violations of certain terms of agreement ,any manufacturer of a selected drug that has entered into an agreement under section #aaic1 with respect to a plan year during the price applicability period for such drug1 that is in violation of a requirement imposed pursuant to section #aaic7;a77#f7 shall be subject to a civil monetary penalty of not more than #a1jjj1jjj for each such violation4 7c7 ,application ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil monetary penalty under this section in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 #aaii4 ,miscellaneous provisions 7a7 ,paperwork ,reduction ,act ,chapter #ce of title #dd1 ,united ,states ,code1 shall not apply to data collected under this part4 7b7 ,national ,academy of ,medicine study ,not later than ,december #ca1 #bjbe1 the ,national ,academy of ,medicine shall conduct a study1 and submit to ,congress a report1 on recommendations for improvements to the program under this part1 including the determination of the limits applied under section #aaid7;c74 7c7 ,med,p,a,c study ,not later than ,december #ca1 #bjbe1 the ,medicare ,payment ,advisory ,commission shall conduct a study1 and submit to ,congress a report1 on the program under this part with respect to the ,medicare program under title ,,xviii1 including with respect to the effect of the program on individuals entitled to benefits or enrolled under such title4 7d7 ,limitation on judicial review ,the following shall not be subject to judicial review3 7#a7 ,the selection of drugs for publication under section #aaib7;a74 7#b7 ,the determination of whether a drug is a negotiation-eligible drug under section #aaib7;d74 7#c7 ,the determination of the maximum fair price of a selected drug under section #aaid4 7#d7 ,the determination of units of a drug for purposes of section #aaia7;c77#c74 7e7 ,coordination ,in carrying out this part with respect to group health plans or health insurance coverage offered in the group market that are subject to oversight by the ,secretary of ,labor or the ,secretary of the ,treasury1 the ,secretary of ,health and ,human ,services shall coordinate with such respective ,secretary4 7f7 ,data sharing ,the ,secretary shall share with the ,secretary of the ,treasury such information as is necessary to determine the tax imposed by section #daib of the ,internal ,revenue ,code of #aihf4 4 7b7 ,application of maximum fair prices and conforming amendments 7#a7 ,under ,medicare 7,a7 ,application to payments under part ,b ,section #ahdg;,a7b77#a77;,b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7b77#a77;,b77 is amended by inserting or in the case of such a drug or biological that is a selected drug 7as defined in section #aaib7;c771 with respect to a price applicability period 7as defined in section #aaia7;b77#b771 #ajf percent of the maximum fair price 7as defined in section #aaia7;c77#b7 applicable for such drug and a plan year during such period after paragraph 7#d74 7,b7 ,exception to part ,d non-interference ,section #ahfj;,d-#aa7;i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7;i77 is amended by inserting 1 except as provided under part ,e of title ,,xi after the ,secretary4 7,c7 ,application as negotiated price under part ,d ,section #ahfj;,d-#b7;d77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;d77#a77 is amended-- 7i7 in subparagraph 7,b71 by inserting 1 subject to subparagraph 7,d71 after negotiated prices2 and 7ii7 by adding at the end the following new subparagraph3 7,d7 ,application of maximum fair price for selected drugs ,in applying this section1 in the case of a covered part ,d drug that is a selected drug 7as defined in section #aaib7;c771 with respect to a price applicability period 7as defined in section #aaia7;b77#b771 the negotiated prices used for payment 7as described in this subsection7 shall be the maximum fair price 7as defined in section #aaia7;c77#b77 for such drug and for each plan year during such period4 4 7,d7 ,information from prescription drug plans and ,,ma-,,pd plans required 7i7 ,prescription drug plans ,section #ahfj;,d-#ab7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aab7;b77 is amended by adding at the end the following new paragraph3 7#h7 ,provision of information related to maximum fair prices ,each contract entered into with a ,,pdp sponsor under this part with respect to a prescription drug plan offered by such sponsor shall require the sponsor to provide information to the ,secretary as requested by the ,secretary in accordance with section #aaif7;b74 4 7ii7 ,,ma-,,pd plans ,section #aheg7;f77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#bg7;f77#c77 is amended by adding at the end the following new subparagraph3 7,e7 ,provision of information related to maximum fair prices ,section #ahfj;,d-#ab7;b77#h74 4 7#b7 ,under group health plans and health insurance coverage 7,a7 ,,phsa ,part ,a of title ,,xxvii of the ,public ,health ,service ,act is amended by inserting after section #bgbi the following new section3 #bgbi;,a4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices 7a7 ,in general ,in the case of a group health plan or health insurance issuer offering health insurance coverage that is treated under section #aaig of the ,social ,security ,act as having in effect an agreement with the ,secretary under the ,fair ,price ,drug ,negotiation ,program under part ,e of title ,,xi of such ,act1 with respect to a price applicability period 7as defined in section #aaia7;b7 of such ,act7 and a selected drug 7as defined in section #aaib7;c7 of such ,act7 with respect to such period with respect to which coverage is provided under such plan or coverage-- 7#a7 the provisions of such part shall apply to the plans or coverage offered by such plan or issuer1 and to the individuals enrolled under such plans or coverage1 during such period1 with respect to such selected drug1 in the same manner as such provisions apply to prescription drug plans and ,,ma-,,pd plans1 and to individuals enrolled under such prescription drug plans and ,,ma-,,pd plans2 7#b7 the plan or issuer shall apply any cost-sharing responsibilities under such plan or coverage1 with respect to such selected drug1 by substituting the maximum fair price negotiated under such part for such drug in lieu of the contracted rate under such plan or coverage for such selected drug2 and 7#c7 the ,secretary shall apply the provisions of such part to such plan1 issuer1 and coverage1 and such individuals so enrolled in such plans4 7b7 ,notification regarding nonparticipation in ,fair ,drug ,price ,negotiation ,program ,a group health plan or a health insurance issuer offering group or individual health insurance coverage shall publicly disclose in a manner and in accordance with a process specified by the ,secretary any election made under section #aaig of the ,social ,security ,act by the plan or issuer to not participate in the ,fair ,drug ,price ,negotiation ,program under part ,e of title ,,xi of such ,act with respect to a selected drug 7as defined in section #aaib7;c7 of such ,act7 for which coverage is provided under such plan or coverage before the beginning of the plan year for which such election was made4 4 7,b7 ,,erisa 7i7 ,in general ,subpart ,b of part #g of subtitle ,b of title ,i of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aaha et4 seq47 is amended by adding at the end the following new section3 #gaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices 7a7 ,in general ,in the case of a group health plan or health insurance issuer offering group health insurance coverage that is treated under section #aaig of the ,social ,security ,act as having in effect an agreement with the ,secretary under the ,fair ,price ,drug ,negotiation ,program under part ,e of title ,,xi of such ,act1 with respect to a price applicability period 7as defined in section #aaia7;b7 of such ,act7 and a selected drug 7as defined in section #aaib7;c7 of such ,act7 with respect to such period with respect to which coverage is provided under such plan or coverage-- 7#a7 the provisions of such part shall apply to the plans or coverage offered by such plan or issuer1 and to the individuals enrolled under such plans or coverage1 during such period1 with respect to such selected drug1 in the same manner as such provisions apply to prescription drug plans and ,,ma-,,pd plans1 and to individuals enrolled under such prescription drug plans and ,,ma-,,pd plans2 7#b7 the plan or issuer shall apply any cost-sharing responsibilities under such plan or coverage1 with respect to such selected drug1 by substituting the maximum fair price negotiated under such part for such drug in lieu of the contracted rate under such plan or coverage for such selected drug2 and 7#c7 the ,secretary shall apply the provisions of such part to such plan1 issuer1 and coverage1 and such individuals so enrolled in such plans4 7b7 ,notification regarding nonparticipation in ,fair ,drug ,price ,negotiation ,program ,a group health plan or a health insurance issuer offering group health insurance coverage shall publicly disclose in a manner and in accordance with a process specified by the ,secretary any election made under section #aaig of the ,social ,security ,act by the plan or issuer to not participate in the ,fair ,drug ,price ,negotiation ,program under part ,e of title ,,xi of such ,act with respect to a selected drug 7as defined in section #aaib7;c7 of such ,act7 for which coverage is provided under such plan or coverage before the beginning of the plan year for which such election was made4 4 7ii7 ,clerical amendment ,the table of sections for part #g of subtitle ,b of title ,i of the ,employee ,retirement ,income ,security ,act of #aigd is amended by adding at the end the following3 ,sec4 #gaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices4 4 7,c7 ,,irc 7i7 ,in general ,subchapter ,b of chapter #ajj of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #ihaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices 7a7 ,in general ,in the case of a group health plan that is treated under section #aaig of the ,social ,security ,act as having in effect an agreement with the ,secretary under the ,fair ,price ,drug ,negotiation ,program under part ,e of title ,,xi of such ,act1 with respect to a price applicability period 7as defined in section #aaia7;b7 of such ,act7 and a selected drug 7as defined in section #aaib7;c7 of such ,act7 with respect to such period with respect to which coverage is provided under such plan-- 7#a7 the provisions of such part shall apply1 as applicable-- 7,a7 if coverage of such selected drug is provided under such plan if the drug is furnished or dispensed at a pharmacy or by a mail order service1 to the plan1 and to the individuals enrolled under such plan during such period1 with respect to such selected drug1 in the same manner as such provisions apply to prescription drug plans and ,,ma-,,pd plans1 and to individuals enrolled under such prescription drug plans and ,,ma-,,pd plans during such period2 and 7,b7 if coverage of such selected drug is provided under such plan if the drug is furnished or administered by a hospital1 physician1 or other provider of services or supplier1 to the plan1 to the individuals enrolled under such plan1 and to hospitals1 physicians1 and other providers of services and suppliers during such period1 with respect to such drug in the same manner as such provisions apply to the ,secretary1 to individuals entitled to benefits under part ,a of title ,,xviii or enrolled under part ,b of such title1 and to hospitals1 physicians1 and other providers and suppliers participating under title ,,xviii during such period2 7#b7 the plan shall apply any cost-sharing responsibilities under such plan1 with respect to such selected drug1 by substituting an amount not more than the maximum fair price negotiated under such part ,e of title ,,xi for such drug in lieu of the drug price upon which the cost-sharing would have otherwise applied2 and 7#c7 the ,secretary shall apply the provisions of such part ,e to such plan and such individuals so enrolled in such plan4 7b7 ,notification regarding nonparticipation in ,fair ,drug ,price ,negotiation ,program ,a group health plan shall publicly disclose in a manner and in accordance with a process specified by the ,secretary any election made under section #aaig of the ,social ,security ,act by the plan to not participate in the ,fair ,drug ,price ,negotiation ,program under part ,e of title ,,xi of such ,act with respect to a selected drug 7as defined in section #aaib7;c7 of such ,act7 for which coverage is provided under such plan before the beginning of the plan year for which such election was made4 4 7ii7 ,application to retiree and certain small group health plans ,section #ihca7;a77#b7 of the ,internal ,revenue ,code of #aihf is amended by inserting other than with respect to section #ihaf1 before any group health plan4 7iii7 ,clerical amendment ,the table of sections for subchapter ,b of chapter #ajj of such ,code is amended by adding at the end the following new item3 ,sec4 #ihaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices4 4 #ajb4 ,selected drug manufacturer excise tax imposed during noncompliance periods 7a7 ,in general ,subchapter ,e of chapter #cb of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #daib4 ,selected drugs during noncompliance periods 7a7 ,in general ,there is hereby imposed on the sale by the manufacturer1 producer1 or importer of any selected drug during a day described in subsection 7b7 a tax in an amount such that the applicable percentage is equal to the ratio of-- 7#a7 such tax1 divided by 7#b7 the sum of such tax and the price for which so sold4 7b7 ,noncompliance periods ,a day is described in this subsection with respect to a selected drug if it is a day during one of the following periods3 7#a7 ,the period beginning on the ,june #afth immediately following the selected drug publication date and ending on the first date during which the manufacturer of the drug has in place an agreement described in subsection 7a7 of section #aaic of the ,social ,security ,act with respect to such drug4 7#b7 ,the period beginning on the ,april #ast immediately following the ,june #afth described in paragraph 7#a7 and ending on the first date during which the manufacturer of the drug has agreed to a maximum fair price under such agreement4 7#c7 ,in the case of a selected drug with respect to which the ,secretary of ,health and ,human ,services has specified a renegotiation period under such agreement1 the period beginning on the first date after the last date of such renegotiation period and ending on the first date during which the manufacturer of the drug has agreed to a renegotiated maximum fair price under such agreement4 7#d7 ,with respect to information that is required to be submitted to the ,secretary of ,health and ,human ,services under such agreement1 the period beginning on the date on which such ,secretary certifies that such information is overdue and ending on the date that such information is so submitted4 7#e7 ,in the case of a selected drug with respect to which a payment is due under subsection 7c7 of such section #aaic1 the period beginning on the date on which the ,secretary of ,health and ,human ,services certifies that such payment is overdue and ending on the date that such payment is made in full4 7c7 ,applicable percentage ,for purposes of this section1 the term applicable percentage means-- 7#a7 in the case of sales of a selected drug during the first #ij days described in subsection 7b7 with respect to such drug1 #fe percent1 7#b7 in the case of sales of such drug during the #iast day through the #ahjth day described in subsection 7b7 with respect to such drug1 #ge percent1 7#c7 in the case of sales of such drug during the #ahast day through the #bgjth day described in subsection 7b7 with respect to such drug1 #he percent1 and 7#d7 in the case of sales of such drug during any subsequent day1 #ie percent4 7d7 ,selected drug ,for purposes of this section-- 7#a7 ,in general ,the term selected drug means any selected drug 7within the meaning of section #aaib of the ,social ,security ,act7 which is manufactured or produced in the ,united ,states or entered into the ,united ,states for consumption1 use1 or warehousing4 7#b7 ,united ,states ,the term ,united ,states has the meaning given such term by section #dfab7;a77#d74 7#c7 ,coordination with rules for possessions of the ,united ,states ,rules similar to the rules of paragraphs 7#b7 and 7#d7 of section #dacb7;c7 shall apply for purposes of this section4 7e7 ,other definitions ,for purposes of this section1 the terms selected drug publication date and maximum fair price have the meaning given such terms in section #aaia of the ,social ,security ,act4 7f7 ,anti-,abuse rule ,in the case of a sale which was timed for the purpose of avoiding the tax imposed by this section1 the ,secretary may treat such sale as occurring during a day described in subsection 7b74 4 7b7 ,no deduction for excise tax payments ,section #bge of the ,internal ,revenue ,code of #aihf is amended by adding or by section #daib before the period at the end of subsection 7a77#f74 7c7 ,conforming amendments 7#a7 ,section #dbba7;a7 of the ,internal ,revenue ,code of #aihf is amended by inserting or #daib after section #daia4 7#b7 ,section #fdaf7;b77#b7 of such ,code is amended by inserting or #daib after section #daia4 7d7 ,clerical amendments 7#a7 ,the heading of subchapter ,e of chapter #cb of the ,internal ,revenue ,code of #aihf is amended by striking ,medical devices and inserting ,other medical products4 7#b7 ,the table of subchapters for chapter #cb of such ,code is amended by striking the item relating to subchapter ,e and inserting the following new item3 ,subchapter ,e4 ,other medical products 4 7#c7 ,the table of sections for subchapter ,e of chapter #cb of such ,code is amended by adding at the end the following new item3 ,sec4 #daib4 ,selected drugs during noncompliance periods4 4 7e7 ,effective date ,the amendments made by this section shall apply to sales after the date of the enactment of this ,act4 ,,ii ,medicare ,parts ,b and ,d ,prescription ,drug ,inflation ,rebates #bja4 ,medicare part ,b rebate by manufacturers 7a7 ,in general ,section #ahcd of the ,social ,security ,act 7#db ,u4,s4,c4 #aciem7 is amended by adding at the end the following new subsection3 7x7 ,rebate by manufacturers for single source drugs with prices increasing faster than inflation 7#a7 ,requirements 7,a7 ,secretarial provision of information ,not later than #f months after the end of each calendar quarter beginning on or after ,july #a1 #bjba1 the ,secretary shall1 for each part ,b rebatable drug1 report to each manufacturer of such part ,b rebatable drug the following for such calendar quarter3 7i7 ,information on the total number of units of the billing and payment code described in subparagraph 7,a77i7 of paragraph 7#c7 with respect to such drug and calendar quarter4 7ii7 ,information on the amount 7if any7 of the excess average sales price increase described in subparagraph 7,a77ii7 of such paragraph for such drug and calendar quarter4 7iii7 ,the rebate amount specified under such paragraph for such part ,b rebatable drug and calendar quarter4 7,b7 ,manufacturer requirement ,for each calendar quarter beginning on or after ,july #a1 #bjba1 the manufacturer of a part ,b rebatable drug shall1 for such drug1 not later than #cj days after the date of receipt from the ,secretary of the information described in subparagraph 7,a7 for such calendar quarter1 provide to the ,secretary a rebate that is equal to the amount specified in paragraph 7#c7 for such drug for such calendar quarter4 7#b7 ,part ,b rebatable drug defined 7,a7 ,in general ,in this subsection1 the term part ,b rebatable drug means a single source drug or biological 7as defined in subparagraph 7,d7 of section #ahdg;,a7c77#f771 including a biosimilar biological product 7as defined in subparagraph 7,h7 of such section71 paid for under this part1 except such term shall not include such a drug or biological-- 7i7 if the average total allowed charges for a year per individual that uses such a drug or biological1 as determined by the ,secretary1 are less than1 subject to subparagraph 7,b71 #ajj2 or 7ii7 that is a vaccine described in subparagraph 7,a7 or 7,b7 of section #ahfa7s77#aj74 7,b7 ,increase ,the dollar amount applied under subparagraph 7,a77i7-- 7i7 for #bjbb1 shall be the dollar amount specified under such subparagraph for #bjba1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 for the #ab month period ending with ,june of the previous year2 and 7ii7 for a subsequent year1 shall be the dollar amount specified in this clause 7or clause 7i77 for the previous year1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 for the #ab month period ending with ,june of the previous year4 ,any dollar amount specified under this subparagraph that is not a multiple of #aj shall be rounded to the nearest multiple of #aj4 7#c7 ,rebate amount 7,a7 ,in general ,for purposes of paragraph 7#a71 the amount specified in this paragraph for a part ,b rebatable drug assigned to a billing and payment code for a calendar quarter is1 subject to paragraph 7#d71 the amount equal to the product of-- 7i7 subject to subparagraphs 7,b7 and 7,g71 the total number of units of the billing and payment code for such part ,b rebatable drug furnished under this part during the calendar quarter2 and 7ii7 the amount 7if any7 by which-- 7,i7 the payment amount under subparagraph 7,b7 or 7,c7 of section #ahdg;,a7b77#a71 as applicable1 for such part ,b rebatable drug during the calendar quarter2 exceeds 7,,ii7 the inflation-adjusted payment amount determined under subparagraph 7,c7 for such part ,b rebatable drug during the calendar quarter4 7,b7 ,excluded units ,for purposes of subparagraph 7,a77i71 the total number of units of the billing and payment code for each part ,b rebatable drug furnished during a calendar quarter shall not include-- 7i7 units packaged into the payment for a procedure or service under section #ahcc7t7 or under section #ahcc7;i7 7instead of separately payable under such respective section72 7ii7 units included under the single payment system for renal dialysis services under section #ahha7;b77#ad72 or 7iii7 units of a part ,b rebatable drug of a manufacturer furnished to an individual1 if such manufacturer1 with respect to the furnishing of such units of such drug1 provides for discounts under section #cdj;,b of the ,public ,health ,service ,act or for rebates under section #aibg4 7,c7 ,determination of inflation-adjusted payment amount ,the inflation-adjusted payment amount determined under this subparagraph for a part ,b rebatable drug for a calendar quarter is-- 7i7 the payment amount for the billing and payment code for such drug in the payment amount benchmark quarter 7as defined in subparagraph 7,d772 increased by 7ii7 the percentage by which the rebate period ,,cpi-,u 7as defined in subparagraph 7,f77 for the calendar quarter exceeds the benchmark period ,,cpi-,u 7as defined in subparagraph 7,e774 7,d7 ,payment amount benchmark quarter ,the term payment amount benchmark quarter means the calendar quarter beginning ,january #a1 #bjaf4 7,e7 ,benchmark period ,,cpi-,u ,the term benchmark period ,,cpi-,u means the consumer price index for all urban consumers 7,united ,states city average7 for ,july #bjae4 7,f7 ,rebate period ,,cpi-,u ,the term rebate period ,,cpi-,u means1 with respect to a calendar quarter described in subparagraph 7,c71 the greater of the benchmark period ,,cpi-,u and the consumer price index for all urban consumers 7,united ,states city average7 for the first month of the calendar quarter that is two calendar quarters prior to such described calendar quarter4 7,g7 ,counting units 7i7 ,cut-off period to count units ,for purposes of subparagraph 7,a77i71 subject to clause 7ii71 to count the total number of billing units for a part ,b rebatable drug for a quarter1 the ,secretary may use a cut-off period in order to exclude from such total number of billing units for such quarter claims for services furnished during such quarter that were not processed at an appropriate time prior to the end of the cut-off period4 7ii7 ,counting units for claims processed after cut-off period ,if the ,secretary uses a cut-off period pursuant to clause 7i71 in the case of units of a part ,b rebatable drug furnished during a quarter but pursuant to application of such cut-off period excluded for purposes of subparagraph 7,a77i7 from the total number of billing units for the drug for such quarter1 the ,secretary shall count such units of such drug so furnished in the total number of billing units for such drug for a subsequent quarter1 as the ,secretary determines appropriate4 7#d7 ,special treatment of certain drugs and exemption 7,a7 ,subsequently approved drugs ,subject to subparagraph 7,b71 in the case of a part ,b rebatable drug first approved or licensed by the ,food and ,drug ,administration after ,july #a1 #bjae1 clause 7i7 of paragraph 7#c77;,c7 shall be applied as if the term payment amount benchmark quarter were defined under paragraph 7#c77;,d7 as the third full calendar quarter after the day on which the drug was first marketed and clause 7ii7 of paragraph 7#c77;,c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under paragraph 7#c77;,e7 as if the reference to ,july #bjae under such paragraph were a reference to the first month of the first full calendar quarter after the day on which the drug was first marketed4 7,b7 ,timeline for provision of rebates for subsequently approved drugs ,in the case of a part ,b rebatable drug first approved or licensed by the ,food and ,drug ,administration after ,july #a1 #bjae1 paragraph 7#a77;,b7 shall be applied as if the reference to ,july #a1 #bjba under such paragraph were a reference to the later of the #fth full calendar quarter after the day on which the drug was first marketed or ,july #a1 #bjba4 7,c7 ,exemption for shortages ,the ,secretary may reduce or waive the rebate amount under paragraph 7#a77;,b7 with respect to a part ,b rebatable drug that is described as currently in shortage on the shortage list in effect under section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act or in the case of other exigent circumstances1 as determined by the ,secretary4 7,d7 ,selected drugs ,in the case of a part ,b rebatable drug that is a selected drug 7as defined in section #aaib7;c77 for a price applicability period 7as defined in section #aaia7;b77#b77 and is determined 7pursuant to such section #aaib7;c77 to no longer be a selected drug1 for each applicable year beginning after the price applicability period with respect to such drug1 clause 7i7 of paragraph 7#c77;,c7 shall be applied as if the term payment amount benchmark quarter were defined under paragraph 7#c77;,d7 as the calendar quarter beginning ,january #a of the last year beginning during such price applicability period with respect to such selected drug and clause 7ii7 of paragraph 7#c77;,c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under paragraph 7#c77;,e7 as if the reference to ,july #bjae under such paragraph were a reference to the ,july of the year preceding such last year4 7#e7 ,application to beneficiary coinsurance ,in the case of a part ,b rebatable drug1 if the payment amount for a quarter exceeds the inflation adjusted payment for such quarter-- 7,a7 in computing the amount of any coinsurance applicable under this title to an individual with respect to such drug1 the computation of such coinsurance shall be based on the inflation-adjusted payment amount determined under paragraph 7#c77;,c7 for such part ,b rebatable drug2 and 7,b7 the amount of such coinsurance is equal to #bj percent of such inflation-adjusted payment amount so determined4 7#f7 ,rebate deposits ,amounts paid as rebates under paragraph 7#a77;,b7 shall be deposited into the ,federal ,supplementary ,medical ,insurance ,trust ,fund established under section #ahda4 7#g7 ,civil money penalty ,if a manufacturer of a part ,b rebatable drug has failed to comply with the requirements under paragraph 7#a77;,b7 for such drug for a calendar quarter1 the manufacturer shall be subject to1 in accordance with a process established by the ,secretary pursuant to regulations1 a civil money penalty in an amount equal to at least #abe percent of the amount specified in paragraph 7#c7 for such drug for such calendar quarter4 ,the provisions of section #aabh;,a 7other than subsections 7a7 7with respect to amounts of penalties or additional assessments7 and 7b77 shall apply to a civil money penalty under this paragraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7#h7 ,study and report 7,a7 ,study ,the ,secretary shall conduct a study of the feasibility of and operational issues involved with the following3 7i7 ,including multiple source drugs 7as defined in section #ahdg;,a7c77#f77;,c77 in the rebate system under this subsection4 7ii7 ,including drugs and biologicals paid for under ,,ma plans under part ,c in the rebate system under this subsection4 7iii7 ,including drugs excluded under paragraph 7#b77;,a7 and units of the billing and payment code of the drugs excluded under paragraph 7#c77;,b7 in the rebate system under this subsection4 7,b7 ,report ,not later than #c years after the date of the enactment of this subsection1 the ,secretary shall submit to ,congress a report on the study conducted under subparagraph 7,a74 7#i7 ,application to multiple source drugs ,the ,secretary may1 based on the report submitted under paragraph 7#h7 and pursuant to rulemaking1 apply the provisions of this subsection to multiple source drugs 7as defined in section #ahdg;,a7c77#f77;,c771 including1 for purposes of determining the rebate amount under paragraph 7#c71 by calculating manufacturer-specific average sales prices for the benchmark period and the rebate period4 4 7b7 ,amounts payable2 cost-,sharing ,section #ahcc of the ,social ,security ,act 7#db ,u4,s4,c4 #aciel7 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#a7-- 7i7 in subparagraph 7,s71 by striking with respect to and inserting subject to subparagraph 7,,dd71 with respect to2 7ii7 by striking and 7,,cc7 and inserting 7,,cc72 and 7iii7 by inserting before the semicolon at the end the following3 1 and 7,,dd7 with respect to a part ,b rebatable drug 7as defined in paragraph 7#b7 of section #ahcd7x77 for which the payment amount for a calendar quarter under paragraph 7#c77;,a77ii77,i7 of such section for such quarter exceeds the inflation-adjusted payment under paragraph 7#c77;,a77ii77,,ii7 of such section for such quarter1 the amounts paid shall be the difference between 7i7 the payment amount under paragraph 7#c77;,a77ii77,i7 of such section for such drug1 and 7ii7 #bj percent of the inflation-adjusted payment amount under paragraph 7#c77;,a77ii77,,ii7 of such section for such drug2 7,b7 by adding at the end of the flush left matter following paragraph 7#i71 the following3 ,for purposes of applying paragraph 7#a77;,,dd71 subsections 7i77#i7 and 7t77#c77;,h71 and section #ahcd7x77#e71 the ,secretary shall make such estimates and use such data as the ,secretary determines appropriate1 and notwithstanding any other provision of law1 may do so by program instruction or otherwise4 2 7#b7 in subsection 7i71 by adding at the end the following new paragraph3 7#i7 ,in the case of a part ,b rebatable drug 7as defined in paragraph 7#b7 of section #ahcd7x77 furnished on or after ,july #a1 #bjba1 under the system under this subsection1 in lieu of calculation of coinsurance and the amount of payment otherwise applicable under this subsection1 the provisions of section #ahcd7x77#e71 paragraph 7#a77;,,dd7 of subsection 7a71 and the flush left matter following paragraph 7#i7 of subsection 7a71 shall1 as determined appropriate by the ,secretary1 apply under this subsection in the same manner as such provisions of section #ahcd7x77#e7 and subsection 7a7 apply under such section and subsection4 2 and 7#c7 in subsection 7t77#c71 by adding at the end the following new subparagraph3 7,h7 ,part ,b rebatable drugs ,in the case of a part ,b rebatable drug 7as defined in paragraph 7#b7 of section #ahcd7x77 furnished on or after ,july #a1 #bjba1 under the system under this subsection1 in lieu of calculation of coinsurance and the amount of payment otherwise applicable under this subsection1 the provisions of section #ahcd7x77#e71 paragraph 7#a77;,,dd7 of subsection 7a71 and the flush left matter following paragraph 7#i7 of subsection 7a71 shall1 as determined appropriate by the ,secretary1 apply under this subsection in the same manner as such provisions of section #ahcd7x77#e7 and subsection 7a7 apply under such section and subsection4 4 7c7 ,conforming amendment to part ,b ,,asp calculation ,section #ahdg;,a7c77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7c77#c77 is amended by inserting or section #ahcd7x7 after section #aibg4 #bjb4 ,medicare part ,d rebate by manufacturers 7a7 ,in general ,part ,d of title ,,xviii of the ,social ,security ,act is amended by inserting after section #ahfj;,d-#ad;,a 7#db ,u4,s4,c4 #aciew-#aad;a7 the following new section3 #ahfj;,d-#ad;,b4 ,manufacturer rebate for certain drugs with prices increasing faster than inflation 7a7 ,in general 7#a7 ,in general ,subject to the provisions of this section1 in order for coverage to be available under this part for a part ,d rebatable drug 7as defined in subsection 7h77#a77 of a manufacturer 7as defined in section #aibg7k77#e77 dispensed during an applicable year1 the manufacturer must have entered into and have in effect an agreement described in subsection 7b74 7#b7 ,authorizing ,coverage for ,drugs ,not ,covered ,under ,agreements ,paragraph 7#a7 shall not apply to the dispensing of a covered part ,d drug if-- 7,a7 the ,secretary has made a determination that the availability of the drug is essential to the health of beneficiaries under this part2 or 7,b7 the ,secretary determines that in the period beginning on ,january #a1 #bjbb1 and ending on ,december #ca1 #bjbb1 there were extenuating circumstances4 7#c7 ,applicable year ,for purposes of this section the term applicable year means a year beginning with #bjbb4 7b7 ,agreements 7#a7 ,terms of agreement ,an agreement described in this subsection1 with respect to a manufacturer of a part ,d rebatable drug1 is an agreement under which the following shall apply3 7,a7 ,secretarial provision of information ,not later than #i months after the end of each applicable year with respect to which the agreement is in effect1 the ,secretary1 for each part ,d rebatable drug of the manufacturer1 shall report to the manufacturer the following for such year3 7i7 ,information on the total number of units 7as defined in subsection 7h77#b77 for each dosage form and strength with respect to such part ,d rebatable drug and year4 7ii7 ,information on the amount 7if any7 of the excess average manufacturer price increase described in subsection 7c77#a77;,b7 for each dosage form and strength with respect to such drug and year4 7iii7 ,the rebate amount specified under subsection 7c7 for each dosage form and strength with respect to such drug and year4 7,b7 ,manufacturer requirements ,for each applicable year with respect to which the agreement is in effect1 the manufacturer of the part ,d rebatable drug1 for each dosage form and strength with respect to such drug1 not later than #cj days after the date of receipt from the ,secretary of the information described in subparagraph 7,a7 for such year1 shall provide to the ,secretary a rebate that is equal to the amount specified in subsection 7c7 for such dosage form and strength with respect to such drug for such year4 7#b7 ,length of agreement 7,a7 ,in general ,an agreement under this section1 with respect to a part ,d rebatable drug1 shall be effective for an initial period of not less than one year and shall be automatically renewed for a period of not less than one year unless terminated under subparagraph 7,b74 7,b7 ,termination 7i7 ,by ,secretary ,the ,secretary may provide for termination of an agreement under this section for violation of the requirements of the agreement or other good cause shown4 ,such termination shall not be effective earlier than #cj days after the date of notice of such termination4 ,the ,secretary shall provide1 upon request1 a manufacturer with a hearing concerning such a termination1 but such hearing shall not delay the effective date of the termination4 7ii7 ,by a manufacturer ,a manufacturer may terminate an agreement under this section for any reason4 ,any such termination shall be effective1 with respect to a plan year-- 7,i7 if the termination occurs before ,january #cj of the plan year1 as of the day after the end of the plan year2 and 7,,ii7 if the termination occurs on or after ,january #cj of the plan year1 as of the day after the end of the succeeding plan year4 7,c7 ,effectiveness of termination ,any termination under this paragraph shall not affect rebates due under the agreement under this section before the effective date of its termination4 7,d7 ,delay before reentry ,in the case of any agreement under this section with a manufacturer that is terminated in a plan year1 the ,secretary may not enter into another such agreement with the manufacturer 7or a successor manufacturer7 before the subsequent plan year1 unless the ,secretary finds good cause for an earlier reinstatement of such an agreement4 7c7 ,rebate amount 7#a7 ,in general ,for purposes of this section1 the amount specified in this subsection for a dosage form and strength with respect to a part ,d rebatable drug and applicable year is1 subject to subparagraphs 7,b7 and 7,c7 of paragraph 7#e71 the amount equal to the product of-- 7,a7 the total number of units of such dosage form and strength with respect to such part ,d rebatable drug and year2 and 7,b7 the amount 7if any7 by which-- 7i7 the annual manufacturer price 7as determined in paragraph 7#b77 paid for such dosage form and strength with respect to such part ,d rebatable drug for the year2 exceeds 7ii7 the inflation-adjusted payment amount determined under paragraph 7#c7 for such dosage form and strength with respect to such part ,d rebatable drug for the year4 7#b7 ,determination of annual manufacturer price ,the annual manufacturer price determined under this paragraph for a dosage form and strength1 with respect to a part ,d rebatable drug and an applicable year1 is the sum of the products of-- 7,a7 the average manufacturer price 7as defined in subsection 7h77#f77 of such dosage form and strength1 as calculated for a unit of such drug1 with respect to each of the calendar quarters of such year2 and 7,b7 the ratio of-- 7i7 the total number of units of such dosage form and strength dispensed during each such calendar quarter of such year2 to 7ii7 the total number of units of such dosage form and strength dispensed during such year4 7#c7 ,determination of inflation-adjusted payment amount ,the inflation-adjusted payment amount determined under this paragraph for a dosage form and strength with respect to a part ,d rebatable drug for an applicable year1 subject to subparagraphs 7,a7 and 7,d7 of paragraph 7#e71 is-- 7,a7 the benchmark year manufacturer price determined under paragraph 7#d7 for such dosage form and strength with respect to such drug and an applicable year2 increased by 7,b7 the percentage by which the applicable year ,,cpi-,u 7as defined in subsection 7h77#e77 for the applicable year exceeds the benchmark period ,,cpi-,u 7as defined in subsection 7h77#d774 7#d7 ,determination of benchmark year manufacturer price ,the benchmark year manufacturer price determined under this paragraph for a dosage form and strength1 with respect to a part ,d rebatable drug and an applicable year1 is the sum of the products of-- 7,a7 the average manufacturer price 7as defined in subsection 7h77#f77 of such dosage form and strength1 as calculated for a unit of such drug1 with respect to each calendar quarter of the payment amount benchmark year 7as defined in subsection 7h77#c772 and 7,b7 the ratio of-- 7i7 the total number of units of such dosage form and strength dispensed during such calendar quarter of the payment amount benchmark year2 to 7ii7 the total number of units of such dosage form and strength dispensed during the payment amount benchmark year4 7#e7 ,special treatment of certain drugs and exemption 7,a7 ,subsequently approved drugs ,in the case of a part ,d rebatable drug first approved or licensed by the ,food and ,drug ,administration after ,january #a1 #bjaf1 subparagraphs 7,a7 and 7,b7 of paragraph 7#d7 shall be applied as if the term payment amount benchmark year were defined under subsection 7h77#c7 as the first calendar year beginning after the day on which the drug was first marketed by any manufacturer and subparagraph 7,b7 of paragraph 7#c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under subsection 7h77#d7 as if the reference to ,january #bjaf under such subsection were a reference to ,january of the first year beginning after the date on which the drug was first marketed by any manufacturer4 7,b7 ,exemption for shortages ,the ,secretary may reduce or waive the rebate under paragraph 7#a7 with respect to a part ,d rebatable drug that is described as currently in shortage on the shortage list in effect under section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act or in the case of other exigent circumstances1 as determined by the ,secretary4 7,c7 ,treatment of new formulations 7i7 ,in general ,in the case of a part ,d rebatable drug that is a line extension of a part ,d rebatable drug that is an oral solid dosage form1 the ,secretary shall establish a formula for determining the amount specified in this subsection with respect to such part ,d rebatable drug and an applicable year with consideration of the original part ,d rebatable drug4 7ii7 ,line extension defined ,in this subparagraph1 the term line extension means1 with respect to a part ,d rebatable drug1 a new formulation of the drug 7as determined by the ,secretary71 such as an extended release formulation1 but does not include an abuse-deterrent formulation of the drug 7as determined by the ,secretary71 regardless of whether such abuse-deterrent formulation is an extended release formulation4 7,d7 ,selected drugs ,in the case of a part ,d rebatable drug that is a selected drug 7as defined in section #aaib7;c77 for a price applicability period 7as defined in section #aaia7;b77#b77 and is determined 7pursuant to such section #aaib7;c77 to no longer be a selected drug1 for each applicable year beginning after the price applicability period with respect to such drug1 subparagraphs 7,a7 and 7,b7 of paragraph 7#d7 shall be applied as if the term payment amount benchmark year were defined under subsection 7h77#c7 as the last year beginning during such price applicability period with respect to such selected drug and subparagraph 7,b7 of paragraph 7#c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under subsection 7h77#d7 as if the reference to ,january #bjaf under such subsection were a reference to ,january of the last year beginning during such price applicability period with respect to such drug4 7d7 ,rebate deposits ,amounts paid as rebates under subsection 7c7 shall be deposited into the ,medicare ,prescription ,drug ,account in the ,federal ,supplementary ,medical ,insurance ,trust ,fund established under section #ahda4 7e7 ,information ,for purposes of carrying out this section1 the ,secretary shall use information submitted by manufacturers under section #aibg7;b77#c74 7f7 ,civil money penalty ,in the case of a manufacturer of a part ,d rebatable drug with an agreement in effect under this section who has failed to comply with the terms of the agreement under subsection 7b77#a77;,b7 with respect to such drug for an applicable year1 the ,secretary may impose a civil money penalty on such manufacturer in an amount equal to #abe percent of the amount specified in subsection 7c7 for such drug for such year4 ,the provisions of section #aabh;,a 7other than subsections 7a7 7with respect to amounts of penalties or additional assessments7 and 7b77 shall apply to a civil money penalty under this subsection in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7g7 ,judicial review ,there shall be no judicial review of the following3 7#a7 ,the determination of units under this section4 7#b7 ,the determination of whether a drug is a part ,d rebatable drug under this section4 7#c7 ,the calculation of the rebate amount under this section4 7h7 ,definitions ,in this section3 7#a7 ,part ,d rebatable drug defined 7,a7 ,in general ,the term part ,d rebatable drug means a drug or biological that would 7without application of this section7 be a covered part ,d drug1 except such term shall1 with respect to an applicable year1 not include such a drug or biological if the average annual total cost under this part for such year per individual who uses such a drug or biological1 as determined by the ,secretary1 is less than1 subject to subparagraph 7,b71 #ajj1 as determined by the ,secretary using the most recent data available or1 if data is not available1 as estimated by the ,secretary4 7,b7 ,increase ,the dollar amount applied under subparagraph 7,a7-- 7i7 for #bjbc1 shall be the dollar amount specified under such subparagraph for #bjbb1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 for the #ab-month period beginning with ,january of #bjbb2 and 7ii7 for a subsequent year1 shall be the dollar amount specified in this subparagraph for the previous year1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 for the #ab-month period beginning with ,january of the previous year4 ,any dollar amount specified under this subparagraph that is not a multiple of #aj shall be rounded to the nearest multiple of #aj4 7#b7 ,unit defined ,the term unit means1 with respect to a part ,d rebatable drug1 the lowest identifiable quantity 7such as a capsule or tablet1 milligram of molecules1 or grams7 of the part ,d rebatable drug that is dispensed to individuals under this part4 7#c7 ,payment amount benchmark year ,the term payment amount benchmark year means the year beginning ,january #a1 #bjaf4 7#d7 ,benchmark period ,,cpi-,u ,the term benchmark period ,,cpi-,u means the consumer price index for all urban consumers 7,united ,states city average7 for ,january #bjaf4 7#e7 ,applicable year ,,cpi-,u ,the term applicable year ,,cpi-,u means1 with respect to an applicable year1 the consumer price index for all urban consumers 7,united ,states city average7 for ,january of such year4 7#f7 ,average manufacturer price ,the term average manufacturer price has the meaning1 with respect to a part ,d rebatable drug of a manufacturer1 given such term in section #aibg7k77#a71 with respect to a covered outpatient drug of a manufacturer for a rebate period under section #aibg4 4 7b7 ,conforming amendment to part ,b ,,asp calculation ,section #ahdg;,a7c77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7c77#c771 as amended by section #bja7;c71 is further amended by striking section #aibg or section #ahcd7x7 and inserting section #aibg1 section #ahcd7x71 or section #ahfj;,d-#ad;,b4 ,,iii ,part ,d ,improvements and ,maximum ,out-of-,pocket ,cap for ,medicare ,beneficiaries #cja4 ,medicare part ,d benefit redesign 7a7 ,benefit structure redesign ,section #ahfj;,d-#b7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77 is amended-- 7#a7 in paragraph 7#b7-- 7,a7 in subparagraph 7,a71 in the matter preceding clause 7i71 by inserting for a year preceding #bjbb and for costs above the annual deductible specified in paragraph 7#a7 and up to the annual out-of-pocket threshold specified in paragraph 7#d77;,b7 for #bjbb and each subsequent year after paragraph 7#c72 7,b7 in subparagraph 7,c7-- 7i7 in clause 7i71 in the matter preceding subclause 7,i71 by inserting for a year preceding #bjbb1 after paragraph 7#d712 and 7ii7 in clause 7ii77,,iii71 by striking and each subsequent year and inserting and #bjba2 and 7,c7 in subparagraph 7,d7-- 7i7 in clause 7i7-- 7,i7 in the matter preceding subclause 7,i71 by inserting for a year preceding #bjbb1 after paragraph 7#d712 and 7,,ii7 in subclause 7,i77bb71 by striking a year after #bjah and inserting each of years #bjah through #bjba2 and 7ii7 in clause 7ii77,v71 by striking #bjai and each subsequent year and inserting each of years #bjai through #bjba2 7#b7 in paragraph 7#c77;,a7-- 7,a7 in the matter preceding clause 7i71 by inserting for a year preceding #bjbb1 after and 7#d712 and 7,b7 in clause 7ii71 by striking for a subsequent year and inserting for each of years #bjjg through #bjba2 and 7#c7 in paragraph 7#d7-- 7,a7 in subparagraph 7,a7-- 7i7 in clause 7i7-- 7,i7 by redesignating subclauses 7,i7 and 7,,ii7 as items 7aa7 and 7bb71 respectively1 and moving the margin of each such redesignated item #b ems to the right2 7,,ii7 in the matter preceding item 7aa71 as redesignated by subclause 7,i71 by striking is equal to the greater of-- and inserting 8is equal to-- 7,i7 for a year preceding #bjbb1 the greater of-- 2 7,,iii7 by striking the period at the end of item 7bb71 as redesignated by subclause 7,i71 and inserting 2 and2 and 7,,iv7 by adding at the end the following3 7,,ii7 for #bjbb and each succeeding year1 #j4 2 and 7ii7 in clause 7ii71 by striking clause 7i77,i7 and inserting clause 7i77,i77aa72 7,b7 in subparagraph 7,b7-- 7i7 in clause 7i7-- 7,i7 in subclause 7,v71 by striking or at the end2 7,,ii7 in subclause 7,,vi7-- 7aa7 by striking for a subsequent year and inserting for #bjba2 and 7bb7 by striking the period at the end and inserting a semicolon2 and 7,,iii7 by adding at the end the following new subclauses3 7,,vii7 for #bjbb1 is equal to #b1jjj2 or 7,,viii7 for a subsequent year1 is equal to the amount specified in this subparagraph for the previous year1 increased by the annual percentage increase described in paragraph 7#f7 for the year involved4 2 and 7ii7 in clause 7ii71 by striking clause 7i77,,ii7 and inserting clause 7i72 7,c7 in subparagraph 7,c77i71 by striking and for amounts and inserting and1 for a year preceding #bjbb1 for amounts2 and 7,d7 in subparagraph 7,e71 by striking ,in applying and inserting ,for each of years #bjaa through #bjba1 in applying4 7b7 ,decreasing reinsurance payment amount ,section #ahfj;,d-#ae7;b77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;b77#a77 is amended by inserting after #hj percent the following3 7or1 with respect to a coverage year after #bjba1 #bj percent74 7c7 ,manufacturer discount program 7#a7 ,in general ,part ,d of title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aja et seq471 as amended by section #bjb1 is further amended by inserting after section #ahfj;,d-#ad;,b the following new section3 #ahfj;,d-#ad;,c4 ,manufacturer discount program 7a7 ,establishment ,the ,secretary shall establish a manufacturer discount program 7in this section referred to as the program74 ,under the program1 the ,secretary shall enter into agreements described in subsection 7b7 with manufacturers and provide for the performance of the duties described in subsection 7c74 ,the ,secretary shall establish a model agreement for use under the program by not later than ,january #a1 #bjba1 in consultation with manufacturers1 and allow for comment on such model agreement4 7b7 ,terms of agreement 7#a7 ,in general 7,a7 ,agreement ,an agreement under this section shall require the manufacturer to provide applicable beneficiaries access to discounted prices for applicable drugs of the manufacturer that are dispensed on or after ,january #a1 #bjbb4 7,b7 ,provision of discounted prices at the point-of-sale ,the discounted prices described in subparagraph 7,a7 shall be provided to the applicable beneficiary at the pharmacy or by the mail order service at the point-of-sale of an applicable drug4 7,c7 ,timing of agreement 7i7 ,special rule for #bjbb ,in order for an agreement with a manufacturer to be in effect under this section with respect to the period beginning on ,january #a1 #bjbb1 and ending on ,december #ca1 #bjbb1 the manufacturer shall enter into such agreement not later than #cj days after the date of the establishment of a model agreement under subsection 7a74 7ii7 #bjbc and subsequent years ,in order for an agreement with a manufacturer to be in effect under this section with respect to plan year #bjbc or a subsequent plan year1 the manufacturer shall enter into such agreement 7or such agreement shall be renewed under paragraph 7#d77;,a77 not later than ,january #cj of the preceding year4 7#b7 ,provision of appropriate data ,each manufacturer with an agreement in effect under this section shall collect and have available appropriate data1 as determined by the ,secretary1 to ensure that it can demonstrate to the ,secretary compliance with the requirements under the program4 7#c7 ,compliance with requirements for administration of program ,each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the ,secretary or a third party with a contract under subsection 7d77#c71 as applicable1 for purposes of administering the program1 including any determination under subparagraph 7,a7 of subsection 7c77#a7 or procedures established under such subsection 7c77#a74 7#d7 ,length of agreement 7,a7 ,in general ,an agreement under this section shall be effective for an initial period of not less than #ab months and shall be automatically renewed for a period of not less than #a year unless terminated under subparagraph 7,b74 7,b7 ,termination 7i7 ,by the ,secretary ,the ,secretary may provide for termination of an agreement under this section for a knowing and willful violation of the requirements of the agreement or other good cause shown4 ,such termination shall not be effective earlier than #cj days after the date of notice to the manufacturer of such termination4 ,the ,secretary shall provide1 upon request1 a manufacturer with a hearing concerning such a termination1 and such hearing shall take place prior to the effective date of the termination with sufficient time for such effective date to be repealed if the ,secretary determines appropriate4 7ii7 ,by a manufacturer ,a manufacturer may terminate an agreement under this section for any reason4 ,any such termination shall be effective1 with respect to a plan year-- 7,i7 if the termination occurs before ,january #cj of a plan year1 as of the day after the end of the plan year2 and 7,,ii7 if the termination occurs on or after ,january #cj of a plan year1 as of the day after the end of the succeeding plan year4 7iii7 ,effectiveness of termination ,any termination under this subparagraph shall not affect discounts for applicable drugs of the manufacturer that are due under the agreement before the effective date of its termination4 7iv7 ,notice to third party ,the ,secretary shall provide notice of such termination to a third party with a contract under subsection 7d77#c7 within not less than #cj days before the effective date of such termination4 7c7 ,duties described ,the duties described in this subsection are the following3 7#a7 ,administration of program ,administering the program1 including-- 7,a7 the determination of the amount of the discounted price of an applicable drug of a manufacturer2 7,b7 the establishment of procedures under which discounted prices are provided to applicable beneficiaries at pharmacies or by mail order service at the point-of-sale of an applicable drug2 7,c7 the establishment of procedures to ensure that1 not later than the applicable number of calendar days after the dispensing of an applicable drug by a pharmacy or mail order service1 the pharmacy or mail order service is reimbursed for an amount equal to the difference between-- 7i7 the negotiated price of the applicable drug2 and 7ii7 the discounted price of the applicable drug2 7,d7 the establishment of procedures to ensure that the discounted price for an applicable drug under this section is applied before any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of applicable beneficiaries as the ,secretary may specify2 and 7,e7 providing a reasonable dispute resolution mechanism to resolve disagreements between manufacturers1 applicable beneficiaries1 and the third party with a contract under subsection 7d77#c74 7#b7 ,monitoring compliance 7,a7 ,in general ,the ,secretary shall monitor compliance by a manufacturer with the terms of an agreement under this section4 7,b7 ,notification ,if a third party with a contract under subsection 7d77#c7 determines that the manufacturer is not in compliance with such agreement1 the third party shall notify the ,secretary of such noncompliance for appropriate enforcement under subsection 7e74 7#c7 ,collection of data from prescription drug plans and ,,ma-,,pd plans ,the ,secretary may collect appropriate data from prescription drug plans and ,,ma-,,pd plans in a timeframe that allows for discounted prices to be provided for applicable drugs under this section4 7d7 ,administration 7#a7 ,in general ,subject to paragraph 7#b71 the ,secretary shall provide for the implementation of this section1 including the performance of the duties described in subsection 7c74 7#b7 ,limitation ,in providing for the implementation of this section1 the ,secretary shall not receive or distribute any funds of a manufacturer under the program4 7#c7 ,contract with third parties ,the ,secretary shall enter into a contract with #a or more third parties to administer the requirements established by the ,secretary in order to carry out this section4 ,at a minimum1 the contract with a third party under the preceding sentence shall require that the third party-- 7,a7 receive and transmit information between the ,secretary1 manufacturers1 and other individuals or entities the ,secretary determines appropriate2 7,b7 receive1 distribute1 or facilitate the distribution of funds of manufacturers to appropriate individuals or entities in order to meet the obligations of manufacturers under agreements under this section2 7,c7 provide adequate and timely information to manufacturers1 consistent with the agreement with the manufacturer under this section1 as necessary for the manufacturer to fulfill its obligations under this section2 and 7,d7 permit manufacturers to conduct periodic audits1 directly or through contracts1 of the data and information used by the third party to determine discounts for applicable drugs of the manufacturer under the program4 7#d7 ,performance requirements ,the ,secretary shall establish performance requirements for a third party with a contract under paragraph 7#c7 and safeguards to protect the independence and integrity of the activities carried out by the third party under the program under this section4 7#e7 ,implementation ,notwithstanding any other provision of law1 the ,secretary may implement the program under this section by program instruction or otherwise4 7#f7 ,administration ,chapter #ce of title #dd1 ,united ,states ,code1 shall not apply to the program under this section4 7e7 ,enforcement 7#a7 ,audits ,each manufacturer with an agreement in effect under this section shall be subject to periodic audit by the ,secretary4 7#b7 ,civil money penalty 7,a7 ,in general ,the ,secretary may impose a civil money penalty on a manufacturer that fails to provide applicable beneficiaries discounts for applicable drugs of the manufacturer in accordance with such agreement for each such failure in an amount the ,secretary determines is equal to the sum of-- 7i7 the amount that the manufacturer would have paid with respect to such discounts under the agreement1 which will then be used to pay the discounts which the manufacturer had failed to provide2 and 7ii7 #be percent of such amount4 7,b7 ,application ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil money penalty under this paragraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7f7 ,clarification regarding availability of other covered part ,d drugs ,nothing in this section shall prevent an applicable beneficiary from purchasing a covered part ,d drug that is not an applicable drug 7including a generic drug or a drug that is not on the formulary of the prescription drug plan or ,,ma-,,pd plan that the applicable beneficiary is enrolled in74 7g7 ,definitions ,in this section3 7#a7 ,applicable beneficiary ,the term applicable beneficiary means an individual who1 on the date of dispensing a covered part ,d drug-- 7,a7 is enrolled in a prescription drug plan or an ,,ma-,,pd plan2 7,b7 is not enrolled in a qualified retiree prescription drug plan2 and 7,c7 has incurred costs for covered part ,d drugs in the year that are equal to or exceed the annual deductible specified in section #ahfj;,d-#b7;b77#a7 for such year4 7#b7 ,applicable drug ,the term applicable drug1 with respect to an applicable beneficiary-- 7,a7 means a covered part ,d drug-- 7i7 approved under a new drug application under section #eje7;c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act or1 in the case of a biologic product1 licensed under section #cea of the ,public ,health ,service ,act2 and 7ii7 7,i7 if the ,,pdp sponsor of the prescription drug plan or the ,,ma organization offering the ,,ma-,,pd plan uses a formulary1 which is on the formulary of the prescription drug plan or ,,ma-,,pd plan that the applicable beneficiary is enrolled in2 7,,ii7 if the ,,pdp sponsor of the prescription drug plan or the ,,ma organization offering the ,,ma-,,pd plan does not use a formulary1 for which benefits are available under the prescription drug plan or ,,ma-,,pd plan that the applicable beneficiary is enrolled in2 or 7,,iii7 is provided through an exception or appeal2 and 7,b7 does not include a selected drug 7as defined in section #aaib7;c77 during a price applicability period 7as defined in section #aaia7;b77#b77 with respect to such drug4 7#c7 ,applicable number of calendar days ,the term applicable number of calendar days means-- 7,a7 with respect to claims for reimbursement submitted electronically1 #ad days2 and 7,b7 with respect to claims for reimbursement submitted otherwise1 #cj days4 7#d7 ,discounted price 7,a7 ,in general ,the term discounted price means1 with respect to an applicable drug of a manufacturer furnished during a year to an applicable beneficiary-- 7i7 who has not incurred costs for covered part ,d drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b77i7 for the year1 #ij percent of the negotiated price of such drug2 and 7ii7 who has incurred such costs in the year that are equal to or exceed such threshold for the year1 #gj percent of the negotiated price of such drug4 7,b7 ,clarification ,nothing in this section shall be construed as affecting the responsibility of an applicable beneficiary for payment of a dispensing fee for an applicable drug4 7,c7 ,special case for certain claims 7i7 ,claims spanning deductible ,in the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall at or above the annual deductible specified in section #ahfj;,d-#b7;b77#a7 for the year1 the manufacturer of the applicable drug shall provide the discounted price under this section on only the portion of the negotiated price of the applicable drug that falls at or above such annual deductible4 7ii7 ,claims spanning out-of-pocket threshold ,in the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall entirely below or entirely above the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b77i7 for the year1 the manufacturer of the applicable drug shall provide the discounted price-- 7,i7 in accordance with subparagraph 7,a77i7 on the portion of the negotiated price of the applicable drug that falls below such threshold2 and 7,,ii7 in accordance with subparagraph 7,a77ii7 on the portion of such price of such drug that falls at or above such threshold4 7#e7 ,manufacturer ,the term manufacturer means any entity which is engaged in the production1 preparation1 propagation1 compounding1 conversion1 or processing of prescription drug products1 either directly or indirectly by extraction from substances of natural origin1 or independently by means of chemical synthesis1 or by a combination of extraction and chemical synthesis4 ,such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under ,state law4 7#f7 ,negotiated price ,the term negotiated price has the meaning given such term in section #dbc4ajj of title #db1 ,code of ,federal ,regulations 7or any successor regulation71 except that1 with respect to an applicable drug1 such negotiated price shall not include any dispensing fee for the applicable drug4 7#g7 ,qualified retiree prescription drug plan ,the term qualified retiree prescription drug plan has the meaning given such term in section #ahfj;,d-#bb7;a77#b74 4 7#b7 ,sunset of ,medicare coverage gap discount program ,section #ahfj;,d-#ad;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #acie-aad;a7 is amended-- 7,a7 in subsection 7a71 in the first sentence1 by striking ,the ,secretary and inserting ,subject to subsection 7h71 the ,secretary2 and 7,b7 by adding at the end the following new subsection3 7h7 ,sunset of program 7#a7 ,in general ,the program shall not apply with respect to applicable drugs dispensed on or after ,january #a1 #bjbb1 and1 subject to paragraph 7#b71 agreements under this section shall be terminated as of such date4 7#b7 ,continued application for applicable drugs dispensed prior to sunset ,the provisions of this section 7including all responsibilities and duties7 shall continue to apply after ,january #a1 #bjbb1 with respect to applicable drugs dispensed prior to such date4 4 7#c7 ,inclusion of actuarial value of manufacturer discounts in bids ,section #ahfj;,d-#aa of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7 is amended-- 7,a7 in subsection 7b77#b77;,c77iii7-- 7i7 by striking assumptions regarding the reinsurance and inserting 8assumptions regarding-- 7,i7 the reinsurance 2 and 7ii7 by adding at the end the following3 7,,ii7 for #bjbb and each subsequent year1 the manufacturer discounts provided under section #ahfj;,d-#ad;,c subtracted from the actuarial value to produce such bid2 and 2 and 7,b7 in subsection 7c77#a77;,c7-- 7i7 by striking an actuarial valuation of the reinsurance and inserting 8an actuarial valuation of-- 7i7 the reinsurance 2 7ii7 in clause 7i71 as inserted by clause 7i7 of this subparagraph1 by adding and at the end2 and 7iii7 by adding at the end the following3 7ii7 for #bjbb and each subsequent year1 the manufacturer discounts provided under section #ahfj;,d-#ad;,c2 4 7d7 ,conforming amendments 7#a7 ,section #ahfj;,d-#b of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7 is amended-- 7,a7 in subsection 7a77#b77;,a77i77,i71 by striking 1 or an increase in the initial and inserting or1 for a year preceding #bjbb1 an increase in the initial2 7,b7 in subsection 7c77#a77;,c7-- 7i7 in the subparagraph heading1 by striking at initial coverage limit2 and 7ii7 by inserting for a year preceding #bjbb or the annual out-of-pocket threshold specified in subsection 7b77#d77;,b7 for the year for #bjbb and each subsequent year after subsection 7b77#c7 for the year each place it appears2 and 7,c7 in subsection 7d77#a77;,a71 by striking or an initial and inserting or1 for a year preceding #bjbb1 an initial4 7#b7 ,section #ahfj;,d-#d7;a77#d77;,b77i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd7;a77#d77;,b77i77 is amended by striking the initial and inserting for a year preceding #bjbb1 the initial4 7#c7 ,section #ahfj;,d-#ad7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77 is amended-- 7,a7 in paragraph 7#a7-- 7i7 in subparagraph 7,c71 by striking ,the continuation and inserting ,for a year preceding #bjbb1 the continuation2 7ii7 in subparagraph 7,d77iii71 by striking #ahfj;,d-#b7;b77#d77;,a77i77,i7 and inserting #ahfj;,d-#b7;b77#d77;,a77i77,i77aa72 and 7iii7 in subparagraph 7,e71 by striking ,the elimination and inserting ,for a year preceding #bjbb1 the elimination2 and 7,b7 in paragraph 7#b7-- 7i7 in subparagraph 7,c71 by striking ,the continuation and inserting ,for a year preceding #bjbb1 the continuation2 and 7ii7 in subparagraph 7,e71 by striking #ahfj;,d-#b7;b77#d77;,a77i77,i7 and inserting #ahfj;,d-#b7;b77#d77;,a77i77,i77aa74 7#d7 ,section #ahfj;,d-#ba7;d77#g7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aca7;d77#g77 is amended by striking section #ahfj;,d-#b7;b77#d77;,b77i7 and inserting section #ahfj;,d-#b7;b77#d77;,c77i74 7#e7 ,section #ahfj;,d-#bb7;a77#b77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#acb7;a77#b77;,a77 is amended-- 7,a7 by striking the value of any discount and inserting the following3 the value of-- 7i7 for years prior to #bjbb1 any discount 2 7,b7 in clause 7i71 as inserted by subparagraph 7,a7 of this paragraph1 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following new clause3 7ii7 for #bjbb and each subsequent year1 any discount provided pursuant to section #ahfj;,d-#ad;,c4 4 7#f7 ,section #ahfj;,d-#da7;a77#f7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aea7;a77#f77 is amended-- 7,a7 by inserting for a year before #bjbb after #ahfj;,d-#b7;b77#c72 and 7,b7 by inserting for such year before the period4 7#g7 ,section #ahfj;,d-#dc of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aec7 is amended-- 7,a7 in subsection 7a7-- 7i7 by striking paragraph 7#a7 and inserting the following3 7#a7 participate in-- 7,a7 for #bjaa through #bjba1 the ,medicare coverage gap discount program under section #ahfj;,d-#ad;,a2 and 7,b7 for #bjbb and each subsequent year1 the manufacturer discount program under section #ahfj;,d-#ad;,c2 2 7ii7 by striking paragraph 7#b7 and inserting the following3 7#b7 have entered into and have in effect-- 7,a7 for #bjaa through #bjba1 an agreement described in subsection 7b7 of section #ahfj;,d-#ad;,a with the ,secretary2 and 7,b7 for #bjbb and each subsequent year1 an agreement described in subsection 7b7 of section #ahfj;,d-#ad;,c with the ,secretary2 and 2 and 7iii7 by striking paragraph 7#c7 and inserting the following3 7#c7 have entered into and have in effect1 under terms and conditions specified by the ,secretary-- 7,a7 for #bjaa through #bjba1 a contract with a third party that the ,secretary has entered into a contract with under subsection 7d77#c7 of section #ahfj;,d-#ad;,a2 and 7,b7 for #bjbb and each subsequent year1 a contract with a third party that the ,secretary has entered into a contract with under subsection 7d77#c7 of section #ahfj;,d-#ad;,c4 2 and 7,b7 by striking subsection 7b7 and inserting the following3 7b7 ,effective date ,paragraphs 7#a77;,a71 7#b77;,a71 and 7#c77;,a7 of subsection 7a7 shall apply to covered part ,d drugs dispensed under this part on or after ,january #a1 #bjaa1 and before ,january #a1 #bjbb1 and paragraphs 7#a77;,b71 7#b77;,b71 and 7#c77;,b7 of such subsection shall apply to covered part ,d drugs dispensed under this part on or after ,january #a1 #bjbb4 4 7e7 ,effective date ,the amendments made by this section shall apply with respect to plan year #bjbb and subsequent plan years4 #cjb4 ,allowing certain enrollees of prescription drugs plans and ,,ma-,,pd plans under ,medicare program to spread out cost-sharing under certain circumstances ,section #ahfj;,d-#b7;b77#b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77#b771 as amended by section #cja1 is further amended-- 7#a7 in subparagraph 7,a71 by striking ,subject to subparagraphs 7,c7 and 7,d7 and inserting ,subject to subparagraphs 7,c71 7,d71 and 7,e72 and 7#b7 by adding at the end the following new subparagraph3 7,e7 ,enrollee option regarding spreading cost-sharing ,the ,secretary shall establish by regulation a process under which1 with respect to plan year #bjbb and subsequent plan years1 a prescription drug plan or an ,,ma-,,pd plan shall1 in the case of a part ,d eligible individual enrolled with such plan for such plan year who is not a subsidy eligible individual 7as defined in section #ahfj;,d-#ad7;a77#c77 and with respect to whom the plan projects that the dispensing of the first fill of a covered part ,d drug to such individual will result in the individual incurring costs that are equal to or above the annual out-of-pocket threshold specified in paragraph 7#d77;,b7 for such plan year1 provide such individual with the option to make the coinsurance payment required under subparagraph 7,a7 7for the portion of such costs that are not above such annual out-of-pocket threshold7 in the form of periodic installments over the remainder of such plan year4 4 #cjc4 ,establishment of pharmacy quality measures under ,medicare part ,d ,section #ahfj;,d-#d7;c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd7;c77 is amended-- 7#a7 by redesignating the paragraph 7#f71 as added by section #ejced of division ,e of the ,bipartisan ,budget ,act of #bjah 7,public ,law #aae-abc71 as paragraph 7#g72 and 7#b7 by adding at the end the following new paragraph3 7#h7 ,application of pharmacy quality measures 7,a7 ,in general ,a ,,pdp sponsor that implements incentive payments to a pharmacy or price concessions paid by a pharmacy based on quality measures shall use measures established or approved by the ,secretary under subparagraph 7,b7 with respect to payment for covered part ,d drugs dispensed by such pharmacy4 7,b7 ,standard pharmacy quality measures ,the ,secretary shall establish or approve standard quality measures from a consensus and evidence-based organization for payments described in subparagraph 7,a74 ,such measures shall focus on patient health outcomes and be based on proven criteria measuring pharmacy performance4 7,c7 ,effective date ,the requirement under subparagraph 7,a7 shall take effect for plan years beginning on or after ,january #a1 #bjba1 or such earlier date specified by the ,secretary if the ,secretary determines there are sufficient measures established or approved under subparagraph 7,b7 to meet the requirement under subparagraph 7,a74 4 ,,iv ,prescription ,drug ,policies for ,low-,income ,individuals #dja4 ,adjustments to ,medicare part ,d cost-sharing reductions for low-income individuals ,section #ahfj;,d-#ad7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a771 as amended by section #cja7;d71 is further amended-- 7#a7 in paragraph 7#a7-- 7,a7 in subparagraph 7,d7-- 7i7 in clause 7ii7-- 7,i7 by striking that does not exceed #a for and all that follows through the period at the end and inserting that does not exceed-- 7,i7 for plan years before plan year #bjba-- 7aa7 for a generic drug or a preferred drug that is a multiple source drug 7as defined in section #aibg7k77#g77;,a77i771 #a or1 if less1 the copayment amount applicable to an individual under clause 7iii72 and 7bb7 for any other drug1 #c or1 if less1 the copayment amount applicable to an individual under clause 7iii72 and 2 and 7,,ii7 by adding at the end the following new subclauses3 7,,ii7 for plan year #bjba-- 7aa7 for a generic drug1 #j2 and 7bb7 for any other drug1 the dollar amount applied under this clause 7after application of paragraph 7#d77;,a77 for plan year #bjbj for a drug described in subclause 7,i77bb72 and 7,,iii7 for a subsequent year1 the dollar amount applied under this clause for the previous year for the drug1 increased by the annual percentage increase in the consumer price index 7all items2 ,u4,s4 city average7 as of ,september of such previous year4 2 and 7ii7 in clause 7iii7-- 7,i7 by striking does not exceed the copayment amount specified under and inserting does not exceed-- 7,i7 for plan years beginning before plan year #bjba1 the copayment amount specified under 2 7,,ii7 by striking the period at the end and inserting 2 and2 and 7,,iii7 by adding at the end the following new subclause3 7,,ii7 for plan year #bjba and each subsequent plan year1 the copayment amount applied under clause 7ii7 for the drug and year involved4 2 and 7,b7 by adding at the end the following new subparagraph3 7,f7 ,rounding ,any amount established under clause 7ii7 of subparagraph 7,d71 including as applied under clause 7iii7 of such subparagraph or paragraph 7#b77;,d71 that is based on an increase of #c1 that is not a multiple of #e cents or #aj cents1 respectively1 shall be rounded to the nearest multiple of #e cents or #aj cents1 respectively4 2 7#b7 in paragraph 7#b7-- 7,a7 in subparagraph 7,d7-- 7i7 by striking of coinsurance of and inserting of-- 7i7 for plan years before plan year #bjba1 coinsurance of 2 7ii7 by striking the period at the end and inserting 2 and2 and 7iii7 by adding at the end the following new clause3 7ii7 for plan year #bjba and each subsequent plan year1 a copayment amount that does not exceed the copayment amount applied under paragraph 7#a77;,d77ii7 for the drug and year involved4 2 and 7,b7 in subparagraph 7,e7-- 7i7 by striking subsection 7c71 the substitution for and inserting subsection 7c7-- 7i7 for plan years before plan year #bjba1 the substitution for 2 7ii7 by striking the period at the end and inserting 2 and2 and 7iii7 by adding at the end the following new clause3 7ii7 for plan year #bjba1 the elimination of any cost-sharing imposed under section #ahfj;,d-#b7;b77#d77;,a74 2 and 7#c7 in paragraph 7#d77;,a77ii71 by inserting 7before #bjba7 after subsequent year4 #djb4 ,dissemination to ,medicare part ,d subsidy eligible individuals of information comparing premiums of certain prescription drug plans ,section #ahfj;,d-#a7;c77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aja7;c77#c77 is amended by adding at the end the following new subparagraph3 7,c7 ,information on premiums for subsidy eligible individuals 7i7 ,in general ,for plan year #bjbb and each subsequent plan year1 the ,secretary shall disseminate to each subsidy eligible individual 7as defined in section #ahfj;,d-#ad7;a77#c77 information under this paragraph comparing premiums that would apply to such individual for prescription drug coverage under ,,lis benchmark plans1 including1 in the case of an individual enrolled in a prescription drug plan under this part1 information that compares the premium that would apply if such individual were to remain enrolled in such plan to premiums that would apply if the individual were to enroll in other ,,lis benchmark plans4 7ii7 ,,lis benchmark plan ,for purposes of clause 7i71 the term ,,lis benchmark plan means1 with respect to an individual1 a prescription drug plan under this part that is offered in the region in which the individual resides and-- 7,i7 that provides for a premium that is not more than the low-income benchmark premium amount 7as defined in section #ahfj;,d-#ad7;b77#b77 for such region2 or 7,,ii7 with respect to which the premium would be waived as de minimis pursuant to section #ahfj;,d-#ad7;a77#e7 for such individual4 4 #djc4 ,providing for intelligent assignment of certain subsidy eligible individuals auto-enrolled under ,medicare prescription drug plans and ,,ma-,,pd plans 7a7 ,in general ,section #ahfj;,d-#a7;b77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aja7;b77#a77 is amended-- 7#a7 in subparagraph 7,c7-- 7,a7 by inserting after ,,pdp region the following3 or through use of an intelligent assignment process that is designed to maximize the access of such individual to necessary prescription drugs while minimizing costs to such individual and to the program under this part to the greatest extent possible4 ,in the case the ,secretary enrolls such individuals through use of an intelligent assignment process1 such process shall take into account the extent to which prescription drugs necessary for the individual are covered in the case of a ,,pdp sponsor of a prescription drug plan that uses a formulary1 the use of prior authorization or other restrictions on access to coverage of such prescription drugs by such a sponsor1 and the overall quality of a prescription drug plan as measured by quality ratings established by the ,secretary2 and 7,b7 by striking ,nothing in the previous sentence and inserting ,nothing in this subparagraph2 and 7#b7 in subparagraph 7,d7-- 7,a7 by inserting after ,,pdp region the following3 or through use of an intelligent assignment process that is designed to maximize the access of such individual to necessary prescription drugs while minimizing costs to such individual and to the program under this part to the greatest extent possible4 ,in the case the ,secretary enrolls such individuals through use of an intelligent assignment process1 such process shall take into account the extent to which prescription drugs necessary for the individual are covered in the case of a ,,pdp sponsor of a prescription drug plan that uses a formulary1 the use of prior authorization or other restrictions on access to coverage of such prescription drugs by such a sponsor1 and the overall quality of a prescription drug plan as measured by quality ratings established by the ,secretary2 and 7,b7 by striking ,nothing in the previous sentence and inserting ,nothing in this subparagraph4 7b7 ,effective date ,the amendments made by subsection 7a7 shall apply with respect to plan years beginning with plan year #bjbb4 #djd4 ,expanding eligibility for low-income subsidies under part ,d of the ,medicare program ,section #ahfj;,d-#ad7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a771 as amended by sections #cja7;d7 and #dja1 is further amended-- 7#a7 in the subsection heading1 by striking individuals and all that follows through line and inserting certain individuals2 7#b7 in paragraph 7#a7-- 7,a7 by striking the paragraph heading and inserting ,individuals with certain low incomes2 and 7,b7 in the matter preceding subparagraph 7,a71 by inserting 7or1 with respect to a plan year beginning on or after ,january #a1 #bjbb1 #aej percent7 after #ace percent2 7#c7 in paragraph 7#b7-- 7,a7 by striking the paragraph heading and inserting ,other low-income individuals2 and 7,b7 in subparagraph 7,a7-- 7i7 by inserting 7or1 with respect to a plan year beginning on or after ,january #a1 #bjbb1 #aej percent7 after #ace percent2 and 7ii7 by inserting 7or1 with respect to a plan year beginning on or after ,january #a1 #bjbb1 #bjj percent7 after #aej percent2 and 7#d7 in paragraph 7#c77;,a77ii71 by inserting 7or1 with respect to a plan year beginning on or after ,january #a1 #bjbb1 #bjj percent7 after #aej percent4 #dje4 ,automatic eligibility of certain low-income territorial residents for premium and cost-sharing subsidies under the ,medicare program2 ,sunset of enhanced allotment program 7a7 ,automatic eligibility of certain low-,income territorial residents for premium and cost-,sharing subsidies under the ,medicare program 7#a7 ,in general ,section #ahfj;,d-#ad7;a77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77#c77 is amended-- 7,a7 in subparagraph 7,b77v7-- 7i7 in subclause 7,i71 by striking and at the end2 7ii7 in subclause 7,,ii71 by striking the period and inserting 2 and2 and 7iii7 by inserting after subclause 7,,ii7 the following new subclause3 7,,iii7 with respect to plan years beginning on or after ,january #a1 #bjba1 shall provide that any part ,d eligible individual who is enrolled for medical assistance under the ,state ,medicaid plan of a territory 7as defined in section #aice7;f77 under title ,,xix 7or a waiver of such a plan7 shall be treated as a subsidy eligible individual described in paragraph 7#a74 2 and 7,b7 in subparagraph 7,f71 by adding at the end the following new sentence3 ,the previous sentence shall not apply with respect to eligibility determinations for premium and cost-sharing subsidies under this section made on or after ,january #a1 #bjba44 7#b7 ,conforming amendment ,section #ahfj;,d-#ca7;j77#b77;,d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ada7;j77#b77;,d77 is amended by adding at the end the following new sentence3 ,the previous sentence shall not apply with respect to amounts made available to a ,state under this paragraph on or after ,january #a1 #bjba44 7b7 ,sunset of enhanced allotment program 7#a7 ,in general ,section #aice7;e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifu-#e7;e77 is amended-- 7,a7 in paragraph 7#a77;,a71 by inserting after such ,state the following3 before ,january #a1 #bjba2 and 7,b7 in paragraph 7#c7-- 7i7 in subparagraph 7,a71 in the matter preceding clause 7i71 by inserting after a year the following3 7before #bjba72 and 7ii7 in subparagraph 7,b77iii71 by striking a subsequent year and inserting each of fiscal years #bjjh through #bjbj4 7#b7 ,territory defined ,section #aice of the ,social ,security ,act 7#db ,u4,s4,c4 #acifu-#e7 is amended by adding at the end the following new subsection3 7f7 ,territory defined ,in this section1 the term territory means ,puerto ,rico1 the ,virgin ,islands1 ,guam1 the ,northern ,mariana ,islands1 and ,american ,samoa4 4 #djf4 ,automatic qualification of certain ,medicaid beneficiaries for premium and cost-sharing subsidies under part ,d of the ,medicare program ,clause 7v7 of section #ahfj;,d-#ad7;a77#c77;,b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77#c77;,b771 as amended by section #dje1 is further amended-- 7#a7 in subclause 7,,ii71 by striking and at the end2 7#b7 in subclause 7,,iii71 by striking the period and inserting 2 and2 and 7#c7 by inserting after subclause 7,,iii7 the following new subclause3 7,,iv7 with respect to plan years beginning on or after ,january #a1 #bjbb1 shall1 notwithstanding the preceding clauses of this subparagraph1 provide that any part ,d eligible individual not described in subclause 7,i71 7,,ii71 or 7,,iii7 who is enrolled1 as of the day before the date on which such individual attains the age of #fe1 for medical assistance under a ,state plan under title ,,xix 7or a waiver of such plan7 pursuant to clause 7i77,,viii7 or 7ii77,,xx7 of section #aijb7;a77#aj77;,a71 and who has income below #bjj percent of the poverty line applicable to a family of the size involved1 shall be treated as a subsidy eligible individual described in paragraph 7#a7 for a limited period of time1 as specified by the ,secretary4 4 #djg4 ,eliminating the resource requirement with respect to subsidy eligible individuals under part ,d of the ,medicare program ,section #ahfj;,d-#ad7;a77#c77;,a77iii7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77#c77;,a77iii77 is amended by inserting in the case of a plan year beginning before ,january #a1 #bjbb1 before meets4 #djh4 ,providing for certain rules regarding the treatment of eligible retirement plans in determining the eligibility of individuals for premium and cost-sharing subsidies under part ,d of the ,medicare program ,section #ahfj;,d-#ad7;a77#c77;,c77i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77#c77;,c77i77 is amended1 by striking except that support and maintenance furnished in kind shall not be counted as income2 and and inserting except that-- 7,i7 support and maintenance furnished in kind shall not be counted as income2 and 7,,ii7 for plan years beginning on or after ,january #a1 #bjbb1 any distribution or withdrawal from an eligible retirement plan 7as defined in subparagraph 7,b7 of section #djb7;c77#h7 of the ,internal ,revenue ,code of #aihf1 but excluding any defined benefit plan described in clause 7iv7 or 7v7 of such subparagraph and any qualified trust 7as defined in subparagraph 7,a7 of such section7 which is part of such a defined benefit plan7 shall be counted as income2 and 4 ,v ,drug ,price ,transparency #eja4 ,drug price transparency ,part ,a of title ,,xi of the ,social ,security ,act is amended by adding at the end the following new sections3 #aaej;,c4 ,reporting on drug prices 7a7 ,definitions ,in this section3 7#a7 ,manufacturer ,the term manufacturer means the person-- 7,a7 that holds the application for a drug approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under section #cea of the ,public ,health ,service ,act2 or 7,b7 who is responsible for setting the wholesale acquisition cost for the drug4 7#b7 ,qualifying drug ,the term qualifying drug means any drug that is approved under subsection 7c7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under subsection 7a7 or 7k7 of section #cea of the ,public ,health ,service ,act-- 7,a7 that has a wholesale acquisition cost of #ajj or more1 adjusted for inflation occurring after the date of enactment of this section1 for a month's supply or a typical course of treatment that lasts less than a month1 and is-- 7i7 subject to section #ejc7;b77#a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act2 and 7ii7 not a preventative vaccine2 and 7,b7 for which1 during the previous calendar year1 at least #a dollar of the total amount of sales were for individuals enrolled under the ,medicare program under title ,,xviii or under a ,state ,medicaid plan under title ,,xix or under a waiver of such plan4 7#c7 ,wholesale acquisition cost ,the term wholesale acquisition cost has the meaning given that term in section #ahdg;,a7c77#f77;,b74 7b7 ,report 7#a7 ,report required ,the manufacturer of a qualifying drug shall submit a report to the ,secretary if1 with respect to the qualifying drug-- 7,a7 there is an increase in the price of the qualifying drug that results in an increase in the wholesale acquisition cost of that drug that is equal to-- 7i7 #aj percent or more within a #ab-month period beginning on or after ,january #a1 #bjai2 or 7ii7 #be percent or more within a #cf-month period beginning on or after ,january #a1 #bjai2 7,b7 the estimated price of the qualifying drug or spending per individual or per user of such drug 7as estimated by the ,secretary7 for the applicable year 7or per course of treatment in such applicable year as determined by the ,secretary7 is at least #bf1jjj beginning on or after ,january #a1 #bjba2 or 7,c7 there was an increase in the price of the qualifying drug that resulted in an increase in the wholesale acquisition cost of that drug that is equal to-- 7i7 #aj percent or more within a #ab-month period that begins and ends during the #e-year period preceding ,january #a1 #bjba2 or 7ii7 #be percent or more within a #cf-month period that begins and ends during the #e-year period preceding ,january #a1 #bjba4 7#b7 ,report deadline ,each report described in paragraph 7#a7 shall be submitted to the ,secretary-- 7,a7 in the case of a report with respect to an increase in the price of a qualifying drug that occurs during the period beginning on ,january #a1 #bjai1 and ending on the day that is #fj days after the date of the enactment of this section1 not later than #ij days after such date of enactment2 7,b7 in the case of a report with respect to an increase in the price of a qualifying drug that occurs after the period described in subparagraph 7,a71 not later than #cj days prior to the planned effective date of such price increase for such qualifying drug2 7,c7 in the case of a report with respect to a qualifying drug that meets the criteria under paragraph 7#a77;,b71 not later than #cj days after such drug meets such criteria2 and 7,d7 in the case of a report with respect to an increase in the price of a qualifying drug that occurs during a #ab-month or #cf-month period described in paragraph 7#a77;,c71 not later than ,april #a1 #bjba4 7c7 ,contents ,a report under subsection 7b71 consistent with the standard for disclosures described in section #bac4c7;d7 of title #ab1 ,code of ,federal ,regulations 7as in effect on the date of enactment of this section71 shall1 at a minimum1 include-- 7#a7 with respect to the qualifying drug-- 7,a7 the percentage by which the manufacturer will raise the wholesale acquisition cost of the drug within the #ab-month period or #cf-month period as described in subsection 7b77#a77;,a77i71 7b77#a77;,a77ii71 7b77#a77;,c77i71 or 7b77#a77;,c77ii71 as applicable1 and the effective date of such price increase or the cost associated with a qualifying drug if such drug meets the criteria under subsection 7b77#a77;,b7 and the effective date at which such drug meets such criteria2 7,b7 an explanation for1 and description of1 each price increase for such drug that will occur during the #ab-month period or the #cf-month period described in subsection 7b77#a77;,a77i71 7b77#a77;,a77ii71 7b77#a77;,c77i71 or 7b77#a77;,c77ii71 as applicable2 7,c7 an explanation for1 and description of1 the cost associated with a qualifying drug if such drug meets the criteria under subsection 7b77#a77;,b71 as applicable2 7,d7 if known and different from the manufacturer of the qualifying drug1 the identity of-- 7i7 the sponsor or sponsors of any investigational new drug applications under section #eje7;i7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act for clinical investigations with respect to such drug1 for which the full reports are submitted as part of the application-- 7,i7 for approval of the drug under section #eje of such ,act2 or 7,,ii7 for licensure of the drug under section #cea of the ,pubic ,health ,service ,act2 and 7ii7 the sponsor of an application for the drug approved under such section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under section #cea of the ,public ,health ,service ,act2 7,e7 a description of the history of the manufacturer's price increases for the drug since the approval of the application for the drug under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or the issuance of the license for the drug under section #cea of the ,public ,health ,service ,act1 or since the manufacturer acquired such approved application or license1 if applicable2 7,f7 the current wholesale acquisition cost of the drug2 7,g7 the total expenditures of the manufacturer on-- 7i7 materials and manufacturing for such drug2 7ii7 acquiring patents and licensing for such drug2 and 7iii7 purchasing or acquiring such drug from another manufacturer1 if applicable2 7,h7 the percentage of total expenditures of the manufacturer on research and development for such drug that was derived from ,federal funds2 7,i7 the total expenditures of the manufacturer on research and development for such drug that is necessary to demonstrate that it meets applicable statutory standards for approval under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensure under section #cea of the ,public ,health ,service ,act1 as applicable2 7,j7 the total expenditures of the manufacturer on pursuing new or expanded indications or dosage changes for such drug under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or section #cea of the ,public ,health ,service ,act2 7,k7 the total expenditures of the manufacturer on carrying out postmarket requirements related to such drug1 including under section #eje7o77#c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act2 7,l7 the total revenue and the net profit generated from the qualifying drug for each calendar year since the approval of the application for the drug under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or the issuance of the license for the drug under section #cea of the ,public ,health ,service ,act1 or since the manufacturer acquired such approved application or license2 and 7,m7 the total costs associated with marketing and advertising for the qualifying drug2 7#b7 with respect to the manufacturer-- 7,a7 the total revenue and the net profit of the manufacturer for each of the #ab-month period described in subsection 7b77#a77;,a77i7 or 7b77#a77;,c77i7 or the #cf-month period described in subsection 7b77#a77;,a77ii7 or 7b77#a77;,c77ii71 as applicable2 7,b7 all stock-based performance metrics used by the manufacturer to determine executive compensation for each of the #ab-month periods described in subsection 7b77#a77;,a77i7 or 7b77#a77;,c77i7 or the #cf-month periods described in subsection 7b77#a77;,a77ii7 or 7b77#a77;,c77ii71 as applicable2 and 7,c7 any additional information the manufacturer chooses to provide related to drug pricing decisions1 such as total expenditures on-- 7i7 drug research and development2 or 7ii7 clinical trials1 including on drugs that failed to receive approval by the ,food and ,drug ,administration2 and 7#c7 such other related information as the ,secretary considers appropriate and as specified by the ,secretary4 7d7 ,information provided ,the manufacturer of a qualifying drug that is required to submit a report under subsection 7b71 shall ensure that such report and any explanation for1 and description of1 each price increase described in subsection 7c77#a7 shall be truthful1 not misleading1 and accurate4 7e7 ,civil monetary penalty ,any manufacturer of a qualifying drug that fails to submit a report for the drug as required by this section1 following notification by the ,secretary to the manufacturer that the manufacturer is not in compliance with this section1 shall be subject to a civil monetary penalty of #ge1jjj for each day on which the violation continues4 7f7 ,false information ,any manufacturer that submits a report for a drug as required by this section that knowingly provides false information in such report is subject to a civil monetary penalty in an amount not to exceed #ajj1jjj for each item of false information4 7g7 ,public posting 7#a7 ,in general ,subject to paragraph 7#d71 the ,secretary shall post each report submitted under subsection 7b7 on the public website of the ,department of ,health and ,human ,services the day the price increase of a qualifying drug is scheduled to go into effect4 7#b7 ,format ,in developing the format in which reports will be publicly posted under paragraph 7#a71 the ,secretary shall consult with stakeholders1 including beneficiary groups1 and shall seek feedback from consumer advocates and readability experts on the format and presentation of the content of such reports to ensure that such reports are-- 7,a7 user-friendly to the public2 and 7,b7 written in plain language that consumers can readily understand4 7#c7 ,list ,in addition to the reports submitted under subsection 7b71 the ,secretary shall also post a list of each qualifying drug with respect to which the manufacturer was required to submit such a report in the preceding year and whether such manufacturer was required to submit such report based on a qualifying price increase or whether such drug meets the criteria under subsection 7b77#a77;,b74 7#d7 ,protected information ,in carrying out this section1 the ,secretary shall enforce applicable law concerning the protection of confidential commercial information and trade secrets4 #aaej;,d4 ,annual report to ,congress 7a7 ,in ,general ,subject to subsection 7b71 the ,secretary shall submit to the ,committees on ,energy and ,commerce and ,ways and ,means of the ,house of ,representatives and the ,committees on ,health1 ,education1 ,labor1 and ,pensions and ,finance of the ,senate1 and post on the public website of the ,department of ,health and ,human ,services in a way that is user-friendly to the public and written in plain language that consumers can readily understand1 an annual report-- 7#a7 summarizing the information reported pursuant to section #aaej;,c2 7#b7 including copies of the reports and supporting detailed economic analyses submitted pursuant to such section2 7#c7 detailing the costs and expenditures incurred by the ,department of ,health and ,human ,services in carrying out section #aaej;,c2 and 7#d7 explaining how the ,department of ,health and ,human ,services is improving consumer and provider information about drug value and drug price transparency4 7b7 ,protected information ,in carrying out this section1 the ,secretary shall enforce applicable law concerning the protection of confidential commercial information and trade secrets4 4 #a4 ,short title2 table of contents 7a7 ,in general ,this ,act may be cited as the ,lower ,drug ,costs ,now ,act of #bjai4 7b7 ,table of contents ,the table of contents is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,title ,i--,lowering ,prices ,through ,fair ,drug ,price ,negotiation ,sec4 #aja4 ,providing for lower prices for certain high-priced single source drugs4 ,sec4 #ajb4 ,selected drug manufacturer excise tax imposed during noncompliance periods4 ,title ,,ii--,medicare ,parts ,b and ,d ,prescription ,drug ,inflation ,rebates ,sec4 #bja4 ,medicare part ,b rebate by manufacturers4 ,sec4 #bjb4 ,medicare part ,d rebate by manufacturers4 ,title ,,iii--,part ,d ,improvements and ,maximum ,out-of-,pocket ,cap for ,medicare ,beneficiaries ,sec4 #cja4 ,medicare part ,d benefit redesign4 ,i ,lowering ,prices ,through ,fair ,drug ,price ,negotiation #aja4 ,providing for lower prices for certain high-priced single source drugs 7a7 ,program ,to lower prices for certain high-,priced single source drugs ,title ,,xi of the ,social ,security ,act 7#db ,u4,s4,c4 #acja et seq47 is amended by adding at the end the following new part3 ,e ,fair ,price ,negotiation ,program to ,lower ,prices for ,certain ,high-,priced ,single ,source ,drugs #aaia4 ,establishment of program 7a7 ,in general ,the ,secretary shall establish a ,fair ,price ,negotiation ,program 7in this part referred to as the program74 ,under the program1 with respect to each price applicability period1 the ,secretary shall-- 7#a7 publish a list of selected drugs in accordance with section #aaib2 7#b7 enter into agreements with manufacturers of selected drugs with respect to such period1 in accordance with section #aaic2 7#c7 negotiate and1 if applicable1 renegotiate maximum fair prices for such selected drugs1 in accordance with section #aaid2 and 7#d7 carry out the administrative duties described in section #aaif4 7b7 ,definitions relating to timing ,for purposes of this part3 7#a7 ,initial price applicability year ,the term initial price applicability year means a plan year 7beginning with plan year #bjbc7 or1 if agreed to in an agreement under section #aaic by the ,secretary and manufacturer involved1 a period of more than one plan year 7beginning on or after ,january #a1 #bjbc74 7#b7 ,price applicability period ,the term price applicability period means1 with respect to a drug1 the period beginning with the initial price applicability year with respect to which such drug is a selected drug and ending with the last plan year during which the drug is a selected drug4 7#c7 ,selected drug publication date ,the term selected drug publication date means1 with respect to each initial price applicability year1 ,april #ae of the plan year that begins #b years prior to such year4 7#d7 ,voluntary negotiation period ,the term voluntary negotiation period means1 with respect to an initial price applicability year with respect to a selected drug1 the period-- 7,a7 beginning on the sooner of-- 7i7 the date on which the manufacturer of the drug and the ,secretary enter into an agreement under section #aaic with respect to such drug2 or 7ii7 ,june #ae following the selected drug publication date with respect to such selected drug2 and 7,b7 ending on ,march #ca of the year that begins one year prior to the initial price applicability year4 7c7 ,other definitions ,for purposes of this part3 7#a7 ,fair price eligible individual ,the term fair price eligible individual means1 with respect to a selected drug-- 7,a7 in the case such drug is furnished or dispensed to the individual at a pharmacy or by a mail order service-- 7i7 an individual who is enrolled under a prescription drug plan under part ,d of title ,,xviii or an ,,ma-,,pd plan under part ,c of such title under which coverage is provided for such drug2 and 7ii7 an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market 7as such terms are defined in section #bgia of the ,public ,health ,service ,act7 with respect to which there is in effect an agreement with the ,secretary under section #aaig with respect to such selected drug as so furnished or dispensed2 and 7,b7 in the case such drug is furnished or administered to the individual by a hospital1 physician1 or other provider of services or supplier-- 7i7 an individual who is entitled to benefits under part ,a of title ,,xviii or enrolled under part ,b of such title if such selected drug is covered under the respective part2 and 7ii7 an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market 7as such terms are defined in section #bgia of the ,public ,health ,service ,act7 with respect to which there is in effect an agreement with the ,secretary under section #aaig with respect to such selected drug as so furnished or administered4 7#b7 ,maximum fair price ,the term maximum fair price means1 with respect to a plan year during a price applicability period and with respect to a selected drug 7as defined in section #aaib7;c77 with respect to such period1 the price published pursuant to section #aaie in the ,federal ,register for such drug and year4 7#c7 ,average international market price defined 7,a7 ,in general ,the terms average international market price and ,,aim price mean1 with respect to a drug1 the average price 7which shall be the net average price1 if practicable1 and volume-weighted1 if practicable7 for a unit 7as defined in paragraph 7#d77 of the drug for sales of such drug 7calculated across different dosage forms and strengths of the drug and not based on the specific formulation or package size or package type71 as computed 7as of the date of publication of such drug as a selected drug under section #aaib7;a77 in all countries described in clause 7ii7 of subparagraph 7,b7 that are applicable countries 7as described in clause 7i7 of such subparagraph7 with respect to such drug4 7,b7 ,applicable countries 7i7 ,in general ,for purposes of subparagraph 7,a71 a country described in clause 7ii7 is an applicable country described in this clause with respect to a drug if there is available an average price for any unit for the drug for sales of such drug in such country4 7ii7 ,countries described ,for purposes of this paragraph1 the following are countries described in this clause3 7,i7 ,australia4 7,,ii7 ,canada4 7,,iii7 ,france4 7,,iv7 ,germany4 7,v7 ,japan4 7,,vi7 ,the ,united ,kingdom4 7#d7 ,unit ,the term unit means1 with respect to a drug1 the lowest identifiable quantity 7such as a capsule or tablet1 milligram of molecules1 or grams7 of the drug that is dispensed4 #aaib4 ,selection of negotiation-eligible drugs as selected drugs 7a7 ,in general ,not later than the selected drug publication date with respect to an initial price applicability year1 the ,secretary shall select and publish in the ,federal ,register a list of-- 7#a7 7,a7 with respect to an initial price applicability year during the period beginning with #bjbc and ending with #bjbg1 at least #be negotiation-eligible drugs described in subparagraphs 7,a7 and 7,b71 but not subparagraph 7,c71 of subsection 7d77#a7 7or1 with respect to an initial price applicability year during such period beginning after #bjbc1 the maximum number 7if such number is less than #be7 of such negotiation-eligible drugs for the year7 with respect to such year2 7,b7 with respect to an initial price applicability year during the period beginning with #bjbh and ending with #bjcb1 at least #cj negotiation-eligible drugs described in subparagraphs 7,a7 and 7,b71 but not subparagraph 7,c71 of subsection 7d77#a7 7or1 with respect to an initial price applicability year during such period1 the maximum number 7if such number is less than #cj7 of such negotiation-eligible drugs for the year7 with respect to such year2 and 7,c7 with respect to an initial price applicability year beginning after #bjcb1 at least #ce negotiation-eligible drugs described in subparagraphs 7,a7 and 7,b71 but not subparagraph 7,c71 of subsection 7d77#a7 7or1 with respect to an initial price applicability year during such period1 the maximum number 7if such number is less than #ce7 of such negotiation-eligible drugs for the year7 with respect to such year2 7#b7 all negotiation-eligible drugs described in subparagraph 7,c7 of such subsection with respect to such year2 and 7#c7 all new-entrant negotiation-eligible drugs 7as defined in subsection 7g77#a77 with respect to such year4 ,each drug published on the list pursuant to the previous sentence shall be subject to the negotiation process under section #aaid for the voluntary negotiation period with respect to such initial price applicability year 7and the renegotiation process under such section as applicable for any subsequent year during the applicable price applicability period74 ,in applying this subsection1 any negotiation-eligible drug that is selected under this subsection for an initial price applicability year shall not count toward the required minimum amount of drugs to be selected under paragraph 7#a7 for any subsequent year1 including such a drug so selected that is subject to renegotiation under section #aaid4 7b7 ,selection of drugs ,in carrying out subsection 7a77#a7 the ,secretary shall select for inclusion on the published list described in subsection 7a7 with respect to a price applicability period1 the negotiation-eligible drugs that the ,secretary projects will result in the greatest savings to the ,federal ,government or fair price eligible individuals during the price applicability period4 ,in making this projection of savings for drugs for which there is an ,,aim price for a price applicability period1 the savings shall be projected across different dosage forms and strengths of the drugs and not based on the specific formulation or package size or package type of the drugs1 taking into consideration both the volume of drugs for which payment is made1 to the extent such data is available1 and the amount by which the net price for the drugs exceeds the ,,aim price for the drugs4 7c7 ,selected drug ,for purposes of this part1 each drug included on the list published under subsection 7a7 with respect to an initial price applicability year shall be referred to as a selected drug with respect to such year and each subsequent plan year beginning before the first plan year beginning after the date on which the ,secretary determines two or more drug products-- 7#a7 are approved or licensed 7as applicable7-- 7,a7 under section #eje7;j7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act using such drug as the listed drug2 or 7,b7 under section #cea7k7 of the ,public ,health ,service ,act using such drug as the reference product2 and 7#b7 continue to be marketed4 7d7 ,negotiation-,eligible drug 7#a7 ,in general ,for purposes of this part1 the term negotiation-eligible drug means1 with respect to the selected drug publication date with respect to an initial price applicability year1 a qualifying single source drug1 as defined in subsection 7e71 that meets any of the following criteria3 7,a7 ,covered part ,d drugs ,the drug is among the #abe covered part ,d drugs 7as defined in section #ahfj;,d-#b7;e77 for which there was an estimated greatest net spending under parts ,c and ,d of title ,,xviii1 as determined by the ,secretary1 during the most recent plan year prior to such drug publication date for which data are available4 7,b7 ,other drugs ,the drug is among the #abe drugs for which there was an estimated greatest net spending in the ,united ,states 7including the #ej ,states1 the ,district of ,columbia1 and the territories of the ,united ,states71 as determined by the ,secretary1 during the most recent plan year prior to such drug publication date for which data are available4 7,c7 ,insulin ,the drug is a qualifying single source drug described in subsection 7e77#c74 7#b7 ,clarification ,in determining whether a qualifying single source drug satisfies any of the criteria described in paragraph 7#a71 the ,secretary shall1 to the extent practicable1 use data that is aggregated across dosage forms and strengths of the drug and not based on the specific formulation or package size or package type of the drug4 7#c7 ,publication ,not later than the selected drug publication date with respect to an initial price applicability year1 the ,secretary shall publish in the ,federal ,register a list of negotiation-eligible drugs with respect to such selected drug publication date4 7e7 ,qualifying single source drug ,for purposes of this part1 the term qualifying single source drug means any of the following3 7#a7 ,drug products ,a drug that-- 7,a7 is approved under section #eje7;c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act and continues to be marketed pursuant to such approval2 and 7,b7 is not the listed drug for any drug that is approved and continues to be marketed under section #eje7;j7 of such ,act4 7#b7 ,biological products ,a biological product that-- 7,a7 is licensed under section #cea7;a7 of the ,public ,health ,service ,act1 including any product that has been deemed to be licensed under section #cea of such ,act pursuant to section #gjjb7;e77#d7 of the ,biologics ,price ,competition and ,innovation ,act of #bjji1 and continues to be marketed under section #cea of such ,act2 and 7,b7 is not the reference product for any biological product that is licensed and continues to be marketed under section #cea7k7 of such ,act4 7#c7 ,insulin product ,notwithstanding paragraphs 7#a7 and 7#b71 any insulin product that is approved under subsection 7c7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under subsection 7a7 or 7k7 of section #cea of the ,public ,health ,service ,act and continues to be marketed under such section #eje or #cea1 including any insulin product that has been deemed to be licensed under section #cea7;a7 of the ,public ,health ,service ,act pursuant to section #gjjb7;e77#d7 of the ,biologics ,price ,competition and ,innovation ,act of #bjji and continues to be marketed pursuant to such licensure4 ,for purposes of applying paragraphs 7#a7 and 7#b71 a drug or biological product that is marketed by the same sponsor or manufacturer 7or an affiliate thereof or a cross-licensed producer or distributor7 as the listed drug or reference product described in such respective paragraph shall not be taken into consideration4 7f7 ,information on international drug prices ,for purposes of determining which negotiation-eligible drugs to select under subsection 7a7 and1 in the case of such drugs that are selected drugs1 to determine the maximum fair price for such a drug and whether such maximum fair price should be renegotiated under section #aaid1 the ,secretary shall use data relating to the ,,aim price with respect to such drug as available or provided to the ,secretary and shall on an ongoing basis request from manufacturers of selected drugs information on the ,,aim price of such a drug4 7g7 ,new-entrant negotiation-eligible drugs 7#a7 ,in general ,for purposes of this part1 the term new-entrant negotiation-eligible drug means1 with respect to the selected drug publication date with respect to an initial price applicability year1 a qualifying single source drug-- 7,a7 that is first approved or licensed1 as described in paragraph 7#a71 7#b71 or 7#c7 of subsection 7e71 as applicable1 during the year preceding such selected drug publication date2 and 7,b7 that the ,secretary determines under paragraph 7#b7 is likely to be a negotiation-eligible drug with respect to the subsequent selected drug publication date4 7#b7 ,determination ,in the case of a qualifying single source drug that meets the criteria described in subparagraphs 7,a7 and 7,b7 of paragraph 7#a71 with respect to an initial price applicability year1 if the wholesale acquisition cost at which such drug is first marketed in the ,united ,states is equal to or greater than the median household income 7as determined according to the most recent data collected by the ,united ,states ,census ,bureau71 the ,secretary shall determine before the selected drug publication date with respect to the initial price applicability year1 if the drug is likely to be included as a negotiation-eligible drug with respect to the subsequent selected drug publication date1 based on the projected spending under title ,,xviii or in the ,united ,states on such drug4 ,for purposes of this paragraph the term ,united ,states includes the #ej ,states1 the ,district of ,columbia1 and the territories of the ,united ,states4 #aaic4 ,manufacturer agreements 7a7 ,in general ,for purposes of section #aaia7;a77#b71 the ,secretary shall enter into agreements with manufacturers of selected drugs with respect to a price applicability period1 by not later than ,june #ae following the selected drug publication date with respect to such selected drug1 under which-- 7#a7 during the voluntary negotiation period for the initial price applicability year for the selected drug1 the ,secretary and manufacturer1 in accordance with section #aaid1 negotiate to determine 7and1 by not later than the last date of such period and in accordance with subsection 7c71 agree to7 a maximum fair price for such selected drug of the manufacturer in order to provide access to such price-- 7,a7 to fair price eligible individuals who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a7 and are furnished or dispensed such drug during1 subject to subparagraph 7#b71 the price applicability period2 and 7,b7 to hospitals1 physicians1 and other providers of services and suppliers with respect to fair price eligible individuals who with respect to such drug are described in subparagraph 7,b7 of such section and are furnished or administered such drug during1 subject to subparagraph 7#b71 the price applicability period2 7#b7 the ,secretary and the manufacturer shall1 in accordance with a process and during a period specified by the ,secretary pursuant to rulemaking1 renegotiate 7and1 by not later than the last date of such period and in accordance with subsection 7c71 agree to7 the maximum fair price for such drug if the ,secretary determines that there is a material change in any of the factors described in section #aaid7;d7 relating to the drug1 including changes in the ,,aim price for such drug1 in order to provide access to such maximum fair price 7as so renegotiated7-- 7,a7 to fair price eligible individuals who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a7 and are furnished or dispensed such drug during any year during the price applicability period 7beginning after such renegotiation7 with respect to such selected drug2 and 7,b7 to hospitals1 physicians1 and other providers of services and suppliers with respect to fair price eligible individuals who with respect to such drug are described in subparagraph 7,b7 of such section and are furnished or administered such drug during any year described in subparagraph 7,a72 7#c7 the maximum fair price 7including as renegotiated pursuant to paragraph 7#b771 with respect to such a selected drug1 shall be provided to fair price eligible individuals1 who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a71 at the pharmacy or by a mail order service at the point-of-sale of such drug2 7#d7 the manufacturer1 subject to subsection 7c71 submits to the ,secretary1 in a form and manner specified by the ,secretary-- 7,a7 for the voluntary negotiation period for the price applicability period 7and1 if applicable1 before any period of renegotiation specified pursuant to paragraph 7#b77 with respect to such drug all information that the ,secretary requires to carry out the negotiation 7or renegotiation process7 under this part1 including information described in section #aaib7;f7 and section #aaid7;d77#a72 and 7,b7 on an ongoing basis1 information on changes in prices for such drug that would affect the ,,aim price for such drug or otherwise provide a basis for renegotiation of the maximum fair price for such drug pursuant to paragraph 7#b72 7#e7 the manufacturer agrees that in the case the selected drug of a manufacturer is a drug described in subsection 7c71 the manufacturer will1 in accordance with such subsection1 make any payment required under such subsection with respect to such drug2 and 7#f7 the manufacturer complies with requirements imposed by the ,secretary for purposes of administering the program1 including with respect to the duties described in section #aaif4 7b7 ,agreement in effect until drug is no longer a selected drug ,an agreement entered into under this section shall be effective1 with respect to a drug1 until such drug is no longer considered a selected drug under section #aaib7;c74 7c7 ,special rule for certain selected drugs without ,,aim price 7#a7 ,in general ,in the case of a selected drug for which there is no ,,aim price available with respect to the initial price applicability year for such drug and for which an ,,aim price becomes available beginning with respect to a subsequent plan year during the price applicability period for such drug1 if the ,secretary determines that the amount described in paragraph 7#b77;,a7 for a unit of such drug is greater than the amount described in paragraph 7#b77;,b7 for a unit of such drug1 then by not later than one year after the date of such determination1 the manufacturer of such selected drug shall pay to the ,treasury an amount equal to the product of-- 7,a7 the difference between such amount described in paragraph 7#b77;,a7 for a unit of such drug and such amount described in paragraph 7#b77;,b7 for a unit of such drug2 and 7,b7 the number of units of such drug sold in the ,united ,states1 including the #ej ,states1 the ,district of ,columbia1 and the territories of the ,united ,states1 during the period described in paragraph 7#b77;,b74 7#b7 ,amounts described 7,a7 ,weighted average price before ,,aim price available ,for purposes of paragraph 7#a71 the amount described in this subparagraph for a selected drug described in such paragraph1 is the amount equal to the weighted average manufacturer price 7as defined in section #aibg7k77#a77 for such dosage strength and form for the drug during the period beginning with the first plan year for which the drug is included on the list of negotiation-eligible drugs published under section #aaib7;d7 and ending with the last plan year during the price applicability period for such drug with respect to which there is no ,,aim price available for such drug4 7,b7 ,amount multiplier after ,,aim price available ,for purposes of paragraph 7#a71 the amount described in this subparagraph for a selected drug described in such paragraph1 is the amount equal to #bjj percent of the ,,aim price for such drug with respect to the first plan year during the price applicability period for such drug with respect to which there is an ,,aim price available for such drug4 7d7 ,confidentiality of information ,information submitted to the ,secretary under this part by a manufacturer of a selected drug that is proprietary information of such manufacturer 7as determined by the ,secretary7 may be used only by the ,secretary or disclosed to and used by the ,comptroller ,general of the ,united ,states or the ,medicare ,payment ,advisory ,commission for purposes of carrying out this part4 7e7 ,regulations 7#a7 ,in general ,the ,secretary shall1 pursuant to rulemaking1 specify1 in accordance with paragraph 7#b71 the information that must be submitted under subsection 7a77#d74 7#b7 ,information specified ,information described in paragraph 7#a71 with respect to a selected drug1 shall include information on sales of the drug 7by the manufacturer of the drug or by another entity under license or other agreement with the manufacturer1 with respect to the sales of such drug1 regardless of the name under which the drug is sold7 in any foreign country that is part of the ,,aim price4 ,the ,secretary shall verify1 to the extent practicable1 such sales from appropriate officials of the government of the foreign country involved4 7f7 ,compliance with requirements for administration of program ,each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the ,secretary or a third party with a contract under section #aaif7;c77#a71 as applicable1 for purposes of administering the program4 #aaid4 ,negotiation and renegotiation process 7a7 ,in general ,for purposes of this part1 under an agreement under section #aaic between the ,secretary and a manufacturer of a selected drug1 with respect to the period for which such agreement is in effect and in accordance with subsections 7b7 and 7c71 the ,secretary and the manufacturer-- 7#a7 shall during the voluntary negotiation period with respect to the initial price applicability year for such drug1 in accordance with this section1 negotiate a maximum fair price for such drug for the purpose described in section #aaic7;a77#a72 and 7#b7 as applicable pursuant to section #aaic7;a77#b7 and in accordance with the process specified pursuant to such section1 renegotiate such maximum fair price for such drug for the purpose described in such section4 7b7 ,negotiating methodology and objective 7#a7 ,in general ,the ,secretary shall develop and use a consistent methodology for negotiations under subsection 7a7 that1 in accordance with paragraph 7#b7 and subject to paragraph 7#c71 achieves the lowest maximum fair price for each selected drug while appropriately rewarding innovation4 7#b7 ,prioritizing factors ,in considering the factors described in subsection 7d7 in negotiating 7and1 as applicable1 renegotiating7 the maximum fair price for a selected drug1 the ,secretary shall1 to the extent practicable1 consider all of the available factors listed but shall prioritize the following factors3 7,a7 ,research and development costs ,the factor described in paragraph 7#a77;,a7 of subsection 7d74 7,b7 ,market data ,the factor described in paragraph 7#a77;,b7 of such subsection4 7,c7 ,unit costs of production and distribution ,the factor described in paragraph 7#a77;,c7 of such subsection4 7,d7 ,comparison to existing therapeutic alternatives ,the factor described in paragraph 7#b77;,a7 of such subsection4 7#c7 ,requirement 7,a7 ,in general ,in negotiating the maximum fair price of a selected drug1 with respect to an initial price applicability year for the selected drug1 and1 as applicable1 in renegotiating the maximum fair price for such drug1 with respect to a subsequent year during the price applicability period for such drug1 in the case that the manufacturer of the selected drug offers under the negotiation or renegotiation1 as applicable1 a price for such drug that is not more than the target price described in subparagraph 7,b7 for such drug for the respective year1 the ,secretary shall agree under such negotiation or renegotiation1 respectively1 to such offered price as the maximum fair price4 7,b7 ,target price 7i7 ,in general ,subject to clause 7ii71 the target price described in this subparagraph for a selected drug with respect to a year1 is the average price 7which shall be the net average price1 if practicable1 and volume-weighted1 if practicable7 for a unit of such drug for sales of such drug1 as computed 7across different dosage forms and strengths of the drug and not based on the specific formulation or package size or package type of the drug7 in the applicable country described in section #aaia7;c77#c77;,b7 with respect to such drug that1 with respect to such year1 has the lowest average price for such drug as compared to the average prices 7as so computed7 of such drug with respect to such year in the other applicable countries described in such section with respect to such drug4 7ii7 ,selected drugs without ,,aim price ,in applying this paragraph in the case of negotiating the maximum fair price of a selected drug for which there is no ,,aim price available with respect to the initial price applicability year for such drug1 or1 as applicable1 renegotiating the maximum fair price for such drug with respect to a subsequent year during the price applicability period for such drug before the first plan year for which there is an ,,aim price available for such drug1 the target price described in this subparagraph for such drug and respective year is the amount that is #hj percent of the average manufacturer price 7as defined in section #aibg7k77#a77 for such drug and year4 7#d7 ,annual report ,after the completion of each voluntary negotiation period1 the ,secretary shall submit to ,congress a report on the maximum fair prices negotiated 7or1 as applicable1 renegotiated7 for such period4 ,such report shall include information on how such prices so negotiated 7or renegotiated7 meet the requirements of this part1 including the requirements of this subsection4 7c7 ,limitation 7#a7 ,in general ,subject to paragraph 7#b71 the maximum fair price negotiated 7including as renegotiated7 under this section for a selected drug1 with respect to each plan year during a price applicability period for such drug1 shall not exceed #abj percent of the ,,aim price applicable to such drug with respect to such year4 7#b7 ,selected drugs without ,,aim price ,in the case of a selected drug for which there is no ,,aim price available with respect to the initial price applicability year for such drug1 for each plan year during the price applicability period before the first plan year for which there is an ,,aim price available for such drug1 the maximum fair price negotiated 7including as renegotiated7 under this section for the selected drug shall not exceed the amount equal to #he percent of the average manufacturer price for the drug with respect to such year4 7d7 ,considerations ,for purposes of negotiating and1 as applicable1 renegotiating 7including for purposes of determining whether to renegotiate7 the maximum fair price of a selected drug under this part with the manufacturer of the drug1 the ,secretary shall1 consistent with subsection 7b77#b71 take into consideration the following factors3 7#a7 ,manufacturer-specific information ,the following information1 including as submitted by the manufacturer3 7,a7 ,research and development costs of the manufacturer for the drug and the extent to which the manufacturer has recouped research and development costs4 7,b7 ,market data for the drug1 including the distribution of sales across different programs and purchasers and projected future revenues for the drug4 7,c7 ,unit costs of production and distribution of the drug4 7,d7 ,prior ,federal financial support for novel therapeutic discovery and development with respect to the drug4 7,e7 ,data on patents and on existing and pending exclusivity for the drug4 7,f7 ,national sales data for the drug4 7,g7 ,information on clinical trials for the drug in the ,united ,states or in applicable countries described in section #aaia7;c77#c77;,b74 7#b7 ,information on alternative products ,the following information3 7,a7 ,the extent to which the drug represents a therapeutic advance as compared to existing therapeutic alternatives and1 to the extent such information is available1 the costs of such existing therapeutic alternatives4 7,b7 ,information on approval by the ,food and ,drug ,administration of alternative drug products4 7,c7 ,information on comparative effectiveness analysis for such products1 taking into consideration the effects of such products on specific populations1 such as individuals with disabilities1 the elderly1 terminally ill1 children1 and other patient populations4 ,in considering information described in subparagraph 7,c71 the ,secretary shall not use evidence or findings from comparative clinical effectiveness research in a manner that treats extending the life of an elderly1 disabled1 or terminally ill individual as of lower value than extending the life of an individual who is younger1 nondisabled1 or not terminally ill4 ,nothing in the previous sentence shall affect the application or consideration of an ,,aim price for a selected drug4 7#c7 ,foreign sales information ,to the extent available on a timely basis1 including as provided by a manufacturer of the selected drug or otherwise1 information on sales of the selected drug in each of the countries described in section #aaia7;c77#c77;,b74 7#d7 ,additional information ,information submitted to the ,secretary1 in accordance with a process specified by the ,secretary1 by other parties that are affected by the establishment of a maximum fair price for the selected drug4 7e7 ,request for information ,for purposes of negotiating and1 as applicable1 renegotiating 7including for purposes of determining whether to renegotiate7 the maximum fair price of a selected drug under this part with the manufacturer of the drug1 with respect to a price applicability period1 and other relevant data for purposes of this section-- 7#a7 the ,secretary shall1 not later than the selected drug publication date with respect to the initial price applicability year of such period1 request drug pricing information from the manufacturer of such selected drug1 including information described in subsection 7d77#a72 and 7#b7 by not later than ,october #a following the selected drug publication date1 the manufacturer of such selected drug shall submit to the ,secretary such requested information in such form and manner as the ,secretary may require4 ,the ,secretary shall request1 from the manufacturer or others1 such additional information as may be needed to carry out the negotiation and renegotiation process under this section4 #aaie4 ,publication of maximum fair prices 7a7 ,in general ,with respect to an initial price applicability year and selected drug with respect to such year1 not later than ,april #a of the plan year prior to such initial price applicability year1 the ,secretary shall publish in the ,federal ,register the maximum fair price for such drug negotiated under this part with the manufacturer of such drug4 7b7 ,updates 7#a7 ,subsequent year maximum fair prices ,for a selected drug1 for each plan year subsequent to the initial price applicability year for such drug with respect to which an agreement for such drug is in effect under section #aaic1 the ,secretary shall publish in the ,federal ,register-- 7,a7 subject to subparagraph 7,b71 the amount equal to the maximum fair price published for such drug for the previous year1 increased by the annual percentage increase in the consumer price index for all urban consumers 7all items2 ,u4,s4 city average7 as of ,september of such previous year2 or 7,b7 in the case the maximum fair price for such drug was renegotiated1 for the first year for which such price as so renegotiated applies1 such renegotiated maximum fair price4 7#b7 ,prices negotiated after deadline ,in the case of a selected drug with respect to an initial price applicability year for which the maximum fair price is determined under this part after the date of publication under this section1 the ,secretary shall publish such maximum fair price in the ,federal ,register by not later than #cj days after the date such maximum price is so determined4 #aaif4 ,administrative duties2 coordination provisions 7a7 ,administrative duties 7#a7 ,in general ,for purposes of section #aaia1 the administrative duties described in this section are the following3 7,a7 ,the establishment of procedures 7including through agreements with manufacturers under this part1 contracts with prescription drug plans under part ,d of title ,,xviii and ,,ma-,,pd plans under part ,c of such title1 and agreements under section #aaig with group health plans and health insurance issuers of health insurance coverage offered in the individual or group market7 under which the maximum fair price for a selected drug is provided to fair price eligible individuals1 who with respect to such drug are described in subparagraph 7,a7 of section #aaia7;c77#a71 at pharmacies or by mail order service at the point-of-sale of the drug for the applicable price period for such drug and providing that such maximum fair price is used for determining cost-sharing under such plans or coverage for the selected drug4 7,b7 ,the establishment of procedures 7including through agreements with manufacturers under this part and contracts with hospitals1 physicians1 and other providers of services and suppliers and agreements under section #aaig with group health plans and health insurance issuers of health insurance coverage offered in the individual or group market7 under which1 in the case of a selected drug furnished or administered by such a hospital1 physician1 or other provider of services or supplier to fair price eligible individuals 7who with respect to such drug are described in subparagraph 7,b7 of section #aaia7;c77#a771 the maximum fair price for the selected drug is provided to such hospitals1 physicians1 and other providers of services and suppliers 7as applicable7 with respect to such individuals and providing that such maximum fair price is used for determining cost-sharing under the respective part1 plan1 or coverage for the selected drug4 7,c7 ,the establishment of procedures 7including through agreements and contracts described in subparagraphs 7,a7 and 7,b77 to ensure that1 not later than #ij days after the dispensing of a selected drug to a fair price eligible individual by a pharmacy or mail order service1 the pharmacy or mail order service is reimbursed for an amount equal to the difference between-- 7i7 the lesser of-- 7,i7 the wholesale acquisition cost of the drug2 7,,ii7 the national average drug acquisition cost of the drug2 and 7,,iii7 any other similar determination of pharmacy acquisition costs of the drug1 as determined by the ,secretary2 and 7ii7 the maximum fair price for the drug4 7,d7 ,the establishment of procedures to ensure that the maximum fair price for a selected drug is applied before-- 7i7 any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of fair price eligible individuals as the ,secretary may specify2 and 7ii7 any other discounts4 7,e7 ,the establishment of procedures to enter into appropriate agreements and protocols for the ongoing computation of ,,aim prices for selected drugs1 including1 to the extent possible1 to compute the ,,aim price for selected drugs and including by providing that the manufacturer of such a selected drug should provide information for such computation not later than #c months after the first date of the voluntary negotiation period for such selected drug4 7,f7 ,the establishment of procedures to compute and apply the maximum fair price across different strengths and dosage forms of a selected drug and not based on the specific formulation or package size or package type of the drug4 7,g7 ,the establishment of procedures to negotiate and apply the maximum fair price in a manner that does not include any dispensing or similar fee4 7,h7 ,the establishment of procedures to carry out the provisions of this part1 as applicable1 with respect to-- 7i7 fair price eligible individuals who are enrolled under a prescription drug plan under part ,d of title ,,xviii or an ,,ma-,,pd plan under part ,c of such title2 and 7ii7 fair price eligible individuals who are enrolled under a group health plan or health insurance coverage offered by a health insurance issuer in the individual or group market with respect to which there is an agreement in effect under section #aaig4 7,i7 ,the establishment of a negotiation process and renegotiation process in accordance with section #aaid1 including a process for acquiring information described in subsection 7d7 of such section and determining amounts described in subsection 7b7 of such section4 7,j7 ,the provision of a reasonable dispute resolution mechanism to resolve disagreements between manufacturers1 fair price eligible individuals1 and the third party with a contract under subsection 7c77#a74 7#b7 ,monitoring compliance 7,a7 ,in general ,the ,secretary shall monitor compliance by a manufacturer with the terms of an agreement under section #aaic1 including by establishing a mechanism through which violations of such terms may be reported4 7,b7 ,notification ,if a third party with a contract under subsection 7c77#a7 determines that the manufacturer is not in compliance with such agreement1 the third party shall notify the ,secretary of such noncompliance for appropriate enforcement under section #daib of the ,internal ,revenue ,code of #aihf or section #aaih1 as applicable4 7b7 ,collection of data 7#a7 ,from prescription drug plans and ,,ma-,,pd plans ,the ,secretary may collect appropriate data from prescription drug plans under part ,d of title ,,xviii and ,,ma-,,pd plans under part ,c of such title in a timeframe that allows for maximum fair prices to be provided under this part for selected drugs4 7#b7 ,from health plans ,the ,secretary may collect appropriate data from group health plans or health insurance issuers offering group or individual health insurance coverage in a timeframe that allows for maximum fair prices to be provided under this part for selected drugs4 7#c7 ,coordination of data collection ,to the extent feasible1 as determined by the ,secretary1 the ,secretary shall ensure that data collected pursuant to this subsection is coordinated with1 and not duplicative of1 other data collection efforts4 7c7 ,contract with third parties 7#a7 ,in general ,the ,secretary may enter into a contract with #a or more third parties to administer the requirements established by the ,secretary in order to carry out this part4 ,at a minimum1 the contract with a third party under the preceding sentence shall require that the third party-- 7,a7 receive and transmit information between the ,secretary1 manufacturers1 and other individuals or entities the ,secretary determines appropriate2 7,b7 receive1 distribute1 or facilitate the distribution of funds of manufacturers to appropriate individuals or entities in order to meet the obligations of manufacturers under agreements under this part2 7,c7 provide adequate and timely information to manufacturers1 consistent with the agreement with the manufacturer under this part1 as necessary for the manufacturer to fulfill its obligations under this part2 and 7,d7 permit manufacturers to conduct periodic audits1 directly or through contracts1 of the data and information used by the third party to determine discounts for applicable drugs of the manufacturer under the program4 7#b7 ,performance requirements ,the ,secretary shall establish performance requirements for a third party with a contract under paragraph 7#a7 and safeguards to protect the independence and integrity of the activities carried out by the third party under the program under this part4 7d7 ,coordination ,with #cdj;,b ,program ,in the case of a manufacturer of a selected drug1 with respect to an initial price applicability year1 for each year with respect to which a maximum fair price is applied under this part for such drug1 such drug shall not be considered a covered outpatient drug subject to an agreement under section #cdj;,b of the ,public ,health ,service ,act4 #aaig4 ,voluntary participation by other health plans 7a7 ,agreement to participate under program 7#a7 ,in general ,subject to paragraph 7#b71 under the program under this part the ,secretary shall be treated as having in effect an agreement with a group health plan or health insurance issuer offering health insurance coverage 7as such terms are defined in section #bgia of the ,public ,health ,service ,act71 with respect to a price applicability period and a selected drug with respect to such period-- 7,a7 with respect to such selected drug furnished or dispensed at a pharmacy or by mail order service if coverage is provided under such plan or coverage during such period for such selected drug as so furnished or dispensed2 and 7,b7 with respect to such selected drug furnished or administered by a hospital1 physician1 or other provider of services or supplier if coverage is provided under such plan or coverage during such period for such selected drug as so furnished or administered4 7#b7 ,opting out of agreement ,the ,secretary shall not be treated as having in effect an agreement under the program under this part with a group health plan or health insurance issuer offering health insurance coverage with respect to a price applicability period and a selected drug with respect to such period if such a plan or issuer affirmatively elects1 through a process specified by the ,secretary1 not to participate under the program with respect to such period and drug4 7b7 ,publication of election ,with respect to each price applicability period and each selected drug with respect to such period1 the ,secretary and the ,secretary of ,labor and the ,secretary of the ,treasury1 as applicable1 shall make public a list of each group health plan and each issuer of health insurance coverage1 with respect to which coverage is provided under such plan or coverage for such drug1 that has elected under subsection 7a7 not to participate under the program with respect to such period and drug4 #aaih4 ,civil monetary penalty 7a7 ,violations relating ,to offering of maximum fair price ,any manufacturer of a selected drug that has entered into an agreement under section #aaic1 with respect to a plan year during the price applicability period for such drug1 that does not provide access to a price that is not more than the maximum fair price 7or a lesser price7 for such drug for such year-- 7#a7 to a fair price eligible individual who with respect to such drug is described in subparagraph 7,a7 of section #aaia7;c77#a7 and who is furnished or dispensed such drug during such year2 or 7#b7 to a hospital1 physician1 or other provider of services or supplier with respect to fair price eligible individuals who with respect to such drug is described in subparagraph 7,b7 of such section and is furnished or administered such drug by such hospital1 physician1 or provider or supplier during such year2 shall be subject to a civil monetary penalty equal to ten times the amount equal to the difference between the price for such drug made available for such year by such manufacturer with respect to such individual or hospital1 physician1 provider1 or supplier and the maximum fair price for such drug for such year4 7b7 ,violations of certain terms of agreement ,any manufacturer of a selected drug that has entered into an agreement under section #aaic1 with respect to a plan year during the price applicability period for such drug1 that is in violation of a requirement imposed pursuant to section #aaic7;a77#f7 shall be subject to a civil monetary penalty of not more than #a1jjj1jjj for each such violation4 7c7 ,application ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil monetary penalty under this section in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 #aaii4 ,miscellaneous provisions 7a7 ,paperwork ,reduction ,act ,chapter #ce of title #dd1 ,united ,states ,code1 shall not apply to data collected under this part4 7b7 ,national ,academy of ,medicine study ,not later than ,december #ca1 #bjbe1 the ,national ,academy of ,medicine shall conduct a study1 and submit to ,congress a report1 on recommendations for improvements to the program under this part1 including the determination of the limits applied under section #aaid7;c74 7c7 ,med,p,a,c study ,not later than ,december #ca1 #bjbe1 the ,medicare ,payment ,advisory ,commission shall conduct a study1 and submit to ,congress a report1 on the program under this part with respect to the ,medicare program under title ,,xviii1 including with respect to the effect of the program on individuals entitled to benefits or enrolled under such title4 7d7 ,limitation on judicial review ,the following shall not be subject to judicial review3 7#a7 ,the selection of drugs for publication under section #aaib7;a74 7#b7 ,the determination of whether a drug is a negotiation-eligible drug under section #aaib7;d74 7#c7 ,the determination of the maximum fair price of a selected drug under section #aaid4 7#d7 ,the determination of units of a drug for purposes of section #aaia7;c77#c74 7e7 ,coordination ,in carrying out this part with respect to group health plans or health insurance coverage offered in the group market that are subject to oversight by the ,secretary of ,labor or the ,secretary of the ,treasury1 the ,secretary of ,health and ,human ,services shall coordinate with such respective ,secretary4 7f7 ,data sharing ,the ,secretary shall share with the ,secretary of the ,treasury such information as is necessary to determine the tax imposed by section #daib of the ,internal ,revenue ,code of #aihf4 7g7 ,,gao study ,not later than ,december #ca1 #bjbe1 the ,comptroller ,general of the ,united ,states shall conduct a study of1 and submit to ,congress a report on1 the implementation of the ,fair ,price ,negotiation ,program under this part4 7h7 ,inflation rebate for group health plans 7#a7 ,in general ,not later than ,december #ca1 #bjba1 the ,secretary of ,labor shall1 in consultation with the ,secretary of ,health and ,human ,services and the ,secretary of the ,treasury1 submit to ,congress a report on the feasibility of the ,secretary of ,labor-- 7,a7 establishing an agreement process with manufacturers of prescription drugs under which manufacturers provide for inflation rebates 7in a manner similar to rebates under section #ahcd7x7 and #ahfj;,d-#ad;,b with respect to part ,b and part ,d drugs1 respectively7 with respect to drugs that are furnished or dispensed to participants1 enrollees1 and beneficiaries of health insurance coverage in connection with a group health plan2 and 7,b7 establishing an enforcement mechanism with respect to such agreement process that ensures that such inflation rebates are1 proportionally distributed1 with respect to costs1 to-- 7i7 participants1 enrollees1 and beneficiaries of health insurance coverage offered in the group market2 and 7ii7 a health insurance issuer offering health insurance coverage in the group market4 7#b7 ,regulations ,not later than ,december #ca1 #bjbb1 the ,secretary of ,labor shall1 in consultation with the ,secretary of ,health and ,human ,services and the ,secretary of the ,treasury1 promulgate regulations consistent with the information contained in the report submitted pursuant to paragraph 7#a7 if-- 7,a7 the ,secretary of ,labor determines the prices of a sufficient number 7as determined by the ,secretary of ,labor7 of drugs described in paragraph 7#a77;,a7 have increased at a percentage that exceeds the percentage by which the consumer price index for all urban consumers 7,united ,states city average7 for a period of time 7as determined by the ,secretary of ,labor72 and 7,b7 the ,secretary of ,labor finds that the agreement process identified pursuant to subparagraph 7,a7 of paragraph 7#a7 and the enforcement mechanism identified pursuant to subparagraph 7,b7 of such paragraph are feasible4 4 7b7 ,application of maximum fair prices and conforming amendments 7#a7 ,under ,medicare prescription drug program 7,a7 ,exception to non-interference ,section #ahfj;,d-#aa7;i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7;i77 is amended by inserting 1 except as provided under part ,e of title ,,xi1 after the ,secretary4 7,b7 ,application as negotiated price ,section #ahfj;,d-#b7;d77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;d77#a77 is amended-- 7i7 in subparagraph 7,b71 by inserting 1 subject to subparagraph 7,d71 after negotiated prices2 and 7ii7 by adding at the end the following new subparagraph3 7,d7 ,application of maximum fair price for selected drugs ,in applying this section1 in the case of a covered part ,d drug that is a selected drug 7as defined in section #aaib7;c771 with respect to a price applicability period 7as defined in section #aaia7;b77#b771 the negotiated price described in this subsection shall be the maximum fair price 7as defined in section #aaia7;c77#b77 for such drug and for each plan year during such period4 4 7,c7 ,information from prescription drug plans and ,,ma-,,pd plans required 7i7 ,prescription drug plans ,section #ahfj;,d-#ab7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aab7;b77 is amended by adding at the end the following new paragraph3 7#h7 ,provision of information related to maximum fair prices ,each contract entered into with a ,,pdp sponsor under this part with respect to a prescription drug plan offered by such sponsor shall require the sponsor to provide information to the ,secretary as requested by the ,secretary in accordance with section #aaif7;b74 4 7ii7 ,,ma-,,pd plans ,section #aheg7;f77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#bg7;f77#c77 is amended by adding at the end the following new subparagraph3 7,e7 ,provision of information related to maximum fair prices ,section #ahfj;,d-#ab7;b77#h74 4 7#b7 ,under group health plans and health insurance coverage 7,a7 ,,phsa ,part ,a of title ,,xxvii of the ,public ,health ,service ,act is amended by inserting after section #bgbi the following new section3 #bgbi;,a4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices 7a7 ,in general ,in the case of a group health plan or health insurance issuer offering health insurance coverage that is treated under section #aaig of the ,social ,security ,act as having in effect an agreement with the ,secretary under the ,fair ,price ,drug ,negotiation ,program under part ,e of title ,,xi of such ,act1 with respect to a price applicability period 7as defined in section #aaia7;b7 of such ,act7 and a selected drug 7as defined in section #aaib7;c7 of such ,act7 with respect to such period with respect to which coverage is provided under such plan or coverage-- 7#a7 the provisions of such part shall apply to the plans or coverage offered by such plan or issuer1 and to the individuals enrolled under such plans or coverage1 during such period1 with respect to such selected drug1 in the same manner as such provisions apply to prescription drug plans and ,,ma-,,pd plans1 and to individuals enrolled under such prescription drug plans and ,,ma-,,pd plans2 7#b7 the plan or issuer shall apply any cost-sharing responsibilities under such plan or coverage1 with respect to such selected drug1 by substituting the maximum fair price negotiated under such part for such drug in lieu of the contracted rate under such plan or coverage for such selected drug2 and 7#c7 the ,secretary shall apply the provisions of such part to such plan1 issuer1 and coverage1 and such individuals so enrolled in such plans4 7b7 ,notification regarding nonparticipation in ,fair ,drug ,price ,negotiation ,program ,a group health plan or a health insurance issuer offering group or individual health insurance coverage shall publicly disclose in a manner and in accordance with a process specified by the ,secretary any election made under section #aaig of the ,social ,security ,act by the plan or issuer to not participate in the ,fair ,drug ,price ,negotiation ,program under part ,e of title ,,xi of such ,act with respect to a selected drug 7as defined in section #aaib7;c7 of such ,act7 for which coverage is provided under such plan or coverage before the beginning of the plan year for which such election was made4 4 7,b7 ,,erisa 7i7 ,in general ,subpart ,b of part #g of subtitle ,b of title ,i of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aaha et4 seq47 is amended by adding at the end the following new section3 #gaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices 7a7 ,in general ,in the case of a group health plan or health insurance issuer offering group health insurance coverage that is treated under section #aaig of the ,social ,security ,act as having in effect an agreement with the ,secretary under the ,fair ,price ,drug ,negotiation ,program under part ,e of title ,,xi of such ,act1 with respect to a price applicability period 7as defined in section #aaia7;b7 of such ,act7 and a selected drug 7as defined in section #aaib7;c7 of such ,act7 with respect to such period with respect to which coverage is provided under such plan or coverage-- 7#a7 the provisions of such part shall apply1 as applicable-- 7,a7 if coverage of such selected drug is provided under such plan or coverage if the drug is furnished or dispensed at a pharmacy or by a mail order service1 to the plans or coverage offered by such plan or issuer1 and to the individuals enrolled under such plans or coverage1 during such period1 with respect to such selected drug1 in the same manner as such provisions apply to prescription drug plans and ,,ma-,,pd plans1 and to individuals enrolled under such prescription drug plans and ,,ma-,,pd plans during such period2 and 7,b7 if coverage of such selected drug is provided under such plan or coverage if the drug is furnished or administered by a hospital1 physician1 or other provider of services or supplier1 to the plans or coverage offered by such plan or issuers1 to the individuals enrolled under such plans or coverage1 and to hospitals1 physicians1 and other providers of services and suppliers during such period1 with respect to such drug in the same manner as such provisions apply to the ,secretary1 to individuals entitled to benefits under part ,a of title ,,xviii or enrolled under part ,b of such title1 and to hospitals1 physicians1 and other providers and suppliers participating under title ,,xviii during such period2 7#b7 the plan or issuer shall apply any cost-sharing responsibilities under such plan or coverage1 with respect to such selected drug1 by substituting an amount not more than the maximum fair price negotiated under such part ,e of title ,,xi for such drug in lieu of the drug price upon which the cost-sharing would have otherwise applied1 and such cost-sharing responsibilities with respect to such selected drug may not exceed such amount2 and 7#c7 the ,secretary shall apply the provisions of such part ,e to such plan1 issuer1 and coverage1 and such individuals so enrolled in such plans4 7b7 ,notification regarding nonparticipation in ,fair ,drug ,price ,negotiation ,program ,a group health plan or a health insurance issuer offering group health insurance coverage shall publicly disclose in a manner and in accordance with a process specified by the ,secretary any election made under section #aaig of the ,social ,security ,act by the plan or issuer to not participate in the ,fair ,drug ,price ,negotiation ,program under part ,e of title ,,xi of such ,act with respect to a selected drug 7as defined in section #aaib7;c7 of such ,act7 for which coverage is provided under such plan or coverage before the beginning of the plan year for which such election was made4 4 7ii7 ,application to retiree and certain small group health plans ,section #gcb7;a7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aaia;a7a77 is amended by striking section #gaa and inserting sections #gaa and #gaf4 7iii7 ,clerical amendment ,the table of sections for subpart ,b of part #g of subtitle ,b of title ,i of the ,employee ,retirement ,income ,security ,act of #aigd is amended by adding at the end the following3 ,sec4 #gaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices4 4 7,c7 ,,irc 7i7 ,in general ,subchapter ,b of chapter #ajj of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #ihaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices 7a7 ,in general ,in the case of a group health plan that is treated under section #aaig of the ,social ,security ,act as having in effect an agreement with the ,secretary under the ,fair ,price ,drug ,negotiation ,program under part ,e of title ,,xi of such ,act1 with respect to a price applicability period 7as defined in section #aaia7;b7 of such ,act7 and a selected drug 7as defined in section #aaib7;c7 of such ,act7 with respect to such period with respect to which coverage is provided under such plan-- 7#a7 the provisions of such part shall apply to the plans offered by such plan1 and to the individuals enrolled under such plans1 during such period1 with respect to such selected drug1 in the same manner as such provisions apply to prescription drug plans and ,,ma-,,pd plans1 and to individuals enrolled under such prescription drug plans and ,,ma-,,pd plans2 7#b7 the plan shall apply any cost-sharing responsibilities under such plan1 with respect to such selected drug1 by substituting the maximum fair price negotiated under such part for such drug in lieu of the contracted rate under such plan for such selected drug2 and 7#c7 the ,secretary shall apply the provisions of such part to such plan and such individuals so enrolled in such plan4 7b7 ,notification regarding nonparticipation in ,fair ,drug ,price ,negotiation ,program ,a group health plan shall publicly disclose in a manner and in accordance with a process specified by the ,secretary any election made under section #aaig of the ,social ,security ,act by the plan to not participate in the ,fair ,drug ,price ,negotiation ,program under part ,e of title ,,xi of such ,act with respect to a selected drug 7as defined in section #aaib7;c7 of such ,act7 for which coverage is provided under such plan before the beginning of the plan year for which such election was made4 4 7ii7 ,clerical amendment ,the table of sections for subchapter ,b of chapter #ajj of such ,code is amended by adding at the end the following new item3 ,sec4 #ihaf4 ,fair ,price ,drug ,negotiation ,program and application of maximum fair prices4 4 #ajb4 ,selected drug manufacturer excise tax imposed during noncompliance periods 7a7 ,in general ,subchapter ,e of chapter #cb of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #daib4 ,selected drugs during noncompliance periods 7a7 ,in general ,there is hereby imposed on the sale by the manufacturer1 producer1 or importer of any selected drug during a day described in subsection 7b7 a tax in an amount such that the applicable percentage is equal to the ratio of-- 7#a7 such tax1 divided by 7#b7 the sum of such tax and the price for which so sold4 7b7 ,noncompliance periods ,a day is described in this subsection with respect to a selected drug if it is a day during one of the following periods3 7#a7 ,the period beginning on the ,june #afth immediately following the selected drug publication date and ending on the first date during which the manufacturer of the drug has in place an agreement described in subsection 7a7 of section #aaic of the ,social ,security ,act with respect to such drug4 7#b7 ,the period beginning on the ,april #ast immediately following the ,june #afth described in paragraph 7#a7 and ending on the first date during which the manufacturer of the drug has agreed to a maximum fair price under such agreement4 7#c7 ,in the case of a selected drug with respect to which the ,secretary of ,health and ,human ,services has specified a renegotiation period under such agreement1 the period beginning on the first date after the last date of such renegotiation period and ending on the first date during which the manufacturer of the drug has agreed to a renegotiated maximum fair price under such agreement4 7#d7 ,with respect to information that is required to be submitted to the ,secretary of ,health and ,human ,services under such agreement1 the period beginning on the date on which such ,secretary certifies that such information is overdue and ending on the date that such information is so submitted4 7#e7 ,in the case of a selected drug with respect to which a payment is due under subsection 7c7 of such section #aaic1 the period beginning on the date on which the ,secretary of ,health and ,human ,services certifies that such payment is overdue and ending on the date that such payment is made in full4 7c7 ,applicable percentage ,the term applicable percentage means-- 7#a7 in the case of sales of a selected drug during the first #ij days described in subsection 7b7 with respect to such drug1 #fe percent1 7#b7 in the case of sales of such drug during the #iast day through the #ahjth day described in subsection 7b7 with respect to such drug1 #ge percent1 7#c7 in the case of sales of such drug during the #ahast day through the #bgjth day described in subsection 7b7 with respect to such drug1 #he percent1 and 7#d7 in the case of sales of such drug during any subsequent day1 #ie percent4 7d7 ,definitions ,the terms selected drug publication date and maximum fair price have the meaning given such terms in section #aaia of the ,social ,security ,act and the term selected drug has the meaning given such term in section #aaib of such ,act4 7e7 ,anti-,abuse rule ,in the case of a sale which was timed for the purpose of avoiding the tax imposed by this section1 the ,secretary may treat such sale as occurring during a day described in subsection 7b74 4 7b7 ,no deduction for excise tax payments ,section #bge of the ,internal ,revenue ,code of #aihf is amended by adding or by section #daib before the period at the end of subsection 7a77#f74 7c7 ,conforming amendments 7#a7 ,section #dbba7;a7 of the ,internal ,revenue ,code of #aihf is amended by inserting or #daib after section #daia4 7#b7 ,section #fdaf7;b77#b7 of such ,code is amended by inserting or #daib after section #daia4 7d7 ,clerical amendments 7#a7 ,the heading of subchapter ,e of chapter #cb of the ,internal ,revenue ,code of #aihf is amended by striking ,medical devices and inserting ,other medical products4 7#b7 ,the table of subchapters for chapter #cb of such ,code is amended by striking the item relating to subchapter ,e and inserting the following new item3 ,subchapter ,e4 ,other medical products 4 7#c7 ,the table of sections for subchapter ,e of chapter #cb of such ,code is amended by adding at the end the following new item3 ,sec4 #daib4 ,selected drugs during noncompliance periods4 4 7e7 ,effective date ,the amendments made by this section shall apply to sales after the date of the enactment of this ,act4 ,,ii ,medicare ,parts ,b and ,d ,prescription ,drug ,inflation ,rebates #bja4 ,medicare part ,b rebate by manufacturers 7a7 ,in general ,section #ahcd of the ,social ,security ,act 7#db ,u4,s4,c4 #aciem7 is amended by adding at the end the following new subsection3 7x7 ,rebate by manufacturers for single source drugs with prices increasing faster than inflation 7#a7 ,requirements 7,a7 ,secretarial provision of information ,not later than #f months after the end of each calendar quarter beginning on or after ,july #a1 #bjba1 the ,secretary shall1 for each part ,b rebatable drug1 report to each manufacturer of such part ,b rebatable drug the following for such calendar quarter3 7i7 ,information on the total number of billing units described in subparagraph 7,a77i7 of paragraph 7#c7 with respect to such drug and calendar quarter4 7ii7 ,information on the amount 7if any7 of the excess average sales price increase described in subparagraph 7,a77ii7 of such paragraph for such drug and calendar quarter4 7iii7 ,the rebate amount specified under such paragraph for such part ,b rebatable drug and calendar quarter4 7,b7 ,manufacturer requirement ,for each calendar quarter beginning on or after ,july #a1 #bjba1 the manufacturer of a part ,b rebatable drug shall1 for such drug1 not later than #cj days after the date of receipt from the ,secretary of the information described in subparagraph 7,a7 for such calendar quarter1 provide to the ,secretary a rebate that is equal to the amount specified in paragraph 7#c7 for such drug for such calendar quarter4 7#b7 ,part ,b rebatable drug defined 7,a7 ,in general ,in this subsection1 the term part ,b rebatable drug means a single source drug or biological 7as defined in subparagraph 7,d7 of section #ahdg;,a7c77#f771 including a biosimilar biological product 7as defined in subparagraph 7,h7 of such section71 paid for under this part1 except such term shall not include such a drug or biological-- 7i7 if the average total allowed charges for a year per individual that uses such a drug or biological1 as determined by the ,secretary1 are less than1 subject to subparagraph 7,b71 #ajj2 or 7ii7 that is a vaccine described in subparagraph 7,a7 or 7,b7 of section #ahfa7s77#aj74 7,b7 ,increase ,the dollar amount applied under subparagraph 7,a77i7-- 7i7 for #bjbb1 shall be the dollar amount specified under such subparagraph for #bjba1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 as of the first quarter of the previous year2 and 7ii7 for a subsequent year1 shall be the dollar amount specified in this clause 7or clause 7i77 for the previous year1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 as of the first quarter of the previous year4 ,any dollar amount specified under this subparagraph that is not a multiple of #aj shall be rounded to the nearest multiple of #aj4 7#c7 ,rebate amount 7,a7 ,in general ,for purposes of paragraph 7#a77;,b71 the amount specified in this paragraph for a part ,b rebatable drug assigned to a billing and payment code for a calendar quarter is1 subject to paragraph 7#d71 the amount equal to the product of-- 7i7 subject to subparagraph 7,b71 the total number of billing units1 as described in section #ahdg;,a7b77#f77;,b71 for such part ,b rebatable drug furnished under this part during the calendar quarter2 and 7ii7 the amount 7if any7 by which-- 7,i7 the payment amount under subparagraph 7,b7 or 7,c7 of section #ahdg;,a7b77#a71 as applicable1 for such part ,b rebatable drug during the calendar quarter2 exceeds 7,,ii7 the inflation-adjusted payment amount determined under subparagraph 7,c7 for such part ,b rebatable drug during the calendar quarter4 7,b7 ,excluded units ,for purposes of subparagraph 7,a77i71 the total number of billing units for part ,b rebatable drugs furnished during a calendar quarter shall not include-- 7i7 units packaged into the payment for a related procedure or service under section #ahcc7t7 or under section #ahcc7;i7 7instead of separately payable under such respective section72 7ii7 units included under the single payment system for renal dialysis services under section #ahha7;b77#ad72 or 7iii7 units of a part ,b rebatable drug of a manufacturer that is furnished to an individual1 if such manufacturer1 with respect to the furnishing of such units of such drug1 provides for discounts under section #cdj;,b of the ,public ,health ,service ,act or for rebates under section #aibg4 7,c7 ,determination of inflation-adjusted payment amount ,the inflation-adjusted payment amount determined under this subparagraph for a part ,b rebatable drug for a calendar quarter is-- 7i7 the payment amount for the billing and payment code for such drug in the payment amount benchmark quarter 7as defined in subparagraph 7,d772 increased by 7ii7 the percentage by which the rebate period ,,cpi-,u 7as defined in subparagraph 7,f77 for the calendar quarter exceeds the benchmark period ,,cpi-,u 7as defined in subparagraph 7,e774 7,d7 ,payment amount benchmark quarter ,the term payment amount benchmark quarter means the calendar quarter beginning ,january #a1 #bjaf4 7,e7 ,benchmark period ,,cpi-,u ,the term benchmark period ,,cpi-,u means the consumer price index for all urban consumers 7,united ,states city average7 for ,july #bjae4 7,f7 ,rebate period ,,cpi-,u ,the term rebate period ,,cpi-,u means1 with respect to a calendar quarter described in subparagraph 7,c71 the greater of the benchmark period ,,cpi-,u and the consumer price index for all urban consumers 7,united ,states city average7 for the first month of the calendar quarter that is two calendar quarters prior to such described calendar quarter4 7#d7 ,special treatment of certain drugs and exemption 7,a7 ,subsequently approved drugs ,subject to subparagraph 7,b71 in the case of a part ,b rebatable drug first approved by the ,food and ,drug ,administration after ,july #a1 #bjae1 clause 7i7 of paragraph 7#c77;,c7 shall be applied as if the term payment amount benchmark quarter were defined under paragraph 7#c77;,d7 as the third full calendar quarter after the day on which the drug was first marketed and clause 7ii7 of paragraph 7#c77;,c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under paragraph 7#c77;,e7 as if the reference to ,july #bjae under such paragraph were a reference to the first month of the first full calendar quarter after the day on which the drug was first marketed4 7,b7 ,timeline for provision of rebates for new drugs ,in the case of a part ,b rebatable drug first approved by the ,food and ,drug ,administration after ,july #a1 #bjae1 clause 7i7 of paragraph 7#a77;,b7 shall be applied as if the reference to ,july #a1 #bjba under such paragraph were a reference to the later of the #fth full calendar quarter after the day on which the drug was first marketed or ,july #a1 #bjba4 7,c7 ,exemption for shortages ,the ,secretary may reduce or waive the rebate under paragraph 7#a77;,b7 with respect to a part ,b rebatable drug that appears on the drug shortage list in effect under section #ejf7;e7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act or in the case of other exigent circumstances1 as determined by the ,secretary4 7,d7 ,selected drugs ,in the case of a part ,b rebatable drug that is a selected drug 7as defined in section #aaib7;c771 for each applicable year beginning after the price applicability period 7as defined in section #aaia7;b77#b7 with respect to such drug1 clause 7i7 of paragraph 7#c77;,c7 shall be applied as if the term payment amount benchmark quarter were defined under paragraph 7#c77;,d7 as the calendar quarter beginning ,january #a of the last year beginning during such price applicability period with respect to such selected drug and clause 7ii7 of paragraph 7#c77;,c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under paragraph 7#c77;,e7 as if the reference to ,july #bjae under such paragraph were a reference to the ,july of the year preceding such last year4 7#e7 ,application to beneficiary coinsurance ,in the case of a part ,b rebatable drug for which a rebate is payable under this subsection-- 7,a7 in computing the amount of any coinsurance applicable under this title to an individual with respect to such drug1 the computation of such coinsurance shall be based on the inflation-adjusted payment amount determined under paragraph 7#c77;,c7 for such part ,b rebatable drug2 and 7,b7 the amount of such coinsurance is equal to #bj percent of such inflation-adjusted payment amount so determined4 7#f7 ,rebate deposits ,amounts paid as rebates under paragraph 7#a77;,b7 shall be deposited into the ,federal ,supplementary ,medical ,insurance ,trust ,fund established under section #ahda4 7#g7 ,civil money penalty ,if a manufacturer of a part ,b rebatable drug has failed to comply with the requirements under paragraph 7#a77;,b7 for such drug for a calendar quarter1 the manufacturer shall be subject to1 in accordance with a process established by the ,secretary pursuant to regulations1 a civil money penalty in an amount equal to at least #abe percent of the amount specified in paragraph 7#c7 for such drug for such calendar quarter4 ,the provisions of section #aabh;,a 7other than subsections 7a7 7with respect to amounts of penalties or additional assessments7 and 7b77 shall apply to a civil money penalty under this paragraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7#h7 ,study and report 7,a7 ,study ,the ,secretary shall conduct a study of the feasibility of and operational issues involved with the following3 7i7 ,including multiple source drugs 7as defined in section #ahdg;,a7c77#f77;,c77 in the rebate system under this subsection4 7ii7 ,including drugs and biologicals paid for under ,,ma plans under part ,c in the rebate system under this subsection4 7iii7 ,including drugs excluded under paragraph 7#b77;,a7 and billing units of drugs excluded under paragraph 7#c77;,b7 in the rebate system under this subsection4 7,b7 ,report ,not later than #c years after the date of the enactment of this subsection1 the ,secretary shall submit to ,congress a report on the study conducted under subparagraph 7,a74 7#i7 ,application to multiple source drugs ,the ,secretary may1 based on the report submitted under paragraph 7#h7 and pursuant to rulemaking1 apply the provisions of this subsection to multiple source drugs 7as defined in section #ahdg;,a7c77#f77;,c771 including1 for purposes of determining the rebate amount under paragraph 7#c71 by calculating manufacturer-specific average sales prices for the benchmark period and the rebate period4 4 7b7 ,amounts payable2 cost-,sharing ,section #ahcc7;a7 of the ,social ,security ,act is amended-- 7#a7 in paragraph 7#a7-- 7,a7 in subparagraph 7,s71 by striking with respect to and inserting subject to subparagraph 7,,dd71 with respect to2 7,b7 by striking and 7,,cc7 and inserting 7,,cc72 and 7,c7 by inserting before the semicolon at the end the following3 1 and 7,,dd7 with respect to a part ,b rebatable drug 7as defined in paragraph 7#b7 of section #ahcd7x77 for which a rebate is payable under such section1 the amounts paid shall be the difference between 7i7 the payment amount under paragraph 7#c77;,a77ii77,i7 of such section for such drug1 and 7ii7 #bj percent of the inflation-adjusted payment amount under paragraph 7#c77;,a77ii77,,ii7 of such section for such drug2 and 7#b7 by adding at the end of the flush left matter following paragraph 7#i71 the following3 ,for purposes of applying paragraph 7#a77;,,dd7 and section #ahcd7x77#e71 the ,secretary shall make such estimates and use such data as the ,secretary determines appropriate4 4 7c7 ,conforming amendment to part ,b ,,asp calculation ,section #ahdg;,a7c77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7c77#c77 is amended by inserting or section #ahcd7x7 after section #aibg4 #bjb4 ,medicare part ,d rebate by manufacturers ,part ,d of title ,,xviii of the ,social ,security ,act is amended by inserting after section #ahfj;,d-#ad;,a 7#db ,u4,s4,c4 #aciew-#aad;a7 the following new section3 #ahfj;,d-#ad;,b4 ,manufacturer rebate for certain drugs with prices increasing faster than inflation 7a7 ,in general ,subject to the provisions of this section1 in order for coverage to be available under this part for a part ,d rebatable drug of a manufacturer dispensed during an applicable year1 the manufacturer must have entered into and have in effect an agreement described in subsection 7b74 ,for purposes of this section the term applicable year means a year beginning with #bjbb4 7b7 ,agreements 7#a7 ,terms of agreement ,an agreement described in this subsection1 with respect to a manufacturer of a part ,d rebatable drug1 is an agreement under which the following applies3 7,a7 ,secretarial provision of information ,not later than #i months after the end of each applicable year with respect to which the agreement is in effect1 the ,secretary1 for the part ,d rebatable drug of the manufacturer1 reports to the manufacturer the following for such year3 7i7 ,information on the total units 7as defined in subsection 7g77#b77 dispensed for each dosage form and strength with respect to such part ,d rebatable drug and year4 7ii7 ,information on the amount 7if any7 of the excess average manufacturer price increase described in subsection 7c77#a77;,b7 for each dosage form and strength with respect to such drug and year4 7iii7 ,the rebate amount specified under subsection 7c7 for each dosage form and strength with respect to such drug and year4 7,b7 ,manufacturer requirements ,for each applicable year with respect to which the agreement is in effect1 the manufacturer of the part ,d rebatable drug1 for each dosage form and strength with respect to such drug1 not later than #cj days after the date of receipt from the ,secretary of the information described in subparagraph 7,a7 for such year1 provides to the ,secretary a rebate that is equal to the amount specified in subsection 7c7 for such dosage form and strength with respect to such drug for such year4 7#b7 ,length of agreement 7,a7 ,in general ,an agreement under this section1 with respect to a part ,d rebatable drug1 shall be effective for an initial period of not less than one year and shall be automatically renewed for a period of not less than one year unless terminated under subparagraph 7,b74 7,b7 ,termination 7i7 ,by ,secretary ,the ,secretary may provide for termination of an agreement under this section for violation of the requirements of the agreement or other good cause shown4 ,such termination shall not be effective earlier than #fj days after the date of notice of such termination4 ,the ,secretary shall provide1 upon request1 a manufacturer with a hearing concerning such a termination1 but such hearing shall not delay the effective date of the termination4 7ii7 ,by a manufacturer ,a manufacturer may terminate an agreement under this section for any reason4 ,any such termination shall not be effective until the year beginning at least #fj days after the date the manufacturer provides notice to the ,secretary4 7,c7 ,effectiveness of termination ,any termination under this paragraph shall not affect rebates due under the agreement under this section before the effective date of its termination4 7,d7 ,delay before reentry ,in the case of any agreement under this section with a manufacturer which is terminated in a plan year1 another such agreement with the manufacturer 7or a successor manufacturer7 may not be entered into before the subsequent plan year1 unless the ,secretary finds good cause for an earlier reinstatement of such an agreement4 7#c7 ,information ,for purposes of carrying out this section1 the ,secretary shall use information submitted by manufacturers under section #aibg7;b77#c74 7c7 ,rebate amount 7#a7 ,in general ,for purposes of this section1 the amount specified in this subsection for a dosage form and strength with respect to a part ,d rebatable drug and applicable year is1 subject to subparagraphs 7,b7 and 7,c7 of paragraph 7#c71 the amount equal to the product of-- 7,a7 the total average number of units weighted by1 and dispensed for1 such dosage form and strength with respect to such part ,d rebatable drug and year2 and 7,b7 the amount 7if any7 by which-- 7i7 the average manufacturer price 7as defined in subsection 7g77 paid for such dosage form and strength with respect to such part ,d rebatable drug during the year2 exceeds 7ii7 the inflation-adjusted payment amount determined under paragraph 7#b7 for such dosage form and strength with respect to such part ,d rebatable drug during the year4 7#b7 ,determination of inflation-adjusted payment amount ,the inflation-adjusted payment amount determined under this paragraph for a dosage form and strength with respect to a part ,d rebatable drug for an applicable year1 subject to subparagraphs 7,a7 and 7,d7 of paragraph 7#c71 is-- 7,a7 the average manufacturer price paid for such dosage form and strength with respect to such drug in the payment amount benchmark year 7as defined in subsection 7g77#c772 increased by 7,b7 the percentage by which the rebate period ,,cpi-,u 7as defined in subsection 7g77#e77 for the applicable year exceeds the benchmark period ,,cpi-,u 7as defined in subsection 7g77#d774 7#c7 ,special treatment of certain drugs and exemption 7,a7 ,subsequently approved drugs ,in the case of a part ,d rebatable drug first approved by the ,food and ,drug ,administration after ,january #a1 #bjaf1 subparagraph 7,a7 of paragraph 7#b7 shall be applied as if the term payment amount benchmark year were defined under subsection 7g77#c7 as the first year beginning after the day on which the drug was first marketed and subparagraph 7,b7 of paragraph 7#b7 shall be applied as if the term benchmark period ,,cpi-,u were defined under subsection 7g77#d7 as if the reference to ,january #bjaf under such subsection were a reference to ,january of the first year beginning after the date on which the drug was first marketed by any manufacturer4 7,b7 ,exemption for shortages ,the ,secretary may reduce or waive the rebate under paragraph 7#a7 with respect to a part ,d rebatable drug in the case of a shortage of such drug or other exigent circumstances1 as determined by the ,secretary4 7,c7 ,treatment of new formulations 7i7 ,in general ,in the case of a part ,d rebatable drug that is a line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form1 the ,secretary shall establish a formula for determining the amount specified in this subsection with respect to such part ,d rebatable drug and an applicable year with consideration of the single source drug or an innovator multiple source drug4 7ii7 ,line extension defined ,in this subparagraph1 the term line extension means1 with respect to a part ,d rebatable drug1 a new formulation of the drug 7as determined by the ,secretary71 such as an extended release formulation1 but does not include an abuse-deterrent formulation of the drug 7as determined by the ,secretary71 regardless of whether such abuse-deterrent formulation is an extended release formulation4 7,d7 ,selected drugs ,in the case of a part ,d rebatable drug that is a selected drug 7as defined in section #aaib7;c771 for each applicable year beginning after the price applicability period 7as defined in section #aaia7;b77#b7 with respect to such drug1 subparagraph 7,a7 of paragraph 7#b7 shall be applied as if the term payment amount benchmark year were defined under subsection 7g77#c7 as the last year beginning during such price applicability period with respect to such selected drug and subparagraph 7,b7 of paragraph 7#b7 shall be applied as if the term benchmark period ,,cpi-,u were defined under subsection 7g77#d7 as if the reference to ,january #bjaf under such subsection were a reference to ,january of the last year beginning during such price applicability period with respect to such drug4 7d7 ,rebate deposits ,amounts paid as rebates under subsection 7c7 shall be deposited into the ,medicare ,prescription ,drug ,account in the ,federal ,supplementary ,medical ,insurance ,trust ,fund established under section #ahda4 7e7 ,civil money penalty ,in the case of a manufacturer of a part ,d rebatable drug with an agreement in effect under this section who has failed to comply with the terms of the agreement under subsection 7b77#a77;,b7 with respect to such drug for an applicable year1 the ,secretary may impose a civil money penalty on such manufacturer in an amount equal to #abe percent of the amount specified in subsection 7c7 for such drug for such year4 ,the provisions of section #aabh;,a 7other than subsections 7a7 7with respect to amounts of penalties or additional assessments7 and 7b77 shall apply to a civil money penalty under this subsection in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7f7 ,judicial review ,there shall be no judicial review of the following3 7#a7 ,the determination of units under this section4 7#b7 ,the determination of whether a drug is a part ,d rebatable drug under this section4 7#c7 ,the calculation of the rebate amount under this section4 7g7 ,definitions ,in this section3 7#a7 ,part ,d rebatable drug defined 7,a7 ,in general ,the term part ,d rebatable drug means a drug or biological that would 7without application of this section7 be a covered part ,d drug1 except such term shall1 with respect to an applicable year1 not include such a drug or biological if the average total cost under a prescription drug plan under this part or ,,ma-,,pd plan under part ,c for such year per individual who uses such a drug or biological1 as determined by the ,secretary1 are less than1 subject to subparagraph 7,b71 #ajj1 as determined by the ,secretary using the most recent data available or1 if data is not available1 as estimated by the ,secretary4 7,b7 ,increase ,the dollar amount applied under subparagraph 7,a7-- 7i7 for #bjbc1 shall be the dollar amount specified under such subparagraph for #bjbb1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 as of ,january of #bjbb2 and 7ii7 for a subsequent year1 shall be the dollar amount specified in this subparagraph 7or subparagraph 7,a77 for the previous year1 increased by the percentage increase in the consumer price index for all urban consumers 7,united ,states city average7 as of ,january of the previous year4 ,any dollar amount specified under this subparagraph that is not a multiple of #aj shall be rounded to the nearest multiple of #aj4 7#b7 ,unit defined ,the term unit means1 with respect to a part ,d rebatable drug1 the lowest identifiable quantity 7such as a capsule or tablet1 milligram of molecules1 or grams7 of the part ,d rebatable drug that is dispensed to individuals enrolled under a prescription drug plan under this part or an ,,ma-,,pd plan under part ,c4 7#c7 ,payment amount benchmark year ,the term payment amount benchmark year means the year beginning ,january #a1 #bjaf4 7#d7 ,benchmark period ,,cpi-,u ,the term benchmark period ,,cpi-,u means the consumer price index for all urban consumers 7,united ,states city average7 for ,january #bjaf4 7#e7 ,rebate period ,,cpi-,u ,the term rebate period ,,cpi-,u means1 with respect to an applicable year1 the consumer price index for all urban consumers 7,united ,states city average7 for ,january of such year4 7#f7 ,average manufacturer price ,the term average manufacturer price has the meaning1 with respect to a part ,d rebatable drug of a manufacturer for an applicable year1 given such term in section #aibg7k77#a71 with respect to a covered outpatient drug of a manufacturer for a rebate period under section #aibg4 ,for purposes of applying the previous sentence1 with respect to a part ,d rebatable drug of a manufacturer and an applicable year1 the ,secretary shall use the information with respect to the average manufacturer price for such drug reported by the manufacturer under section #aibg7;b77#c7 with respect to each of the quarters in the applicable year and calculate an annual average manufacturer price for such applicable year as the average of such average manufacturer prices for each such quarter1 weighted by units of such drug sold or dispensed with respect to such applicable year4 4 ,,iii ,part ,d ,improvements and ,maximum ,out-of-,pocket ,cap for ,medicare ,beneficiaries #cja4 ,medicare part ,d benefit redesign 7a7 ,benefit structure redesign ,section #ahfj;,d-#b7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77 is amended-- 7#a7 in paragraph 7#b7-- 7,a7 in subparagraph 7,a71 in the matter preceding clause 7i71 by inserting for a year preceding #bjbb and for costs above the annual deductible specified in paragraph 7#a7 and up to the annual out-of-pocket threshold specified in paragraph 7#d77;,b7 for #bjbb and each subsequent year after paragraph 7#c72 7,b7 in subparagraph 7,c7-- 7i7 in clause 7i71 in the matter preceding subclause 7,i71 by inserting for a year preceding #bjbb1 after paragraph 7#d712 and 7ii7 in clause 7ii77,,iii71 by striking and each subsequent year and inserting and #bjba2 and 7,c7 in subparagraph 7,d7-- 7i7 in clause 7i7-- 7,i7 in the matter preceding subclause 7,i71 by inserting for a year preceding #bjbb1 after paragraph 7#d712 and 7,,ii7 in subclause 7,i77bb71 by striking a year after #bjah and inserting each of years #bjah through #bjba2 and 7ii7 in clause 7ii77,v71 by striking #bjai and each subsequent year and inserting each of years #bjai through #bjba2 7#b7 in paragraph 7#c77;,a7-- 7,a7 in the matter preceding clause 7i71 by inserting for a year preceding #bjbb1 after and 7#d712 and 7,b7 in clause 7ii71 by striking for a subsequent year and inserting for each of years #bjjg through #bjba2 and 7#c7 in paragraph 7#d7-- 7,a7 in subparagraph 7,a7-- 7i7 in clause 7i7-- 7,i7 by redesignating subclauses 7,i7 and 7,,ii7 as items 7aa7 and 7bb71 respectively1 and moving the margin of each such redesignated item #b ems to the right2 7,,ii7 in the matter preceding item 7aa71 as redesignated by subclause 7,i71 by striking is equal to the greater of-- and inserting 8is equal to-- 7,i7 for a year preceding #bjbb1 the greater of-- 2 7,,iii7 by striking the period at the end of item 7bb71 as redesignated by subclause 7,i71 and inserting 2 and2 and 7,,iv7 by adding at the end the following3 7,,ii7 for #bjbb and each succeeding year1 #j4 2 and 7ii7 in clause 7ii7-- 7,i7 by striking clause 7i77,i7 and inserting clause 7i77,i77aa72 and 7,,ii7 by adding at the end the following new sentence3 ,the ,secretary shall continue to calculate the dollar amounts specified in clause 7i77,i77aa71 including with the adjustment under this clause1 after #bjba for purposes of section #ahfj;,d-#ad7;a77#a77;,d77iii742 7,b7 in subparagraph 7,b7-- 7i7 in clause 7i7-- 7,i7 in subclause 7,v71 by striking or at the end2 7,,ii7 in subclause 7,,vi7-- 7aa7 by striking for a subsequent year and inserting for #bjba2 and 7bb7 by striking the period at the end and inserting a semicolon2 and 7,,iii7 by adding at the end the following new subclauses3 7,,vii7 for #bjbb1 is equal to #b1jjj2 or 7,,viii7 for a subsequent year1 is equal to the amount specified in this subparagraph for the previous year1 increased by the annual percentage increase described in paragraph 7#f7 for the year involved4 2 and 7ii7 in clause 7ii71 by striking clause 7i77,,ii7 and inserting clause 7i72 7,c7 in subparagraph 7,c77i71 by striking and for amounts and inserting and1 for a year preceding #bjbb1 for amounts2 and 7,d7 in subparagraph 7,e71 by striking ,in applying and inserting ,for each of years #bjaa through #bjba1 in applying4 7b7 ,decreasing reinsurance payment amount ,section #ahfj;,d-#ae7;b77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;b77#a77 is amended by inserting after #hj percent the following3 7or1 with respect to a coverage year after #bjba1 #bj percent74 7c7 ,manufacturer discount program 7#a7 ,in general ,part ,d of title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aja et seq471 as amended by section #bjb1 is further amended by inserting after section #ahfj;,d-#ad;,b the following new section3 #ahfj;,d-#ad;,c4 ,manufacturer discount program 7a7 ,establishment ,the ,secretary shall establish a manufacturer discount program 7in this section referred to as the program74 ,under the program1 the ,secretary shall enter into agreements described in subsection 7b7 with manufacturers and provide for the performance of the duties described in subsection 7c74 ,the ,secretary shall establish a model agreement for use under the program by not later than ,january #a1 #bjba1 in consultation with manufacturers1 and allow for comment on such model agreement4 7b7 ,terms of agreement 7#a7 ,in general 7,a7 ,agreement ,an agreement under this section shall require the manufacturer to provide applicable beneficiaries access to discounted prices for applicable drugs of the manufacturer that are dispensed on or after ,january #a1 #bjbb4 7,b7 ,provision of discounted prices at the point-of-sale ,the discounted prices described in subparagraph 7,a7 shall be provided to the applicable beneficiary at the pharmacy or by the mail order service at the point-of-sale of an applicable drug4 7,c7 ,timing of agreement 7i7 ,special rule for #bjbb ,in order for an agreement with a manufacturer to be in effect under this section with respect to the period beginning on ,january #a1 #bjbb1 and ending on ,december #ca1 #bjbb1 the manufacturer shall enter into such agreement not later than #cj days after the date of the establishment of a model agreement under subsection 7a74 7ii7 #bjbc and subsequent years ,in order for an agreement with a manufacturer to be in effect under this section with respect to plan year #bjbc or a subsequent plan year1 the manufacturer shall enter into such agreement 7or such agreement shall be renewed under paragraph 7#d77;,a77 not later than ,january #cj of the preceding year4 7#b7 ,provision of appropriate data ,each manufacturer with an agreement in effect under this section shall collect and have available appropriate data1 as determined by the ,secretary1 to ensure that it can demonstrate to the ,secretary compliance with the requirements under the program4 7#c7 ,compliance with requirements for administration of program ,each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the ,secretary or a third party with a contract under subsection 7d77#c71 as applicable1 for purposes of administering the program1 including any determination under subparagraph 7,a7 of subsection 7c77#a7 or procedures established under such subsection 7c77#a74 7#d7 ,length of agreement 7,a7 ,in general ,an agreement under this section shall be effective for an initial period of not less than #ab months and shall be automatically renewed for a period of not less than #a year unless terminated under subparagraph 7,b74 7,b7 ,termination 7i7 ,by the ,secretary ,the ,secretary may provide for termination of an agreement under this section for a knowing and willful violation of the requirements of the agreement or other good cause shown4 ,such termination shall not be effective earlier than #cj days after the date of notice to the manufacturer of such termination4 ,the ,secretary shall provide1 upon request1 a manufacturer with a hearing concerning such a termination1 and such hearing shall take place prior to the effective date of the termination with sufficient time for such effective date to be repealed if the ,secretary determines appropriate4 7ii7 ,by a manufacturer ,a manufacturer may terminate an agreement under this section for any reason4 ,any such termination shall be effective1 with respect to a plan year-- 7,i7 if the termination occurs before ,january #cj of a plan year1 as of the day after the end of the plan year2 and 7,,ii7 if the termination occurs on or after ,january #cj of a plan year1 as of the day after the end of the succeeding plan year4 7iii7 ,effectiveness of termination ,any termination under this subparagraph shall not affect discounts for applicable drugs of the manufacturer that are due under the agreement before the effective date of its termination4 7iv7 ,notice to third party ,the ,secretary shall provide notice of such termination to a third party with a contract under subsection 7d77#c7 within not less than #cj days before the effective date of such termination4 7c7 ,duties described ,the duties described in this subsection are the following3 7#a7 ,administration of program ,administering the program1 including-- 7,a7 the determination of the amount of the discounted price of an applicable drug of a manufacturer2 7,b7 the establishment of procedures under which discounted prices are provided to applicable beneficiaries at pharmacies or by mail order service at the point-of-sale of an applicable drug2 7,c7 the establishment of procedures to ensure that1 not later than the applicable number of calendar days after the dispensing of an applicable drug by a pharmacy or mail order service1 the pharmacy or mail order service is reimbursed for an amount equal to the difference between-- 7i7 the negotiated price of the applicable drug2 and 7ii7 the discounted price of the applicable drug2 7,d7 the establishment of procedures to ensure that the discounted price for an applicable drug under this section is applied before any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of applicable beneficiaries as the ,secretary may specify2 and 7,e7 providing a reasonable dispute resolution mechanism to resolve disagreements between manufacturers1 applicable beneficiaries1 and the third party with a contract under subsection 7d77#c74 7#b7 ,monitoring compliance 7,a7 ,in general ,the ,secretary shall monitor compliance by a manufacturer with the terms of an agreement under this section4 7,b7 ,notification ,if a third party with a contract under subsection 7d77#c7 determines that the manufacturer is not in compliance with such agreement1 the third party shall notify the ,secretary of such noncompliance for appropriate enforcement under subsection 7e74 7#c7 ,collection of data from prescription drug plans and ,,ma-,,pd plans ,the ,secretary may collect appropriate data from prescription drug plans and ,,ma-,,pd plans in a timeframe that allows for discounted prices to be provided for applicable drugs under this section4 7d7 ,administration 7#a7 ,in general ,subject to paragraph 7#b71 the ,secretary shall provide for the implementation of this section1 including the performance of the duties described in subsection 7c74 7#b7 ,limitation ,in providing for the implementation of this section1 the ,secretary shall not receive or distribute any funds of a manufacturer under the program4 7#c7 ,contract with third parties ,the ,secretary shall enter into a contract with #a or more third parties to administer the requirements established by the ,secretary in order to carry out this section4 ,at a minimum1 the contract with a third party under the preceding sentence shall require that the third party-- 7,a7 receive and transmit information between the ,secretary1 manufacturers1 and other individuals or entities the ,secretary determines appropriate2 7,b7 receive1 distribute1 or facilitate the distribution of funds of manufacturers to appropriate individuals or entities in order to meet the obligations of manufacturers under agreements under this section2 7,c7 provide adequate and timely information to manufacturers1 consistent with the agreement with the manufacturer under this section1 as necessary for the manufacturer to fulfill its obligations under this section2 and 7,d7 permit manufacturers to conduct periodic audits1 directly or through contracts1 of the data and information used by the third party to determine discounts for applicable drugs of the manufacturer under the program4 7#d7 ,performance requirements ,the ,secretary shall establish performance requirements for a third party with a contract under paragraph 7#c7 and safeguards to protect the independence and integrity of the activities carried out by the third party under the program under this section4 7#e7 ,implementation ,the ,secretary may implement the program under this section by program instruction or otherwise4 7#f7 ,administration ,chapter #ce of title #dd1 ,united ,states ,code1 shall not apply to the program under this section4 7e7 ,enforcement 7#a7 ,audits ,each manufacturer with an agreement in effect under this section shall be subject to periodic audit by the ,secretary4 7#b7 ,civil money penalty 7,a7 ,in general ,the ,secretary may impose a civil money penalty on a manufacturer that fails to provide applicable beneficiaries discounts for applicable drugs of the manufacturer in accordance with such agreement for each such failure in an amount the ,secretary determines is commensurate with the sum of-- 7i7 the amount that the manufacturer would have paid with respect to such discounts under the agreement1 which will then be used to pay the discounts which the manufacturer had failed to provide2 and 7ii7 #be percent of such amount4 7,b7 ,application ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil money penalty under this paragraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7f7 ,clarification regarding availability of other covered part ,d drugs ,nothing in this section shall prevent an applicable beneficiary from purchasing a covered part ,d drug that is not an applicable drug 7including a generic drug or a drug that is not on the formulary of the prescription drug plan or ,,ma-,,pd plan that the applicable beneficiary is enrolled in74 7g7 ,definitions ,in this section3 7#a7 ,applicable beneficiary ,the term applicable beneficiary means an individual who1 on the date of dispensing a covered part ,d drug-- 7,a7 is enrolled in a prescription drug plan or an ,,ma-,,pd plan2 7,b7 is not enrolled in a qualified retiree prescription drug plan2 and 7,c7 has incurred costs for covered part ,d drugs in the year that are equal to or exceed the annual deductible specified in section #ahfj;,d-#b7;b77#a7 for such year4 7#b7 ,applicable drug ,the term applicable drug1 with respect to an applicable beneficiary-- 7,a7 means a covered part ,d drug-- 7i7 approved under a new drug application under section #eje7;b7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act or1 in the case of a biologic product1 licensed under section #cea of the ,public ,health ,service ,act2 and 7ii7 7,i7 if the ,,pdp sponsor of the prescription drug plan or the ,,ma organization offering the ,,ma-,,pd plan uses a formulary1 which is on the formulary of the prescription drug plan or ,,ma-,,pd plan that the applicable beneficiary is enrolled in2 7,,ii7 if the ,,pdp sponsor of the prescription drug plan or the ,,ma organization offering the ,,ma-,,pd plan does not use a formulary1 for which benefits are available under the prescription drug plan or ,,ma-,,pd plan that the applicable beneficiary is enrolled in2 or 7,,iii7 is provided through an exception or appeal2 and 7,b7 does not include a selected drug 7as defined in section #aaib7;c77 during a price applicability period 7as defined in section #aaia7;b77#b77 with respect to such drug4 7#c7 ,applicable number of calendar days ,the term applicable number of calendar days means-- 7,a7 with respect to claims for reimbursement submitted electronically1 #ad days2 and 7,b7 with respect to claims for reimbursement submitted otherwise1 #cj days4 7#d7 ,discounted price 7,a7 ,in general ,the term discounted price means1 with respect to an applicable drug of a manufacturer furnished during a year to an applicable beneficiary-- 7i7 who has not incurred costs for covered part ,d drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b77i7 for the year1 #ij percent of the negotiated price of such drug2 and 7ii7 who has incurred such costs in the year that are equal to or exceed such threshold for the year1 #gj percent of the negotiated price of such drug4 7,b7 ,clarification ,nothing in this section shall be construed as affecting the responsibility of an applicable beneficiary for payment of a dispensing fee for an applicable drug4 7,c7 ,special case for certain claims 7i7 ,claims spanning deductible ,in the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall at or above the annual deductible specified in section #ahfj;,d-#b7;b77#a7 for the year1 the manufacturer of the applicable drug shall provide the discounted price under this section on only the portion of the negotiated price of the applicable drug that falls at or above such annual deductible4 7ii7 ,claims spanning out-of-pocket threshold ,in the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall entirely below or entirely above the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b77i7 for the year1 the manufacturer of the applicable drug shall provide the discounted price-- 7,i7 in accordance with subparagraph 7,a77i7 on the portion of the negotiated price of the applicable drug that falls below such threshold2 and 7,,ii7 in accordance with subparagraph 7,a77ii7 on the portion of such price of such drug that falls at or above such threshold4 7#e7 ,manufacturer ,the term manufacturer means any entity which is engaged in the production1 preparation1 propagation1 compounding1 conversion1 or processing of prescription drug products1 either directly or indirectly by extraction from substances of natural origin1 or independently by means of chemical synthesis1 or by a combination of extraction and chemical synthesis4 ,such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under ,state law4 7#f7 ,negotiated price ,the term negotiated price has the meaning given such term in section #dbc4ajj of title #db1 ,code of ,federal ,regulations 7as in effect on the date of enactment of section #ahfj;,d-#ad;,a71 except that such negotiated price shall not include any dispensing fee for the applicable drug4 7#g7 ,qualified retiree prescription drug plan ,the term qualified retiree prescription drug plan has the meaning given such term in section #ahfj;,d-#bb7;a77#b74 4 7#b7 ,sunset of ,medicare coverage gap discount program ,section #ahfj;,d-#ad;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #acie-aad;a7 is amended-- 7,a7 in subsection 7a71 in the first sentence1 by striking ,the ,secretary and inserting ,subject to subsection 7h71 the ,secretary2 and 7,b7 by adding at the end the following new subsection3 7h7 ,sunset of program 7#a7 ,in general ,the program shall not apply with respect to applicable drugs dispensed on or after ,january #a1 #bjbb1 and1 subject to paragraph 7#b71 agreements under this section shall be terminated as of such date4 7#b7 ,continued application for applicable drugs dispensed prior to sunset ,the provisions of this section 7including all responsibilities and duties7 shall continue to apply after ,january #a1 #bjbb1 with respect to applicable drugs dispensed prior to such date4 4 7#c7 ,inclusion of actuarial value of manufacturer discounts in bids ,section #ahfj;,d-#aa of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7 is amended-- 7,a7 in subsection 7b77#b77;,c77iii7-- 7i7 by striking assumptions regarding the reinsurance an inserting 8assumptions regarding-- 7,i7 the reinsurance 2 and 7ii7 by adding at the end the following3 7,,ii7 for #bjbb and each subsequent year1 the manufacturer discounts provided under section #ahfj;,d-#ad;,c subtracted from the actuarial value to produce such bid2 and 2 and 7,b7 in subsection 7c77#a77;,c7-- 7i7 by striking an actuarial valuation of the reinsurance and inserting 8an actuarial valuation of-- 7i7 the reinsurance 2 7ii7 in clause 7i71 as inserted by clause 7i7 of this subparagraph1 by adding and at the end2 and 7iii7 by adding at the end the following3 7ii7 for #bjbb and each subsequent year1 the manufacturer discounts provided under section #ahfj;,d-#ad;,c2 4 7d7 ,conforming amendments 7#a7 ,section #ahfj;,d-#b of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7 is amended-- 7,a7 in subsection 7a77#b77;,a77i77,i71 by striking 1 or an increase in the initial and inserting or1 for a year preceding #bjbb1 an increase in the initial2 7,b7 in subsection 7c77#a77;,c7-- 7i7 in the subparagraph heading1 by striking at initial coverage limit2 and 7ii7 by inserting for a year preceding #bjbb or the annual out-of-pocket threshold specified in subsection 7b77#d77;,b7 for the year for #bjbb and each subsequent year after subsection 7b77#c7 for the year each place it appears2 and 7,c7 in subsection 7d77#a77;,a71 by striking or an initial and inserting or1 for a year preceding #bjbb1 an initial4 7#b7 ,section #ahfj;,d-#d7;a77#d77;,b77i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd7;a77#d77;,b77 is amended by striking the initial and inserting for a year preceding #bjbb1 the initial4 7#c7 ,section #ahfj;,d-#ad7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77 is amended-- 7,a7 in paragraph 7#a7-- 7i7 in subparagraph 7,c71 by striking ,the continuation and inserting ,for a year preceding #bjbb1 the continuation2 7ii7 in subparagraph 7,d77iii71 by striking #ahfj;,d-#b7;b77#d77;,a77i77,i7 and inserting #ahfj;,d-#b7;b77#d77;,a77i77,i77aa72 and 7iii7 in subparagraph 7,e71 by striking ,the elimination and inserting ,for a year preceding #bjbb1 the elimination2 and 7,b7 in paragraph 7#b7-- 7i7 in subparagraph 7,c71 by striking ,the continuation and inserting ,for a year preceding #bjbb1 the continuation2 and 7ii7 in subparagraph 7,e7-- 7,i7 by inserting for a year preceding #bjbb1 after subsection 7c72 and 7,,ii7 by striking #ahfj;,d-#b7;b77#d77;,a77i77,i7 and inserting #ahfj;,d-#b7;b77#d77;,a77i77,i77aa74 7#d7 ,section #ahfj;,d-#ba7;d77#g7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aca7;d77#g77 is amended by striking section #ahfj;,d-#b7;b77#d77;,b77i7 and inserting section #ahfj;,d-#b7;b77#d77;,c77i74 7#e7 ,section #ahfj;,d-#bb7;a77#b77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#acb7;a77#b77;,a77 is amended-- 7,a7 by striking the value of any discount and inserting the following3 the value of-- 7i7 for years prior to #bjbb1 any discount 4 7,b7 in clause 7i71 as inserted by subparagraph 7,a7 of this paragraph1 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following new clause3 7ii7 for #bjbb and each subsequent year1 any discount provided pursuant to section #ahfj;,d-#ad;,c4 4 7#f7 ,section #ahfj;,d-#da7;a77#f7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aea7;a77#f77 is amended-- 7,a7 by inserting for a year before #bjbb after #ahfj;,d-#b7;b77#c72 and 7,b7 by inserting for such year before the period4 7#g7 ,paragraph 7#a7 of section #ahfj;,d-#dc7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aec7;a77 is amended to read as follows3 7#a7 participate in-- 7,a7 for #bjaa through #bjba1 the ,medicare coverage gap discount program under section #ahfj;,d-#ad;,a2 and 7,b7 for #bjbb and each subsequent year1 the manufacturer discount program under section #ahfj;,d-#ad;,c2 4 7e7 ,effective date ,the amendments made by this section shall apply with respect to plan year #bjbb and subsequent plan years4 ,december #i1 #bjai ,reported from the ,committee on ,education and ,labor with an amendment2 committed to the ,committee of the ,whole ,house on the ,state of the ,union and ordered to be printed