,i #aafth ,,congress #ast ,session ,h4 ,r4 #dfai ,,in ,,the ,,house ,,of ,,representatives ,october #h1 #bjai,ms4 ,schakowsky 7for herself1 ,mr4 ,higgins of ,new ,york1 and ,ms4 ,wild7 introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce1 and in addition to the ,committee on ,ways and ,means1 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 ,a ,,bill ,to amend title ,,xviii of the ,social ,security ,act to require drug manufacturers to pay a ,medicare part ,d rebate for certain drugs if the price of such drugs increases faster than inflation4 #a4 ,short title ,this ,act may be cited as the ,pharmaceutical ,rebates for ,excessive ,pricing ,above ,inflation ,act or the ,pharmaceutical ,,repai ,act4 #b4 ,medicare part ,d prescription drug inflation 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 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