,,ii #aafth ,,congress #ast ,session ,s4 #bje ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,january #bd1 #bjai,mr4 ,wyden 7for himself and ,mr4 ,grassley7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend title ,,xix of the ,social ,security ,act to prevent the misclassification of drugs for purposes of the ,medicaid drug rebate program4 #a4 ,short title ,this ,act may be cited as the ,right ,rebate ,act of #bjai4 #b4 ,preventing the misclassification of drugs under the ,medicaid drug rebate program 7a7 ,application of civil money penalty for misclassification of covered outpatient drugs 7#a7 ,in general ,section #aibg7;b77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#c77 is amended-- 7,a7 in the paragraph heading1 by inserting and drug product after price2 7,b7 in subparagraph 7,a7-- 7i7 in clause 7ii71 by striking 2 and at the end and inserting a semicolon2 7ii7 in clause 7iii71 by striking the period at the end and inserting a semicolon2 7iii7 in clause 7iv71 by striking the semicolon at the end and inserting 2 and2 and 7iv7 by inserting after clause 7iv7 the following new clause3 7v7 not later than #cj days after the last day of each month of a rebate period under the agreement1 such drug product information as the ,secretary shall require for each of the manufacturer's covered outpatient drugs4 2 7,c7 in subparagraph 7,c7-- 7i7 in clause 7ii71 by inserting 1 including information related to drug pricing1 drug product information1 and data related to drug pricing or drug product information1 after provides false information2 and 7ii7 by adding at the end the following new clauses3 7iii7 ,misclassified or misreported information 7,i7 ,in general ,any manufacturer with an agreement under this section that knowingly 7as defined in section #ajjc4aaj of title #db1 ,code of ,federal ,regulations 7or any successor regulation77 misclassifies a covered outpatient drug1 such as by knowingly submitting incorrect drug category information1 is subject to a civil money penalty for each covered outpatient drug that is misclassified in an amount not to exceed #b times the amount of the difference1 as determined by the ,secretary1 between-- 7aa7 the total amount of rebates that the manufacturer paid with respect to the drug to all ,states for all rebate periods during which the drug was misclassified2 and 7bb7 the total amount of rebates that the manufacturer would have been required to pay1 as determined by the ,secretary1 with respect to the drug to all ,states for all rebate periods during which the drug was misclassified if the drug had been correctly classified4 7,,ii7 ,other penalties and recovery of underpaid rebates ,the civil money penalties described in subclause 7,i7 are in addition to other penalties as may be prescribed by law and any other recovery of the underlying underpayment for rebates due under this section or the terms of the rebate agreement as determined by the ,secretary4 7iv7 ,increasing oversight and enforcement ,each year the ,secretary shall retain1 in addition to any amount retained by the ,secretary to recoup investigation and litigation costs related to the enforcement of the civil money penalties under this subparagraph and subsection 7c77#d77;,b77ii77,,iii71 an amount equal to #be percent of the total amount of civil money penalties collected under this subparagraph and subsection 7c77#d77;,b77ii77,,iii7 for the year1 and such retained amount shall be available to the ,secretary1 without further appropriation and until expended1 for activities related to the oversight and enforcement of this section and agreements under this section1 including-- 7,i7 improving drug data reporting systems2 7,,ii7 evaluating and ensuring manufacturer compliance with rebate obligations2 and 7,,iii7 oversight and enforcement related to ensuring that manufacturers accurately and fully report drug information1 including data related to drug classification4 2 and 7iii7 in subparagraph 7,d7-- 7,i7 in clause 7iv71 by striking 2 and and inserting a comma2 7,,ii7 in clause 7v71 by striking the period and inserting 2 and2 and 7,,iii7 by inserting after clause 7v7 the following new clause3 7vi7 in the case of categories of drug product or classification information that were not considered confidential by the ,secretary on the day before the date of the enactment of the ,right ,rebate ,act of #bjai4 4 7#b7 ,technical amendments 7,a7 ,section #aijc7;i77#aj7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acif;b7i77#aj77 is amended-- 7i7 in subparagraph 7,c7-- 7,i7 by adjusting the left margin so as to align with the left margin of subparagraph 7,b72 and 7,,ii7 by striking 1 and and inserting a semicolon2 7ii7 in subparagraph 7,d71 by striking 2 or and inserting 2 and2 and 7iii7 by adding at the end the following new subparagraph3 7,e7 with respect to any amount expended for a covered outpatient drug for which a suspension under section #aibg7;c77#d77;,b77ii77,,ii7 is in effect2 or 4 7,b7 ,section #aibg7;b77#c77;,c77ii7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#c77;,c77ii77 is amended by striking subsections 7a7 and 7b7 and inserting subsections 7a71 7b71 7f77#c71 and 7f77#d74 7b7 ,recovery of unpaid rebate amounts due to misclassification of covered outpatient drugs 7#a7 ,in general ,section #aibg7;c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;c77 is amended by adding at the end the following new paragraph3 7#d7 ,recovery of unpaid rebate amounts due to misclassification of covered outpatient drugs 7,a7 ,in general ,if the ,secretary determines that a manufacturer with an agreement under this section paid a lower per-unit rebate amount to a ,state for a rebate period as a result of the misclassification by the manufacturer of a covered outpatient drug 7without regard to whether the manufacturer knowingly made the misclassification or should have known that the misclassification would be made7 than the per-unit rebate amount that the manufacturer would have paid to the ,state if the drug had been correctly classified1 the manufacturer shall pay to the ,state an amount equal to the product of-- 7i7 the difference between-- 7,i7 the per-unit rebate amount paid to the ,state for the period2 and 7,,ii7 the per-unit rebate amount that the manufacturer would have paid to the ,state for the period1 as determined by the ,secretary1 if the drug had been correctly classified2 and 7ii7 the total units of the drug paid for under the ,state plan in the period4 7,b7 ,authority to correct misclassifications 7i7 ,in general ,if the ,secretary determines that a manufacturer with an agreement under this section has misclassified a covered outpatient drug 7without regard to whether the manufacturer knowingly made the misclassification or should have known that the misclassification would be made71 the ,secretary shall notify the manufacturer of the misclassification and require the manufacturer to correct the misclassification in a timely manner4 7ii7 ,enforcement ,if1 after receiving notice of a misclassification from the ,secretary under clause 7i71 a manufacturer fails to correct the misclassification by such time as the ,secretary shall require1 until the manufacturer makes such correction1 the ,secretary may-- 7,i7 correct the misclassification on behalf of the manufacturer2 7,,ii7 suspend the misclassified drug and the drug's status as a covered outpatient drug under the manufacturer's national rebate agreement2 or 7,,iii7 impose a civil money penalty 7which shall be in addition to any other recovery or penalty which may be available under this section or any other provision of law7 for each rebate period during which the drug is misclassified not to exceed an amount equal to the product of-- 7aa7 the total number of units of each dosage form and strength of such misclassified drug paid for under any ,state plan during such a rebate period2 and 7bb7 #bc4a percent of the average manufacturer price for the dosage form and strength of such misclassified drug4 7,c7 ,reporting and transparency 7i7 ,in general ,the ,secretary shall submit a report to ,congress on at least an annual basis that includes information on the covered outpatient drugs that have been identified as misclassified1 the steps taken to reclassify such drugs1 the actions the ,secretary has taken to ensure the payment of any rebate amounts which were unpaid as a result of such misclassification1 and a disclosure of expenditures from the fund created in subsection 7b77#c77;,c77iv71 including an accounting of how such funds have been allocated and spent in accordance with such subsection4 7ii7 ,public access ,the ,secretary shall make the information contained in the report required under clause 7i7 available to the public on a timely basis4 7,d7 ,other penalties and actions ,actions taken and penalties imposed under this clause shall be in addition to other remedies available to the ,secretary including terminating the manufacturer's rebate agreement for noncompliance with the terms of such agreement and shall not exempt a manufacturer from1 or preclude the ,secretary from pursuing1 any civil money penalty under this title or title ,,xi1 or any other penalty or action as may be prescribed by law4 4 7#b7 ,offset of recovered amounts against medical assistance ,section #aibg7;b77#a77;,b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#a77;,b77 is amended by inserting 1 including amounts received by a ,state under subsection 7c77#d71 after in any quarter4 7c7 ,clarifying definitions ,section #aibg7k77#g77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7k77#g77;,a77 is amended-- 7#a7 by striking an original new drug application and inserting a new drug application each place it appears2 7#b7 in clause 7i71 by inserting but including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph 7#d7 after drug described in paragraph 7#e72 7#c7 in clause 7ii71 by striking was originally marketed and inserting is marketed2 and 7#d7 in clause 7iv7-- 7,a7 by inserting 1 including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph 7#d71 after covered outpatient drug2 and 7,b7 by adding at the end the following new sentence3 ,such term also includes a covered outpatient drug that is a biological product licensed1 produced1 or distributed under a biologics license application approved by the ,food and ,drug ,administration44 7d7 ,exclusion of manufacturers for knowing misclassification of covered outpatient drugs ,section #aabh7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;a-#g7;b77 is amended by adding at the end the following new paragraph3 7#ag7 ,knowingly misclassifying covered outpatient drugs ,any manufacturer or officer1 director1 agent1 or managing employee of such manufacturer that knowingly misclassifies a covered outpatient drug under an agreement under section #aibg1 knowingly fails to correct such misclassification1 or knowingly provides false information related to drug pricing1 drug product information1 or data related to drug pricing or drug product information4 4 7e7 ,effective date ,the amendments made by this section shall take effect on the date of the enactment of this ,act1 and shall apply to covered outpatient drugs supplied by manufacturers under agreements under section #aibg of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7 on or after such date4