,,ii  #aaf? ,,congress  #a/ ,session    
,s4 #bjha  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,july #aj1 #bjai ,mr4  
,pet]s 7= himself & ,ms4 ,/ab5[7        
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d title      
,,xviii ( ! ,social ,security ,act to   
require drug manufactur]s to provide    
rebates = drugs furni%$ "u ,m$ic>e "p ,b
 = :i* ! gr[? 9 av]age sales price has  
exce$$ inflation1 & = o!r purposes4  #a4
 ,%ort title ,?is ,act may be cit$ z !  
,/op ,drug ,companies f ,ov]*>g+ ,s5iors
 9 ,m$ic>e ,"p ,b ,act ( #bjai4  #b4    
,requir+ drug manufactur]s to provide   
rebates = drugs furni%$ "u ,m$ic>e "p ,b
 = :i* ,,asp gr[? has exce$$ inflation  
,section #ahdg;,a ( ! ,social ,security 
,act 7#db ,u4,s4,c4 #aciew-#c;a7 is     
am5d$ by add+ at ! end ! foll[+ new     
subsection3  7h7 ,prescription drug     
rebate agreem5t  7#a7 ,requirem5t  7,a7 
,9 g5]al ,subject to subp>agraphs 7,b7 &
 7,c71 9 ord] = paym5t to be made "u ?is

 "p = an applicable "p ,b drug 7z def9$ 
9 p>agraph 7#g77;,a77 ( a manufactur]   
furni%$ on or aft] ,janu>y #a1 #bjbj1 ! 
manufactur] %all h ent]$ into & h 9     
effect a rebate agreem5t describ$ 9     
p>agraph 7#b7 ) ! ,secret>y4  7,b7      
,exceptions ,?is subsection %all n apply
 ) respect to an applicable "p ,b drug (
 a manufactur]--  7i7 if ! ,secret>y    
det]m9es t ! e/imat$ av]age annual co/  
p] us] = ! associat$ drug bill+ code z  
det]m9$ 9 su* mann] z ! ,secret>y       
det]m9es appropriate1 includ+ ) respect 
to an applicable "p ,b drug = :i* a     
,,hcpcs code has n be5 assign$1 is less 
?an-- 7,i7 = #bjbj1 #ajj2 &  7,,ii7 = a 
subsequ5t ye>1 ! am\nt det]m9$ "u ?is   
clause = ! prec$+ ye> increas$ by !     
p]c5tage increase 9 ! consum] price     
index = all urban consum]s 7,u4,s4 city 
av]age7 = ! #ab-mon? p]iod end+ ) ,june 
( ! previ\s ye>2  7ii7 if ! drug is     
includ$ on ! drug %ortage li/ "u section
 #ejf;,e ( ! ,f$]al ,food1 ,drug1 &     
,cosmetic ,act 7#ba ,u4,s4,c4 #cef;e74  

7,c7 ,e/abli%m5t ( proc$ures to avoid   
duplication ,! ,secret>y %all e/abli%   
proc$ures to ensure t !re is no         
duplication ) respect to drug rebates   
provid$ by manufactur]s ) respect to    
applicable "p ,b drugs "u ?is subsection
 & ei!r ( ! foll[+3 7i7 ,pur*ase by a   
cov]$ entity ( cov]$ outpati5t drugs    
pursuant to an agreem5t "u section      
#cdj;,b ( ! ,public ,heal? ,s]vice ,act 
7#db ,u4,s4,c4 #bef;b74  7ii7 ,drug     
rebates provid$ by manufactur]s )       
respect to cov]$ outpati5t drugs        
pursuant to section #aibg4  7#b7 ,rebate
 agreem5t ,a rebate agreem5t "u ?is     
subsection %all require ! manufactur] to
 provide to ! ,secret>y 7to be deposit$ 
9 ! ,treasury to ! cr$it ( ! ,f$]al     
,supplem5t>y ,m$ical ,insurance ,tru/   
,fund7 a rebate = ea* rebate p]iod 7z   
def9$ 9 p>agraph 7#g77;,b77 end+ aft]   
,decemb] #ca1 #bjai1 9 an am\nt specifi$
 9 p>agraph 7#d7 = applicable "p ,b     
drugs ( ! manufactur] furni%$ aft]      
,decemb] #ca1 #bjai1 = :i* paym5t 0 made

 "u ?is section or "u a sep>ate         
ambulatory classification gr\p pursuant 
to section #ahcc7t7 = su* p]iod4 ,su*   
rebate %all be paid by ! manufactur] n  
lat] ?an #cj days aft] ! date ( receipt 
( ! in=mation describ$ 9 p>agraph 7#c7 =
 ! p]iod involv$4  7#c7 ,secret>y       
provision ( in=mation  7,a7 ,9 g5]al ,! 
,secret>y %all report to ea* manufactur]
 n lat] ?an #ahj days aft] ! end ( ea*  
rebate p]iod & 9 a =m consi/5t ) a /&>d 
report+ =mat e/abli%$ by ! ,secret>y1   
in=mation on ! total numb] ( units ( ea*
 dosage =m & /r5g? & package size ( ea* 
applicable "p ,b drug ( ! manufactur]   
furni%$ aft] ,decemb] #ca1 #bjai1 = :i* 
paym5t 0 made "u ?is section or "u a    
sep>ate ambulatory classification gr\p  
pursuant to section #ahcc7t7 dur+ !     
p]iod4  7,b7 ,audits by manufactur] (   
in=mation provid$ ,a manufactur] may1 z 
det]m9$ by ! ,secret>y1 audit !         
in=mation provid$ 7or requir$ to be     
provid$7 "u subp>agraph 7,a74  7,c7     
,audits by ,secret>y ,! ,secret>y may   

audit ! in=mation provid$ 7or requir$ to
 be provid$7 "u subp>agraph 7,a7 & !    
det]m9ation ( ! bill+-code level rebate 
am\nt1 includ+ ! manufactur]-level      
bill+-code level ,,asp &                
inflation-adju/$ bill+-code level ,,asp1
 "u p>agraph 7#d74  7,d7 ,adju/m5ts bas$
 on audit results ,! ,secret>y %all make
 adju/m5ts to rebates & av]age sales    
price z appropriate bas$ on ! results ( 
an audit conduct$ "u subp>agraph 7,b7 or
 7,c74  7#d7 ,det]m9ation ( bill+-code  
level rebate am\nt  7,a7 ,9 g5]al ,!    
am\nt ( ! rebate specifi$ "u ?is        
p>agraph = a manufactur] = a rebate     
p]iod1 ) respect to applicable "p ,b    
drugs ( a manufactur] assign$ to a bill+
 code1 %all be equal to ! product (--   
7i7 ! total numb] ( units ( su* drugs ( 
! manufactur] assign$ to ! bill+ code = 
:i* paym5t 0 made "u ?is section or "u a
 sep>ate ambulatory classification gr\p 
pursuant to section #ahcc7t7 = ! rebate 
p]iod2 &  7ii7 ! am\nt 7if any7 by :i*--
 7,i7 ! manufactur]-level bill+-code    

level ,,asp 7z def9$ 9 subp>agraph 7,b77
 = ! manufactur] = ! rebate p]iod1      
exce$s  7,,ii7 ! inflation-adju/$       
bill+-code level ,,asp 7z def9$ 9       
subp>agraph 7,c77 = ! rebate p]iod4     
7,b7 ,manufactur]-level bill+-code level
 ,,asp def9$ ,9 ?is subsection1 ! t]m   
manufactur]-level bill+-code level ,,asp
 means1 ) respect to a manufactur] & a  
bill+ code = a rebate p]iod1 subject to 
subp>agraph 7,e77i71 ! weight$ av]age   
sales price 7p] unit7 across all ( !    
,national ,drug ,codes = a manufactur]  
assign$ to ! bill+ code1 z det]m9$ by ! 
,secret>y1 = ! qu>t] us$ to e/abli%     
paym5t rates = su* ,codes dur+ ! rebate 
p]iod4  7,c7 ,inflation-adju/$          
bill+-code level ,,asp def9$ ,9 ?is     
subsection1 ! t]m inflation-adju/$      
bill+-code level ,,asp means1 ) respect 
to a bill+ code & a rebate p]iod1 !     
product (-- 7i7 subject to subp>agraph  
7,e77ii71 ! av]age sales price = all    
,national ,drug ,codes1 reg>dless (     
manufactur]1 assign$ to ! bill+ code1 z 

det]m9$ by ! ,secret>y1 = ! cal5d> qu>t]
 beg9n+ ,janu>y #a1 #bjag2 &  7ii7 !    
p]c5tage increase 9 ! consum] price     
index = all urban consum]s 7,unit$      
,/ates city av]age7 betwe5 ,decemb]     
#bjaf1 & ! mon? prior to ! qu>t]        
describ$ 9 subp>agraph 7,b74  7,d7      
,treatm5t ( subsequ5tly approv$ drugs ,9
 ! case ( an applicable "p ,b drug fir/ 
m>ket$ aft] ,septemb] #cj1 #bjaf1 clause
 7i7 ( subp>agraph 7,c7 %all be appli$  
by sub/itut+ ! second full cal5d> qu>t] 
aft] ! day on :i* ! drug 0 fir/ m>ket$ =
 ! cal5d> qu>t] beg9n+ ,janu>y #a1 #bjag
 & clause 7ii7 ( su* subp>agraph %all be
 appli$ by sub/itut+ ! mon? prior to !  
fir/ mon? ( ! second full cal5d> qu>t]  
aft] ! day on :i* ! drug 0 fir/ m>ket$ =
 ,decemb] #bjaf4  7,e7 ,au?ority to     
modify me?odology  7i7 ,det]m9ation (   
manufactur]-level bill+-code level ,,asp
 ,9 ! case :]e ! ,secret>y does n h     
manufactur] level data ) respect to a   
bill+ code1 ! ,secret>y may reque/ su*  
additional data z ne$$1 allocate total  

volume = all ,national ,drug ,codes1    
reg>dless ( manufactur]1 assign$ to !   
bill+ ,code z det]m9$ by ! ,secret>y1 or
 use an alt]nate me?odology z necess>y 9
 ord] to det]m9e ! manufactur]-level    
bill+-code level ,,asp "u subp>agraph   
7,b74  7ii7 ,det]m9ation (              
inflation-adju/$ bill+-code level ,,asp 
,9 ! case :]e ! ,secret>y does n h      
suffici5t data ) respect to ! av]age    
sales price = applicable "p ,b drugs    
assign$ to a bill+ code 9 ord] to       
det]m9e ! inflation-adju/$ bill+-code   
level ,,asp = ! p]iod describ$ 9        
subp>agraph 7,c77i71 includ+ ?r\gh !    
application ( subp>agraph 7,d7 to su*   
subp>agraph 7,c77i71 ! ,secret>y may    
modify ! me?odology or p]iod z necess>y 
= purposes ( det]m9+ an inflation-adju/$
 bill+-code level ,,asp = su* p]iod4    
7#e7 ,submission ( data ,a rebate       
agreem5t "u ?is subsection %all require 
a manufactur] ( an applicable "p ,b drug
 to submit to ! ,secret>y at su* "t1 & 9
 su* mann]1 z ! ,secret>y may specify   

su* data z ! ,secret>y det]m9es is      
necess>y 9 ord] to c>ry out ?is         
subsection4  7#f7 ,l5g? ( agreem5t ,!   
provisions ( p>agraph 7#d7 ( section    
#aibg7;b7 7o!r ?an clauses 7iv7 & 7v7 ( 
subp>agraph 7,b77 %all apply to rebate  
agreem5ts "u ?is subsection 9 ! same    
mann] z su* p>agraph applies to a rebate
 agreem5t "u su* section4  7#g7 ,o!r    
t]ms & conditions ,! ,secret>y %all     
e/abli% o!r t]ms & conditions ( ! rebate
 agreem5t "u ?is subsection1 includ+    
t]ms & conditions relat$ to compliance1 
t are consi/5t ) ?is subsection4  7#h7  
,def9itions ,9 ?is subsection3  7,a7    
,applicable "p ,b drug ,! t]m applicable
 "p ,b drug means-- 7i7 a drug or       
biological describ$ 9 section           
#ahdb7o77#a77;,c7 = :i* paym5t is made  
"u ?is section2 or  7ii7 a drug or      
biological = :i* ! ,secret>y has        
e/abli%$ a sep>ate ambulatory           
classification gr\p "u ! prospective    
paym5t sy/em = hospital outpati5t       
dep>tm5t s]vices "u section #ahcc7t74   

7,b7 ,rebate p]iod ,! t]m rebate p]iod  
means1 ) respect to an agreem5t "u      
p>agraph 7#b71 a cal5d> qu>t] or o!r    
p]iod specifi$ by ! ,secret>y ) respect 
to ! paym5t ( rebates "u su* agreem5t4  
4  #c4 ,protection aga9/ high           
out-(-pocket exp5ditures = "p ,b drugs  
,title ,,xviii ( ! ,social ,security    
,act 7#db ,u4,s4,c4 #acie et seq47 is   
am5d$ by ins]t+ aft] section #ahdg;,b ! 
foll[+ new section3  #ahdg;,c4          
,protection aga9/ high out-(-pocket     
exp5ditures = "p ,b drugs  7a7 ,9 g5]al 
,not)/&+ any o!r provision ( ?is title1 
9 ! case ( an individual enroll$ "u ?is 
"p1 if ! am\nt ( ! out-(-pocket co/-%>+ 
= "p ,b drugs 7z def9$ 9 subsection 7b77
 ( su* individual = a ye> 7beg9n+ )     
#bjbj7 equals or exce$s ! "p ,b drug    
annual out-(-pocket ?re%old specifi$ 9  
subsection 7c7 = ! ye>1 section         
#ahcc7;a77#a77,s7 %all be appli$ by     
sub/itut+ #ajj p]c5t = #hj p]c5t4  7b7  
,out-(-,pocket ,co/-,%>+ = "p ,b drugs  
def9$ ,9 ?is section1 ! t]m out-(-pocket

 co/-%>+ = "p ,b drugs means1 ) respect 
to an individual1 ! am\nt ( ! exp5ses   
incurr$ by ! individual t are           
attributable to drugs or biologicals    
furni%$ "u ?is "p4  7c7 ,"p ,b drug     
annual out-(-,pocket ?re%old  7#a7 ,9   
g5]al ,= purposes ( ?is section1 ! "p ,b
 drug annual out-(-pocket ?re%old       
specifi$ 9 ?is subsection--  7,a7 =     
#bjbj1 is equal to ! annual out-(-pocket
 ?re%old specifi$ 9 section             
#ahfj;,d-#b7;b77#d77;,b7 = #bjai1       
increas$ by ! annual p]c5tage increase 9
 ! consum] price index = all urban      
consum]s 7,unit$ ,/ates city av]age7 = !
 #ab-mon? p]iod end+ 9 ,july ( ! #bjai2 
&  7,b7 = a subsequ5t ye>1 is equal to !
 am\nt specifi$ 9 ?is subsection = !    
previ\s ye>1 increas$ by ! annual       
p]c5tage increase 9 ! consum] price     
index = all urban consum]s 7,unit$      
,/ates city av]age7 = ! #ab-mon? p]iod  
end+ 9 ,july ( ! previ\s ye>4  7#b7     
,r\nd+ ,any am\nt det]m9$ "u p>agraph   
7#a7 t is n a multiple ( #ej %all be    

r\nd$ to ! ne>e/ multiple ( #ej4  4