,,ii ,calendar ,no4 #bbe #aafth ,,congress #ast ,session ,s4 #bedc ,report ,no4 #aaf-abj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #be1 #bjai ,mr4 ,grassley1 from the ,committee on ,finance1 reported the following original bill2 which was read twice and placed on the calendar ,a ,,bill ,to amend titles ,,xi1 ,,xviii1 and ,,xix of the ,social ,security ,act to lower prescription drug prices in the ,medicare and ,medicaid programs1 to improve transparency related to pharmaceutical prices and transactions1 to lower patients' out-of-pocket costs1 and to ensure accountability to taxpayers1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,prescription ,drug ,pricing ,reduction ,act of #bjai4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,,title ,i--,medicare ,subtitle ,a--,part ,b ,sec4 #aja4 ,improving manufacturers' reporting of average sales prices to set accurate payment rates4 ,sec4 #ajb4 ,inclusion of value of coupons in determination of average sales price for drugs and biologicals under ,medicare part ,b4 ,sec4 #ajc4 ,payment for biosimilar biological products during initial period4 ,sec4 #ajd4 ,temporary increase in ,medicare part ,b payment for biosimilar biological products4 ,sec4 #aje4 ,improvements to ,medicare site-of-service transparency4 ,sec4 #ajf4 ,medicare part ,b rebate by manufacturers for drugs or biologicals with prices increasing faster than inflation4 ,sec4 #ajg4 ,requiring manufacturers of certain single-dose container or single-use package drugs payable under part ,b of the ,medicare program to provide refunds with respect to discarded amounts of such drugs4 ,sec4 #ajh4 ,clarification of ,medicare average sales price payment methodology4 ,sec4 #aji4 ,establishment of maximum add-on payment for drugs and biologicals4 ,sec4 #aaj4 ,treatment of drug administration services furnished by certain excepted off-campus outpatient departments of a provider4 ,sec4 #aaa4 ,,gao study and report on average sales price4 ,sec4 #aab4 ,authority to use alternative payment for drugs and biologicals to prevent potential drug shortages4 ,subtitle ,b--,part ,d ,sec4 #aba4 ,medicare part ,d modernization redesign4 ,sec4 #abb4 ,providing the ,medicare ,payment ,advisory ,commission and ,medicaid and ,,chip ,payment and ,access ,commission with access to certain drug payment information1 including certain rebate information4 ,sec4 #abc4 ,public disclosure of drug discounts and other pharmacy benefit manager 7,,pbm7 provisions4 ,sec4 #abd4 ,public disclosure of direct and indirect remuneration review and audit results4 ,sec4 #abe4 ,increasing the use of real-time benefit tools to lower beneficiary costs4 ,sec4 #abf4 ,improvements to provision of parts ,a and ,b claims data to prescription drug plans4 ,sec4 #abg4 ,permanently authorize a successful pilot on retroactive ,medicare part ,d coverage for low-income beneficiaries4 ,sec4 #abh4 ,medicare part ,d rebate by manufacturers for certain drugs with prices increasing faster than inflation4 ,sec4 #abi4 ,prohibiting branding on part ,d benefit cards4 ,sec4 #acj4 ,requiring prescription drug plans and ,,ma-,,pd plans to report potential fraud1 waste1 and abuse to the ,secretary of ,,hhs4 ,sec4 #aca4 ,establishment of pharmacy quality measures under ,medicare part ,d4 ,sec4 #acb4 ,addition of new measures based on access to biosimilar biological products to the #e-star rating system under ,medicare ,advantage4 ,sec4 #acc4 ,,hhs study and report on the influence of pharmaceutical manufacturer third-party reimbursement hubs on health care providers who prescribe their drugs and biologicals4 ,subtitle ,c--,miscellaneous ,sec4 #ada4 ,drug manufacturer price transparency4 ,sec4 #adb4 ,strengthening and expanding pharmacy benefit managers transparency requirements4 ,sec4 #adc4 ,prescription drug pricing dashboards4 ,sec4 #add4 ,improving coordination between the ,food and ,drug ,administration and the ,centers for ,medicare ,medicaid ,services4 ,sec4 #ade4 ,patient consultation in ,medicare national and local coverage determinations in order to mitigate barriers to inclusion of such perspectives4 ,sec4 #adf4 ,,gao study on increases to ,medicare and ,medicaid spending due to copayment coupons and other patient assistance programs4 ,sec4 #adg4 ,med,p,a,c report on shifting coverage of certain ,medicare part ,b drugs to ,medicare part ,d4 ,sec4 #adh4 ,taking steps to fulfill treaty obligations to tribal communities4 ,,title ,,ii--,medicaid ,sec4 #bja4 ,medicaid pharmacy and therapeutics committee improvements4 ,sec4 #bjb4 ,improving reporting requirements and developing standards for the use of drug use review boards in ,state ,medicaid programs4 ,sec4 #bjc4 ,,gao report on conflicts of interest in ,state ,medicaid program drug use review boards and pharmacy and therapeutics 7,p,t7 committees4 ,sec4 #bjd4 ,ensuring the accuracy of manufacturer price and drug product information under the ,medicaid drug rebate program4 ,sec4 #bje4 ,excluding authorized generic drugs from calculation of average manufacturer price under the ,medicaid drug rebate program4 ,sec4 #bjf4 ,improving transparency and preventing the use of abusive spread pricing and related practices in ,medicaid4 ,sec4 #bjg4 ,t-,,msis drug data analytics reports4 ,sec4 #bjh4 ,risk-sharing value-based payment agreements for covered outpatient drugs under ,medicaid4 ,sec4 #bji4 ,modification of maximum rebate amount under ,medicaid drug rebate program4 ,sec4 #baj4 ,applying ,medicaid drug rebate requirement to drugs provided as part of outpatient hospital services4 ,i ,medicare ,a ,part ,b #aja4 ,improving manufacturers' reporting of average sales prices to set accurate payment rates 7a7 ,in general ,section #ahdg;,a7f7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7f77 is amended-- 7#a7 by striking price4--,for requirements and inserting 8price4-- 7#a7 ,in general ,for requirements 2 and 7#b7 by adding at the end the following new paragraph3 7#b7 ,manufacturers that do not have a rebate agreement 7,a7 ,in general ,for calendar quarters beginning with the first calendar quarter after the date of the enactment of this paragraph1 the following provisions shall apply with respect to a manufacturer of an applicable drug or biological 7as defined in subparagraph 7,b77 that has not entered into and does not have in effect a rebate agreement described in subsection 7b7 of section #aibg in the same manner and to the same extent as such provisions apply with respect to a manufacturer that has entered into and has in effect such a rebate agreement3 7i7 ,section #aibg7;b77#c77;,a77iii74 7ii7 ,subparagraphs 7,b7 and 7,c7 7other than the rebate agreement suspension described in such subparagraph 7,c77 of section #aibg7;b77#c74 7,b7 ,applicable drug or biological defined ,for purposes of subparagraph 7,a71 the term applicable drug or biological means a drug or biological described in subparagraph 7,c71 7,e71 or 7,g7 of section #ahdb7o77#a7 or in section #ahha7;b77#ad77;,b7 that is payable under this part4 ,for purposes of applying this paragraph1 a drug or biological described in the previous sentence includes an item1 service1 supply1 or product that is payable under this part as a drug or biological4 4 7b7 ,conforming amendments 7#a7 ,title ,,xviii ,section #ahdg;,a7b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7b77 is amended-- 7,a7 in paragraph 7#b77;,a71 by inserting or subsection 7f77#b71 as applicable after under section #aibg7;b77#c77;,a77iii72 and 7,b7 in each of paragraphs 7#c7 and 7#f77;,a71 in the matter preceding subparagraph 7,a7 and clause 7i71 respectively1 by inserting or subsection 7f77#b71 as applicable1 after under section #aibg7;b77#c77;,a77iii74 7#b7 ,title ,,xix ,section #aibg7;b77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#c77 is amended-- 7,a7 in subparagraph 7,a71 in the flush matter following clause 7iv71 by inserting or section #ahdg;,a7f77#b7 after ,information reported under this subparagraph2 and 7,b7 in subparagraph 7,d71 in the matter preceding clause 7i71 by striking or wholesalers under this paragraph or under and inserting or wholesalers under this paragraph1 under section #ahdg;,a7f77#b71 or under4 7#c7 ,technical correction ,section #aibg7;b77#c77;,a77iii7 of such ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#c77;,a77iii77 is amended by striking section #ahha7;b77#ac77;,a77ii7 and inserting section #ahha7;b77#ad77;,b74 #ajb4 ,inclusion of value of coupons in determination of average sales price for drugs and biologicals under ,medicare part ,b ,section #ahdg;,a7c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7c77 is amended-- 7#a7 in paragraph 7#c7-- 7,a7 by striking discounts4--,in calculating and inserting 8discounts to purchasers and coupons provided to privately insured individuals4-- 7,a7 ,discounts to purchasers ,in calculating 2 and 7,b7 by adding at the end the following new subparagraph3 7,b7 ,coupons provided to reduce cost-,sharing ,for calendar quarters beginning on or after ,july #a1 #bjba1 in calculating the manufacturer's average sales price under this subsection1 such price shall include the value 7as defined in paragraph 7#f77;,j77 of any coupons provided under a drug coupon program of a manufacturer 7as those terms are defined in subparagraphs 7,k7 and 7,l71 respectively1 of paragraph 7#f774 2 and 7#b7 in paragraph 7#f71 by adding at the end the following new subparagraphs3 7,j7 ,value ,the term value means1 with respect to a coupon 7as defined in subparagraph 7,k771 the difference1 if any1 between-- 7i7 the amount of any reduction or elimination of cost-sharing or other out-of-pocket costs described in such subparagraph to a patient as a result of the use of such coupon2 and 7ii7 any charge to the patient for the use of such coupon4 7,k7 ,coupon ,the term coupon means any financial support that is provided to a patient1 either directly to the patient or indirectly to the patient through a physician1 prescriber1 pharmacy1 or other provider1 under a drug coupon program of a manufacturer 7as defined in subparagraph 7,l77 that is used to reduce or eliminate cost-sharing or other out-of-pocket costs of the patient1 including costs related to a deductible1 coinsurance1 or copayment1 with respect to a drug or biological1 including a biosimilar biological product1 of the manufacturer4 7,l7 ,drug coupon program 7i7 ,in general ,subject to clause 7ii71 the term drug coupon program means1 with respect to a manufacturer1 a program through which the manufacturer provides coupons to patients as described in subparagraph 7,k74 7ii7 ,exclusions ,such term does not include-- 7,i7 a patient assistance program operated by a manufacturer that provides free or discounted drugs or biologicals1 including biosimilar biological products1 7through in-kind donations7 to patients of low income2 or 7,,ii7 a contribution by a manufacturer to a nonprofit or ,foundation that provides free or discounted drugs or biologicals1 including biosimilar biological products1 7through in-kind donations7 to patients of low income4 4 #ajc4 ,payment for biosimilar biological products during initial period ,section #ahdg;,a7c77#d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7c77#d77 is amended-- 7#a7 in each of subparagraphs 7,a7 and 7,b71 by redesignating clauses 7i7 and 7ii7 as subclauses 7,i7 and 7,,ii71 respectively1 and moving such subclauses #b ems to the right2 7#b7 by redesignating subparagraphs 7,a7 and 7,b7 as clauses 7i7 and 7ii7 and moving such clauses #b ems to the right2 7#c7 by striking unavailable4--,in the case and inserting 8unavailable4-- 7,a7 ,in general ,subject to subparagraph 7,b71 in the case 2 and 7#d7 by adding at the end the following new subparagraph3 7,b7 ,limitation on payment amount for biosimilar biological products during initial period ,in the case of a biosimilar biological product furnished on or after ,july #a1 #bjbj1 in lieu of applying subparagraph 7,a7 during the initial period described in such subparagraph with respect to the biosimilar biological product1 the amount payable under this section for the biosimilar biological product is the lesser of the following3 7i7 ,the amount determined under clause 7ii7 of such subparagraph for the biosimilar biological product4 7ii7 ,the amount determined under subsection 7b77#a77;,b7 for the reference biological product4 4 #ajd4 ,temporary increase in ,medicare part ,b payment for 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 indenting appropriately2 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 for biosimilar biological products 7i7 ,in general ,beginning ,january #a1 #bjbj1 in the case of a biosimilar biological product described in paragraph 7#a77;,c7 that is furnished during the applicable #e-year period for such product1 the amount specified in this paragraph for such product is an amount equal to the lesser of the following3 7,i7 ,the amount specified in subparagraph 7,a7 for such product if clause 7ii7 of such subparagraph was applied by substituting #h percent for #f percent4 7,,ii7 ,the amount determined under subsection 7b77#a77;,b7 for the reference biological product4 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 that is not described in subclause 7,i71 the #e-year period beginning on the first day of the first calendar quarter in which payment was made for such product under this paragraph4 4 #aje4 ,improvements to ,medicare site-of-service transparency ,section #ahcd7t7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciem7t77 is amended-- 7#a7 in paragraph 7#a7-- 7,a7 in the heading1 by striking ,in general and inserting ,site payment2 7,b7 in the matter preceding subparagraph 7,a7-- 7i7 by striking or to and inserting 1 to2 7ii7 by inserting 1 or to a physician for services furnished in a physician's office after surgical center2 and 7iii7 by inserting 7or #bjba with respect to a physician for services furnished in a physician's office7 after #bjah2 and 7,c7 in subparagraph 7,a7-- 7i7 by striking and the and inserting 1 the2 and 7ii7 by inserting 1 and the physician fee schedule under section #ahdh 7with respect to the practice expense component of such payment amount7 after such section2 7#b7 by redesignating paragraphs 7#b7 through 7#d7 and paragraphs 7#c7 through 7#e71 respectively2 and 7#c7 by inserting after paragraph 7#a7 the following new paragraph3 7#b7 ,physician payment ,beginning in #bjba1 the ,secretary may expand the information included on the ,internet website described in paragraph 7#a7 to include-- 7,a7 the amount paid to a physician under section #ahdh for an item or service for the settings described in paragraph 7#a72 and 7,b7 the estimated amount of beneficiary liability applicable to the item or service4 4 #ajf4 ,medicare part ,b rebate by manufacturers for drugs or biologicals with prices increasing faster than inflation 7a7 ,in general ,section #ahdg;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7 is amended by adding at the end the following new subsection3 7h7 ,rebate by manufacturers for drugs or biologicals 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 rebate period 7as defined in paragraph 7#b77;,a77 beginning on or after ,january #a1 #bjba1 the ,secretary shall1 for each rebatable drug 7as defined in paragraph 7#b77;,b771 report to each manufacturer of such rebatable drug the following for such rebate period3 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 rebatable drug and rebate period4 7ii7 ,information on the amount 7if any7 of the excess average sales price increase described in subparagraph 7,a77ii7 of such paragraph for such rebatable drug and rebate period4 7iii7 ,the rebate amount specified under such paragraph for such rebatable drug and rebate period4 7,b7 ,manufacturer rebate 7i7 ,in general ,subject to clause 7ii71 for each rebate period beginning on or after ,january #a1 #bjba1 the manufacturer of a rebatable drug shall1 for such drug1 not later than #cj days after the date of receipt from the ,secretary of the information and rebate amount pursuant to subparagraph 7,a7 for such rebate period1 provide to the ,secretary a rebate that is equal to the amount specified in paragraph 7#c7 for such drug for such rebate period4 7ii7 ,exemption for shortages ,the ,secretary may reduce or waive the rebate under this subparagraph with respect to a rebatable drug that is listed on the drug shortage list maintained by the ,food and ,drug ,administration pursuant to section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act 4 7,c7 ,request for reconsideration ,the ,secretary shall establish procedures under which a manufacturer of a rebatable drug may request a reconsideration by the ,secretary of the rebate amount specified under paragraph 7#c7 for such rebatable drug and rebate period1 as reported to the manufacturer pursuant to subparagraph 7,a77iii74 7#b7 ,rebate period and ,rebatable drug defined ,in this subsection3 7,a7 ,rebate period ,the term rebate period means a calendar quarter beginning on or after ,january #a1 #bjba4 7,b7 ,rebatable drug ,the term rebatable drug means a single source drug or biological 7other than a biosimilar biological product7-- 7i7 described in section #ahdb7o77#a77;,c7 for which the payment amount is provided under this section2 or 7ii7 for which payment is made separately under section #ahcc7;i7 or section #ahcc7t7 and for which the payment amount is calculated based on the payment amount under this section4 7#c7 ,rebate amount 7,a7 ,in general ,for purposes of paragraph 7#a77;,b71 the amount specified in this paragraph for a rebatable drug assigned to a billing and payment code for a rebate period 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 rebatable drug furnished during the rebate period2 and 7ii7 the amount 7if any7 by which-- 7,i7 the amount determined under subsection 7b77#d7 for such rebatable drug during the rebate period2 exceeds 7,,ii7 the inflation-adjusted base payment amount determined under subparagraph 7,c7 of this paragraph for such rebatable drug during the rebate period4 7,b7 ,excluded units ,for purposes of subparagraph 7,a77i71 the total number of units of the billing and payment code for rebatable drugs furnished during a rebate period shall not include units with respect to which the manufacturer provides a discount under the program under section #cdj;,b of the ,public ,health ,service ,act or a rebate under section #aibg4 7,c7 ,determination of inflation-adjusted payment amount ,the inflation-adjusted payment amount determined under this subparagraph for a rebatable drug for a rebate period is-- 7i7 the amount determined under subsection 7b77#d7 for such rebatable 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 rebate period 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 ,july #a1 #bjai4 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 #bjai4 7,f7 ,rebate period ,,cpi-,u ,the term rebate period ,,cpi-,u means1 with respect to a rebate period1 the consumer price index for all urban consumers 7,united ,states city average7 for the last month of the calendar quarter that is two calendar quarters prior to the rebate period4 7#d7 ,application to new drugs ,in the case of a rebatable drug first approved or licensed by the ,food and ,drug ,administration after ,july #a1 #bjai1 the following shall apply3 7,a7 ,during initial period ,for quarters during the initial period in which the payment amount for such drug is determined using the methodology described in subsection 7c77#d7-- 7i7 clause 7ii77,i7 of paragraph 7#c77;,a7 shall be applied as if the reference to the amount determined under subsection 7b77#d71 were a reference to the wholesale acquisition cost applicable under subsection 7c77#d72 7ii7 clause 7i7 of paragraph 7#c77;,c7 shall be applied-- 7,i7 as if the reference to the amount determined under subsection 7b77#d71 were a reference to the wholesale acquisition cost applicable under subsection 7c77#d72 and 7,,ii7 as if the term payment amount benchmark quarter were defined under paragraph 7#c77;,d7 as the first full calendar quarter after the day on which the drug was first marketed2 and 7iii7 clause 7ii7 of paragraph 7#c77;,c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under paragraph 7#d77;,e7 as if the reference to ,july #bjai 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 ,after initial period ,for quarters beginning after such initial period-- 7i7 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 first full calendar quarter for which the ,secretary is able to compute an average sales price for the rebatable drug2 and 7ii7 clause 7ii7 of paragraph 7#c77;,c7 shall be applied as if the term benchmark period ,,cpi-,u were defined under paragraph 7#d77;,e7 as if the reference to ,july #bjai under such paragraph were a reference to the first month of the first full calendar quarter for which the ,secretary is able to compute an average sales price for the rebatable drug4 7#e7 ,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#f7 ,enforcement 7,a7 ,civil money penalty 7i7 ,in general ,the ,secretary shall impose a civil money penalty on a manufacturer that fails to comply with the requirements under paragraph 7#a77;,b7 with respect to providing a rebate for a rebatable drug for a rebate period for each such failure in an amount equal to the sum of-- 7,i7 the rebate amount specified pursuant to paragraph 7#c7 for such drug for such rebate period2 and 7,,ii7 #be percent of such amount4 7ii7 ,application ,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 subparagraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7,b7 ,no payment for manufacturers who fail to pay penalty ,if the manufacturer of a rebatable drug fails to pay a civil money penalty under subparagraph 7,a7 with respect to the failure to provide a rebate for a rebatable drug for a rebate period by a date specified by the ,secretary after the imposition of such penalty1 no payment shall be available under this part for such rebatable drug for calendar quarters beginning on or after such date until the ,secretary determines the manufacturer has paid the penalty due under such subparagraph4 4 7b7 ,implementation ,section #ahdg;,a7g7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c7;g77 is amended-- 7#a7 in paragraph 7#d71 by striking and at the end2 7#b7 in paragraph 7#e71 by striking the period at the end and inserting 2 and2 and 7#c7 by adding at the end the following new paragraph3 7#f7 determination of the rebate amount for a rebatable drug under paragraph 7#c7 of subsection 7h71 including with respect to a new drug pursuant to paragraph 7#d7 of such subsection1 including-- 7,a7 a decision by the ,secretary with respect to a request for reconsideration under paragraph 7#a77;,c72 and 7,b7 the determination of-- 7i7 the total number of units of the billing and payment code under paragraph 7#c77;,a77i72 and 7ii7 the inflation-adjusted payment amount under paragraph 7#c77;,c74 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 subsection 7h7 after section #aibg4 #ajg4 ,requiring manufacturers of certain single-dose container or single-use package drugs payable under part ,b of the ,medicare program to provide refunds with respect to discarded amounts of such drugs ,section #ahdg;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #acie-c;a71 as amended by section #ajf1 is amended by adding at the end the following new subsection3 7i7 ,refund for certain discarded single-dose container or single-use package drugs 7#a7 ,secretarial provision of information 7,a7 ,in general ,for each calendar quarter beginning on or after ,july #a1 #bjba1 the ,secretary shall1 with respect to a refundable single-dose container or single-use package drug 7as defined in paragraph 7#h771 report to each manufacturer 7as defined in subsection 7c77#f77;,a77 of such refundable single-dose container or single-use package drug the following for the calendar quarter3 7i7 ,subject to subparagraph 7,c71 information on the total number of units of the billing and payment code of such drug1 if any1 that were discarded during such quarter1 as determined using a mechanism such as the ,,jw modifier used as of the date of enactment of this subsection 7or any such successor modifier that includes such data as determined appropriate by the ,secretary74 7ii7 ,the refund amount that the manufacturer is liable for pursuant to paragraph 7#c74 7,b7 ,determination of discarded amounts ,for purposes of subparagraph 7,a77i71 with respect to a refundable single-dose container or single-use package drug furnished during a quarter1 the amount of such drug that was discarded shall be determined based on the amount of such drug that was unused and discarded for each drug on the date of service4 7,c7 ,exclusion of units of packaged drugs ,the total number of units of the billing and payment code of a refundable single-dose container or single-use package drug of a manufacturer furnished during a calendar quarter for purposes of subparagraph 7,a77i71 and the determination of the estimated total allowed charges for the drug in the quarter for purposes of paragraph 7#c77;,a77ii71 shall not include such units that are packaged into the payment amount for an item or service and are not separately payable4 7#b7 ,manufacturer requirement ,for each calendar quarter beginning on or after ,july #a1 #bjba1 the manufacturer of a refundable single-dose container or single-use package drug shall1 for such drug1 provide to the ,secretary a refund that is equal to the amount specified in paragraph 7#c7 for such drug for such quarter4 7#c7 ,refund amount 7,a7 ,in general ,the amount of the refund specified in this paragraph is1 with respect to a refundable single-dose container or single-use package drug of a manufacturer assigned to a billing and payment code for a calendar quarter beginning on or after ,july #a1 #bjba1 an amount equal to the estimated amount 7if any7 by which-- 7i7 the product of-- 7,i7 the total number of units of the billing and payment code for such drug that were discarded during such quarter 7as determined under paragraph 7#a772 and 7,,ii7 7aa7 in the case of a refundable single-dose container or single-use package drug that is a single source drug or biological1 the amount determined for such drug under subsection 7b77#d72 or 7bb7 in the case of a refundable single-dose container or single-use package drug that is a biosimilar biological product1 the average sales price determined under subsection 7b77#h77;,a72 exceeds 7ii7 an amount equal to the applicable percentage 7as defined in subparagraph 7,b77 of the estimated total allowed charges for such drug during the quarter4 7,b7 ,applicable percentage defined 7i7 ,in general ,for purposes of subparagraph 7,a77ii71 the term applicable percentage means-- 7,i7 subject to subclause 7,,ii71 #aj percent2 and 7,,ii7 in the case of a refundable single-dose container or single-use package drug described in subclause 7,i7 of clause 7iii7 and1 if applicable1 a refundable single-dose container or single-use package drug described in subclause 7,,ii7 of such clause1 a percentage specified by the ,secretary pursuant to clause 7ii74 7ii7 ,treatment of drugs that require filtration or other unique circumstances ,the ,secretary1 through notice and comment rulemaking-- 7,i7 in the case of a refundable single-dose container or single-use package drug described in subclause 7,i7 of clause 7iii71 shall increase the applicable percentage otherwise applicable under clause 7i77,i7 as determined appropriate by the ,secretary2 and 7,,ii7 in the case of a refundable single-dose container or single-use package drug described in subclause 7,,ii7 of clause 7iii71 may increase the applicable percentage otherwise applicable under clause 7i77,i7 as determined appropriate by the ,secretary4 7iii7 ,drug described ,for purposes of clause 7ii71 a refundable single-dose container or single-use package drug described in this clause is either of the following3 7,i7 ,a refundable single-dose container or single-use package drug for which preparation instructions required and approved by the ,commissioner of the ,food and ,drug ,administration include filtration during the drug preparation process1 prior to dilution and administration1 and require that any unused portion of such drug after the filtration process be discarded after the completion of such filtration process4 7,,ii7 ,any other refundable single-dose container or single-use package drug that has unique circumstances involving similar loss of product4 7#d7 ,frequency ,amounts required to be refunded pursuant to paragraph 7#b7 shall be paid in regular intervals 7as determined appropriate by the ,secretary74 7#e7 ,refund deposits ,amounts paid as refunds pursuant to paragraph 7#b7 shall be deposited into the ,federal ,supplementary ,medical ,insurance ,trust ,fund established under section #ahda4 7#f7 ,enforcement 7,a7 ,audits 7i7 ,manufacturer audits ,each manufacturer of a refundable single-dose container or single-use package drug that is required to provide a refund under this subsection shall be subject to periodic audit with respect to such drug and such refunds by the ,secretary4 7ii7 ,provider audits ,the ,secretary shall conduct periodic audits of claims submitted under this part with respect to refundable single-dose container or single-use package drugs in accordance with the authority under section #ahcc7;e7 to ensure compliance with the requirements applicable under this subsection4 7,b7 ,civil money penalty 7i7 ,in general ,the ,secretary shall impose a civil money penalty on a manufacturer of a refundable single-dose container or single-use package drug who has failed to comply with the requirement under paragraph 7#b7 for such drug for a calendar quarter in an amount equal to the sum of-- 7,i7 the amount that the manufacturer would have paid under such paragraph with respect to such drug for such quarter2 and 7,,ii7 #be percent of such amount4 7ii7 ,application ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil money penalty under this subparagraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7#g7 ,implementation ,the ,secretary shall implement this subsection through notice and comment rulemaking4 7#h7 ,definition of refundable single-dose container or single-use package drug 7,a7 ,in general ,except as provided in subparagraph 7,b71 in this subsection1 the term refundable single-dose container or single-use package drug means a single source drug or biological 7as defined in section #ahdg;,a7c77#f77;,d77 or a biosimilar biological product 7as defined in section #ahdg;,a7c77#f77;,h77 for which payment is established under this part and that is furnished from a single-dose container or single-use package4 7,b7 ,exclusions ,the term refundable single-dose container or single-use package drug does not include a drug or biological that is either a radiopharmaceutical or an imaging agent4 4 #ajh4 ,clarification of ,medicare average sales price payment methodology 7a7 ,in general ,section #ahdg;,a7c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7c771 as amended by section #ajb1 is amended-- 7#a7 in paragraph 7#c77;,a71 in the first sentence-- 7,a7 by striking and rebates and inserting rebates2 and 7,b7 by inserting 1 and fees 7other than bona fide service fees7 before the period at the end2 and 7#b7 in paragraph 7#f71 by adding at the end the following new subparagraph3 7,m7 ,bona fide service fee ,the term bona fide service fee means a fee paid by a manufacturer to an entity that-- 7i7 represents fair market value for a bona fide1 itemized service that-- 7,i7 is actually performed on behalf of the manufacturer2 and 7,,ii7 the manufacturer would otherwise perform 7or contract for7 in the absence of the service arrangement2 7ii7 is not passed on1 in whole or in part1 to a client or customer of the entity1 whether or not the entity takes title to the drug or biological2 7iii7 is a fixed payment and not based on a percentage of sales2 and 7iv7 is not determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties4 4 7b7 ,effective date ,the amendments made by subsection 7a7 shall apply to drugs and biologicals furnished on or after the first day of the first calendar quarter that begins on or after the date that is #ahj days after the date of the enactment of this ,act4 #aji4 ,establishment of maximum add-on payment for drugs and biologicals 7a7 ,in general ,section #ahdg;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7 is amended-- 7#a7 in subsection 7b7-- 7,a7 in paragraph 7#a71 in the matter preceding subparagraph 7,a71 by striking paragraph 7#g7 and inserting paragraphs 7#g7 and 7#i72 and 7,b7 by adding at the end the following new paragraph3 7#i7 ,maximum add-on payment amount 7,a7 ,in general ,in determining the payment amount under the provisions of subparagraph 7,a71 7,b71 or 7,c7 of paragraph 7#a7 of this subsection1 subsection 7c77#d77;,a77ii71 or subsection 7d77#c77;,c7 for a drug or biological furnished on or after ,january #a1 #bjba1 if the applicable add-on payment 7as defined in subparagraph 7,b77 for each drug or biological on a claim for a date of service exceeds the maximum add-on payment amount specified under subparagraph 7,c7 for the drug or biological1 then the payment amount otherwise determined for the drug or biological under those provisions1 as applicable1 shall be reduced by the amount of such excess4 7,b7 ,applicable add-on payment defined ,in this paragraph1 the term applicable add-on payment means the following amounts1 determined without regard to the application of subparagraph 7,a73 7i7 ,in the case of a multiple source drug1 an amount equal to the difference between-- 7,i7 the amount that would otherwise be applied under paragraph 7#a77;,a72 and 7,,ii7 the amount that would be applied under such paragraph if #ajj percent were substituted for #ajf percent4 7ii7 ,in the case of a single source drug or biological1 an amount equal to the difference between-- 7,i7 the amount that would otherwise be applied under paragraph 7#a77;,b72 and 7,,ii7 the amount that would be applied under such paragraph if #ajj percent were substituted for #ajf percent4 7iii7 ,in the case of a biosimilar biological product1 the amount otherwise determined under paragraph 7#h77;,b74 7iv7 ,in the case of a drug or biological during the initial period described in subsection 7c77#d77;,a71 an amount equal to the difference between-- 7,i7 the amount that would otherwise be applied under subsection 7c77#d77;,a77ii72 and 7,,ii7 the amount that would be applied under such subsection if #ajj percent were substituted1 as applicable1 for-- 7aa7 #ajc percent in subclause 7,i7 of such subsection2 or 7bb7 any percent in excess of #ajj percent applied under subclause 7,,ii7 of such subsection4 7v7 ,in the case of a drug or biological to which subsection 7d77#c77;,c7 applies1 an amount equal to the difference between-- 7,i7 the amount that would otherwise be applied under such subsection2 and 7,,ii7 the amount that would be applied under such subsection if #ajj percent were substituted1 as applicable1 for-- 7aa7 any percent in excess of #ajj percent applied under clause 7i7 of such subsection2 or 7bb7 #ajc percent in clause 7ii7 of such subsection4 7,c7 ,maximum add-on payment amount specified ,for purposes of subparagraph 7,a71 the maximum add-on payment amount specified in this subparagraph is-- 7i7 for each of #bjba through #bjbh1 #a1jjj2 and 7ii7 for a subsequent year1 the amount specified in this subparagraph for the preceding year increased by the percentage increase in the consumer price index for all urban consumers 7all items2 ,united ,states city average7 for the #ab-month period ending with ,june of the previous year4 ,any amount determined under this subparagraph that is not a multiple of #aj shall be rounded to the nearest multiple of #aj4 2 and 7#b7 in subsection 7c77#d77;,a77ii71 by striking in the case and inserting subject to subsection 7b77#i71 in the case4 7b7 ,conforming amendments relating to separately payable drugs 7#a7 ,,opps ,section #ahcc7t77#ad7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciel7t77#ad77 is amended-- 7,a7 in subparagraph 7,a77iii77,,ii71 by inserting 1 subject to subparagraph 7,i7 after are not available2 and 7,b7 by adding at the end the following new subparagraph3 7,i7 ,application of maximum add-on payment for separately payable drugs and biologicals ,in establishing the amount of payment under subparagraph 7,a7 for a specified covered outpatient drug that is furnished as part of a covered ,,opd service 7or group of services7 on or after ,january #a1 #bjba1 if such payment is determined based on the average price for the year established under section #ahdg;,a pursuant to clause 7iii77,,ii7 of such subparagraph1 the provisions of subsection 7b77#i7 of section #ahdg;,a shall apply to the amount of payment so established in the same manner as such provisions apply to the amount of payment under section #ahdg;,a4 4 7#b7 ,,asc ,section #ahcc7;i77#b77;,d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciel7i77#b77;,d77 is amended-- 7,a7 by moving clause 7v7 #f ems to the left2 7,b7 by redesignating clause 7vi7 as clause 7vii72 and 7,c7 by inserting after clause 7v7 the following new clause3 7vi7 ,if there is a separate payment under the system described in clause 7i7 for a drug or biological furnished on or after ,january #a1 #bjba1 the provisions of subsection 7t77#ad77;,i7 shall apply to the establishment of the amount of payment for the drug or biological under such system in the same manner in which such provisions apply to the establishment of the amount of payment under subsection 7t77#ad77;,a74 4 #aaj4 ,treatment of drug administration services furnished by certain excepted off-campus outpatient departments of a provider ,section #ahcc7t77#af7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciel7t77#af77 is amended by adding at the end the following new subparagraph3 7,g7 ,special payment rule for drug administration services furnished by an excepted department of a provider 7i7 ,in general ,in the case of a covered ,,opd service that is a drug administration service 7as defined by the ,secretary7 furnished by a department of a provider described in clause 7ii7 or 7iv7 of paragraph 7#ba77;,b71 the payment amount for such service furnished on or after ,january #a1 #bjba1 shall be the same payment amount 7as determined in paragraph 7#ba77;,c77 that would apply if the drug administration service was furnished by an off-campus outpatient department of a provider 7as defined in paragraph 7#ba77;,b774 7ii7 ,application without regard to budget neutrality ,the reductions made under this subparagraph-- 7,i7 shall not be considered an adjustment under paragraph 7#b77;,e72 and 7,,ii7 shall not be implemented in a budget neutral manner4 4 #aaa4 ,,gao study and report on average sales price 7a7 ,study 7#a7 ,in general ,the ,comptroller ,general of the ,united ,states 7in this section referred to as the ,comptroller ,general7 shall conduct a study on spending for applicable drugs under part ,b of title ,,xviii of the ,social ,security ,act4 7#b7 ,applicable drugs defined ,in this section1 the term applicable drugs means drugs and biologicals-- 7,a7 for which reimbursement under such part ,b is based on the average sales price of the drug or biological2 and 7,b7 that account for the largest percentage of total spending on drugs and biologicals under such part ,b 7as determined by the ,comptroller ,general1 but in no case less that #be drugs or biologicals74 7#c7 ,requirements ,the study under paragraph 7#a7 shall include an analysis of the following3 7,a7 ,the extent to which each applicable drug is paid for-- 7i7 under such part ,b for ,medicare beneficiaries2 or 7ii7 by private payers in the commercial market4 7,b7 ,any change in ,medicare spending or ,medicare beneficiary cost-sharing that would occur if the average sales price of an applicable drug was based solely on payments by private payers in the commercial market4 7,c7 ,the extent to which drug manufacturers provide rebates1 discounts1 or other price concessions to private payers in the commercial market for applicable drugs1 which the manufacturer includes in its average sales price calculation1 for-- 7i7 formulary placement2 7ii7 utilization management considerations2 or 7iii7 other purposes4 7,d7 ,barriers to drug manufacturers providing such price concessions for applicable drugs4 7,e7 ,other areas determined appropriate by the ,comptroller ,general4 7b7 ,report ,not later than #b years after the date of the enactment of this ,act1 the ,comptroller ,general shall submit to ,congress a report on the study conducted under subsection 7a71 together with recommendations for such legislation and administrative action as the ,secretary determines appropriate4 #aab4 ,authority to use alternative payment for drugs and biologicals to prevent potential drug shortages 7a7 ,in general ,section #ahdg;,a7e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c;a7e77 is amended-- 7#a7 by striking ,payment in ,response to ,public ,health ,emergency4--,in the case and inserting 8,payments4-- 7#a7 ,in response to public health emergency ,in the case 2 and 7#b7 by adding at the end the following new paragraph3 7#b7 ,preventing potential drug shortages 7,a7 ,in general ,in the case of a drug or biological that the ,secretary determines is described in subparagraph 7,b7 for one or more quarters beginning on or after ,january #a1 #bjba1 the ,secretary may use wholesale acquisition cost 7or other reasonable measure of a drug or biological price7 instead of the manufacturer's average sales price for such quarters and for subsequent quarters until the end of the quarter in which such drug or biological is removed from the drug shortage list under section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act1 or in the case of a drug or biological described in subparagraph 7,b77ii71 the date on which the ,secretary determines that the total manufacturing capacity or the total number of manufacturers of such drug or biological is sufficient to mitigate a potential shortage of the drug or biological4 7,b7 ,drug or biological described ,for purposes of subparagraph 7,a71 a drug or biological described in this subparagraph is a drug or biological-- 7i7 that is listed on the drug shortage list maintained by the ,food and ,drug ,administration pursuant to section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act1 and with respect to which any manufacturer of such drug or biological notifies the ,secretary of a permanent discontinuance or an interruption that is likely to lead to a meaningful disruption in the manufacturer's supply of that drug pursuant to section #ejf;,c7a7 of such ,act2 or 7ii7 that-- 7,i7 is described in section #ejf;,c7a7 of such ,act2 7,,ii7 was listed on the drug shortage list maintained by the ,food and ,drug ,administration pursuant to section #ejf;,e of such ,act within the preceding #e years2 and 7,,iii7 for which the total manufacturing capacity of all manufacturers with an approved application for such drug or biological that is currently marketed or total number of manufacturers with an approved application for such drug or biological that is currently marketed declines during a #f-month period1 as determined by the ,secretary4 7,c7 ,provision of additional information ,for each quarter in which the amount of payment for a drug or biological described in subparagraph 7,b7 pursuant to subparagraph 7,a7 exceeds the amount of payment for the drug or biological otherwise applicable under this section1 each manufacturer of such drug or biological shall provide to the ,secretary information related to the potential cause or causes of the shortage and the expected duration of the shortage with respect to such drug4 4 7b7 ,tracking shortage drugs through claims ,the ,secretary of ,health and ,human ,services 7referred to in this section as the ,secretary7 shall establish a mechanism 7such as a modifier7 for purposes of tracking utilization under title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq47 of drugs and biologicals listed on the drug shortage list maintained by the ,food and ,drug ,administration pursuant to section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cef;e74 7c7 ,,hhs report and recommendations 7#a7 ,in general ,not later than ,july #a1 #bjba1 the ,secretary shall submit to ,congress a report on shortages of drugs within the ,medicare program under title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq474 ,the report shall include-- 7,a7 an analysis of-- 7i7 the effect of drug shortages on ,medicare beneficiary access1 quality1 safety1 and out-of-pocket costs2 7ii7 the effect of drug shortages on health providers1 including hospitals and physicians1 across the ,medicare program2 7iii7 the current role of the ,centers for ,medicare ,medicaid ,services 7,,cms7 in addressing drug shortages1 including ,,cms's working relationship and communication with other ,federal agencies and stakeholders2 7iv7 the role of all actors in the drug supply chain 7including drug manufacturers1 distributors1 wholesalers1 secondary wholesalers1 group purchasing organizations1 hospitals1 and physicians7 on drug shortages within the ,medicare program2 and 7v7 payment structures and incentives under parts ,a1 ,b1 ,c1 and ,d of the ,medicare program and their effect1 if any1 on drug shortages2 and 7,b7 relevant findings and recommendations to ,congress4 7#b7 ,public availability ,the report under this subsection shall be made available to the public4 7#c7 ,consultation ,the ,secretary shall consult with the drug shortage task force authorized under section #ejf;,d7a77#a77;,a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cef;d7a77#a77;,a77 in preparing the report under this subsection1 as appropriate4 ,b ,part ,d #aba4 ,medicare part ,d modernization 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 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 indenting appropriately2 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 #c1ajj2 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 and for a year preceding #bjbb for amounts2 and 7,d7 in subparagraph 7,e71 by striking ,in applying and inserting ,for each of #bjaa through #bjba1 in applying 7b7 ,decreasing reinsurance payment amount ,section #ahfj;,d-#ae7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;b77 is amended-- 7#a7 in paragraph 7#a7-- 7,a7 by striking equal to #hj percent and inserting 8equal to-- 7,a7 for a year preceding #bjbb1 #hj percent 2 7,b7 in subparagraph 7,a71 as added by paragraph 7#a71 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following new subparagraph3 7,b7 for a subsequent year1 the sum of-- 7i7 an amount equal to the applicable percentage specified in paragraph 7#e77;,a7 of such allowable reinsurance costs attributable to that portion of gross prescription drug costs as specified in paragraph 7#c7 incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b7 with respect to applicable drugs 7as defined in section #ahfj;,d-#ad;,b7g77#b772 and 7ii7 an amount equal to the applicable percentage specified in paragraph 7#e77;,b7 of allowable reinsurance costs attributable to that portion of gross prescription drug costs as specified in paragraph 7#c7 incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b7 with respect to covered part ,d drugs that are not applicable drugs 7as so defined74 2 and 7#b7 by adding at the end the following new paragraph3 7#e7 ,applicable percentage specified ,for purposes of paragraph 7#a77;,b71 the applicable percentage specified in this paragraph is-- 7,a7 with respect to applicable drugs 7as defined in section #ahfj;,d-#ad;,b7g77#b77-- 7i7 for #bjbb1 #fj percent2 7ii7 for #bjbc1 #dj percent2 and 7iii7 for #bjbd and each subsequent year1 #bj percent2 and 7,b7 with respect to covered part ,d drugs that are not applicable drugs 7as so defined7-- 7i7 for #bjbb1 #hj percent2 7ii7 for #bjbc1 #fj percent2 and 7iii7 for #bjbd and each subsequent year1 #dj percent4 4 7c7 ,manufacturer catastrophic discount program 7#a7 ,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 #adiew-#aad7 the following new section3 #ahfj;,d-#ad;,b4 ,manufacturer catastrophic discount program 7a7 ,establishment ,the ,secretary shall establish a manufacturer catastrophic 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#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 7#e7 ,effective date of agreement ,an agreement under this section shall take effect on a date determined appropriate by the ,secretary1 which may be at the start of a calendar quarter4 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 ,administration ,chapter #ce of title #dd1 ,united ,states ,code1 shall not apply to the program under this section4 7#f7 ,funding ,for purposes of carrying out this section1 the ,secretary shall provide for the transfer1 from the ,federal ,supplementary ,medical ,insurance ,trust ,fund under section #ahda to the ,centers for ,medicare ,medicaid ,services ,program ,management ,account1 of #d1jjj1jjj for each of fiscal years #bjbj through #bjbc1 to remain available until expended404 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 shall 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 out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b74 7#b7 ,applicable drug ,the term applicable drug means1 with respect to an applicable beneficiary1 a covered part ,d drug-- 7,a7 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 ,act 7including a product licensed under subsection 7k7 of such section #cea72 and 7,b7 7i7 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 7ii7 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 7iii7 is provided through an exception or appeal4 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 means #hj percent of the negotiated price of the applicable drug of a manufacturer4 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 ,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 out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b7 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 out-of-pocket 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 #ahfj;,d-#b7;d77#a77;,b71 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 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;,b 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 added 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;,b2 4 7d7 ,determination of allowable reinsurance costs ,section #ahfj;,d-#ae7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;b77 is amended-- 7#a7 in paragraph 7#b7-- 7,a7 by striking costs4--,for purposes and inserting 8costs4-- 7,a7 ,in general ,subject to subparagraph 7,b71 for purposes 2 and 7,b7 by adding at the end the following new subparagraph3 7,b7 ,inclusion of manufacturer discounts on applicable drugs ,for purposes of applying subparagraph 7,a71 the term allowable reinsurance costs shall include the portion of the negotiated price 7as defined in section #ahfj;,d-#ad;,b7g77#f77 of an applicable drug 7as defined in section #ahfj;,d-#ad7;g77#b77 that was paid by a manufacturer under the manufacturer catastrophic discount program under section #ahfj;,d-#ad;,b4 2 and 7#b7 in paragraph 7#c7-- 7,a7 in the first sentence1 by striking ,for purposes and inserting ,subject to paragraph 7#b77;,b71 for purposes2 and 7,b7 in the second sentence1 by inserting or1 in the case of an applicable drug1 by a manufacturer after by the individual or under the plan4 7e7 ,updating risk adjustment methodologies to account for part ,d modernization redesign ,section #ahfj;,d-#ae7;c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;c77 is amended by adding at the end the following new paragraph3 7#c7 ,updating risk adjustment methodologies to account for part ,d modernization redesign ,the ,secretary shall update the risk adjustment model used to adjust bid amounts pursuant to this subsection as appropriate to take into account changes in benefits under this part pursuant to the amendments made by section #aba of the ,prescription ,drug ,pricing ,reduction ,act of #bjai4 4 7f7 ,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 or for a year preceding #bjbb 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 7,c7 in subsection 7d77#a77;,a71 by striking or an initial and inserting or for a year preceding #bjbb 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,e71 by striking ,the elimination and inserting ,for a year preceding #bjbb1 the elimination2 and 7iii7 in subparagraph 7,d77iii71 by striking #ahfj;,d-#b7;b77#d77;,a77i77,i7 and inserting #ahfj;,d-#b7;b77#d77;,a77i77,i77aa72 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,b77#d77;,b77i7 and inserting section #ahfj;,d-#b7;b77,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;,b4 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-#dc7;a77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aec7;a77#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 catastrophic discount program under section #ahfj;,d-#ad;,b2 4 7g7 ,effective date ,the amendments made by this section shall apply to plan year #bjbb and subsequent plan years4 #abb4 ,providing the ,medicare ,payment ,advisory ,commission and ,medicaid and ,,chip ,payment and ,access ,commission with access to certain drug payment information1 including certain rebate information 7a7 ,access to certain part ,d payment data ,section #ahfj;,d-#ae7;f7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aae7;f77 is amended-- 7#a7 in paragraph 7#b7-- 7,a7 in subparagraph 7,a77ii71 by striking and at the end2 7,b7 in subparagraph 7,b71 by striking the period at the end and inserting 2 and2 and 7,c7 by inserting at the end the following new subparagraph3 7,c7 by the ,executive ,director of the ,medicare ,payment ,advisory ,commission for purposes of monitoring1 making recommendations1 and analysis of the program under this title and by the ,executive ,director of the ,medicaid and ,,chip ,payment and ,access ,commission for purposes of monitoring1 making recommendations1 and analysis of the ,medicaid program established under title ,,xix and the ,children's ,health ,insurance ,program established under title ,,xxi4 2 and 7#b7 by adding at the end the following new paragraph3 7#c7 ,additional restrictions on disclosure of information ,the ,executive ,directors described in paragraph 7#b77;,c7 shall not disclose any of the following information disclosed to such ,executive ,directors or obtained by such ,executive ,directors pursuant to such paragraph1 with respect to a prescription drug plan offered by a ,,pdp sponsor or an ,,ma-,,pd plan offered by an ,,ma organization3 7,a7 ,the specific amounts or the identity of the source of any rebates1 price concessions1 or other forms of direct or indirect remuneration under such prescription drug plan or such ,,ma-,,pd plan4 7,b7 ,information submitted with the bid submitted under section #ahfj;,d-#aa by such ,,pdp sponsor or section #ahed by such ,,ma organization4 7,c7 ,in the case of such information from prescription drug event records1 in a form that would not be permitted under section #dbc4eje7m7 of title #db1 ,code of ,federal ,regulations1 or any successor regulation1 if made by the ,centers for ,medicare ,medicaid ,services4 4 7b7 ,access to certain rebate and payment data under ,medicare and ,medicaid ,section #aibg7;b77#c77;,d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#c77;,d77 is amended-- 7#a7 in the matter before clause 7i71 by striking subsection 7a77#f77;,a77ii7 and inserting subsection 7a77#f77;,a72 7#b7 in clause 7v71 by striking and at the end2 7#c7 in clause 7vi71 by striking the period at the end and inserting 1 and2 7#d7 by inserting after clause 7vi7 the following new clause3 7vii7 to permit the ,executive ,director of the ,medicare ,payment ,advisory ,commission and the ,executive ,director of the ,medicaid and ,,chip ,payment and ,access ,commission to review the information provided4 2 7#e7 in the matter at the end1 by striking #ahfj;,d-#d7;c77#b77;,e7 and inserting #ahfj;,d-#d7;c77#b77;,g72 and 7#f7 by adding at the end the following new sentence3 ,any information disclosed to the ,executive ,director of the ,medicare ,payment ,advisory ,commission or the ,executive ,director of the ,medicaid and ,,chip ,payment and ,access ,commission pursuant to this subparagraph shall not be disclosed by either such ,executive ,director in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler44 #abc4 ,public disclosure of drug discounts and other pharmacy benefit manager 7,,pbm7 provisions 7a7 ,public disclosure of drug discounts 7#a7 ,in general ,section #aaej;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;b-#bc7 is amended-- 7,a7 in subsection 7c71 in the matter preceding paragraph 7#a71 by striking this section and inserting subsection 7b77#a72 and 7,b7 by adding at the end the following new subsection3 7e7 ,public availability of certain information 7#a7 ,in general ,subject to paragraphs 7#b7 and 7#c71 in order to allow patients and employers to compare ,p,b,ms' ability to negotiate rebates1 discounts1 and price concessions and the amount of such rebates1 discounts1 and price concessions that are passed through to plan sponsors1 not later than ,july #a1 #bjbb1 the ,secretary shall make available on the ,internet website of the ,department of ,health and ,human ,services the information provided to the ,secretary and described in paragraphs 7#b7 and 7#c7 of subsection 7b7 with respect to each ,,pbm4 7#b7 ,lag in data ,the information made available in a plan year under paragraph 7#a7 shall not include information with respect to such plan year or the two preceding plan years4 7#c7 ,confidentiality ,the ,secretary shall ensure that such information is displayed in a manner that prevents the disclosure of information on rebates1 discounts1 and price concessions with respect to an individual drug or an individual ,,pdp sponsor1 ,,ma organization1 or qualified health benefits plan4 4 7#b7 ,effective date ,the amendment made by paragraph 7#a77;,a7 shall take effect on ,january #a1 #bjbb4 7b7 ,plan audit of pharmacy benefit manager data ,section #ahfj;,d-#b7;d77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;d77#c77 is amended-- 7#a7 by striking ,audits4--,to protect and inserting the following3 8,audits4-- 7,a7 ,audits of plans by the ,secretary ,to protect 2 and 7#b7 by adding at the end the following new subparagraph3 7,b7 ,audits of pharmacy benefit managers by ,,pdp sponsors and ,,ma organizations 7i7 ,in general ,beginning ,january #a1 #bjbb1 in order to ensure that-- 7,i7 contracting terms between a ,,pdp sponsor offering a prescription drug plan or an ,,ma organization offering an ,,ma-,,pd plan and its contracted or owned pharmacy benefit manager are met2 and 7,,ii7 the ,,pdp sponsor and ,,ma organization can account for the cost of each covered part ,d drug net of all direct and indirect remuneration2 the ,,pdp sponsor or ,,ma organization shall conduct financial audits4 7ii7 ,independent third party ,an audit described in clause 7i7 shall-- 7,i7 be conducted by an independent third party2 and 7,,ii7 account and reconcile flows of funds that determine the net cost of covered part ,d drugs1 including direct and indirect remuneration from drug manufacturers and pharmacies or provided to pharmacies4 7iii7 ,rebate agreements ,a ,,pdp sponsor and an ,,ma organization shall require pharmacy benefit managers to make rebate contracts with drug manufacturers made on their behalf available under audits described in clause 7i74 7iv7 ,confidentiality agreements ,audits described in clause 7i7 shall be subject to confidentiality agreements to prevent1 except as required under clause 7vii71 the redisclosure of data transmitted under the audit4 7v7 ,frequency ,a financial audit under clause 7i7 shall be conducted periodically 7but in no case less frequently than once every #b years74 7vi7 ,timeframe for ,,pbm to provide information ,a ,,pdp sponsor and an ,,ma organization shall require that a pharmacy benefit manager that is being audited under clause 7i7 provide 7as part of their contracting agreement7 the requested information to the independent third party conducting the audit within #de days of the date of the request4 7vii7 ,submission of audit reports to the ,secretary 7,i7 ,in general ,a ,,pdp sponsor and an ,,ma organization shall submit to the ,secretary the final report on any audit conducted under clause 7i7 within #cj days of the ,,pdp sponsor or ,,ma organization receiving the report from the independent third party conducting the audit4 7,,ii7 ,review ,the ,secretary shall review final reports submitted under clause 7i7 to determine the extent to which the goals specified in subclauses 7,i7 and 7,,ii7 of subparagraph 7,b77i7 are met4 7,,iii7 ,confidentiality ,notwithstanding any other provision of law1 information disclosed in a report submitted under clause 7i7 related to the net cost of a covered part ,d drug is confidential and shall not be disclosed by the ,secretary or a ,medicare contractor4 7viii7 ,notice of noncompliance ,a ,,pdp sponsor and an ,,ma organization shall notify the ,secretary if any pharmacy benefit manager is not complying with requests for access to information required under an audit under clause 7i74 7ix7 ,civil monetary penalties 7,i7 ,in general ,subject to subclause 7,,ii71 if the ,secretary determines that a ,,pdp sponsor or an ,,ma organization has failed to conduct an audit under clause 7i71 the ,secretary may impose a civil monetary penalty of not more than #aj1jjj for each day of such noncompliance4 7,,ii7 ,procedure ,the provisions of section #aabh;,a1 other than subsections 7a7 and 7b7 and the first sentence of subsection 7c77#a7 of such section1 shall apply to civil monetary penalties under this clause in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a4 4 7c7 ,disclosure to pharmacy of post-point-of-sale pharmacy price concessions and incentive payments ,section #ahfj;,d-#b7;d77#b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;d77#b77 is amended-- 7#a7 by striking ,disclosure4--,a ,,pdp sponsor and inserting the following3 8,disclosure4-- 7,a7 ,to the ,secretary ,a ,,pdp sponsor 2 and 7#b7 by adding at the end the following new subparagraph3 7,b7 ,to pharmacies 7i7 ,in general ,for plan year #bjbb and subsequent plan years1 a ,,pdp sponsor offering a prescription drug plan and an ,,ma organization offering an ,,ma-,,pd plan shall report any pharmacy price concession or incentive payment that occurs with respect to a pharmacy after payment for covered part ,d drugs at the point-of-sale1 including by an intermediary organization with which a ,,pdp sponsor or ,,ma organization has contracted1 to the pharmacy4 7ii7 ,timing ,the reporting of price concessions and incentive payments to a pharmacy under clause 7i7 shall be made on a periodic basis 7but in no case less frequently than annually74 7iii7 ,claim level ,the reporting of price concessions and incentive payments to a pharmacy under clause 7i7 shall be at the claim level or approximated at the claim level if the price concession or incentive payment was applied at a level other than at the claim level4 4 7d7 ,disclosure of ,p,t ,committee conflicts of interest 7#a7 ,in general ,section #ahfj;,d-#d7;b77#c77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd7;b77#c77;,a77 is amended by adding at the end the following new clause3 7iii7 ,disclosure of conflicts of interest ,with respect to plan year #bjbb and subsequent plan years1 a ,,pdp sponsor of a prescription drug plan and an ,,ma organization offering an ,,ma-,,pd plan shall1 as part of its bid submission under section #ahfj;,d-#aa7;b71 provide the ,secretary with a completed statement of financial conflicts of interest1 including with manufacturers1 from each member of any pharmacy and therapeutic committee used by the sponsor or organization pursuant to this paragraph4 4 7#b7 ,inclusion in bid ,section #ahfj;,d-#aa7;b77#b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7;b77#b77 is amended-- 7,a7 by redesignating subparagraph 7,f7 as subparagraph 7,g72 and 7,b7 by inserting after subparagraph 7,e7 the following new subparagraph3 7,f7 ,p,t ,committee conflicts of interest ,the information required to be disclosed under section #ahfj;,d-#d7;b77#c77;,a77iii74 4 7e7 ,information on direct and indirect remuneration required ,to be included in bid ,section #ahfj;,d-#aa7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7;b77 is amended-- 7#a7 in paragraph 7#a71 by adding at the end the following new sentence3 ,with respect to actual amounts of direct and indirect remuneration submitted pursuant to clause 7v7 of paragraph 7#b71 such amounts shall be consistent with data reported to the ,secretary in a prior year42 and 7#b7 in paragraph 7#b77;,c7-- 7,a7 in clause 7iii71 by striking and at the end2 7,b7 in clause 7iv71 by striking the period at the end and inserting the following3 1 and1 with respect to plan year #bjbb and subsequent plan years1 actual and projected administrative expenses assumed in the bid1 categorized by the type of such expense1 including actual and projected price concessions retained by a pharmacy benefit manager2 and2 and 7,c7 by adding at the end the following new clause3 7v7 with respect to plan year #bjbb and subsequent plan years1 actual and projected direct and indirect remuneration1 categorized as received from each of the following3 7,i7 ,a pharmacy4 7,,ii7 ,a manufacturer4 7,,iii7 ,a pharmacy benefit manager4 7,,iv7 ,other entities1 as determined by the ,secretary4 4 #abd4 ,public disclosure of direct and indirect remuneration review and audit results ,section #ahfj;,d-#db of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aeb7 is amended by adding at the end the following new subsection3 7e7 ,public disclosure of direct and indirect remuneration review and financial audit results 7#a7 ,,dir review results 7,a7 ,in general ,except as provided in subparagraph 7,b71 in #bjbj and each subsequent year1 the ,secretary shall make available to the public on the ,internet website of the ,centers for ,medicare ,medicaid ,services information on discrepancies related to summary and detailed ,,dir reports submitted by ,,pdp sponsors pursuant to section #ahfj;,d-#ae across all prescription drug plans based on the most recent data available4 ,information made available under this subparagraph shall include the following3 7i7 ,the number of potential errors identified by the ,secretary for ,,pdp sponsors to review4 7ii7 ,the extent to which ,,pdp sponsors resubmitted ,,dir reports to make changes for previous contract years4 7iii7 ,the extent to which resubmitted ,,dir reports resulted in an increase or decrease in ,,dir in a previous contract year4 7,b7 ,exclusion of certain submissions in calculation ,the ,secretary shall exclude any information in ,,dir reports submitted with respect to ,,pace programs under section #ahid 7pursuant to section #ahfj;,d-#ba7;f77 and qualified retiree prescription drug plans 7as defined in section #ahfj;,d-#bb7;a77#b77 from the information that is made available to the public under subparagraph 7,a74 7#b7 ,financial audit results ,in #bjbj and each subsequent year1 the ,secretary shall make available to the public on the ,internet website of the ,centers for ,medicare ,medicaid ,services the results of ,,dir audits required under section #ahfj;,d-#ab7;b77#c77;,c74 ,information made available under this paragraph shall include the following3 7,a7 ,with respect to the year1 the number of ,,pdp sponsors that received each of the following3 7i7 ,a notice of observations or findings that required the sponsor to make ,,dir report corrections4 7ii7 ,an unqualified audit opinion that renders the audit closed4 7iii7 ,a qualified audit opinion that requires the sponsor to submit a corrective action plan to the ,secretary4 7iv7 ,an adverse opinion1 with a description of the types of actions that the ,secretary takes when issuing an adverse opinion4 7,b7 ,with respect to a preceding year3 7i7 ,the number of ,,pdp sponsors that reopened a previously closed reconciliation as a result of an audit1 including as a result of ,,dir changes4 7ii7 ,the extent to which the ,secretary recouped an overpayment or made an underpayment as a result of a reopening of a previously closed reconciliation4 7#c7 ,definition of ,,dir ,for purposes of this subsection1 the term ,,dir means direct and indirect remuneration as defined in section #dbc4cjh of title #db1 ,code of ,federal ,regulations1 or any successor regulation4 4 #abe4 ,increasing the use of real-time benefit tools to lower beneficiary costs 7a7 ,requiring prescription drug plan sponsors and ,medicare ,advantage organizations to include real-time benefit information under ,medicare part ,d ,section #ahfj;,d-#d of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd7 is amended-- 7#a7 by redesignating subsection 7m7 7relating to program integrity transparency measures71 as added by section #fjfc7;c7 of the ,substance ,use-,disorder ,prevention that ,promotes ,opioid ,recovery and ,treatment for ,patients and ,communities ,act 7,public ,law #aae-bga71 as subsection 7n72 and 7#b7 by adding at the end the following new subsection3 7o7 ,real-time benefit information 7#a7 ,in general ,after the ,secretary has adopted a standard under paragraph 7#c7 for electronic real-time benefit tools1 and at a time determined appropriate by the ,secretary1 a ,,pdp sponsor of a prescription drug plan shall implement one or more of such tools that meet the requirements described in paragraph 7#b74 7#b7 ,requirements ,for purposes of paragraph 7#a71 the requirements described in this paragraph1 with respect to an electronic real-time benefit tool1 are that the tool is capable of-- 7,a7 integrating with electronic prescribing and electronic health record systems of prescribing health care professionals for the transmission of eligibility and formulary and benefit information in real time to such professionals2 and 7,b7 with respect to a covered part ,d drug1 transmitting such information specific to an individual enrolled in a prescription drug plan1 including the following3 7i7 ,a list of any clinically-appropriate alternatives to such drug included in the formulary of such plan4 7ii7 ,cost-sharing information and the negotiated price for such drug and such alternatives at-- 7,i7 multiple pharmacy options1 including the individual's preferred pharmacy and1 as applicable1 other retail pharmacies and a mail order pharmacy2 and 7,,ii7 the formulary status of such drug and such alternatives and any prior authorization or other utilization management requirements applicable to such drug and such alternatives included in the formulary of such plan4 7#c7 ,standards ,in order to be treated 7for purposes of this subsection7 as an electronic real-time benefit tool described in paragraph 7#a71 such tool shall comply with technical standards adopted by the ,secretary in consultation with the ,national ,coordinator for ,health ,information ,technology1 the ,national ,council for ,prescription ,drug ,programs1 other standard setting organizations determined appropriate by the ,secretary1 and stakeholders including ,,pdp sponsors1 ,medicare ,advantage organizations1 health care professionals1 and health information technology software vendors4 7#d7 ,rule of construction ,nothing in this subsection shall be construed to prohibit the application of paragraph 7b77#g7 of section #dbc4afj of title #db1 ,code of ,federal ,regulations1 as is to be added to such section pursuant to the final rule published in the ,federal ,register on ,may #bc1 #bjai1 and titled ,modernizing ,part ,d and ,medicare ,advantage ,to ,lower ,drug ,prices and ,reduce ,out-of-,pocket ,expenses 7#hd ,fed4 ,reg4 #bchcb through #bchhd74 4 7b7 ,requiring qualified electronic health records ,to include real-time benefit tools ,section #cjjj7ac7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #cjj;jj7#ac77 is amended-- 7#a7 in subparagraph 7,a71 by striking and at the end2 7#b7 in subparagraph 7,b71 by striking the period and inserting 2 and2 and 7#c7 by adding at the end the following3 7,c7 includes1 or is capable of including1 a real-time benefit tool that conveys patient-specific real-time cost and coverage information with respect to prescription drugs that1 with respect to any health information technology certified for electronic prescribing1 the technology shall be capable of incorporating the information described in clauses 7i7 and 7ii7 of paragraph 7#b77;,b7 of section #ahfj;,d-#d7o7 of the ,social ,security ,act at a time specified by the ,secretary but not before the ,secretary adopts a standard for such tools as described in paragraph 7#a7 of such section4 4 7c7 ,inclusion of use of real-time electronic information in shared decision-making under ,,mips ,section #ahdh7q77#b77;,b77iii77,,iv7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#d7q77#b77;,b77iii77,,iv77 is amended by adding at the end the following new sentence3 ,this subcategory shall include as an activity option1 beginning with the performance period starting on ,january #a1 #bjba1 use of a real-time benefit tool as described in #ahfj;,d-#d7o744 #abf4 ,improvements to provision of parts ,a and ,b claims data to prescription drug plans 7a7 ,data use 7#a7 ,in general ,paragraph 7#f7 of section #ahfj;,d-#d7;c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd7;c771 as added by section #ejced of division ,e of the ,bipartisan ,budget ,act of #bjah 7,public ,law #aae-abc71 relating to providing prescription drug plans with parts ,a and ,b claims data to promote the appropriate use of medications and improve health outcomes1 is amended-- 7,a7 in subparagraph 7,b7-- 7i7 by redesignating clauses 7i71 7ii71 and 7iii7 as subclauses 7,i71 7,,ii71 and 7,,iii71 respectively1 and moving such subclauses #b ems to the right2 7ii7 by striking ,purposes4--,a ,,pdp sponsor and inserting ,purposes-- 7i7 ,in general ,a ,,pdp sponsor4 2 and 7iii7 by adding at the end the following new clause3 7ii7 ,clarification ,the limitation on data use under subparagraph 7,c77i7 shall not apply to the extent that the ,,pdp sponsor is using the data provided to carry out any of the purposes described in clause 7i74 2 and 7,b7 in subparagraph 7,c77i71 by striking ,to inform and inserting ,subject to subparagraph 7,b77ii71 to inform4 7#b7 ,effective date ,the amendments made by this subsection shall apply to plan years beginning on or after ,january #a1 #bjbb4 7b7 ,manner of provision ,subparagraph 7,d7 of such paragraph 7#f7 is amended-- 7#a7 by striking described4--,the data described in this clause and inserting 8described4-- 7i7 ,in general ,the data described in this subparagraph 2 and 7#b7 by adding at the end the following new clause3 7ii7 ,manner of provision 7,i7 ,in general ,such data may be provided pursuant to this paragraph in the same manner as data under the ,part ,d ,enhanced ,medication ,therapy ,management model tested under section #aaae;,a1 through ,application ,programming ,interface1 or in another manner as determined by the ,secretary4 7,,ii7 ,implementation ,notwithstanding any other provision of law1 the ,secretary may implement this clause by program instruction or otherwise4 4 7c7 ,technical correction ,such paragraph 7#f7 is redesignated as paragraph 7#g74 #abg4 ,permanently authorize a successful pilot on retroactive ,medicare part ,d coverage for low-income beneficiaries ,section #ahfj;,d-#ad of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7 is amended-- 7#a7 by redesignating subsection 7e7 as subsection 7f72 and 7#b7 by inserting after subsection 7d7 the following new subsection3 7e7 ,limited income newly eligible transition 7,,li ,,net7 program 7#a7 ,in general ,by not later than #bjbb1 the ,secretary shall establish a program to provide transitional coverage for covered part ,d drugs for ,,li ,,net eligible individuals in accordance with this subsection4 7#b7 ,,li ,,net eligible individual defined ,for purposes of this subsection1 the term ,,li ,,net eligible individual means a part ,d eligible individual who-- 7,a7 meets the requirements of clauses 7ii7 and 7iii7 of subsection 7a77#c77;,a72 and 7,b7 has not yet enrolled in a prescription drug plan or an ,,ma-,,pd plan1 or1 who has so enrolled1 but with respect to whom coverage under such plan has not yet taken effect4 7#c7 ,transitional coverage defined ,for purposes of this subsection1 the term transitional coverage means the following with respect to a ,,li ,,net eligible individual3 7,a7 ,all ,,li ,,net eligible individuals ,immediate access to covered part ,d drugs at the point of sale during the period that begins on the first day of the month such individual is determined to meet the requirements of clauses 7ii7 and 7iii7 of subsection 7a77#c77;,a7 and ends on the date that coverage under a prescription drug plan or an ,,ma-,,pd plan takes effect with respect to such individual4 7,b7 ,full-benefit dual eligibles and ,,ssi recipients ,in the case of a ,,li ,,net eligible individual who is a full-benefit dual eligible individual 7as defined in section #aice7;c77#f77 or recipient of supplemental security income benefits under title ,,xvi1 retroactive coverage 7in the form of reimbursement of the amounts that would have been paid under this part had such individual been enrolled in a prescription drug plan or an ,,ma-,,pd plan7 of covered part ,d drugs purchased by such individual during the period that-- 7i7 begins on the date that is the later of the date that-- 7,i7 such individual was first eligible for a low income subsidy under this part2 or 7,,ii7 is #cf months prior to the date such individual enrolls in a prescription drug plan or an ,,ma-,,pd plan2 and 7ii7 ends on the date that coverage under such plan takes effect4 7#d7 ,program administration 7,a7 ,single point of contact ,the ,secretary shall1 to the extent feasible1 administer the program under this subsection through a contract with a single program administrator who will provide for a single point of contact for ,,li ,,net eligible individuals4 7,b7 ,benefit design ,the ,secretary shall ensure that the transitional coverage provided to ,,li ,,net eligible individuals under this subsection-- 7i7 provides access to all covered part ,d drugs under an open formulary2 7ii7 permits all pharmacies determined by the ,secretary to be in good standing to process claims under the program2 7iii7 is consistent with such requirements as the ,secretary considers necessary to improve patient safety and ensure appropriate dispensing of medication2 and 7iv7 meets such other requirements as the ,secretary may establish4 7#e7 ,relationship to other provisions of this title2 waiver authority 7,a7 ,in general ,the following provisions shall not apply to the program under this subsection3 7i7 ,paragraphs 7#a7 and 7#c77;,b7 of section #ahfj;,d-#d7;a7 7dissemination of general information2 availability of information on changes in formulary through the internet74 7ii7 ,subparagraphs 7,a7 and 7,b7 of section #ahfj;,d-#d7;b77#c7 7development and revision by a pharmacy and therapeutic committee2 formulary development74 7iii7 ,paragraphs 7#a77;,c7 and 7#b7 of section #ahfj;,d-#d7;c7 7medication therapy management program74 7,b7 ,waiver authority ,the ,secretary may waive such other requirements of title ,,xi and this title as may be necessary to carry out the purposes of the program established under this subsection4 4 #abh4 ,medicare part ,d rebate by manufacturers for certain drugs with prices increasing faster than inflation 7a7 ,in general ,subpart #b of part ,d of title ,,xviii of the ,social ,security ,act is amended by inserting after section #ahfj;,d-#ad;,b1 as added by section #aba1 the following new section3 #ahfj;,d-#ad;,c4 ,manufacturer rebate for certain drugs with prices increasing faster than inflation 7a7 ,requirements 7#a7 ,secretarial provision of information 7,a7 ,in general ,subject to subparagraph 7,b71 not later than #f months after the end of each rebate period 7as defined in paragraph 7#d77;,a77 beginning on or after ,january #a1 #bjbb1 the ,secretary shall1 for each rebatable covered part ,d drug 7as defined in paragraph 7#d77;,b771 report to each manufacturer 7as defined in paragraph 7#d77;,c77 of such rebatable covered part ,d drug the following for the rebate period3 7i7 ,information on the total number of units 7as defined in paragraph 7#d77;,d77 of each dosage form and strength described in paragraph 7#a77;,a7 of subsection 7b7 for such rebatable covered part ,d drug and rebate period4 7ii7 ,information on the amount 7if any7 of the excess price described in paragraph 7#a77;,b7 of such subsection for such rebatable covered part ,d drug and rebate period4 7iii7 ,the rebate amount specified under such subsection for such rebatable covered part ,d drug and rebate period4 7iv7 ,other information determined appropriate by the ,secretary4 7,b7 ,transition rule for information in #bjbb ,notwithstanding subparagraph 7,a71 the ,secretary may1 for each rebatable covered part ,d drug1 delay the timeframe for reporting the information and rebate amount described in clauses 7i71 7ii71 7iii71 and 7iv7 of such subparagraph for rebate periods in #bjbb until not later than ,december #ca1 #bjbc4 7#b7 ,manufacturer rebate 7,a7 ,in general ,subject to subparagraph 7,b71 for each rebate period beginning on or after ,january #a1 #bjbb1 each manufacturer of a rebatable covered part ,d drug shall1 not later than #cj days after the date of receipt from the ,secretary of the information and rebate amount pursuant to paragraph 7#a71 provide to the ,secretary a rebate that is equal to the amount specified in subsection 7b7 for such drug for such rebate period4 7,b7 ,exemption for shortages ,the ,secretary may reduce or waive the rebate under this paragraph with respect to a rebatable covered part ,d drug that is listed on the drug shortage list maintained by the ,food and ,drug ,administration pursuant to section #ejf;,e of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 7#c7 ,request for reconsideration ,the ,secretary shall establish procedures under which a manufacturer of a rebatable covered part ,d drug may request a reconsideration by the ,secretary of the rebate amount specified under subsection 7b7 for such drug and rebate period1 as reported to the manufacturer pursuant to paragraph 7#a74 ,timing for a reconsideration shall be coordinated with the timing of reconciliation1 as described in subsection 7b77#f7 and as determined appropriate by the ,secretary4 7#d7 ,definitions ,in this section3 7,a7 ,rebate period 7i7 ,in general ,subject to clause 7ii71 the term rebate period means1 with respect to a year1 each of the six month periods that begin on ,january #a and ,july #a of the year4 7ii7 ,initial rebate period for subsequently approved drugs ,in the case of a rebatable covered part ,d drug described in subsection 7c71 the initial rebate period for which a rebate amount is determined for such rebatable covered part ,d drug pursuant to such subsection shall be the period beginning with the first month after the last day of the six month period that begins on the day on which the drug was first marketed and ending on the last day of the first full rebate period under clause 7i7 that begins after the last day of such six month period4 7,b7 ,rebatable covered part ,d drug ,the term rebatable covered part ,d drug means a covered part ,d drug 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 #cea7;a7 of the ,public ,health ,service ,act4 7,c7 ,manufacturer ,the term manufacturer has the meaning given such term in section #ahfj;,d--#ad;,a7g74 7,d7 ,units ,the term units means1 with respect to a rebatable covered part ,d drug1 the lowest common quantity 7such as the number of capsules or tablets1 milligrams of molecules1 or grams7 of such drug dispensed to individuals under this part4 7,e7 ,price ,the term price means1 with respect to a rebatable covered part ,d drug1 the wholesale acquisition cost 7as defined in section #ahdg;,a7c77#f77;,b77 for such drug4 7b7 ,rebate amount 7#a7 ,in general ,subject to subsection 7e77#b71 the amount of the rebate specified in this subsection for a rebate period1 with respect to each dosage form and strength of a rebatable covered part ,d drug1 is the amount equal to the product of-- 7,a7 the total number of units of such dosage form and strength for each rebatable covered part ,d drug during the rebate period2 and 7,b7 the amount 7if any7 by which-- 7i7 the unit-weighted average price for such dosage form and strength of the drug determined under paragraph 7#b7 for the rebate period2 exceeds 7ii7 the inflation-adjusted price for such dosage form and strength determined under paragraph 7#c7 for the rebate period4 7#b7 ,determination of unit-weighted average price 7,a7 ,in general ,the unit-weighted average price determined under this paragraph for a rebate period1 with respect to each dosage form and strength of a rebatable covered ,part ,d drug1 is the sum of the products of-- 7i7 the weighted average price determined under subparagraph 7,b7 with respect to each package size of such dosage form and strength dispensed during the rebate period2 and 7ii7 the ratio of-- 7,i7 the total number of units of such package size dispensed during the rebate period2 to 7,,ii7 the total number of units of such dosage form and strength of such drug dispensed during such rebate period4 7,b7 ,computation of weighted average price ,the weighted average price1 with respect to each package size of such dosage form and strength of a rebatable covered part ,d drug dispensed during a rebate period1 is the sum of the products of-- 7i7 each price1 as calculated for a unit of such drug1 applicable to each package size of such dosage form and strength of such drug during the rebate period2 and 7ii7 the ratio of-- 7,i7 the number of days for which each such price is applicable during the rebate period2 to 7,,ii7 the total number of days in such rebate period4 7#c7 ,determination of inflation-adjusted price 7,a7 ,in general ,the inflation-adjusted price determined under this paragraph for a rebate period1 with respect to each dosage form and strength of a rebatable covered part ,d drug1 is-- 7i7 the benchmark unit-weighted price determined under subparagraph 7,b7 for the rebate period2 increased by 7ii7 the percentage by which the rebate period ,,cpi-,u 7as defined in paragraph 7#d77 for the rebate period exceeds the benchmark ,,cpi-,u 7as defined in paragraph 7#e774 7,b7 ,determination of benchmark unit-weighted price ,the benchmark unit-weighted price determined under this subparagraph for a rebate period1 with respect to each dosage form and strength of a rebatable covered part ,d drug1 is the sum of the products of-- 7i7 each price1 as calculated for a unit of such drug1 applicable to each package size of such dosage form and strength of such drug on ,july #a1 #bjai2 and 7ii7 the ratio of-- 7,i7 the total number of units of such package size dispensed on ,july #a1 #bjai2 to 7,,ii7 the total number of units of such dosage form and strength dispensed on ,july #a1 #bjai4 7#d7 ,benchmark ,,cpi-,u ,the term benchmark ,,cpi-,u means the consumer price index for all urban consumers 7,united ,states city average7 for ,july #bjai4 7#e7 ,rebate period ,,cpi-,u ,the term rebate period ,,cpi-,u means1 with respect to a rebate period1 the consumer price index for all urban consumers 7,united ,states city average7 for the last month of the rebate period4 7#f7 ,annual reconciliation of rebate amount ,the ,secretary shall1 on an annual basis1 conduct a one-time reconciliation of the rebate amounts owed by a manufacturer under this section based on any changes submitted by a ,,pdp sponsor of a prescription drug plan or an ,,ma organization offering an ,,ma-,,pd plan to the number of units of a rebatable covered part ,d drug dispensed during the preceding year4 ,such reconciliation shall be completed not later than #f months after the date by which the ,secretary reconciles payment for covered part ,d drugs with ,,pdp sponsors of prescription drug plans or ,,ma organizations offering ,,ma-,,pd plans4 7c7 ,treatment of subsequently approved drugs ,subject to subsection 7e77#b71 in the case of a rebatable covered part ,d drug first approved or licensed by the ,food and ,drug ,administration after ,july #a1 #bjai-- 7#a7 subparagraph 7,a77ii7 of subsection 7b77#c7 shall be applied as if the term benchmark ,,cpi-,u were defined under subsection 7b77#d7 as if the reference to ,july #bjai under such subsection were a reference to the first month after the last day of the six month period that begins on the day on which the drug was first marketed2 and 7#b7 subsection 7b77#c7 shall be applied by substituting1 for the benchmark unit-weighted price otherwise determined under subparagraph 7,b7 of such subsection1 the benchmark unit-weighted average price determined under paragraph 7#c7 for the rebate period2 7#c7 the benchmark unit-weighted average price determined under this paragraph for a rebate period1 with respect to each dosage form and strength of a rebatable covered part ,d drug1 is the sum of the products of-- 7,a7 the new drug weighted average price determined under paragraph 7#d7 with respect to each package size of such dosage form and strength of such drug dispensed during the six month period that begins on the day on which the drug was first marketed2 and 7,b7 the ratio of-- 7i7 the total number of units of such package size dispensed during the six month period that begins on the day on which the drug was first marketed2 to 7ii7 the total number of units of such dosage form and strength of such drug dispensed during such six month period2 and 7#d7 the new drug weighted average price1 with respect to each package size of such dosage form and strength of such rebatable covered part ,d drug dispensed during the six month period that begins on the day on which the drug was first marketed1 is the sum of the products of-- 7,a7 each price1 as calculated for a unit of such drug1 applicable to each package size of such dosage form and strength of such drug during the six month period that begins on the day on which the drug was first marketed2 and 7,b7 the ratio of-- 7i7 the number of days for which each such price is applicable during such six month period2 to 7ii7 the total number of days in such six month period4 7d7 ,rebate deposits ,amounts paid as rebates under subsection 7b7 shall be deposited into the ,federal ,supplementary ,medical ,insurance ,trust ,fund established under section #ahda4 7e7 ,administration 7#a7 ,periodic audits ,the ,secretary shall permit a manufacturer of a rebatable covered part ,d drug to conduct periodic audits1 directly or through contracts1 of the data and information used to determine the rebate amount for such drug under this section4 7#b7 ,special rules for calculation of benchmark unit-weighted price and benchmark-unit-weighted average price 7,a7 ,benchmark unit-weighted price ,in the case that the benchmark unit-weighted price of a dosage form and strength of a rebatable covered part ,d drug is determined under subsection 7b77#c77;,b7 to be #j due to no units of such dosage form and strength of such drug being dispensed on ,july #a1 #bjai1 the ,secretary may use a calculation1 as determined appropriate by the ,secretary1 to determine the benchmark-unit weighted price for such dosage form and strength of such drug that is different than the calculation described in such subsection4 7,b7 ,benchmark unit-weighted average price ,in the case that the benchmark unit-weighted average price of a dosage form and strength of a rebatable covered part ,d drug described under subsection 7c7 is determined under paragraph 7#c7 of such subsection to be #j due to no units of such dosage form and strength of such drug being dispensed during the six month period that begins on the day on which the drug was first marketed1 the ,secretary may use a calculation1 as determined appropriate by the ,secretary1 to determine the benchmark-unit weighted average price for such dosage form and strength of such drug that is different than the calculation described in such paragraph4 7#c7 ,administration ,chapter #ce of title #dd1 ,united ,states ,code1 shall not apply to the program under this section4 7#d7 ,judicial review ,there shall be no administrative or judicial review under section #ahfi1 section #ahgh1 or otherwise of the determination of the rebate amount under subsection 7b71 including with respect to a subsequently approved drug pursuant to subsection 7c71 including-- 7,a7 the determination of-- 7i7 the total number of units of each rebatable covered part ,d drug under subsection 7b77#a77;,a72 7ii7 the unit-weighted average price under subsection 7b77#b72 7iii7 the inflation-adjusted price under subsection 7b77#c72 7iv7 the benchmark unit-weighted average price under subsection 7c77#c72 and 7v7 the new drug weighted average price under subsection 7c77#d72 and 7,b7 the application of special rules for calculation of benchmark unit-weighted price and benchmark unit-weighted average price under paragraph 7#b7 of this subsection4 7f7 ,civil money penalty 7#a7 ,in general ,the ,secretary shall impose a civil money penalty on a manufacturer that fails to comply with the requirements under subsection 7a77#b7 with respect to providing a rebate for a rebatable covered part ,d drug for a rebate period for each such failure in an amount equal to the sum of-- 7,a7 the rebate amount determined pursuant to subsection 7b7 for such drug for such rebate period2 and 7,b7 #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 subsection in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7g7 ,rule of construction ,nothing in this section shall be construed as having any effect on-- 7#a7 any formulary design under section #ahfj;,d-#d7;b77#c72 or 7#b7 any discounts provided under the coverage gap discount program under section #ahfj;,d-#ad;,a or the manufacturer catastrophic discount program under section #ahfj;,d-#ad;,b4 7h7 ,rebate agreement 7#a7 ,in general ,the ,secretary shall enter into agreements described in paragraph 7#b7 with manufacturers4 7#b7 ,terms of agreement 7,a7 ,in general ,a rebate agreement under this paragraph shall require the manufacturer to provide to the ,secretary rebates required under subsection 7a77#b77;,a7 with respect to a rebate period4 7,b7 ,manufacturer provision of price and drug product information ,each manufacturer with an agreement in effect under this subsection shall report to the ,secretary1 with respect to each rebatable covered part ,d drug of the manufacturer1 at a time specified by the ,secretary-- 7i7 for each calendar month under the rebate agreement-- 7,i7 each wholesale acquisition cost 7as defined in section #ahdg;,a7c77#f77 applicable during the month1 applicable to each ,national ,drug ,code for the dosage form and strength of such rebatable covered part ,d drug2 and 7,,ii7 the number of days with respect to which each wholesale acquisition cost reported was applicable2 7ii7 the wholesale acquisition cost 7as so defined7 applicable on ,july #a1 #bjai1 applicable to each ,national ,drug ,code for the dosage form and strength of such rebatable covered part ,d drug 7or1 in the case of a rebatable covered part ,d drug first approved or licensed by the ,food and ,drug ,administration after ,july #a1 #bjai1 each wholesale acquisition cost applicable to each ,national ,drug ,code of each dosage form and strength of the rebatable covered part ,d drug of the manufacturer during the six month period that begins on the day on which the drug was first marketed72 and 7iii7 such other information as the ,secretary shall require4 ,information reported under this subparagraph is subject to audit by the ,inspector ,general of the ,department of ,health and ,human ,services4 7#c7 ,civil money penalties ,the provisions of subparagraph 7,c7 of section #aibg7;b77#c7 shall apply with respect to information required pursuant to paragraph 7#b77;,b7 of this subsection and the failure to provide such information in the same manner and to the same extent as such provisions apply with respect to information required under subparagraph 7,a7 of such section #aibg7;b77#c7 and the failure to provide such information4 7#d7 ,coordination ,the ,secretary may coordinate rebate agreements required under this subsection with agreements required under section #ahfj;,d-#ad;,b4 7i7 ,funding 7#a7 ,in general ,there are appropriated to the ,secretary1 from the ,federal ,supplementary ,medical ,insurance ,trust ,fund established under section #ahda-- 7,a7 for each of calendar years #bjbj through #bjbe1 #d1jjj1jjj2 and 7,b7 for each subsequent calendar year1 such sums as are necessary to carry out this section4 7#b7 ,availability ,amounts appropriated under paragraph 7#a7 shall remain available until expended4 4 7b7 ,conforming amendments 7#a7 ,section #ahfj;,d-#dc7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aec7;a771 as amended by section #aba7;f77#g71 is amended-- 7,a7 in paragraph 7#b71 by striking and at the end2 7,b7 in paragraph 7#c71 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following new paragraph3 7#d7 for #bjbb and each subsequent year1 have entered into and have in effect an agreement described in section #ahfj;,d-#ad;,c7h77#b7 with the ,secretary 4 7#b7 ,section #aibg7;c77#a77;,c77,,vi7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;c77#a77;,c77,,vi77 is amended-- 7,a7 by striking or any discounts and inserting any discounts2 and 7,b7 by inserting 1 or any rebates under section #ahfj;,d-#ad;,c before the period4 #abi4 ,prohibiting branding on part ,d benefit cards 7a7 ,in general ,section #ahea7;j77#b77;,b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ba7;j77#b77;,b77 is amended by striking co-branded network provider and inserting co-branded1 co-owned1 or affiliated network provider1 pharmacy1 or pharmacy benefit manager4 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply to plan years beginning on or after ,january #a1 #bjbb4 #acj4 ,requiring prescription drug plans and ,,ma-,,pd plans to report potential fraud1 waste1 and abuse to the ,secretary of ,,hhs ,section #ahfj;,d-#d of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajd71 as amended by section #abe1 is amended by adding at the end the following new subsection3 7p7 ,reporting potential fraud1 waste1 and abuse ,beginning ,january #a1 #bjba1 the ,,pdp sponsor of a prescription drug plan shall report to the ,secretary1 as specified by the ,secretary-- 7#a7 any substantiated or suspicious activities 7as defined by the ,secretary7 with respect to the program under this part as it relates to fraud1 waste1 and abuse2 and 7#b7 any steps made by the ,,pdp sponsor after identifying such activities to take corrective actions4 4 #aca4 ,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;c771 as amended by section #abf1 is amended 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 #bjbc1 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 #acb4 ,addition of new measures based on access to biosimilar biological products to the #e-star rating system under ,medicare ,advantage 7a7 ,in general ,section #ahec7o77#d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#bc7o77#d77 is amended by adding at the end the following new subparagraph3 7,e7 ,addition of new measures based on access to biosimilar biological products 7i7 ,in general ,for #bjbe and subsequent years1 the ,secretary shall add a new set of measures to the #e-star rating system based on access to biosimilar biological products covered under part ,b and1 in the case of ,,ma-,,pd plans1 such products that are covered part ,d drugs4 ,such measures shall assess the impact a plan's benefit structure may have on enrollees' utilization of or ability to access biosimilar biological products1 including in comparison to the reference biological product1 and shall include measures1 as applicable1 with respect to the following3 7,i7 ,coverage ,assessing whether a biosimilar biological product is on the plan formulary in lieu of or in addition to the reference biological product4 7,,ii7 ,preferencing ,assessing tier placement or cost-sharing for a biosimilar biological product relative to the reference biological product4 7,,iii7 ,utilization management tools ,assessing whether and how utilization management tools are used with respect to a biosimilar biological product relative to the reference biological product4 7,,iv7 ,utilization ,assessing the percentage of enrollees prescribed the biosimilar biological product and the percentage of enrollees prescribed the reference biological product when the reference biological product is also on the plan formulary4 7ii7 ,definitions ,in this subparagraph1 the terms biosimilar biological product and reference biological product have the meaning given those terms in section #ahdg;,a7c77#f74 7iii7 ,protecting ,patient ,interests ,in developing such measures1 the ,secretary shall ensure that each measure developed to address coverage1 preferencing1 or utilization management is constructed such that patients retain access to appropriate therapeutic options without undue administrative burden4 4 7b7 ,clarification regarding application to prescription drug plans ,to the extent the ,secretary of ,health and ,human ,services applies the #e-star rating system under section #ahec7o77#d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#bc7o77#d771 or a similar system1 to prescription drug plans under part ,d of title ,,xviii of such ,act1 the provisions of subparagraph 7,e7 of such section1 as added by subsection 7a7 of this section1 shall apply under the system with respect to such plans in the same manner as such provisions apply to the #e-star rating system under such section #ahec7o77#d74 #acc4 ,,hhs study and report on the influence of pharmaceutical manufacturer third-party reimbursement hubs on health care providers who prescribe their drugs and biologicals 7a7 ,study 7#a7 ,in general ,the ,secretary of ,health and ,human ,services 7in this section referred to as the ,secretary7 shall conduct a study on the influence of pharmaceutical manufacturer distribution models that provide third-party reimbursement hub services on health care providers who prescribe the manufacturer's drugs and biologicals1 including for ,medicare part ,d beneficiaries4 7#b7 ,requirements ,the study under paragraph 7#a7 shall include an analysis of the following3 7,a7 ,the influence of pharmaceutical manufacturer distribution models that provide third-party reimbursement hub services to health care providers who prescribe the manufacturer's drugs and biologicals1 including-- 7i7 the operations of pharmaceutical manufacturer distribution models that provide reimbursement hub services for health care providers who prescribe the manufacturer's products2 7ii7 ,federal laws affecting these pharmaceutical manufacturer distribution models2 and 7iii7 whether hub services could improperly incentivize health care providers to deem a drug or biological as medically necessary under section #dbc4egh of title #db1 ,code of ,federal ,regulations4 7,b7 ,other areas determined appropriate by the ,secretary4 7b7 ,report ,not later than ,january #a1 #bjba1 the ,secretary shall submit to ,congress a report on the study conducted under subsection 7a71 together with recommendations for such legislation and administrative action as the ,secretary determines appropriate4 7c7 ,consultation ,in conducting the study under subsection 7a7 and preparing the report under subsection 7b71 the ,secretary shall consult with the ,attorney ,general4 ,c ,miscellaneous #ada4 ,drug manufacturer price transparency ,title ,,xi of the ,social ,security ,act 7#db ,u4,s4,c4 #acja et seq47 is amended by inserting after section #aabh,k the following new section3 #aabh,l4 ,drug manufacturer price transparency 7a7 ,in general 7#a7 ,determinations ,beginning ,july #a1 #bjbb1 the ,secretary shall make determinations as to whether a drug is an applicable drug as described in subsection 7b74 7#b7 ,required justification ,if the ,secretary determines under paragraph 7#a7 that an applicable drug is described in subsection 7b71 the manufacturer of the applicable drug shall submit to the ,secretary the justification described in subsection 7c7 in accordance with the timing described in subsection 7d74 7b7 ,applicable drug described 7#a7 ,in general ,an applicable drug is described in this subsection if it meets any of the following at the time of the determination3 7,a7 ,large increase ,the drug 7per dose7-- 7i7 has a wholesale acquisition cost of at least #aj2 and 7ii7 had an increase in the wholesale acquisition cost1 with respect to determinations made-- 7,i7 during #bjbj1 of at least #ajj percent since the date of the enactment of this section2 7,,ii7 during #bjba1 of at least #ajj percent in the preceding #ab months or of at least #aej percent in the preceding #bd months2 7,,iii7 during #bjbb1 of at least #ajj percent in the preceding #ab months or of at least #bjj percent in the preceding #cf months2 7,,iv7 during #bjbc1 of at least #ajj percent in the preceding #ab months or of at least #bej percent in the preceding #dh months2 or 7,v7 on or after ,january #a1 #bjbd1 of at least #ajj percent in the preceding #ab months or of at least #cjj percent in the preceding #fj months4 7,b7 ,high spending with increase ,the drug-- 7i7 was in the top #ejth percentile of net spending under title ,,xviii or ,,xix 7to the extent data is available7 during any #ab-month period in the preceding #fj months2 and 7ii7 per dose1 had an increase in the wholesale acquisition cost1 with respect to determinations made-- 7,i7 during #bjbj1 of at least #ae percent since the date of the enactment of this section2 7,,ii7 during #bjba1 of at least #ae percent in the preceding #ab months or of at least #bj percent in the preceding #bd months2 7,,iii7 during #bjbb1 of at least #ae percent in the preceding #ab months or of at least #cj percent in the preceding #cf months2 7,,iv7 during #bjbc1 of at least #ae percent in the preceding #ab months or of at least #dj percent in the preceding #dh months2 or 7,v7 on or after ,january #a1 #bjbd1 of at least #ae percent in the preceding #ab months or of at least #ej percent in the preceding #fj months4 7,c7 ,high launch price for new drugs ,in the case of a drug that is marketed for the first time on or after ,january #a1 #bjbj1 and for which the manufacturer has established the first wholesale acquisition cost on or after such date1 such wholesale acquisition cost for a year's supply or a course of treatment for such drug exceeds the gross spending for covered part ,d drugs at which the annual out-of-pocket threshold under section #ahfj;,d-#b7;b77#d77;,b7 would be met for the year4 7#b7 ,special ,rules 7,a7 ,authority of ,secretary to substitute percentages within a de minimis range ,for purposes of applying paragraph 7#a71 the ,secretary may substitute for each percentage described in subparagraph 7,a7 or 7,b7 of such paragraph 7other than the percentile described subparagraph 7,b77i7 of such paragraph7 a percentage within a de minimis range specified by the ,secretary below the percentage so described4 7,b7 ,drugs with high launch prices annually report until a therapeutic equivalent is available ,in the case of a drug that the ,secretary determines is an applicable drug described in subparagraph 7,c7 of paragraph 7#a71 such drug shall remain described in such subparagraph 7,c7 7and the manufacturer of such drug shall annually report the justification under subsection 7c77#b77 until the ,secretary determines that there is a therapeutic equivalent 7as defined in section #cad4c of title #ba1 ,code of ,federal ,regulations1 or any successor regulation7 for such drug4 7#c7 ,dose ,for purposes of applying paragraph 7#a71 the ,secretary shall establish a definition of the term dose4 7c7 ,justification described 7#a7 ,increase in ,,wac ,in the case of a drug that the ,secretary determines is an applicable drug described in subparagraph 7,a7 or 7,b7 of subsection 7b77#a71 the justification described in this subsection is all relevant1 truthful1 and nonmisleading information and supporting documentation necessary to justify the increase in the wholesale acquisition cost of the applicable drug of the manufacturer1 as determined appropriate by the ,secretary and which may include the following3 7,a7 ,the individual factors that have contributed to the increase in the wholesale acquisition cost4 7,b7 ,an explanation of the role of each factor in contributing to such increase4 7,c7 ,total expenditures of the manufacturer on-- 7i7 materials and manufacturing for such drug2 7ii7 acquiring patents and licensing for each drug of the manufacturer2 and 7iii7 costs to purchase or acquire the drug from another company1 if applicable4 7,d7 ,the percentage of total expenditures of the manufacturer on research and development for such drug that was derived from ,federal funds4 7,e7 ,the total expenditures of the manufacturer on research and development for such drug4 7,f7 ,the total revenue and net profit generated from the applicable drug for each calendar year since drug approval4 7,g7 ,the total expenditures of the manufacturer that are associated with marketing and advertising for the applicable drug4 7,h7 ,additional information specific to the manufacturer of the applicable drug1 such as-- 7i7 the total revenue and net profit of the manufacturer for the period of such increase1 as determined by the ,secretary2 7ii7 metrics used to determine executive compensation2 7iii7 any additional information related to drug pricing decisions of the manufacturer1 such as total expenditures on-- 7,i7 drug research and development2 or 7,,ii7 clinical trials on drugs that failed to receive approval by the ,food and ,drug ,administration4 7#b7 ,high launch price ,in the case of a drug that the ,secretary determines is an applicable drug described in subparagraph 7,c7 of subsection 7b77#a71 the justification described in this subsection is all relevant1 truthful1 and nonmisleading information and supporting documentation necessary to justify the wholesale acquisition cost of the applicable drug of the manufacturer1 as determined by the ,secretary and which may include the items described in subparagraph 7,c7 through 7,h7 of paragraph 7#a74 7d7 ,timing 7#a7 ,notification ,not later than #fj days after the date on which the ,secretary makes the determination that a drug is an applicable drug under subsection 7b71 the ,secretary shall notify the manufacturer of the applicable drug of such determination4 7#b7 ,submission of justification ,not later than #ahj days after the date on which a manufacturer receives a notification under paragraph 7#a71 the manufacturer shall submit to the ,secretary the justification required under subsection 7a74 7#c7 ,posting on ,internet website 7,a7 ,in general ,subject to subparagraph 7,b71 not later than #cj days after receiving the justification under paragraph 7#b71 the ,secretary shall post on the ,internet website of the ,centers for ,medicare ,medicaid ,services the justification1 together with a summary of such justification that is written and formatted using language that is easily understandable by beneficiaries under titles ,,xviii and ,,xix4 7,b7 ,exclusion of proprietary information ,the ,secretary shall exclude proprietary information1 such as trade secrets and intellectual property1 submitted by the manufacturer in the justification under paragraph 7#b7 from the posting described in subparagraph 7,a74 7e7 ,exception to requirement for submission ,in the case of a drug that the ,secretary determines is an applicable drug described in subparagraph 7,a7 or 7,b7 of subsection 7b77#a71 the requirement to submit a justification under subsection 7a7 shall not apply where the manufacturer1 after receiving the notification under subsection 7d77#a7 with respect to the applicable drug of the manufacturer1 reduces the wholesale acquisition cost of a drug so that it no longer is described in such subparagraph 7,a7 or 7,b7 for at least a #d-month period1 as determined by the ,secretary4 7f7 ,penalties 7#a7 ,failure to submit timely justification ,if the ,secretary determines that a manufacturer has failed to submit a justification as required under this section1 including in accordance with the timing and form required1 with respect to an applicable drug1 the ,secretary shall apply a civil monetary penalty in an amount of #aj1jjj for each day the manufacturer has failed to submit such justification as so required4 7#b7 ,false information ,any manufacturer that submits a justification under this section and knowingly provides false information in such justification is subject to a civil monetary penalty in an amount not to exceed #ajj1jjj for each item of false information4 7#c7 ,application of procedures ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil monetary penalty under this subsection in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 ,civil monetary penalties imposed under this subsection are in addition to other penalties as may be prescribed by law4 7g7 ,definitions ,in this section3 7#a7 ,drug ,the term drug means a drug1 as defined in section #bja7;g7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act1 that is intended for human use and subject to section #ejc7;b77#a7 of such ,act1 including a product licensed under section #cea of the ,public health ,service ,act4 7#b7 ,manufacturer ,the term manufacturer has the meaning given that term in section #ahdg;,a7c77#f77;,a74 7#c7 ,wholesale acquisition cost ,the term wholesale acquisition cost has the meaning given that term in section #ahdg;,a7c77#f77;,b74 4 #adb4 ,strengthening and expanding pharmacy benefit managers transparency requirements ,section #aaej;,a of the ,social ,security ,act 7#db ,u4,s4,c4 #acbj;b-#bc71 as amended by section #abc1 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#a71 by striking or at then end2 7,b7 in paragraph 7#b71 by striking the comma at the end and inserting 2 or2 and 7,c7 by inserting after paragraph 7#b7 the following new paragraph3 7#c7 a ,state plan under title ,,xix1 including a managed care entity 7as defined in section #aicb7;a77#a77;,b771 2 7#b7 in subsection 7b7-- 7,a7 in paragraph 7#b7-- 7i7 by striking 7excluding bona fide and all that follows through patient education programs772 and 7ii7 by striking aggregate amount of and inserting aggregate amount and percentage of2 7,b7 in paragraph 7#c71 by striking aggregate amount of and inserting aggregate amount and percentage 7defined as a share of gross drug costs7 of2 and 7,c7 by adding at the end the following new paragraph3 7#d7 ,the aggregate amount of bona fide service fees 7which include distribution service fees1 inventory management fees1 product stocking allowances1 and fees associated with administrative services agreements and patient care programs 7such as medication compliance programs and patient education programs77 the ,,pbm received from-- 7,a7 ,,pdp sponsors2 7,b7 qualified health benefit plans2 7,c7 managed care entities 7as defined in section #aicb7;a77#a77;b772 and 7,d7 drug manufacturers4 2 7#c7 in subsection 7c71 by adding at the end the following new paragraphs3 7#e7 ,to ,states to carry out their administration and oversight of the ,state plan under title ,,xix4 7#f7 ,to the ,federal ,trade ,commission to carry out section #e7;a7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de;a7 and any other relevant consumer protection or antitrust authorities enforced by such ,commission1 including reviewing proposed mergers in the prescription drug sector4 7#g7 ,to assist the ,department of ,justice to carry out its antitrust authorities1 including reviewing proposed mergers in the prescription drug sector4 2 and 7#d7 by adding at the end the following new subsection3 7f7 ,annual ,,oig evaluation and report 7#a7 ,analysis ,the ,inspector ,general of the ,department of ,health and ,human ,services shall conduct an annual evaluation of the information provided to the ,secretary under this section4 ,such evaluation shall include an analysis of-- 7,a7 ,,pbm rebates2 7,b7 administrative fees2 7,c7 the difference between what plans pay ,p,b,ms and what ,p,b,ms pay pharmacies2 7,d7 generic dispensing rates2 and 7,e7 other areas determined appropriate by the ,inspector ,general4 7#b7 ,report ,not later than ,july #a1 #bjbj1 and annually thereafter1 the ,inspector ,general of the ,department of ,health and ,human ,services shall submit to ,congress a report containing the results of the evaluation conducted under paragraph 7#a71 together with recommendations for such legislation and administrative action as the ,inspector ,general determines appropriate4 ,such report shall not disclose the identity of a specific ,,pbm1 plan1 or price charged for a drug4 4 #adc4 ,prescription drug pricing dashboards ,part ,a of title ,,xi of the ,social ,security ,act is amended by adding at the end the following new section3 #aaej;,c4 ,prescription drug pricing dashboards 7a7 ,in general ,beginning not later than ,january #a1 #bjbj1 the ,secretary shall establish1 and annually update1 internet website-based dashboards1 through which beneficiaries1 clinicians1 researchers1 and the public can review information on spending for1 and utilization of1 prescription drugs and biologicals 7and related supplies and mechanisms of delivery7 covered under each of parts ,b and ,d of title ,,xviii and under a ,state program under title ,,xix1 including information on trends of such spending and utilization over time4 7b7 ,medicare part ,b drug and biological dashboard 7#a7 ,in general ,the dashboard established under subsection 7a7 for part ,b of title ,,xviii shall provide the information described in paragraph 7#b74 7#b7 ,information described ,the information described in this paragraph is the following information with respect to drug or biologicals covered under such part ,b3 7,a7 ,the brand name and1 if applicable1 the generic names of the drug or biological4 7,b7 ,consumer-friendly information on the uses and clinical indications of the drug or biological4 7,c7 ,the manufacturer or labeler of the drug or biological4 7,d7 ,to the extent feasible1 the following information3 7i7 ,average total spending per dosage unit of the drug or biological in the most recent #b calendar years for which data is available4 7ii7 ,the percentage change in average spending on the drug or biological per dosage unit between the most recent calendar year for which data is available and-- 7,i7 the preceding calendar year2 and 7,,ii7 the preceding #e and #aj calendar years4 7iii7 ,the annual growth rate in average spending per dosage unit of the drug or biological in the most recent #e or #aj calendar years for which data is available4 7iv7 ,total spending for the drug or biological for the most recent calendar year for which data is available4 7v7 ,the number of beneficiaries receiving the drug or biological in the most recent calendar year for which data is available4 7vi7 ,average spending on the drug per beneficiary for the most recent calendar year for which data is available4 7,e7 ,the average sales price of the drug or biological 7as determined under section #ahdg;,a7 for the most recent quarter4 7,f7 ,consumer-friendly information about the coinsurance amount for the drug or biological for beneficiaries for the most recent quarter4 ,such information shall not include coinsurance amounts for qualified medicare beneficiaries 7as defined in section #aije7p77#a774 7,g7 ,for the most recent calendar year for which data is available-- 7i7 the #ae drugs and biologicals with the highest total spending under such part2 and 7ii7 any drug or biological for which the average annual per beneficiary spending exceeds the gross spending for covered part ,d drugs at which the annual out-of-pocket threshold under section #ahfj;,d-#b7;b77#d77;,b7 would be met for the year4 7,h7 ,other information 7not otherwise prohibited in law from being disclosed7 that the ,secretary determines would provide beneficiaries1 clinicians1 researchers1 and the public with helpful information about drug and biological spending and utilization 7including trends of such spending and utilization74 7c7 ,medicare covered part ,d drug dashboard 7#a7 ,in general ,the dashboard established under subsection 7a7 for part ,d of title ,,xviii shall provide the information described in paragraph 7#b74 7#b7 ,information described ,the information described in this paragraph is the following information with respect to covered part ,d drugs under such part ,d3 7,a7 ,the information described in subparagraphs 7,a7 through 7,d7 of subsection 7b77#b74 7,b7 ,information on average annual beneficiary out-of-pocket costs below and above the annual out-of-pocket threshold under section #ahfj;,d-#b7;b77#d77;,b7 for the current plan year4 ,such information shall not include out-of-pocket costs for subsidy eligible individuals under section #ahfj;,d-#ad4 7,c7 ,information on how to access resources as described in sections #ahfj;,d-#a7;c7 and #ahea7;d74 7,d7 ,for the most recent calendar year for which data is available-- 7i7 the #ae covered part ,d drugs with the highest total spending under such part2 and 7ii7 any covered part ,d drug for which the average annual per beneficiary spending exceeds the gross spending for covered part ,d drugs at which the annual out-of-pocket threshold under section #ahfj;,d-#b7;b77#d77;,b7 would be met for the year4 7,e7 ,other information 7not otherwise prohibited in law from being disclosed7 that the ,secretary determines would provide beneficiaries1 clinicians1 researchers1 and the public with helpful information about covered part ,d drug spending and utilization 7including trends of such spending and utilization74 7d7 ,medicaid covered outpatient drug dashboard 7#a7 ,in general ,the dashboard established under subsection 7a7 for title ,,xix shall provide the information described in paragraph 7#b74 7#b7 ,information described ,the information described in this paragraph is the following information with respect to covered outpatient drugs under such title3 7,a7 ,the information described in subparagraphs 7,a7 through 7,d7 of subsection 7b77#b74 7,b7 ,for the most recent calendar year for which data is available1 the #ae covered outpatient drugs with the highest total spending under such title4 7,c7 ,other information 7not otherwise prohibited in law from being disclosed7 that the ,secretary determines would provide beneficiaries1 clinicians1 researchers1 and the public with helpful information about covered outpatient drug spending and utilization 7including trends of such spending and utilization74 7e7 ,data files ,the ,secretary shall make available the underlying data for each dashboard established under subsection 7a7 in a machine-readable format4 4 #add4 ,improving coordination between the ,food and ,drug ,administration and the ,centers for ,medicare ,medicaid ,services 7a7 ,in general 7#a7 ,public meeting 7,a7 ,in general ,not later than #ab months after the date of the enactment of this ,act1 the ,secretary of ,health and ,human ,services 7referred to in this section as the ,secretary7 shall convene a public meeting for the purposes of discussing and providing input on improvements to coordination between the ,food and ,drug ,administration and the ,centers for ,medicare ,medicaid ,services in preparing for the availability of novel medical products described in subsection 7c7 on the market in the ,united ,states4 7,b7 ,attendees ,the public meeting shall include-- 7i7 representatives of relevant ,federal agencies1 including representatives from each of the medical product centers within the ,food and ,drug ,administration and representatives from the coding1 coverage1 and payment offices within the ,centers for ,medicare ,medicaid ,services2 7ii7 stakeholders with expertise in the research and development of novel medical products1 including manufacturers of such products2 7iii7 representatives of commercial health insurance payers2 7iv7 stakeholders with expertise in the administration and use of novel medical products1 including physicians2 and 7v7 stakeholders representing patients and with expertise in the utilization of patient experience data in medical product development4 7,c7 ,topics ,the public meeting shall include a discussion of-- 7i7 the status of the drug and medical device development pipeline related to the availability of novel medical products2 7ii7 the anticipated expertise necessary to review the safety and effectiveness of such products at the ,food and ,drug ,administration and current gaps in such expertise1 if any2 7iii7 the expertise necessary to make coding1 coverage1 and payment decisions with respect to such products within the ,centers for ,medicare ,medicaid ,services1 and current gaps in such expertise1 if any2 7iv7 trends in the differences in the data necessary to determine the safety and effectiveness of a novel medical product and the data necessary to determine whether a novel medical product meets the reasonable and necessary requirements for coverage and payment under title ,,xviii of the ,social ,security ,act pursuant to section #ahfb7;a77#a77;,a7 of such ,act 7#db ,u4,s4,c4 #aciey7a77#a77;,a772 7v7 the availability of information for sponsors of such novel medical products to meet each of those requirements2 and 7vi7 the coordination of information related to significant clinical improvement over existing therapies for patients between the ,food and ,drug ,administration and the ,centers for ,medicare ,medicaid ,services with respect to novel medical products4 7,d7 ,trade secrets and confidential information ,no information discussed as a part of the public meeting under this paragraph shall be construed as authorizing the ,secretary to disclose any information that is a trade secret or confidential information subject to section #eeb7;b77#d7 of title #e1 ,united ,states ,code4 7#b7 ,improving transparency of criteria for ,medicare coverage 7,a7 ,draft guidance ,not later than #ah months after the public meeting under paragraph 7#a71 the ,secretary shall update the final guidance titled ,national ,coverage ,determinations with ,data ,collection as a ,condition of ,coverage3 ,coverage with ,evidence ,development to address any opportunities to improve the availability and coordination of information as described in clauses 7iv7 through 7vi7 of paragraph 7#a77;,c74 7,b7 ,final guidance ,not later than #ab months after issuing draft guidance under subparagraph 7,a71 the ,secretary shall finalize the updated guidance to address any such opportunities4 7b7 ,report on coding1 coverage1 and payment processes under medicare for novel medical products ,not later than #ab months after the date of the enactment of this ,act1 the ,secretary shall publish a report on the ,internet website of the ,department of ,health and ,human ,services regarding processes under the ,medicare program under title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie et seq47 with respect to the coding1 coverage1 and payment of novel medical products described in subsection 7c74 ,such report shall include the following3 7#a7 ,a description of challenges in the coding1 coverage1 and payment processes under the ,medicare program for novel medical products4 7#b7 ,recommendations to-- 7,a7 incorporate patient experience data 7such as the impact of a disease or condition on the lives of patients and patient treatment preferences7 into the coverage and payment processes within the ,centers for ,medicare ,medicaid ,services2 7,b7 decrease the length of time to make national and local coverage determinations under the ,medicare program 7as those terms are defined in subparagraph 7,a7 and 7,b71 respectively1 of section #ahfb7l77#f7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciey7l77#f772 7,c7 streamline the coverage process under the ,medicare program and incorporate input from relevant stakeholders into such coverage determinations2 and 7,d7 identify potential mechanisms to incorporate novel payment designs similar to those in development in commercial insurance plans and ,state plans under title ,,xix of such ,act 7#db ,u4,s4,c4 #acif et seq47 into the ,medicare program4 7c7 ,novel medical products described ,for purposes of this section1 a novel medical product described in this subsection is a medical product1 including a drug1 biological 7including gene and cell therapy71 or medical device1 that has been designated as a breakthrough therapy under section #ejf7;a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cef7;a771 a breakthrough device under section #eae;,b of such ,act 7#ba ,u4,s4,c4 #cfj;e-#c71 or a regenerative advanced therapy under section #ejf7;g7 of such ,act 7#ba ,u4,s4,c4 #cef7;g774 #ade4 ,patient consultation in ,medicare national and local coverage determinations in order to mitigate barriers to inclusion of such perspectives ,section #ahfb7l7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciey7l77 is amended by adding at the end the following new paragraph3 7#g7 ,patient consultation in national and local coverage determinations ,the ,secretary may consult with patients and organizations representing patients in making national and local coverage determinations4 4 #adf4 ,,gao study on increases to ,medicare and ,medicaid spending due to copayment coupons and other patient assistance programs 7a7 ,study ,the ,comptroller ,general of the ,united ,states shall conduct a study on the impact of copayment coupons and other patient assistance programs on prescription drug pricing and expenditures within the ,medicare and ,medicaid programs4 ,the study shall assess the following3 7#a7 ,the extent to which copayment coupons and other patient assistance programs contribute to inflated prescription drug prices under such programs4 7#b7 ,the impact copayment coupons and other patient assistance programs have in the ,medicare ,part ,d program established under part ,d of title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aja et seq47 on utilization of higher-cost brand drugs and lower utilization of generic drugs in that program4 7#c7 ,the extent to which manufacturers report or obtain tax benefits1 including deductions of business expenses and charitable contributions1 for any of the following3 7,a7 ,offering copayment coupons or other patient assistance programs4 7,b7 ,sponsoring manufacturer patient assistance programs4 7,c7 ,paying for sponsorships at outreach and advocacy events organized by patient assistance programs4 7#d7 ,the efficacy of oversight conducted to ensure that independent charity patient assistance programs adhere to guidance from the ,office of the ,inspector ,general of the ,department of ,health and ,human ,services on avoiding waste1 fraud1 and abuse4 7b7 ,definitions ,in this section3 7#a7 ,independent charity patient assistance program ,the term independent charity patient assistance program means any organization described in section #eja7;c77#c7 of the ,internal ,revenue ,code of #aihf and exempt from taxation under section #eja7;a7 of such ,code and which is not a private foundation 7as defined in section #eji7;a7 of such ,code7 that offers patient assistance4 7#b7 ,manufacturer ,the term manufacturer has the meaning given that term in section #aibg7k77#e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7k77#e774 7#c7 ,manufacturer patient assistance program ,the term manufacturer patient assistance program means an organization1 including a private foundation 7as so defined71 that is sponsored by1 or receives funding from1 a manufacturer and that offers patient assistance4 ,such term does not include an independent charity patient assistance program4 7#d7 ,patient assistance ,the term patient assistance means assistance provided to offset the cost of drugs for individuals4 ,such term includes free products1 coupons1 rebates1 copay or discount cards1 and other means of providing assistance to individuals related to drug costs1 as determined by the ,secretary of ,health and ,human ,services4 7c7 ,report ,not later than #bd months after the date of the enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall submit to ,congress a report describing the findings of the study required under subsection 7a74 #adg4 ,med,p,a,c report on shifting coverage of certain ,medicare part ,b drugs to ,medicare part ,d 7a7 ,study ,the ,medicare ,payment ,advisory ,commission 7in this section referred to as the ,commission7 shall conduct a study on shifting coverage of certain drugs and biologicals for which payment is currently made under part ,b of title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;j et seq47 to part ,d of such title 7#db ,u4,s4,c4 #aciew-#ba et seq474 ,such study shall include an analysis of-- 7#a7 differences in program structures and payment methods for drugs and biologicals covered under such parts ,b and ,d1 including effects of such a shift on program spending1 beneficiary cost-sharing liability1 and utilization management techniques for such drugs and biologicals2 and 7#b7 the feasibility and policy implications of shifting coverage of drugs and biologicals for which payment is currently made under such part ,b to such part ,d4 7b7 ,report 7#a7 ,in general ,not later than ,june #cj1 #bjba1 the ,commission shall submit to ,congress a report containing the results of the study conducted under subsection 7a74 7#b7 ,contents ,the report under paragraph 7#a7 shall include information1 and recommendations as the ,commission deems appropriate1 regarding-- 7,a7 formulary design under such part ,d2 7,b7 the ability of the benefit structure under such part ,d to control total spending on drugs and biologicals for which payment is currently made under such part ,b2 7,c7 changes to the bid process under such part ,d1 if any1 that may be necessary to integrate coverage of such drugs and biologicals into such part ,d2 and 7,d7 any other changes to the program that ,congress should consider in determining whether to shift coverage of such drugs and biologicals from such part ,b to such part ,d4 #adh4 ,taking steps to fulfill treaty obligations to tribal communities 7a7 ,,gao study ,the ,comptroller ,general shall conduct a study regarding access to1 and the cost of1 prescription drugs among ,indians4 ,the study shall include-- 7#a7 a review of what ,indian health programs pay for prescription drugs on reservations and in urban centers relative to other consumers2 7#b7 recommendations to align the value of prescription drug discounts available under the ,medicaid drug rebate program established under section #aibg of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7 with prescription drug discounts available to ,tribal communities through the purchased_/referred care program of the ,indian ,health ,service for physician administered drugs2 and 7#c7 an examination of how ,tribal communities and urban ,indian organizations utilize the ,medicare part ,d program established under title ,,xviii of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aja et seq47 and recommendations to improve enrollment among ,indians in that program4 7b7 ,report ,not later than #ah months after the date of the enactment of this ,act1 the ,comptroller ,general shall submit to ,congress a report containing the results of the study conducted under subsection 7a71 together with recommendations for such legislation and administrative action as the ,comptroller ,general determines appropriate4 7c7 ,definitions ,in this section3 7#a7 ,comptroller ,general ,the term ,comptroller ,general means the ,comptroller ,general of the ,united ,states4 7#b7 ,indian2 ,indian health program2 ,indian tribe ,the terms ,indian1 ,indian health program1 and ,indian tribe have the meanings given those terms in section #d of the ,indian ,health ,care ,improvement ,act 7#be ,u4,s4,c4 #afjc74 ,,ii ,medicaid #bja4 ,medicaid pharmacy and therapeutics committee improvements 7a7 ,in general ,subparagraph 7,a7 of section #aibg7;d77#d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;d77#d77 is amended to read as follows3 7,a7 7i7 ,the formulary is developed and reviewed by a pharmacy and therapeutics committee consisting of physicians1 pharmacists1 and other appropriate individuals appointed by the ,governor of the ,state4 7ii7 ,subject to clause 7vi71 the ,state establishes and implements a conflict of interest policy for the pharmacy and therapeutics committee that-- 7,i7 is publicly accessible2 7,,ii7 requires all committee members to complete1 on at least an annual basis1 a disclosure of relationships1 associations1 and financial dealings that may affect their independence of judgement in committee matters2 and 7,,iii7 contains clear processes1 such as recusal from voting or discussion1 for those members who report a conflict of interest1 along with appropriate processes to address any instance where a member fails to report a conflict of interest4 7iii7 ,the membership of the pharmacy and therapeutics committee-- 7,i7 includes at least #a actively practicing physician and at least #a actively practicing pharmacist1 each of whom-- 7aa7 is independent and free of conflict with respect to manufacturers and ,medicaid participating plans or subcontractors1 including pharmacy benefit managers2 and 7bb7 has expertise in the care of #a or more ,medicaid-specific populations such as elderly or disabled individuals1 children with complex medical needs1 or low-income individuals with chronic illnesses and 7,,ii7 is made publicly available4 7iv7 ,at the option of the ,state1 the ,state's drug use review board established under subsection 7g77#c7 may serve as the pharmacy and therapeutics committee provided the ,state ensures that such board meets the requirements of clauses 7ii7 and 7iii74 7v7 ,the ,state reviews and has final approval of the formulary established by the pharmacy and therapeutics committee4 7vi7 ,if the ,secretary determines it appropriate or necessary based on the findings and recommendations of the ,comptroller ,general of the ,united ,states in the report submitted to ,congress under section #bjc of the ,prescription ,drug ,pricing ,reduction ,act of #bjai1 the ,secretary shall issue guidance that ,states must follow for establishing conflict of interest policies for the pharmacy and therapeutics committee in accordance with the requirements of clause 7ii71 including appropriate standards and requirements for identifying1 addressing1 and reporting on conflicts of interest4 4 7b7 ,application to ,medicaid managed care organizations ,clause 7xiii7 of section #aijc7m77#b77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acif;b7m77#b77;,a77 is amended-- 7#a7 by striking and 7,,iii7 and inserting 7,,iii72 7#b7 by striking the period at the end and inserting 1 and 7,,iv7 any formulary used by the entity for covered outpatient drugs dispensed to individuals eligible for medical assistance who are enrolled with the entity is developed and reviewed by a pharmacy and therapeutics committee that meets the requirements of clauses 7ii7 and 7iii7 of section #aibg7;d77#d77;,a742 and 7#c7 by moving the left margin #b ems to the left4 7c7 ,effective date ,the amendments made by this section shall take effect on the date that is #a year after the date of enactment of this ,act4 #bjb4 ,improving reporting requirements and developing standards for the use of drug use review boards in ,state ,medicaid programs 7a7 ,in general ,section #aibg7;g77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;g77#c77 is amended-- 7#a7 by amending subparagraph 7,b7 to read as follows3 7,b7 ,membership 7i7 ,in general ,the membership of the ,,dur ,board shall include health care professionals who have recognized knowledge and expertise in one or more of the following3 7,i7 ,the clinically appropriate prescribing of covered outpatient drugs4 7,,ii7 ,the clinically appropriate dispensing and monitoring of covered outpatient drugs4 7,,iii7 ,drug use review1 evaluation1 and intervention4 7,,iv7 ,medical quality assurance4 7ii7 ,membership requirements ,the membership of the ,,dur ,board shall-- 7,i7 be made up of at least #a_/c but no more than #ea percent members who are licensed and actively practicing physicians and at least #a_/c members who are licensed and actively practicing pharmacists2 and 7,,ii7 include at least #a licensed and actively practicing physician and at least #a licensed and actively practicing pharmacist1 each of whom-- 7aa7 is independent and free of any conflict1 including with respect to manufacturers1 medicaid managed care entities1 or pharmacy benefit managers2 and 7bb7 has expertise in the care of #a or more categories of individuals who are likely to be eligible for benefits under this title1 including elderly or disabled individuals1 children with complex medical needs1 or low-income individuals with chronic illnesses2 and 7,,iii7 be made publicly available4 7iii7 ,conflict of interest policy ,the ,state shall establish and implement a conflict of interest policy for the ,,dur ,board that-- 7,i7 is publicly accessible2 7,,ii7 requires all board members to complete1 on at least an annual basis1 a disclosure of relationships1 associations1 and financial dealings that may affect their independence of judgement in board matters2 and 7,,iii7 contains clear processes1 such as recusal from voting or discussion1 for those members who report a conflict of interest1 along with appropriate processes to address any instance where a member fails to report a conflict of interest4 2 and 7#b7 by adding at the end the following new subparagraph3 7,e7 ,,dur ,board membership reports 7i7 ,,dur ,board reports ,each ,state shall require the ,,dur ,board to prepare and submit to the ,state an annual report on the ,,dur ,board membership4 ,each such report shall include any conflicts of interest with respect to members of the ,,dur ,board that the ,,dur ,board recorded or was aware of during the period that is the subject of the report1 and the process applied to address such conflicts of interest1 in addition to any other information required by the ,state4 7ii7 ,inclusion of ,,dur ,board membership information in ,state reports ,each annual ,state report to the ,secretary required under subparagraph 7,d7 shall include-- 7,i7 the number of individuals serving on the ,state's ,,dur ,board2 7,,ii7 the names and professions of the individuals serving on such ,,dur ,board2 7,,iii7 any conflicts of interest or recusals with respect to members of such ,,dur ,board reported by the ,,dur ,board or that the ,state was aware of during the period that is the subject of the report2 and 7,,iv7 whether the ,state has elected for such ,,dur ,board to serve as the committee responsible for developing a ,state formulary under subsection 7d77#d77;,a74 4 7b7 ,managed care requirements ,section #aicb7;i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifu-#b7;i77 is amended-- 7#a7 by striking section #dhc4c7s77#d7 and inserting section #dch4c7s77#d72 7#b7 by striking #dhc4c7s77#e7 and inserting #dch4c7s77#e72 and 7#c7 by adding at the end the following3 ,such a managed care entity shall not be considered to be in compliance with the requirement of such section #dch4c7s77#e7 that the entity provide a detailed description of its drug utilization review activities unless the entity includes a description of the prospective drug review activities described in paragraph 7#b77;,a7 of section #aibg7;g7 and the activities listed in paragraph 7#c77;,c7 of section #aibg7;g71 makes the underlying drug utilization review data available to the ,state and the ,secretary1 and provides such other information as deemed appropriate by the ,secretary44 7c7 ,development of national standards for ,medicaid drug use review ,the ,secretary of ,health and ,human ,services may promulgate regulations or guidance establishing national standards for ,medicaid drug use review programs under section #aibg7;g7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7 and drug utilization review activities and requirements under section #aicb7;i7 of such ,act 7#db ,u4,s4,c4 #acifu-#b7;i771 for the purpose of aligning review criteria for prospective and retrospective drug use review across all ,state ,medicaid programs4 7d7 ,,cms guidance ,not later than #ah months after the date of enactment of this ,act1 the ,secretary of ,health and ,human ,services shall issue guidance-- 7#a7 outlining steps that ,states must take to come into compliance with statutory and regulatory requirements for prospective and retrospective drug use review under section #aibg7;g7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;g77 and drug utilization review activities and requirements under section #aicb7;i7 of such ,act 7#db ,u4,s4,c4 #acifu-#b7;i77 7including with respect to requirements that were in effect before the date of enactment of this ,act72 and 7#b7 describing the actions that the ,secretary will take to enforce such requirements4 7e7 ,effective date ,the amendments made by this section shall take effect on the date that is #a year after the date of enactment of this ,act4 #bjc4 ,,gao report on conflicts of interest in ,state ,medicaid program drug use review boards and pharmacy and therapeutics 7,p,t7 committees 7a7 ,investigation ,the ,comptroller ,general of the ,united ,states shall conduct an investigation of potential or existing conflicts of interest among members of ,state ,medicaid program ,state drug use review boards 7in this section referred to as ,,dur ,boards7 and pharmacy and therapeutics committees 7in this section referred to as ,p,t ,committees74 7b7 ,report ,not later than #bd months after the date of enactment of this ,act1 the ,comptroller ,general shall submit to ,congress a report on the investigation conducted under subsection 7a7 that includes the following3 7#a7 ,a description outlining how ,,dur ,boards and ,p,t ,committees operate in ,states1 including details with respect to-- 7,a7 the structure and operation of ,,dur ,boards and statewide ,p,t ,committees2 7,b7 ,states that operate separate ,p,t ,committees for their fee-for-service ,medicaid program and their ,medicaid managed care organizations or other ,medicaid managed care arrangements 7collectively referred to in this section as ,medicaid ,m,c,os72 and 7,c7 ,states that allow ,medicaid ,m,c,os to have their own ,p,t ,committees and the extent to which pharmacy benefit managers administer or participate in such ,p,t ,committees4 7#b7 ,a description outlining the differences between ,,dur ,boards established in accordance with section #aibg7;g77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr7g77#c77 and ,p,t ,committees4 7#c7 ,a description outlining the tools ,p,t ,committees may use to determine ,medicaid drug coverage and utilization management policies4 7#d7 ,an analysis of whether and how ,states or ,p,t ,committees establish participation and independence requirements for ,,dur ,boards and ,p,t ,committees1 including with respect to entities with connections with drug manufacturers1 ,state ,medicaid programs1 managed care organizations1 and other entities or individuals in the pharmaceutical industry4 7#e7 ,a description outlining how ,states1 ,,dur ,boards1 or ,p,t ,committees define conflicts of interest4 7#f7 ,a description of how ,,dur ,boards and ,p,t ,committees address conflicts of interest1 including who is responsible for implementing such policies4 7#g7 ,a description of the tools1 if any1 ,states use to ensure that there are no conflicts of interest on ,,dur ,boards and ,p,t ,committees4 7#h7 ,an analysis of the effectiveness of tools ,states use to ensure that there are no conflicts of interest on ,,dur ,boards and ,p,t ,committees and1 if applicable1 recommendations as to how such tools could be improved4 7#i7 ,a review of strategies ,states may use to guard against conflicts of interest on ,,dur ,boards and ,p,t ,committees and to ensure compliance with the requirements of titles ,,xi and ,,xix of the ,social ,security ,act 7#db ,u4,s4,c4 #acja et seq41 #acif et seq47 and access to effective1 clinically appropriate1 and medically necessary drug treatments for ,medicaid beneficiaries1 including recommendations for such legislative and administrative actions as the ,comptroller ,general determines appropriate4 #bjd4 ,ensuring the accuracy of manufacturer price and drug product information under the ,medicaid drug rebate program 7a7 ,audit of manufacturer price and drug product information 7#a7 ,in general ,subparagraph 7,b7 of section #aibg7;b77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#c77 is amended to read as follows3 7,b7 ,audits and surveys of manufacturer price and drug product information 7i7 ,audits ,the ,secretary shall conduct ongoing audits of the price and drug product information reported by manufacturers under subparagraph 7,a7 for the most recently ended rebate period to ensure the accuracy and timeliness of such information4 ,in conducting such audits1 the ,secretary may employ evaluations1 surveys1 statistical sampling1 predictive analytics and other relevant tools and methods 4 7ii7 ,verifications surveys of average manufacturer price and manufacturer's average sales price ,in addition to the audits required under clause 7i71 the ,secretary may survey wholesalers and manufacturers 7including manufacturers that directly distribute their covered outpatient drugs 7in this subparagraph referred to as direct sellers771 when necessary1 to verify manufacturer prices and manufacturer's average sales prices 7including wholesale acquisition cost7 to make payment reported under subparagraph 7,a74 7iii7 ,penalties ,in addition to other penalties as may be prescribed by law1 including under subparagraph 7,c7 of this paragraph1 the ,secretary may impose a civil monetary penalty in an amount not to exceed #ahe1jjj on an annual basis on a wholesaler1 manufacturer1 or direct seller1 if the wholesaler1 manufacturer1 or direct seller of a covered outpatient drug refuses a request for information about charges or prices by the ,secretary in connection with an audit or survey under this subparagraph or knowingly provides false information4 ,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 clause in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7iv7 ,reports 7,i7 ,report to ,congress ,the ,secretary shall1 not later than #ah months after date of enactment of this subparagraph1 submit a report to the ,committee on ,energy and ,commerce of the ,house of ,representatives and the ,committee on ,finance of the ,senate regarding additional regulatory or statutory changes that may be required in order to ensure accurate and timely reporting and oversight of manufacturer price and drug product information1 including whether changes should be made to reasonable assumption requirements to ensure such assumptions are reasonable and accurate or whether another methodology for ensuring accurate and timely reporting of price and drug product information should be considered to ensure the integrity of the drug rebate program under this section4 7,,ii7 ,annual reports ,the ,secretary shall1 on at least an annual basis1 submit a report to the ,committee on ,energy and ,commerce of the ,house of ,representatives and the ,committee on ,finance of the ,senate summarizing the results of the audits and surveys conducted under this subparagraph during the period that is the subject of the report4 7,,iii7 ,content ,each report submitted under subclause 7,,ii7 shall1 with respect to the period that is the subject of the report1 include summaries of-- 7aa7 error rates in the price1 drug product1 and other relevant information supplied by manufacturers under subparagraph 7,a72 7bb7 the timeliness with which manufacturers1 wholesalers1 and direct sellers provide information required under subparagraph 7,a7 or under clause 7i7 or 7ii7 of this subparagraph2 7cc7 the number of manufacturers1 wholesalers1 and direct sellers and drug products audited under this subparagraph2 7dd7 the types of price and drug product information reviewed under the audits conducted under this subparagraph2 7ee7 the tools and methodologies employed in such audits2 7ff7 the findings of such audits1 including which manufacturers1 if any1 were penalized under this subparagraph2 and 7gg7 such other relevant information as the ,secretary shall deem appropriate4 7,,iv7 ,protection of information ,in preparing a report required under subclause 7,,ii71 the ,secretary shall redact such proprietary information as the ,secretary determines appropriate to prevent disclosure of1 and to safeguard1 such information4 7v7 ,appropriations ,out of any funds in the ,treasury not otherwise appropriated1 there is appropriated to the ,secretary #b1jjj1jjj for fiscal year #bjbj and each fiscal year thereafter to carry out this subparagraph4 4 7#b7 ,effective date ,the amendments made by this subsection shall take effect on the first day of the first fiscal quarter that begins after the date of enactment of this ,act4 7b7 ,increased penalties for noncompliance with reporting requirements 7#a7 ,increased penalty for late reporting of information ,section #aibg7;b77#c77;,c77i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#c77;,c77i77 is amended by striking increased by #aj1jjj for each day in which such information has not been provided and such amount shall be paid to the ,treasury and inserting 1 for each covered outpatient drug with respect to which such information is not provided1 #ej1jjj for the first day that such information is not provided on a timely basis and #ai1jjj for each subsequent day that such information is not provided4 7#b7 ,increased penalty for knowingly reporting false information ,section #aibg7;b77#c77;,c77ii7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#c77;,c77ii77 is amended by striking #ajj1jjj and inserting #ejj1jjj4 7#c7 ,effective date ,the amendments made by this subsection shall take effect on the first day of the first fiscal quarter that begins after the date of enactment of this ,act4 #bje4 ,excluding authorized generic drugs from calculation of average manufacturer price under the ,medicaid drug rebate program 7a7 ,in general ,subparagraph 7,c7 of section #aibg7k77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7k77#a77 is amended-- 7#a7 in the subparagraph heading1 by striking ,inclusion and inserting ,exclusion2 7#b7 by striking a new drug application and inserting the manufacturer's new drug application2 and 7#c7 by striking inclusive and inserting exclusive4 7b7 ,excluding manufacturers from definition of wholesaler ,section #aibg7k77#aa7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7k77#aa77 is amended-- 7#a7 by striking manufacturers12 7#b7 by striking manufacturer's and2 and 7#c7 by adding at the end the following3 ,such term does not include a manufacturer engaged in wholesale distribution or a manufacturer's warehouses44 7c7 ,effective date ,the amendments made by this section shall take effect on the first day of the first fiscal quarter that begins after the date of enactment of this ,act4 #bjf4 ,improving transparency and preventing the use of abusive spread pricing and related practices in ,medicaid 7a7 ,pass-through pricing required 7#a7 ,in general ,section #aibg7;e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;e77 is amended by adding at the end the following3 7#f7 ,pass-through pricing required ,a contract between the ,state and a pharmacy benefit manager 7referred to in this paragraph as a ,,pbm71 or a contract between the ,state and a managed care entity or other specified entity 7as such terms are defined in section #aijc7m77#i77;,d77 that includes provisions making the entity responsible for coverage of covered outpatient drugs dispensed to individuals enrolled with the entity1 shall require that payment for such drugs and related administrative services 7as applicable71 including payments made by a ,,pbm on behalf of the ,state or entity1 is based on a pass-through pricing model under which-- 7,a7 any payment made by the entity or the ,,pbm 7as applicable7 for such a drug-- 7i7 is limited to-- 7,i7 ingredient cost2 and 7,,ii7 a professional dispensing fee that is not less than the professional dispensing fee that the ,state plan or waiver would pay if the plan or waiver was making the payment directly2 7ii7 is passed through in its entirety by the entity or ,,pbm to the pharmacy that dispenses the drug2 and 7iii7 is made in a manner that is consistent with section #aijb7;a77#cj77;,a7 and sections #ddg4eab1 #ddg4ead1 and #ddg4eah of title #db1 ,code of ,federal ,regulations 7or any successor regulation7 as if such requirements applied directly to the entity or the ,,pbm2 7,b7 payment to the entity or the ,,pbm 7as applicable7 for administrative services performed by the entity or ,,pbm is limited to a reasonable administrative fee that covers the reasonable cost of providing such services2 7,c7 the entity or the ,,pbm 7as applicable7 shall make available to the ,state1 and the ,secretary upon request1 all costs and payments related to covered outpatient drugs and accompanying administrative services incurred1 received1 or made by the entity or the ,,pbm1 including ingredient costs1 professional dispensing fees1 administrative fees1 post-sale and post-invoice fees1 discounts1 or related adjustments such as direct and indirect remuneration fees1 and any and all other remuneration2 and 7,d7 any form of spread pricing whereby any amount charged or claimed by the entity or the ,,pbm 7as applicable7 is in excess of the amount paid to the pharmacies on behalf of the entity1 including any post-sale or post-invoice fees1 discounts1 or related adjustments such as direct and indirect remuneration fees or assessments 7after allowing for a reasonable administrative fee as described in subparagraph 7,b77 is not allowable for purposes of claiming ,federal matching payments under this title4 4 7#b7 ,conforming amendment ,section #aijc7m77#b77;,a77xiii7 of such ,act 7#db ,u4,s4,c4 #acif;b7m77#b77;,a77xiii77 is amended-- 7,a7 by striking and 7,,iii7 and inserting 7,,iii72 7,b7 by inserting before the period at the end the following3 1 and 7,,iv7 pharmacy benefit management services provided by the entity1 or provided by a pharmacy benefit manager on behalf of the entity under a contract or other arrangement between the entity and the pharmacy benefit manager1 shall comply with the requirements of section #aibg7;e77#f72 and 7,c7 by moving the left margin #b ems to the left4 7#c7 ,effective date ,the amendments made by this subsection apply to contracts between ,states and managed care entities1 other specified entities1 or pharmacy benefits managers that are entered into or renewed on or after the date that is #ah months after the date of enactment of this ,act4 7b7 ,survey of retail prices 7#a7 ,in general ,section #aibg7;f7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;f77 is amended-- 7,a7 by striking and after the semicolon at the end of paragraph 7#a77;,a77i7 and all that precedes it through 7#a7 and inserting the following3 7#a7 ,survey of retail prices ,the ,secretary shall conduct a survey of retail community drug prices1 to include at least the national average drug acquisition cost1 as follows3 7,a7 ,use of vendor ,the ,secretary may contract services for-- 7i7 with respect to retail community pharmacies1 the determination on a monthly basis of retail survey prices of the national average drug acquisition cost for covered outpatient drugs for such pharmacies1 net of all discounts and rebates 7to the extent any information with respect to such discounts and rebates is available71 the average reimbursement received for such drugs by such pharmacies from all sources of payment1 including third parties1 and1 to the extent available1 the usual and customary charges to consumers for such drugs2 and 2 7,b7 by adding at the end of paragraph 7#a7 the following3 7,f7 ,survey reporting ,in order to meet the requirement of section #aijb7;a77#ed71 a ,state shall require that any retail community pharmacy in the ,state that receives any payment1 administrative fee1 discount1 or rebate related to the dispensing of covered outpatient drugs to individuals receiving benefits under this title1 regardless of whether such payment1 fee1 discount1 or rebate is received from the ,state or a managed care entity directly or from a pharmacy benefit manager or another entity that has a contract with the ,state or a managed care entity1 shall respond to surveys of retail prices conducted under this subsection4 7,g7 ,survey information ,information on retail community prices obtained under this paragraph shall be made publicly available and shall include at least the following3 7i7 ,the monthly response rate of the survey including a list of pharmacies not in compliance with subparagraph 7,f74 7ii7 ,the sampling frame and number of pharmacies sampled monthly4 7iii7 ,characteristics of reporting pharmacies1 including type 7such as independent or chain71 geographic or regional location1 and dispensing volume4 7iv7 ,reporting of a separate national average drug acquisition cost for each drug for independent retail pharmacies and chain operated pharmacies4 7v7 ,information on price concessions including on and off invoice discounts1 rebates1 and other price concessions4 7vi7 ,information on average professional dispensing fees paid4 7,h7 ,penalties 7i7 ,failure to provide timely information ,a retail community pharmacy that fails to respond to a survey conducted under this subsection on a timely basis may be subject to a civil monetary penalty in the amount of #aj1jjj for each day in which such information has not been provided4 7ii7 ,false information ,a retail community pharmacy that knowingly provides false information in response to a survey conducted under this subsection may be subject to a civil money penalty in an amount not to exceed #ajj1jjj for each item of false information4 7iii7 ,other penalties ,any civil money penalties imposed under this subparagraph shall be in addition to other penalties as may be prescribed by law4 ,the provisions of section #aabh;,a 7other than subsections 7a7 and 7b77 shall apply to a civil money penalty under this subparagraph in the same manner as such provisions apply to a penalty or proceeding under section #aabh;,a7a74 7,i7 ,report on specialty pharmacies 7i7 ,in general ,not later than #a year after the effective date of this subparagraph1 the ,secretary shall submit a report to ,congress examining specialty drug coverage and reimbursement under this title4 7ii7 ,content of report ,such report shall include a description of how ,state ,medicaid programs define specialty drugs1 how much ,state ,medicaid programs pay for specialty drugs1 how ,states and managed care plans determine payment for specialty drugs1 the settings in which specialty drugs are dispensed 7such as retail community pharmacies or specialty pharmacies71 whether acquisition costs for specialty drugs are captured in the national average drug acquisition cost survey1 and recommendations as to whether specialty pharmacies should be included in the survey of retail prices to ensure national average drug acquisition costs capture drugs sold at specialty pharmacies and how such specialty pharmacies should be defined4 2 7,c7 in paragraph 7#b7-- 7i7 in subparagraph 7,a71 by inserting 1 including payments rates under ,medicaid managed care plans1 after under this title2 and 7ii7 in subparagraph 7,b71 by inserting and the basis for such dispensing fees before the semicolon2 and 7,d7 in paragraph 7#d71 by inserting 1 and #e1jjj1jjj for fiscal year #bjbj and each fiscal year thereafter1 after #bjaj4 7#b7 ,effective date ,the amendments made by this subsection take effect on the #ast day of the #ast quarter that begins on or after the date that is #ah months after the date of enactment of this ,act4 7c7 ,manufacturer reporting of wholesale acquisition cost ,section #aibg7;b77#c7 of such ,act 7#db ,u4,s4,c4 #acifr-#h7;b77#c77 is amended-- 7#a7 in subparagraph 7,a77i7-- 7,a7 in subclause 7,i71 by striking and after the semicolon2 7,b7 in subclause 7,,ii71 by adding and after the semicolon2 7,c7 by moving the left margins of subclause 7,i7 and 7,,ii7 #b ems to the right2 and 7,d7 by adding at the end the following3 7,,iii7 in the case of rebate periods that begin on or after the date of enactment of this subclause1 on the wholesale acquisition cost 7as defined in section #ahdg;,a7c77#f77;,b77 for covered outpatient drugs for the rebate period under the agreement 7including for all such drugs that are sold under a new drug application approved under section #eje7;c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act72 2 and 7#b7 in subparagraph 7,d7-- 7,a7 in the matter preceding clause 7i71 by inserting and clause 7vii7 of this subparagraph after #ahdg;,a2 7,b7 in clause 7v71 by striking and after the comma2 7,c7 in clause 7vi71 by striking the period and inserting 1 and2 and 7,d7 by inserting after clause 7vi7 the following3 7vii7 to the ,secretary to disclose 7through a website accessible to the public7 the most recently reported wholesale acquisition cost 7as defined in section #ahdg;,a7c77#f77;,b77 for each covered outpatient drug 7including for all such drugs that are sold under a new drug application approved under section #eje7;c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act71 as reported under subparagraph 7,a77i77,,iii74 4 #bjg4 ,t-,,msis drug data analytics reports 7a7 ,in general ,not later than ,may #a of each calendar year beginning with calendar year #bjba1 the ,secretary of ,health and ,human ,services 7in this section referred to as the ,secretary7 shall publish on a website of the ,centers for ,medicare ,medicaid ,services that is accessible to the public a report of the most recently available data on provider prescribing patterns under the ,medicaid program4 7b7 ,content of report 7#a7 ,required content ,each report required under subsection 7a7 for a calendar year shall include the following information with respect to each ,state 7and1 to the extent available1 with respect to ,puerto ,rico1 the ,united ,states ,virgin ,islands1 ,guam1 the ,northern ,mariana ,islands1 and ,american ,samoa73 7,a7 ,a comparison of covered outpatient drug 7as defined in section #aibg7k77#b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7k77#b777 prescribing patterns under the ,state ,medicaid plan or waiver of such plan 7including drugs prescribed on a fee-for-service basis and drugs prescribed under managed care arrangements under such plan or waiver7-- 7i7 across all forms or models of reimbursement used under the plan or waiver2 7ii7 within specialties and subspecialties1 as defined by the ,secretary2 7iii7 by episodes of care for-- 7,i7 each chronic disease category1 as defined by the ,secretary1 that is represented in the #aj conditions that accounted for the greatest share of total spending under the plan or waiver during the year that is the subject of the report2 7,,ii7 procedural groupings2 and 7,,iii7 rare disease diagnosis codes2 7iv7 by patient demographic characteristics1 including race 7to the extent that the ,secretary determines that there is sufficient data available with respect to such characteristic in a majority of ,states71 gender1 and age2 7v7 by patient high-utilizer or risk status2 and 7vi7 by high and low resource settings by facility and place of service categories1 as determined by the ,secretary4 7,b7 ,in the case of medical assistance for covered outpatient drugs 7as so defined7 provided under a ,state ,medicaid plan or waiver of such plan in a managed care setting1 an analysis of the differences in managed care prescribing patterns when a covered outpatient drug is prescribed in a managed care setting as compared to when the drug is prescribed in a fee-for-service setting4 7#b7 ,additional content ,a report required under subsection 7a7 for a calendar year may include ,state-specific information about prescription utilization management tools under ,state ,medicaid plans or waivers of such plans1 including-- 7,a7 a description of prescription utilization management tools under ,state programs to provide long-term services and supports under a ,state ,medicaid plan or a waiver of such plan2 7,b7 a comparison of prescription utilization management tools applicable to populations covered under a ,state ,medicaid plan waiver under section #aaae of the ,social ,security ,act 7#db ,u4,s4,c4 #acae7 and the models applicable to populations that are not covered under the waiver2 7,c7 a comparison of the prescription utilization management tools employed by different ,medicaid managed care organizations1 pharmacy benefit managers1 and related entities within the ,state2 7,d7 a comparison of the prescription utilization management tools applicable to each enrollment category under a ,state ,medicaid plan or waiver2 and 7,e7 a comparison of the prescription utilization management tools applicable under the ,state ,medicaid plan or waiver by patient high-utilizer or risk status4 7#c7 ,additional analysis ,to the extent practicable1 the ,secretary shall include in each report published under subsection 7a7-- 7,a7 analyses of national1 ,state1 and local patterns of ,medicaid population-based prescribing behaviors2 and 7,b7 recommendations for administrative or legislative action to improve the effectiveness of1 and reduce costs for1 covered outpatient drugs under ,medicaid while ensuring timely beneficiary access to medically necessary covered outpatient drugs4 7c7 ,use of ,t-,,msis data ,each report required under subsection 7a7 shall-- 7#a7 be prepared using data and definitions from the ,transformed ,medicaid ,statistical ,information ,system 7,t-,,msis7 data set 7or a successor data set7 that is not more than #bd months old on the date that the report is published2 and 7#b7 as appropriate1 include a description with respect to each ,state of the quality and completeness of the data1 as well as any necessary caveats describing the limitations of the data reported to the ,secretary by the ,state that are sufficient to communicate the appropriate uses for the information4 7d7 ,preparation of report ,each report required under subsection 7a7 shall be prepared by the ,administrator for the ,centers for ,medicare ,medicaid ,services4 7e7 ,appropriation ,for fiscal year #bjbj and each fiscal year thereafter1 there is appropriated to the ,secretary #b1jjj1jjj to carry out this section4 #bjh4 ,risk-sharing value-based payment agreements for covered outpatient drugs under ,medicaid 7a7 ,in general ,section #aibg of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7 is amended by adding at the end the following new subsection3 7l7 ,state option to pay for covered outpatient drugs through risk-sharing value-based agreements 7#a7 ,in general ,beginning ,january #a1 #bjbb1 a ,state shall have the option to pay 7whether on a fee-for-service or managed care basis7 for covered outpatient drugs that are potentially curative treatments intended for one-time use that are administered to individuals under this title by entering into a risk-sharing value-based payment agreement with the manufacturer of the drug in accordance with the requirements of this subsection4 7#b7 ,secretarial approval 7,a7 ,in general ,a ,state shall submit a request to the ,secretary to enter into a risk-sharing value based payment agreement1 and the ,secretary shall not approve a proposed risk-sharing value-based payment agreement between a ,state and a manufacturer for payment for a covered outpatient drug of the manufacturer unless the following requirements are met3 7i7 ,manufacturer is party to rebate agreement and in compliance with requirements ,the manufacturer has a rebate agreement in effect as required under subsection 7a7 and 7b7 of this section and is in compliance with all applicable requirements under this title4 7ii7 ,no increase to projected net ,federal spending 7,i7 ,in general ,the ,chief ,actuary certifies that the projected payments for each covered outpatient drug under such proposed agreement would not result in greater estimated ,federal spending under this title than the net ,federal spending that would result in the absence of the agreement4 7,,ii7 ,net federal spending defined ,for purposes of this subsection1 the term net ,federal spending means the amount of ,federal payments the ,chief ,actuary estimates would be made under this title for administering a covered outpatient drug to an individual eligible for medical assistance under a ,state plan or a waiver of such plan1 reduced by the amount of all rebates the ,chief ,actuary estimates would be paid with respect to the administering of such drug1 including all rebates under this title and any supplemental or other additional rebates1 in the absence of such an agreement4 7,,iii7 ,information ,the ,chief ,actuary shall make the certifications required under this clause based on the most recently available and reliable drug pricing and product information4 ,the ,state and manufacturer shall provide the ,secretary and the ,chief ,actuary with all necessary information required to make the estimates needed for such certifications4 7iii7 ,launch and list price justifications ,the manufacturer submits all relevant information and supporting documentation necessary for pricing decisions as deemed appropriate by the ,secretary1 which shall be truthful and non-misleading1 including manufacturer information and supporting documentation for launch price or list price increases1 and any applicable justification required under section #aabh,l4 7iv7 ,confidentiality of information2 penalties ,the provisions of subparagraphs 7,c7 and 7,d7 of subsection 7b77#c7 shall apply to a manufacturer that fails to submit the information and documentation required under clauses 7ii7 and 7iii7 on a timely basis1 or that knowingly provides false or misleading information1 in the same manner as such provisions apply to a manufacturer with a rebate agreement under this section4 7,b7 ,consideration of ,state request for approval 7i7 ,in general ,the ,secretary shall treat a ,state request for approval of a risk-sharing value-based payment agreement in the same manner that the ,secretary treats a ,state plan amendment1 and subpart ,b of part #dcj of title #db1 ,code of ,federal ,regulations1 including1 subject to clause 7ii71 the timing requirements of section #dcj4af of such title 7as in effect on the date of enactment of this subsection71 shall apply to a request for approval of a risk-sharing value-based payment agreement in the same manner as such subpart applies to a ,state plan amendment4 7ii7 ,timing ,the ,secretary shall consult with the ,commissioner of ,food and ,drugs as required under subparagraph 7,c7 and make a determination on whether to approve a request from a ,state for approval of a proposed risk-sharing value-based payment agreement 7or request additional information necessary to allow the ,secretary to make a determination with respect to such request for approval7 within the time period1 to the extent practicable1 specified in section #dcj4af of title #db1 ,code of ,federal ,regulations 7as in effect on the date of enactment of this subsection71 but in no case shall the ,secretary take more than #ahj days after the receipt of such request for approval or response to such request for additional information to make such a determination 7or request additional information74 7,c7 ,consultation with the ,commissioner of ,food and ,drugs ,in considering whether to approve a risk-sharing value-based payment agreement1 the ,secretary1 to the extent necessary1 shall consult with the ,commissioner of ,food and ,drugs to determine whether the relevant clinical parameters specified in such agreement are appropriate4 7#c7 ,installment-based payment structure 7,a7 ,in general ,a risk-sharing value-based payment agreement shall provide for a payment structure under which1 for every installment year of the agreement 7subject to subparagraph 7,b771 the ,state shall pay the total installment year amount in equal installments to be paid at regular intervals over a period of time that shall be specified in the agreement4 7,b7 ,requirements for installment payments 7i7 ,timing of first payment ,the ,state shall make the first of the installment payments described in subparagraph 7,a7 for an installment year not later than #cj days after the end of such year4 7ii7 ,length of installment period ,the period of time over which the ,state shall make the installment payments described in subparagraph 7,a7 for an installment year shall not be longer than #e years4 7iii7 ,nonpayment or reduced payment of installments following a failure to meet clinical parameter ,if1 prior to the payment date 7as specified in the agreement7 of any installment payment described in subparagraph 7,a7 or any other alternative date or time frame 7as otherwise specified in the agreement71 the covered outpatient drug which is subject to the agreement fails to meet a relevant clinical parameter of the agreement1 the agreement shall provide that-- 7,i7 the installment payment shall not be made2 or 7,,ii7 the installment payment shall be reduced by a percentage specified in the agreement that is based on the outcome achieved by the drug relative to the relevant clinical parameter4 7#d7 ,notice of intent 7,a7 ,in general ,subject to subparagraph 7,b71 a manufacturer of a covered outpatient drug shall not be eligible to enter into a risk-sharing value-based payment agreement under this subsection with respect to such drug unless the manufacturer notifies the ,secretary that the manufacturer is interested in entering into such an agreement with respect to such drug4 ,the decision to submit and timing of a request to enter into a proposed risk-sharing value-based payment agreement shall remain solely within the discretion of the ,state and shall only be effective upon ,secretarial approval as required under this subsection4 7,b7 ,treatment of subsequently approved drugs 7i7 ,in general ,in the case of a manufacturer of a covered outpatient drug approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under section #cea of the ,public ,health ,service ,act after the date of enactment of this subsection1 not more than #ij days after meeting with the ,food and ,drug ,administration following phase ,,ii clinical trials for such drug 7or1 in the case of a drug described in clause 7ii71 not later than ,march #ca1 #bjbb71 the manufacturer must notify the ,secretary of the manufacturer's intent to enter into a risk-sharing value-based payment agreement under this subsection with respect to such drug4 ,if no such meeting has occurred1 the ,secretary may use discretion as to whether a potentially curative treatment intended for one-time use may qualify for a risk-sharing value-based payment agreement under this section4 ,a manufacturer notification of interest shall not have any influence on a decision for approval by the ,food and ,drug ,administration4 7ii7 ,application to certain subsequently approved drugs ,a drug described in this clause is a covered outpatient drug of a manufacturer-- 7,i7 that is approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under section #cea of the ,public ,health ,service ,act after the date of enactment of this subsection2 and 7,,ii7 with respect to which1 as of ,january #a1 #bjbb1 more than #ij days have passed after the manufacturer's meeting with the ,food and ,drug ,administration following phase ,,ii clinical trials for such drug4 7iii7 ,parallel approval ,the ,secretary1 in coordination with the ,administrator of the ,centers for ,medicare ,medicaid ,services and the ,commissioner of ,food and ,drugs1 shall1 to the extent practicable1 approve a ,state's request to enter into a proposed risk-sharing value-based payment agreement that otherwise meets the requirements of this subsection at the time that such a drug is approved by the ,food and ,drug ,administration to help provide that no ,state that wishes to enter into such an agreement is required to pay for the drug in full at one time if the ,state is seeking to pay over a period of time as outlined in the proposed agreement4 7iv7 ,rule of construction ,nothing in this paragraph shall be applied or construed to modify or affect the timeframes or factors involved in the ,secretary's determination of whether to approve or license a drug under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or section #cea of the ,public ,health ,service ,act4 7#e7 ,special payment rules 7,a7 ,in general ,except as otherwise provided in this paragraph1 with respect to an individual who is administered a unit of a covered outpatient drug that is purchased under a ,state plan by a ,state ,medicaid agency under a risk-sharing value-based payment agreement in an installment year1 the ,state shall remain liable to the manufacturer of such drug for payment for such unit without regard to whether the individual remains enrolled in the ,state plan under this title 7or a waiver of such plan7 for each installment year for which the ,state is to make installment payments for covered outpatient drugs purchased under the agreement in such year4 7,b7 ,death ,in the case of an individual described in subparagraph 7,a7 who dies during the period described in such subparagraph1 the ,state plan shall not be liable for any remaining payment for the unit of the covered outpatient drug administered to the individual which is owed under the agreement described in such subparagraph4 7,c7 ,withdrawal of approval ,in the case of a covered outpatient drug that is the subject of a risk-sharing value-based agreement between a ,state and a manufacturer under this subsection1 including a drug approved in accordance with section #ejf7;c7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act1 and such drug is the subject of an application that has been withdrawn by the ,secretary1 the ,state plan shall not be liable for any remaining payment that is owed under the agreement4 7,d7 ,alternative arrangement under agreement ,subject to approval by the ,secretary1 the terms of a proposed risk-sharing value-based payment agreement submitted for approval by a ,state may provide that subparagraph 7,a7 shall not apply4 7,e7 ,guidance ,not later than ,january #a1 #bjbb1 the ,secretary shall issue guidance to ,states establishing a process for ,states to notify the ,secretary when an individual who is administered a unit of a covered outpatient drug that is purchased by a ,state plan under a risk-sharing value-based payment agreement ceases to be enrolled under the ,state plan under this title 7or a waiver of such plan7 or dies before the end of the installment period applicable to such unit under the agreement4 7#f7 ,treatment of payments under risk-sharing value-based agreements for purposes of average manufacturer price2 best price ,the ,secretary shall treat any payments made to the manufacturer of a covered outpatient drug under a risk-sharing value-based payment agreement under this subsection during a rebate period in the same manner that the ,secretary treats payments made under a ,state supplemental rebate agreement under sections #ddg4ejd7;c77#ai7 and #ddg4eje7;c77#g7 of title #db1 ,code of ,federal ,regulations 7or any successor regulations7 for purposes of determining average manufacturer price and best price under this section with respect to the covered outpatient drug and a rebate period and for purposes of offsets required under subsection 7b77#a77;,b74 7#g7 ,assessments and report to ,congress 7,a7 ,assessments 7i7 ,in general ,not later than #ahj days after the end of each assessment period of any risk-sharing value-based payment agreement for a ,state approved under this subsection1 the ,secretary shall conduct an evaluation of such agreement which shall include an evaluation by the ,chief ,actuary to determine whether program spending under the risk-sharing value-based payment agreement aligned with the projections for the agreement made under paragraph 7#b77;,a77ii71 including an assessment of whether actual ,federal spending under this title under the agreement was less or more than net ,federal spending would have been in the absence of the agreement4 7ii7 ,assessment period ,for purposes of clause 7i7-- 7,i7 the first assessment period for a risk-sharing value-based payment agreement shall be the period of time over which payments are scheduled to be made under the agreement for the first #aj individuals who are administered covered outpatient drugs under the agreement except that such period shall not exceed the #e-year period after the date on which the ,secretary approves the agreement2 and 7,,ii7 each subsequent assessment period for a risk-sharing value-based payment agreement shall be the #e-year period following the end of the previous assessment period4 7,b7 ,results of assessments 7i7 ,termination option ,if the ,secretary determines as a result of the assessment by the ,chief ,actuary under subparagraph 7,a7 that the actual ,federal spending under this title for any covered outpatient drug that was the subject of the ,state's risk-sharing value-based payment agreement was greater than the net ,federal spending that would have resulted in the absence of the agreement1 the ,secretary may terminate approval of such agreement and shall immediately conduct an assessment under this paragraph of any other ongoing risk-sharing value-based payment agreement to which the same manufacturer is a party4 7ii7 ,repayment required 7,i7 ,in general ,if the ,secretary determines as a result of the assessment by the ,chief ,actuary under subparagraph 7,a7 that the ,federal spending under the risk-sharing value-based agreement for a covered outpatient drug that was subject to such agreement was greater than the net ,federal spending that would have resulted in the absence of the agreement1 the manufacturer shall repay the difference to the ,state and ,federal governments in a timely manner as determined by the ,secretary4 7,,ii7 ,termination for failure to pay ,the failure of a manufacturer to make repayments required under subclause 7,i7 in a timely manner shall result in immediate termination of all risk-sharing value-based agreements to which the manufacturer is a party4 7,,iii7 ,additional penalties ,in the case of a manufacturer that fails to make repayments required under subclause 7,i71 the ,secretary may treat such manufacturer in the same manner as a manufacturer that fails to pay required rebates under this section1 and the ,secretary may-- 7aa7 suspend or terminate the manufacturer's rebate agreement under this section2 and 7bb7 pursue any other remedy that would be available if the manufacturer had failed to pay required rebates under this section4 7,c7 ,report to congress ,not later than #e years after the first risk-sharing value-based payment agreement is approved under this subsection1 the ,secretary shall submit to ,congress and make available to the public a report that includes-- 7i7 an assessment of the impact of risk-sharing value-based payment agreements on access for individuals who are eligible for benefits under a ,state plan or waiver under this title to medically necessary covered outpatient drugs and related treatments2 7ii7 an analysis of the impact of such agreements on overall ,state and ,federal spending under this title2 7iii7 an assessment of the impact of such agreements on drug prices1 including launch price and price increases2 and 7iv7 such recommendations to ,congress as the ,secretary deems appropriate4 7#h7 ,guidance and regulations 7,a7 ,in general ,not later than ,january #a1 #bjbb1 the ,secretary shall issue guidance to ,states seeking to enter into risk-sharing value-based payment agreements under this subsection that includes a model template for such agreements4 ,the ,secretary may issue any additional guidance or promulgate regulations as necessary to implement and enforce the provisions of this subsection4 7,b7 ,model agreements 7i7 ,in general ,if a ,state expresses an interest in pursuing a risk-sharing value-based payment agreement under this subsection with a manufacturer for the purchase of a covered outpatient drug1 the ,secretary may share with such ,state any risk-sharing value-based agreement between a ,state and the manufacturer for the purchase of such drug that has been approved under this subsection4 ,while such shared agreement may serve as a template for a ,state that wishes to propose1 the use of a previously approved agreement shall not affect the submission and approval process for approval of a proposed risk-sharing value-based payment agreement under this subsection1 including the requirements under paragraph 7#b77;,a74 7ii7 ,confidentiality ,in the case of a risk-sharing value-based payment agreement that is disclosed to a ,state by the ,secretary under this subparagraph and that is only in effect with respect to a single ,state1 the confidentiality of information provisions described in subsection 7b77#c77;,d7 shall apply to such information4 7,c7 ,,oig consultation 7i7 ,in general ,the ,secretary shall consult with the ,office of the ,inspector ,general of the ,department of ,health and ,human ,services to determine whether there are potential program integrity concerns with agreement approvals or templates and address accordingly4 7ii7 ,,oig policy updates as necessary ,the ,inspector ,general of the ,department of ,health and ,human ,services shall review and update1 as necessary1 any policies or guidelines of the ,office of the ,inspector ,general of the ,department of ,human ,services 7including policies related to the enforcement of section #aabh;,b7 to accommodate the use of risk-sharing value-based payment agreements in accordance with this section4 7#i7 ,rules of construction 7,a7 ,modifications ,nothing in this subsection or any regulations promulgated under this subsection shall prohibit a ,state from requesting a modification from the ,secretary to the terms of a risk-sharing value-based payment agreement4 ,a modification that is expected to result in any increase to projected net ,state or ,federal spending under the agreement shall be subject to recertification by the ,chief ,actuary as described in paragraph 7#b77;,a77ii7 before the modification may be approved4 7,b7 ,rebate agreements ,nothing in this subsection shall be construed as requiring a ,state to enter into a risk-sharing value-based payment agreement or as limiting or superseding the ability of a ,state to enter into a supplemental rebate agreement for a covered outpatient drug4 7,c7 ,,ffp for payments under risk-sharing value-based payment agreements ,federal financial participation shall be available under this title for any payment made by a ,state to a manufacturer for a covered outpatient drug under a risk-sharing value-based payment agreement in accordance with this subsection1 except that no ,federal financial participation shall be available for any payment made by a ,state to a manufacturer under such an agreement on and after the effective date of a disapproval of such agreement by the ,secretary4 7,d7 ,continued application of other provisions ,except as expressly provided in this subsection1 nothing in this subsection or in any regulations promulgated under this subsection shall affect the application of any other provision of this ,act4 7#aj7 ,appropriations ,for fiscal year #bjbj and each fiscal year thereafter1 there are appropriated to the ,secretary #e1jjj1jjj for the purpose of carrying out this subsection4 7#aa7 ,definitions ,in this subsection3 7,a7 ,chief ,actuary ,the term ,chief ,actuary means the ,chief ,actuary of the ,centers for ,medicare ,medicaid ,services4 7,b7 ,installment year ,the term installment year means1 with respect to a risk-sharing value-based payment agreement1 a #ab-month period during which a covered outpatient drug is administered under the agreement4 7,c7 ,potentially curative treatment intended for one-time use ,the term potentially curative treatment intended for one-time use means a treatment that consists of the administration of a covered outpatient drug that-- 7i7 is a form of gene therapy for a rare disease1 as defined by the ,commissioner of ,food and ,drugs1 designated under section #ebf of the ,federal ,food1 ,drug1 and ,cosmetics ,act1 and approved under section #eje of such ,act or licensed under subsection 7a7 or 7k7 of section #cea of the ,public ,health ,service ,act to treat a serious or life-threatening disease or condition2 7ii7 if administered in accordance with the labeling of such drug1 is expected to result in either-- 7,i7 the cure of such disease or condition2 or 7,,ii7 a reduction in the symptoms of such disease or condition to the extent that such disease or condition is not expected to lead to early mortality2 and 7iii7 is expected to achieve a result described in clause 7ii71 which may be achieved over an extended period of time1 after not more than #c administrations4 7,d7 ,relevant clinical parameter ,the term relevant clinical parameter means1 with respect to a covered outpatient drug that is the subject of a risk-sharing value-based payment agreement-- 7i7 a clinical endpoint specified in the drug's labeling or supported by one or more of the compendia described in section #ahfa7t77#b77;,b77ii77,i7 that-- 7,i7 is able to be measured or evaluated on an annual basis for each year of the agreement on an independent basis by a provider or other entity2 and 7,,ii7 is required to be achieved 7based on observed metrics in patient populations7 under the terms of the agreement2 or 7ii7 a surrogate endpoint 7as defined in section #ejg7;e77#i7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act71 including those developed by patient-focused drug development tools1 that-- 7,i7 is able to be measured or evaluated on an annual basis for each year of the agreement on an independent basis by a provider or other entity2 and 7,,ii7 has been qualified by the ,food and ,drug ,administration4 7,e7 ,risk-sharing value-based payment agreement ,the term risk-sharing value-based payment agreement means an agreement between a ,state plan and a manufacturer-- 7i7 for the purchase of a covered outpatient drug of the manufacturer that is a potentially curative treatment intended for one-time use2 7ii7 under which payment for such drug shall be made pursuant to an installment-based payment structure that meets the requirements of paragraph 7#c72 7iii7 which conditions payment on the achievement of at least #b relevant clinical parameters 7as defined in subparagraph 7,c772 7iv7 which provides that-- 7,i7 the ,state plan will directly reimburse the manufacturer for the drug2 or 7,,ii7 a third party will reimburse the manufacture in a manner approved by the ,secretary2 7v7 is approved by the ,secretary in accordance with paragraph 7#b74 7,f7 ,total installment year amount ,the term total installment year amount means1 with respect to a risk-sharing value-based payment agreement for the purchase of a covered outpatient drug and an installment year1 an amount equal to the product of-- 7i7 the unit price of the drug charged under the agreement2 and 7ii7 the number of units of such drug administered under the agreement during such installment year4 4 7b7 ,conforming amendments 7#a7 ,section #aijc7;i77#aj77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acif;b7i77#aj77;,a77 is amended by striking or unless section #aibg7;a77#c7 applies and inserting 1 section #aibg7;a77#c7 applies with respect to such drugs1 or such drugs are the subject of a risk-sharing value-based payment agreement under section #aibg7l74 7#b7 ,section #aibg7;b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;b77 is amended-- 7,a7 in paragraph 7#a77;,a71 by inserting 7except for drugs for which payment is made by a ,state under a risk-sharing value-based payment agreement under subsection 7l77 after under the ,state plan for such period2 and 7,b7 in paragraph 7#c7-- 7i7 in subparagraph 7,c77i71 by inserting or subsection 7l77#b77;,a7 after subparagraph 7,a72 and 7ii7 in subparagraph 7,d71 in the matter preceding clause 7i71 by inserting 1 under subsection 7l77#b77;,a71 after under this paragraph4 #bji4 ,modification of maximum rebate amount under ,medicaid drug rebate program 7a7 ,in general ,subparagraph 7,d7 of section #aibg7;c77#b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;c77#b77 is amended to read as follows3 7,d7 ,maximum rebate amount 7i7 ,in general ,except as provided in clause 7ii71 in no case shall the sum of the amounts applied under paragraph 7#a77;,a77ii7 and this paragraph with respect to each dosage form and strength of a single source drug or an innovator multiple source drug for a rebate period exceed-- 7,i7 for rebate periods beginning after ,december #ca1 #bjji1 and before ,september #cj1 #bjbb1 #ajj percent of the average manufacturer price of the drug2 and 7,,ii7 for rebate periods beginning on or after ,october #a1 #bjbb1 #abe percent of the average manufacturer price of the drug4 7ii7 ,no maximum amount for drugs if ,,amp increases outpace inflation 7,i7 ,in general ,if the average manufacturer price with respect to each dosage form and strength of a single source drug or an innovator multiple source drug increases on or after ,october #a1 #bjba1 and such increased average manufacturer price exceeds the inflation-adjusted average manufacturer price determined with respect to such drug under subclause 7,,ii7 for the rebate period1 clause 7i7 shall not apply and there shall be no limitation on the sum of the amounts applied under paragraph 7#a77;,a77ii7 and this paragraph for the rebate period with respect to each dosage form and strength of the single source drug or innovator multiple source drug4 7,,ii7 ,inflation-adjusted average manufacturer price defined ,in this clause1 the term inflation-adjusted average manufacturer price means1 with respect to a single source drug or an innovator multiple source drug and a rebate period1 the average manufacturer price for each dosage form and strength of the drug for the calendar quarter beginning ,july #a1 #aiij 7without regard to whether or not the drug has been sold or transferred to an entity1 including a division or subsidiary of the manufacturer1 after the #ast day of such quarter71 increased by the percentage by which the consumer price index for all urban consumers 7,united ,states city average7 for the month before the month in which the rebate period begins exceeds such index for ,september #aiij4 4 7b7 ,treatment of subsequently approved drugs ,section #aibg7;c77#b77;,b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;c77#b77;,b77 is amended by inserting and clause 7ii77,,ii7 of subparagraph 7,d7 after clause 7ii77,,ii7 of subparagraph 7,a74 7c7 ,technical amendments ,section #aibg7;c77#c77;,c77ii77,,iv7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#i7;c77#c77;,c77ii77,,iv77 is amended-- 7#a7 by striking subparagraph 7,a7 and inserting paragraph 7#c77;,a72 and 7#b7 by striking this subparagraph and inserting paragraph 7#c77;,c74 #baj4 ,applying ,medicaid drug rebate requirement to drugs provided as part of outpatient hospital services 7a7 ,in general ,section #aibg7k77#c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7k77#c77 is amended to read as follows3 7#c7 ,limiting definition 7,a7 ,in general ,the term covered outpatient drug does not include any drug1 biological product1 or insulin provided as part of1 or as incident to and in the same setting as1 any of the following 7and for which payment may be made under this title as part of payment for the following and not as direct reimbursement for the drug73 7i7 ,inpatient hospital services4 7ii7 ,hospice services4 7iii7 ,dental services1 except that drugs for which the ,state plan authorizes direct reimbursement to the dispensing dentist are covered outpatient drugs4 7iv7 ,physicians' services4 7v7 ,outpatient hospital services4 7vi7 ,nursing facility services and services provided by an intermediate care facility for the mentally retarded4 7vii7 ,other laboratory and x-ray services4 7viii7 ,renal dialysis4 7,b7 ,other exclusions ,such term also does not include any such drug or product for which a ,national ,drug ,code number is not required by the ,food and ,drug ,administration or a drug or biological used for a medical indication which is not a medically accepted indication4 7,c7 ,state option ,at the option of a ,state1 such term may include any drug1 biological product1 or insulin provided on an outpatient basis as part of1 or as incident to and in the same setting as1 described in clause 7iv7 or 7v7 of subparagraph 7,a7 7such as a drug1 biological product1 or insulin being provided as part of a bundled payment74 7,d7 ,no effect on best price ,any drug1 biological product1 or insulin excluded from the definition of such term as a result of this paragraph shall be treated as a covered outpatient drug for purposes of determining the best price 7as defined in subsection 7c77#a77;,c77 for such drug1 biological product1 or insulin4 4 7b7 ,effective date2 implementation guidance 7#a7 ,in general ,the amendment made by subsection 7a7 shall take effect on the date that is #a year after the date of enactment of this ,act4 7#b7 ,implementation and guidance ,not later than #a year after the date of enactment of this ,act1 the ,secretary of ,health and ,human ,services shall issue guidance and relevant informational bulletins for ,states1 manufacturers 7as defined in section #aibg7k77#e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7k77#e771 and other relevant stakeholders1 including health care providers1 regarding implementation of the amendment made by subsection 7a74 ,september #be1 #bjai,read twice and placed on the calendar