,,ii #aafth ,,congress #b;d ,session ,s4 #cchd ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #c1 #bjbj,ms4 ,mc,sally introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to allow for negotiation of prices for certain covered ,medicare part ,d drugs1 to allow for importation by individuals of prescription drugs from ,canada1 to preserve access to affordable generics and biosimilars1 to increase the use of real-time benefit tools to lower beneficiary costs1 to establish a manufacturer discount program1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,lowering ,prescription ,drug ,prices for ,america's ,seniors and ,families ,act of #bjbj4 #b4 ,negotiation of prices for certain covered part ,d drugs following period of exclusivity 7a7 ,in general ,section #ahfj;,d-#aa of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7 is amended-- 7#a7 in subsection 7i71 by striking ,in order and inserting ,except as provided in subsection 7k71 in order2 and 7#b7 by adding at the end the following new subsection3 7k7 ,negotiation of prices for certain covered part ,d drugs following period of exclusivity 7#a7 ,in general ,notwithstanding any other provision of law1 subject to paragraph 7#b71 the ,secretary shall1 for plan years beginning on or after the date on which the applicable period with respect to an applicable covered part ,d drug 7as those terms are defined in paragraph 7#c77 expires-- 7,a7 negotiate directly with pharmaceutical manufacturers the prices that may be charged to ,,pdp sponsors and ,,ma organizations for such applicable covered part ,d drug2 and 7,b7 complete such negotiations not later than #c months prior to the beginning of each such plan year4 7#b7 ,use of ,medicaid best price if negotiations fail ,in the case where the ,secretary is not able to reach an agreement under paragraph 7#a7 with respect to an applicable covered part ,d drug for a plan year by the date specified in paragraph 7#a77;,b71 the price that a pharmaceutical manufacturer may charge to ,,pdp sponsors and ,,ma organizations for such applicable covered part ,d drug for the plan year shall be determined using the methodology used to determine the best price of a covered outpatient drug under section #aibg7;c77#a77;,c74 7#c7 ,definitions ,in this subsection3 7,a7 ,applicable covered part ,d drug ,the term applicable covered part ,d drug means a covered part ,d drug for which there is in effect-- 7i7 in the case of a drug approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act1 a patent on an active ingredient of the drug2 or 7ii7 in the case of a biological product1 a patent on the structure of the biological product4 ,a patent shall be considered to be in effect for purposes of this subparagraph during any extension of the patent term under section #aef of title #ce1 ,united ,states ,code4 7,b7 ,applicable period ,the term applicable period means1 with respect to an applicable covered part ,d drug1 any applicable patent described in subparagraph 7,a74 7#d7 ,condition of coverage 7,a7 ,in general ,subject to subparagraph 7,b71 in order for coverage to be available under this part for an applicable covered part ,d drug 7as defined in section #ahfj;,d-#b7;e77 of a manufacturer with respect to a plan year beginning on or after the date on which the applicable period with respect to such covered part ,d drug expires1 the manufacturer must provide such applicable covered part ,d drug to ,,pdp sponsors and ,,ma organizations at the price negotiated under paragraph 7#a7 or the price determined under paragraph 7#b71 if applicable1 for the plan year4 7,b7 ,authorizing coverage in certain circumstances ,subparagraph 7,a7 shall not apply to the dispensing of a covered part ,d drug if the ,secretary has made a determination that the availability of the drug is essential to the health of beneficiaries under this part4 4 7b7 ,effective date ,the amendments made by this section shall apply to covered part ,d drugs dispensed on or after ,january #a1 #bjba4 #c4 ,drug importation ,chapter ,,viii of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cha et seq47 is amended by adding at the end the following3 #haj4 ,importation by individuals of prescription drugs from ,canada 7a7 ,in general ,notwithstanding any other provision of this ,act1 not later than #ahj days after the date of enactment of this section1 the ,secretary shall promulgate regulations permitting individuals to safely import into the ,united ,states a prescription drug described in subsection 7b74 7b7 ,prescription drug ,a prescription drug described in this subsection-- 7#a7 is a prescription drug that-- 7,a7 is purchased from an approved ,canadian pharmacy2 7,b7 is dispensed by a pharmacist licensed to practice pharmacy and dispense prescription drugs in ,canada2 7,c7 is purchased for personal use by the individual1 not for resale1 in quantities that do not exceed a #ij-;day supply2 7,d7 is filled using a valid prescription issued by a physician licensed to practice in a ,state in the ,united ,states2 and 7,e7 has the same active ingredient or ingredients1 route of administration1 dosage form1 and strength as a prescription drug approved by the ,secretary under chapter ,v2 and 7#b7 does not include-- 7,a7 a controlled substance 7as defined in section #ajb of the ,controlled ,substances ,act72 7,b7 a biological product 7as defined in section #cea of the ,public ,health ,service ,act72 7,c7 an infused drug 7including a peritoneal dialysis solution72 7,d7 an intravenously injected drug2 7,e7 a drug that is inhaled during surgery2 7,f7 a parenteral drug2 7,g7 a drug manufactured through one or more biotechnology processes1 including-- 7i7 a therapeutic ,,dna plasmid product2 7ii7 a therapeutic synthetic peptide product of not more than #dj amino acids2 7iii7 a monoclonal antibody product for in vivo use2 and 7iv7 a therapeutic recombinant ,,dna-derived product2 7,h7 a drug required to be refrigerated at any time during manufacturing1 packing1 processing1 or holding2 or 7,i7 a photoreactive drug4 7c7 ,approved ,canadian pharmacy 7#a7 ,in general ,in this section1 an approved ,canadian pharmacy is a pharmacy that-- 7,a7 is located in ,canada2 and 7,b7 the ,secretary certifies-- 7i7 is licensed to operate and dispense prescription drugs to individuals in ,canada2 and 7ii7 meets the criteria under paragraph 7#c74 7#b7 ,publication of approved ,canadian pharmacies ,the ,secretary shall publish on the internet website of the ,food and ,drug ,administration a list of approved ,canadian pharmacies1 including the internet website address of each such approved ,canadian pharmacy1 from which individuals may purchase prescription drugs in accordance with subsection 7a74 7#c7 ,additional criteria ,to be an approved ,canadian pharmacy1 the ,secretary shall certify that the pharmacy-- 7,a7 has been in existence for a period of at least #e years preceding the date of such certification and has a purpose other than to participate in the program established under this section2 7,b7 operates in accordance with pharmacy standards set forth by the provincial pharmacy rules and regulations enacted in ,canada2 7,c7 has processes established by the pharmacy1 or participates in another established process1 to certify that the physical premises and data reporting procedures and licenses are in compliance with all applicable laws and regulations1 and has implemented policies designed to monitor ongoing compliance with such laws and regulations2 7,d7 conducts or commits to participate in ongoing and comprehensive quality assurance programs and implements such quality assurance measures1 including blind testing1 to ensure the veracity and reliability of the findings of the quality assurance program2 7,e7 agrees that laboratories approved by the ,secretary shall be used to conduct product testing to determine the safety and efficacy of sample pharmaceutical products2 7,f7 has established1 or will establish or participate in1 a process for resolving grievances and will be held accountable for violations of established guidelines and rules2 7,g7 does not resell products from online pharmacies located outside ,canada to customers in the ,united ,states2 and 7,h7 meets any other criteria established by the ,secretary4 4 #d4 ,preserving access through ,,ftc actions 7a7 ,preserve ,access to ,affordable ,generics and ,biosimilars 7#a7 ,unlawful compensation for delay 7,a7 ,in general ,the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq47 is amended by inserting after section #bf 7#ae ,u4,s4,c4 #eg;c-#b7 the following3 #bg4 ,preserving access to affordable generics and biosimilars 7a7 ,in general 7#a7 ,enforcement proceeding ,the ,commission may initiate a proceeding to enforce the provisions of this section against the parties to any agreement resolving or settling1 on a final or interim basis1 a patent infringement claim1 in connection with the sale of a drug product or biological product4 7#b7 ,presumption and violation 7,a7 ,in general ,subject to subparagraph 7,b71 in such a proceeding1 an agreement shall be presumed to have anticompetitive effects and shall be a violation of this section if-- 7i7 an ,,anda filer or a biosimilar biological product application filer receives anything of value1 including an exclusive license2 and 7ii7 the ,,anda filer or biosimilar biological product application filer agrees to limit or forego research1 development1 manufacturing1 marketing1 or sales of the ,,anda product or biosimilar biological product1 as applicable1 for any period of time4 7,b7 ,exception ,subparagraph 7,a7 shall not apply if the parties to such agreement demonstrate by clear and convincing evidence that-- 7i7 the value described in subparagraph 7,a77i7 is compensation solely for other goods or services that the ,,anda filer or biosimilar biological product application filer has promised to provide2 or 7ii7 the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement4 7b7 ,limitations ,in determining whether the settling parties have met their burden under subsection 7a77#b77;,b71 the fact finder shall not presume-- 7#a7 that entry would not have occurred until the expiration of the relevant patent or statutory exclusivity2 or 7#b7 that the agreement's provision for entry of the ,,anda product or biosimilar biological product prior to the expiration of the relevant patent or statutory exclusivity means that the agreement is procompetitive4 7c7 ,exclusions ,nothing in this section shall prohibit a resolution or settlement of a patent infringement claim in which the consideration granted by the ,,nda holder or biological product license holder to the ,,anda filer or biosimilar biological product application filer1 respectively1 as part of the resolution or settlement includes only one or more of the following3 7#a7 ,the right to market the ,,anda product or biosimilar biological product in the ,united ,states prior to the expiration of-- 7,a7 any patent that is the basis for the patent infringement claim2 or 7,b7 any patent right or other statutory exclusivity that would prevent the marketing of such ,,anda product or biosimilar biological product4 7#b7 ,a payment for reasonable litigation expenses not to exceed #g1ejj1jjj4 7#c7 ,a covenant not to sue on any claim that the ,,anda product or biosimilar biological product infringes a ,united ,states patent4 7d7 ,enforcement 7#a7 ,enforcement ,a violation of this section shall be treated as a violation of section #e4 7#b7 ,judicial review 7,a7 ,in general ,any party that is subject to a final order of the ,commission1 issued in an administrative adjudicative proceeding under the authority of subsection 7a77#a71 may1 within #cj days of the issuance of such order1 petition for review of such order in-- 7i7 the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit2 7ii7 the ,united ,states ,court of ,appeals for the circuit in which the ultimate parent entity1 as defined in section #hja4a7;a77#c7 of title #af1 ,code of ,federal ,regulations1 or any successor thereto1 of the ,,nda holder or biological product license holder is incorporated as of the date that the ,,nda or biological product license application1 as applicable1 is filed with the ,commissioner of ,food and ,drugs2 or 7iii7 the ,united ,states ,court of ,appeals for the circuit in which the ultimate parent entity of the ,,anda filer or biosimilar biological product application filer is incorporated as of the date that the ,,anda or biosimilar biological product application is filed with the ,commissioner of ,food and ,drugs4 7,b7 ,treatment of findings ,in a proceeding for judicial review of a final order of the ,commission1 the findings of the ,commission as to the facts1 if supported by evidence1 shall be conclusive4 7e7 ,antitrust laws ,nothing in this section shall modify1 impair1 limit1 or supersede the applicability of the antitrust laws as defined in subsection 7a7 of the first section of the ,clayton ,act 7#ae ,u4,s4,c4 #ab7;a771 and of section #e of this ,act to the extent that section #e applies to unfair methods of competition4 ,nothing in this section shall modify1 impair1 limit1 or supersede the right of an ,,anda filer or biosimilar biological product application filer to assert claims or counterclaims against any person1 under the antitrust laws or other laws relating to unfair competition4 7f7 ,penalties 7#a7 ,forfeiture ,each party that violates or assists in the violation of this section shall forfeit and pay to the ,united ,states a civil penalty sufficient to deter violations of this section1 but in no event greater than #c times the value received by the party that is reasonably attributable to the violation of this section4 ,if no such value has been received by the ,,nda holder or biological product license holder1 the penalty to the ,,nda holder or biological product license holder shall be sufficient to deter violations1 but in no event greater than #c times the value given to the ,,anda filer or biosimilar biological product application filer reasonably attributable to the violation of this section4 ,such penalty shall accrue to the ,united ,states and may be recovered in a civil action brought by the ,commission1 in its own name by any of its attorneys designated by it for such purpose1 in a district court of the ,united ,states against any party that violates this section4 ,in such actions1 the ,united ,states district courts are empowered to grant mandatory injunctions and such other and further equitable relief as they deem appropriate4 7#b7 ,cease and desist 7,a7 ,in general ,if the ,commission has issued a cease and desist order with respect to a party in an administrative adjudicative proceeding under the authority of subsection 7a77#a71 an action brought pursuant to paragraph 7#a7 may be commenced against such party at any time before the expiration of #a year after such order becomes final pursuant to section #e7;g74 7,b7 ,exception ,in an action under subparagraph 7,a71 the findings of the ,commission as to the material facts in the administrative adjudicative proceeding with respect to the violation of this section by a party shall be conclusive unless-- 7i7 the terms of such cease and desist order expressly provide that the ,commission's findings shall not be conclusive2 or 7ii7 the order became final by reason of section #e7;g77#a71 in which case such finding shall be conclusive if supported by evidence4 7#c7 ,civil penalty ,in determining the amount of the civil penalty described in this section1 the court shall take into account-- 7,a7 the nature1 circumstances1 extent1 and gravity of the violation2 7,b7 with respect to the violator1 the degree of culpability1 any history of violations1 the ability to pay1 any effect on the ability to continue doing business1 profits earned by the ,,nda holder or biological product license holder1 compensation received by the ,,anda filer or biosimilar biological product application filer1 and the amount of commerce affected2 and 7,c7 other matters that justice requires4 7#d7 ,remedies in addition ,remedies provided in this subsection are in addition to1 and not in lieu of1 any other remedy provided by ,federal law4 ,nothing in this paragraph shall be construed to affect any authority of the ,commission under any other provision of law4 7g7 ,definitions ,in this section3 7#a7 ,agreement ,the term agreement means anything that would constitute an agreement under section #a of the ,sherman ,act 7#ae ,u4,s4,c4 #a7 or section #e of this ,act4 7#b7 ,agreement resolving or settling a patent infringement claim ,the term agreement resolving or settling a patent infringement claim includes any agreement that is entered into within #cj days of the resolution or the settlement of the claim1 or any other agreement that is contingent upon1 provides a contingent condition for1 or is otherwise related to the resolution or settlement of the claim4 7#c7 ,,anda ,the term ,,anda means an abbreviated new drug application filed under section #eje7;j7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;j77 or a new drug application filed under section #eje7;b77#b7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;b77#b774 7#d7 ,,anda filer ,the term ,,anda filer means a party that owns or controls an ,,anda filed with the ,food and ,drug ,administration or has the exclusive rights under such ,,anda to distribute the ,,anda product4 7#e7 ,,anda product ,the term ,,anda product means the product to be manufactured under the ,,anda that is the subject of the patent infringement claim4 7#f7 ,biological product ,the term biological product has the meaning given such term in section #cea7;i77#a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7;i77#a774 7#g7 ,biological product license application ,the term biological product license application means an application under section #cea7;a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7;a774 7#h7 ,biological product license holder ,the term biological product license holder means-- 7,a7 the holder of an approved biological product license application for a biological product2 7,b7 a person owning or controlling enforcement of any patents that claim the biological product that is the subject of such approved application2 or 7,c7 the predecessors1 subsidiaries1 divisions1 groups1 and affiliates controlled by1 controlling1 or under common control with any of the entities described in subparagraphs 7,a7 and 7,b7 7such control to be presumed by direct or indirect share ownership of #ej percent or greater71 as well as the licensees1 licensors1 successors1 and assigns of each of the entities4 7#i7 ,biosimilar biological product ,the term biosimilar biological product means the product to be manufactured under the biosimilar biological product application that is the subject of the patent infringement claim4 7#aj7 ,biosimilar biological product application ,the term biosimilar biological product application means an application under section #cea7k7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7k77 for licensure of a biological product as biosimilar to1 or interchangeable with1 a reference product4 7#aa7 ,biosimilar biological product application filer ,the term biosimilar biological product application filer means a party that owns or controls a biosimilar biological product application filed with the ,food and ,drug ,administration or has the exclusive rights under such application to distribute the biosimilar biological product4 7#ab7 ,drug product ,the term drug product has the meaning given such term in section #cad4c7;b7 of title #ba1 ,code of ,federal ,regulations 7or any successor regulation74 7#ac7 ,,nda ,the term ,,nda means a new drug application filed under section #eje7;b7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;b774 7#ad7 ,,nda holder ,the term ,,nda holder means-- 7,a7 the holder of an approved ,,nda application for a drug product2 7,b7 a person owning or controlling enforcement of the patent listed in the ,approved ,drug ,products ,with ,therapeutic ,equivalence ,evaluations 7commonly known as the ,,fda ,orange ,book7 in connection with the ,,nda2 or 7,c7 the predecessors1 subsidiaries1 divisions1 groups1 and affiliates controlled by1 controlling1 or under common control with any of the entities described in subparagraphs 7,a7 and 7,b7 7such control to be presumed by direct or indirect share ownership of #ej percent or greater71 as well as the licensees1 licensors1 successors1 and assigns of each of the entities4 7#ae7 ,party ,the term party means any person1 partnership1 corporation1 or other legal entity4 7#af7 ,patent infringement ,the term patent infringement means infringement of any patent or of any filed patent application1 extension1 reissue1 renewal1 division1 continuation1 continuation in part1 reexamination1 patent term restoration1 patents of addition1 and extensions thereof4 7#ag7 ,patent infringement claim ,the term patent infringement claim means any allegation made to an ,,anda filer or biosimilar biological product application filer1 whether or not included in a complaint filed with a court of law1 that its ,,anda or ,,anda product1 or biological product license application or biological product1 may infringe any patent held by1 or exclusively licensed to1 the ,,nda holder or biological product license holder of the drug product or biological product1 as applicable4 7#ah7 ,statutory exclusivity ,the term statutory exclusivity means those prohibitions on the approval of drug applications under clauses 7ii7 through 7iv7 of section #eje7;c77#c77;,e7 7#e- and #c-year data exclusivity71 section #ebg 7orphan drug exclusivity71 or section #eje;,a 7pediatric exclusivity7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;c77#c77;,e71 #cfj;cc1 #cee;a71 or on the licensing of biological product applications under section #cea7k77#g7 7#ab-year exclusivity7 or paragraph 7#b7 or 7#c7 of section #cea7m7 7pediatric exclusivity7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7 or under section #ebg of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7orphan drug exclusivity74 4 7,b7 ,effective date ,section #bg of the ,federal ,trade ,commission ,act1 as added by this paragraph1 shall apply to all agreements described in section #bg7;a77#a7 of that ,act entered into after ,june #ag1 #bjac4 ,section #bg7;f7 of the ,federal ,trade ,commission ,act1 as added by this paragraph1 shall apply to agreements entered into on or after the date of enactment of this ,act4 7#b7 ,certification of agreements ,section #aaab of the ,medicare ,prescription ,drug1 ,improvement1 and ,modernization ,act of #bjjc 7#ba ,u4,s4,c4 #cee note7 is amended by adding at the end the following3 7d7 ,certification ,the ,chief ,executive ,officer or the company official responsible for negotiating any agreement under subsection 7a7 or 7b7 that is required to be filed under subsection 7c71 within #cj days after such filing1 shall execute and file with the ,assistant ,attorney ,general and the ,commission a certification as follows3 ,i declare that the following is true1 correct1 and complete to the best of my knowledge3 ,the materials filed with the ,federal ,trade ,commission and the ,department of ,justice under section #aaab of subtitle ,b of title ,,xi of the ,medicare ,prescription ,drug1 ,improvement1 and ,modernization ,act of #bjjc1 with respect to the agreement referenced in this certification-- 7#a7 represent the complete1 final1 and exclusive agreement between the parties2 7#b7 include any ancillary agreements that are contingent upon1 provide a contingent condition for1 or are otherwise related to1 the referenced agreement2 and 7#c7 include written descriptions of any oral agreements1 representations1 commitments1 or promises between the parties that are responsive to subsection 7a7 or 7b7 of such section #aaab and have not been reduced to writing4 4 4 7#c7 ,forfeiture of #ahj-;day exclusivity period ,section #eje7;j77#e77;,d77i77,v7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;j77#e77;,d77i77,v77 is amended by inserting section #bg of the ,federal ,trade ,commission ,act or after that the agreement has violated4 7#d7 ,commission litigation authority ,section #af7;a77#b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #ef7;a77#b77 is amended-- 7,a7 in subparagraph 7,d71 by striking or after the semicolon2 7,b7 in subparagraph 7,e71 by inserting or after the semicolon2 and 7,c7 inserting after subparagraph 7,e7 the following3 7,f7 under section #bg2 4 7#e7 ,statute of limitations ,the ,federal ,trade ,commission shall commence any enforcement proceeding described in section #bg of the ,federal ,trade ,commission ,act1 as added by paragraph 7#a71 except for an action described in section #bg7;f77#b7 of the ,federal ,trade ,commission ,act1 not later than #f years after the date on which the parties to the agreement file the certification under section #aaab7;d7 of the ,medicare ,prescription ,drug ,improvement and ,modernization ,act of #bjjc 7#ba ,u4,s4,c4 #cee note74 7b7 ,citizen petitions ,section #eje7q77#a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7q77#a77 is amended-- 7#a7 in subparagraph 7,e7-- 7,a7 by striking ,if the ,secretary and inserting the following3 7i7 ,in general ,if the ,secretary 2 7,b7 by striking the second sentence and inserting the following3 7ii7 ,factors ,in determining whether a petition was submitted with the primary purpose of delaying the approval of an application1 the ,secretary shall consider-- 7,i7 whether it appears1 based on the date that relevant information relied upon in the petition became known to the petitioner 7or reasonably should have been known to the petitioner71 as certified by the petitioner in accordance with subparagraph 7,h71 that the petitioner has taken an unreasonable length of time to submit the petition2 7,,ii7 whether the petitioner has submitted multiple or serial petitions raising issues that reasonably could have been known to the petitioner at the time of submission of the earlier petition or petitions2 7,,iii7 whether the petition was submitted close in time to a known1 first date upon which an application under subsection 7b77#b7 of this section or section #cea7k7 of the ,public ,health ,service ,act could be approved2 7,,iv7 whether the petition was submitted without any data or information in support of the scientific positions set forth in the petition2 7,v7 whether the petition raises the same or substantially similar issues as a prior petition to which the ,secretary has responded substantively already1 particularly if the subsequent submission follows the earlier response closely in time2 7,,vi7 whether the petition concerns standards for approval of a drug for which the ,secretary has provided an opportunity for public input1 such as draft or final product-specific guidance applicable to the drug1 and the petitioner has not provided comment other than through the petition2 7,,vii7 whether the petition requests that other applicants meet standards for testing1 data1 or labeling for a drug that are more onerous or rigorous than the standards applicable to1 as applicable1 the listed drug1 reference product1 or petitioner's version of the same drug2 7,,viii7 the history of the petitioner with the ,food and ,drug ,administration1 such as whether the petitioner has a history of submitting petitions that the ,secretary has determined were submitted with the primary purpose of delay2 and 7,,ix7 other relevant considerations1 as the ,secretary may describe in guidance4 2 and 7,c7 by adding at the end the following3 7iii7 ,public availability ,the ,secretary shall publish on the internet website of the ,food and ,drug ,administration a list of any petitions that the ,secretary determines were submitted for the primary purpose of delaying the approval of an application4 7iv7 ,referral to the ,federal ,trade ,commission ,the ,secretary shall establish procedures for referring to the ,federal ,trade ,commission any petition or supplement to a petition that the ,secretary determines was submitted with the primary purpose of delaying approval of an application4 ,such procedures shall include notification to the petitioner and an opportunity for the petitioner to respond to the ,secretary prior to referral to the ,federal ,trade ,commission4 2 and 7#b7 by adding at the end the following3 7,j7 ,timeline for submitting petitions ,the ,secretary may establish a time period after the relevant information relied upon in a petition became known to the petitioner 7or reasonably should have been known to a petitioner71 as certified by the petitioner in accordance with subparagraph 7,h71 and any petition that is submitted after such time period has passed shall be summarily denied4 4 7c7 ,federal ,trade ,commission enforcement against sham petitions 7#a7 ,definitions ,in this subsection3 7,a7 ,commission ,the term ,commission means the ,federal ,trade ,commission4 7,b7 ,covered application ,the term covered application means an application filed pursuant to subsection 7b77#b7 or 7j7 of section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7 or section #cea7k7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7k774 7,c7 ,covered petition ,the term covered petition means a petition1 or a supplement to a petition1 filed under section #eje7q7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7q774 7,d7 ,person ,the term person-- 7i7 means an individual or entity2 and 7ii7 includes-- 7,i7 a successor and an assign of an entity2 and 7,,ii7 a joint venture1 subsidiary1 partnership1 division1 group1 and affiliate controlled by an entity1 and 7,,iii7 a successor and an assign of a joint venture1 subsidiary1 partnership1 division1 group1 and affiliate controlled by an entity4 7,e7 ,series of covered petitions ,the term series of covered petitions means any group of more than #a covered petition relating to the same covered application4 7,f7 ,sham ,the term sham means a covered petition that is objectively baseless and that attempts to use a governmental process1 as opposed to the outcome of that process1 to interfere with the business of a competitor1 or a series of covered petitions that attempts to use a governmental process1 as opposed to the outcome of that process1 to interfere with the business of a competitor4 7#b7 ,violation ,a person submitting or causing the submission of a covered petition or a series of covered petitions that is a sham shall be liable for engaging in an unfair method of competition under section #e7;a77#a7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7;a77#a774 7#c7 ,civil action 7,a7 ,in general ,if the ,commission has reason to believe that the submission of a covered petition or a series of covered petitions constitutes a violation of section #e7;a77#a7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7;a77#a771 the ,commission may commence a civil action to recover a civil penalty and seek other appropriate relief in a district court of the ,united ,states against any person that submitted or caused to be submitted such covered petition or such series of covered petitions1 including successors or assigns4 7,b7 ,presumption ,in a civil action under subparagraph 7,a71 a covered petition shall be presumed to be part of a series of covered petitions that is a sham under paragraph 7#b7 of this subsection if-- 7i7 the ,secretary of ,health and ,human ,services-- 7,i7 has determined that the covered petition was submitted with the primary purpose of delaying the approval of a covered application2 and 7,,ii7 has referred such determination to the ,federal ,trade ,commission in writing1 including a reasoned basis for the determination2 and 7ii7 the covered petition was part of a series of covered petitions4 7,c7 ,exception ,the presumption in subparagraph 7,b7 shall not apply if the defendant establishes1 by a preponderance of the evidence1 that the series of covered petitions that includes the covered petition referred to the ,commission by the ,secretary of ,health and ,human ,services is not a sham4 7,d7 ,civil penalty ,in an action under subparagraph 7,a71 any person that has been found liable for a violation of section #e7;a77#a7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7;a77#a77 shall be subject to a civil penalty for each violation of not more than the greater of-- 7i7 any revenue earned from the sale by such person of any drug product1 referenced in a covered application that was the subject of a covered petition or a series of covered petitions that is a sham1 during the period in which the covered petition or series of covered petitions was under review by the ,secretary of ,health and ,human ,services2 or 7ii7 #ej1jjj for each calendar day that each covered petition that is a sham or that was part of a series of covered petitions that is a sham was under review by the ,secretary of ,health and ,human ,services4 7,e7 ,antitrust laws ,nothing in this subsection shall modify1 impair1 limit1 or supersede the applicability of the antitrust laws as defined in subsection 7a7 of the first section of the ,clayton ,act 7#ae ,u4,s4,c4 #ab7;a771 and of section #e of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #de7 to the extent that it applies to unfair methods of competition4 7,f7 ,rule of construction ,the civil penalty provided in this paragraph is in addition to1 and not in lieu of1 any other remedies provided by ,federal law1 including under section #af of the ,clayton ,act 7#ae ,u4,s4,c4 #bf7 or under section #ac7;b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #ec7;b774 ,nothing in this subparagraph shall be construed to affect any authority of the ,commission under any other provision of law4 7#d7 ,applicability ,this subsection shall apply to any covered petition submitted on or after the date of enactment of this ,act4 #e4 ,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 #f4 ,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 applying4 7b7 ,reduction in beneficiary coinsurance 7#a7 ,in general ,section #ahfj;,d-#b7;b77#b77;,a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77#b77;,a771 as amended by subsection 7a71 is amended-- 7,a7 by redesignating clauses 7i7 and 7ii7 as subclauses 7,i7 and 7,,ii7 and moving such subclauses #b ems to the right2 7,b7 by striking #be percent coinsurance4--,subject to and inserting 8,coinsurance4-- 7i7 ,in general ,subject to 2 7,c7 in each of subclauses 7,i7 and 7,,ii71 as redesignated by subparagraph 7,a71 by striking #be percent and inserting the applicable percentage 7as defined in clause 7ii772 and 7,d7 by adding at the end the following new clause3 7ii7 ,applicable percentage defined ,for purposes of clause 7i71 the term applicable percentage means-- 7,i7 for a year preceding #bjbb1 #be percent2 and 7,,ii7 for #bjbb and each subsequent year1 #bj percent4 4 7#b7 ,conforming amendment ,section #ahfj;,d-#ad7;a77#b77;,d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aad7;a77#b77;,d77 is amended by striking #be percent and inserting the applicable percentage4 7c7 ,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 7d7 ,manufacturer discount program during initial and catastrophic phases of coverage 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 discount program 7a7 ,establishment ,the ,secretary shall establish a manufacturer discount program 7in this section referred to as the program74 ,under the program1 the ,secretary shall enter into agreements described in subsection 7b7 with manufacturers and provide for the performance of the duties described in subsection 7c74 ,the ,secretary shall establish a model agreement for use under the program by not later than ,january #a1 #bjba1 in consultation with manufacturers1 and allow for comment on such model agreement4 7b7 ,terms of agreement 7#a7 ,in general 7,a7 ,agreement ,an agreement under this section shall require the manufacturer to provide applicable beneficiaries access to discounted prices for applicable drugs of the manufacturer that are dispensed on or after ,january #a1 #bjbb4 7,b7 ,provision of discounted prices at the point-of-sale ,the discounted prices described in subparagraph 7,a7 shall be provided to the applicable beneficiary at the pharmacy or by the mail order service at the point-of-sale of an applicable drug4 7#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 one 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 above the annual deductible specified in section #ahfj;,d-#b7;b77#a74 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-- 7i7 with respect to an applicable drug dispensed for an applicable beneficiary who has incurred costs that are below the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b71 #ic percent of the negotiated price of the applicable drug of a manufacturer2 and 7ii7 with respect to an applicable drug dispensed for an applicable beneficiary who 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;,b71 #hf 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 ,clarification for certain claims ,with respect to the amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary1 the manufacturer of the applicable drug shall provide-- 7i7 the discounted price under clause 7i7 of subparagraph 7,a7 only on the portion of the negotiated price of the applicable drug that falls above the deductible specified in section #ahfj;,d-#b7;b77#a7 and below the annual out-of-pocket threshold specified in section #ahfj;,d-#b7;b77#d77;,b72 and 7ii7 the discounted price under clause 7ii7 of subparagraph 7,a7 only on 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 7#d7 ,clarification regarding exclusion of manufacturer discounts from ,tr,o,o,p ,section #ahfj;,d-#b7;b77#d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;b77#d77 is amended-- 7,a7 in subparagraph 7,c71 by inserting and subject to subparagraph 7,f7 after subparagraph 7,e72 and 7,b7 by adding at the end the following new subparagraph3 7,f7 ,clarification regarding exclusion of manufacturer discounts ,in applying subparagraph 7,a71 incurred costs shall not include any manufacturer discounts provided under section #ahfj;,d-#ad;,b4 4 7e7 ,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-#ad;,b7g77#b77 that was paid by a manufacturer under the manufacturer 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 7f7 ,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 methodologies 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 ,lowering ,prescription ,drug ,prices for ,america's ,seniors and ,families ,act of #bjbj4 4 7g7 ,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 8the 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 discount program under section #ahfj;,d-#ad;,b2 4 7h7 ,effective date ,the amendments made by this section shall apply to plan year #bjbb and subsequent plan years4 #g4 ,severability ,if any provision of this ,act1 an amendment made by this ,act1 or the application of such provision or amendment to any person or circumstance is held to be unconstitutional1 the remainder of this ,act1 the amendments made by this ,act1 and the application of the provisions of such ,act or amendments to any person or circumstance shall not be affected4