,i  #aag? ,,congress  #a/ ,session  ,h4 
,r4 #ebfj  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,septemb] #ad1 #bjba  
,mr4 ,pet]s 7= himself1 ,mr4 ,s*rad]1   
,miss ,rice ( ,new ,york1 ,mrs4 ,murphy 
( ,florida1 & ,mr4 ,correa7 introduc$ ! 
foll[+ bill2 :i* 0 ref]r$ to !          
,committee on ,en]gy & ,comm]ce1 & 9    
addition to ! ,committees on ,ways &    
,means1 & ! ,judici>y1 = a p]iod to be  
subsequ5tly det]m9$ by ! ,speak]1 9 ea* 
case = consid]ation ( su* provisions z  
fall )9 ! jurisdiction ( ! committee    
conc]n$  ,a ,,bill  ,to am5d titles     
,,xi1 ,,xviii1 & ,,xix ( ! ,social      
,security ,act to l[] prescription drug 
prices 9 ! ,m$ic>e & ,m$icaid programs1 
to improve transp>5cy relat$ to         
ph>maceutical prices & transactions1 to 
l[] pati5ts' out-(-pocket co/s1 & to    
ensure acc\ntability to taxpay]s1 & =   
o!r purposes4  #a4 ,%ort title2 table ( 
cont5ts  7a7 ,%ort title ,?is ,act may  
be cit$ z ! ,r$uc$ ,co/s & ,cont9u$     
,cures ,act4  7b7 ,table ( cont5ts ,!   

table ( cont5ts ( ?is ,act is z foll[s3 
,sec4 #a4 ,%ort title2 table ( cont5ts4 
,title ,i--,e/abli%m5t ( "p ,b paym5t   
rules = negotiation-eligible drugs &    
biologicals ,sec4 #aja4 ,e/abli%m5t ( "p
 ,b paym5t rules = negotiation-eligible 
drugs & biologicals4 ,title             
,,ii--,m$ic>e ,subtitle ,a--,"p ,b ,sec4
 #bja4 ,inclusion ( value ( c\pons 9    
det]m9ation ( av]age sales price = drugs
 & biologicals "u ,m$ic>e "p ,b4 ,sec4  
#bjb4 ,paym5t = biosimil> biological    
products dur+ initial p]iod4 ,sec4 #bjc4
 ,tempor>y increase 9 ,m$ic>e "p ,b     
paym5t = biosimil> biological products4 
,sec4 #bjd4 ,m$ic>e "p ,b rebate by     
manufactur]s4 ,sec4 #bje4 ,e/abli%m5t ( 
maximum add-on paym5t = drugs &         
biologicals4 ,sec4 #bjf4 ,,gao /udy &   
report on av]age sales price4 ,sec4     
#bjg4 ,au?ority to use alt]native paym5t
 = drugs & biologicals to prev5t        
pot5tial drug %ortages4 ,sec4 #bjh4     
,*ange 9 def9ition ( /r5g? = ! purposes 
( det]m9+ int]*angeability ( biological 

& biosimil> products4 ,subtitle ,b--,"p 
,d ,sec4 #bji4 ,m$ic>e "p ,d            
mod]nization r$esign4 ,sec4 #baj4       
,public disclosure ( drug disc\nts & o!r
 ph>macy b5efit manag] 7,,pbm7          
provisions4 ,sec4 #baa4 ,public         
disclosure ( direct & indirect          
remun]ation review & audit results4     
,sec4 #bab4 ,improvem5ts to provision ( 
p>ts ,a & ,b claims data to prescription
 drug plans4 ,sec4 #bac4 ,m$ic>e "p ,d  
rebate by manufactur]s4 ,sec4 #bad4     
,prohibit+ br&+ on "p ,d b5efit c>ds4   
,sec4 #bae4 ,requir+ prescription drug  
plans & ,,ma-,,pd plans to report       
pot5tial fraud1 wa/e1 & abuse to !      
,secret>y ( ,,hhs4 ,sec4 #baf4          
,e/abli%m5t ( ph>macy quality measures  
"u ,m$ic>e "p ,d4 ,sec4 #bag4 ,addition 
( new measures bas$ on access to        
biosimil> biological products to ! #e-/>
 rat+ sy/em "u ,m$ic>e ,advantage4 ,sec4
 #bah4 ,,hhs /udy & report on ! influ5ce
 ( ph>maceutical manufactur] ?ird-p>ty  
reimbursem5t hubs on heal? c>e provid]s 

:o prescribe _! drugs & biologicals4    
,sec4 #bai4 ,e/abli%+ a mon?ly cap on   
b5efici>y incurr$ co/s = insul9 products
 & supplies "u a prescription drug plan 
or ,,ma-,,pd plan4 ,sec4 #bbj4 ,mon?ly  
out-(-pocket co/ %>+ maximum = enrollees
 :o incur a significant portion ( co/s  
t[>ds annual out-(-pocket ?re%old4      
,subtitle ,c--,miscellane\s ,sec4 #bba4 
,drug manufactur] price transp>5cy4     
,sec4 #bbb4 ,/r5g!n+ & exp&+ ph>macy    
b5efit manag]s transp>5cy requirem5ts4  
,sec4 #bbc4 ,prescription drug pric+    
da%bo>ds4 ,sec4 #bbd4 ,improv+          
coord9ation betwe5 ! ,food & ,drug      
,adm9i/ration & ! ,c5t]s = ,m$ic>e      
,m$icaid ,s]vices4 ,sec4 #bbe4 ,pati5t  
consultation 9 ,m$ic>e national & local 
cov]age det]m9ations 9 ord] to mitigate 
b>ri]s to inclusion ( su* p]spectives4  
,sec4 #bbf4 ,,gao /udy on increases to  
,m$ic>e & ,m$icaid sp5d+ due to copaym5t
 c\pons & o!r pati5t assi/ance programs4
 ,sec4 #bbg4 ,med,p,a,c report on %ift+ 
cov]age ( c]ta9 ,m$ic>e "p ,b drugs to  

,m$ic>e "p ,d4 ,sec4 #bbh4 ,tak+ /eps to
 fulfill treaty obligations to ,tribal  
communities4 ,title ,,iii--,m$icaid     
,sec4 #cja4 ,m$icaid ph>macy &          
!rapeutics committee improvem5ts4 ,sec4 
#cjb4 ,improv+ report+ requirem5ts &    
develop+ /&>ds = ! use ( drug use review
 bo>ds 9 ,/ate ,m$icaid programs4 ,sec4 
#cjc4 ,,gao report on conflicts ( int]e/
 9 ,/ate ,m$icaid program drug use      
review bo>ds & ph>macy & !rapeutics     
7,p,t7 committees4 ,sec4 #cjd4 ,ensur+ !
 accuracy ( manufactur] price & drug    
product in=mation "u ! ,m$icaid drug    
rebate program4 ,sec4 #cje4 ,t-,,msis   
drug data analytics reports4 ,sec4 #cjf4
 ,risk-%>+ value-bas$ paym5t agreem5ts =
 cov]$ outpati5t drugs "u ,m$icaid4     
,sec4 #cjg4 ,modification ( maximum     
rebate am\nt "u ,m$icaid drug rebate    
program4 ,title ,,iv--,address+         
,int]m$i>ies & ,drug ,competition ,sec4 
#dja4 ,heal? plan ov]sight ( ph>macy    
b5efit manag] s]vices4 ,sec4 #djb4 ,/udy
 ( ph>maceutical supply *a9 int]m$i>ies 

& m]g] activity4 ,sec4 #djc4 ,requirem5t
 t direct-to-consum] adv]tisem5ts =     
prescription drugs & biological products
 include tru?ful & non-mislead+ pric+   
in=mation4 ,sec4 #djd4 ,*ange conditions
 ( fir/ g5]ic exclusivity to spur access
 & competition4 ,sec4 #dje4 ,end+ !     
practice prev5t+ m>ket competition kn[n 
z 8,pay-=-,delay04 ,sec4 #djf4 ,emp[]+ !
 ,,ftc to prev5t 8product hopp+04 ,sec4 
#djg4 ,promot+ competition by limit+    
pat5t ?ickets4 ,title ,v--,b5efici>y    
,co/ ,%>+ ,fairness ,sec4 #eja4 ,repeal+
 ( rule by ! ,dep>tm5t ( ,heal? & ,human
 ,s]vices4 ,sec4 #ejb4 ,def9+ co/ "u    
prescription drug plans "u "p ,d (      
,m$ic>e4  ,i ,e/abli%m5t ( "p ,b paym5t 
rules = negotiation-eligible drugs &    
biologicals  #aja4 ,e/abli%m5t ( "p ,b  
paym5t rules = negotiation-eligible     
drugs & biologicals ,section #ahdg;,a ( 
! ,social ,security ,act 7#db ,u4,s4,c4 
#aciew-#c;a7 is am5d$-- 7#a7 9 p>agraph 
7#a7--  7,a7 9 ! matt] prec$+           
subp>agraph 7,a71 by /rik+ ,subject to  

p>agraph 7#g7 & ins]t+ ,subject to      
p>agraphs 7#g7 & 7#i72  7,b7 9          
subp>agraph 7,b71 by /rik+ at ! end or2 
7,c7 9 subp>agraph 7,c71 by /rik+ !     
p]iod at ! end & ins]t+ 2 or2 &  7,d7 by
 add+ at ! end ! foll[+ new subp>agraph3
  7,d7 9 ! case ( a negotiation-eligible
 drug or biological1 ! maximum all[able 
co/ det]m9$ "u p>agraph 7#i74  2 &  7#b7
 by add+ at ! end ! foll[+ new p>agraph3
  7#i7 ,rules = negotiation-eligible    
drugs & biologicals  7,a7 ,notification 
( manufactur]s ( negotiation-eligible   
drugs & biologicals  7i7 ,9 g5]al ,n    
lat] ?an #ahj days aft] ! date ( !      
enactm5t ( ?is p>agraph1 ! ,secret>y    
%all notify ea* manufactur] ( ea*       
negotiation-eligible drug or biological 
t is subject to negotiation = paym5t "u 
?is "p4  7ii7 ,negotiation-eligible drug
 or biological ,9 ?is p>agraph1 ! t]m   
negotiation-eligible drug or biological 
means a s+le s\rce drug or biological 7z
 def9$ 9 subp>agraph 7,c77 = :i* ea* ( !
 foll[+ h expir$3  7,i7 ,! p]iod (      

regulatory data protections or          
exclusivity grant$ = su* drug or        
biological 7includ+ = new *emical       
entities1 biologics1 orphan drugs1      
p$iatric =mulations1 & cl9ical trials74 
7,,ii7 ,subject to ! succe$+ s5t5ce1 !  
p]iod ( any pat5ts issu$ = su* drug or  
biological up to #a ye> aft] ! approval 
( su* drug or biological4 ,9 ! case (   
small molecule product t is a su* a drug
 or biological1 ! p]iod ( any pat5ts    
li/$ 9 ! publication1 ,approv$ ,drug    
,products ,) ,!rapeutic ,equival5ce     
,evaluations 7ref]r$ to z ! ,orange     
,book74  7,b7 ,negotiation  7i7 ,9 g5]al
 ,! ,secret>y & ! manufactur] ( a       
negotiation-eligible drug or biological 
%all dur+ ! negotiation p]iod negotiate 
a maximum all[able co/ = su* drug or    
biological4 ,9 ! case t ! ,secret>y & ! 
manufactur] d n det]m9e a maximum       
all[able co/ = su* drug or biological1 !
 ,secret>y %all det]m9e ! maximum       
all[able co/ = su* drug or biological at
 an am\nt t is at lea/ #fe p]c5t & n m  

?an #ge p]c5t ( ! av]age sales price (  
su* drug or biological4  7ii7 ,maximum  
all[able co/ ,9 ?is subp>agraph1 ! t]m  
maximum all[able co/ means ! am\nt agre$
 to by ! ,secret>y & ! manufactur] ( a  
negotiation-eligible drug or biological 
= a unit ( su* drug or biological t is n
 less ?an #fe p]c5t & n m ?an #ge p]c5t 
( ! l[e/ av]age sales price ( su* drug  
or biological = ! prec$+ #a-ye> p]iod4  
7,c7 ,s+le s\rce drug or biological ,=  
purposes ( ?is p>agraph1 ! t]m s+le     
s\rce drug or biological means-- 7i7 a  
drug or drug product t--  7,i7 is       
approv$ "u section #eje7;c7 ( ! ,f$]al  
,food1 ,drug1 & ,cosmetic ,act & is     
m>ket$ pursuant to su* approval2 &      
7,,ii7 is n ! li/$ drug = any drug t is 
approv$ "u section #eje7;j7 & is m>ket$ 
pursuant to su* approval2 or  7ii7 a    
biological product t-- 7,i7 is lic5s$ "u
 section #cea7;a7 ( ! ,public ,heal?    
,s]vice ,act1 includ+ any product deem$ 
to be lic5s$ "u su* section pursuant to 
section #gjjb7;e77#d7 ( ! ,biologics    

,price ,competition & ,innovation ,act &
 is m>ket$ pursuant to section #cea ( ! 
,public ,heal? ,s]vice ,act2 &  7,,ii7  
is n ! ref]5ce product = any biological 
product t is lic5s$ & is m>ket$ pursuant
 to su* section ( su* ,act4  4  ,,ii    
,m$ic>e  ,a ,"p ,b  #bja4 ,inclusion (  
value ( c\pons 9 det]m9ation ( av]age   
sales price = drugs & biologicals "u    
,m$ic>e "p ,b ,section #ahdg;,a7c7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#c;a7c77 is am5d$--  7#a7 9      
p>agraph 7#c7-- 7,a7 by /rik+           
disc\nts4--,9 calculat+ & ins]t+        
disc\nts to pur*as]s & c\pons provid$ to
 privately insur$ individuals4-- 7,a7   
,disc\nts to pur*as]s ,9 calculat+  2 & 
7,b7 by add+ at ! end ! foll[+ new      
subp>agraph3  7,b7 ,c\pons provid$ to   
r$uce co/-,%>+ ,= cal5d> qu>t]s beg9n+  
on or aft] ,july #a1 #bjbd1 9 calculat+ 
! manufactur]'s av]age sales price "u   
?is subsection1 su* price %all include !
 value 7z def9$ 9 p>agraph 7#f77;,j77 ( 
any c\pons provid$ "u a drug c\pon      

program ( a manufactur] 7z ^? t]ms are  
def9$ 9 subp>agraphs 7,k7 & 7,l71       
respectively1 ( p>agraph 7#f774  2 &    
7#b7 9 p>agraph 7#f71 by add+ at ! end !
 foll[+ new subp>agraphs3  7,j7 ,value  
,! t]m value means1 ) respect to a c\pon
 7z def9$ 9 subp>agraph 7,k771 !        
diff]5ce1 if any1 betwe5--  7i7 ! am\nt 
( any r$uction or elim9ation ( co/-%>+  
or o!r out-(-pocket co/s describ$ 9 su* 
subp>agraph to a pati5t z a result ( !  
use ( su* c\pon2 &  7ii7 any *>ge to !  
pati5t = ! use ( su* c\pon4  7,k7 ,c\pon
 ,! t]m c\pon means any f9ancial support
 t is provid$ to a pati5t1 ei!r directly
 to ! pati5t or indirectly to ! pati5t  
?r\gh a physician1 prescrib]1 ph>macy1  
or o!r provid]1 "u a drug c\pon program 
( a manufactur] 7z def9$ 9 subp>agraph  
7,l77 t is us$ to r$uce or elim9ate     
co/-%>+ or o!r out-(-pocket co/s ( !    
pati5t1 includ+ co/s relat$ to a        
d$uctible1 co9surance1 or copaym5t1 )   
respect to a drug or biological1 includ+
 a biosimil> biological product1 ( !    

manufactur]4  7,l7 ,drug c\pon program  
7i7 ,9 g5]al ,subject to clause 7ii71 ! 
t]m drug c\pon program means1 ) respect 
to a manufactur]1 a program ?r\gh :i* ! 
manufactur] provides c\pons to pati5ts z
 describ$ 9 subp>agraph 7,k74  7ii7     
,exclusions ,su* t]m does n include--   
7,i7 a pati5t assi/ance program op]at$  
by a manufactur] t provides free or     
disc\nt$ drugs or biologicals1 includ+  
biosimil> biological products1 7?r\gh   
9-k9d donations7 to pati5ts ( l[ income2
 or  7,,ii7 a contribution by a         
manufactur] to a nonpr(it or ,f\ndation 
t provides free or disc\nt$ drugs or    
biologicals1 includ+ biosimil>          
biological products1 7?r\gh 9-k9d       
donations7 to pati5ts ( l[ income4  4   
#bjb4 ,paym5t = biosimil> biological    
products dur+ initial p]iod ,section    
#ahdg;,a7c77#d7 ( ! ,social ,security   
,act 7#db ,u4,s4,c4 #aciew-#c;a7c77#d77 
is am5d$--  7#a7 9 ea* ( subp>agraphs   
7,a7 & 7,b71 by r$esignat+ clauses 7i7 &
 7ii7 z subclauses 7,i7 & 7,,ii71       

respectively1 & mov+ su* subclauses #b  
ems to ! "r2  7#b7 by r$esignat+        
subp>agraphs 7,a7 & 7,b7 z clauses 7i7 &
 7ii7 & mov+ su* clauses #b ems to ! "r2
  7#c7 by /rik+ unavailable4--,9 ! case 
& ins]t+ unavailable4--  7,a7 ,9 g5]al  
,subject to subp>agraph 7,b71 9 ! case  
2 &  7#d7 by add+ at ! end ! foll[+ new 
subp>agraph3  7,b7 ,limitation on paym5t
 am\nt = biosimil> biological products  
dur+ initial p]iod ,9 ! case ( a        
biosimil> biological product furni%$ on 
or aft] ,july #a1 #bjbc1 9 lieu ( apply+
 subp>agraph 7,a7 dur+ ! initial p]iod  
describ$ 9 su* subp>agraph ) respect to 
! biosimil> biological product1 ! am\nt 
payable "u ?is section = ! biosimil>    
biological product is ! less] ( !       
foll[+3 7i7 ,! am\nt det]m9$ "u clause  
7ii7 ( su* subp>agraph = ! biosimil>    
biological product4  7ii7 ,! am\nt      
det]m9$ "u subsection 7b77#a77;,b7 = !  
ref]5ce biological product4  4  #bjc4   
,tempor>y increase 9 ,m$ic>e "p ,b      
paym5t = biosimil> biological products  

,section #ahdg;,a7b77#h7 ( ! ,social    
,security ,act 7#db ,u4,s4,c4           
#aciew-#c;a7b77#h77 is am5d$--  7#a7 by 
r$esignat+ subp>agraphs 7,a7 & 7,b7 z   
clauses 7i7 & 7ii71 respectively1 &     
ind5t+ appropriately2  7#b7 by /rik+    
product4--,! am\nt & ins]t+ ! foll[+3   
product4-- 7,a7 ,9 g5]al ,subject to    
subp>agraph 7,b71 ! am\nt  2 &  7#c7 by 
add+ at ! end ! foll[+ new subp>agraph3 
7,b7 ,tempor>y paym5t increase =        
biosimil> biological products  7i7 ,9   
g5]al ,beg9n+ ,janu>y #a1 #bjbc1 9 !    
case ( a biosimil> biological product   
describ$ 9 p>agraph 7#a77;,c7 t is      
furni%$ dur+ ! applicable #e-ye> p]iod =
 su* product1 ! am\nt specifi$ 9 ?is    
p>agraph = su* product is an am\nt equal
 to ! less] ( ! foll[+3  7,i7 ,! am\nt  
specifi$ 9 subp>agraph 7,a7 = su*       
product if clause 7ii7 ( su* subp>agraph
 0 appli$ by sub/itut+ #h p]c5t = #f    
p]c5t4  7,,ii7 ,! am\nt det]m9$ "u      
subsection 7b77#a77;,b7 = ! ref]5ce     
biological product4  7ii7 ,applicable   

#e-ye> p]iod ,= purposes ( clause 7i71 !
 applicable #e-ye> p]iod = a biosimil>  
biological product is-- 7,i7 9 ! case ( 
su* a product = :i* paym5t 0 made "u ?is
 p>agraph z ( ,decemb] #ca1 #bjab1 !    
#e-ye> p]iod beg9n+ on ,janu>y #a1      
#bjbc2 &  7,,ii7 9 ! case ( su* a       
product t is n describ$ 9 subclause     
7,i71 ! #e-ye> p]iod beg9n+ on ! fir/   
day ( ! fir/ cal5d> qu>t] 9 :i* paym5t 0
 made = su* product "u ?is p>agraph4  4 
#bjd4 ,m$ic>e "p ,b rebate by           
manufactur]s  7a7 ,9 g5]al ,section     
#ahcd ( ! ,social ,security ,act 7#db   
,u4,s4,c4 #aciem7 is am5d$ by add+ at ! 
end ! foll[+ new subsection3  7x7       
,rebate by manufactur]s = s+le s\rce    
drugs ) prices increas+ fa/] ?an        
inflation  7#a7 ,requirem5ts  7,a7      
,secret>ial provision ( in=mation ,n    
lat] ?an #f mon?s aft] ! end ( ea*      
cal5d> qu>t] beg9n+ on or aft] ,july #a1
 #bjbd1 ! ,secret>y %all1 = ea* "p ,b   
rebatable drug1 report to ea*           
manufactur] ( su* "p ,b rebatable drug !

 foll[+ = su* cal5d> qu>t]3 7i7         
,in=mation on ! total numb] ( units ( ! 
bill+ & paym5t code describ$ 9          
subp>agraph 7,a77i7 ( p>agraph 7#c7 )   
respect to su* drug & cal5d> qu>t]4     
7ii7 ,in=mation on ! am\nt 7if any7 ( ! 
excess av]age sales price increase      
describ$ 9 subp>agraph 7,a77ii7 ( su*   
p>agraph = su* drug & cal5d> qu>t]4     
7iii7 ,! rebate am\nt specifi$ "u su*   
p>agraph = su* "p ,b rebatable drug &   
cal5d> qu>t]4  7,b7 ,manufactur]        
requirem5t ,= ea* cal5d> qu>t] beg9n+ on
 or aft] ,july #a1 #bjbd1 ! manufactur] 
( a "p ,b rebatable drug %all1 = su*    
drug1 n lat] ?an #cj days aft] ! date ( 
receipt f ! ,secret>y ( ! in=mation     
describ$ 9 subp>agraph 7,a7 = su* cal5d>
 qu>t]1 provide to ! ,secret>y a rebate 
t is equal to ! am\nt specifi$ 9        
p>agraph 7#c7 = su* drug = su* cal5d>   
qu>t]4  7#b7 ,"p ,b rebatable drug def9$
  7,a7 ,9 g5]al ,9 ?is subsection1 ! t]m
 "p ,b rebatable drug means a s+le s\rce
 drug or biological 7z def9$ 9          

subp>agraph 7,d7 ( section              
#ahdg;,a7c77#f771 includ+ a biosimil>   
biological product 7z def9$ 9           
subp>agraph 7,h7 ( su* section71 paid = 
"u ?is "p1 except su* t]m %all n include
 su* a drug or biological--  7i7 if !   
av]age total all[$ *>ges = a ye> p]     
individual t uses su* a drug or         
biological1 z det]m9$ by ! ,secret>y1   
are less ?an1 subject to subp>agraph    
7,b71 #ajj2 or  7ii7 t is a vacc9e      
describ$ 9 subp>agraph 7,a7 or 7,b7 (   
section #ahfa7s77#aj74  7,b7 ,increase  
,! doll> am\nt appli$ "u subp>agraph    
7,a77i7-- 7i7 = #bjbe1 %all be ! doll>  
am\nt specifi$ "u su* subp>agraph =     
#bjbd1 increas$ by ! p]c5tage increase 9
 ! consum] price index = all urban      
consum]s 7,unit$ ,/ates city av]age7 = !
 #ab-mon? p]iod end+ ) ,june ( ! previ\s
 ye>2 &  7ii7 = a subsequ5t ye>1 %all be
 ! doll> am\nt specifi$ 9 ?is clause 7or
 clause 7i77 = ! previ\s ye>1 increas$  
by ! p]c5tage increase 9 ! consum] price
 index = all urban consum]s 7,unit$     

,/ates city av]age7 = ! #ab-mon? p]iod  
end+ ) ,june ( ! previ\s ye>4  ,any     
doll> am\nt specifi$ "u ?is subp>agraph 
t is n a multiple ( #aj %all be r\nd$ to
 ! ne>e/ multiple ( #aj4  7#c7 ,rebate  
am\nt  7,a7 ,9 g5]al ,= purposes (      
p>agraph 7#a71 ! am\nt specifi$ 9 ?is   
p>agraph = a "p ,b rebatable drug       
assign$ to a bill+ & paym5t code = a    
cal5d> qu>t] is1 subject to p>agraph    
7#d71 ! am\nt equal to ! product (--    
7i7 subject to subp>agraphs 7,b7 & 7,g71
 ! total numb] ( units ( ! bill+ &      
paym5t code = su* "p ,b rebatable drug  
furni%$ "u ?is "p dur+ ! cal5d> qu>t]2 &
  7ii7 ! am\nt 7if any7 by :i*--  7,i7 !
 paym5t am\nt "u subp>agraph 7,b7 or    
7,c7 ( section #ahdg;,a7b77#a71 z       
applicable1 = su* "p ,b rebatable drug  
dur+ ! cal5d> qu>t]2 exce$s  7,,ii7 !   
inflation-adju/$ paym5t am\nt det]m9$ "u
 subp>agraph 7,c7 = su* "p ,b rebatable 
drug dur+ ! cal5d> qu>t]4  7,b7 ,exclud$
 units ,= purposes ( subp>agraph        
7,a77i71 ! total numb] ( units ( ! bill+

 & paym5t code = ea* "p ,b rebatable    
drug furni%$ dur+ a cal5d> qu>t] %all n 
include-- 7i7 units packag$ into !      
paym5t = a proc$ure or s]vice "u section
 #ahcc7t7 or "u section #ahcc7;i7       
7in/ead ( sep>ately payable "u su*      
respective section72  7ii7 units includ$
 "u ! s+le paym5t sy/em = r5al dialysis 
s]vices "u section #ahha7;b77#ad72 or   
7iii7 units ( a "p ,b rebatable drug ( a
 manufactur] furni%$ to an individual1  
if su* manufactur]1 ) respect to !      
furni%+ ( su* units ( su* drug1 provides
 = disc\nts "u section #cdj;,b ( !      
,public ,heal? ,s]vice ,act or = rebates
 "u section #aibg4  7,c7 ,det]m9ation ( 
inflation-adju/$ paym5t am\nt ,!        
inflation-adju/$ paym5t am\nt det]m9$ "u
 ?is subp>agraph = a "p ,b rebatable    
drug = a cal5d> qu>t] is-- 7i7 ! paym5t 
am\nt = ! bill+ & paym5t code = su* drug
 9 ! paym5t am\nt b5*m>k qu>t] 7z def9$ 
9 subp>agraph 7,d772 increas$ by  7ii7 !
 p]c5tage by :i* ! rebate p]iod ,,cpi-,u
 7z def9$ 9 subp>agraph 7,f77 = ! cal5d>

 qu>t] exce$s ! b5*m>k p]iod ,,cpi-,u 7z
 def9$ 9 subp>agraph 7,e774  7,d7       
,prospective paym5t am\nt b5*m>k qu>t]  
,! t]m prospective paym5t am\nt b5*m>k  
qu>t] means ! cal5d> qu>t] beg9n+       
,janu>y #a1 #bjaf4  7,e7 ,b5*m>k p]iod  
cpi-u ,! t]m b5*m>k p]iod ,,cpi-,u means
 ! consum] price index = all urban      
consum]s 7,unit$ ,/ates city av]age7 =  
,july #bjae4  7,f7 ,rebate p]iod cpi-u  
,! t]m rebate p]iod ,,cpi-,u means1 )   
respect to a cal5d> qu>t] describ$ 9    
subp>agraph 7,c71 ! great] ( ! b5*m>k   
p]iod ,,cpi-,u & ! consum] price index =
 all urban consum]s 7,unit$ ,/ates city 
av]age7 = ! fir/ mon? ( ! cal5d> qu>t] t
 is two cal5d> qu>t]s prior to su*      
describ$ cal5d> qu>t]4  7,g7 ,c\nt+     
units  7i7 ,cut-(f p]iod to c\nt units  
,= purposes ( subp>agraph 7,a77i71      
subject to clause 7ii71 to c\nt ! total 
numb] ( bill+ units = a "p ,b rebatable 
drug = a qu>t]1 ! ,secret>y may use a   
cut-(f p]iod 9 ord] to exclude f su*    
total numb] ( bill+ units = su* qu>t]   

claims = s]vices furni%$ dur+ su* qu>t] 
t 7 n process$ at an appropriate "t     
prior to ! end ( ! cut-(f p]iod4  7ii7  
,c\nt+ units = claims process$ aft]     
cut-(f p]iod ,if ! ,secret>y uses a     
cut-(f p]iod pursuant to clause 7i71 9 !
 case ( units ( a "p ,b rebatable drug  
furni%$ dur+ a qu>t] b pursuant to      
application ( su* cut-(f p]iod exclud$ =
 purposes ( subp>agraph 7,a77i7 f !     
total numb] ( bill+ units = ! drug = su*
 qu>t]1 ! ,secret>y %all c\nt su* units 
( su* drug s furni%$ 9 ! total numb] (  
bill+ units = su* drug = a subsequ5t    
qu>t]1 z ! ,secret>y det]m9es           
appropriate4  7#d7 ,special treatm5t (  
c]ta9 drugs & exemption  7,a7           
,subsequ5tly approv$ drugs ,subject to  
subp>agraph 7,b71 9 ! case ( a "p ,b    
rebatable drug fir/ approv$ or lic5s$ by
 ! ,food & ,drug ,adm9i/ration aft]     
,july #a1 #bjae1 clause 7i7 ( p>agraph  
7#c77;,c7 %all be appli$ z if ! t]m     
paym5t am\nt b5*m>k qu>t] 7 def9$ "u    
p>agraph 7#c77;,d7 z ! ?ird full cal5d> 

qu>t] aft] ! day on :i* ! drug 0 fir/   
m>ket$ & clause 7ii7 ( p>agraph         
7#c77;,c7 %all be appli$ z if ! t]m     
b5*m>k p]iod ,,cpi-,u 7 def9$ "u        
p>agraph 7#c77;,e7 z if ! ref]5ce to    
,july #bjae "u su* p>agraph 7 a ref]5ce 
to ! fir/ mon? ( ! fir/ full cal5d>     
qu>t] aft] ! day on :i* ! drug 0 fir/   
m>ket$4  7,b7 ,timel9e = provision (    
rebates = subsequ5tly approv$ drugs ,9 !
 case ( a "p ,b rebatable drug fir/     
approv$ or lic5s$ by ! ,food & ,drug    
,adm9i/ration aft] ,july #a1 #bjae1     
p>agraph 7#a77;,b7 %all be appli$ z if !
 ref]5ce to ,july #a1 #bjbd "u su*      
p>agraph 7 a ref]5ce to ! lat] ( ! #f?  
full cal5d> qu>t] aft] ! day on :i* !   
drug 0 fir/ m>ket$ or ,july #a1 #bjbd4  
7,c7 ,exemption = %ortages ,! ,secret>y 
may r$uce or waive ! rebate am\nt "u    
p>agraph 7#a77;,b7 ) respect to a "p ,b 
rebatable drug t is describ$ z curr5tly 
9 %ortage on ! %ortage li/ 9 effect "u  
section #ejf;,e ( ! ,f$]al ,food1 ,drug1
 & ,cosmetic ,act or 9 ! case ( o!r     

exig5t circum/ances1 z det]m9$ by !     
,secret>y4  7,d7 ,select$ drugs ,9 !    
case ( a "p ,b rebatable drug t is a    
select$ drug 7z def9$ 9 section         
#aaib7;c77 = a price applicability p]iod
 7z def9$ 9 section #aaia7;b77#b77--    
7i7 = cal5d> qu>t]s dur+ su* p]iod = :i*
 a maximum fair price 7z def9$ 9 section
 #aaia7;c77#b77 = su* drug has be5      
det]m9$ & is appli$ "u "p ,e ( title    
,,xi1 ! rebate am\nt "u p>agraph        
7#a77;,b7 %all be waiv$2 &  7ii7 9 !    
case su* drug is det]m9$ 7pursuant to   
su* section #aaib7;c77 to no long] be a 
select$ drug1 = ea* applicable ye>      
beg9n+ aft] ! price applicability p]iod 
) respect to su* drug1 clause 7i7 (     
p>agraph 7#c77;,c7 %all be appli$ z if !
 t]m paym5t am\nt b5*m>k qu>t] 7 def9$  
"u p>agraph 7#c77;,d7 z ! cal5d> qu>t]  
beg9n+ ,janu>y #a ( ! la/ ye> beg9n+    
dur+ su* price applicability p]iod )    
respect to su* select$ drug & clause    
7ii7 ( p>agraph 7#c77;,c7 %all be appli$
 z if ! t]m b5*m>k p]iod ,,cpi-,u 7     

def9$ "u p>agraph 7#c77;,e7 z if !      
ref]5ce to ,july #bjae "u su* p>agraph 7
 a ref]5ce to ! ,july ( ! ye> prec$+ su*
 la/ ye>4  7#e7 ,application to         
b5efici>y co9surance ,9 ! case ( a "p ,b
 rebatable drug1 if ! paym5t am\nt = a  
qu>t] exce$s ! inflation adju/$ paym5t =
 su* qu>t]-- 7,a7 9 comput+ ! am\nt (   
any co9surance applicable "u ?is title  
to an individual ) respect to su* drug1 
! computation ( su* co9surance %all be  
bas$ on ! inflation-adju/$ paym5t am\nt 
det]m9$ "u p>agraph 7#c77;,c7 = su* "p  
,b rebatable drug2 &  7,b7 ! am\nt ( su*
 co9surance is equal to #bj p]c5t ( su* 
inflation-adju/$ paym5t am\nt s det]m9$4
  7#f7 ,rebate deposits ,am\nts paid z  
rebates "u p>agraph 7#a77;,b7 %all be   
deposit$ into ! ,f$]al ,supplem5t>y     
,m$ical ,insurance ,tru/ ,fund e/abli%$ 
"u section #ahda4  7#g7 ,civil money    
p5alty ,if a manufactur] ( a "p ,b      
rebatable drug has fail$ to comply ) !  
requirem5ts "u p>agraph 7#a77;,b7 = su* 
drug = a cal5d> qu>t]1 ! manufactur]    

%all be subject to1 9 accordance ) a    
process e/abli%$ by ! ,secret>y pursuant
 to regulations1 a civil money p5alty 9 
an am\nt equal to at lea/ #abe p]c5t ( !
 am\nt specifi$ 9 p>agraph 7#c7 = su*   
drug = su* cal5d> qu>t]4 ,! provisions (
 section #aabh;,a 7o!r ?an subsections  
7a7 7) respect to am\nts ( p5alties or  
additional assessm5ts7 & 7b77 %all apply
 to a civil money p5alty "u ?is p>agraph
 9 ! same mann] z su* provisions apply  
to a p5alty or proce$+ "u section       
#aabh;,a7a74  7#h7 ,/udy & report  7,a7 
,/udy ,! ,secret>y %all conduct a /udy (
 ! feasibility ( & op]ational issues    
involv$ ) ! foll[+3  7i7 ,includ+       
multiple s\rce drugs 7z def9$ 9 section 
#ahdg;,a7c77#f77;,c77 9 ! rebate sy/em  
"u ?is subsection4  7ii7 ,includ+ drugs 
& biologicals paid = "u ,,ma plans "u "p
 ,c 9 ! rebate sy/em "u ?is subsection4 
7iii7 ,includ+ drugs exclud$ "u p>agraph
 7#b77;,a7 & units ( ! bill+ & paym5t   
code ( ! drugs exclud$ "u p>agraph      
7#c77;,b7 9 ! rebate sy/em "u ?is       

subsection4  7,b7 ,report ,n lat] ?an #c
 ye>s aft] ! date ( ! enactm5t ( ?is    
subsection1 ! ,secret>y %all submit to  
,congress a report on ! /udy conduct$ "u
 subp>agraph 7,a74  7#i7 ,application to
 multiple s\rce drugs ,! ,secret>y may1 
bas$ on ! report submitt$ "u p>agraph   
7#h7 & pursuant to rulemak+1 apply !    
provisions ( ?is subsection to multiple 
s\rce drugs 7z def9$ 9 section          
#ahdg;,a7c77#f77;,c771 includ+1 =       
purposes ( det]m9+ ! rebate am\nt "u    
p>agraph 7#c71 by calculat+             
manufactur]-specific av]age sales prices
 = ! b5*m>k p]iod & ! rebate p]iod4  4  
7b7 ,am\nts ,payable2 ,co/-,%>+ ,section
 #ahcc ( ! ,social ,security ,act 7#db  
,u4,s4,c4 #aciel7 is am5d$--  7#a7 9    
subsection 7a7-- 7,a7 9 p>agraph 7#a7-- 
7i7 9 subp>agraph 7,s71 by /rik+ )      
respect to & ins]t+ subject to          
subp>agraph 7,,dd71 ) respect to2  7ii7 
by /rik+ & 7,,cc7 & ins]t+ 7,,cc72 &    
7iii7 by ins]t+ be=e ! semicolon at !   
end ! foll[+3 1 & 7,,dd7 ) respect to a 

"p ,b rebatable drug 7z def9$ 9 p>agraph
 7#b7 ( section #ahcd7x77 = :i* ! paym5t
 am\nt = a cal5d> qu>t] "u p>agraph     
7#c77;,a77ii77,i7 ( su* section = su*   
qu>t] exce$s ! inflation-adju/$ paym5t  
"u p>agraph 7#c77;,a77ii77,,ii7 ( su*   
section = su* qu>t]1 ! am\nts paid %all 
be ! diff]5ce betwe5 7i7 ! paym5t am\nt 
"u p>agraph 7#c77;,a77ii77,i7 ( su*     
section = su* drug1 & 7ii7 #bj p]c5t ( !
 inflation-adju/$ paym5t am\nt "u       
p>agraph 7#c77;,a77ii77,,ii7 ( su*      
section = su* drug2 &  7,b7 by add+ at !
 end ( ! flu% left matt] foll[+ p>agraph
 7#i7 ! foll[+3  ,= purposes ( apply+   
p>agraph 7#a77;,,dd71 subsections       
7i77#i7 & 7t77#h77;,f71 & section       
#ahcd7x77#e71 ! ,secret>y %all make su* 
e/imates & use su* data z ! ,secret>y   
det]m9es appropriate1 & not)/&+ any o!r 
provision ( law1 may d s by program     
in/ruction or o!rwise4  2  7#b7 9       
subsection 7i71 by add+ at ! end !      
foll[+ new p>agraph3  7#i7 ,9 ! case ( a
 "p ,b rebatable drug 7z def9$ 9        

p>agraph 7#b7 ( section #ahcd7x77 = :i* 
paym5t "u ?is subsection is n packag$   
into a paym5t = a cov]$ ,,opd s]vice 7z 
def9$ 9 subsection 7t77#a77;,b77 7or    
gr\p ( s]vices7 furni%$ on or aft] ,july
 #a1 #bjbd1 "u ! sy/em "u ?is           
subsection1 9 lieu ( calculation (      
co9surance & ! am\nt ( paym5t o!rwise   
applicable "u ?is subsection1 !         
provisions ( section #ahcd7x77#e71      
p>agraph 7#a77;,,dd7 ( subsection 7a71 &
 ! flu% left matt] foll[+ p>agraph 7#i7 
( subsection 7a71 %all1 z det]m9$       
appropriate by ! ,secret>y1 apply "u ?is
 subsection 9 ! same mann] z su*        
provisions ( section #ahcd7x77#e7 &     
subsection 7a7 apply "u su* section &   
subsection4  2 &  7#c7 9 subsection     
7t77#h71 by add+ at ! end ! foll[+ new  
subp>agraph3  7,f7 ,"p ,b rebatable     
drugs ,9 ! case ( a "p ,b rebatable drug
 7z def9$ 9 p>agraph 7#b7 ( section     
#ahcd7x77 = :i* paym5t "u ?is "p is n   
packag$ into a paym5t = a s]vice furni%$
 on or aft] ,july #a1 #bjbd1 "u ! sy/em 

"u ?is subsection1 9 lieu ( calculation 
( co9surance & ! am\nt ( paym5t o!rwise 
applicable "u ?is subsection1 !         
provisions ( section #ahcd7x77#e71      
p>agraph 7#a77;,,dd7 ( subsection 7a71 &
 ! flu% left matt] foll[+ p>agraph 7#i7 
( subsection 7a71 %all1 z det]m9$       
appropriate by ! ,secret>y1 apply "u ?is
 subsection 9 ! same mann] z su*        
provisions ( section #ahcd7x77#e7 &     
subsection 7a7 apply "u su* section &   
subsection4  4  7c7 ,con=m+ am5dm5ts    
7#a7 ,to "p ,b asp calculation ,section 
#ahdg;,a7c77#c7 ( ! ,social ,security   
,act 7#db ,u4,s4,c4 #aciew-#c;a7c77#c77 
is am5d$ by ins]t+ or section #ahcd7x7  
aft] section #aibg4  7#b7 ,exclud+ "p b 
drug inflation rebate f be/ price       
,section #aibg7;c77#a77;,c77ii77,i7 ( ! 
,social ,security ,act 7#db ,u4,s4,c4   
#acifr-#h7;c77#a77;,c77ii77,i77 is am5d$
 by ins]t+ or section #ahcd7x7 aft] ?is 
section4  7#c7 ,coord9ation ) m$icaid   
rebate in=mation disclosure ,section    
#aibg7;b77#c77;,d77i7 ( ! ,social       

,security ,act 7#db ,u4,s4,c4           
#acifr-#h7;b77#c77;,d77i77 is am5d$ by  
/rik+ or to c>ry out section #ahdg;,b & 
ins]t+ to c>ry out section #ahdg;,b or  
section #ahcd7x74  #bje4 ,e/abli%m5t (  
maximum add-on paym5t = drugs &         
biologicals  7a7 ,9 g5]al ,section      
#ahdg;,a ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #aciew-#c;a7 is am5d$-- 7#a7 
9 subsection 7b7--  7,a7 9 p>agraph     
7#a71 9 ! matt] prec$+ subp>agraph 7,a71
 by /rik+ p>agraph 7#g7 & ins]t+        
p>agraphs 7#g7 & 7#i72 &  7,b7 by add+  
at ! end ! foll[+ new p>agraph3  7#i7   
,maximum add-on paym5t am\nt  7,a7 ,9   
g5]al ,9 det]m9+ ! paym5t am\nt "u !    
provisions ( subp>agraph 7,a71 7,b71 or 
7,c7 ( p>agraph 7#a7 ( ?is subsection1  
subsection 7c77#d77;,a77ii71 or         
subsection 7d77#c77;,c7 = a drug or     
biological furni%$ on or aft] ,janu>y   
#a1 #bjbd1 if ! applicable add-on paym5t
 7z def9$ 9 subp>agraph 7,b77 = ea* drug
 or biological on a claim = a date (    
s]vice exce$s ! maximum add-on paym5t   

am\nt specifi$ "u subp>agraph 7,c7 = !  
drug or biological1 !n ! paym5t am\nt   
o!rwise det]m9$ = ! drug or biological  
"u ^? provisions1 z applicable1 %all be 
r$uc$ by ! am\nt ( su* excess4  7,b7    
,applicable add-on paym5t def9$ ,9 ?is  
p>agraph1 ! t]m applicable add-on paym5t
 means ! foll[+ am\nts1 det]m9$ )\t     
reg>d to ! application ( subp>agraph    
7,a73  7i7 ,9 ! case ( a multiple s\rce 
drug1 an am\nt equal to ! diff]5ce      
betwe5-- 7,i7 ! am\nt t w\ld o!rwise be 
appli$ "u p>agraph 7#a77;,a72 &  7,,ii7 
! am\nt t w\ld be appli$ "u su* p>agraph
 if #ajj p]c5t 7 sub/itut$ = #ajf p]c5t4
  7ii7 ,9 ! case ( a s+le s\rce drug or 
biological1 an am\nt equal to ! diff]5ce
 betwe5--  7,i7 ! am\nt t w\ld o!rwise  
be appli$ "u p>agraph 7#a77;,b72 &      
7,,ii7 ! am\nt t w\ld be appli$ "u su*  
p>agraph if #ajj p]c5t 7 sub/itut$ =    
#ajf p]c5t4  7iii7 ,9 ! case ( a        
biosimil> biological product1 ! am\nt   
o!rwise det]m9$ "u p>agraph 7#h77;,b74  
7iv7 ,9 ! case ( a drug or biological   

dur+ ! initial p]iod describ$ 9         
subsection 7c77#d77;,a71 an am\nt equal 
to ! diff]5ce betwe5--  7,i7 ! am\nt t  
w\ld o!rwise be appli$ "u subsection    
7c77#d77;,a77ii72 &  7,,ii7 ! am\nt t   
w\ld be appli$ "u su* subsection if #ajj
 p]c5t 7 sub/itut$1 z applicable1 =--   
7aa7 #ajc p]c5t 9 subclause 7,i7 ( su*  
subsection2 or  7bb7 any p]c5t 9 excess 
( #ajj p]c5t appli$ "u subclause 7,,ii7 
( su* subsection4  7v7 ,9 ! case ( a    
drug or biological to :i* subsection    
7d77#c77;,c7 applies1 an am\nt equal to 
! diff]5ce betwe5-- 7,i7 ! am\nt t w\ld 
o!rwise be appli$ "u su* subsection2 &  
7,,ii7 ! am\nt t w\ld be appli$ "u su*  
subsection if #ajj p]c5t 7 sub/itut$1 z 
applicable1 =-- 7aa7 any p]c5t 9 excess 
( #ajj p]c5t appli$ "u clause 7i7 ( su* 
subsection2 or  7bb7 #ajc p]c5t 9 clause
 7ii7 ( su* subsection4  7,c7 ,maximum  
add-on paym5t am\nt specifi$ ,= purposes
 ( subp>agraph 7,a71 ! maximum add-on   
paym5t am\nt specifi$ 9 ?is subp>agraph 
is--  7i7 = ea* ( #bjbd ?r\gh #bjca1    

#a1jjj2 &  7ii7 = a subsequ5t ye>1 !    
am\nt specifi$ 9 ?is subp>agraph = !    
prec$+ ye> increas$ by ! p]c5tage       
increase 9 ! consum] price index = all  
urban consum]s 7all items2 ,unit$ ,/ates
 city av]age7 = ! #ab-mon? p]iod end+ ) 
,june ( ! previ\s ye>4  ,any am\nt      
det]m9$ "u ?is subp>agraph t is n a     
multiple ( #aj %all be r\nd$ to ! ne>e/ 
multiple ( #aj4  2 &  7#b7 9 subsection 
7c77#d77;,a77ii71 by /rik+ 9 ! case &   
ins]t+ subject to subsection 7b77#i71 9 
! case4  7b7 ,con=m+ am5dm5ts relat+ to 
sep>ately payable drugs  7#a7 ,,opps    
,section #ahcc7t77#ad7 ( ! ,social      
,security ,act 7#db ,u4,s4,c4           
#aciel7t77#ad77 is am5d$--  7,a7 9      
subp>agraph 7,a77iii77,,ii71 by ins]t+ 1
 subject to subp>agraph 7,i7 aft] are n 
available2 &  7,b7 by add+ at ! end !   
foll[+ new subp>agraph3  7,i7           
,application ( maximum add-on paym5t =  
sep>ately payable drugs & biologicals ,9
 e/abli%+ ! am\nt ( paym5t "u           
subp>agraph 7,a7 = a specifi$ cov]$     

outpati5t drug t is furni%$ z "p ( a    
cov]$ ,,opd s]vice 7or gr\p ( s]vices7  
on or aft] ,janu>y #a1 #bjbd1 if su*    
paym5t is det]m9$ bas$ on ! av]age price
 = ! ye> e/abli%$ "u section #ahdg;,a   
pursuant to clause 7iii77,,ii7 ( su*    
subp>agraph1 ! provisions ( subsection  
7b77#i7 ( section #ahdg;,a %all apply to
 ! am\nt ( paym5t s e/abli%$ 9 ! same   
mann] z su* provisions apply to ! am\nt 
( paym5t "u section #ahdg;,a4  4  7#b7  
,,asc ,section #ahcc7;i77#b77;,d7 ( !   
,social ,security ,act 7#db ,u4,s4,c4   
#aciel7i77#b77;,d77 is am5d$--  7,a7 by 
mov+ clause 7v7 #f ems to ! left2  7,b7 
by r$esignat+ clause 7vi7 z clause      
7vii72 &  7,c7 by ins]t+ aft] clause 7v7
 ! foll[+ new clause3  7vi7 ,if !re is a
 sep>ate paym5t "u ! sy/em describ$ 9   
clause 7i7 = a drug or biological       
furni%$ on or aft] ,janu>y #a1 #bjbd1 ! 
provisions ( subsection 7t77#ad77;,i7   
%all apply to ! e/abli%m5t ( ! am\nt (  
paym5t = ! drug or biological "u su*    
sy/em 9 ! same mann] 9 :i* su*          

provisions apply to ! e/abli%m5t ( !    
am\nt ( paym5t "u subsection            
7t77#ad77;,a74  4  #bjf4 ,,gao /udy &   
report on av]age sales price  7a7 ,/udy 
7#a7 ,9 g5]al ,! ,comptroll] ,g5]al ( ! 
,unit$ ,/ates 79 ?is section ref]r$ to z
 ! ,comptroll] ,g5]al7 %all conduct a   
/udy on sp5d+ = applicable drugs "u "p  
,b ( title ,,xviii ( ! ,social ,security
 ,act4  7#b7 ,applicable drugs def9$ ,9 
?is section1 ! t]m applicable drugs     
means drugs & biologicals--  7,a7 = :i* 
reimbursem5t "u su* "p ,b is bas$ on !  
av]age sales price ( ! drug or          
biological2 &  7,b7 t acc\nt = ! l>ge/  
p]c5tage ( total sp5d+ on drugs &       
biologicals "u su* "p ,b 7z det]m9$ by !
 ,comptroll] ,g5]al1 b 9 no case less t 
#be drugs or biologicals74  7#c7        
,requirem5ts ,! /udy "u p>agraph 7#a7   
%all include an analysis ( ! foll[+3    
7,a7 ,! ext5t to :i* ea* applicable drug
 is paid =--  7i7 "u su* "p ,b = ,m$ic>e
 b5efici>ies2 or  7ii7 by private pay]s 
9 ! comm]cial m>ket4  7,b7 ,any *ange 9 

,m$ic>e sp5d+ or ,m$ic>e b5efici>y      
co/-%>+ t w\ld occur if ! av]age sales  
price ( an applicable drug 0 bas$ solely
 on paym5ts by private pay]s 9 !        
comm]cial m>ket4  7,c7 ,! ext5t to :i*  
drug manufactur]s provide rebates1      
disc\nts1 or o!r price concessions to   
private pay]s 9 ! comm]cial m>ket =     
applicable drugs1 :i* ! manufactur]     
includes 9 its av]age sales price       
calculation1 =--  7i7 =mul>y placem5t2  
7ii7 utilization managem5t              
consid]ations2 or  7iii7 o!r purposes4  
7,d7 ,b>ri]s to drug manufactur]s       
provid+ su* price concessions =         
applicable drugs4  7,e7 ,o!r areas      
det]m9$ appropriate by ! ,comptroll]    
,g5]al4  7b7 ,report ,n lat] ?an #b ye>s
 aft] ! date ( ! enactm5t ( ?is ,act1 ! 
,comptroll] ,g5]al %all submit to       
,congress a report on ! /udy conduct$ "u
 subsection 7a71 toge!r ) recomm5dations
 = su* legislation & adm9i/rative action
 z ! ,secret>y det]m9es appropriate4    
#bjg4 ,au?ority to use alt]native paym5t

 = drugs & biologicals to prev5t        
pot5tial drug %ortages  7a7 ,9 g5]al    
,section #ahdg;,a7e7 ( ! ,social        
,security ,act 7#db ,u4,s4,c4           
#aciew-#c;a7e77 is am5d$-- 7#a7 by /rik+
 ,paym5t 9 ,response to ,public ,heal?  
,em]g5cy4--,9 ! case & ins]t+           
,paym5ts4-- 7#a7 ,9 response to public  
heal? em]g5cy ,9 ! case  2 &  7#b7 by   
add+ at ! end ! foll[+ new p>agraph3    
7#b7 ,prev5t+ pot5tial drug %ortages    
7,a7 ,9 g5]al ,9 ! case ( a drug or     
biological t ! ,secret>y det]m9es is    
describ$ 9 subp>agraph 7,b7 = "o or m   
qu>t]s beg9n+ on or aft] ,janu>y #a1    
#bjbd1 ! ,secret>y may use :olesale     
acquisition co/ 7or o!r reasonable      
measure ( a drug or biological price7   
in/ead ( ! manufactur]'s av]age sales   
price = su* qu>t]s & = subsequ5t qu>t]s 
until ! end ( ! qu>t] 9 :i* su* drug or 
biological is remov$ f ! drug %ortage   
li/ "u section #ejf;,e ( ! ,f$]al ,food1
 ,drug1 & ,cosmetic ,act1 or 9 ! case ( 
a drug or biological describ$ 9         

subp>agraph 7,b77ii71 ! date on :i* !   
,secret>y det]m9es t ! total manufactur+
 capacity or ! total numb] (            
manufactur]s ( su* drug or biological is
 suffici5t to mitigate a pot5tial       
%ortage ( ! drug or biological4  7,b7   
,drug or biological describ$ ,= purposes
 ( subp>agraph 7,a71 a drug or          
biological describ$ 9 ?is subp>agraph is
 a drug or biological-- 7i7 t is li/$ on
 ! drug %ortage li/ ma9ta9$ by ! ,food &
 ,drug ,adm9i/ration pursuant to section
 #ejf;,e ( ! ,f$]al ,food1 ,drug1 &     
,cosmetic ,act1 & ) respect to :i* any  
manufactur] ( su* drug or biological    
notifies ! ,secret>y ( a p]man5t        
discont9uance or an int]ruption t is    
likely to lead to a mean+ful disruption 
9 ! manufactur]'s supply ( t drug       
pursuant to section #ejf;,c7a7 ( su*    
,act2 or  7ii7 t-- 7,i7 is describ$ 9   
section #ejf;,c7a7 ( su* ,act2  7,,ii7 0
 li/$ on ! drug %ortage li/ ma9ta9$ by !
 ,food & ,drug ,adm9i/ration pursuant to
 section #ejf;,e ( su* ,act )9 ! prec$+ 

#e ye>s2 &  7,,iii7 = :i* ! total       
manufactur+ capacity ( all manufactur]s 
) an approv$ application = su* drug or  
biological t is curr5tly m>ket$ or total
 numb] ( manufactur]s ) an approv$      
application = su* drug or biological t  
is curr5tly m>ket$ decl9es dur+ a       
#f-mon? p]iod1 z det]m9$ by ! ,secret>y4
  7,c7 ,provision ( additional in=mation
 ,= ea* qu>t] 9 :i* ! am\nt ( paym5t = a
 drug or biological describ$ 9          
subp>agraph 7,b7 pursuant to subp>agraph
 7,a7 exce$s ! am\nt ( paym5t = ! drug  
or biological o!rwise applicable "u ?is 
section1 ea* manufactur] ( su* drug or  
biological %all provide to ! ,secret>y  
in=mation relat$ to ! pot5tial cause or 
causes ( ! %ortage & ! expect$ duration 
( ! %ortage ) respect to su* drug4  4   
7b7 ,track+ %ortage drugs ?r\gh claims  
,! ,secret>y ( ,heal? & ,human ,s]vices 
7ref]r$ to 9 ?is section z ! ,secret>y7 
%all e/abli% a me*anism 7su* z a        
modifi]7 = purposes ( track+ utilization
 "u title ,,xviii ( ! ,social ,security 

,act 7#db ,u4,s4,c4 #acie et seq47 (    
drugs & biologicals li/$ on ! drug      
%ortage li/ ma9ta9$ by ! ,food & ,drug  
,adm9i/ration pursuant to section       
#ejf;,e ( ! ,f$]al ,food1 ,drug1 &      
,cosmetic ,act 7#ba ,u4,s4,c4 #cef;e74  
7c7 ,,hhs report & recomm5dations  7#a7 
,9 g5]al ,n lat] ?an ,july #a1 #bjbd1 ! 
,secret>y %all submit to ,congress a    
report on %ortages ( drugs )9 ! ,m$ic>e 
program "u title ,,xviii ( ! ,social    
,security ,act 7#db ,u4,s4,c4 #acie et  
seq474 ,! report %all include-- 7,a7 an 
analysis (--  7i7 ! effect ( drug       
%ortages on ,m$ic>e b5efici>y access1   
quality1 safety1 & out-(-pocket co/s2   
7ii7 ! effect ( drug %ortages on heal?  
provid]s1 includ+ hospitals &           
physicians1 across ! ,m$ic>e program2   
7iii7 ! curr5t role ( ! ,c5t]s = ,m$ic>e
  ,m$icaid ,s]vices 7,,cms7 9 address+  
drug %ortages1 includ+ ,,cms's work+    
relation%ip & communication ) o!r ,f$]al
 ag5cies & /akehold]s2  7iv7 ! role (   
all actors 9 ! drug supply *a9 7includ+ 

drug manufactur]s1 di/ributors1         
:olesal]s1 second>y :olesal]s1 gr\p     
pur*as+ organizations1 hospitals1 &     
physicians7 on drug %ortages )9 !       
,m$ic>e program2 &  7v7 paym5t /ructures
 & inc5tives "u p>ts ,a1 ,b1 ,c1 & ,d ( 
! ,m$ic>e program & _! effect1 if any1  
on drug %ortages2 &  7,b7 relevant f9d+s
 & recomm5dations to ,congress4  7#b7   
,public availability ,! report "u ?is   
subsection %all be made available to !  
public4  7#c7 ,consultation ,! ,secret>y
 %all consult ) ! drug %ortage task =ce 
au?oriz$ "u section #ejf;,d7a77#a77;,a7 
( ! ,f$]al ,food1 ,drug1 & ,cosmetic    
,act 7#ba ,u4,s4,c4 #cef;d7a77#a77;,a77 
9 prep>+ ! report "u ?is subsection1 z  
appropriate4  #bjh4 ,*ange 9 def9ition (
 /r5g? = ! purposes ( det]m9+           
int]*angeability ( biological &         
biosimil> products  7a7 ,section        
#cea7;i7 ( ! ,public ,heal? ,s]vice ,act
 is am5d$ by ins]t+ ! foll[+ aft]       
p>agraph 7#d73  7#e7 ,! t]m /r5g?1 9    
ref]5ce to a biological product int5d$ =

 adm9i/ration by injection1 means !     
total cont5t ( drug sub/ance 9 ! dosage 
=m )\t reg>d to ! conc5tration ( drug   
sub/ance or total volume ( ! biological 
product4  4  7b7 ,section               
#cea7k77#g77;,c77ii77,i7 ( ! ,public    
,heal? ,s]vice ,act is am5d$ by ins]t+  
8conc5tration10 aft] 8deliv]y device104 
,b ,"p ,d  #bji4 ,m$ic>e "p ,d          
mod]nization r$esign  7a7 ,b5efit       
/ructure r$esign ,section               
#ahfj;,d-#b7;b7 ( ! ,social ,security   
,act 7#db ,u4,s4,c4 #aciew- #ajb7;b77 is
 am5d$--  7#a7 9 p>agraph 7#b7-- 7,a7 9 
subp>agraph 7,a71 9 ! matt] prec$+      
clause 7i71 by ins]t+ = a ye> prec$+    
#bjbd & = co/s above ! annual d$uctible 
specifi$ 9 p>agraph 7#a7 & up to !      
annual out-(-pocket ?re%old specifi$ 9  
p>agraph 7#d77;,b7 = #bjbd & ea*        
subsequ5t ye> aft] p>agraph 7#c72  7,b7 
9 subp>agraph 7,c7-- 7i7 9 clause 7i71 9
 ! matt] prec$+ subclause 7,i71 by      
ins]t+ = a ye> prec$+ #bjbd1 aft]       
p>agraph 7#d712 &  7ii7 9 clause        

7ii77,,iii71 by /rik+ & ea* subsequ5t   
ye> & ins]t+ 1 #bjba1 #bjbb1 & #bjbc2 & 
7,c7 9 subp>agraph 7,d7--  7i7 9 clause 
7i7-- 7,i7 9 ! matt] prec$+ subclause   
7,i71 by ins]t+ = a ye> prec$+ #bjbd1   
aft] p>agraph 7#d712 &  7,,ii7 9        
subclause 7,i77bb71 by /rik+ a ye> aft] 
#bjah & ins]t+ ea* ( ye>s #bjah ?r\gh   
#bjbc2 &  7ii7 9 clause 7ii77,v71 by    
/rik+ #bjai & ea* subsequ5t ye> & ins]t+
 ea* ( ye>s ?r\gh #bjbc2  7#b7 9        
p>agraph 7#c77;,a7-- 7,a7 9 ! matt]     
prec$+ clause 7i71 by ins]t+ = a ye>    
prec$+ #bjbd1 aft] & 7#d712 &  7,b7 9   
clause 7ii71 by /rik+ = a subsequ5t ye> 
& ins]t+ = ea* ( ye>s #bjjg ?r\gh #bjbc2
 &  7#c7 9 p>agraph 7#d7--  7,a7 9      
subp>agraph 7,a7-- 7i7 9 clause 7i7--   
7,i7 by r$esignat+ subclauses 7,i7 &    
7,,ii7 z items 7aa7 & 7bb71             
respectively1 & ind5t+ appropriately2   
7,,ii7 9 ! matt] prec$+ item 7aa71 z    
r$esignat$ by subclause 7,i71 by /rik+  
is equal to ! great] (-- & ins]t+  is   
equal to-- 7,i7 = a ye> prec$+ #bjbd1 ! 

great] (--  2  7,,iii7 by /rik+ ! p]iod 
at ! end ( item 7bb71 z r$esignat$ by   
subclause 7,i71 & ins]t+ 2 &2 &  7,,iv7 
by add+ at ! end ! foll[+3  7,,ii7 = &  
ea* succe$+ ye>1 #j4  2 &  7ii7 9 clause
 7ii7--  7,i7 by /rik+ clause 7i77,i7 & 
ins]t+ clause 7i77,i77aa72 &  7,,ii7 by 
add+ at ! end ! foll[+ new s5t5ce3 ,!   
,secret>y %all cont9ue to calculate !   
doll> am\nts specifi$ 9 clause          
7i77,i77aa71 includ+ ) ! adju/m5t "u ?is
 clause1 aft] #bjbc = purposes ( section
 #ahfj;,d-#ad7;a77#a77;,d77iii742  7,b7 
9 subp>agraph 7,b7-- 7i7 9 clause 7i7-- 
7,i7 9 subclause 7,v71 by /rik+ or at ! 
end2  7,,ii7 9 subclause 7,,vi7--  7aa7 
by /rik+ = a subsequ5t ye> & ins]t+ =   
#bjba1 #bjbb1 & #bjbc2 &  7bb7 by /rik+ 
! p]iod at ! end & ins]t+ a semicolon2 &
  7,,iii7 by add+ at ! end ! foll[+ new 
subclauses3  7,,vii7 = #bjbd1 is equal  
to--  7aa7 #c1ajj = b5efici>ies det]m9$ 
to h income t is ov] #djj p]c5t ( !     
,f$]al pov]ty l9e applicable to a family
 ( ! size involv$2  7bb7 #a1hjj =       

b5efici>ies det]m9$ to h income t is    
betwe5 #cjj to #djj p]c5t ( ! ,f$]al    
pov]ty l9e applicable to a family ( !   
size involv$2 or  7cc7 #a1bjj =         
b5efici>ies det]m9$ to h income t is    
bel[ #cjj p]c5t ( ! ,f$]al pov]ty l9e   
applicable to a family ( ! size involv$2
 or  7,,viii7 = a subsequ5t ye>1 is     
equal to ! am\nt specifi$ 9 ?is         
subp>agraph = ! previ\s ye>1 increas$ by
 ! annual p]c5tage increase describ$ 9  
p>agraph 7#f7 = ! ye> involv$4  2 &     
7ii7 9 clause 7ii71 by /rik+ clause     
7i77,,ii7 & ins]t+ clause 7i72  7,c7 9  
subp>agraph 7,c77i71 by /rik+ & = am\nts
 & ins]t+ & = a ye> prec$+ #bjbd =      
am\nts2 &  7,d7 9 subp>agraph 7,e71 by  
/rik+ ,9 apply+ & ins]t+ ,= ea* ( #bjaa 
?r\gh #bjbc1 9 apply+4  7b7 ,decreas+   
re9surance paym5t am\nt ,section        
#ahfj;,d-#ae7;b7 ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciew-#aae7;b77 is 
am5d$--  7#a7 9 p>agraph 7#a7-- 7,a7 by 
/rik+ equal to #hj p]c5t & ins]t+  equal
 to-- 7,a7 = a ye> prec$+ #bjbd1 #hj    

p]c5t  2  7,b7 9 subp>agraph 7,a71 z    
add$ by p>agraph 7#a71 by /rik+ ! p]iod 
at ! end & ins]t+ 2 &2 &  7,c7 by add+  
at ! end ! foll[+ new subp>agraph3  7,b7
 = #bjbd & ea* subsequ5t ye>1 ! sum (-- 
7i7 an am\nt equal to ! applicable      
p]c5tage specifi$ 9 p>agraph 7#e77;,a7 (
 su* all[able re9surance co/s           
attributable to t portion ( gross       
prescription drug co/s z specifi$ 9     
p>agraph 7#c7 incurr$ 9 ! cov]age ye>   
aft] su* individual has incurr$ co/s t  
exce$ ! annual out-(-pocket ?re%old     
specifi$ 9 section                      
#ahfj;,d-#b7;b77#d77;,b7 ) respect to   
applicable drugs 7z def9$ 9 section     
#ahfj;,d-#ad;,b7g77#b772 &  7ii7 an     
am\nt equal to ! applicable p]c5tage    
specifi$ 9 p>agraph 7#e77;,b7 ( all[able
 re9surance co/s attributable to t      
portion ( gross prescription drug co/s z
 specifi$ 9 p>agraph 7#c7 incurr$ 9 !   
cov]age ye> aft] su* individual has     
incurr$ co/s t exce$ ! annual           
out-(-pocket ?re%old specifi$ 9 section 

#ahfj;,d-#b7;b77#d77;,b7 ) respect to   
cov]$ "p ,d drugs t are n applicable    
drugs 7z s def9$74  2 &  7#b7 by add+ at
 ! end ! foll[+ new p>agraph3  7#e7     
,applicable p]c5tage specifi$ ,=        
purposes ( p>agraph 7#a77;,b71 !        
applicable p]c5tage specifi$ 9 ?is      
p>agraph is-- 7,a7 ) respect to         
applicable drugs 7z def9$ 9 section     
#ahfj;,d-#ad;,b7g77#b77--  7i7 = #bjbd1 
#fj p]c5t2  7ii7 = #bjbe1 #dj p]c5t2 &  
7iii7 = #bjbf & ea* subsequ5t ye>1 #bj  
p]c5t2 &  7,b7 ) respect to cov]$ "p ,d 
drugs t are n applicable drugs 7z s     
def9$7--  7i7 = #bjbd1 #hj p]c5t2  7ii7 
= #bjbe1 #fj p]c5t2 &  7iii7 = #bjbf &  
ea* subsequ5t ye>1 #dj p]c5t4  4  7c7   
,manufactur] disc\nt program dur+       
initial & cata/rophic phases ( cov]age  
7#a7 ,9 g5]al ,"p ,d ( title ,,xviii ( !
 ,social ,security ,act is am5d$ by     
ins]t+ aft] section #ahfj;,d-#ad;,a 7#db
 ,u4,s4,c4 #adiew-#aad7 ! foll[+ new    
section3  #ahfj;,d-#ad;,b4 ,manufactur] 
disc\nt program  7a7 ,e/abli%m5t ,!     

,secret>y %all e/abli% a manufactur]    
disc\nt program 79 ?is section ref]r$ to
 z ! program74 ,"u ! program1 !         
,secret>y %all ent] into agreem5ts      
describ$ 9 subsection 7b7 ) manufactur]s
 & provide = ! p]=mance ( ! duties      
describ$ 9 subsection 7c74 ,! ,secret>y 
%all e/abli% a model agreem5t = use "u !
 program by n lat] ?an ,janu>y #a1      
#bjbc1 9 consultation ) manufactur]s1 & 
all[ = comm5t on su* model agreem5t4    
7b7 ,t]ms ( agreem5t  7#a7 ,9 g5]al     
7,a7 ,agreem5t ,an agreem5t "u ?is      
section %all require ! manufactur] to   
provide applicable b5efici>ies access to
 disc\nt$ prices = applicable drugs ( ! 
manufactur] t are disp5s$ on or aft]    
,janu>y #a1 #bjbd4  7,b7 ,provision (   
disc\nt$ prices at ! po9t-(-sale ,!     
disc\nt$ prices describ$ 9 subp>agraph  
7,a7 %all be provid$ to ! applicable    
b5efici>y at ! ph>macy or by ! mail ord]
 s]vice at ! po9t-(-sale ( an applicable
 drug4  7#b7 ,provision ( appropriate   
data ,ea* manufactur] ) an agreem5t 9   

effect "u ?is section %all collect & h  
available appropriate data1 z det]m9$ by
 ! ,secret>y1 to ensure t x c demon/rate
 to ! ,secret>y compliance ) !          
requirem5ts "u ! program4  7#c7         
,compliance ) requirem5ts = adm9i/ration
 ( program ,ea* manufactur] ) an        
agreem5t 9 effect "u ?is section %all   
comply ) requirem5ts impos$ by !        
,secret>y or a ?ird p>ty ) a contract "u
 subsection 7d77#c71 z applicable1 =    
purposes ( adm9i/]+ ! program1 includ+  
any det]m9ation "u subp>agraph 7,a7 (   
subsection 7c77#a7 or proc$ures e/abli%$
 "u su* subsection 7c77#a74  7#d7 ,l5g? 
( agreem5t  7,a7 ,9 g5]al ,an agreem5t  
"u ?is section %all be effective = an   
initial p]iod ( n less ?an #ab mon?s &  
%all be automatically r5ew$ = a p]iod ( 
n less ?an #a ye> unless t]m9at$ "u     
subp>agraph 7,b74  7,b7 ,t]m9ation  7i7 
,by ! ,secret>y ,! ,secret>y may provide
 = t]m9ation ( an agreem5t "u ?is       
section = a kn[+ & willful violation ( !
 requirem5ts ( ! agreem5t or o!r good   

cause %[n4 ,su* t]m9ation %all n be     
effective e>li] ?an #cj days aft] ! date
 ( notice to ! manufactur] ( su*        
t]m9ation4 ,! ,secret>y %all provide1 ^u
 reque/1 a manufactur] ) a he>+ conc]n+ 
su* a t]m9ation1 & su* he>+ %all take   
place prior to ! effective date ( !     
t]m9ation ) suffici5t "t = su* effective
 date to be repeal$ if ! ,secret>y      
det]m9es appropriate4  7ii7 ,by a       
manufactur] ,a manufactur] may t]m9ate  
an agreem5t "u ?is section = any reason4
 ,any su* t]m9ation %all be effective1 )
 respect to a plan ye>--  7,i7 if !     
t]m9ation occurs be=e ,janu>y #cj ( a   
plan ye>1 z ( ! day aft] ! end ( ! plan 
ye>2 &  7,,ii7 if ! t]m9ation occurs on 
or aft] ,janu>y #cj ( a plan ye>1 z ( ! 
day aft] ! end ( ! succe$+ plan ye>4    
7iii7 ,effectiv5ess ( t]m9ation ,any    
t]m9ation "u ?is subp>agraph %all n     
affect disc\nts = applicable drugs ( !  
manufactur] t are due "u ! agreem5t be=e
 ! effective date ( its t]m9ation4  7iv7
 ,notice to ?ird p>ty ,! ,secret>y %all 

provide notice ( su* t]m9ation to a ?ird
 p>ty ) a contract "u subsection 7d77#c7
 )9 n less ?an #cj days be=e ! effective
 date ( su* t]m9ation4  7#e7 ,effective 
date ( agreem5t ,an agreem5t "u ?is     
section %all take effect on a date      
det]m9$ appropriate by ! ,secret>y1 :i* 
may be at ! />t ( a cal5d> qu>t]4  7c7  
,duties describ$ ,! duties describ$ 9   
?is subsection are ! foll[+3  7#a7      
,adm9i/ration ( program ,adm9i/]+ !     
program1 includ+-- 7,a7 ! det]m9ation ( 
! am\nt ( ! disc\nt$ price ( an         
applicable drug ( a manufactur]2  7,b7 !
 e/abli%m5t ( proc$ures "u :i* disc\nt$ 
prices are provid$ to applicable        
b5efici>ies at ph>macies or by mail ord]
 s]vice at ! po9t-(-sale ( an applicable
 drug2  7,c7 ! e/abli%m5t ( proc$ures to
 ensure t1 n lat] ?an ! applicable numb]
 ( cal5d> days aft] ! disp5s+ ( an      
applicable drug by a ph>macy or mail    
ord] s]vice1 ! ph>macy or mail ord]     
s]vice is reimburs$ = an am\nt equal to 
! diff]5ce betwe5--  7i7 ! negotiat$    

price ( ! applicable drug2 &  7ii7 !    
disc\nt$ price ( ! applicable drug2     
7,d7 ! e/abli%m5t ( proc$ures to ensure 
t ! disc\nt$ price = an applicable drug 
"u ?is section is appli$ be=e any       
cov]age or f9ancial assi/ance "u o!r    
heal? b5efit plans or programs t provide
 cov]age or f9ancial assi/ance = !      
pur*ase or provision ( prescription drug
 cov]age on behalf ( applicable         
b5efici>ies z ! ,secret>y may specify2 &
  7,e7 provid+ a reasonable dispute     
resolution me*anism to resolve          
disagreem5ts betwe5 manufactur]s1       
applicable b5efici>ies1 & ! ?ird p>ty ) 
a contract "u subsection 7d77#c74  7#b7 
,monitor+ compliance  7,a7 ,9 g5]al ,!  
,secret>y %all monitor compliance by a  
manufactur] ) ! t]ms ( an agreem5t "u   
?is section4  7,b7 ,notification ,if a  
?ird p>ty ) a contract "u subsection    
7d77#c7 det]m9es t ! manufactur] is n 9 
compliance ) su* agreem5t1 ! ?ird p>ty  
%all notify ! ,secret>y ( su*           
noncompliance = appropriate en=cem5t "u 

subsection 7e74  7#c7 ,collection ( data
 f prescription drug plans & ma-pd plans
 ,! ,secret>y may collect appropriate   
data f prescription drug plans &        
,,ma-,,pd plans 9 a timeframe t all[s = 
disc\nt$ prices to be provid$ =         
applicable drugs "u ?is section4  7d7   
,adm9i/ration  7#a7 ,9 g5]al ,subject to
 p>agraph 7#b71 ! ,secret>y %all provide
 = ! implem5tation ( ?is section1       
includ+ ! p]=mance ( ! duties describ$ 9
 subsection 7c74  7#b7 ,limitation ,9   
provid+ = ! implem5tation ( ?is section1
 ! ,secret>y %all n receive or di/ribute
 any funds ( a manufactur] "u ! program4
  7#c7 ,contract ) ?ird p>ties ,!       
,secret>y %all ent] into a contract ) #a
 or m ?ird p>ties to adm9i/] !          
requirem5ts e/abli%$ by ! ,secret>y 9   
ord] to c>ry out ?is section4 ,at a     
m9imum1 ! contract ) a ?ird p>ty "u !   
prec$+ s5t5ce %all require t ! ?ird     
p>ty--  7,a7 receive & transmit         
in=mation betwe5 ! ,secret>y1           
manufactur]s1 & o!r individuals or      

entities ! ,secret>y det]m9es           
appropriate2  7,b7 receive1 di/ribute1  
or facilitate ! di/ribution ( funds (   
manufactur]s to appropriate individuals 
or entities 9 ord] to meet ! obligations
 ( manufactur]s "u agreem5ts "u ?is     
section2  7,c7 provide adequate & timely
 in=mation to manufactur]s1 consi/5t ) !
 agreem5t ) ! manufactur] "u ?is        
section1 z necess>y = ! manufactur] to  
fulfill its obligations "u ?is section2 
&  7,d7 p]mit manufactur]s to conduct   
p]iodic audits1 directly or ?r\gh       
contracts1 ( ! data & in=mation us$ by !
 ?ird p>ty to det]m9e disc\nts =        
applicable drugs ( ! manufactur] "u !   
program4  7#d7 ,p]=mance requirem5ts ,! 
,secret>y %all e/abli% p]=mance         
requirem5ts = a ?ird p>ty ) a contract  
"u p>agraph 7#c7 & safegu>ds to protect 
! indep5d5ce & integrity ( ! activities 
c>ri$ out by ! ?ird p>ty "u ! program "u
 ?is section4  7#e7 ,adm9i/ration ,*apt]
 #ce ( title #dd1 ,unit$ ,/ates ,code1  
%all n apply to ! program "u ?is        

section4  7#f7 ,fund+ ,= purposes (     
c>ry+ out ?is section1 ! ,secret>y %all 
provide = ! transf]1 f ! ,f$]al         
,supplem5t>y ,m$ical ,insurance ,tru/   
,fund "u section #ahda to ! ,c5t]s =    
,m$ic>e  ,m$icaid ,s]vices ,program     
,managem5t ,acc\nt1 ( #d1jjj1jjj = ea* (
 fiscal ye>s #bjba ?r\gh #bjbd1 to rema9
 available until exp5d$4  7e7 ,en=cem5t 
7#a7 ,audits ,ea* manufactur] ) an      
agreem5t 9 effect "u ?is section %all be
 subject to p]iodic audit by !          
,secret>y4  7#b7 ,civil money p5alty    
7,a7 ,9 g5]al ,! ,secret>y %all impose a
 civil money p5alty on a manufactur] t  
fails to provide applicable b5efici>ies 
disc\nts = applicable drugs ( !         
manufactur] 9 accordance ) su* agreem5t 
= ea* su* failure 9 an am\nt ! ,secret>y
 det]m9es is comm5surate ) ! sum (-- 7i7
 ! am\nt t ! manufactur] w\ld h paid )  
respect to su* disc\nts "u ! agreem5t1  
:i* w !n be us$ to pay ! disc\nts :i* ! 
manufactur] _h fail$ to provide2 &  7ii7
 #be p]c5t ( su* am\nt4  7,b7           

,application ,! provisions ( section    
#aabh;,a 7o!r ?an subsections 7a7 & 7b77
 %all apply to a civil money p5alty "u  
?is p>agraph 9 ! same mann] z su*       
provisions apply to a p5alty or proce$+ 
"u section #aabh;,a7a74  7f7            
,cl>ification reg>d+ availability ( o!r 
cov]$ "p d drugs ,no?+ 9 ?is section    
%all prev5t an applicable b5efici>y f   
pur*as+ a cov]$ "p ,d drug t is n an    
applicable drug 7includ+ a g5]ic drug or
 a drug t is n on ! =mul>y ( !          
prescription drug plan or ,,ma-,,pd plan
 t ! applicable b5efici>y is enroll$ 974
  7g7 ,def9itions ,9 ?is section3  7#a7 
,applicable b5efici>y ,! t]m applicable 
b5efici>y means an individual :o1 on !  
date ( disp5s+ a cov]$ "p ,d drug-- 7,a7
 is enroll$ 9 a prescription drug plan  
or an ,,ma-,,pd plan2  7,b7 is n enroll$
 9 a qualifi$ retiree prescription drug 
plan2 &  7,c7 has incurr$ co/s = cov]$  
"p ,d drugs 9 ! ye> t are above ! annual
 d$uctible specifi$ 9 section           
#ahfj;,d-#b7;b77#a7 = su* ye>4  7#b7    

,applicable drug ,! t]m applicable drug 
means1 ) respect to an applicable       
b5efici>y1 a cov]$ "p ,d drug-- 7,a7    
approv$ "u a new drug application "u    
section #eje7;c7 ( ! ,f$]al ,food1      
,drug1 & ,cosmetic ,act or1 9 ! case ( a
 biologic product1 lic5s$ "u section    
#cea ( ! ,public ,heal? ,s]vice ,act    
7includ+ a product lic5s$ "u subsection 
7k7 ( su* section #cea72 &  7,b7  7i7 if
 ! ,,pdp sponsor ( ! prescription drug  
plan or ! ,,ma organization (f]+ !      
,,ma-,,pd plan uses a =mul>y1 :i* is on 
! =mul>y ( ! prescription drug plan or  
,,ma-,,pd plan t ! applicable b5efici>y 
is enroll$ 92  7ii7 if ! ,,pdp sponsor (
 ! prescription drug plan or ! ,,ma     
organization (f]+ ! ,,ma-,,pd plan does 
n use a =mul>y1 = :i* b5efits are       
available "u ! prescription drug plan or
 ,,ma-,,pd plan t ! applicable b5efici>y
 is enroll$ 92 or  7iii7 is provid$     
?r\gh an exception or appeal4  7#c7     
,applicable numb] ( cal5d> days ,! t]m  
applicable numb] ( cal5d> days means--  

7,a7 ) respect to claims = reimbursem5t 
submitt$ electronically1 #ad days2 &    
7,b7 ) respect to claims = reimbursem5t 
submitt$ o!rwise1 #cj days4  7#d7       
,disc\nt$ price  7,a7 ,9 g5]al ,except z
 provid$ 9 subp>agraph 7,b71 ! t]m      
disc\nt$ price means #ij p]c5t ( !      
negotiat$ price ( ! applicable drug ( a 
manufactur]4  7,b7 ,phase-9 = c]ta9     
drugs disp5s$ = subsidy eligible        
individuals  7i7 ,9 g5]al ,9 ! case ( an
 applicable drug ( a specifi$           
manufactur] 7z def9$ 9 clause 7ii77 t is
 disp5s$ = an applicable b5efici>y :o is
 a subsidy eligible individual 7z def9$ 
9 section #ahfj;,d-#ad7;a77#c71 ! t]m   
disc\nt$ price means ! specifi$ ,,lis   
p]c5t 7z def9$ 9 clause 7iii77 ( !      
negotiat$ price ( ! applicable drug ( ! 
manufactur]4  7ii7 ,specifi$ manufactur]
 ,9 ?is subp>agraph1 ! t]m specifi$     
manufactur] means a manufactur] ( an    
applicable drug = :i*1 9 ! cal5d> ye> #b
 ye>s prior to ! curr5t plan ye> 7ref]r$
 to 9 ?is clause z ! applicable p]iod71 

! total reimbursem5t "u ?is title dur+ !
 applicable p]iod repres5t$ less ?an #a 
p]c5t ( ! total reimbursem5t "u ?is     
title = all prescription drugs dur+ su* 
p]iod4  7iii7 ,specifi$ ,,lis p]c5t ,9  
?is subp>agraph1 ! t]m specifi$ ,,lis   
p]c5t means--  7,i7 = #bjbd1 #ih p]c5t2 
7,,ii7 = #bjbe1 #ig p]c5t2  7,,iii7 =   
#bjbf1 #if p]c5t2  7,,iv7 = #bjbg1 #ie  
p]c5t2  7,v7 = #bjbh1 #id p]c5t2  7,,vi7
 = #bjbi1 #ic p]c5t2  7,,vii7 = #bjcj1  
#ib p]c5t2  7,,viii7 = #bjca1 #ia p]c5t2
 &  7,,ix7 = #bjcb & ea* subsequ5t ye>1 
#ij p]c5t4  7,c7 ,cl>ification ,no?+ 9  
?is section %all be con/ru$ z affect+ ! 
responsibility ( an applicable b5efici>y
 = paym5t ( a disp5s+ fee = an          
applicable drug4  7#e7 ,manufactur] ,!  
t]m manufactur] means any entity :i* is 
engag$ 9 ! production1 prep>ation1      
propagation1 comp\nd+1 conv]sion1 or    
process+ ( prescription drug products1  
ei!r directly or indirectly by          
extraction f sub/ances ( natural orig91 
or indep5d5tly by means ( *emical       

syn!sis1 or by a comb9ation ( extraction
 & *emical syn!sis4 ,su* t]m does n     
include a :olesale di/ributor ( drugs or
 a retail ph>macy lic5s$ "u ,/ate law4  
7#f7 ,negotiat$ price ,! t]m negotiat$  
price has ! mean+ giv5 su* t]m 9 section
 #ahfj;,d-#b7;d77#a77;,b71 except t su* 
negotiat$ price %all n include any      
disp5s+ fee = ! applicable drug4  7#g7  
,qualifi$ retiree prescription drug plan
 ,! t]m qualifi$ retiree prescription   
drug plan has ! mean+ giv5 su* t]m 9    
section #ahfj;,d-#bb7;a77#b74  4  7#b7  
,sunset ( ,m$ic>e cov]age gap disc\nt   
program ,section #ahfj;,d-#ad;,a ( !    
,social ,security ,act 7#db ,u4,s4,c4   
#acie-aad;a7 is am5d$--  7,a7 9         
subsection 7a71 9 ! fir/ s5t5ce1 by     
/rik+ ,! ,secret>y & ins]t+ ,subject to 
subsection 7h71 ! ,secret>y2 &  7,b7 by 
add+ at ! end ! foll[+ new subsection3  
7h7 ,sunset ( program  7#a7 ,9 g5]al ,! 
program %all n apply to applicable drugs
 disp5s$ on or aft] ,janu>y #a1 #bjbd1  
&1 subject to p>agraph 7#b71 agreem5ts  

"u ?is section %all be t]m9at$ z ( su*  
date4  7#b7 ,cont9u$ application =      
applicable drugs disp5s$ prior to sunset
 ,! provisions ( ?is section 7includ+   
all responsibilities & duties7 %all     
cont9ue to apply aft] ,janu>y #a1 #bjbd1
 ) respect to applicable drugs disp5s$  
prior to su* date4  4  7#c7 ,inclusion (
 actu>ial value ( manufactur] disc\nts 9
 bids ,section #ahfj;,d-#aa ( ! ,social 
,security ,act 7#db ,u4,s4,c4           
#aciew-#aaa7 is am5d$-- 7,a7 9          
subsection 7b77#b77;,c77iii7--  7i7 by  
/rik+ assumptions reg>d+ ! re9surance & 
ins]t+ an actu>ial valuation (--  7,i7 !
 re9surance  2 &  7ii7 by add+ at ! end 
! foll[+3  7,,ii7 = #bjbd & ea*         
subsequ5t ye>1 ! manufactur] disc\nts   
provid$ "u section #ahfj;,d-#ad;,b      
subtract$ f ! actu>ial value to produce 
su* bid2 &  2 &  7,b7 9 subsection      
7c77#a77;,c7--  7i7 by /rik+ an actu>ial
 valuation ( ! re9surance & ins]t+ an   
actu>ial valuation (--  7i7 ! re9surance
  2  7ii7 9 clause 7i71 z add$ by clause

 7i7 ( ?is subp>agraph1 by add+ & at !  
end2 &  7iii7 by add+ at ! end ! foll[+3
  7ii7 = #bjbd & ea* subsequ5t ye>1 !   
manufactur] disc\nts provid$ "u section 
#ahfj;,d-#ad;,b2  4  7#d7 ,cl>ification 
reg>d+ exclusion ( manufactur] disc\nts 
f troop ,section #ahfj;,d-#b7;b77#d7 ( !
 ,social ,security ,act 7#db ,u4,s4,c4  
#aciew-#ajb7;b77#d77 is am5d$-- 7,a7 9  
subp>agraph 7,c71 by ins]t+ & subject to
 subp>agraph 7,f7 aft] subp>agraph 7,e72
 &  7,b7 by add+ at ! end ! foll[+ new  
subp>agraph3  7,f7 ,cl>ification reg>d+ 
exclusion ( manufactur] disc\nts ,9     
apply+ subp>agraph 7,a71 incurr$ co/s   
%all n include any manufactur] disc\nts 
provid$ "u section #ahfj;,d-#ad;,b4  4  
7d7 ,det]m9ation ( all[able re9surance  
co/s ,section #ahfj;,d-#ae7;b7 ( !      
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aae7;b77 is am5d$-- 7#a7 9      
p>agraph 7#b7--  7,a7 by /rik+ co/s4--,=
 purposes & ins]t+3 co/s4--  7,a7 ,9    
g5]al ,subject to subp>agraph 7,b71 =   
purposes  2 &  7,b7 by add+ at ! end !  

foll[+ new subp>agraph3  7,b7 ,inclusion
 ( manufactur] disc\nts on applicable   
drugs ,= purposes ( apply+ subp>agraph  
7,a71 ! t]m all[able re9surance co/s    
%all include ! portion ( ! negotiat$    
price 7z def9$ 9 section                
#ahfj;,d-#ad;,b7g77#f77 ( an applicable 
drug 7z def9$ 9 section                 
#ahfj;,d-#ad;,b7g77#b77 t 0 paid by a   
manufactur] "u ! manufactur] disc\nt    
program "u section #ahfj;,d-#ad;,b4  2 &
  7#b7 9 p>agraph 7#c7--  7,a7 9 ! fir/ 
s5t5ce1 by /rik+ ,= purposes & ins]t+   
,subject to p>agraph 7#b77;,b71 =       
purposes2 &  7,b7 9 ! second s5t5ce1 by 
ins]t+ or1 9 ! case ( an applicable     
drug1 by a manufactur] aft] by !        
individual or "u ! plan4  7e7 ,updat+   
risk adju/m5t me?odologies ,to acc\nt = 
"p ,d mod]nization r$esign ,section     
#ahfj;,d-#ae7;c7 ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciew-#aae7;c77 is 
am5d$ by add+ at ! end ! foll[+ new     
p>agraph3  7#c7 ,updat+ risk adju/m5t   
me?odologies to acc\nt = "p ,d          

mod]nization r$esign ,! ,secret>y %all  
update ! risk adju/m5t me?odologies us$ 
to adju/ bid am\nts pursuant to ?is     
subsection z appropriate to take into   
acc\nt *anges 9 b5efits "u ?is "p       
pursuant to ! am5dm5ts made by section  
#b ( ! ,s5iors ,prescription ,drug      
,relief ,act4  4  7f7 ,conditions =     
cov]age ( drugs "u ?is "p ,section      
#ahfj;,d-#dc ( ! ,social ,security ,act 
7#db ,u4,s4,c4 #aciew-#aec7 is am5d$--  
7#a7 9 subsection 7a7--  7,a7 9 p>agraph
 7#b71 by /rik+ & at ! end2  7,b7 9     
p>agraph 7#c71 by /rik+ ! p]iod at ! end
 & ins]t+ a semicolon2 &  7,c7 by add+  
at ! end ! foll[+ new p>agraphs3  7#d7  
p>ticipate 9 ! manufactur] disc\nt      
program "u section #ahfj;,d-#ad;,b2     
7#e7 h ent]$ into & h 9 effect an       
agreem5t describ$ 9 subsection 7b7 ( su*
 section #ahfj;,d-#ad;,b ) ! ,secret>y2 
&  7#f7 h ent]$ into & h 9 effect1 "u   
t]ms & conditions specifi$ by !         
,secret>y1 a contract ) a ?ird p>ty t ! 
,secret>y has ent]$ into a contract ) "u

 subsection 7d77#c7 ( su* section       
#ahfj;,d-#ad;,b4  2  7#b7 by /rik+      
subsection 7b7 & ins]t+ ! foll[+3  7b7  
,effective date ,p>agraphs 7#a7 ?r\gh   
7#c7 ( subsection 7a7 %all apply to     
cov]$ "p ,d drugs disp5s$ "u ?is "p on  
or aft] ,janu>y #a1 #bjaa1 & be=e       
,janu>y #a1 #bjbd1 & p>agraphs 7#d7     
?r\gh 7#f7 ( su* subsection %all apply  
to cov]$ "p ,d drugs disp5s$ on or aft] 
,janu>y #a1 #bjbd4  2 &  7#c7 9         
subsection 7c71 by /rik+ p>agraph 7#b7 &
 ins]t+ ! foll[+3  7#b7 ! ,secret>y     
det]m9es t 9 ! p]iod beg9n+ on ,janu>y  
#a1 #bjaa1 & end+ on ,decemb] #ca1 #bjaa
 7) respect to p>agraphs 7#a7 ?r\gh 7#c7
 ( subsection 7a771 or ! p]iod beg9n+ on
 ,janu>y #a1 #bjbd1 & end+ ,decemb] #ca1
 #bjbd 7) respect to p>agraphs 7#d7     
?r\gh 7#f7 ( su* subsection71 !re 7     
ext5uat+ circum/ances4  4  7g7 ,con=m+  
am5dm5ts  7#a7 ,section #ahfj;,d-#b ( ! 
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#ajb7 is am5d$-- 7,a7 9          
subsection 7a77#b77;,a77i77,i71 by /rik+

 1 or an increase 9 ! initial & ins]t+  
or = a ye> prec$+ #bjbd an increase 9 ! 
initial2  7,b7 9 subsection             
7c77#a77;,c7-- 7i7 9 ! subp>agraph      
head+1 by /rik+ at initial cov]age      
limit2 &  7ii7 by ins]t+ = a ye> prec$+ 
#bjbd or ! annual out-(-pocket ?re%old  
specifi$ 9 subsection 7b77#d77;,b7 = !  
ye> = #bjbd & ea* subsequ5t ye> aft]    
subsection 7b77#c7 = ! ye> ea* place x  
appe>s2 &  7,c7 9 subsection            
7d77#a77;,a71 by /rik+ or an initial &  
ins]t+ or = a ye> prec$+ #bjbd an       
initial4  7#b7 ,section                 
#ahfj;,d-#d7;a77#d77;,b77i7 ( ! ,social 
,security ,act 7#db ,u4,s4,c4           
#aciew-#ajd7;a77#d77;,b77i77 is am5d$ by
 /rik+ ! initial & ins]t+ = a ye> prec$+
 #bjbd1 ! initial4  7#c7 ,section       
#ahfj;,d-#ad7;a7 ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciew-#aad7;a77 is 
am5d$--  7,a7 9 p>agraph 7#a7-- 7i7 9   
subp>agraph 7,c71 by /rik+ ,!           
cont9uation & ins]t+ ,= a ye> prec$+    
#bjbd1 ! cont9uation2  7ii7 9           

subp>agraph 7,d77iii71 by /rik+         
#ahfj;,d-#b7;b77#d77;,a77i77,i7 & ins]t+
 #ahfj;,d-#b7;b77#d77;,a77i77,i77aa72 & 
7iii7 9 subp>agraph 7,e71 by /rik+ ,!   
elim9ation & ins]t+ ,= a ye> prec$+     
#bjbd1 ! elim9ation2 &  7,b7 9 p>agraph 
7#b7-- 7i7 9 subp>agraph 7,c71 by /rik+ 
,! cont9uation & ins]t+ ,= a ye> prec$+ 
#bjbd1 ! cont9uation2 &  7ii7 9         
subp>agraph 7,e7-- 7,i7 by ins]t+ = a   
ye> prec$+ #bjbd1 aft] subsection 7c72 &
  7,,ii7 by /rik+ #ahfj;,d-             
#b7;b77#d77;,a77i77,i7 & ins]t+         
#ahfj;,d-#b7;b77#d77;,a77i77,i77aa74    
7#d7 ,section #ahfj;,d-#ba7;d77#g7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aca7;d77#g77 is am5d$ by /rik+  
section #ahfj;,d-#b7;b77,b77#d77;,b77i7 
& ins]t+ section                        
#ahfj;,d-#b7;b77,b77#d77;,c77i74  7#e7  
,section #ahfj;,d-#bb7;a77#b77;,a7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#acb7;a77#b77;,a77 is am5d$--    
7,a7 by /rik+ ! value ( any disc\nt &   
ins]t+ ! foll[+3  ! value (-- 7i7 = ye>s

 prior to #bjbd1 any disc\nt  2  7,b7 9 
clause 7i71 z ins]t$ by subp>agraph 7,a7
 ( ?is p>agraph1 by /rik+ ! p]iod at !  
end & ins]t+ 2 &2 &  7,c7 by add+ at !  
end ! foll[+ new clause3  7ii7 = #bjbd &
 ea* subsequ5t ye>1 any disc\nt provid$ 
pursuant to section #ahfj;,d-#ad;,b4  4 
7#f7 ,section #ahfj;,d-#da7;a77#f7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aea7;a77#f77 is am5d$--  7,a7 by
 ins]t+ = a ye> be=e #bjbd aft]         
#ahfj;,d-#b7;b77#c72 &  7,b7 by ins]t+ =
 su* ye> be=e ! p]iod4  7h7 ,effective  
date ,! am5dm5ts made by ?is section    
%all apply to plan ye> #bjbd & subsequ5t
 plan ye>s4  #baj4 ,public disclosure ( 
drug disc\nts & o!r ph>macy b5efit      
manag] 7,,pbm7 provisions  7a7 ,public  
disclosure ( drug disc\nts  7#a7 ,9     
g5]al ,section #aaej;,a ( ! ,social     
,security ,act 7#db ,u4,s4,c4           
#acbj;b-#bc7 is am5d$--  7,a7 9         
subsection 7c71 9 ! matt] prec$+        
p>agraph 7#a71 by /rik+ ?is section &   
ins]t+ subsection 7b77#a72 &  7,b7 by   

add+ at ! end ! foll[+ new subsection3  
7e7 ,public availability ( c]ta9        
in=mation  7#a7 ,9 g5]al ,subject to    
p>agraphs 7#b7 & 7#c71 9 ord] to all[   
pati5ts & employ]s to comp>e ,p,b,ms'   
ability to negotiate rebates1 disc\nts1 
& price concessions & ! am\nt ( su*     
rebates1 disc\nts1 & price concessions t
 are pass$ ?r\gh to plan sponsors1 n    
lat] ?an ,july #a1 #bjbe1 ! ,secret>y   
%all make available on ! ,int]net       
website ( ! ,dep>tm5t ( ,heal? & ,human 
,s]vices ! in=mation provid$ to !       
,secret>y & describ$ 9 p>agraphs 7#b7 & 
7#c7 ( subsection 7b7 ) respect to ea*  
,,pbm4  7#b7 ,lag 9 data ,! in=mation   
made available 9 a plan ye> "u p>agraph 
7#a7 %all n include in=mation ) respect 
to su* plan ye> or ! two prec$+ plan    
ye>s4  7#c7 ,confid5tiality ,! ,secret>y
 %all ensure t su* in=mation is display$
 9 a mann] t prev5ts ! disclosure (     
in=mation on rebates1 disc\nts1 & price 
concessions ) respect to an individual  
drug or an individual ,,pdp sponsor1    

,,ma organization1 or qualifi$ heal?    
b5efits plan4  4  7#b7 ,effective date  
,! am5dm5t made by p>agraph 7#a77;,a7   
%all take effect on ,janu>y #a1 #bjbe4  
7b7 ,plan audit ( ph>macy b5efit manag] 
data ,section #ahfj;,d-#b7;d77#c7 ( !   
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#ajb7;d77#c77 is am5d$-- 7#a7 by 
/rik+ ,audits4--,to protect & ins]t+ !  
foll[+3  ,audits4-- 7,a7 ,audits ( plans
 by ! ,secret>y ,to protect  2 &  7#b7  
by add+ at ! end ! foll[+ new           
subp>agraph3  7,b7 ,audits ( ph>macy    
b5efit manag]s by ,,pdp sponsors & ,,ma 
organizations  7i7 ,9 g5]al ,beg9n+     
,janu>y #a1 #bjbe1 9 ord] to ensure t-- 
7,i7 contract+ t]ms betwe5 a ,,pdp      
sponsor (f]+ a prescription drug plan or
 an ,,ma organization (f]+ an ,,ma-,,pd 
plan & its contract$ or own$ ph>macy    
b5efit manag] are met2 &  7,,ii7 ! ,,pdp
 sponsor & ,,ma organization c acc\nt = 
! co/ ( ea* cov]$ "p ,d drug net ( all  
direct & indirect remun]ation1  ! ,,pdp 
sponsor or ,,ma organization %all       

conduct f9ancial audits4  7ii7          
,indep5d5t ?ird p>ty ,an audit describ$ 
9 clause 7i7 %all-- 7,i7 be conduct$ by 
an indep5d5t ?ird p>ty2 &  7,,ii7 acc\nt
 & reconcile fl[s ( funds t det]m9e !   
net co/ ( cov]$ "p ,d drugs1 includ+    
direct & indirect remun]ation f drug    
manufactur]s & ph>macies or provid$ to  
ph>macies4  7iii7 ,rebate agreem5ts ,a  
,,pdp sponsor & an ,,ma organization    
%all require ph>macy b5efit manag]s to  
make rebate contracts ) drug            
manufactur]s made on _! behalf available
 "u audits describ$ 9 clause 7i74  7iv7 
,confid5tiality agreem5ts ,audits       
describ$ 9 clause 7i7 %all be subject to
 confid5tiality agreem5ts to prev5t1    
except z requir$ "u clause 7vii71 !     
r$isclosure ( data transmitt$ "u !      
audit4  7v7 ,frequ5cy ,a f9ancial audit 
"u clause 7i7 %all be conduct$          
p]iodically 7b 9 no case less frequ5tly 
?an once e #b ye>s74  7vi7 ,timeframe = 
,,pbm to provide in=mation ,a ,,pdp     
sponsor & an ,,ma organization %all     

require t a ph>macy b5efit manag] t is  
be+ audit$ "u clause 7i7 provide 7z "p (
 _! contract+ agreem5t7 ! reque/$       
in=mation to ! indep5d5t ?ird p>ty      
conduct+ ! audit )9 #de days ( ! date ( 
! reque/4  7vii7 ,submission ( audit    
reports to ! ,secret>y  7,i7 ,9 g5]al ,a
 ,,pdp sponsor & an ,,ma organization   
%all submit to ! ,secret>y ! f9al report
 on any audit conduct$ "u clause 7i7 )9 
#cj days ( ! ,,pdp sponsor or ,,ma      
organization receiv+ ! report f !       
indep5d5t ?ird p>ty conduct+ ! audit4   
7,,ii7 ,review ,! ,secret>y %all review 
f9al reports submitt$ "u clause 7i7 to  
det]m9e ! ext5t to :i* ! goals specifi$ 
9 subclauses 7,i7 & 7,,ii7 ( subp>agraph
 7,b77i7 are met4  7,,iii7              
,confid5tiality ,not)/&+ any o!r        
provision ( law1 in=mation disclos$ 9 a 
report submitt$ "u clause 7i7 relat$ to 
! net co/ ( a cov]$ "p ,d drug is       
confid5tial & %all n be disclos$ by !   
,secret>y or a ,m$ic>e contractor4      
7viii7 ,notice ( noncompliance ,a ,,pdp 

sponsor & an ,,ma organization %all     
notify ! ,secret>y if any ph>macy b5efit
 manag] is n comply+ ) reque/s = access 
to in=mation requir$ "u an audit "u     
clause 7i74  7ix7 ,civil monet>y        
p5alties  7,i7 ,9 g5]al ,subject to     
subclause 7,,ii71 if ! ,secret>y        
det]m9es t a ,,pdp sponsor or an ,,ma   
organization has fail$ to conduct an    
audit "u clause 7i71 ! ,secret>y may    
impose a civil monet>y p5alty ( n m ?an 
#aj1jjj = ea* day ( su* noncompliance4  
7,,ii7 ,proc$ure ,! provisions ( section
 #aabh;,a1 o!r ?an subsections 7a7 & 7b7
 & ! fir/ s5t5ce ( subsection 7c77#a7 ( 
su* section1 %all apply to civil monet>y
 p5alties "u ?is clause 9 ! same mann] z
 su* provisions apply to a p5alty or    
proce$+ "u section #aabh;,a4  4  7c7    
,disclosure to ph>macy (                
,po/-,po9t-(-,sale ph>macy price        
concessions & inc5tive paym5ts ,section 
#ahfj;,d-#b7;d77#b7 ( ! ,social         
,security ,act 7#db ,u4,s4,c4           
#aciew-#ajb7;d77#b77 is am5d$--  7#a7 by

 /rik+ ,disclosure4--,a ,,pdp sponsor & 
ins]t+ ! foll[+3 ,disclosure4--  7,a7   
,to ! ,secret>y ,a ,,pdp sponsor  2 &   
7#b7 by add+ at ! end ! foll[+ new      
subp>agraph3  7,b7 ,to ph>macies  7i7 ,9
 g5]al ,= plan ye> #bjbe & subsequ5t    
plan ye>s1 a ,,pdp sponsor (f]+ a       
prescription drug plan & an ,,ma        
organization (f]+ an ,,ma-,,pd plan %all
 report any ph>macy price concession or 
inc5tive paym5t t occurs ) respect to a 
ph>macy aft] paym5t = cov]$ "p ,d drugs 
at ! po9t-(-sale1 includ+ by an         
int]m$i>y organization ) :i* a ,,pdp    
sponsor or ,,ma organization has        
contract$1 to ! ph>macy4  7ii7 ,tim+ ,! 
report+ ( price concessions & inc5tive  
paym5ts to a ph>macy "u clause 7i7 %all 
be made on a p]iodic basis 7b 9 no case 
less frequ5tly ?an annually74  7iii7    
,claim level ,! report+ ( price         
concessions & inc5tive paym5ts to a     
ph>macy "u clause 7i7 %all be at ! claim
 level or approximat$ at ! claim level  
if ! price concession or inc5tive paym5t

 0 appli$ at a level o!r ?an at ! claim 
level4  4  7d7 ,disclosure ( ,p,t       
,committee conflicts ( int]e/  7#a7 ,9  
g5]al ,section #ahfj;,d-#d7;b77#c77;,a7 
( ! ,social ,security ,act 7#db         
,u4,s4,c4 #aciew-#ajd7;b77#c77;,a77 is  
am5d$ by add+ at ! end ! foll[+ new     
clause3  7iii7 ,disclosure ( conflicts (
 int]e/ ,) respect to plan ye> #bjbe &  
subsequ5t plan ye>s1 a ,,pdp sponsor ( a
 prescription drug plan & an ,,ma       
organization (f]+ an ,,ma-,,pd plan     
%all1 z "p ( its bid submission "u      
section #ahfj;,d-#aa7;b71 provide !     
,secret>y ) a complet$ /atem5t (        
f9ancial conflicts ( int]e/1 includ+ )  
manufactur]s1 f ea* memb] ( any ph>macy 
& !rapeutic committee us$ by ! sponsor  
or organization pursuant to ?is         
p>agraph4  4  7#b7 ,inclusion 9 bid     
,section #ahfj;,d-#aa7;b77#b7 ( !       
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aaa7;b77#b77 is am5d$--  7,a7 by
 r$esignat+ subp>agraph 7,f7 z          
subp>agraph 7,g72 &  7,b7 by ins]t+ aft]

 subp>agraph 7,e7 ! foll[+ new          
subp>agraph3  7,f7 ,p,t ,committee      
conflicts ( int]e/ ,! in=mation requir$ 
to be disclos$ "u section               
#ahfj;,d-#d7;b77#c77;,a77iii74  4  7e7  
,in=mation on direct & indirect         
remun]ation requir$ ,to be includ$ 9 bid
 ,section #ahfj;,d-#aa7;b7 ( ! ,social  
,security ,act 7#db ,u4,s4,c4           
#aciew-#aaa7;b77 is am5d$--  7#a7 9     
p>agraph 7#a71 by add+ at ! end ! foll[+
 new s5t5ce3 ,) respect to actual am\nts
 ( direct & indirect remun]ation        
submitt$ pursuant to clause 7v7 (       
p>agraph 7#b71 su* am\nts %all be       
consi/5t ) data report$ to ! ,secret>y 9
 a prior ye>42 &  7#b7 9 p>agraph       
7#b77;,c7--  7,a7 9 clause 7iii71 by    
/rik+ & at ! end2  7,b7 9 clause 7iv71  
by /rik+ ! p]iod at ! end & ins]t+ !    
foll[+3 1 &1 ) respect to plan ye> #bjbe
 & subsequ5t plan ye>s1 actual &        
project$ adm9i/rative exp5ses assum$ 9 !
 bid1 categoriz$ by ! type ( su* exp5se1
 includ+ actual & project$ price        

concessions reta9$ by a ph>macy b5efit  
manag]2 &2 &  7,c7 by add+ at ! end !   
foll[+ new clause3  7v7 ) respect to    
plan ye> #bjbe & subsequ5t plan ye>s1   
actual & project$ direct & indirect     
remun]ation1 categoriz$ z receiv$ f ea* 
( ! foll[+3  7,i7 ,a ph>macy4  7,,ii7 ,a
 manufactur]4  7,,iii7 ,a ph>macy b5efit
 manag]4  7,,iv7 ,o!r entities1 z       
det]m9$ by ! ,secret>y4  4  #baa4       
,public disclosure ( direct & indirect  
remun]ation review & audit results      
,section #ahfj;,d-#db ( ! ,social       
,security ,act 7#db ,u4,s4,c4           
#aciew-#aeb7 is am5d$ by add+ at ! end !
 foll[+ new subsection3  7e7 ,public    
disclosure ( direct & indirect          
remun]ation review & f9ancial audit     
results  7#a7 ,,dir review results  7,a7
 ,9 g5]al ,except z provid$ 9           
subp>agraph 7,b71 9 #bjbc & ea*         
subsequ5t ye>1 ! ,secret>y %all make    
available to ! public on ! ,int]net     
website ( ! ,c5t]s = ,m$ic>e  ,m$icaid  
,s]vices in=mation on discrepancies     

relat$ to summ>y & detail$ ,,dir reports
 submitt$ by ,,pdp sponsors pursuant to 
section #ahfj;,d-#ae across all         
prescription drug plans bas$ on ! mo/   
rec5t data available4 ,in=mation made   
available "u ?is subp>agraph %all       
include ! foll[+3  7i7 ,! numb] (       
pot5tial errors id5tifi$ by ! ,secret>y 
= ,,pdp sponsors to review4  7ii7 ,!    
ext5t to :i* ,,pdp sponsors resubmitt$  
,,dir reports to make *anges = previ\s  
contract ye>s4  7iii7 ,! ext5t to :i*   
resubmitt$ ,,dir reports result$ 9 an   
increase or decrease 9 ,,dir 9 a previ\s
 contract ye>4  7,b7 ,exclusion ( c]ta9 
submissions 9 calculation ,! ,secret>y  
%all exclude any in=mation 9 ,,dir      
reports submitt$ ) respect to ,,pace    
programs "u section #ahid 7pursuant to  
section #ahfj;,d-#ba7;f77 & qualifi$    
retiree prescription drug plans 7z def9$
 9 section #ahfj;,d-#bb7;a77#b77 f !    
in=mation t is made available to !      
public "u subp>agraph 7,a74  7#b7       
,f9ancial audit results ,9 #bjbc & ea*  

subsequ5t ye>1 ! ,secret>y %all make    
available to ! public on ! ,int]net     
website ( ! ,c5t]s = ,m$ic>e  ,m$icaid  
,s]vices ! results ( ,,dir audits       
requir$ "u section                      
#ahfj;,d-#ab7;b77#c77;,c74 ,in=mation   
made available "u ?is p>agraph %all     
include ! foll[+3 7,a7 ,) respect to !  
ye>1 ! numb] ( ,,pdp sponsors t receiv$ 
ea* ( ! foll[+3  7i7 ,a notice (        
obs]vations or f9d+s t requir$ ! sponsor
 to make ,,dir report corrections4  7ii7
 ,an unqualifi$ audit op9ion t r5d]s !  
audit clos$4  7iii7 ,a qualifi$ audit   
op9ion t requires ! sponsor to submit a 
corrective action plan to ! ,secret>y4  
7iv7 ,an adv]se op9ion1 ) a description 
( ! types ( actions t ! ,secret>y takes 
:5 issu+ an adv]se op9ion4  7,b7 ,)     
respect to a prec$+ ye>3 7i7 ,! numb] ( 
,,pdp sponsors t reop5$ a previ\sly     
clos$ reconciliation z a result ( an    
audit1 includ+ z a result ( ,,dir       
*anges4  7ii7 ,! ext5t to :i* !         
,secret>y rec\p$ an ov]paym5t or made an

 und]paym5t z a result ( a reop5+ ( a   
previ\sly clos$ reconciliation4  7#c7   
,def9ition ( ,,dir ,= purposes ( ?is    
subsection1 ! t]m ,,dir means direct &  
indirect remun]ation z def9$ 9 section  
#dbc4cjh ( title #db1 ,code ( ,f$]al    
,regulations1 or any successor          
regulation4  4  #bab4 ,improvem5ts to   
provision ( p>ts ,a & ,b claims data to 
prescription drug plans  7a7 ,data use  
7#a7 ,9 g5]al ,p>agraph 7#f7 ( section  
#ahfj;,d-#d7;c7 ( ! ,social ,security   
,act 7#db ,u4,s4,c4 #aciew-#ajd7;c771 z 
add$ by section #ejced ( division ,e ( !
 ,bip>tisan ,budget ,act ( #bjah        
7,public ,law #aae-abc71 relat+ to      
provid+ prescription drug plans ) p>ts  
,a & ,b claims data to promote !        
appropriate use ( m$ications & improve  
heal? outcomes1 is am5d$-- 7,a7 9       
subp>agraph 7,b7--  7i7 by r$esignat+   
clauses 7i71 7ii71 & 7iii7 z subclauses 
7,i71 7,,ii71 & 7,,iii71 respectively1 &
 mov+ su* subclauses #b ems to ! "r2    
7ii7 by /rik+ ,purposes4--,a ,,pdp      

sponsor & ins]t+  ,purposes4-- 7i7 ,9   
g5]al ,a ,,pdp sponsor4  2 &  7iii7 by  
add+ at ! end ! foll[+ new clause3  7ii7
 ,cl>ification ,! limitation on data use
 "u subp>agraph 7,c77i7 %all n apply to 
! ext5t t ! ,,pdp sponsor is us+ ! data 
provid$ to c>ry out any ( ! purposes    
describ$ 9 clause 7i74  2 &  7,b7 9     
subp>agraph 7,c77i71 by /rik+ ,to in=m &
 ins]t+ ,subject to subp>agraph         
7,b77ii71 to in=m4  7#b7 ,effective date
 ,! am5dm5ts made by ?is subsection %all
 apply to plan ye>s beg9n+ on or aft]   
,janu>y #a1 #bjbe4  7b7 ,mann] (        
provision ,subp>agraph 7,d7 ( su*       
p>agraph 7#f7 is am5d$-- 7#a7 by /rik+  
describ$4--,! data describ$ 9 ?is clause
 & ins]t+  describ$4-- 7i7 ,9 g5]al ,!  
data describ$ 9 ?is subp>agraph  2 &    
7#b7 by add+ at ! end ! foll[+ new      
clause3  7ii7 ,mann] ( provision  7,i7  
,9 g5]al ,su* data may be provid$       
pursuant to ?is p>agraph 9 ! same mann] 
z data "u ! ,"p ,d ,enhanc$ ,m$ication  
,!rapy ,managem5t model te/$ "u section 

#aaae;,a1 ?r\gh ,application ,programm+ 
,int]face1 or 9 ano!r mann] z det]m9$ by
 ! ,secret>y4  7,,ii7 ,implem5tation    
,not)/&+ any o!r provision ( law1 !     
,secret>y may implem5t ?is clause by    
program in/ruction or o!rwise4  4  7c7  
,te*nical correction ,su* p>agraph 7#f7 
is r$esignat$ z p>agraph 7#g74  #bac4   
,m$ic>e "p d rebate by manufactur]s  7a7
 ,9 g5]al ,"p ,d ( title ,,xviii ( !    
,social ,security ,act is am5d$ by      
ins]t+ aft] section #ahfj;,d-#ad;,a 7#db
 ,u4,s4,c4 #aciew-#aad;a7 ! foll[+ new  
section3  #ahfj;,d-#ad;,b4 ,manufactur] 
rebate = c]ta9 drugs ) prices increas+  
fa/] ?an inflation  7a7 ,9 g5]al  7#a7  
,9 g5]al ,subject to ! provisions ( ?is 
section1 9 ord] = cov]age to be         
available "u ?is "p = a "p ,d rebatable 
drug 7z def9$ 9 subsection 7h77#a77 ( a 
manufactur] 7z def9$ 9 section          
#aibg7k77#e77 disp5s$ dur+ an applicable
 ye>1 ! manufactur] mu/ h ent]$ into & h
 9 effect an agreem5t describ$ 9        
subsection 7b74  7#b7 ,au?oriz+ cov]age 

= drugs n cov]$ "u agreem5ts ,p>agraph  
7#a7 %all n apply to ! disp5s+ ( a cov]$
 "p ,d drug if-- 7,a7 ! ,secret>y has   
made a det]m9ation t ! availability ( ! 
drug is ess5tial to ! heal? (           
b5efici>ies "u ?is "p2 or  7,b7 !       
,secret>y det]m9es t 9 ! p]iod beg9n+ on
 ,janu>y #a1 #bjbe1 & end+ on ,decemb]  
#ca1 #bjbe1 !re 7 ext5uat+ circum/ances4
  7#c7 ,applicable ye> ,= purposes ( ?is
 section ! t]m applicable ye> means a   
ye> beg9n+ ) #bjbe4  7b7 ,agreem5ts     
7#a7 ,t]ms ( agreem5t ,an agreem5t      
describ$ 9 ?is subsection1 ) respect to 
a manufactur] ( a "p ,d rebatable drug1 
is an agreem5t "u :i* ! foll[+ %all     
apply3 7,a7 ,secret>ial provision (     
in=mation ,n lat] ?an #i mon?s aft] !   
end ( ea* applicable ye> ) respect to   
:i* ! agreem5t is 9 effect1 ! ,secret>y1
 = ea* "p ,d rebatable drug ( !         
manufactur]1 %all report to !           
manufactur] ! foll[+ = su* ye>3  7i7    
,in=mation on ! total numb] ( units 7z  
def9$ 9 subsection 7h77#b77 = ea* dosage

 =m & /r5g? ) respect to su* "p ,d      
rebatable drug & ye>4  7ii7 ,in=mation  
on ! am\nt 7if any7 ( ! excess av]age   
manufactur] price increase describ$ 9   
subsection 7c77#a77;,b7 = ea* dosage =m 
& /r5g? ) respect to su* drug & ye>4    
7iii7 ,! rebate am\nt specifi$ "u       
subsection 7c7 = ea* dosage =m & /r5g? )
 respect to su* drug & ye>4  7,b7       
,manufactur] requirem5ts ,= ea*         
applicable ye> ) respect to :i* !       
agreem5t is 9 effect1 ! manufactur] ( ! 
"p ,d rebatable drug1 = ea* dosage =m & 
/r5g? ) respect to su* drug1 n lat] ?an 
#cj days aft] ! date ( receipt f !      
,secret>y ( ! in=mation describ$ 9      
subp>agraph 7,a7 = su* ye>1 %all provide
 to ! ,secret>y a rebate t is equal to !
 am\nt specifi$ 9 subsection 7c7 = su*  
dosage =m & /r5g? ) respect to su* drug 
= su* ye>4  7#b7 ,l5g? ( agreem5t  7,a7 
,9 g5]al ,an agreem5t "u ?is section1 ) 
respect to a "p ,d rebatable drug1 %all 
be effective = an initial p]iod ( n less
 ?an "o ye> & %all be automatically     

r5ew$ = a p]iod ( n less ?an "o ye>     
unless t]m9at$ "u subp>agraph 7,b74     
7,b7 ,t]m9ation  7i7 ,by secret>y ,!    
,secret>y may provide = t]m9ation ( an  
agreem5t "u ?is section = violation ( ! 
requirem5ts ( ! agreem5t or o!r good    
cause %[n4 ,su* t]m9ation %all n be     
effective e>li] ?an #cj days aft] ! date
 ( notice ( su* t]m9ation4 ,! ,secret>y 
%all provide1 ^u reque/1 a manufactur] )
 a he>+ conc]n+ su* a t]m9ation1 b su*  
he>+ %all n delay ! effective date ( !  
t]m9ation4  7ii7 ,by a manufactur] ,a   
manufactur] may t]m9ate an agreem5t "u  
?is section = any reason4 ,any su*      
t]m9ation %all be effective1 ) respect  
to a plan ye>-- 7,i7 if ! t]m9ation     
occurs be=e ,janu>y #cj ( ! plan ye>1 z 
( ! day aft] ! end ( ! plan ye>2 &      
7,,ii7 if ! t]m9ation occurs on or aft] 
,janu>y #cj ( ! plan ye>1 z ( ! day aft]
 ! end ( ! succe$+ plan ye>4  7,c7      
,effectiv5ess ( t]m9ation ,any t]m9ation
 "u ?is p>agraph %all n affect rebates  
due "u ! agreem5t "u ?is section be=e ! 

effective date ( its t]m9ation4  7,d7   
,delay be=e re5try ,9 ! case ( any      
agreem5t "u ?is section ) a manufactur] 
t is t]m9at$ 9 a plan ye>1 ! ,secret>y  
may n ent] into ano!r su* agreem5t ) !  
manufactur] 7or a successor manufactur]7
 be=e ! subsequ5t plan ye>1 unless !    
,secret>y f9ds good cause = an e>li]    
re9/atem5t ( su* an agreem5t4  7c7      
,rebate am\nt  7#a7 ,9 g5]al ,= purposes
 ( ?is section1 ! am\nt specifi$ 9 ?is  
subsection = a dosage =m & /r5g? )      
respect to a "p ,d rebatable drug &     
applicable ye> is1 subject to           
subp>agraphs 7,b7 & 7,c7 ( p>agraph     
7#e71 ! am\nt equal to ! product (--    
7,a7 ! total numb] ( units ( su* dosage 
=m & /r5g? ) respect to su* "p ,d       
rebatable drug & ye>2 &  7,b7 ! am\nt   
7if any7 by :i*--  7i7 ! annual         
manufactur] price 7z det]m9$ 9 p>agraph 
7#b77 paid = su* dosage =m & /r5g? )    
respect to su* "p ,d rebatable drug = ! 
ye>2 exce$s  7ii7 ! inflation-adju/$    
paym5t am\nt det]m9$ "u p>agraph 7#c7 = 

su* dosage =m & /r5g? ) respect to su*  
"p ,d rebatable drug = ! ye>4  7#b7     
,det]m9ation ( annual manufactur] price 
,! annual manufactur] price det]m9$ "u  
?is p>agraph = a dosage =m & /r5g?1 )   
respect to a "p ,d rebatable drug & an  
applicable ye>1 is ! sum ( ! products   
(-- 7,a7 ! av]age manufactur] price 7z  
def9$ 9 subsection 7h77#f77 ( su* dosage
 =m & /r5g?1 z calculat$ = a unit ( su* 
drug1 ) respect to ea* ( ! cal5d> qu>t]s
 ( su* ye>2 &  7,b7 ! ratio (-- 7i7 !   
total numb] ( units ( su* dosage =m &   
/r5g? disp5s$ dur+ ea* su* cal5d> qu>t] 
( su* ye>2 to  7ii7 ! total numb] (     
units ( su* dosage =m & /r5g? disp5s$   
dur+ su* ye>4  7#c7 ,det]m9ation (      
inflation-adju/$ paym5t am\nt ,!        
inflation-adju/$ paym5t am\nt det]m9$ "u
 ?is p>agraph = a dosage =m & /r5g? )   
respect to a "p ,d rebatable drug = an  
applicable ye>1 subject to subp>agraphs 
7,a7 & 7,d7 ( p>agraph 7#e71 is--  7,a7 
! b5*m>k ye> manufactur] price det]m9$  
"u p>agraph 7#d7 = su* dosage =m & /r5g?

 ) respect to su* drug & an applicable  
ye>2 increas$ by  7,b7 ! p]c5tage by :i*
 ! applicable ye> ,,cpi-,u 7z def9$ 9   
subsection 7h77#e77 = ! applicable ye>  
exce$s ! b5*m>k p]iod ,,cpi-,u 7z def9$ 
9 subsection 7h77#d774  7#d7            
,det]m9ation ( b5*m>k ye> manufactur]   
price ,! b5*m>k ye> manufactur] price   
det]m9$ "u ?is p>agraph = a dosage =m & 
/r5g?1 ) respect to a "p ,d rebatable   
drug & an applicable ye>1 is ! sum ( !  
products (-- 7,a7 ! av]age manufactur]  
price 7z def9$ 9 subsection 7h77#f77 (  
su* dosage =m & /r5g?1 z calculat$ = a  
unit ( su* drug1 ) respect to ea* ( !   
cal5d> qu>t]s ( ! paym5t am\nt b5*m>k   
ye> 7z def9$ 9 subsection 7h77#c772 &   
7,b7 ! ratio (-- 7i7 ! total numb] (    
units ( su* dosage =m & /r5g? disp5s$   
dur+ ea* su* cal5d> qu>t] ( su* paym5t  
am\nt b5*m>k ye>2 to  7ii7 ! total numb]
 ( units ( su* dosage =m & /r5g? disp5s$
 dur+ su* paym5t am\nt b5*m>k ye>4  7#e7
 ,special treatm5t ( c]ta9 drugs &      
exemption  7,a7 ,subsequ5tly approv$    

drugs ,9 ! case ( a "p ,d rebatable drug
 fir/ approv$ or lic5s$ by ! ,food &    
,drug ,adm9i/ration aft] ,janu>y #a1    
#bjaf1 subp>agraphs 7,a7 & 7,b7 (       
p>agraph 7#d7 %all be appli$ z if ! t]m 
paym5t am\nt b5*m>k ye> 7 def9$ "u      
subsection 7h77#c7 z ! fir/ cal5d> ye>  
beg9n+ aft] ! day on :i* ! drug 0 fir/  
m>ket$ by any manufactur] & subp>agraph 
7,b7 ( p>agraph 7#c7 %all be appli$ z if
 ! t]m b5*m>k p]iod ,,cpi-,u 7 def9$ "u 
subsection 7h77#d7 z if ! ref]5ce to    
,janu>y #bjaf "u su* subsection 7 a     
ref]5ce to ,janu>y ( ! fir/ ye> beg9n+  
aft] ! date on :i* ! drug 0 fir/ m>ket$ 
by any manufactur]4  7,b7 ,exemption =  
%ortages ,! ,secret>y may r$uce or waive
 ! rebate "u p>agraph 7#a7 ) respect to 
a "p ,d rebatable drug t is describ$ z  
curr5tly 9 %ortage on ! %ortage li/ 9   
effect "u section #ejf;,e ( ! ,f$]al    
,food1 ,drug1 & ,cosmetic ,act or 9 !   
case ( o!r exig5t circum/ances1 z       
det]m9$ by ! ,secret>y4  7,c7 ,treatm5t 
( new =mulations  7i7 ,9 g5]al ,9 ! case

 ( a "p ,d rebatable drug t is a l9e    
ext5sion ( a "p ,d rebatable drug t is  
an oral solid dosage =m1 ! ,secret>y    
%all e/abli% a =mula = det]m9+ ! am\nt  
specifi$ 9 ?is subsection ) respect to  
su* "p ,d rebatable drug & an applicable
 ye> ) consid]ation ( ! orig9al "p ,d   
rebatable drug4  7ii7 ,l9e ext5sion     
def9$ ,9 ?is subp>agraph1 ! t]m l9e     
ext5sion means1 ) respect to a "p ,d    
rebatable drug1 a new =mulation ( ! drug
 7z det]m9$ by ! ,secret>y71 su* z an   
ext5d$ release =mulation1 b does n      
include an abuse-det]r5t =mulation ( !  
drug 7z det]m9$ by ! ,secret>y71        
reg>dless ( :e!r su* abuse-det]r5t      
=mulation is an ext5d$ release          
=mulation4  7,d7 ,select$ drugs ,9 !    
case ( a "p ,d rebatable drug t is a    
select$ drug 7z def9$ 9 section         
#aaib7;c77 = a price applicability p]iod
 7z def9$ 9 section #aaia7;b77#b77--    
7i7 = plan ye>s dur+ su* p]iod = :i* a  
maximum fair price 7z def9$ 9 section   
#aaia7;c77#b77 = su* drug has be5       

det]m9$ & is appli$ "u "p ,e ( title    
,,xi1 ! rebate "u subsection            
7b77#a77;,b7 %all be waiv$2 &  7ii7 9 ! 
case su* drug is det]m9$ 7pursuant to   
su* section #aaib7;c77 to no long] be a 
select$ drug1 = ea* applicable ye>      
beg9n+ aft] ! price applicability p]iod 
) respect to su* drug1 subp>agraphs 7,a7
 & 7,b7 ( p>agraph 7#d7 %all be appli$ z
 if ! t]m paym5t am\nt b5*m>k ye> 7     
def9$ "u subsection 7h77#c7 z ! la/ ye> 
beg9n+ dur+ su* price applicability     
p]iod ) respect to su* select$ drug &   
subp>agraph 7,b7 ( p>agraph 7#c7 %all be
 appli$ z if ! t]m b5*m>k p]iod ,,cpi-,u
 7 def9$ "u subsection 7h77#d7 z if !   
ref]5ce to ,janu>y #bjaf "u su*         
subsection 7 a ref]5ce to ,janu>y ( !   
la/ ye> beg9n+ dur+ su* price           
applicability p]iod ) respect to su*    
drug4  7d7 ,rebate deposits ,am\nts paid
 z rebates "u subsection 7c7 %all be    
deposit$ into ! ,m$ic>e ,prescription   
,drug ,acc\nt 9 ! ,f$]al ,supplem5t>y   
,m$ical ,insurance ,tru/ ,fund e/abli%$ 

"u section #ahda4  7e7 ,in=mation ,=    
purposes ( c>ry+ out ?is section1 !     
,secret>y %all use in=mation submitt$ by
 manufactur]s "u section #aibg7;b77#c74 
7f7 ,civil money p5alty ,9 ! case ( a   
manufactur] ( a "p ,d rebatable drug )  
an agreem5t 9 effect "u ?is section :o  
has fail$ to comply ) ! t]ms ( !        
agreem5t "u subsection 7b77#a77;,b7 )   
respect to su* drug = an applicable ye>1
 ! ,secret>y may impose a civil money   
p5alty on su* manufactur] 9 an am\nt    
equal to #abe p]c5t ( ! am\nt specifi$ 9
 subsection 7c7 = su* drug = su* ye>4 ,!
 provisions ( section #aabh;,a 7o!r ?an 
subsections 7a7 7) respect to am\nts (  
p5alties or additional assessm5ts7 &    
7b77 %all apply to a civil money p5alty 
"u ?is subsection 9 ! same mann] z su*  
provisions apply to a p5alty or proce$+ 
"u section #aabh;,a7a74  7g7 ,judicial  
review ,!re %all be no judicial review (
 ! foll[+3  7#a7 ,! det]m9ation ( units 
"u ?is section4  7#b7 ,! det]m9ation (  
:e!r a drug is a "p ,d rebatable drug "u

 ?is section4  7#c7 ,! calculation ( !  
rebate am\nt "u ?is section4  7h7       
,def9itions ,9 ?is section3  7#a7 ,"p d 
rebatable drug def9$  7,a7 ,9 g5]al ,!  
t]m "p ,d rebatable drug means a drug or
 biological t w\ld 7)\t application (   
?is section7 be a cov]$ "p ,d drug1     
except su* t]m %all1 ) respect to an    
applicable ye>1 n include su* a drug or 
biological if ! av]age annual total co/ 
"u ?is "p = su* ye> p] individual :o    
uses su* a drug or biological1 z det]m9$
 by ! ,secret>y1 is less ?an1 subject to
 subp>agraph 7,b71 #ajj1 z det]m9$ by ! 
,secret>y us+ ! mo/ rec5t data available
 or1 if data is n available1 z e/imat$  
by ! ,secret>y4  7,b7 ,increase ,! doll>
 am\nt appli$ "u subp>agraph 7,a7--  7i7
 = #bjbf1 %all be ! doll> am\nt specifi$
 "u su* subp>agraph = #bjbe1 increas$ by
 ! p]c5tage increase 9 ! consum] price  
index = all urban consum]s 7,unit$      
,/ates city av]age7 = ! #ab-mon? p]iod  
beg9n+ ) ,janu>y ( #bjbe2 &  7ii7 = a   
subsequ5t ye>1 %all be ! doll> am\nt    

specifi$ 9 ?is subp>agraph = ! previ\s  
ye>1 increas$ by ! p]c5tage increase 9 !
 consum] price index = all urban        
consum]s 7,unit$ ,/ates city av]age7 = !
 #ab-mon? p]iod beg9n+ ) ,janu>y ( !    
previ\s ye>4  ,any doll> am\nt specifi$ 
"u ?is subp>agraph t is n a multiple (  
#aj %all be r\nd$ to ! ne>e/ multiple ( 
#aj4  7#b7 ,unit def9$ ,! t]m unit      
means1 ) respect to a "p ,d rebatable   
drug1 ! l[e/ id5tifiable quantity 7su* z
 a capsule or tablet1 milligram (       
molecules1 or grams7 ( ! "p ,d rebatable
 drug t is disp5s$ to individuals "u ?is
 "p4  7#c7 ,paym5t am\nt b5*m>k ye> ,!  
t]m paym5t am\nt b5*m>k ye> means ! ye> 
beg9n+ ,janu>y #a1 #bjaf4  7#d7 ,b5*m>k 
p]iod cpi-u ,! t]m b5*m>k p]iod ,,cpi-,u
 means ! consum] price index = all urban
 consum]s 7,unit$ ,/ates city av]age7 = 
,janu>y #bjaf4  7#e7 ,applicable ye>    
cpi-u ,! t]m applicable ye> ,,cpi-,u    
means1 ) respect to an applicable ye>1 !
 consum] price index = all urban        
consum]s 7,unit$ ,/ates city av]age7 =  

,janu>y ( su* ye>4  7#f7 ,av]age        
manufactur] price ,! t]m av]age         
manufactur] price has ! mean+1 ) respect
 to a "p ,d rebatable drug ( a          
manufactur]1 giv5 su* t]m 9 section     
#aibg7k77#a71 ) respect to a cov]$      
outpati5t drug ( a manufactur] = a      
rebate p]iod "u section #aibg4  4  7b7  
,con=m+ am5dm5ts  7#a7 ,to "p ,b asp    
calculation ,section #ahdg;,a7c77#c7 ( !
 ,social ,security ,act 7#db ,u4,s4,c4  
#aciew-#c;a7c77#c771 z am5d$ by section 
#bja7;c77#a71 is fur!r am5d$ by /rik+   
section #aibg or section #ahcd7x7 &     
ins]t+ section #aibg1 section #ahcd7x71 
or section #ahfj;,d-#ad;,b4  7#b7       
,exclud+ "p d drug inflation rebate f   
be/ price ,section                      
#aibg7;c77#a77;,c77ii77,i7 ( ! ,social  
,security ,act 7#db ,u4,s4,c4           
#acifr-#h7;c77#a77;,c77ii77,i771 z am5d$
 by section #bja7;c77#b71 is fur!r am5d$
 by /rik+ or section #ahcd7x7 & ins]t+ 1
 section #ahcd7x71 or section           
#ahfj;,d-#ad;,b4  7#c7 ,coord9ation )   

m$icaid rebate in=mation disclosure     
,section #aibg7;b77#c77;,d77i7 ( !      
,social ,security ,act 7#db ,u4,s4,c4   
#acifr-#h7;b77#c77;,d77i771 z am5d$ by  
section #bja7;c77#c71 is fur!r am5d$ by 
/rik+ or section #ahcd7x7 & ins]t+ 1    
section #ahcd7x71 or section            
#ahfj;,d-#ad;,b4  #bad4 ,prohibit+ br&+ 
on "p ,d b5efit c>ds  7a7 ,9 g5]al      
,section #ahea7;j77#b77;,b7 ( ! ,social 
,security ,act 7#db ,u4,s4,c4           
#aciew-#ba7;j77#b77;,b77 is am5d$ by    
/rik+ co-br&$ network provid] & ins]t+  
co-br&$1 co-own$1 or affiliat$ network  
provid]1 ph>macy1 or ph>macy b5efit     
manag]4  7b7 ,effective date ,! am5dm5t 
made by subsection 7a7 %all apply to    
plan ye>s beg9n+ on or aft] ,janu>y #a1 
#bjbe4  #bae4 ,requir+ prescription drug
 plans & ,,ma-,,pd plans to report      
pot5tial fraud1 wa/e1 & abuse to !      
,secret>y ( ,,hhs ,section #ahfj;,d-#d (
 ! ,social ,security ,act 7#db ,u4,s4,c4
 #aciew-#ajd71 z am5d$ by section #bbe1 
is am5d$ by add+ at ! end ! foll[+ new  

subsection3  7p7 ,report+ pot5tial      
fraud1 wa/e1 & abuse ,beg9n+ ,janu>y #a1
 #bjbd1 ! ,,pdp sponsor ( a prescription
 drug plan %all report to ! ,secret>y1 z
 specifi$ by ! ,secret>y--  7#a7 any    
sub/antiat$ or suspici\s activities 7z  
def9$ by ! ,secret>y7 ) respect to !    
program "u ?is "p z x relates to fraud1 
wa/e1 & abuse2 &  7#b7 any /eps made by 
! ,,pdp sponsor aft] id5tify+ su*       
activities to take corrective actions4  
4  #baf4 ,e/abli%m5t ( ph>macy quality  
measures "u ,m$ic>e "p ,d ,section      
#ahfj;,d-#d7;c7 ( ! ,social ,security   
,act 7#db ,u4,s4,c4 #aciew-#ajd7;c771 z 
am5d$ by section #bbf1 is am5d$ by add+ 
at ! end ! foll[+ new p>agraph3  7#h7   
,application ( ph>macy quality measures 
7,a7 ,9 g5]al ,a ,,pdp sponsor t        
implem5ts inc5tive paym5ts to a ph>macy 
or price concessions paid by a ph>macy  
bas$ on quality measures %all use       
measures e/abli%$ or approv$ by !       
,secret>y "u subp>agraph 7,b7 ) respect 
to paym5t = cov]$ "p ,d drugs disp5s$ by

 su* ph>macy4  7,b7 ,/&>d ph>macy       
quality measures ,! ,secret>y %all      
e/abli% or approve /&>d quality measures
 f a cons5sus & evid5ce-bas$            
organization = paym5ts describ$ 9       
subp>agraph 7,a74 ,su* measures %all    
focus on pati5t heal? outcomes & be bas$
 on prov5 crit]ia measur+ ph>macy       
p]=mance4  7,c7 ,effective date ,!      
requirem5t "u subp>agraph 7,a7 %all take
 effect = plan ye>s beg9n+ on or aft]   
,janu>y #a1 #bjbf1 or su* e>li] date    
specifi$ by ! ,secret>y if ! ,secret>y  
det]m9es !re are suffici5t measures     
e/abli%$ or approv$ "u subp>agraph 7,b7 
to meet ! requirem5t "u subp>agraph     
7,a74  4  #bag4 ,addition ( new measures
 bas$ on access to biosimil> biological 
products to ! #e-/> rat+ sy/em "u       
,m$ic>e ,advantage  7a7 ,9 g5]al        
,section #ahec7o77#d7 ( ! ,social       
,security ,act 7#db ,u4,s4,c4           
#aciew-#bc7o77#d77 is am5d$ by add+ at !
 end ! foll[+ new subp>agraph3  7,e7    
,addition ( new measures bas$ on access 

to biosimil> biological products  7i7 ,9
 g5]al ,= #bjbh & subsequ5t ye>s1 !     
,secret>y %all add a new set ( measures 
to ! #e-/> rat+ sy/em bas$ on access to 
biosimil> biological products cov]$ "u  
"p ,b &1 9 ! case ( ,,ma-,,pd plans1 su*
 products t are cov]$ "p ,d drugs4 ,su* 
measures %all assess ! impact a plan's  
b5efit /ructure may h on enrollees'     
utilization ( or ability to access      
biosimil> biological products1 includ+ 9
 comp>ison to ! ref]5ce biological      
product1 & %all include measures1 z     
applicable1 ) respect to ! foll[+3  7,i7
 ,cov]age ,assess+ :e!r a biosimil>     
biological product is on ! plan =mul>y 9
 lieu ( or 9 addition to ! ref]5ce      
biological product4  7,,ii7 ,pref]5c+   
,assess+ ti] placem5t or co/-%>+ = a    
biosimil> biological product relative to
 ! ref]5ce biological product4  7,,iii7 
,utilization managem5t tools ,assess+   
:e!r & h[ utilization managem5t tools   
are us$ ) respect to a biosimil>        
biological product relative to ! ref]5ce

 biological product4  7,,iv7            
,utilization ,assess+ ! p]c5tage (      
enrollees prescrib$ ! biosimil>         
biological product & ! p]c5tage (       
enrollees prescrib$ ! ref]5ce biological
 product :5 ! ref]5ce biological product
 is also on ! plan =mul>y4  7ii7        
,def9itions ,9 ?is subp>agraph1 ! t]ms  
biosimil> biological product & ref]5ce  
biological product h ! mean+ giv5 ^?    
t]ms 9 section #ahdg;,a7c77#f74  7iii7  
,protect+ ,pati5t ,int]e/s ,9 develop+  
su* measures1 ! ,secret>y %all ensure t 
ea* measure develop$ to address cov]age1
 pref]5c+1 or utilization managem5t is  
con/ruct$ su* t pati5ts reta9 access to 
appropriate !rapeutic options )\t undue 
adm9i/rative burd54  4  7b7             
,cl>ification reg>d+ application to     
prescription drug plans ,to ! ext5t !   
,secret>y ( ,heal? & ,human ,s]vices    
applies ! #e-/> rat+ sy/em "u section   
#ahec7o77#d7 ( ! ,social ,security ,act 
7#db ,u4,s4,c4 #aciew-#bc7o77#d771 or a 
simil> sy/em1 to prescription drug plans

 "u "p ,d ( title ,,xviii ( su* ,act1 ! 
provisions ( subp>agraph 7,e7 ( su*     
section1 z add$ by subsection 7a7 ( ?is 
section1 %all apply "u ! sy/em ) respect
 to su* plans 9 ! same mann] z su*      
provisions apply to ! #e-/> rat+ sy/em  
"u su* section #ahec7o77#d74  #bah4     
,,hhs /udy & report on ! influ5ce (     
ph>maceutical manufactur] ?ird-p>ty     
reimbursem5t hubs on heal? c>e provid]s 
:o prescribe _! drugs & biologicals  7a7
 ,/udy  7#a7 ,9 g5]al ,! ,secret>y (    
,heal? & ,human ,s]vices 79 ?is section 
ref]r$ to z ! ,secret>y7 %all conduct a 
/udy on ! influ5ce ( ph>maceutical      
manufactur] di/ribution models t provide
 ?ird-p>ty reimbursem5t hub s]vices on  
heal? c>e provid]s :o prescribe !       
manufactur]'s drugs & biologicals1      
includ+ = ,m$ic>e "p ,d b5efici>ies4    
7#b7 ,requirem5ts ,! /udy "u p>agraph   
7#a7 %all include an analysis ( !       
foll[+3 7,a7 ,! influ5ce ( ph>maceutical
 manufactur] di/ribution models t       
provide ?ird-p>ty reimbursem5t hub      

s]vices to heal? c>e provid]s :o        
prescribe ! manufactur]'s drugs &       
biologicals1 includ+--  7i7 ! op]ations 
( ph>maceutical manufactur] di/ribution 
models t provide reimbursem5t hub       
s]vices = heal? c>e provid]s :o         
prescribe ! manufactur]'s products2     
7ii7 ,f$]al laws affect+ ^!             
ph>maceutical manufactur] di/ribution   
models2 &  7iii7 :e!r hub s]vices c\ld  
improp]ly inc5tivize heal? c>e provid]s 
to deem a drug or biological z m$ically 
necess>y "u section #dbc4egh ( title    
#db1 ,code ( ,f$]al ,regulations4  7,b7 
,o!r areas det]m9$ appropriate by !     
,secret>y4  7b7 ,report ,n lat] ?an     
,janu>y #a1 #bjbd1 ! ,secret>y %all     
submit to ,congress a report on ! /udy  
conduct$ "u subsection 7a71 toge!r )    
recomm5dations = su* legislation &      
adm9i/rative action z ! ,secret>y       
det]m9es appropriate4  7c7 ,consultation
 ,9 conduct+ ! /udy "u subsection 7a7 & 
prep>+ ! report "u subsection 7b71 !    
,secret>y %all consult ) ! ,attorney    

,g5]al4  #bai4 ,e/abli%+ a mon?ly cap on
 b5efici>y incurr$ co/s = insul9        
products & supplies "u a prescription   
drug plan or ma-pd plan  7a7 ,9 g5]al   
,section #ahfj;,d-#b ( ! ,social        
,security ,act 7#db ,u4,s4,c4           
#aciew-#ajb71 z am5d$ by sections #aba &
 #acc1 is fur!r am5d$-- 7#a7 9          
subsection 7b77#b7--  7,a7 9 subp>agraph
 7,a71 by /rik+ & 7,e7 & ins]t+ 7,e71 & 
7,f72  7,b7 9 subp>agraph 7,b71 by /rik+
 & 7,d7 & ins]t+ 7,d71 & 7,f72 &  7,c7  
by add+ at ! end ! foll[+ new           
subp>agraph3  7,f7 ,cap on incurr$ co/s 
= insul9 products & supplies  7i7 ,9    
g5]al ,! cov]age provides b5efits1 =    
co/s above ! annual d$uctible specifi$ 9
 p>agraph 7#a7 & up to ! annual         
out-(-pocket ?re%old describ$ 9 p>agraph
 7#d77;,b7 & ) respect to a mon? 7beg9n+
 ) ,janu>y ( #bjbb71 ) co/ %>+ t is     
equal to #j = a specifi$ cov]$ "p ,d    
drug 7z def9$ 9 clause 7iii77 furni%$ to
 an individual :o has incurr$ co/s dur+ 
su* mon? ) respect to specifi$ cov]$ "p 

,d drugs equal to--  7,i7 = mon?s       
occurr+ 9 #bjbb1 #ej2 or  7,,ii7 = mon?s
 occurr+ 9 a subsequ5t ye>1 ! am\nt     
applicable "u ?is clause = mon?s occurr+
 9 ! ye> prec$+ su* subsequ5t ye>1      
increas$ by ! annual p]c5tage increase  
specifi$ 9 p>agraph 7#f7 = su* subsequ5t
 ye> & r\nd$ to ! ne>e/ doll>4  7ii7    
,application ,! provisions ( clauses 7i7
 ?r\gh 7iii7 ( p>agraph 7#d77;,c7 %all  
apply ) respect to ! det]m9ation ( !    
incurr$ co/s = specifi$ cov]$ "p ,d     
drugs = purposes ( clause 7i7 9 ! same  
mann] z su* provisions apply ) respect  
to ! det]m9ation ( incurr$ co/s = cov]$ 
"p ,d drugs = purposes ( p>agraph       
7#d77;,a74  7iii7 ,specifi$ cov]$ "p d  
drug ,= purposes ( ?is subp>agraph1 !   
t]m specifi$ cov]$ "p ,d drug means a   
cov]$ "p ,d drug t is--  7,i7 insul92 or
  7,,ii7 a m$ical supply associat$ ) !  
injection ( insul9 7z def9$ 9           
regulations ( ! ,secret>y promulgat$    
pursuant to subsection 7e77#a77;,b774  2
 &  7#b7 9 subsection 7c71 by add+ at ! 

end ! foll[+ new p>agraph3  7#e7 ,same  
protection ) respect to exp5ditures =   
insul9 & c]ta9 m$ical supplies ,!       
cov]age provides ! cov]age requir$ "u   
subsection 7b77#b77;,f74  4  7b7 ,con=m+
 am5dm5ts  7#a7 ,9 g5]al ,section       
#ahfj;,d-#ad7;a77#a77;,d7 ( ! ,social   
,security ,act 7#db ,u4,s4,c4           
#aciew-#aad7;a77#a77;,d771 z am5d$ by   
section #aba1 is fur!r am5d$-- 7,a7 9   
clause 7ii71 by /rik+ section           
#ahfj;,d-#b7;b77#b7 & ins]t+ section    
#ahfj;,d-#b7;b77#b77;,a72 &  7,b7 9     
clause 7iii71 by /rik+ section          
#ahfj;,d-#b7;b77#b7 & ins]t+ section    
#ahfj;,d-#b7;b77#b77;,a74  7#b7         
,effective date ,! am5dm5ts made by     
p>agraph 7#a7 %all apply ) respect to   
plan ye> #bjbb & ea* subsequ5t plan ye>4
  #bbj4 ,mon?ly out-(-pocket co/ %>+    
maximum = enrollees :o incur a          
significant portion ( co/s t[>ds annual 
out-(-pocket ?re%old  7a7 ,9 g5]al      
,section #ahfj;,d-#b7;b7 ( ! ,social    
,security ,act 7#db ,u4,s4,c4           

#aciew-#ajb7;b771 z am5d$ by section #b1
 is am5d$-- 7#a7 9 p>agraph 7#b7--  7,a7
 9 subp>agraph 7,a71 by /rik+ & 7,d7 &  
ins]t+ 1 7,d71 & 7,e72 &  7,b7 by add+  
at ! end ! foll[+ new subp>agraph3  7,e7
 ,mon?ly out-(-pocket co/ %>+ maximum = 
enrollees :o incur a significant portion
 ( co/s t[>ds annual out-(-pocket       
?re%old  7i7 ,e/abli%m5t ( process  7,i7
 ,9 g5]al ,= plan ye>s beg9n+ on or aft]
 ,janu>y #a1 #bjbd1 ! ,secret>y %all1   
?r\gh notice & comm5t rulemak+1 e/abli% 
a process "u :i* ea* ,,pdp sponsor (f]+ 
a prescription drug plan & ea* ,,ma     
organization (f]+ an ,,ma-,,pd plan %all
 ea* plan ye> automatically enroll      
applicable enrollees 9 ! option to h _! 
mon?ly out-(-pocket co/-%>+ "u ! plan   
capp$ & paid 9 mon?ly in/allm5ts 9      
accordance ) ?is subp>agraph 7ref]r$ to 
9 ?is subp>agraph z ! mon?ly            
out-(-pocket co/ %>+ maximum option74   
7,,ii7 ,opt out ,! process e/abli%$ "u  
?is clause %all p]mit an applicable     
enrollee1 prior to ! beg9n+ ( ! plan ye>

 or at any po9t dur+ ! plan ye>1 to opt 
out ( enrollm5t 9 ! mon?ly out-(-pocket 
co/ %>+ maximum option & pay any        
out-(-pocket co/-%>+ o!rwise applicable 
= any cov]$ "p ,d drug 9 full at ! "t ( 
! disp5s+ ( su* drug 7or at ! "t ( su*  
opt out 9 ! case ( co/s incurr$ dur+ su*
 enrollm5t t h n yet be5 bill$ to !     
enrollee74  7ii7 ,def9itions  7,i7      
,applicable enrollee ,9 ?is subp>agraph1
 ! t]m applicable enrollee means any    
enrollee 9 a prescription drug plan or  
an ,,ma-,,pd plan1 includ+ an enrollee  
:o is a subsidy eligible individual 7z  
def9$ 9 p>agraph 7#c7 ( section         
#ahfj;,d-#ad7;a771 :o incurs or is      
likely to incur a significant p]c5tage (
 co/s = cov]$ "p ,d drugs4  7,,ii7      
,significant p]c5tage ,= purposes (     
subclause 7,i71 ! ,secret>y %all1 9 !   
rulemak+ "u clause 7i71 def9e ! t]m     
significant p]c5tage ) respect to a     
p]c5tage ( ! annual out-(-pocket ?re%old
 specifi$ 9 p>agraph 7#d77;,b7 b 9 no   
case %all ! significant p]c5tage be less

 ?an #ej p]c5t or m ?an #ajj p]c5t ( !  
annual out-(-pocket ?re%old4  7iii7     
,det]m9ation ( mon?ly out-(-pocket co/  
%>+ maximum ,= ea* mon? 9 a plan ye> 9  
:i* an applicable enrollee is enroll$ 9 
! mon?ly out-(-pocket co/ %>+ maximum   
option1 ! ,,pdp sponsor or ,,ma         
organization %all det]m9e a mon?ly      
out-(-pocket co/ %>+ maximum 7z def9$ 9 
clause 7v77 = su* enrollee4  7iv7       
,b5efici>y mon?ly paym5ts ,) respect to 
an applicable enrollee :o is enroll$ 9 !
 mon?ly out-(-pocket co/ %>+ maximum    
option1 = ea* mon? describ$ 9 clause    
7iii71 ! ,,pdp sponsor or ,,ma          
organization %all bill su* enrollee an  
am\nt 7n to exce$ ! mon?ly out-(-pocket 
co/ %>+ maximum7 = ! out-(-pocket co/s (
 su* enrollee 9 su* mon?4  7v7 ,mon?ly  
out-(-pocket co/ %>+ maximum def9$ ,9   
?is subp>agraph1 ! t]m mon?ly           
out-(-pocket co/ %>+ maximum means1 )   
respect to an enrollee-- 7,i7 = ! fir/  
mon? 9 :i* ?is subp>agraph applies1 an  
am\nt det]m9$ by calculat+--  7aa7 !    

annual out-(-pocket ?re%old specifi$ 9  
p>agraph 7#d77;,b7 m9us ! incurr$ co/s (
 ! enrollee z describ$ 9 p>agraph       
7#d77;,c72 divid$ by  7bb7 ! numb] (    
mon?s rema9+ 9 ! plan ye>2 &  7,,ii7 = a
 subsequ5t mon?1 an am\nt det]m9$ by    
calculat+-- 7aa7 ! sum ( any rema9+     
out-(-pocket co/s ow$ by ! enrollee f a 
previ\s mon? t h n yet be5 bill$ to !   
enrollee & any additional co/s incurr$  
by ! enrollee2 divid$ by  7bb7 ! numb] (
 mon?s rema9+ 9 ! plan ye>4  7vi7       
,additional requirem5ts ,! foll[+       
requirem5ts %all apply ) respect to !   
mon?ly out-(-pocket co/ %>+ maximum     
option "u ?is subp>agraph3  7,i7        
,secret>ial responsibilities ,!         
,secret>y %all provide in=mation to "p  
,d eligible individuals on ! mon?ly     
out-(-pocket co/ %>+ maximum option     
?r\gh educational mat]ials1 includ+     
?r\gh ! notices provid$ "u section      
#ahjd7;a74  7,,ii7 ,,pdp sponsor & ,,ma 
organization responsibilities ,ea* ,,pdp
 sponsor (f]+ a prescription drug plan  

or ,,ma organization (f]+ an ,,ma-,,pd  
plan--  7aa7 %all n limit ! application 
( ! mon?ly out-(-pocket co/ %>+ maximum 
option to c]ta9 cov]$ "p ,d drugs2  7bb7
 %all1 prior to ! plan ye>1 notify      
prospective enrollees ( su* option1     
includ+ ! availability ( ! opt out "u   
clause 7i77,,ii72  7cc7 %all include    
in=mation on su* option 9 enrollee      
educational mat]ials1 includ+ !         
availability ( ! opt out "u clause      
7i77,,ii72  7dd7 %all h 9 place a       
me*anism to notify a ph>macy dur+ ! plan
 ye> :5 an enrollee incurs out-(-pocket 
co/s ) respect to cov]$ "p ,d drugs t   
make x likely ! enrollee is an          
applicable enrollee2  7ee7 %all provide 
t a ph>macy1 aft] receiv+ a notification
 describ$ 9 item 7dd7 ) respect to an   
enrollee1 in=ms ! enrollee ( su*        
notification2  7ff7 %all ensure t !     
application ( ?is subp>agraph has no    
effect on ! am\nt paid to ph>macies 7or 
! tim+ ( su* paym5ts7 ) respect to cov]$
 "p ,d drugs disp5s$ to ! enrollee2 &   

7gg7 %all h 9 place a f9ancial          
reconciliation process to correct       
inaccuracies 9 paym5ts made by an       
enrollee "u ?is subp>agraph ) respect to
 cov]$ "p ,d drugs dur+ ! plan ye>4     
7,,iii7 ,failure to pay am\nt bill$ "u  
mon?ly out-(-pocket co/ %>+ maximum     
option ,if an applicable enrollee fails 
to pay ! am\nt bill$ = a mon? z requir$ 
"u ?is subp>agraph1 ! applicable        
enrollee's enrollm5t 9 ! mon?ly         
out-(-pocket co/ %>+ maximum option %all
 be t]m9at$ & ! enrollee %all pay !     
co/-%>+ o!rwise applicable = any cov]$  
"p ,d drugs subsequ5tly disp5s$ to !    
enrollee up to ! annual out-(-pocket    
?re%old specifi$ 9 p>agraph 7#d77;,b74  
7,,iv7 ,cl>ification reg>d+ pa/ due     
am\nts ,no?+ 9 ?is subp>agraph %all be  
con/ru$ z prohibit+ a ,,pdp sponsor or  
an ,,ma organization f bill+ an enrollee
 = an am\nt ow$ "u ?is subp>agraph4     
7,v7 ,treatm5t ( unsettl$ balances ,any 
unsettl$ balances ) respect to am\nts   
ow$ "u ?is subp>agraph %all be treat$ z 

plan losses & ! ,secret>y %all n be     
liable = any su* balances outside ( ^?  
assum$ z losses e/imat$ 9 plan bids4  2 
&  7#b7 9 p>agraph 7#d7-- 7,a7 9        
subp>agraph 7,c71 by /rik+ & subject to 
subp>agraph 7,f7 & ins]t+ & subject to  
subp>agraphs 7,f7 & 7,g72 &  7,b7 by    
add+ at ! end ! foll[+ new subp>agraph3 
7,g7 ,inclusion ( co/s paid "u mon?ly   
out-(-pocket co/ %>+ maximum option ,9  
apply+ subp>agraph 7,a71 ) respect to an
 applicable enrollee :o is enroll$ 9 !  
mon?ly out-(-pocket co/ %>+ maximum     
option describ$ 9 clause 7i77,i7 (      
p>agraph 7#b77;,e71 co/s %all be treat$ 
z incurr$ if su* co/s are paid by a     
,,pdp sponsor or an ,,ma organization "u
 ! process provid$ "u su* p>agraph4  4  
7b7 ,application to alt]native          
prescription drug cov]age ,section      
#ahfj;,d-#b7;c7 ( ! ,social ,security   
,act 7#db ,u4,s4,c4 #aciew-#ajb7;c77 is 
am5d$ by add+ at ! end ! foll[+ new     
p>agraph3  7#d7 ,same mon?ly            
out-(-pocket co/ %>+ maximum ,= plan    

ye>s beg9n+ on or aft] ,janu>y #a1      
#bjbd1 ! mon?ly out-(-pocket co/ %>+    
maximum = applicable enrollees "u !     
process provid$ "u subsection           
7b77#b77;,e7 %all apply to su* cov]age4 
4  ,c ,miscellane\s  #bba4 ,drug        
manufactur] price transp>5cy ,title ,,xi
 ( ! ,social ,security ,act 7#db        
,u4,s4,c4 #acja et seq47 is am5d$ by    
ins]t+ aft] section #aabh,k ! foll[+ new
 section3  #aabh,l4 ,drug manufactur]   
price transp>5cy  7a7 ,9 g5]al  7#a7    
,det]m9ations ,beg9n+ ,july #a1 #bjbe1 !
 ,secret>y %all make det]m9ations z to  
:e!r a drug is an applicable drug z     
describ$ 9 subsection 7b74  7#b7        
,requir$ ju/ification ,if ! ,secret>y   
det]m9es "u p>agraph 7#a7 t an          
applicable drug is describ$ 9 subsection
 7b71 ! manufactur] ( ! applicable drug 
%all submit to ! ,secret>y !            
ju/ification describ$ 9 subsection 7c7 9
 accordance ) ! tim+ describ$ 9         
subsection 7d74  7b7 ,applicable drug   
describ$  7#a7 ,9 g5]al ,an applicable  

drug is describ$ 9 ?is subsection if x  
meets any ( ! foll[+ at ! "t ( !        
det]m9ation3  7,a7 ,l>ge increase ,!    
drug 7p] dose7-- 7i7 has a :olesale     
acquisition co/ ( at lea/ #aj2 &  7ii7  
_h an increase 9 ! :olesale acquisition 
co/1 ) respect to det]m9ations made--   
7,i7 dur+ #bjbc1 ( at lea/ #ajj p]c5t   
s9ce ! date ( ! enactm5t ( ?is section2 
7,,ii7 dur+ #bjbd1 ( at lea/ #ajj p]c5t 
9 ! prec$+ #ab mon?s or ( at lea/ #aej  
p]c5t 9 ! prec$+ #bd mon?s2  7,,iii7    
dur+ #bjbe1 ( at lea/ #ajj p]c5t 9 !    
prec$+ #ab mon?s or ( at lea/ #bjj p]c5t
 9 ! prec$+ #cf mon?s2  7,,iv7 dur+     
#bjbf1 ( at lea/ #ajj p]c5t 9 ! prec$+  
#ab mon?s or ( at lea/ #bej p]c5t 9 !   
prec$+ #dh mon?s2 or  7,v7 on or aft]   
,janu>y #a1 #bjbg1 ( at lea/ #ajj p]c5t 
9 ! prec$+ #ab mon?s or ( at lea/ #cjj  
p]c5t 9 ! prec$+ #fj mon?s4  7,b7 ,high 
sp5d+ ) increase ,! drug-- 7i7 0 9 ! top
 #ej? p]c5tile ( net sp5d+ "u title     
,,xviii or ,,xix 7to ! ext5t data is    
available7 dur+ any #ab-mon? p]iod 9 !  

prec$+ #fj mon?s2 &  7ii7 p] dose1 _h an
 increase 9 ! :olesale acquisition co/1 
) respect to det]m9ations made-- 7,i7   
dur+ #bjbc1 ( at lea/ #ae p]c5t s9ce !  
date ( ! enactm5t ( ?is section2  7,,ii7
 dur+ #bjbd1 ( at lea/ #ae p]c5t 9 !    
prec$+ #ab mon?s or ( at lea/ #bj p]c5t 
9 ! prec$+ #bd mon?s2  7,,iii7 dur+     
#bjbe1 ( at lea/ #ae p]c5t 9 ! prec$+   
#ab mon?s or ( at lea/ #cj p]c5t 9 !    
prec$+ #cf mon?s2  7,,iv7 dur+ #bjbf1 ( 
at lea/ #ae p]c5t 9 ! prec$+ #ab mon?s  
or ( at lea/ #dj p]c5t 9 ! prec$+ #dh   
mon?s2 or  7,v7 on or aft] ,janu>y #a1  
#bjbg1 ( at lea/ #ae p]c5t 9 ! prec$+   
#ab mon?s or ( at lea/ #ej p]c5t 9 !    
prec$+ #fj mon?s4  7,c7 ,high laun*     
price = new drugs ,9 ! case ( a drug t  
is m>ket$ = ! fir/ "t on or aft] ,janu>y
 #a1 #bjbc1 & = :i* ! manufactur] has   
e/abli%$ ! fir/ :olesale acquisition co/
 on or aft] su* date1 su* :olesale      
acquisition co/ = a ye>'s supply or a   
c\rse ( treatm5t = su* drug exce$s !    
gross sp5d+ = cov]$ "p ,d drugs at :i* !

 annual out-(-pocket ?re%old "u section 
#ahfj;,d-#b7;b77#d77;,b7 w\ld be met = !
 ye>4  7#b7 ,special ,rules  7,a7       
,au?ority ( ,secret>y to sub/itute      
p]c5tages )9 a de m9imis range ,=       
purposes ( apply+ p>agraph 7#a71 !      
,secret>y may sub/itute = ea* p]c5tage  
describ$ 9 subp>agraph 7,a7 or 7,b7 (   
su* p>agraph 7o!r ?an ! p]c5tile        
describ$ subp>agraph 7,b77i7 ( su*      
p>agraph7 a p]c5tage )9 a de m9imis     
range specifi$ by ! ,secret>y bel[ !    
p]c5tage s describ$4  7,b7 ,drugs ) high
 laun* prices annually report until a   
!rapeutic equival5t is available ,9 !   
case ( a drug t ! ,secret>y det]m9es is 
an applicable drug describ$ 9           
subp>agraph 7,c7 ( p>agraph 7#a71 su*   
drug %all rema9 describ$ 9 su*          
subp>agraph 7,c7 7& ! manufactur] ( su* 
drug %all annually report ! ju/ification
 "u subsection 7c77#b77 until !         
,secret>y det]m9es t !re is a !rapeutic 
equival5t 7z def9$ 9 section #cad4c (   
title #ba1 ,code ( ,f$]al ,regulations1 

or any successor regulation7 = su* drug4
  7#c7 ,dose ,= purposes ( apply+       
p>agraph 7#a71 ! ,secret>y %all e/abli% 
a def9ition ( ! t]m dose4  7c7          
,ju/ification describ$  7#a7 ,increase 9
 ,,wac ,9 ! case ( a drug t ! ,secret>y 
det]m9es is an applicable drug describ$ 
9 subp>agraph 7,a7 or 7,b7 ( subsection 
7b77#a71 ! ju/ification describ$ 9 ?is  
subsection is all relevant1 tru?ful1 &  
nonmislead+ in=mation & support+        
docum5tation necess>y to ju/ify !       
increase 9 ! :olesale acquisition co/ ( 
! applicable drug ( ! manufactur]1 z    
det]m9$ appropriate by ! ,secret>y & :i*
 may include ! foll[+3 7,a7 ,!          
individual factors t h contribut$ to !  
increase 9 ! :olesale acquisition co/4  
7,b7 ,an explanation ( ! role ( ea*     
factor 9 contribut+ to su* increase4    
7,c7 ,total exp5ditures ( ! manufactur] 
on--  7i7 mat]ials & manufactur+ = su*  
drug2  7ii7 acquir+ pat5ts & lic5s+ =   
ea* drug ( ! manufactur]2 &  7iii7 co/s 
to pur*ase or acquire ! drug f ano!r    

company1 if applicable4  7,d7 ,!        
p]c5tage ( total exp5ditures ( !        
manufactur] on rese>* & developm5t = su*
 drug t 0 d]iv$ f ,f$]al funds4  7,e7 ,!
 total exp5ditures ( ! manufactur] on   
rese>* & developm5t = su* drug4  7,f7 ,!
 total rev5ue & net pr(it g5]at$ f !    
applicable drug = ea* cal5d> ye> s9ce   
drug approval4  7,g7 ,! total           
exp5ditures ( ! manufactur] t are       
associat$ ) m>ket+ & adv]tis+ = !       
applicable drug4  7,h7 ,additional      
in=mation specific to ! manufactur] ( ! 
applicable drug1 su* z--  7i7 ! total   
rev5ue & net pr(it ( ! manufactur] = !  
p]iod ( su* increase1 z det]m9$ by !    
,secret>y2  7ii7 metrics us$ to det]m9e 
executive comp5sation2 &  7iii7 any     
additional in=mation relat$ to drug     
pric+ decisions ( ! manufactur]1 su* z  
total exp5ditures on-- 7,i7 drug rese>* 
& developm5t2 or  7,,ii7 cl9ical trials 
on drugs t fail$ to receive approval by 
! ,food & ,drug ,adm9i/ration4  7#b7    
,high laun* price ,9 ! case ( a drug t !

 ,secret>y det]m9es is an applicable    
drug describ$ 9 subp>agraph 7,c7 (      
subsection 7b77#a71 ! ju/ification      
describ$ 9 ?is subsection is all        
relevant1 tru?ful1 & nonmislead+        
in=mation & support+ docum5tation       
necess>y to ju/ify ! :olesale           
acquisition co/ ( ! applicable drug ( ! 
manufactur]1 z det]m9$ by ! ,secret>y & 
:i* may include ! items describ$ 9      
subp>agraph 7,c7 ?r\gh 7,h7 ( p>agraph  
7#a74  7d7 ,tim+  7#a7 ,notification ,n 
lat] ?an #fj days aft] ! date on :i* !  
,secret>y makes ! det]m9ation t a drug  
is an applicable drug "u subsection 7b71
 ! ,secret>y %all notify ! manufactur] (
 ! applicable drug ( su* det]m9ation4   
7#b7 ,submission ( ju/ification ,n lat] 
?an #ahj days aft] ! date on :i* a      
manufactur] receives a notification "u  
p>agraph 7#a71 ! manufactur] %all submit
 to ! ,secret>y ! ju/ification requir$  
"u subsection 7a74  7#c7 ,po/+ on       
,int]net website  7,a7 ,9 g5]al ,subject
 to subp>agraph 7,b71 n lat] ?an #cj    

days aft] receiv+ ! ju/ification "u     
p>agraph 7#b71 ! ,secret>y %all po/ on !
 ,int]net website ( ! ,c5t]s = ,m$ic>e  
,m$icaid ,s]vices ! ju/ification1 toge!r
 ) a summ>y ( su* ju/ification t is     
writt5 & =matt$ us+ language t is easily
 und]/&able by b5efici>ies "u titles    
,,xviii & ,,xix4  7,b7 ,exclusion (     
propriet>y in=mation ,! ,secret>y %all  
exclude propriet>y in=mation1 su* z     
trade secrets & intellectual prop]ty1   
submitt$ by ! manufactur] 9 !           
ju/ification "u p>agraph 7#b7 f ! po/+  
describ$ 9 subp>agraph 7,a74  7e7       
,exception to requirem5t = submission ,9
 ! case ( a drug t ! ,secret>y det]m9es 
is an applicable drug describ$ 9        
subp>agraph 7,a7 or 7,b7 ( subsection   
7b77#a71 ! requirem5t to submit a       
ju/ification "u subsection 7a7 %all n   
apply :]e ! manufactur]1 aft] receiv+ ! 
notification "u subsection 7d77#a7 )    
respect to ! applicable drug ( !        
manufactur]1 r$uces ! :olesale          
acquisition co/ ( a drug s t x no long] 

is describ$ 9 su* subp>agraph 7,a7 or   
7,b7 = at lea/ a #d-mon? p]iod1 z       
det]m9$ by ! ,secret>y4  7f7 ,p5alties  
7#a7 ,failure to submit timely          
ju/ification ,if ! ,secret>y det]m9es t 
a manufactur] has fail$ to submit a     
ju/ification z requir$ "u ?is section1  
includ+ 9 accordance ) ! tim+ & =m      
requir$1 ) respect to an applicable     
drug1 ! ,secret>y %all apply a civil    
monet>y p5alty 9 an am\nt ( #aj1jjj =   
ea* day ! manufactur] has fail$ to      
submit su* ju/ification z s requir$4    
7#b7 ,false in=mation ,any manufactur] t
 submits a ju/ification "u ?is section &
 kn[+ly provides false in=mation 9 su*  
ju/ification is subject to a civil      
monet>y p5alty 9 an am\nt n to exce$    
#ajj1jjj = ea* item ( false in=mation4  
7#c7 ,application ( proc$ures ,!        
provisions ( section #aabh;,a 7o!r ?an  
subsections 7a7 & 7b77 %all apply to a  
civil monet>y p5alty "u ?is subsection 9
 ! same mann] z su* provisions apply to 
a p5alty or proce$+ "u section          

#aabh;,a7a74 ,civil monet>y p5alties    
impos$ "u ?is subsection are 9 addition 
to o!r p5alties z may be prescrib$ by   
law4  7g7 ,def9itions ,9 ?is section3   
7#a7 ,drug ,! t]m drug means a drug1 z  
def9$ 9 section #bja7;g7 ( ! ,f$]al     
,food1 ,drug1 & ,cosmetic ,act1 t is    
int5d$ = human use & subject to section 
#ejc7;b77#a7 ( su* ,act1 includ+ a      
product lic5s$ "u section #cea ( !      
,public ,heal? ,s]vice ,act4  7#b7      
,manufactur] ,! t]m manufactur] has !   
mean+ giv5 t t]m 9 section              
#ahdg;,a7c77#f77;,a74  7#c7 ,:olesale   
acquisition co/ ,! t]m :olesale         
acquisition co/ has ! mean+ giv5 t t]m 9
 section #ahdg;,a7c77#f77;,b74  4  #bbb4
 ,/r5g!n+ & exp&+ ph>macy b5efit manag]s
 transp>5cy requirem5ts ,section        
#aaej;,a ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #acbj;b-#bc71 z am5d$ by     
section #bbc1 is am5d$-- 7#a7 9         
subsection 7a7--  7,a7 9 p>agraph 7#a71 
by /rik+ or at !n end2  7,b7 9 p>agraph 
7#b71 by /rik+ ! comma at ! end & ins]t+

 2 or2 &  7,c7 by ins]t+ aft] p>agraph  
7#b7 ! foll[+ new p>agraph3  7#c7 a     
,/ate plan "u title ,,xix1 includ+ a    
manag$ c>e entity 7z def9$ 9 section    
#aicb7;a77#a77;,b771  2  7#b7 9         
subsection 7b7-- 7,a7 9 p>agraph 7#b7-- 
7i7 by /rik+ 7exclud+ bona fide & all t 
foll[s ?r\gh pati5t education           
programs772 &  7ii7 by /rik+ aggregate  
am\nt ( & ins]t+ aggregate am\nt &      
p]c5tage (2  7,b7 9 p>agraph 7#c71 by   
/rik+ aggregate am\nt ( & ins]t+        
aggregate am\nt & p]c5tage 7def9$ z a   
%>e ( gross drug co/s7 (2 &  7,c7 by    
add+ at ! end ! foll[+ new p>agraph3    
7#d7 ,! aggregate am\nt ( bona fide     
s]vice fees 7:i* include di/ribution    
s]vice fees1 inv5tory managem5t fees1   
product /ock+ all[ances1 & fees         
associat$ ) adm9i/rative s]vices        
agreem5ts & pati5t c>e programs 7su* z  
m$ication compliance programs & pati5t  
education programs77 ! ,,pbm receiv$ f--
 7,a7 ,,pdp sponsors2  7,b7 qualifi$    
heal? b5efit plans2  7,c7 manag$ c>e    

entities 7z def9$ 9 section             
#aicb7;a77#a77;b772 &  7,d7 drug        
manufactur]s4  2  7#c7 9 subsection 7c71
 by add+ at ! end ! foll[+ new          
p>agraphs3  7#e7 ,to ,/ates to c>ry out 
_! adm9i/ration & ov]sight ( ! ,/ate    
plan "u title ,,xix4  7#f7 ,to ! ,f$]al 
,trade ,commission to c>ry out section  
#e7;a7 ( ! ,f$]al ,trade ,commission    
,act 7#ae ,u4,s4,c4 #de;a7 & any o!r    
relevant consum] protection or antitru/ 
au?orities en=c$ by su* ,commission1    
includ+ review+ propos$ m]g]s 9 !       
prescription drug sector4  7#g7 ,to     
assi/ ! ,dep>tm5t ( ,ju/ice to c>ry out 
its antitru/ au?orities1 includ+ review+
 propos$ m]g]s 9 ! prescription drug    
sector4  2 &  7#d7 by add+ at ! end !   
foll[+ new subsection3  7f7 ,annual     
,,oig evaluation & report  7#a7         
,analysis ,! ,inspector ,g5]al ( !      
,dep>tm5t ( ,heal? & ,human ,s]vices    
%all conduct an annual evaluation ( !   
in=mation provid$ to ! ,secret>y "u ?is 
section4 ,su* evaluation %all include an

 analysis (-- 7,a7 ,,pbm rebates2  7,b7 
adm9i/rative fees2  7,c7 ! diff]5ce     
betwe5 :at plans pay ,p,b,ms & :at      
,p,b,ms pay ph>macies2  7,d7 g5]ic      
disp5s+ rates2 &  7,e7 o!r areas det]m9$
 appropriate by ! ,inspector ,g5]al4    
7#b7 ,report ,n lat] ?an ,july #a1      
#bjbc1 & annually !reaft]1 ! ,inspector 
,g5]al ( ! ,dep>tm5t ( ,heal? & ,human  
,s]vices %all submit to ,congress a     
report conta9+ ! results ( ! evaluation 
conduct$ "u p>agraph 7#a71 toge!r )     
recomm5dations = su* legislation &      
adm9i/rative action z ! ,inspector      
,g5]al det]m9es appropriate4 ,su* report
 %all n disclose ! id5tity ( a specific 
,,pbm1 plan1 or price *>g$ = a drug4  4 
#bbc4 ,prescription drug pric+ da%bo>ds 
,"p ,a ( title ,,xi ( ! ,social         
,security ,act is am5d$ by add+ at ! end
 ! foll[+ new section3  #aaej;,c4       
,prescription drug pric+ da%bo>ds  7a7  
,9 g5]al ,beg9n+ n lat] ?an ,janu>y #a1 
#bjbc1 ! ,secret>y %all e/abli%1 &      
annually update1 int]net website-bas$   

da%bo>ds1 ?r\gh :i* b5efici>ies1        
cl9icians1 rese>*]s1 & ! public c review
 in=mation on sp5d+ =1 & utilization (1 
prescription drugs & biologicals 7&     
relat$ supplies & me*anisms ( deliv]y7  
cov]$ "u ea* ( p>ts ,b & ,d ( title     
,,xviii & "u a ,/ate program "u title   
,,xix1 includ+ in=mation on tr5ds ( su* 
sp5d+ & utilization ov] "t4  7b7 ,m$ic>e
 "p ,b drug & biological da%bo>d  7#a7  
,9 g5]al ,! da%bo>d e/abli%$ "u         
subsection 7a7 = "p ,b ( title ,,xviii  
%all provide ! in=mation describ$ 9     
p>agraph 7#b74  7#b7 ,in=mation describ$
 ,! in=mation describ$ 9 ?is p>agraph is
 ! foll[+ in=mation ) respect to drug or
 biologicals cov]$ "u su* "p ,b3 7,a7 ,!
 br& "n &1 if applicable1 ! g5]ic names 
( ! drug or biological4  7,b7           
,consum]-fri5dly in=mation on ! uses &  
cl9ical indications ( ! drug or         
biological4  7,c7 ,! manufactur] or     
label] ( ! drug or biological4  7,d7 ,to
 ! ext5t feasible1 ! foll[+ in=mation3  
7i7 ,av]age total sp5d+ p] dosage unit (

 ! drug or biological 9 ! mo/ rec5t #b  
cal5d> ye>s = :i* data is available4    
7ii7 ,! p]c5tage *ange 9 av]age sp5d+ on
 ! drug or biological p] dosage unit    
betwe5 ! mo/ rec5t cal5d> ye> = :i* data
 is available &-- 7,i7 ! prec$+ cal5d>  
ye>2 &  7,,ii7 ! prec$+ #e & #aj cal5d> 
ye>s4  7iii7 ,! annual gr[? rate 9      
av]age sp5d+ p] dosage unit ( ! drug or 
biological 9 ! mo/ rec5t #e or #aj      
cal5d> ye>s = :i* data is available4    
7iv7 ,total sp5d+ = ! drug or biological
 = ! mo/ rec5t cal5d> ye> = :i* data is 
available4  7v7 ,! numb] ( b5efici>ies  
receiv+ ! drug or biological 9 ! mo/    
rec5t cal5d> ye> = :i* data is          
available4  7vi7 ,av]age sp5d+ on ! drug
 p] b5efici>y = ! mo/ rec5t cal5d> ye> =
 :i* data is available4  7,e7 ,! av]age 
sales price ( ! drug or biological 7z   
det]m9$ "u section #ahdg;,a7 = ! mo/    
rec5t qu>t]4  7,f7 ,consum]-fri5dly     
in=mation ab\t ! co9surance am\nt = !   
drug or biological = b5efici>ies = ! mo/
 rec5t qu>t]4 ,su* in=mation %all n     

include co9surance am\nts = qualifi$    
m$ic>e b5efici>ies 7z def9$ 9 section   
#aije7p77#a774  7,g7 ,= ! mo/ rec5t     
cal5d> ye> = :i* data is available--    
7i7 ! #ae drugs & biologicals ) ! highe/
 total sp5d+ "u su* "p2 &  7ii7 any drug
 or biological = :i* ! av]age annual p] 
b5efici>y sp5d+ exce$s ! gross sp5d+ =  
cov]$ "p ,d drugs at :i* ! annual       
out-(-pocket ?re%old "u section         
#ahfj;,d-#b7;b77#d77;,b7 w\ld be met = !
 ye>4  7,h7 ,o!r in=mation 7n o!rwise   
prohibit$ 9 law f be+ disclos$7 t !     
,secret>y det]m9es w\ld provide         
b5efici>ies1 cl9icians1 rese>*]s1 & !   
public ) helpful in=mation ab\t drug &  
biological sp5d+ & utilization 7includ+ 
tr5ds ( su* sp5d+ & utilization74  7c7  
,m$ic>e cov]$ "p ,d drug da%bo>d  7#a7  
,9 g5]al ,! da%bo>d e/abli%$ "u         
subsection 7a7 = "p ,d ( title ,,xviii  
%all provide ! in=mation describ$ 9     
p>agraph 7#b74  7#b7 ,in=mation describ$
 ,! in=mation describ$ 9 ?is p>agraph is
 ! foll[+ in=mation ) respect to cov]$  

"p ,d drugs "u su* "p ,d3 7,a7 ,!       
in=mation describ$ 9 subp>agraphs 7,a7  
?r\gh 7,d7 ( subsection 7b77#b74  7,b7  
,in=mation on av]age annual b5efici>y   
out-(-pocket co/s bel[ & above ! annual 
out-(-pocket ?re%old "u section         
#ahfj;,d-#b7;b77#d77;,b7 = ! curr5t plan
 ye>4 ,su* in=mation %all n include     
out-(-pocket co/s = subsidy eligible    
individuals "u section #ahfj;,d-#ad4    
7,c7 ,in=mation on h[ to access res\rces
 z describ$ 9 sections #ahfj;,d-#a7;c7 &
 #ahea7;d74  7,d7 ,= ! mo/ rec5t cal5d> 
ye> = :i* data is available-- 7i7 ! #ae 
cov]$ "p ,d drugs ) ! highe/ total sp5d+
 "u su* "p2 &  7ii7 any cov]$ "p ,d drug
 = :i* ! av]age annual p] b5efici>y     
sp5d+ exce$s ! gross sp5d+ = cov]$ "p ,d
 drugs at :i* ! annual out-(-pocket     
?re%old "u section                      
#ahfj;,d-#b7;b77#d77;,b7 w\ld be met = !
 ye>4  7,e7 ,o!r in=mation 7n o!rwise   
prohibit$ 9 law f be+ disclos$7 t !     
,secret>y det]m9es w\ld provide         
b5efici>ies1 cl9icians1 rese>*]s1 & !   

public ) helpful in=mation ab\t cov]$ "p
 ,d drug sp5d+ & utilization 7includ+   
tr5ds ( su* sp5d+ & utilization74  7d7  
,m$icaid cov]$ outpati5t drug da%bo>d   
7#a7 ,9 g5]al ,! da%bo>d e/abli%$ "u    
subsection 7a7 = title ,,xix %all       
provide ! in=mation describ$ 9 p>agraph 
7#b74  7#b7 ,in=mation describ$ ,!      
in=mation describ$ 9 ?is p>agraph is !  
foll[+ in=mation ) respect to cov]$     
outpati5t drugs "u su* title3  7,a7 ,!  
in=mation describ$ 9 subp>agraphs 7,a7  
?r\gh 7,d7 ( subsection 7b77#b74  7,b7  
,= ! mo/ rec5t cal5d> ye> = :i* data is 
available1 ! #ae cov]$ outpati5t drugs )
 ! highe/ total sp5d+ "u su* title4     
7,c7 ,o!r in=mation 7n o!rwise prohibit$
 9 law f be+ disclos$7 t ! ,secret>y    
det]m9es w\ld provide b5efici>ies1      
cl9icians1 rese>*]s1 & ! public )       
helpful in=mation ab\t cov]$ outpati5t  
drug sp5d+ & utilization 7includ+ tr5ds 
( su* sp5d+ & utilization74  7e7 ,data  
files ,! ,secret>y %all make available !
 und]ly+ data = ea* da%bo>d e/abli%$ "u 

subsection 7a7 9 a ma*9e-readable =mat4 
4  #bbd4 ,improv+ coord9ation betwe5 !  
,food & ,drug ,adm9i/ration & ! ,c5t]s =
 ,m$ic>e  ,m$icaid ,s]vices  7a7 ,9     
g5]al  7#a7 ,public meet+  7,a7 ,9 g5]al
 ,n lat] ?an #ab mon?s aft] ! date ( !  
enactm5t ( ?is ,act1 ! ,secret>y (      
,heal? & ,human ,s]vices 7ref]r$ to 9   
?is section z ! ,secret>y7 %all conv5e a
 public meet+ = ! purposes ( discuss+ & 
provid+ input on improvem5ts to         
coord9ation betwe5 ! ,food & ,drug      
,adm9i/ration & ! ,c5t]s = ,m$ic>e      
,m$icaid ,s]vices 9 prep>+ = !          
availability ( novel m$ical products    
describ$ 9 subsection 7c7 on ! m>ket 9 !
 ,unit$ ,/ates4  7,b7 ,att5dees ,!      
public meet+ %all include--  7i7        
repres5tatives ( relevant ,f$]al        
ag5cies1 includ+ repres5tatives f ea* ( 
! m$ical product c5t]s )9 ! ,food &     
,drug ,adm9i/ration & repres5tatives f !
 cod+1 cov]age1 & paym5t (fices )9 !    
,c5t]s = ,m$ic>e  ,m$icaid ,s]vices2    
7ii7 /akehold]s ) exp]tise 9 ! rese>* & 

developm5t ( novel m$ical products1     
includ+ manufactur]s ( su* products2    
7iii7 repres5tatives ( comm]cial heal?  
insurance pay]s2  7iv7 /akehold]s )     
exp]tise 9 ! adm9i/ration & use ( novel 
m$ical products1 includ+ physicians2 &  
7v7 /akehold]s repres5t+ pati5ts & )    
exp]tise 9 ! utilization ( pati5t       
exp]i5ce data 9 m$ical product          
developm5t4  7,c7 ,topics ,! public     
meet+ %all include a discussion (--  7i7
 ! /atus ( ! drug & m$ical device       
developm5t pipel9e relat$ to !          
availability ( novel m$ical products2   
7ii7 ! anticipat$ exp]tise necess>y to  
review ! safety & effectiv5ess ( su*    
products at ! ,food & ,drug             
,adm9i/ration & curr5t gaps 9 su*       
exp]tise1 if any2  7iii7 ! exp]tise     
necess>y to make cod+1 cov]age1 & paym5t
 decisions ) respect to su* products )9 
! ,c5t]s = ,m$ic>e  ,m$icaid ,s]vices1 &
 curr5t gaps 9 su* exp]tise1 if any2    
7iv7 tr5ds 9 ! diff]5ces 9 ! data       
necess>y to det]m9e ! safety &          

effectiv5ess ( a novel m$ical product & 
! data necess>y to det]m9e :e!r a novel 
m$ical product meets ! reasonable &     
necess>y requirem5ts = cov]age & paym5t 
"u title ,,xviii ( ! ,social ,security  
,act pursuant to section                
#ahfb7;a77#a77;,a7 ( su* ,act 7#db      
,u4,s4,c4 #aciey7a77#a77;,a772  7v7 !   
availability ( in=mation = sponsors (   
su* novel m$ical products to meet ea* ( 
^? requirem5ts2 &  7vi7 ! coord9ation ( 
in=mation relat$ to significant cl9ical 
improvem5t ov] exi/+ !rapies = pati5ts  
betwe5 ! ,food & ,drug ,adm9i/ration & !
 ,c5t]s = ,m$ic>e  ,m$icaid ,s]vices )  
respect to novel m$ical products4  7,d7 
,trade secrets & confid5tial in=mation  
,no in=mation discuss$ z a "p ( ! public
 meet+ "u ?is p>agraph %all be con/ru$ z
 au?oriz+ ! ,secret>y to disclose any   
in=mation t is a trade secret or        
confid5tial in=mation subject to section
 #eeb7;b77#d7 ( title #e1 ,unit$ ,/ates 
,code4  7#b7 ,improv+ transp>5cy (      
crit]ia = ,m$ic>e cov]age  7,a7 ,draft  

guidance ,n lat] ?an #ah mon?s aft] !   
public meet+ "u p>agraph 7#a71 !        
,secret>y %all update ! f9al guidance   
titl$ ,national ,cov]age ,det]m9ations )
 ,data ,collection z a ,condition (     
,cov]age3 ,cov]age ) ,evid5ce           
,developm5t to address any opportunities
 to improve ! availability & coord9ation
 ( in=mation z describ$ 9 clauses 7iv7  
?r\gh 7vi7 ( p>agraph 7#a77;,c74  7,b7  
,f9al guidance ,n lat] ?an #ab mon?s    
aft] issu+ draft guidance "u subp>agraph
 7,a71 ! ,secret>y %all f9alize ! updat$
 guidance to address any su*            
opportunities4  7b7 ,report on cod+1    
cov]age1 & paym5t processes "u m$ic>e = 
novel m$ical products ,n lat] ?an #ab   
mon?s aft] ! date ( ! enactm5t ( ?is    
,act1 ! ,secret>y %all publi% a report  
on ! ,int]net website ( ! ,dep>tm5t (   
,heal? & ,human ,s]vices reg>d+         
processes "u ! ,m$ic>e program "u title 
,,xviii ( ! ,social ,security ,act 7#db 
,u4,s4,c4 #acie et seq47 ) respect to ! 
cod+1 cov]age1 & paym5t ( novel m$ical  

products describ$ 9 subsection 7c74 ,su*
 report %all include ! foll[+3  7#a7 ,a 
description ( *all5ges 9 ! cod+1        
cov]age1 & paym5t processes "u ! ,m$ic>e
 program = novel m$ical products4  7#b7 
,recomm5dations to--  7,a7 incorporate  
pati5t exp]i5ce data 7su* z ! impact ( a
 disease or condition on ! lives (      
pati5ts & pati5t treatm5t pref]5ces7    
into ! cov]age & paym5t processes )9 !  
,c5t]s = ,m$ic>e  ,m$icaid ,s]vices2    
7,b7 decrease ! l5g? ( "t to make       
national & local cov]age det]m9ations "u
 ! ,m$ic>e program 7z ^? t]ms are def9$ 
9 subp>agraph 7,a7 & 7,b71 respectively1
 ( section #ahfb7l77#f7 ( ! ,social     
,security ,act 7#db ,u4,s4,c4           
#aciey7l77#f7772  7,c7 /reaml9e !       
cov]age process "u ! ,m$ic>e program &  
incorporate input f relevant /akehold]s 
into su* cov]age det]m9ations2 &  7,d7  
id5tify pot5tial me*anisms to           
incorporate novel paym5t designs simil> 
to ^? 9 developm5t 9 comm]cial insurance
 plans & ,/ate plans "u title ,,xix (   

su* ,act 7#db ,u4,s4,c4 #acif et seq47  
into ! ,m$ic>e program4  7c7 ,novel     
m$ical products describ$ ,= purposes (  
?is section1 a novel m$ical product     
describ$ 9 ?is subsection is a m$ical   
product1 includ+ a drug1 biological     
7includ+ g5e & cell !rapy71 or m$ical   
device1 t has be5 designat$ z a         
break?r\gh !rapy "u section #ejf7;a7 ( !
 ,f$]al ,food1 ,drug1 & ,cosmetic ,act  
7#ba ,u4,s4,c4 #cef7;a771 a break?r\gh  
device "u section #eae;,b ( su* ,act    
7#ba ,u4,s4,c4 #cfj;e-#c71 or a         
reg5]ative advanc$ !rapy "u section     
#ejf7;g7 ( su* ,act 7#ba ,u4,s4,c4      
#cef7;g774  #bbe4 ,pati5t consultation 9
 ,m$ic>e national & local cov]age       
det]m9ations 9 ord] to mitigate b>ri]s  
to inclusion ( su* p]spectives ,section 
#ahfb7l7 ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #aciey7l77 is am5d$ by add+  
at ! end ! foll[+ new p>agraph3  7#g7   
,pati5t consultation 9 national & local 
cov]age det]m9ations ,! ,secret>y may   
consult ) pati5ts & organizations       

repres5t+ pati5ts 9 mak+ national &     
local cov]age det]m9ations4  4  #bbf4   
,,gao /udy on increases to ,m$ic>e &    
,m$icaid sp5d+ due to copaym5t c\pons & 
o!r pati5t assi/ance programs  7a7 ,/udy
 ,! ,comptroll] ,g5]al ( ! ,unit$ ,/ates
 %all conduct a /udy on ! impact (      
copaym5t c\pons & o!r pati5t assi/ance  
programs on prescription drug pric+ &   
exp5ditures )9 ! ,m$ic>e & ,m$icaid     
programs4 ,! /udy %all assess ! foll[+3 
7#a7 ,! ext5t to :i* copaym5t c\pons &  
o!r pati5t assi/ance programs contribute
 to inflat$ prescription drug prices "u 
su* programs4  7#b7 ,! impact copaym5t  
c\pons & o!r pati5t assi/ance programs h
 9 ! ,m$ic>e ,"p ,d program e/abli%$ "u 
"p ,d ( title ,,xviii ( ! ,social       
,security ,act 7#db ,u4,s4,c4           
#aciew-#aja et seq47 on utilization (   
high]-co/ br& drugs & l[] utilization ( 
g5]ic drugs 9 t program4  7#c7 ,! ext5t 
to :i* manufactur]s report or obta9 tax 
b5efits1 includ+ d$uctions ( bus9ess    
exp5ses & *>itable contributions1 = any 

( ! foll[+3 7,a7 ,(f]+ copaym5t c\pons  
or o!r pati5t assi/ance programs4  7,b7 
,sponsor+ manufactur] pati5t assi/ance  
programs4  7,c7 ,pay+ = sponsor%ips at  
outrea* & advocacy ev5ts organiz$ by    
pati5t assi/ance programs4  7#d7 ,!     
efficacy ( ov]sight conduct$ to ensure t
 indep5d5t *>ity pati5t assi/ance       
programs adh]e to guidance f ! ,(fice ( 
! ,inspector ,g5]al ( ! ,dep>tm5t (     
,heal? & ,human ,s]vices on avoid+ wa/e1
 fraud1 & abuse4  7b7 ,def9itions ,9 ?is
 section3  7#a7 ,indep5d5t *>ity pati5t 
assi/ance program ,! t]m indep5d5t *>ity
 pati5t assi/ance program means any     
organization describ$ 9 section         
#eja7;c77#c7 ( ! ,int]nal ,rev5ue ,code 
( #aihf & exempt f taxation "u section  
#eja7;a7 ( su* ,code & :i* is n a       
private f\ndation 7z def9$ 9 section    
#eji7;a7 ( su* ,code7 t (f]s pati5t     
assi/ance4  7#b7 ,manufactur] ,! t]m    
manufactur] has ! mean+ giv5 t t]m 9    
section #aibg7k77#e7 ( ! ,social        
,security ,act 7#db ,u4,s4,c4           

#acifr-#h7k77#e774  7#c7 ,manufactur]   
pati5t assi/ance program ,! t]m         
manufactur] pati5t assi/ance program    
means an organization1 includ+ a private
 f\ndation 7z s def9$71 t is sponsor$   
by1 or receives fund+ f1 a manufactur] &
 t (f]s pati5t assi/ance4 ,su* t]m does 
n include an indep5d5t *>ity pati5t     
assi/ance program4  7#d7 ,pati5t        
assi/ance ,! t]m pati5t assi/ance means 
assi/ance provid$ to (fset ! co/ ( drugs
 = individuals4 ,su* t]m includes free  
products1 c\pons1 rebates1 copay or     
disc\nt c>ds1 & o!r means ( provid+     
assi/ance to individuals relat$ to drug 
co/s1 z det]m9$ by ! ,secret>y ( ,heal? 
& ,human ,s]vices4  7c7 ,report ,n lat] 
?an #bd mon?s aft] ! date ( ! enactm5t (
 ?is ,act1 ! ,comptroll] ,g5]al ( !     
,unit$ ,/ates %all submit to ,congress a
 report describ+ ! f9d+s ( ! /udy       
requir$ "u subsection 7a74  #bbg4       
,med,p,a,c report on %ift+ cov]age (    
c]ta9 ,m$ic>e "p ,b drugs to ,m$ic>e "p 
,d  7a7 ,/udy ,! ,m$ic>e ,paym5t        

,advisory ,commission 79 ?is section    
ref]r$ to z ! ,commission7 %all conduct 
a /udy on %ift+ cov]age ( c]ta9 drugs & 
biologicals = :i* paym5t is curr5tly    
made "u "p ,b ( title ,,xviii ( !       
,social ,security ,act 7#db ,u4,s4,c4   
#acie;j et seq47 to "p ,d ( su* title   
7#db ,u4,s4,c4 #aciew-#ba et seq474 ,su*
 /udy %all include an analysis (--  7#a7
 diff]5ces 9 program /ructures & paym5t 
me?ods = drugs & biologicals cov]$ "u   
su* p>ts ,b & ,d1 includ+ effects ( su* 
a %ift on program sp5d+1 b5efici>y      
co/-%>+ liability1 & utilization        
managem5t te*niques = su* drugs &       
biologicals2 &  7#b7 ! feasibility &    
policy implications ( %ift+ cov]age (   
drugs & biologicals = :i* paym5t is     
curr5tly made "u su* "p ,b to su* "p ,d4
  7b7 ,report  7#a7 ,9 g5]al ,n lat] ?an
 ,june #cj1 #bjbd1 ! ,commission %all   
submit to ,congress a report conta9+ !  
results ( ! /udy conduct$ "u subsection 
7a74  7#b7 ,cont5ts ,! report "u        
p>agraph 7#a7 %all include in=mation1 & 

recomm5dations z ! ,commission deems    
appropriate1 reg>d+--  7,a7 =mul>y      
design "u su* "p ,d2  7,b7 ! ability ( !
 b5efit /ructure "u su* "p ,d to control
 total sp5d+ on drugs & biologicals =   
:i* paym5t is curr5tly made "u su* "p   
,b2  7,c7 *anges to ! bid process "u su*
 "p ,d1 if any1 t may be necess>y to    
integrate cov]age ( su* drugs &         
biologicals into su* "p ,d2 &  7,d7 any 
o!r *anges to ! program t ,congress %\ld
 consid] 9 det]m9+ :e!r to %ift cov]age 
( su* drugs & biologicals f su* "p ,b to
 su* "p ,d4  #bbh4 ,tak+ /eps to fulfill
 treaty obligations to ,tribal          
communities  7a7 ,,gao /udy ,!          
,comptroll] ,g5]al %all conduct a /udy  
reg>d+ access to1 & ! co/ (1            
prescription drugs among ,indians4 ,!   
/udy %all include-- 7#a7 a review ( :at 
,indian heal? programs pay =            
prescription drugs on res]vations & 9   
urban c5t]s relative to o!r consum]s2   
7#b7 recomm5dations to align ! value (  
prescription drug disc\nts available "u 

! ,m$icaid drug rebate program e/abli%$ 
"u section #aibg ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #acifr-#h7 )        
prescription drug disc\nts available to 
,tribal communities ?r\gh !             
pur*as$_/ref]r$ c>e program ( ! ,indian 
,heal? ,s]vice = physician adm9i/]$     
drugs2 &  7#c7 an exam9ation ( h[       
,tribal communities & urban ,indian     
organizations utilize ! ,m$ic>e "p ,d   
program e/abli%$ "u title ,,xviii ( !   
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aja et seq47 & recomm5dations to
 improve enrollm5t among ,indians 9 t   
program4  7b7 ,report ,n lat] ?an #ah   
mon?s aft] ! date ( ! enactm5t ( ?is    
,act1 ! ,comptroll] ,g5]al %all submit  
to ,congress a report conta9+ ! results 
( ! /udy conduct$ "u subsection 7a71    
toge!r ) recomm5dations = su*           
legislation & adm9i/rative action z !   
,comptroll] ,g5]al det]m9es appropriate4
  7c7 ,def9itions ,9 ?is section3  7#a7 
,comptroll] ,g5]al ,! t]m ,comptroll]   
,g5]al means ! ,comptroll] ,g5]al ( !   

,unit$ ,/ates4  7#b7 ,indian2 ,indian   
heal? program2 ,indian tribe ,! t]ms    
,indian1 ,indian heal? program1 &       
,indian tribe h ! mean+s giv5 ^? t]ms 9 
section #d ( ! ,indian ,heal? ,c>e      
,improvem5t ,act 7#be ,u4,s4,c4 #afjc74 
,,iii ,m$icaid  #cja4 ,m$icaid ph>macy &
 !rapeutics committee improvem5ts  7a7  
,9 g5]al ,subp>agraph 7,a7 ( section    
#aibg7;d77#d7 ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #acifr-#h7;d77#d77 is   
am5d$ to read z foll[s3  7,a7 7i7 ,!    
=mul>y is develop$ & review$ by a       
ph>macy & !rapeutics committee consi/+ (
 physicians1 ph>maci/s1 & o!r           
appropriate individuals appo9t$ by !    
,gov]nor ( ! ,/ate4  7ii7 ,subject to   
clause 7vi71 ! ,/ate e/abli%es &        
implem5ts a conflict ( int]e/ policy = !
 ph>macy & !rapeutics committee t-- 7,i7
 is publicly accessible2  7,,ii7        
requires all committee memb]s to        
complete1 on at lea/ an annual basis1 a 
disclosure ( relation%ips1 associations1
 & f9ancial deal+s t may affect _!      

indep5d5ce ( judgem5t 9 committee       
matt]s2 &  7,,iii7 conta9s cle>         
processes1 su* z recusal f vot+ or      
discussion1 = ^? memb]s :o report a     
conflict ( int]e/1 along ) appropriate  
processes to address any in/ance :]e a  
memb] fails to report a conflict (      
int]e/4  7iii7 ,! memb]%ip ( ! ph>macy &
 !rapeutics committee-- 7,i7 includes at
 lea/ #a actively practic+ physician &  
at lea/ #a actively practic+ ph>maci/1  
ea* ( :om--  7aa7 is indep5d5t & free ( 
conflict ) respect to manufactur]s &    
,m$icaid p>ticipat+ plans or            
subcontractors1 includ+ ph>macy b5efit  
manag]s2 &  7bb7 has exp]tise 9 ! c>e ( 
#a or m ,m$icaid-specific populations   
su* z eld]ly or disabl$ individuals1    
*ildr5 ) complex m$ical ne$s1 or        
l[-income individuals ) *ronic          
illnesses2 &  7,,ii7 is made publicly   
available4  7iv7 ,at ! option ( ! ,/ate1
 ! ,/ate's drug use review bo>d e/abli%$
 "u subsection 7g77#c7 may s]ve z !     
ph>macy & !rapeutics committee provid$ !

 ,/ate ensures t su* bo>d meets !       
requirem5ts ( clauses 7ii7 & 7iii74  7v7
 ,! ,/ate reviews & has f9al approval ( 
! =mul>y e/abli%$ by ! ph>macy &        
!rapeutics committee4  7vi7 ,if !       
,secret>y det]m9es x appropriate or     
necess>y bas$ on ! f9d+s &              
recomm5dations ( ! ,comptroll] ,g5]al ( 
! ,unit$ ,/ates 9 ! report submitt$ to  
,congress "u section #cjc ( ! ,r$uc$    
,co/s & ,cont9u$ ,cures ,act1 !         
,secret>y %all issue guidance t ,/ates  
mu/ foll[ = e/abli%+ conflict ( int]e/  
policies = ! ph>macy & !rapeutics       
committee 9 accordance ) ! requirem5ts (
 clause 7ii71 includ+ appropriate /&>ds 
& requirem5ts = id5tify+1 address+1 &   
report+ on conflicts ( int]e/4  4  7b7  
,application to ,m$icaid manag$ c>e     
organizations ,clause 7xiii7 ( section  
#aijc7m77#b77;,a7 ( ! ,social ,security 
,act 7#db ,u4,s4,c4 #acif;b7m77#b77;,a77
 is am5d$-- 7#a7 by /rik+ & 7,,iii7 &   
ins]t+ 7,,iii72  7#b7 by /rik+ ! p]iod  
at ! end & ins]t+ 1 & 7,,iv7 any =mul>y 

us$ by ! entity = cov]$ outpati5t drugs 
disp5s$ to individuals eligible = m$ical
 assi/ance :o are enroll$ ) ! entity is 
develop$ & review$ by a ph>macy &       
!rapeutics committee t meets !          
requirem5ts ( clauses 7ii7 & 7iii7 (    
section #aibg7;d77#d77;,a742 &  7#c7 by 
mov+ ! left m>g9 #b ems to ! left4  7c7 
,effective date ,! am5dm5ts made by ?is 
section %all take effect on ! date t is 
#a ye> aft] ! date ( enactm5t ( ?is     
,act4  #cjb4 ,improv+ report+           
requirem5ts & develop+ /&>ds = ! use (  
drug use review bo>ds 9 ,/ate ,m$icaid  
programs  7a7 ,9 g5]al ,section         
#aibg7;g77#c7 ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #acifr-#h7;g77#c77 is   
am5d$--  7#a7 by am5d+ subp>agraph 7,b7 
to read z foll[s3  7,b7 ,memb]%ip  7i7  
,9 g5]al ,! memb]%ip ( ! ,,dur ,bo>d    
%all include heal? c>e pr(essionals :o h
 recogniz$ k & exp]tise 9 "o or m ( !   
foll[+3  7,i7 ,! cl9ically appropriate  
prescrib+ ( cov]$ outpati5t drugs4      
7,,ii7 ,! cl9ically appropriate disp5s+ 

& monitor+ ( cov]$ outpati5t drugs4     
7,,iii7 ,drug use review1 evaluation1 & 
int]v5tion4  7,,iv7 ,m$ical quality     
assurance4  7ii7 ,memb]%ip requirem5ts  
,! memb]%ip ( ! ,,dur ,bo>d %all-- 7,i7 
be made up ( at lea/ #a_/c b no m ?an   
#ea p]c5t memb]s :o are lic5s$ &        
actively practic+ physicians & at lea/  
#a_/c memb]s :o are lic5s$ & actively   
practic+ ph>maci/s2  7,,ii7 include at  
lea/ #a lic5s$ & actively practic+      
physician & at lea/ #a lic5s$ & actively
 practic+ ph>maci/1 ea* ( :om-- 7aa7 is 
indep5d5t & free ( any conflict1 includ+
 ) respect to manufactur]s1 m$icaid     
manag$ c>e entities1 or ph>macy b5efit  
manag]s2 &  7bb7 has exp]tise 9 ! c>e ( 
#a or m categories ( individuals :o are 
likely to be eligible = b5efits "u ?is  
title1 includ+ eld]ly or disabl$        
individuals1 *ildr5 ) complex m$ical    
ne$s1 or l[-income individuals ) *ronic 
illnesses2 &  7,,iii7 be made publicly  
available4  7iii7 ,conflict ( int]e/    
policy ,! ,/ate %all e/abli% & implem5t 

a conflict ( int]e/ policy = ! ,,dur    
,bo>d t-- 7,i7 is publicly accessible2  
7,,ii7 requires all bo>d memb]s to      
complete1 on at lea/ an annual basis1 a 
disclosure ( relation%ips1 associations1
 & f9ancial deal+s t may affect _!      
indep5d5ce ( judgem5t 9 bo>d matt]s2 &  
7,,iii7 conta9s cle> processes1 su* z   
recusal f vot+ or discussion1 = ^?      
memb]s :o report a conflict ( int]e/1   
along ) appropriate processes to address
 any in/ance :]e a memb] fails to report
 a conflict ( int]e/4  2 &  7#b7 by add+
 at ! end ! foll[+ new subp>agraph3     
7,e7 ,,dur ,bo>d memb]%ip reports  7i7  
,,dur ,bo>d reports ,ea* ,/ate %all     
require ! ,,dur ,bo>d to prep>e & submit
 to ! ,/ate an annual report on ! ,,dur 
,bo>d memb]%ip4 ,ea* su* report %all    
include any conflicts ( int]e/ ) respect
 to memb]s ( ! ,,dur ,bo>d t ! ,,dur    
,bo>d record$ or 0 aw>e ( dur+ ! p]iod t
 is ! subject ( ! report1 & ! process   
appli$ to address su* conflicts (       
int]e/1 9 addition to any o!r in=mation 

requir$ by ! ,/ate4  7ii7 ,inclusion (  
,,dur ,bo>d memb]%ip in=mation 9 ,/ate  
reports ,ea* annual ,/ate report to !   
,secret>y requir$ "u subp>agraph 7,d7   
%all include-- 7,i7 ! numb] (           
individuals s]v+ on ! ,/ate's ,,dur     
,bo>d2  7,,ii7 ! names & pr(essions ( ! 
individuals s]v+ on su* ,,dur ,bo>d2    
7,,iii7 any conflicts ( int]e/ or       
recusals ) respect to memb]s ( su* ,,dur
 ,bo>d report$ by ! ,,dur ,bo>d or t !  
,/ate 0 aw>e ( dur+ ! p]iod t is !      
subject ( ! report2 &  7,,iv7 :e!r !    
,/ate has elect$ = su* ,,dur ,bo>d to   
s]ve z ! committee responsible =        
develop+ a ,/ate =mul>y "u subsection   
7d77#d77;,a74  4  7b7 ,manag$ c>e       
requirem5ts ,section #aicb7;i7 ( !      
,social ,security ,act 7#db ,u4,s4,c4   
#acifu-#b7;i77 is am5d$--  7#a7 by /rik+
 section #dhc4c7s77#d7 & ins]t+ section 
#dch4c7s77#d72  7#b7 by /rik+           
#dhc4c7s77#e7 & ins]t+ #dch4c7s77#e72 & 
7#c7 by add+ at ! end ! foll[+3 ,su* a  
manag$ c>e entity %all n be consid]$ to 

be 9 compliance ) ! requirem5t ( su*    
section #dch4c7s77#e7 t ! entity provide
 a detail$ description ( its drug       
utilization review activities unless !  
entity includes a description ( !       
prospective drug review activities      
describ$ 9 p>agraph 7#b77;,a7 ( section 
#aibg7;g7 & ! activities li/$ 9 p>agraph
 7#c77;,c7 ( section #aibg7;g71 makes ! 
und]ly+ drug utilization review data    
available to ! ,/ate & ! ,secret>y1 &   
provides su* o!r in=mation z deem$      
appropriate by ! ,secret>y44  7c7       
,developm5t ( national /&>ds = ,m$icaid 
drug use review ,! ,secret>y ( ,heal? & 
,human ,s]vices may promulgate          
regulations or guidance e/abli%+        
national /&>ds = ,m$icaid drug use      
review programs "u section #aibg7;g7 ( !
 ,social ,security ,act 7#db ,u4,s4,c4  
#acifr-#h7 & drug utilization review    
activities & requirem5ts "u section     
#aicb7;i7 ( su* ,act 7#db ,u4,s4,c4     
#acifu-#b7;i771 = ! purpose ( align+    
review crit]ia = prospective &          

retrospective drug use review across all
 ,/ate ,m$icaid programs4  7d7 ,,cms    
guidance ,n lat] ?an #ah mon?s aft] !   
date ( enactm5t ( ?is ,act1 ! ,secret>y 
( ,heal? & ,human ,s]vices %all issue   
guidance-- 7#a7 outl9+ /eps t ,/ates mu/
 take to come into compliance ) /atutory
 & regulatory requirem5ts = prospective 
& retrospective drug use review "u      
section #aibg7;g7 ( ! ,social ,security 
,act 7#db ,u4,s4,c4 #acifr-#h7;g77 &    
drug utilization review activities &    
requirem5ts "u section #aicb7;i7 ( su*  
,act 7#db ,u4,s4,c4 #acifu-#b7;i77      
7includ+ ) respect to requirem5ts t 7 9 
effect be=e ! date ( enactm5t ( ?is     
,act72 &  7#b7 describ+ ! actions t !   
,secret>y w take to en=ce su*           
requirem5ts4  7e7 ,effective date ,!    
am5dm5ts made by ?is section %all take  
effect on ! date t is #a ye> aft] ! date
 ( enactm5t ( ?is ,act4  #cjc4 ,,gao    
report on conflicts ( int]e/ 9 ,/ate    
,m$icaid program drug use review bo>ds &
 ph>macy & !rapeutics 7,p,t7 committees 

7a7 ,inve/igation ,! ,comptroll] ,g5]al 
( ! ,unit$ ,/ates %all conduct an       
inve/igation ( pot5tial or exi/+        
conflicts ( int]e/ among memb]s ( ,/ate 
,m$icaid program ,/ate drug use review  
bo>ds 79 ?is section ref]r$ to z ,,dur  
,bo>ds7 & ph>macy & !rapeutics          
committees 79 ?is section ref]r$ to z   
,p,t ,committees74  7b7 ,report ,n lat] 
?an #bd mon?s aft] ! date ( enactm5t (  
?is ,act1 ! ,comptroll] ,g5]al %all     
submit to ,congress a report on !       
inve/igation conduct$ "u subsection 7a7 
t includes ! foll[+3  7#a7 ,a           
description outl9+ h[ ,,dur ,bo>ds &    
,p,t ,committees op]ate 9 ,/ates1       
includ+ details ) respect to-- 7,a7 !   
/ructure & op]ation ( ,,dur ,bo>ds &    
/atewide ,p,t ,committees2  7,b7 ,/ates 
t op]ate sep>ate ,p,t ,committees = _!  
fee-=-s]vice ,m$icaid program & _!      
,m$icaid manag$ c>e organizations or o!r
 ,m$icaid manag$ c>e arrangem5ts        
7collectively ref]r$ to 9 ?is section z 
,m$icaid ,m,c,os72 &  7,c7 ,/ates t all[

 ,m$icaid ,m,c,os to h _! own ,p,t      
,committees & ! ext5t to :i* ph>macy    
b5efit manag]s adm9i/] or p>ticipate 9  
su* ,p,t ,committees4  7#b7 ,a          
description outl9+ ! diff]5ces betwe5   
,,dur ,bo>ds e/abli%$ 9 accordance )    
section #aibg7;g77#c7 ( ! ,social       
,security ,act 7#db ,u4,s4,c4           
#acifr7g77#c77 & ,p,t ,committees4  7#c7
 ,a description outl9+ ! tools ,p,t     
,committees may use to det]m9e ,m$icaid 
drug cov]age & utilization managem5t    
policies4  7#d7 ,an analysis ( :e!r & h[
 ,/ates or ,p,t ,committees e/abli%     
p>ticipation & indep5d5ce requirem5ts = 
,,dur ,bo>ds & ,p,t ,committees1 includ+
 ) respect to entities ) connections )  
drug manufactur]s1 ,/ate ,m$icaid       
programs1 manag$ c>e organizations1 &   
o!r entities or individuals 9 !         
ph>maceutical indu/ry4  7#e7 ,a         
description outl9+ h[ ,/ates1 ,,dur     
,bo>ds1 or ,p,t ,committees def9e       
conflicts ( int]e/4  7#f7 ,a description
 ( h[ ,,dur ,bo>ds & ,p,t ,committees   

address conflicts ( int]e/1 includ+ :o  
is responsible = implem5t+ su* policies4
  7#g7 ,a description ( ! tools1 if any1
 ,/ates use to ensure t !re are no      
conflicts ( int]e/ on ,,dur ,bo>ds &    
,p,t ,committees4  7#h7 ,an analysis ( !
 effectiv5ess ( tools ,/ates use to     
ensure t !re are no conflicts ( int]e/  
on ,,dur ,bo>ds & ,p,t ,committees &1 if
 applicable1 recomm5dations z to h[ su* 
tools c\ld be improv$4  7#i7 ,a review (
 /rategies ,/ates may use to gu>d aga9/ 
conflicts ( int]e/ on ,,dur ,bo>ds &    
,p,t ,committees & to ensure compliance 
) ! requirem5ts ( titles ,,xi & ,,xix ( 
! ,social ,security ,act 7#db ,u4,s4,c4 
#acja et seq41 #acif et seq47 & access  
to effective1 cl9ically appropriate1 &  
m$ically necess>y drug treatm5ts =      
,m$icaid b5efici>ies1 includ+           
recomm5dations = su* legislative &      
adm9i/rative actions z ! ,comptroll]    
,g5]al det]m9es appropriate4  #cjd4     
,ensur+ ! accuracy ( manufactur] price &
 drug product in=mation "u ! ,m$icaid   

drug rebate program  7a7 ,audit (       
manufactur] price & drug product        
in=mation  7#a7 ,9 g5]al ,subp>agraph   
7,b7 ( section #aibg7;b77#c7 ( ! ,social
 ,security ,act 7#db ,u4,s4,c4          
#acifr-#h7;b77#c77 is am5d$ to read z   
foll[s3  7,b7 ,audits & surveys (       
manufactur] price & drug product        
in=mation  7i7 ,audits ,! ,secret>y %all
 conduct ongo+ audits ( ! price & drug  
product in=mation report$ by            
manufactur]s "u subp>agraph 7,a7 = ! mo/
 rec5tly end$ rebate p]iod to ensure !  
accuracy & timel9ess ( su* in=mation4 ,9
 conduct+ su* audits1 ! ,secret>y may   
employ evaluations1 surveys1 /ati/ical  
sampl+1 pr$ictive analytics1 & o!r      
relevant tools & me?ods4  7ii7          
,v]ifications surveys ( av]age          
manufactur] price & manufactur]'s av]age
 sales price ,9 addition to ! audits    
requir$ "u clause 7i71 ! ,secret>y may  
survey :olesal]s & manufactur]s 7includ+
 manufactur]s t directly di/ribute _!   
cov]$ outpati5t drugs 79 ?is subp>agraph

 ref]r$ to z direct sell]s771 :5        
necess>y1 to v]ify manufactur] prices & 
manufactur]'s av]age sales prices       
7includ+ :olesale acquisition co/7 to   
make paym5t report$ "u subp>agraph 7,a74
  7iii7 ,p5alties ,9 addition to o!r    
p5alties z may be prescrib$ by law1     
includ+ "u subp>agraph 7,c7 ( ?is       
p>agraph1 ! ,secret>y may impose a civil
 monet>y p5alty 9 an am\nt n to exce$   
#ahe1jjj on an annual basis on a        
:olesal]1 manufactur]1 or direct sell]1 
if ! :olesal]1 manufactur]1 or direct   
sell] ( a cov]$ outpati5t drug refuses a
 reque/ = in=mation ab\t *>ges or prices
 by ! ,secret>y 9 connection ) an audit 
or survey "u ?is subp>agraph or kn[+ly  
provides false in=mation4 ,! provisions 
( section #aabh;,a 7o!r ?an subsections 
7a7 7) respect to am\nts ( p5alties or  
additional assessm5ts7 & 7b77 %all apply
 to a civil money p5alty "u ?is clause 9
 ! same mann] z su* provisions apply to 
a p5alty or proce$+ "u section          
#aabh;,a7a74  7iv7 ,reports  7,i7       

,report to ,congress ,! ,secret>y %all1 
n lat] ?an #ah mon?s aft] date (        
enactm5t ( ?is subp>agraph1 submit a    
report to ! ,committee on ,en]gy &      
,comm]ce ( ! ,h\se ( ,repres5tatives & !
 ,committee on ,f9ance ( ! ,s5ate reg>d+
 additional regulatory or /atutory      
*anges t may be requir$ 9 ord] to ensure
 accurate & timely report+ & ov]sight ( 
manufactur] price & drug product        
in=mation1 includ+ :e!r *anges %\ld be  
made to reasonable assumption           
requirem5ts to ensure su* assumptions   
are reasonable & accurate or :e!r ano!r 
me?odology = ensur+ accurate & timely   
report+ ( price & drug product in=mation
 %\ld be consid]$ to ensure ! integrity 
( ! drug rebate program "u ?is section4 
7,,ii7 ,annual reports ,! ,secret>y     
%all1 on at lea/ an annual basis1 submit
 a report to ! ,committee on ,en]gy &   
,comm]ce ( ! ,h\se ( ,repres5tatives & !
 ,committee on ,f9ance ( ! ,s5ate       
summ>iz+ ! results ( ! audits & surveys 
conduct$ "u ?is subp>agraph dur+ ! p]iod

 t is ! subject ( ! report4  7,,iii7    
,cont5t ,ea* report submitt$ "u         
subclause 7,,ii7 %all1 ) respect to !   
p]iod t is ! subject ( ! report1 include
 summ>ies (-- 7aa7 error rates 9 !      
price1 drug product1 & o!r relevant     
in=mation suppli$ by manufactur]s "u    
subp>agraph 7,a72  7bb7 ! timel9ess )   
:i* manufactur]s1 :olesal]s1 & direct   
sell]s provide in=mation requir$ "u     
subp>agraph 7,a7 or "u clause 7i7 or    
7ii7 ( ?is subp>agraph2  7cc7 ! numb] ( 
manufactur]s1 :olesal]s1 & direct sell]s
 & drug products audit$ "u ?is          
subp>agraph2  7dd7 ! types ( price &    
drug product in=mation review$ "u !     
audits conduct$ "u ?is subp>agraph2     
7ee7 ! tools & me?odologies employ$ 9   
su* audits2  7ff7 ! f9d+s ( su* audits1 
includ+ :i* manufactur]s1 if any1 7     
p5aliz$ "u ?is subp>agraph2 &  7gg7 su* 
o!r relevant in=mation z ! ,secret>y    
%all deem appropriate4  7,,iv7          
,protection ( in=mation ,9 prep>+ a     
report requir$ "u subclause 7,,ii71 !   

,secret>y %all r$act su* propriet>y     
in=mation z ! ,secret>y det]m9es        
appropriate to prev5t disclosure (1 & to
 safegu>d1 su* in=mation4  7v7          
,appropriations ,out ( any funds 9 !    
,treasury n o!rwise appropriat$1 !re is 
appropriat$ to ! ,secret>y #b1jjj1jjj = 
fiscal ye> #bjbc & ea* fiscal ye>       
!reaft] to c>ry out ?is subp>agraph4  4 
7#b7 ,effective date ,! am5dm5ts made by
 ?is subsection %all take effect on !   
fir/ day ( ! fir/ fiscal qu>t] t beg9s  
aft] ! date ( enactm5t ( ?is ,act4  7b7 
,increas$ p5alties = noncompliance )    
report+ requirem5ts  7#a7 ,increas$     
p5alty = late report+ ( in=mation       
,section #aibg7;b77#c77;,c77i7 ( !      
,social ,security ,act 7#db ,u4,s4,c4   
#acifr-#h7;b77#c77;,c77i77 is am5d$ by  
/rik+ increas$ by #aj1jjj = ea* day 9   
:i* su* in=mation has n be5 provid$ &   
su* am\nt %all be paid to ! ,treasury & 
ins]t+ 1 = ea* cov]$ outpati5t drug )   
respect to :i* su* in=mation is n       
provid$1 #ej1jjj = ! fir/ day t su*     

in=mation is n provid$ on a timely basis
 & #ai1jjj = ea* subsequ5t day t su*    
in=mation is n provid$4  7#b7 ,increas$ 
p5alty = kn[+ly report+ false in=mation 
,section #aibg7;b77#c77;,c77ii7 ( !     
,social ,security ,act 7#db ,u4,s4,c4   
#acifr-#h7;b77#c77;,c77ii77 is am5d$ by 
/rik+ #ajj1jjj & ins]t+ #ejj1jjj4  7#c7 
,effective date ,! am5dm5ts made by ?is 
subsection %all take effect on ! fir/   
day ( ! fir/ fiscal qu>t] t beg9s aft] !
 date ( enactm5t ( ?is ,act4  #cje4     
,t-,,msis drug data analytics reports   
7a7 ,9 g5]al ,n lat] ?an ,may #a ( ea*  
cal5d> ye> beg9n+ ) cal5d> ye> #bjbd1 ! 
,secret>y ( ,heal? & ,human ,s]vices 79 
?is section ref]r$ to z ! ,secret>y7    
%all publi% on ! ,int]net website ( !   
,c5t]s = ,m$ic>e  ,m$icaid ,s]vices t is
 accessible to ! public a report ( ! mo/
 rec5tly available data on provid]      
prescrib+ patt]ns "u ! ,m$icaid program4
  7b7 ,cont5t ( report  7#a7 ,requir$   
cont5t ,ea* report requir$ "u subsection
 7a7 = a cal5d> ye> %all include !      

foll[+ in=mation ) respect to ea* ,/ate 
7&1 to ! ext5t available1 ) respect to  
,pu]to ,rico1 ! ,unit$ ,/ates ,virg9    
,isl&s1 ,guam1 ! ,nor!rn ,m>iana ,isl&s1
 & ,am]ican ,samoa73  7,a7 ,a comp>ison 
( cov]$ outpati5t drug 7z def9$ 9       
section #aibg7k77#b7 ( ! ,social        
,security ,act 7#db ,u4,s4,c4           
#acifr-#h7k77#b777 prescrib+ patt]ns "u 
! ,/ate ,m$icaid plan or waiv] ( su*    
plan 7includ+ drugs prescrib$ on a      
fee-=-s]vice basis & drugs prescrib$ "u 
manag$ c>e arrangem5ts "u su* plan or   
waiv]7-- 7i7 across all =ms or models ( 
reimbursem5t us$ "u ! plan or waiv]2    
7ii7 )9 specialties & subspecialties1 z 
def9$ by ! ,secret>y2  7iii7 by episodes
 ( c>e =--  7,i7 ea* *ronic disease     
category1 z def9$ by ! ,secret>y1 t is  
repres5t$ 9 ! #aj conditions t acc\nt$ =
 ! greate/ %>e ( total sp5d+ "u ! plan  
or waiv] dur+ ! ye> t is ! subject ( !  
report2  7,,ii7 proc$ural gr\p+s2 &     
7,,iii7 r>e disease diagnosis codes2    
7iv7 by pati5t demographic *>act]i/ics1 

includ+ race 7to ! ext5t t ! ,secret>y  
det]m9es t !re is suffici5t data        
available ) respect to su* *>act]i/ic 9 
a majority ( ,/ates71 g5d]1 & age2  7v7 
by pati5t high-utiliz] or risk /atus2 & 
7vi7 by high & l[ res\rce sett+s by     
facility & place ( s]vice categories1 z 
det]m9$ by ! ,secret>y4  7,b7 ,9 ! case 
( m$ical assi/ance = cov]$ outpati5t    
drugs 7z s def9$7 provid$ "u a ,/ate    
,m$icaid plan or waiv] ( su* plan 9 a   
manag$ c>e sett+1 an analysis ( !       
diff]5ces 9 manag$ c>e prescrib+ patt]ns
 :5 a cov]$ outpati5t drug is prescrib$ 
9 a manag$ c>e sett+ z comp>$ to :5 !   
drug is prescrib$ 9 a fee-=-s]vice      
sett+4  7#b7 ,additional cont5t ,a      
report requir$ "u subsection 7a7 = a    
cal5d> ye> may include ,/ate-specific   
in=mation ab\t prescription utilization 
managem5t tools "u ,/ate ,m$icaid plans 
or waiv]s ( su* plans1 includ+--  7,a7 a
 description ( prescription utilization 
managem5t tools "u ,/ate programs to    
provide long-t]m s]vices & supports "u a

 ,/ate ,m$icaid plan or a waiv] ( su*   
plan2  7,b7 a comp>ison ( prescription  
utilization managem5t tools applicable  
to populations cov]$ "u a ,/ate ,m$icaid
 plan waiv] "u section #aaae ( ! ,social
 ,security ,act 7#db ,u4,s4,c4 #acae7 & 
! models applicable to populations t are
 n cov]$ "u ! waiv]2  7,c7 a comp>ison (
 ! prescription utilization managem5t   
tools employ$ by diff]5t ,m$icaid manag$
 c>e organizations1 ph>macy b5efit      
manag]s1 & relat$ entities )9 ! ,/ate2  
7,d7 a comp>ison ( ! prescription       
utilization managem5t tools applicable  
to ea* enrollm5t category "u a ,/ate    
,m$icaid plan or waiv]2 &  7,e7 a       
comp>ison ( ! prescription utilization  
managem5t tools applicable "u ! ,/ate   
,m$icaid plan or waiv] by pati5t        
high-utiliz] or risk /atus4  7#c7       
,additional analysis ,to ! ext5t        
practicable1 ! ,secret>y %all include 9 
ea* report publi%$ "u subsection 7a7--  
7,a7 analyses ( national1 ,/ate1 & local
 patt]ns ( ,m$icaid population-bas$     

prescrib+ behaviors2 &  7,b7            
recomm5dations = adm9i/rative or        
legislative action to improve !         
effectiv5ess (1 & r$uce co/s =1 cov]$   
outpati5t drugs "u ,m$icaid :ile ensur+ 
timely b5efici>y access to m$ically     
necess>y cov]$ outpati5t drugs4  7c7    
,use ( ,t-,,msis data ,ea* report       
requir$ "u subsection 7a7 %all-- 7#a7 be
 prep>$ us+ data & def9itions f !       
,trans=m$ ,m$icaid ,/ati/ical ,in=mation
 ,sy/em 7,t-,,msis7 data set 7or a      
successor data set7 t is n m ?an #bd    
mon?s old on ! date t ! report is       
publi%$2 &  7#b7 z appropriate1 include 
a description ) respect to ea* ,/ate ( !
 quality & complet5ess ( ! data1 z well 
z any necess>y caveats describ+ !       
limitations ( ! data report$ to !       
,secret>y by ! ,/ate t are suffici5t to 
communicate ! appropriate uses = !      
in=mation4  7d7 ,prep>ation ( report    
,ea* report requir$ "u subsection 7a7   
%all be prep>$ by ! ,adm9i/rator = !    
,c5t]s = ,m$ic>e  ,m$icaid ,s]vices4    

7e7 ,appropriation ,= fiscal ye> #bjbc &
 ea* fiscal ye> !reaft]1 !re is         
appropriat$ to ! ,secret>y #b1jjj1jjj to
 c>ry out ?is section4  #cjf4 ,risk-%>+ 
value-bas$ paym5t agreem5ts = cov]$     
outpati5t drugs "u ,m$icaid  7a7 ,9     
g5]al ,section #aibg ( ! ,social        
,security ,act 7#db ,u4,s4,c4 #acifr-#h7
 is am5d$ by add+ at ! end ! foll[+ new 
subsection3  7l7 ,/ate option ,to pay = 
cov]$ outpati5t drugs ?r\gh risk-,%>+   
value-,bas$ agreem5ts  7#a7 ,9 g5]al    
,beg9n+ ,janu>y #a1 #bjbe1 a ,/ate %all 
h ! option to pay 7:e!r on a            
fee-=-s]vice or manag$ c>e basis7 =     
cov]$ outpati5t drugs t are pot5tially  
curative treatm5ts int5d$ = "o-"t use t 
are adm9i/]$ to individuals "u ?is title
 by ent]+ into a risk-%>+ value-bas$    
paym5t agreem5t ) ! manufactur] ( ! drug
 9 accordance ) ! requirem5ts ( ?is     
subsection4  7#b7 ,secret>ial approval  
7,a7 ,9 g5]al ,a ,/ate %all submit a    
reque/ to ! ,secret>y to ent] into a    
risk-%>+ value bas$ paym5t agreem5t1 & !

 ,secret>y %all n approve a propos$     
risk-%>+ value-bas$ paym5t agreem5t     
betwe5 a ,/ate & a manufactur] = paym5t 
= a cov]$ outpati5t drug ( ! manufactur]
 unless ! foll[+ requirem5ts are met3   
7i7 ,manufactur] is p>ty to rebate      
agreem5t & 9 compliance ) requirem5ts ,!
 manufactur] has a rebate agreem5t 9    
effect z requir$ "u subsections 7a7 &   
7b7 ( ?is section & is 9 compliance )   
all applicable requirem5ts "u ?is title4
  7ii7 ,no increase to project$ net     
,f$]al sp5d+  7,i7 ,9 g5]al ,! ,*ief    
,actu>y c]tifies t ! project$ paym5ts = 
ea* cov]$ outpati5t drug "u su* propos$ 
agreem5t w\ld n result 9 great] e/imat$ 
,f$]al sp5d+ "u ?is title ?an ! net     
,f$]al sp5d+ t w\ld result 9 ! abs5ce ( 
! agreem5t4  7,,ii7 ,net f$]al sp5d+    
def9$ ,= purposes ( ?is subsection1 !   
t]m net ,f$]al sp5d+ means ! am\nt (    
,f$]al paym5ts ! ,*ief ,actu>y e/imates 
w\ld be made "u ?is title = adm9i/]+ a  
cov]$ outpati5t drug to an individual   
eligible = m$ical assi/ance "u a ,/ate  

plan or a waiv] ( su* plan1 r$uc$ by !  
am\nt ( all rebates ! ,*ief ,actu>y     
e/imates w\ld be paid ) respect to !    
adm9i/]+ ( su* drug1 includ+ all rebates
 "u ?is title & any supplem5tal or o!r  
additional rebates1 9 ! abs5ce ( su* an 
agreem5t4  7,,iii7 ,in=mation ,! ,*ief  
,actu>y %all make ! c]tifications       
requir$ "u ?is clause bas$ on ! mo/     
rec5tly available & reliable drug pric+ 
& product in=mation4 ,! ,/ate &         
manufactur] %all provide ! ,secret>y & !
 ,*ief ,actu>y ) all necess>y in=mation 
requir$ to make ! e/imates ne$$ = su*   
c]tifications4  7iii7 ,laun* & li/ price
 ju/ifications ,! manufactur] submits   
all relevant in=mation & support+       
docum5tation necess>y = pric+ decisions 
z deem$ appropriate by ! ,secret>y1 :i* 
%all be tru?ful & non-mislead+1 includ+ 
manufactur] in=mation & support+        
docum5tation = laun* price or li/ price 
increases1 & any applicable ju/ification
 requir$ "u section #aabh,l4  7iv7      
,confid5tiality ( in=mation2 p5alties ,!

 provisions ( subp>agraphs 7,c7 & 7,d7 (
 subsection 7b77#c7 %all apply to a     
manufactur] t fails to submit !         
in=mation & docum5tation requir$ "u     
clauses 7ii7 & 7iii7 on a timely basis1 
or t kn[+ly provides false or mislead+  
in=mation1 9 ! same mann] z su*         
provisions apply to a manufactur] ) a   
rebate agreem5t "u ?is section4  7,b7   
,consid]ation ( ,/ate reque/ = approval 
7i7 ,9 g5]al ,! ,secret>y %all treat a  
,/ate reque/ = approval ( a risk-%>+    
value-bas$ paym5t agreem5t 9 ! same     
mann] t ! ,secret>y treats a ,/ate plan 
am5dm5t1 & subp>t ,b ( "p #dcj ( title  
#db1 ,code ( ,f$]al ,regulations1       
includ+1 subject to clause 7ii71 ! tim+ 
requirem5ts ( section #dcj4af ( su*     
title 7z 9 effect on ! date ( enactm5t (
 ?is subsection71 %all apply to a reque/
 = approval ( a risk-%>+ value-bas$     
paym5t agreem5t 9 ! same mann] z su*    
subp>t applies to a ,/ate plan am5dm5t4 
7ii7 ,tim+ ,! ,secret>y %all consult ) !
 ,commission] ( ,food & ,drugs z requir$

 "u subp>agraph 7,c7 & make a           
det]m9ation on :e!r to approve a reque/ 
f a ,/ate = approval ( a propos$        
risk-%>+ value-bas$ paym5t agreem5t 7or 
reque/ additional in=mation necess>y to 
all[ ! ,secret>y to make a det]m9ation )
 respect to su* reque/ = approval7 )9 ! 
"t p]iod1 to ! ext5t practicable1       
specifi$ 9 section #dcj4af ( title #db1 
,code ( ,f$]al ,regulations 7z 9 effect 
on ! date ( enactm5t ( ?is subsection71 
b 9 no case %all ! ,secret>y take m ?an 
#ahj days aft] ! receipt ( su* reque/ = 
approval or response to su* reque/ =    
additional in=mation to make su* a      
det]m9ation 7or reque/ additional       
in=mation74  7,c7 ,consultation ) !     
,commission] ( ,food & ,drugs ,9        
consid]+ :e!r to approve a risk-%>+     
value-bas$ paym5t agreem5t1 ! ,secret>y1
 to ! ext5t necess>y1 %all consult ) !  
,commission] ( ,food & ,drugs to det]m9e
 :e!r ! relevant cl9ical p>amet]s       
specifi$ 9 su* agreem5t are appropriate4
  7#c7 ,in/allm5t-bas$ paym5t /ructure  

7,a7 ,9 g5]al ,a risk-%>+ value-bas$    
paym5t agreem5t %all provide = a paym5t 
/ructure "u :i*1 = e in/allm5t ye> ( !  
agreem5t 7subject to subp>agraph 7,b771 
! ,/ate %all pay ! total in/allm5t ye>  
am\nt 9 equal in/allm5ts to be paid at  
regul> int]vals ov] a p]iod ( "t t %all 
be specifi$ 9 ! agreem5t4  7,b7         
,requirem5ts = in/allm5t paym5ts  7i7   
,tim+ ( fir/ paym5t ,! ,/ate %all make !
 fir/ ( ! in/allm5t paym5ts describ$ 9  
subp>agraph 7,a7 = an in/allm5t ye> n   
lat] ?an #cj days aft] ! end ( su* ye>4 
7ii7 ,l5g? ( in/allm5t p]iod ,! p]iod ( 
"t ov] :i* ! ,/ate %all make ! in/allm5t
 paym5ts describ$ 9 subp>agraph 7,a7 =  
an in/allm5t ye> %all n be long] ?an #e 
ye>s4  7iii7 ,nonpaym5t or r$uc$ paym5t 
( in/allm5ts foll[+ a failure to meet   
cl9ical p>amet] ,if1 prior to ! paym5t  
date 7z specifi$ 9 ! agreem5t7 ( any    
in/allm5t paym5t describ$ 9 subp>agraph 
7,a7 or any o!r alt]native date or "t   
frame 7z o!rwise specifi$ 9 ! agreem5t71
 ! cov]$ outpati5t drug :i* is subject  

to ! agreem5t fails to meet a relevant  
cl9ical p>amet] ( ! agreem5t1 ! agreem5t
 %all provide t-- 7,i7 ! in/allm5t      
paym5t %all n be made2 or  7,,ii7 !     
in/allm5t paym5t %all be r$uc$ by a     
p]c5tage specifi$ 9 ! agreem5t t is bas$
 on ! outcome a*iev$ by ! drug relative 
to ! relevant cl9ical p>amet]4  7#d7    
,notice ( int5t  7,a7 ,9 g5]al ,subject 
to subp>agraph 7,b71 a manufactur] ( a  
cov]$ outpati5t drug %all n be eligible 
to ent] into a risk-%>+ value-bas$      
paym5t agreem5t "u ?is subsection )     
respect to su* drug unless ! manufactur]
 notifies ! ,secret>y t ! manufactur] is
 int]e/$ 9 ent]+ into su* an agreem5t ) 
respect to su* drug4 ,! decision to     
submit & tim+ ( a reque/ to ent] into a 
propos$ risk-%>+ value-bas$ paym5t      
agreem5t %all rema9 solely )9 !         
discretion ( ! ,/ate & %all only be     
effective ^u ,secret>ial approval z     
requir$ "u ?is subsection4  7,b7        
,treatm5t ( subsequ5tly approv$ drugs   
7i7 ,9 g5]al ,9 ! case ( a manufactur] (

 a cov]$ outpati5t drug approv$ "u      
section #eje ( ! ,f$]al ,food1 ,drug1 & 
,cosmetic ,act or lic5s$ "u section #cea
 ( ! ,public ,heal? ,s]vice ,act aft] ! 
date ( enactm5t ( ?is subsection1 n m   
?an #ij days aft] meet+ ) ! ,food &     
,drug ,adm9i/ration foll[+ phase ,,ii   
cl9ical trials = su* drug 7or1 9 ! case 
( a drug describ$ 9 clause 7ii71 n lat] 
?an ,m>* #ca1 #bjbe71 ! manufactur] mu/ 
notify ! ,secret>y ( ! manufactur]'s    
int5t to ent] into a risk-%>+ value-bas$
 paym5t agreem5t "u ?is subsection )    
respect to su* drug4 ,if no su* meet+   
has occurr$1 ! ,secret>y may use        
discretion z to :e!r a pot5tially       
curative treatm5t int5d$ = "o-"t use may
 qualify = a risk-%>+ value-bas$ paym5t 
agreem5t "u ?is section4 ,a manufactur] 
notification ( int]e/ %all n h any      
influ5ce on a decision = approval by !  
,food & ,drug ,adm9i/ration4  7ii7      
,application to c]ta9 subsequ5tly       
approv$ drugs ,a drug describ$ 9 ?is    
clause is a cov]$ outpati5t drug ( a    

manufactur]--  7,i7 t is approv$ "u     
section #eje ( ! ,f$]al ,food1 ,drug1 & 
,cosmetic ,act or lic5s$ "u section #cea
 ( ! ,public ,heal? ,s]vice ,act aft] ! 
date ( enactm5t ( ?is subsection2 &     
7,,ii7 ) respect to :i*1 z ( ,janu>y #a1
 #bjbe1 m ?an #ij days h pass$ aft] !   
manufactur]'s meet+ ) ! ,food & ,drug   
,adm9i/ration foll[+ phase ,,ii cl9ical 
trials = su* drug4  7iii7 ,p>allel      
approval ,! ,secret>y1 9 coord9ation ) !
 ,adm9i/rator ( ! ,c5t]s = ,m$ic>e      
,m$icaid ,s]vices & ! ,commission] (    
,food & ,drugs1 %all1 to ! ext5t        
practicable1 approve a ,/ate's reque/ to
 ent] into a propos$ risk-%>+ value-bas$
 paym5t agreem5t t o!rwise meets !      
requirem5ts ( ?is subsection at ! "t t  
su* a drug is approv$ by ! ,food & ,drug
 ,adm9i/ration to help provide t no     
,/ate t wi%es to ent] into su* an       
agreem5t is requir$ to pay = ! drug 9   
full at "o "t if ! ,/ate is seek+ to pay
 ov] a p]iod ( "t z outl9$ 9 ! propos$  
agreem5t4  7iv7 ,rule ( con/ruction     

,no?+ 9 ?is p>agraph %all be appli$ or  
con/ru$ to modify or affect ! timeframes
 or factors involv$ 9 ! ,secret>y's     
det]m9ation ( :e!r to approve or lic5se 
a drug "u section #eje ( ! ,f$]al ,food1
 ,drug1 & ,cosmetic ,act or section #cea
 ( ! ,public ,heal? ,s]vice ,act4  7#e7 
,special paym5t rules  7,a7 ,9 g5]al    
,except z o!rwise provid$ 9 ?is         
p>agraph1 ) respect to an individual :o 
is adm9i/]$ a unit ( a cov]$ outpati5t  
drug t is pur*as$ "u a ,/ate plan by a  
,/ate ,m$icaid ag5cy "u a risk-%>+      
value-bas$ paym5t agreem5t 9 an         
in/allm5t ye>1 ! ,/ate %all rema9 liable
 to ! manufactur] ( su* drug = paym5t = 
su* unit )\t reg>d to :e!r ! individual 
rema9s enroll$ 9 ! ,/ate plan "u ?is    
title 7or a waiv] ( su* plan7 = ea*     
in/allm5t ye> = :i* ! ,/ate is to make  
in/allm5t paym5ts = cov]$ outpati5t     
drugs pur*as$ "u ! agreem5t 9 su* ye>4  
7,b7 ,dea? ,9 ! case ( an individual    
describ$ 9 subp>agraph 7,a7 :o dies dur+
 ! p]iod describ$ 9 su* subp>agraph1 !  

,/ate plan %all n be liable = any rema9+
 paym5t = ! unit ( ! cov]$ outpati5t    
drug adm9i/]$ to ! individual :i* is ow$
 "u ! agreem5t describ$ 9 su*           
subp>agraph4  7,c7 ,)drawal ( approval  
,9 ! case ( a cov]$ outpati5t drug t is 
! subject ( a risk-%>+ value-bas$       
agreem5t betwe5 a ,/ate & a manufactur] 
"u ?is subsection1 includ+ a drug       
approv$ 9 accordance ) section #ejf7;c7 
( ! ,f$]al ,food1 ,drug1 & ,cosmetic    
,act1 & su* drug is ! subject ( an      
application t has be5 )drawn by !       
,secret>y1 ! ,/ate plan %all n be liable
 = any rema9+ paym5t t is ow$ "u !      
agreem5t4  7,d7 ,alt]native arrangem5t  
"u agreem5t ,subject to approval by !   
,secret>y1 ! t]ms ( a propos$ risk-%>+  
value-bas$ paym5t agreem5t submitt$ =   
approval by a ,/ate may provide t       
subp>agraph 7,a7 %all n apply4  7,e7    
,guidance ,n lat] ?an ,janu>y #a1 #bjbe1
 ! ,secret>y %all issue guidance to     
,/ates e/abli%+ a process = ,/ates to   
notify ! ,secret>y :5 an individual :o  

is adm9i/]$ a unit ( a cov]$ outpati5t  
drug t is pur*as$ by a ,/ate plan "u a  
risk-%>+ value-bas$ paym5t agreem5t     
ceases to be enroll$ "u ! ,/ate plan "u 
?is title 7or a waiv] ( su* plan7 or    
dies be=e ! end ( ! in/allm5t p]iod     
applicable to su* unit "u ! agreem5t4   
7#f7 ,treatm5t ( paym5ts "u risk-%>+    
value-bas$ agreem5ts = purposes ( av]age
 manufactur] price2 be/ price ,!        
,secret>y %all treat any paym5ts made to
 ! manufactur] ( a cov]$ outpati5t drug 
"u a risk-%>+ value-bas$ paym5t agreem5t
 "u ?is subsection dur+ a rebate p]iod 9
 ! same mann] t ! ,secret>y treats      
paym5ts made "u a ,/ate supplem5tal     
rebate agreem5t "u sections             
#ddg4ejd7;c77#ai7 & #ddg4eje7;c77#g7 (  
title #db1 ,code ( ,f$]al ,regulations  
7or any successor regulations7 =        
purposes ( det]m9+ av]age manufactur]   
price & be/ price "u ?is section )      
respect to ! cov]$ outpati5t drug & a   
rebate p]iod & = purposes ( (fsets      
requir$ "u subsection 7b77#a77;,b74     

7#g7 ,assessm5ts & report to ,congress  
7,a7 ,assessm5ts  7i7 ,9 g5]al ,n lat]  
?an #ahj days aft] ! end ( ea* assessm5t
 p]iod ( any risk-%>+ value-bas$ paym5t 
agreem5t = a ,/ate approv$ "u ?is       
subsection1 ! ,secret>y %all conduct an 
evaluation ( su* agreem5t :i* %all      
include an evaluation by ! ,*ief ,actu>y
 to det]m9e :e!r program sp5d+ "u !     
risk-%>+ value-bas$ paym5t agreem5t     
align$ ) ! projections = ! agreem5t made
 "u p>agraph 7#b77;,a77ii71 includ+ an  
assessm5t ( :e!r actual ,f$]al sp5d+ "u 
?is title "u ! agreem5t 0 less or m ?an 
net ,f$]al sp5d+ w\ld h be5 9 ! abs5ce (
 ! agreem5t4  7ii7 ,assessm5t p]iod ,=  
purposes ( clause 7i7--  7,i7 ! fir/    
assessm5t p]iod = a risk-%>+ value-bas$ 
paym5t agreem5t %all be ! p]iod ( "t ov]
 :i* paym5ts are s*$ul$ to be made "u ! 
agreem5t = ! fir/ #aj individuals :o are
 adm9i/]$ cov]$ outpati5t drugs "u !    
agreem5t except t su* p]iod %all n exce$
 ! #e-ye> p]iod aft] ! date on :i* !    
,secret>y approves ! agreem5t2 &  7,,ii7

 ea* subsequ5t assessm5t p]iod = a      
risk-%>+ value-bas$ paym5t agreem5t %all
 be ! #e-ye> p]iod foll[+ ! end ( !     
previ\s assessm5t p]iod4  7,b7 ,results 
( assessm5ts  7i7 ,t]m9ation option ,if 
! ,secret>y det]m9es z a result ( !     
assessm5t by ! ,*ief ,actu>y "u         
subp>agraph 7,a7 t ! actual ,f$]al sp5d+
 "u ?is title = any cov]$ outpati5t drug
 t 0 ! subject ( ! ,/ate's risk-%>+     
value-bas$ paym5t agreem5t 0 great] ?an 
! net ,f$]al sp5d+ t w\ld h result$ 9 ! 
abs5ce ( ! agreem5t1 ! ,secret>y may    
t]m9ate approval ( su* agreem5t & %all  
imm$iately conduct an assessm5t "u ?is  
p>agraph ( any o!r ongo+ risk-%>+       
value-bas$ paym5t agreem5t to :i* ! same
 manufactur] is a p>ty4  7ii7 ,repaym5t 
requir$  7,i7 ,9 g5]al ,if ! ,secret>y  
det]m9es z a result ( ! assessm5t by !  
,*ief ,actu>y "u subp>agraph 7,a7 t !   
,f$]al sp5d+ "u ! risk-%>+ value-bas$   
agreem5t = a cov]$ outpati5t drug t 0   
subject to su* agreem5t 0 great] ?an !  
net ,f$]al sp5d+ t w\ld h result$ 9 !   

abs5ce ( ! agreem5t1 ! manufactur] %all 
repay ! diff]5ce to ! ,/ate & ,f$]al    
gov]nm5ts 9 a timely mann] z det]m9$ by 
! ,secret>y4  7,,ii7 ,t]m9ation =       
failure to pay ,! failure ( a           
manufactur] to make repaym5ts requir$ "u
 subclause 7,i7 9 a timely mann] %all   
result 9 imm$iate t]m9ation ( all       
risk-%>+ value-bas$ agreem5ts to :i* !  
manufactur] is a p>ty4  7,,iii7         
,additional p5alties ,9 ! case ( a      
manufactur] t fails to make repaym5ts   
requir$ "u subclause 7,i71 ! ,secret>y  
may treat su* manufactur] 9 ! same mann]
 z a manufactur] t fails to pay requir$ 
rebates "u ?is section1 & ! ,secret>y   
may--  7aa7 susp5d or t]m9ate !         
manufactur]'s rebate agreem5t "u ?is    
section2 &  7bb7 pursue any o!r rem$y t 
w\ld be available if ! manufactur] _h   
fail$ to pay requir$ rebates "u ?is     
section4  7,c7 ,report to congress ,n   
lat] ?an #e ye>s aft] ! fir/ risk-%>+   
value-bas$ paym5t agreem5t is approv$ "u
 ?is subsection1 ! ,secret>y %all submit

 to ,congress & make available to !     
public a report t includes-- 7i7 an     
assessm5t ( ! impact ( risk-%>+         
value-bas$ paym5t agreem5ts on access = 
individuals :o are eligible = b5efits "u
 a ,/ate plan or waiv] "u ?is title to  
m$ically necess>y cov]$ outpati5t drugs 
& relat$ treatm5ts2  7ii7 an analysis ( 
! impact ( su* agreem5ts on ov]all ,/ate
 & ,f$]al sp5d+ "u ?is title2  7iii7 an 
assessm5t ( ! impact ( su* agreem5ts on 
drug prices1 includ+ laun* price & price
 increases2 &  7iv7 su* recomm5dations  
to ,congress z ! ,secret>y deems        
appropriate4  7#h7 ,guidance &          
regulations  7,a7 ,9 g5]al ,n lat] ?an  
,janu>y #a1 #bjbe1 ! ,secret>y %all     
issue guidance to ,/ates seek+ to ent]  
into risk-%>+ value-bas$ paym5t         
agreem5ts "u ?is subsection t includes a
 model template = su* agreem5ts4 ,!     
,secret>y may issue any additional      
guidance or promulgate regulations z    
necess>y to implem5t & en=ce !          
provisions ( ?is subsection4  7,b7      

,model agreem5ts  7i7 ,9 g5]al ,if a    
,/ate expresses an int]e/ 9 pursu+ a    
risk-%>+ value-bas$ paym5t agreem5t "u  
?is subsection ) a manufactur] = !      
pur*ase ( a cov]$ outpati5t drug1 !     
,secret>y may %>e ) su* ,/ate any       
risk-%>+ value-bas$ agreem5t betwe5 a   
,/ate & ! manufactur] = ! pur*ase ( su* 
drug t has be5 approv$ "u ?is           
subsection4 ,:ile su* %>$ agreem5t may  
s]ve z a template = a ,/ate t wi%es to  
propose1 ! use ( a previ\sly approv$    
agreem5t %all n affect ! submission &   
approval process = approval ( a propos$ 
risk-%>+ value-bas$ paym5t agreem5t "u  
?is subsection1 includ+ ! requirem5ts "u
 p>agraph 7#b77;,a74  7ii7              
,confid5tiality ,9 ! case ( a risk-%>+  
value-bas$ paym5t agreem5t t is disclos$
 to a ,/ate by ! ,secret>y "u ?is       
subp>agraph & t is only 9 effect )      
respect to a s+le ,/ate1 !              
confid5tiality ( in=mation provisions   
describ$ 9 subsection 7b77#c77;,d7 %all 
apply to su* in=mation4  7,c7 ,,oig     

consultation  7i7 ,9 g5]al ,! ,secret>y 
%all consult ) ! ,(fice ( ! ,inspector  
,g5]al ( ! ,dep>tm5t ( ,heal? & ,human  
,s]vices to det]m9e :e!r !re are        
pot5tial program integrity conc]ns )    
agreem5t approvals or templates &       
address accord+ly4  7ii7 ,,oig policy   
updates z necess>y ,! ,inspector ,g5]al 
( ! ,dep>tm5t ( ,heal? & ,human ,s]vices
 %all review & update1 z necess>y1 any  
policies or guidel9es ( ! ,(fice ( !    
,inspector ,g5]al ( ! ,dep>tm5t ( ,human
 ,s]vices 7includ+ policies relat$ to ! 
en=cem5t ( section #aabh;,b7 to         
accommodate ! use ( risk-%>+ value-bas$ 
paym5t agreem5ts 9 accordance ) ?is     
section4  7#i7 ,rules ( con/ruction     
7,a7 ,modifications ,no?+ 9 ?is         
subsection or any regulations promulgat$
 "u ?is subsection %all prohibit a ,/ate
 f reque/+ a modification f ! ,secret>y 
to ! t]ms ( a risk-%>+ value-bas$ paym5t
 agreem5t4 ,a modification t is expect$ 
to result 9 any increase to project$ net
 ,/ate or ,f$]al sp5d+ "u ! agreem5t    

%all be subject to rec]tification by !  
,*ief ,actu>y z describ$ 9 p>agraph     
7#b77;,a77ii7 be=e ! modification may be
 approv$4  7,b7 ,rebate agreem5ts ,no?+ 
9 ?is subsection %all be con/ru$ z      
requir+ a ,/ate to ent] into a risk-%>+ 
value-bas$ paym5t agreem5t or z limit+  
or sup]s$+ ! ability ( a ,/ate to ent]  
into a supplem5tal rebate agreem5t = a  
cov]$ outpati5t drug4  7,c7 ,,ffp =     
paym5ts "u risk-%>+ value-bas$ paym5t   
agreem5ts ,f$]al f9ancial p>ticipation  
%all be available "u ?is title = any    
paym5t made by a ,/ate to a manufactur] 
= a cov]$ outpati5t drug "u a risk-%>+  
value-bas$ paym5t agreem5t 9 accordance 
) ?is subsection1 except t no ,f$]al    
f9ancial p>ticipation %all be available 
= any paym5t made by a ,/ate to a       
manufactur] "u su* an agreem5t on & aft]
 ! effective date ( a disapproval ( su* 
agreem5t by ! ,secret>y4  7,d7 ,cont9u$ 
application ( o!r provisions ,except z  
expressly provid$ 9 ?is subsection1 no?+
 9 ?is subsection or 9 any regulations  

promulgat$ "u ?is subsection %all affect
 ! application ( any o!r provision ( ?is
 ,act4  7#aj7 ,appropriations ,= fiscal 
ye> #bjbc & ea* fiscal ye> !reaft]1 !re 
are appropriat$ to ! ,secret>y          
#e1jjj1jjj = ! purpose ( c>ry+ out ?is  
subsection4  7#aa7 ,def9itions ,9 ?is   
subsection3  7,a7 ,*ief ,actu>y ,! t]m  
,*ief ,actu>y means ! ,*ief ,actu>y ( ! 
,c5t]s = ,m$ic>e  ,m$icaid ,s]vices4    
7,b7 ,in/allm5t ye> ,! t]m in/allm5t ye>
 means1 ) respect to a risk-%>+         
value-bas$ paym5t agreem5t1 a #ab-mon?  
p]iod dur+ :i* a cov]$ outpati5t drug is
 adm9i/]$ "u ! agreem5t4  7,c7          
,pot5tially curative treatm5t int5d$ =  
"o-"t use ,! t]m pot5tially curative    
treatm5t int5d$ = "o-"t use means a     
treatm5t t consi/s ( ! adm9i/ration ( a 
cov]$ outpati5t drug t-- 7i7 is a =m (  
g5e !rapy = a r>e disease1 z def9$ by ! 
,commission] ( ,food & ,drugs1 designat$
 "u section #ebf ( ! ,f$]al ,food1      
,drug1 & ,cosmetics ,act1 & approv$ "u  
section #eje ( su* ,act or lic5s$ "u    

subsection 7a7 or 7k7 ( section #cea ( !
 ,public ,heal? ,s]vice ,act to treat a 
s]i\s or life-?reat5+ disease or        
condition2  7ii7 if adm9i/]$ 9          
accordance ) ! label+ ( su* drug1 is    
expect$ to result 9 ei!r-- 7,i7 ! cure (
 su* disease or condition2 or  7,,ii7 a 
r$uction 9 ! symptoms ( su* disease or  
condition to ! ext5t t su* disease or   
condition is n expect$ to lead to e>ly  
mortality2 &  7iii7 is expect$ to a*ieve
 a result describ$ 9 clause 7ii71 :i*   
may be a*iev$ ov] an ext5d$ p]iod ( "t1 
aft] n m ?an #c adm9i/rations4  7,d7    
,relevant cl9ical p>amet] ,! t]m        
relevant cl9ical p>amet] means1 )       
respect to a cov]$ outpati5t drug t is !
 subject ( a risk-%>+ value-bas$ paym5t 
agreem5t-- 7i7 a cl9ical endpo9t        
specifi$ 9 ! drug's label+ or support$  
by "o or m ( ! comp5dia describ$ 9      
section #ahfa7t77#b77;,b77ii77,i7 t--   
7,i7 is able to be measur$ or evaluat$  
on an annual basis = ea* ye> ( !        
agreem5t on an indep5d5t basis by a     

provid] or o!r entity2 &  7,,ii7 is     
requir$ to be a*iev$ 7bas$ on obs]v$    
metrics 9 pati5t populations7 "u ! t]ms 
( ! agreem5t2 or  7ii7 a surrogate      
endpo9t 7z def9$ 9 section #ejg7;e77#i7 
( ! ,f$]al ,food1 ,drug1 & ,cosmetic    
,act71 includ+ ^? develop$ by           
pati5t-focus$ drug developm5t tools1 t--
 7,i7 is able to be measur$ or evaluat$ 
on an annual basis = ea* ye> ( !        
agreem5t on an indep5d5t basis by a     
provid] or o!r entity2 &  7,,ii7 has be5
 qualifi$ by ! ,food & ,drug            
,adm9i/ration4  7,e7 ,risk-%>+          
value-bas$ paym5t agreem5t ,! t]m       
risk-%>+ value-bas$ paym5t agreem5t     
means an agreem5t betwe5 a ,/ate plan & 
a manufactur]--  7i7 = ! pur*ase ( a    
cov]$ outpati5t drug ( ! manufactur] t  
is a pot5tially curative treatm5t int5d$
 = "o-"t use2  7ii7 "u :i* paym5t = su* 
drug %all be made pursuant to an        
in/allm5t-bas$ paym5t /ructure t meets !
 requirem5ts ( p>agraph 7#c72  7iii7 :i*
 conditions paym5t on ! a*ievem5t ( at  

lea/ #b relevant cl9ical p>amet]s 7z    
def9$ 9 subp>agraph 7,c772  7iv7 :i*    
provides t--  7,i7 ! ,/ate plan w       
directly reimburse ! manufactur] = !    
drug2 or  7,,ii7 a ?ird p>ty w reimburse
 ! manufacture 9 a mann] approv$ by !   
,secret>y2 &  7v7 is approv$ by !       
,secret>y 9 accordance ) p>agraph 7#b74 
7,f7 ,total in/allm5t ye> am\nt ,! t]m  
total in/allm5t ye> am\nt means1 )      
respect to a risk-%>+ value-bas$ paym5t 
agreem5t = ! pur*ase ( a cov]$ outpati5t
 drug & an in/allm5t ye>1 an am\nt equal
 to ! product (--  7i7 ! unit price ( ! 
drug *>g$ "u ! agreem5t2 &  7ii7 ! numb]
 ( units ( su* drug adm9i/]$ "u !       
agreem5t dur+ su* in/allm5t ye>4  4  7b7
 ,con=m+ am5dm5ts  7#a7 ,section        
#aijc7;i77#aj77;,a7 ( ! ,social         
,security ,act 7#db ,u4,s4,c4           
#acif;b7i77#aj77;,a77 is am5d$ by /rik+ 
or unless section #aibg7;a77#c7 applies 
& ins]t+ 1 section #aibg7;a77#c7 applies
 ) respect to su* drugs1 or su* drugs   
are ! subject ( a risk-%>+ value-bas$   

paym5t agreem5t "u section #aibg7l74    
7#b7 ,section #aibg7;b7 ( ! ,social     
,security ,act 7#db ,u4,s4,c4           
#acifr-#h7;b77 is am5d$--  7,a7 9       
p>agraph 7#a77;,a71 by ins]t+ 7except = 
drugs = :i* paym5t is made by a ,/ate "u
 a risk-%>+ value-bas$ paym5t agreem5t  
"u subsection 7l77 aft] "u ! ,/ate plan 
= su* p]iod2 &  7,b7 9 p>agraph 7#c7--  
7i7 9 subp>agraph 7,c77i71 by ins]t+ or 
subsection 7l77#b77;,a7 aft] subp>agraph
 7,a72 &  7ii7 9 subp>agraph 7,d71 9 !  
matt] prec$+ clause 7i71 by ins]t+ 1 "u 
subsection 7l77#b77;,a71 aft] "u ?is    
p>agraph4  #cjg4 ,modification ( maximum
 rebate am\nt "u ,m$icaid drug rebate   
program  7a7 ,9 g5]al ,subp>agraph 7,d7 
( section #aibg7;c77#b7 ( ! ,social     
,security ,act 7#db ,u4,s4,c4           
#acifr-#h7;c77#b77 is am5d$ to read z   
foll[s3  7,d7 ,maximum rebate am\nt  7i7
 ,9 g5]al ,except z provid$ 9 clause    
7ii71 9 no case %all ! sum ( ! am\nts   
appli$ "u p>agraph 7#a77;,a77ii7 & ?is  
p>agraph ) respect to ea* dosage =m &   

/r5g? ( a s+le s\rce drug or an         
innovator multiple s\rce drug = a rebate
 p]iod exce$--  7,i7 = rebate p]iods    
beg9n+ aft] ,decemb] #ca1 #bjji1 & be=e 
,septemb] #cj1 #bjbe1 #ajj p]c5t ( !    
av]age manufactur] price ( ! drug2 &    
7,,ii7 = rebate p]iods beg9n+ on or aft]
 ,octob] #a1 #bjbe1 #abe p]c5t ( !      
av]age manufactur] price ( ! drug4  7ii7
 ,no maximum am\nt = drugs if ,,amp     
increases outpace inflation  7,i7 ,9    
g5]al ,if ! av]age manufactur] price )  
respect to ea* dosage =m & /r5g? ( a    
s+le s\rce drug or an innovator multiple
 s\rce drug increases on or aft] ,octob]
 #a1 #bjbd1 & su* increas$ av]age       
manufactur] price exce$s !              
inflation-adju/$ av]age manufactur]     
price det]m9$ ) respect to su* drug "u  
subclause 7,,ii7 = ! rebate p]iod1      
clause 7i7 %all n apply & !re %all be no
 limitation on ! sum ( ! am\nts appli$  
"u p>agraph 7#a77;,a77ii7 & ?is p>agraph
 = ! rebate p]iod ) respect to ea*      
dosage =m & /r5g? ( ! s+le s\rce drug or

 innovator multiple s\rce drug4  7,,ii7 
,inflation-adju/$ av]age manufactur]    
price def9$ ,9 ?is clause1 ! t]m        
inflation-adju/$ av]age manufactur]     
price means1 ) respect to a s+le s\rce  
drug or an innovator multiple s\rce drug
 & a rebate p]iod1 ! av]age manufactur] 
price = ea* dosage =m & /r5g? ( ! drug =
 ! cal5d> qu>t] beg9n+ ,july #a1 #aiij  
7)\t reg>d to :e!r or n ! drug has be5  
sold or transf]r$ to an entity1 includ+ 
a division or subsidi>y ( ! manufactur]1
 aft] ! #a/ day ( su* qu>t]71 increas$  
by ! p]c5tage by :i* ! consum] price    
index = all urban consum]s 7,unit$      
,/ates city av]age7 = ! mon? be=e ! mon?
 9 :i* ! rebate p]iod beg9s exce$s su*  
index = ,septemb] #aiij4  4  7b7        
,treatm5t ( subsequ5tly approv$ drugs   
,section #aibg7;c77#b77;,b7 ( ! ,social 
,security ,act 7#db ,u4,s4,c4           
#acifr-#h7;c77#b77;,b77 is am5d$ by     
ins]t+ & clause 7ii77,,ii7 ( subp>agraph
 7,d7 aft] clause 7ii77,,ii7 (          
subp>agraph 7,a74  7c7 ,te*nical        

am5dm5ts ,section                       
#aibg7;c77#c77;,c77ii77,,iv7 ( ! ,social
 ,security ,act 7#db ,u4,s4,c4          
#acifr-#i7;c77#c77;,c77ii77,,iv77 is    
am5d$--  7#a7 by /rik+ subp>agraph 7,a7 
& ins]t+ p>agraph 7#c77;,a72 &  7#b7 by 
/rik+ ?is subp>agraph & ins]t+ p>agraph 
7#c77;,c74  ,,iv ,address+ ,int]m$i>ies 
& ,drug ,competition  #dja4 ,heal? plan 
ov]sight ( ph>macy b5efit manag] s]vices
 ,subp>t ,,ii ( "p ,a ( title ,,xxvii ( 
! ,public ,heal? ,s]vice ,act 7#db      
,u4,s4,c4 #cjj;gg-#aa et seq47 is am5d$ 
by add+ at ! end ! foll[+3  #bgbi;,a4   
,heal? plan ov]sight ( ph>macy b5efit   
manag] s]vices  7a7 ,9 g5]al ,a gr\p    
heal? plan or heal? insurance issu] (f]+
 gr\p or individual heal? insurance     
cov]age or an entity or subsidi>y       
provid+ ph>macy b5efits managem5t       
s]vices %all n ent] into a contract ) a 
drug manufactur]1 di/ributor1 :olesal]1 
subcontractor1 rebate aggregator1 or any
 associat$ ?ird p>ty t limits !         
disclosure ( in=mation to plan sponsors 

9 su* a mann] t prev5ts ! plan or       
cov]age1 or an entity or subsidi>y      
provid+ ph>macy b5efits managem5t       
s]vices on behalf ( a plan or cov]age f 
mak+ ! reports describ$ 9 subsection    
7b74  7b7 ,reports to gr\p plan sponsors
  7#a7 ,9 g5]al ,beg9n+ ) ! fir/ plan   
ye> t beg9s aft] ! date ( enactm5t ( ?is
 section1 n less frequ5tly ?an once e   
six mon?s1 a heal? insurance issu] (f]+ 
gr\p heal? insurance cov]age or an      
entity provid+ ph>macy b5efits managem5t
 s]vices on behalf ( a gr\p heal? plan  
%all submit to ! self-fund$ gr\p heal?  
plan & at ! reque/ ( any o!r gr\p heal? 
plan a report 9 accordance ) ?is        
subsection & make su* report available  
to ! plan sponsor 9 a ma*9e-readable    
=mat4 ,ea* su* report %all include1 )   
respect to ! applicable gr\p heal? plan 
or heal? insurance cov]age-- 7,a7       
in=mation collect$ f drug manufactur]s  
by su* issu] or entity on ! total am\nt 
( copaym5t assi/ance doll>s paid1 or    
copaym5t c>ds appli$1 t 7 fund$ by !    

drug manufactur] ) respect to !         
enrollees 9 su* plan or cov]age2  7,b7 a
 li/ ( ea* cov]$ drug disp5s$ dur+ !    
report+ p]iod1 includ+1 ) respect to ea*
 su* drug dur+ ! report+ p]iod-- 7i7 !  
br& "n1 *emical entity1 & ,national     
,drug ,code2  7ii7 ! numb] ( enrollees =
 :om ! drug 0 fill$ dur+ ! plan ye>1 !  
total numb] ( prescription fills = !    
drug 7includ+ orig9al prescriptions &   
refills71 & ! total numb] ( dosage units
 ( ! drug disp5s$ across ! plan ye>1    
includ+ :e!r ! disp5s+ *annel 0 by      
retail1 mail ord]1 or specialty ph>macy2
  7iii7 ! :olesale acquisition co/1 li/$
 z co/ p] days supply & co/ p] pill1 or 
9 ! case ( a drug 9 ano!r =m1 p] dose2  
7iv7 ! total out-(-pocket sp5d+ by      
enrollees on su* drug1 includ+ enrollee 
sp5d+ ?r\gh copaym5ts1 co9surance1 &    
d$uctibles2 &  7v7 = any drug = :i*     
gross sp5d+ ( ! gr\p heal? plan or heal?
 insurance cov]age exce$$ #aj1jjj dur+ !
 report+ p]iod--  7,i7 a li/ ( all o!r  
available drugs 9 ! same !rapeutic      

category or class1 includ+ br& "n drugs 
& biological products & g5]ic drugs or  
biosimil> biological products t are 9 ! 
same !rapeutic category or class2 &     
7,,ii7 ! rationale = pref]r$ =mul>y     
placem5t ( a p>ticul> drug or drugs 9 t 
!rapeutic category or class2  7,c7 a li/
 ( ea* !rapeutic category or class (    
drugs t 7 disp5s$ "u ! heal? plan or    
heal? insurance cov]age dur+ ! report+  
p]iod1 &1 ) respect to ea* su* !rapeutic
 category or class ( drugs1 dur+ !      
report+ p]iod-- 7i7 total gross sp5d+ by
 ! plan1 be=e manufactur] rebates1 fees1
 or o!r manufactur] remun]ation2  7ii7 !
 numb] ( enrollees :o fill$ a           
prescription = a drug 9 t category or   
class2  7iii7 if applicable to t        
category or class1 a description ( !    
=mul>y ti]s & utilization me*anisms 7su*
 z prior au?orization or /ep !rapy7     
employ$ = drugs 9 t category or class2  
7iv7 ! total out-(-pocket sp5d+ by      
enrollees1 includ+ enrollee sp5d+ ?r\gh 
copaym5ts1 co9surance1 & d$uctibles2 &  

7v7 = ea* !rapeutic category or class "u
 :i* ?ree or m drugs are m>ket$ &       
available--  7,i7 ! am\nt receiv$1 or   
expect$ to be receiv$1 f drug           
manufactur]s 9 rebates1 fees1 alt]native
 disc\nts1 or o!r remun]ation-- 7aa7 to 
be paid by drug manufactur]s = claims   
incurr$ dur+ ! report+ p]iod2 or  7bb7 t
 is relat$ to utilization ( drugs1 9 su*
 !rapeutic category or class2  7,,ii7 ! 
total net sp5d+ by ! heal? plan or heal?
 insurance cov]age on t category or     
class ( drugs2 &  7,,iii7 ! net price p]
 dosage unit or c\rse ( treatm5t incurr$
 by ! heal? plan or heal? insurance     
cov]age & its enrollees1 aft]           
manufactur] rebates1 fees1 & o!r        
remun]ation = drugs disp5s$ )9 su*      
!rapeutic category or class dur+ !      
report+ p]iod2  7,d7 total gross sp5d+  
on prescription drugs by ! plan or      
cov]age dur+ ! report+ p]iod1 be=e      
rebates & o!r manufactur] fees or       
remun]ation2  7,e7 total am\nt receiv$1 
or expect$ to be receiv$1 by ! heal?    

plan or heal? insurance cov]age 9 drug  
manufactur] rebates1 fees1 alt]native   
disc\nts1 & all o!r remun]ation receiv$ 
f ! manufactur] or any ?ird p>ty relat$ 
to utilization ( drug or drug sp5d+ "u t
 heal? plan or heal? insurance cov]age  
dur+ ! report+ p]iod2  7,f7 ! total net 
sp5d+ on prescription drugs by ! heal?  
plan or heal? insurance cov]age dur+ !  
report+ p]iod2 &  7,g7 am\nts paid      
directly or indirectly 9 rebates1 fees1 
or any o!r type ( remun]ation to brok]s1
 consultants1 advisors1 or any o!r      
individual or firm :o ref]r$ ! gr\p     
heal? plan's or heal? insurance issu]'s 
bus9ess to ! ph>macy b5efit manag]4     
7#b7 ,privacy requirem5ts ,heal?        
insurance issu]s (f]+ gr\p heal?        
insurance cov]age & entities provid+    
ph>macy b5efits managem5t s]vices on    
behalf ( a gr\p heal? plan %all provide 
in=mation "u p>agraph 7#a7 9 a mann]    
consi/5t ) ! privacy1 security1 & brea* 
notification regulations promulgat$ "u  
section #bfd7;c7 ( ! ,heal? ,insurance  

,portability & ,acc\ntability ,act (    
#aiif 7or successor regulations71 & %all
 re/rict ! use & disclosure ( su*       
in=mation accord+ to su* privacy        
regulations4  7#c7 ,disclosure &        
r$isclosure  7,a7 ,limitation to bus9ess
 associates ,a gr\p heal? plan receiv+ a
 report "u p>agraph 7#a7 may disclose   
su* in=mation only to bus9ess associates
 ( su* plan z def9$ 9 section #afj4ajc (
 title #de1 ,code ( ,f$]al ,regulations 
7or successor regulations74  7,b7       
,cl>ification reg>d+ public disclosure (
 in=mation ,no?+ 9 ?is section prev5ts a
 heal? insurance issu] (f]+ gr\p heal?  
insurance cov]age or an entity provid+  
ph>macy b5efits managem5t s]vices on    
behalf ( a gr\p heal? plan f plac+      
reasonable re/rictions on ! public      
disclosure ( ! in=mation conta9$ 9 a    
report describ$ 9 p>agraph 7#a74  7c7   
,en=cem5t  7#a7 ,9 g5]al ,! ,secret>y1 9
 consultation ) ! ,secret>y ( ,labor & !
 ,secret>y ( ! ,treasury1 %all en=ce ?is
 section4  7#b7 ,failure ,to provide    

timely in=mation ,a heal? insurance     
issu] or an entity provid+ ph>macy      
b5efit managem5t s]vices t violates     
subsection 7a7 or fails to provide      
in=mation requir$ "u subsection 7b7 or a
 drug manufactur] t fails to provide    
in=mation "u subsection 7b77#a77;,a71 9 
a timely mann] %all be subject to a     
civil monet>y p5alty 9 ! am\nt ( #aj1jjj
 = ea* day dur+ :i* su* violation       
cont9ues or su* in=mation is n disclos$ 
or report$4  7#c7 ,false in=mation ,a   
heal? insurance issu]1 entity provid+   
ph>macy b5efit managem5t s]vices1 or    
drug manufactur] t kn[+ly provides false
 in=mation "u ?is section %all be       
subject to a civil money p5alty 9 an    
am\nt n to exce$ #ajj1jjj = ea* item (  
false in=mation4 ,su* civil money p5alty
 %all be 9 addition to o!r p5alties z   
may be prescrib$ by law4  7#d7 ,proc$ure
 ,! provisions ( section #aabh;,a ( !   
,social ,security ,act1 o!r ?an         
subsections 7a7 & 7b7 & ! fir/ s5t5ce ( 
subsection 7c77#a7 ( su* section %all   

apply to civil monet>y p5alties "u ?is  
subsection 9 ! same mann] z su*         
provisions apply to a p5alty or proce$+ 
"u section #aabh;,a ( ! ,social         
,security ,act4  7#e7 ,safe h>bor ,!    
,secret>y may waive p5alties "u p>agraph
 7#b71 or ext5d ! p]iod ( "t =          
compliance ) a requirem5t ( ?is section1
 = an entity 9 violation ( ?is section t
 has made a good-fai? ef=t to comply )  
?is section4  7d7 ,rule ( con/ruction   
,no?+ 9 ?is section %all be con/ru$ to  
prohibit entities provid+ ph>macy       
b5efits managem5t s]vices f reta9+ bona 
fide s]vice fees1 provid$ t su* fees are
 transp>5t to gr\p heal? plans & heal?  
insurance issu]s & are n l9k$ directly  
to ! price or =mul>y placem5t or        
position ( a drug4  7e7 ,def9itions ,9  
?is section-- 7#a7 ! t]m simil>ly       
situat$ ph>macy means1 ) respect to a   
p>ticul> ph>macy1 ano!r ph>macy t is    
approximately ! same size 7z measur$ by 
! numb] ( prescription drugs disp5s$71 &
 t s]ves pati5ts 9 ! same geographical  

area1 :e!r ?r\gh physical locations or  
mail ord]2  7#b7 ! t]m :olesale         
acquisition co/ has ! mean+ giv5 su* t]m
 9 section #ahdg;,a7c77#f77;,b7 ( !     
,social ,security ,act2 &  7#c7 ! t]m   
bona fide s]vice fees means fees paid by
 a manufactur]1 cu/om]1 or cli5t 7o!r   
?an a gr\p heal? plan or heal? insurance
 issu]7 ( an entity provid+ ph>macy     
b5efit managem5t s]vices1 to an entity  
provid+ ph>macy b5efit managem5t        
s]vices1 t repres5t fair m>ket value =  
bona fide1 itemiz$ s]vices actually     
p]=m$ on behalf ( ! manufactur]1 cu/om]1
 or cli5t w\ld o!rwise p]=m or contract 
= 9 ! abs5ce ( ! s]vice arrangem5t1 )\t 
prior cons5t = any specific arrangem5ts4
  4  #djb4 ,/udy ( ph>maceutical supply 
*a9 int]m$i>ies & m]g] activity  7a7    
,initial report ,n lat] ?an #a ye> aft] 
! date ( enactm5t ( ?is ,act1 !         
,commission %all submit to ! appropriate
 committees ( ,congress a report t--    
7#a7 addresses at m9imum--  7,a7 :e!r   
ph>macy b5efit manag]s-- 7i7 *>ge pay]s 

a high] price ?an ! reimbursem5t rate at
 :i* ! ph>macy b5efit manag]s reimburse 
compet+ ph>macies2  7ii7 /e] pati5ts =  
anticompetitive purposes to any         
ph>macies1 includ+ retail1 mail-ord]1 or
 any o!r type ( ph>macy1 9 :i* ! ph>macy
 b5efit manag] has an own]%ip int]e/2   
7iii7 audit or review propriet>y data1  
includ+ acquisition co/s1 pati5t        
in=mation1 or disp5s+ in=mation1 (      
compet+ ph>macies t c be us$ =          
anticompetitive purposes2 or  7iv7 use  
=mul>y designs to increase ! m>ket %>e (
 high] co/ prescription drugs & depress 
! m>ket %>e ( l[] co/ prescription drugs
 7ea* net ( rebates & disc\nts72  7,b7  
h[ companies & pay]s assess ! b5efits1  
co/s1 & risks ( contract+ ) int]m$i>ies1
 includ+ ph>macy s]vices adm9i/rative   
organizations1 & :e!r m in=mation ab\t !
 roles ( int]m$i>ies %\ld be available  
to consum]s & pay]s2 &  7,c7 :e!r !re   
are any specific legal or regulatory    
ob/acles ! ,commission curr5tly faces 9 
ensur+ a competitive & transp>5t        

m>ketplace 9 ! ph>maceutical supply *a91
 includ+ ! ph>macy b5efit manag]        
m>ketplace & ph>macy s]vices            
adm9i/rative organizations2 &  7#b7     
provides--  7,a7 obs]vations or         
conclusions drawn f ! ,novemb] #bjag    
r\ndtable entitl$ ,und]/&+ ,competition 
9 ,prescription ,drug ,m>kets3 ,entry & 
,supply ,*a9 ,dynamics1 & any simil>    
ef=ts2  7,b7 specific actions !         
,commission int5ds to take z a result ( 
! ,novemb] #bjag r\ndtable1 & any simil>
 ef=ts1 includ+ a detail$ description ( 
relevant =?com+ actions1 additional     
rese>* or r\ndtable discussions1 consum]
 education ef=ts1 or en=cem5t actions2 &
  7,c7 policy or legislative            
recomm5dations to-- 7i7 improve         
transp>5cy & competition 9 !            
ph>maceutical supply *a92  7ii7 prev5t &
 det] anticompetitive behavior 9 !      
ph>maceutical supply *a92 &  7iii7 be/  
ensure t consum]s b5efit f any co/ sav+s
 or effici5cies t may result f m]g]s &  
consolidations4  7b7 ,int]im report ,n  

lat] ?an #ahj days aft] ! date (        
enactm5t ( ?is ,act1 ! ,commission %all 
submit to ! appropriate committees (    
,congress an int]im report on ! progress
 ( ! report requir$ by subsection 7a71  
along ) prelim9>y f9d+s & conclusions   
bas$ on in=mation collect$ to t date4   
7c7 ,def9itions ,9 ?is section3  7#a7   
,appropriate committees ( ,congress ,!  
t]m appropriate committees ( ,congress  
means-- 7,a7 ! ,committee on ,en]gy &   
,comm]ce ( ! ,h\se ( ,repres5tatives2   
7,b7 ! ,committee on ! ,judici>y ( !    
,s5ate2 &  7,c7 ! ,committee on !       
,judici>y ( ! ,h\se ( ,repres5tatives4  
7#b7 ,commission ,! t]m ,commission     
means ! ,f$]al ,trade ,commission4      
#djc4 ,requirem5t t direct-to-consum]   
adv]tisem5ts = prescription drugs &     
biological products include tru?ful &   
non-mislead+ pric+ in=mation ,"p ,a (   
title ,,xi ( ! ,social ,security ,act is
 am5d$ by add+ at ! end ! foll[+ new    
section3  #aaej;,d4 ,requirem5t t       
direct-to-consum] adv]tisem5ts =        

prescription drugs & biological products
 include tru?ful & non-mislead+ pric+   
in=mation  7a7 ,9 g5]al ,! ,secret>y    
%all require t ea* direct-to-consum]    
adv]tisem5t = a prescription drug or    
biological product = :i* paym5t is      
available "u title ,,xviii or ,,xix     
includes an appropriate disclosure (    
tru?ful & non-mislead+ pric+ in=mation )
 respect to ! drug or product4  7b7     
,det]m9ation by ,,cms ,! ,secret>y1 act+
 ?r\gh ! ,adm9i/rator ( ! ,c5t]s =      
,m$ic>e  ,m$icaid ,s]vices1 %all det]m9e
 ! compon5ts ( ! requirem5t "u          
subsection 7a71 su* z ! =ms ( adv]tis+1 
! mann] ( disclosure1 ! price po9t li/+1
 & ! price in=mation = disclosure4  4   
#djd4 ,*ange conditions ( fir/ g5]ic    
exclusivity to spur access & competition
 ,clause 7iv7 ( section                 
#eje7;j77#e77;,b7 ( ! ,f$]al ,food1     
,drug1 & ,cosmetic ,act 7#ba ,u4,s4,c4  
#cee7;j77#e77;,b77 is am5d$-- 7#a7 9    
subclause 7,i71 aft] #ahj days aft] !   
date ( ! fir/ comm]cial m>ket+ ( ! drug 

7includ+ ! comm]cial m>ket+ ( ! li/$    
drug7 by any fir/ applicant by ins]t+ or
 by an applicant ^: application is      
approv$ pursuant to subclause 7,,iii72 &
  7#b7 by add+ at ! end ! foll[+ new    
subclause3  7,,iii7 ,applicant approval 
,an application conta9+ a c]tification  
describ$ 9 p>agraph 7#b77;,a77vii77,,iv7
 t is = a drug = :i* a fir/ applicant   
has submitt$ an application conta9+ su* 
a c]tification c be approv$ not)/&+ !   
eligibility ( a fir/ applicant = !      
#ahj-;day exclusivity p]iod describ$ 9  
subclause 7,,ii77aa7 if ea* ( ! foll[+  
conditions is met3  7aa7 ,! approval (  
su* an application c\ld be made         
effective1 b = ! eligibility ( a fir/   
applicant = #ahj-;day exclusivity "u ?is
 clause4  7bb7 ,at lea/ #cj mon?s h     
pass$ s9ce ! date ( submission ( an     
application = ! drug by at lea/ "o fir/ 
applicant4  7cc7 ,approval ( an         
application = ! drug submitt$ by at lea/
 "o fir/ applicant is n preclud$ "u     
clause 7iii74  7dd7 ,no application = ! 

drug submitt$ by any fir/ applicant is  
approv$ at ! "t ! conditions "u items   
7aa71 7bb71 & 7cc7 are all met1         
reg>dless ( :e!r su* an application is  
subsequ5tly approv$4  4  #dje4 ,end+ !  
practice prev5t+ m>ket competition kn[n 
z 8,pay-=-,delay0  7a7 ,congressional   
f9d+s & decl>ation ( purposes  7#a7     
,f9d+s ,congress f9ds ! foll[+3 7,a7 ,9 
#aihd1 ! ,drug ,price ,competition &    
,pat5t ,t]m ,re/oration ,act 7,public   
,law #ih-dag7 7ref]r$ to 9 ?is ,act z ! 
#aihd ,act71 0 enact$ ) ! int5t (       
facilitat+ ! e>ly entry ( g5]ic drugs   
:ile pres]v+ inc5tives = innovation4    
7,b7 ,prescription drugs make up        
approximately #aj p]c5t ( ! national    
heal? c>e sp5d+4  7,c7 ,initially1 !    
#aihd ,act 0 successful 9 facilitat+    
g5]ic competition to ! b5efit ( consum]s
 & heal? c>e pay]s1 al?\gh #hh p]c5t (  
all prescriptions disp5s$ 9 ! ,unit$    
,/ates are g5]ic drugs1 !y acc\nt = only
 #bh p]c5t ( all exp5ditures4  7,d7     
,g5]ic drugs co/ sub/antially less ?an  

br& "n drugs1 ) disc\nts (f ! br& price 
av]ag+ #hj to #he p]c5t4  7,e7 ,f$]al   
doll>s curr5tly acc\nt = ov] #dj p]c5t (
 ! #cbe1jjj1jjj1jjj sp5t on retail      
prescription drugs1 & ?is %>e is expect$
 to rise to #dg p]c5t by #bjbe4  7,f7   
7i7 ,9 rec5t ye>s1 ! int5t ( ! #aihd    
,act has be5 subv]t$ by c]ta9 settlem5t 
agreem5ts 9 :i* br& "n companies transf]
 value to _! pot5tial g5]ic competitors 
to settle claims t ! g5]ic company is   
infr++ ! br&$ company's pat5ts4  7ii7   
,^! rev]se paym5t settlem5t agreem5ts-- 
7,i7 all[ a br&$ company to %>e its     
monopoly pr(its ) ! g5]ic company z a   
way to protect ! br&$ company's         
monopoly2 &  7,,ii7 h unduly delay$ !   
m>ket+ ( l[-co/ g5]ic drugs contr>y to  
free competition1 ! int]e/s ( consum]s1 
& ! pr9ciples und]ly+ antitru/ law4     
7iii7 ,because ( ! price disp>ity betwe5
 br& "n & g5]ic drugs1 su* agreem5ts are
 m pr(itable = bo? ! br& & g5]ic        
manufactur]s ?an competition & w become 
increas+ly common unless prohibit$4     

7iv7 ,^! agreem5ts result 9 consum]s    
los+ ! b5efits t ! #aihd ,act 0 int5d$  
to provide4  7,g7 ,9 #bjaj1 ! ,biologics
 ,price ,competition & ,innovation ,act 
7,public ,law #aaa-adh7 7ref]r$ to 9 ?is
 ,act z ! ,,bpcia71 0 enact$ ) ! int5t (
 facilitat+ ! e>ly entry ( biosimil> &  
int]*angeable foll[-on v]sions ( br&$   
biological products :ile pres]v+        
inc5tives = innovation4  7,h7           
,biological drugs play an important role
 9 treat+ _m s]i\s illnesses1 f canc]s  
to g5etic disord]s4 ,!y are also        
exp5sive1 repres5t+ m ?an #dj p]c5t (   
all prescription drug sp5d+4  7,i7      
,competition f biosimil> & int]*angeable
 biological products promises to l[]    
drug co/s & increase pati5t access to   
biological m$ic9es4 ,b rev]se paym5t    
settlem5t agreem5ts also ?reat5 to delay
 ! entry ( biosimil> & int]*angeable    
biological products1 :i* w\ld und]m9e ! 
goals ( ,,bpcia4  7#b7 ,purposes ,!     
purposes ( ?is ,act are--  7,a7 to      
enhance competition 9 ! ph>maceutical   

m>ket by /opp+ anticompetitive agreem5ts
 betwe5 br& "n & g5]ic drug & biosimil> 
biological product manufactur]s t limit1
 delay1 or o!rwise prev5t competition f 
g5]ic drugs & biosimil> biological      
products2 &  7,b7 to support ! purpose &
 int5t ( antitru/ law by prohibit+      
anticompetitive practices 9 !           
ph>maceutical indu/ry t h>m consum]s4   
7b7 ,unlawful comp5sation = delay  7#a7 
,9 g5]al ,! ,f$]al ,trade ,commission   
,act 7#ae ,u4,s4,c4 #dd et seq47 is     
am5d$ by ins]t+ aft] section #bf 7#ae   
,u4,s4,c4 #eg;c-#b7 ! foll[+3  #bg4     
,pres]v+ access to af=dable g5]ics &    
biosimil>s  7a7 ,9 g5]al  7#a7 ,en=cem5t
 proce$+ ,! ,commission may initiate a  
proce$+ to en=ce ! provisions ( ?is     
section aga9/ ! p>ties to any agreem5t  
resolv+ or settl+1 on a f9al or int]im  
basis1 a pat5t claim1 9 connection ) !  
sale ( a drug product or biological     
product4  7#b7 ,presumption & violation 
7,a7 ,9 g5]al ,subject to subp>agraph   
7,b71 9 su* a proce$+1 an agreem5t %all 

be presum$ to h anticompetitive effects 
& %all be a violation ( ?is section if--
 7i7 an ,,&a fil] or a biosimil>        
biological product application fil]     
receives any?+ ( value1 includ+ an      
exclusive lic5se2 &  7ii7 ! ,,&a fil] or
 biosimil> biological product           
application fil] agrees to limit or =go 
rese>*1 developm5t1 manufactur+1 m>ket+1
 or sales ( ! ,,&a product or biosimil> 
biological product1 z applicable1 = any 
p]iod ( "t4  7,b7 ,exception            
,subp>agraph 7,a7 %all n apply if !     
p>ties to su* agreem5t demon/rate by    
cle> & conv9c+ evid5ce t--  7i7 ! value 
describ$ 9 subp>agraph 7,a77i7 is       
comp5sation solely = o!r goods or       
s]vices t ! ,,&a fil] or biosimil>      
biological product application fil] has 
promis$ to provide2 or  7ii7 !          
procompetitive b5efits ( ! agreem5t     
outweigh ! anticompetitive effects ( !  
agreem5t4  7b7 ,limitations ,9 det]m9+  
:e!r ! settl+ p>ties h met _! burd5 "u  
subsection 7a77#b77;,b71 ! fact f9d]    

%all n presume-- 7#a7 t entry w\ld n h  
occurr$ until ! expiration ( ! relevant 
pat5t or /atutory exclusivity2 or  7#b7 
t ! agreem5t's provision = entry ( !    
,,&a product or biosimil> biological    
product prior to ! expiration ( !       
relevant pat5t or /atutory exclusivity  
means t ! agreem5t is procompetitive4   
7c7 ,exclusions ,no?+ 9 ?is section %all
 prohibit a resolution or settlem5t ( a 
pat5t infr+em5t claim 9 :i* !           
consid]ation t ! ,,&a fil] or biosimil> 
biological product application fil]1    
respectively1 receives z "p ( !         
resolution or settlem5t includes only "o
 or m ( ! foll[+3  7#a7 ,! "r to m>ket &
 secure f9al approval 9 ! ,unit$ ,/ates 
= ! ,,&a product or biosimil> biological
 product at a date1 :e!r c]ta9 or       
cont+5t1 prior to ! expiration (-- 7,a7 
any pat5t t is ! basis = ! pat5t        
infr+em5t claim2 or  7,b7 any pat5t "r  
or o!r /atutory exclusivity t w\ld      
prev5t ! m>ket+ ( su* ,,&a product or   
biosimil> biological product4  7#b7 ,a  

paym5t = reasonable litigation exp5ses n
 to exce$--  7,a7 = cal5d> ye> #bjba1   
#g1ejj1jjj2 or  7,b7 = cal5d> ye> #bjbb 
& ea* subsequ5t cal5d> ye>1 ! am\nt     
det]m9$ = ! prec$+ cal5d> ye> adju/$ to 
reflect ! p]c5tage increase 7if any7 9 !
 ,produc] ,price ,index = ,legal        
,s]vices publi%$ by ! ,bureau ( ,labor  
,/ati/ics ( ! ,dep>tm5t ( ,labor = ! mo/
 rec5t cal5d> ye>4  7#c7 ,a cov5ant n to
 sue on any claim t ! ,,&a product or   
biosimil> biological product infr+es a  
,unit$ ,/ates pat5t4  7d7 ,en=cem5t     
7#a7 ,en=cem5t ,a violation ( ?is       
section %all be treat$ z an unfair me?od
 ( competition "u section #e7;a77#a74   
7#b7 ,judicial review  7,a7 ,9 g5]al    
,any p>ty t is subject to a f9al ord] ( 
! ,commission1 issu$ 9 an adm9i/rative  
adjudicative proce$+ "u ! au?ority (    
subsection 7a77#a71 may1 )9 #cj days ( !
 issuance ( su* ord]1 petition = review 
( su* ord] 9-- 7i7 ! ,unit$ ,/ates ,c\rt
 ( ,appeals = ! ,di/rict ( ,columbia    
,circuit2  7ii7 ! ,unit$ ,/ates ,c\rt ( 

,appeals = ! circuit 9 :i* ! ultimate   
p>5t entity1 z def9$ 9 section          
#hja4a7;a77#c7 ( title #af1 ,code (     
,f$]al ,regulations1 or any successor   
!reto1 ( ! ,,nda hold] or biological    
product lic5se hold] is incorporat$ z ( 
! date t ! ,,nda or biological product  
lic5se application1 z applicable1 is    
fil$ ) ! ,commission] ( ,food & ,drugs2 
or  7iii7 ! ,unit$ ,/ates ,c\rt (       
,appeals = ! circuit 9 :i* ! ultimate   
p>5t entity ( ! ,,&a fil] or biosimil>  
biological product application fil] is  
incorporat$ z ( ! date t ! ,,&a or      
biosimil> biological product application
 is fil$ ) ! ,commission] ( ,food &     
,drugs4  7,b7 ,treatm5t ( f9d+s ,9 a    
proce$+ = judicial review ( a f9al ord] 
( ! ,commission1 ! f9d+s ( ! ,commission
 z to ! facts1 if support$ by evid5ce1  
%all be conclusive4  7e7 ,antitru/ laws 
,no?+ 9 ?is section %all modify1 impair1
 limit1 or sup]s$e ! applicability ( !  
antitru/ laws z def9$ 9 subsection 7a7 (
 ! fir/ section ( ! ,clayton ,act 7#ae  

,u4,s4,c4 #ab7;a771 & ( section #e ( ?is
 ,act to ! ext5t t section #e applies to
 unfair me?ods ( competition4 ,no?+ 9   
?is section %all modify1 impair1 limit1 
or sup]s$e ! "r ( an ,,&a fil] or       
biosimil> biological product application
 fil] to ass]t claims or c\nt]claims    
aga9/ any p]son1 "u ! antitru/ laws or  
o!r laws relat+ to unfair competition4  
7f7 ,p5alties  7#a7 ,=feiture ,ea* p>ty 
t violates or assi/s 9 ! violation ( ?is
 section %all =feit & pay to ! ,unit$   
,/ates a civil p5alty suffici5t to det] 
violations ( ?is section1 b 9 no ev5t   
great] ?an #c times ! value receiv$ by !
 p>ty t is reasonably attributable to ! 
violation ( ?is section4 ,if no su*     
value has be5 receiv$ by ! ,,nda hold]1 
! biological product lic5se hold]1 !    
,,&a fil]1 or ! biosimil> biological    
product application fil]1 ! p5alty to ! 
,,nda hold]1 ! biological product lic5se
 hold]1 ! ,,&a fil]1 or ! biosimil>     
biological product application fil] %all
 be suffici5t to det] violations1 b 9 no

 ev5t %all be great] ?an #c times !     
value giv5 to an ,,&a fil] or biosimil> 
biological product application fil]     
reasonably attributable to ! violation (
 ?is section4 ,su* p5alty %all accrue to
 ! ,unit$ ,/ates & may be recov]$ 9 a   
civil action br\ght by ! ,commission1 9 
its own "n by any ( its attorneys       
designat$ by x = su* purpose1 9 a       
di/rict c\rt ( ! ,unit$ ,/ates aga9/ any
 p>ty t violates ?is section4 ,9 su*    
actions1 ! ,unit$ ,/ates di/rict c\rts  
are emp[]$ to grant m&atory injunctions 
& su* o!r & fur!r equitable relief z !y 
deem appropriate4  7#b7 ,cease & desi/  
7,a7 ,9 g5]al ,if ! ,commission has     
issu$ a cease & desi/ ord] ) respect to 
a p>ty 9 an adm9i/rative adjudicative   
proce$+ "u ! au?ority ( subsection      
7a77#a71 an action br\ght pursuant to   
p>agraph 7#a7 may be comm5c$ aga9/ su*  
p>ty at any "t be=e ! expiration ( #a   
ye> aft] su* ord] becomes f9al pursuant 
to section #e7;g74  7,b7 ,exception ,9  
an action "u subp>agraph 7,a71 ! f9d+s (

 ! ,commission z to ! mat]ial facts 9 ! 
adm9i/rative adjudicative proce$+ )     
respect to ! violation ( ?is section by 
a p>ty %all be conclusive unless-- 7i7 !
 t]ms ( su* cease & desi/ ord] expressly
 provide t ! ,commission's f9d+s %all n 
be conclusive2 or  7ii7 ! ord] became   
f9al by reason ( section #e7;g77#a71 9  
:i* case su* f9d+ %all be conclusive if 
support$ by evid5ce4  7#c7 ,civil p5alty
 ,9 det]m9+ ! am\nt ( ! civil p5alty    
describ$ 9 ?is section1 ! c\rt %all take
 into acc\nt--  7,a7 ! nature1          
circum/ances1 ext5t1 & gravity ( !      
violation2  7,b7 ) respect to !         
violator1 ! degree ( culpability1 any   
hi/ory ( violations1 ! ability to pay1  
any effect on ! ability to cont9ue do+  
bus9ess1 pr(its e>n$ by ! ,,nda hold]1 !
 biological product lic5se hold]1 ! ,,&a
 fil]1 or ! biosimil> biological product
 application fil]1 comp5sation receiv$  
by ! ,,&a fil] or biosimil> biological  
product application fil]1 & ! am\nt (   
comm]ce affect$2 &  7,c7 o!r matt]s t   

ju/ice requires4  7#d7 ,rem$ies 9       
addition ,rem$ies provid$ 9 ?is         
subsection are 9 addition to1 & n 9 lieu
 (1 any o!r rem$y provid$ by ,f$]al law4
 ,no?+ 9 ?is p>agraph %all be con/ru$ to
 affect any au?ority ( ! ,commission "u 
any o!r provision ( law4  7g7           
,def9itions ,9 ?is section3 7#a7        
,agreem5t ,! t]m agreem5t means any?+ t 
w\ld con/itute an agreem5t "u section #a
 ( ! ,%]man ,act 7#ae ,u4,s4,c4 #a7 or  
section #e ( ?is ,act4  7#b7 ,agreem5t  
resolv+ or settl+ a pat5t infr+em5t     
claim ,! t]m agreem5t resolv+ or settl+ 
a pat5t infr+em5t claim includes any    
agreem5t t is ent]$ into )9 #cj days ( !
 resolution or ! settlem5t ( ! claim1 or
 any o!r agreem5t t is cont+5t ^u1      
provides a cont+5t condition =1 or is   
o!rwise relat$ to ! resolution or       
settlem5t ( ! claim4  7#c7 ,,&a ,! t]m  
,,&a means an abbreviat$ new drug       
application fil$ "u section #eje7;j7 ( !
 ,f$]al ,food1 ,drug1 & ,cosmetic ,act  
7#ba ,u4,s4,c4 #cee7;j77 or a new drug  

application fil$ "u section #eje7;b77#b7
 ( ! ,f$]al ,food1 ,drug1 & ,cosmetic   
,act 7#ba ,u4,s4,c4 #cee7;b77#b774  7#d7
 ,,&a fil] ,! t]m ,,&a fil] means a p>ty
 t owns or controls an ,,&a fil$ ) !    
,food & ,drug ,adm9i/ration or has !    
exclusive rights "u su* ,,&a to         
di/ribute ! ,,&a product4  7#e7 ,,&a    
product ,! t]m ,,&a product means !     
product to be manufactur$ "u ! ,,&a t is
 ! subject ( ! pat5t infr+em5t claim4   
7#f7 ,biological product ,! t]m         
biological product has ! mean+ giv5 su* 
t]m 9 section #cea7;i77#a7 ( ! ,public  
,heal? ,s]vice ,act 7#db ,u4,s4,c4      
#bfb7;i77#a774  7#g7 ,biological product
 lic5se application ,! t]m biological   
product lic5se application means an     
application "u section #cea7;a7 ( !     
,public ,heal? ,s]vice ,act 7#db        
,u4,s4,c4 #bfb7;a774  7#h7 ,biological  
product lic5se hold] ,! t]m biological  
product lic5se hold] means-- 7,a7 !     
hold] ( an approv$ biological product   
lic5se application = a biological       

product2  7,b7 a p]son own+ or controll+
 en=cem5t ( any pat5ts t claim !        
biological product t is ! subject ( su* 
approv$ application2 or  7,c7 !         
pr$ecessors1 subsidi>ies1 divisions1    
gr\ps1 & affiliates controll$ by1       
controll+1 or "u common control ) any ( 
! entities describ$ 9 subp>agraphs 7,a7 
& 7,b7 7su* control to be presum$ by    
direct or indirect %>e own]%ip ( #ej    
p]c5t or great]71 z well z ! lic5sees1  
lic5sors1 successors1 & assigns ( ea* ( 
! entities4  7#i7 ,biosimil> biological 
product ,! t]m biosimil> biological     
product means ! product to be           
manufactur$ "u ! biosimil> biological   
product application t is ! subject ( !  
pat5t infr+em5t claim4  7#aj7 ,biosimil>
 biological product application ,! t]m  
biosimil> biological product application
 means an application "u section #cea7k7
 ( ! ,public ,heal? ,s]vice ,act 7#db   
,u4,s4,c4 #bfb7k77 = lic5sure ( a       
biological product z biosimil> to1 or   
int]*angeable )1 a ref]5ce product4     

7#aa7 ,biosimil> biological product     
application fil] ,! t]m biosimil>       
biological product application fil]     
means a p>ty t owns or controls a       
biosimil> biological product application
 fil$ ) ! ,food & ,drug ,adm9i/ration or
 has ! exclusive rights "u su*          
application to di/ribute ! biosimil>    
biological product4  7#ab7 ,drug product
 ,! t]m drug product has ! mean+ giv5   
su* t]m 9 section #cad4c7;b7 ( title    
#ba1 ,code ( ,f$]al ,regulations 7or any
 successor regulation74  7#ac7 ,m>ket ,!
 t]m m>ket means ! promotion1 (f]+ =    
sale1 sell+1 or di/ribution ( a drug    
product4  7#ad7 ,,nda ,! t]m ,,nda means
 a new drug application fil$ "u section 
#eje7;b7 ( ! ,f$]al ,food1 ,drug1 &     
,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;b774
  7#ae7 ,,nda hold] ,! t]m ,,nda hold]  
means-- 7,a7 ! hold] ( an approv$ ,,nda 
application = a drug product2  7,b7 a   
p]son own+ or controll+ en=cem5t ( !    
pat5t li/$ 9 ! ,approv$ ,drug ,products 
,) ,!rapeutic ,equival5ce ,evaluations  

7commonly kn[n z ! ,,fda ,orange ,book7 
9 connection ) ! ,,nda2 or  7,c7 !      
pr$ecessors1 subsidi>ies1 divisions1    
gr\ps1 & affiliates controll$ by1       
controll+1 or "u common control ) any ( 
! entities describ$ 9 subp>agraphs 7,a7 
& 7,b7 7su* control to be presum$ by    
direct or indirect %>e own]%ip ( #ej    
p]c5t or great]71 z well z ! lic5sees1  
lic5sors1 successors1 & assigns ( ea* ( 
! entities4  7#af7 ,p>ty ,! t]m p>ty    
means any p]son1 p>tn]%ip1 corporation1 
or o!r legal entity4  7#ag7 ,pat5t      
infr+em5t ,! t]m pat5t infr+em5t means  
infr+em5t ( any pat5t or ( any fil$     
pat5t application1 includ+ any ext5sion1
 reissue1 r5ewal1 division1 cont9uation1
 cont9uation 9 "p1 reexam9ation1 pat5t  
t]m re/oration1 pat5ts ( addition1 &    
ext5sions !re(4  7#ah7 ,pat5t infr+em5t 
claim ,! t]m pat5t infr+em5t claim means
 any allegation made to an ,,&a fil] or 
biosimil> biological product application
 fil]1 :e!r or n includ$ 9 a compla9t   
fil$ ) a c\rt ( law1 t its ,,&a or ,,&a 

product1 or biosimil> biological product
 lic5se application or biosimil>        
biological product1 may infr+e any pat5t
 held by1 or exclusively lic5s$ to1 !   
,,nda hold]1 biological product lic5se  
hold]1 ,,&a fil]1 or biosimil>          
biological product application fil] ( ! 
drug product or biological product1 z   
applicable4  7#ai7 ,/atutory exclusivity
 ,! t]m /atutory exclusivity means ^?   
prohibitions on ! approval ( drug       
applications "u clauses 7ii7 ?r\gh 7iv7 
( section #eje7;c77#c77;,e7 7#e- &      
#c-ye> data exclusivity71 section #ebg  
7orphan drug exclusivity71 or section   
#eje;,a 7p$iatric exclusivity7 ( !      
,f$]al ,food1 ,drug1 & ,cosmetic ,act   
7#ba ,u4,s4,c4 #cee7;c77#c77;,e71       
#cfj;cc1 #cee;a71 or on ! lic5s+ (      
biological product applications "u      
section #cea7k77#g7 7#ab-ye>            
exclusivity7 or p>agraph 7#b7 or 7#c7 ( 
section #cea7m7 7p$iatric exclusivity7 (
 ! ,public ,heal? ,s]vice ,act 7#db     
,u4,s4,c4 #bfb7 or "u section #ebg ( !  

,f$]al ,food1 ,drug1 & ,cosmetic ,act   
7#ba ,u4,s4,c4 #cfj;cc7 7orphan drug    
exclusivity74  4  7#b7 ,effective date  
,section #bg ( ! ,f$]al ,trade          
,commission ,act1 z add$ by ?is section1
 %all apply to all agreem5ts describ$ 9 
section #bg7;a77#a7 ( t ,act ent]$ into 
on or aft] ! date ( enactm5t ( ?is ,act4
  7c7 ,c]tification ( agreem5ts  7#a7   
,notice ( all agreem5ts ,section        
#aaaa7g7 ( ! ,m$ic>e ,prescription      
,drug1 ,improvem5t1 & ,mod]nization ,act
 ( #bjjc 7#ba ,u4,s4,c4 #cee note7 is   
am5d$ by ins]t+ 1 or ! own] ( a pat5t = 
:i* a claim ( infr+em5t c\ld reasonably 
be ass]t$ aga9/ any p]son = mak+1 us+1  
(f]+ to sell1 sell+1 or import+ into !  
,unit$ ,/ates a biological product t is 
! subject ( a biosimil> biological      
product application be=e ! p]iod at !   
end4  7#b7 ,c]tification ( agreem5ts    
,section #aaab ( ! ,m$ic>e ,prescription
 ,drug1 ,improvem5t1 & ,mod]nization    
,act ( #bjjc 7#ba ,u4,s4,c4 #cee note7  
is am5d$ by add+ at ! end ! foll[+3  7d7

 ,c]tification ,! ,*ief ,executive      
,(fic] or ! company (ficial responsible 
= negotiat+ any agreem5t "u subsection  
7a7 or 7b7 t is requir$ to be fil$ "u   
subsection 7c71 )9 #cj days aft] su*    
fil+1 %all execute & file ) ! ,assi/ant 
,attorney ,g5]al & ! ,commission a      
c]tification z foll[s3  ,i decl>e t !   
foll[+ is true1 correct1 & complete to !
 be/ ( my k3 ,! mat]ials fil$ ) ! ,f$]al
 ,trade ,commission & ! ,dep>tm5t (     
,ju/ice "u section #aaab ( subtitle ,b (
 title ,,xi ( ! ,m$ic>e ,prescription   
,drug1 ,improvem5t1 & ,mod]nization ,act
 ( #bjjc1 ) respect to ! agreem5t       
ref]5c$ 9 ?is c]tification-- 7#a7       
repres5t ! complete1 f9al1 & exclusive  
agreem5t betwe5 ! p>ties2  7#b7 include 
any ancill>y agreem5ts t are cont+5t ^u1
 provide a cont+5t condition =1 or are  
o!rwise relat$ to1 ! ref]5c$ agreem5t2 &
  7#c7 include writt5 descriptions ( any
 oral agreem5ts1 repres5tations1        
commitm5ts1 or promises betwe5 ! p>ties 
t are responsive to subsection 7a7 or   

7b7 ( su* section #aaab & h n be5 r$uc$ 
to writ+4  4  4  7d7 ,notification (    
agreem5ts ,section #aaab ( ! ,m$ic>e    
,prescription ,drug1 ,improvem5t1 &     
,mod]nization ,act ( #bjjc 7#ba         
,u4,s4,c4 #cee note71 z am5d$ by section
 #d7;b71 is fur!r am5d$ by add+ at ! end
 ! foll[+3  7e7 ,rule ( con/ruction     
7#a7 ,9 g5]al ,an agreem5t t is requir$ 
"u subsection 7a7 or 7b7 %all include   
agreem5ts resolv+ any out/&+ disputes1  
includ+ agreem5ts resolv+ or settl+ a   
,pat5t ,trial & ,appeal ,bo>d proce$+4  
7#b7 ,def9ition ,= purposes (           
subp>agraph 7,a71 ! t]m ,pat5t ,trial & 
,appeal ,bo>d proce$+ means a proce$+   
conduct$ by ! ,pat5t ,trial & ,appeal   
,bo>d ( ! ,unit$ ,/ates ,pat5t &        
,tradem>k ,(fice1 includ+ an int] p>tes 
review in/itut$ "u *apt] #ca ( title    
#ce1 ,unit$ ,/ates ,code1 a po/-grant   
review in/itut$ "u *apt] #cb ( t title  
7includ+ a proce$+ in/itut$ pursuant to 
! transitional program = cov]$ bus9ess  
me?od pat5ts1 z describ$ 9 section #ah (

 ! ,leahy-,smi? ,am]ica ,inv5ts ,act    
7#ce ,u4,s4,c4 #cba note771 & a         
d]ivation proce$+ in/itut$ "u section   
#ace ( t title4  4  7e7 ,=feiture (     
#ahj-;,day exclusivity p]iod ,section   
#eje7;j77#e77;,d77i77,v7 ( ! ,f$]al     
,food1 ,drug1 & ,cosmetic ,act 7#ba     
,u4,s4,c4 #cee7;j77#e77;,d77i77,v77 is  
am5d$ by ins]t+ section #bg ( ! ,f$]al  
,trade ,commission ,act or aft] t !     
agreem5t has violat$4  7f7 ,commission  
litigation au?ority ,section #af7;a77#b7
 ( ! ,f$]al ,trade ,commission ,act 7#ae
 ,u4,s4,c4 #ef7;a77#b77 is am5d$-- 7#a7 
9 subp>agraph 7,d71 by /rik+ or aft] !  
semicolon2  7#b7 9 subp>agraph 7,e71 by 
ins]t+ or aft] ! semicolon2 &  7#c7     
ins]t+ aft] subp>agraph 7,e7 ! foll[+3  
7,f7 "u section #bg1  4  7g7 ,report on 
additional exclusion  7#a7 ,9 g5]al ,n  
lat] ?an #a ye> aft] ! date ( enactm5t (
 ?is ,act1 ! ,f$]al ,trade ,commission  
%all submit to ! ,committee on !        
,judici>y ( ! ,s5ate & ! ,committee on !
 ,judici>y ( ! ,h\se ( ,repres5tatives a

 recomm5dation1 & ! ,commission's basis 
= su* recomm5dation1 reg>d+ a pot5tial  
am5dm5t to include 9 section #bg7;c7 ( !
 ,f$]al ,trade ,commission ,act 7z add$ 
by section #c ( ?is ,act7 an additional 
exclusion = consid]ation grant$ by an   
,,nda hold] to a ,,&a fil] or by a      
biological product lic5se hold] to a    
biosimil> biological product application
 fil] z "p ( ! resolution or settlem5t1 
a release1 waiv]1 or limitation ( a     
claim = damages or o!r monet>y relief4  
7#b7 ,def9itions ,9 ?is section1 ! t]ms 
,,&a fil]1 biological product lic5se    
hold]1 biosimil> biological product     
application fil]1 & ,,nda hold] h !     
mean+s giv5 su* t]ms 9 section #bg7;g7 (
 ! ,f$]al ,trade ,commission ,act 7z    
add$ by section #c ( ?is ,act74  7h7    
,/atute ( limitations ,! ,f$]al ,trade  
,commission %all comm5ce any en=cem5t   
proce$+ describ$ 9 section #bg ( !      
,f$]al ,trade ,commission ,act1 z add$  
by section #c1 except = an action       
describ$ 9 section #bg7;f77#b7 ( !      

,f$]al ,trade ,commission ,act1 n lat]  
?an #f ye>s aft] ! date on :i* ! p>ties 
to ! agreem5t file ! c]tification "u    
section #aaab7;d7 ( ! ,m$ic>e           
,prescription ,drug ,improvem5t &       
,mod]nization ,act ( #bjjc 7#ba         
,u4,s4,c4 #cee note74  7i7 ,sev]ability 
,if any provision ( ?is ,act1 an am5dm5t
 made by ?is ,act1 or ! application (   
su* provision or am5dm5t to any p]son or
 circum/ance is held to be              
uncon/itutional1 ! rema9d] ( ?is ,act1 !
 am5dm5ts made by ?is ,act1 & !         
application ( ! provisions ( su* ,act or
 am5dm5ts to any p]son or circum/ance   
%all n be affect$4  #djf4 ,emp[]+ !     
,,ftc to prev5t 8product hopp+0  7a7 ,9 
g5]al ,! ,f$]al ,trade ,commission ,act 
7#ae ,u4,s4,c4 #da et seq47 is am5d$ by 
ins]t+ aft] section #bf 7#ae ,u4,s4,c4  
#eg;c-#b7 ! foll[+3  #bg4 ,product hopp+
  7a7 ,def9itions ,9 ?is section3 7#a7  
,abbreviat$ new drug application ,! t]m 
abbreviat$ new drug application means an
 application "u subsection 7b77#b7 or   

7j7 ( section #eje ( ! ,f$]al ,food1    
,drug1 & ,cosmetic ,act 7#ba ,u4,s4,c4  
#cee74  7#b7 ,biosimil> biological      
product ,! t]m biosimil> biological     
product means a biological product      
lic5s$ "u section #cea7k7 ( ! ,public   
,heal? ,s]vice ,act 7#db ,u4,s4,c4      
#bfb7k774  7#c7 ,biosimil> biological   
product lic5se application ,! t]m       
biosimil> biological product lic5se     
application means an application        
submitt$ "u section #cea7k7 ( ! ,public 
,heal? ,s]vice ,act 7#db ,u4,s4,c4      
#bfb7k774  7#d7 ,foll[-on product ,! t]m
 foll[-on product-- 7,a7 means a drug   
approv$ ?r\gh an application or         
supplem5t to an application submitt$ "u 
section #eje7;b7 ( ! ,f$]al ,food1      
,drug1 & ,cosmetic ,act 7#ba ,u4,s4,c4  
#cee7;b77 or a biological product lic5s$
 ?r\gh an application or supplem5t to an
 application submitt$ "u section        
#cea7;a7 ( ! ,public ,heal? ,s]vice ,act
 7#db ,u4,s4,c4 #bfb7;a77 = a *ange1    
modification1 or re=mulation to ! same  

manufactur]'s previ\sly approv$ drug or 
biological product t treats ! same      
m$ical condition2 &  7,b7 excludes su*  
an application or supplem5t to an       
application = a *ange1 modification1 or 
re=mulation ( a drug or biological      
product t is reque/$ by ! ,secret>y or  
necess>y to comply ) law1 includ+       
sections #eje;,a & #eje;,b ( ! ,f$]al   
,food1 ,drug1 & ,cosmetic ,act 7#ba     
,u4,s4,c4 #cee;a1 #cee;c74  7#e7 ,g5]ic 
drug ,! t]m g5]ic drug means a drug     
approv$ "u an application submitt$ "u   
subsection 7b77#b7 or 7j7 ( section #eje
 ( ! ,f$]al ,food1 ,drug1 & ,cosmetic   
,act 7#ba ,u4,s4,c4 #cee74  7#f7 ,li/$  
drug ,! t]m li/$ drug means a drug li/$ 
"u section #eje7;j77#g7 ( ! ,f$]al      
,food1 ,drug1 & ,cosmetic ,act 7#ba     
,u4,s4,c4 #cee7;j77#g774  7#g7          
,manufactur] ,! t]m manufactur] means ! 
hold]1 lic5see1 or assignee (--  7,a7 an
 approv$ application = a drug "u section
 #eje7;c7 ( ! ,f$]al ,food1 ,drug1 &    
,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;c772

 or  7,b7 a biological product lic5se "u
 section #cea7;a7 ( ! ,public ,heal?    
,s]vice ,act 7#db ,u4,s4,c4 #bfb7;a774  
7#h7 ,ref]5ce product ,! t]m ref]5ce    
product has ! mean+ giv5 ! t]m 9 section
 #cea7;i7 ( ! ,public ,heal? ,s]vice    
,act 7#db ,u4,s4,c4 #bfb7;i774  7#i7    
,ultimate p>5t entity ,! t]m ultimate   
p>5t entity has ! mean+ giv5 ! t]m 9    
section #hja4a ( title #af1 ,code (     
,f$]al ,regulations1 or any successor   
regulation4  7b7 ,prohibition on product
 hopp+  7#a7 ,prima facie ,except z     
provid$ 9 p>agraph 7#b71 a manufactur] (
 a ref]5ce product or li/$ drug %all be 
consid]$ to h engag$ 9 an unfair me?od (
 competition 9 or affect+ comm]ce 9     
violation ( section #e7;a7 if !         
,commission demon/rates by a            
prepond]ance ( ! evid5ce 9 a proce$+    
initiat$ by ! ,commission "u subsection 
7c77#a77;,a71 or 9 a suit br\ght "u     
subp>agraph 7,b7 or 7,c7 ( subsection   
7c77#a71 t1 dur+ ! p]iod beg9n+ on !    
date on :i* ! manufactur] ( ! ref]5ce   

product or li/$ drug fir/ receives      
notice t an applicant has submitt$ to ! 
,commission] ( ,food & ,drugs an        
abbreviat$ new drug application or      
biosimil> biological product lic5se     
application & end+ on ! date t is #ahj  
days aft] ! date on :i* t g5]ic drug or 
biosimil> biological product is fir/    
m>ket$1 ! manufactur] engag$ 9 ei!r ( ! 
foll[+ actions3 7,a7 ,! manufactur]     
engag$ 9 a h>d swit*1 :i* %all be       
e/abli%$ by demon/rat+ t ! manufactur]  
engag$ 9 ei!r ( ! foll[+ actions3  7i7  
,^u ! reque/ ( ! manufactur] ( ! li/$   
drug or ref]5ce product1 ! ,commission] 
( ,food & ,drugs )drew ! approval ( !   
application = ! li/$ drug or ref]5ce    
product or plac$ ! li/$ drug or ref]5ce 
product on ! discont9u$ products li/ & !
 manufactur] m>ket$ or sold a foll[-on  
product4  7ii7 ,! manufactur] ( ! li/$  
drug or ref]5ce product--  7,i7  7aa7   
ann\nc$ )drawal (1 discont9uance ( !    
manufacture (1 or int5t to )draw !      
application ) respect to ! drug or      

ref]5ce product 9 a mann] t imp$es      
competition f a g5]ic drug or a         
biosimil> biological product1 z e/abli%$
 by objective circum/ances2 or  7bb7    
de/roy$ ! inv5tory ( ! li/$ drug or     
ref]5ce product 9 a mann] t imp$es      
competition f a g5]ic drug or a         
biosimil> biological product1 :i* may be
 e/abli%$ by objective circum/ances2 &  
7,,ii7 m>ket$ or sold a foll[-on        
product4  7,b7 ,! manufactur] engag$ 9 a
 s(t swit*1 :i* %all be e/abli%$ by     
demon/rat+ t ! manufactur] engag$ 9 bo? 
( ! foll[+ actions3  7i7 ,! manufactur] 
took actions ) respect to ! li/$ drug or
 ref]5ce product o!r ?an ^? describ$ 9  
subp>agraph 7,a7 t unfairly disadvantage
 ! li/$ drug or ref]5ce product relative
 to ! foll[-on product describ$ 9 clause
 7ii7 9 a mann] t imp$es competition f a
 g5]ic drug or a biosimil> biological   
product t is highly simil> to1 & has no 
cl9ically mean+ful diff]5ce ) respect to
 safety1 purity1 & pot5cy f1 ! ref]5ce  
product1 :i* may be e/abli%$ by         

objective circum/ances4  7ii7 ,!        
manufactur] m>ket$ or sold a foll[-on   
product4  7#b7 ,ju/ification  7,a7 ,9   
g5]al ,subject to p>agraph 7#c71 !      
actions describ$ 9 p>agraph 7#a7 by a   
manufactur] ( a li/$ drug or ref]5ce    
product %all n be consid]$ to be an     
unfair me?od ( competition 9 or affect+ 
comm]ce if-- 7i7 ! manufactur]          
demon/rates to ! ,commission or a       
di/rict c\rt ( ! ,unit$ ,/ates1 z       
applicable1 by a prepond]ance ( !       
evid5ce 9 a proce$+ initiat$ by !       
,commission "u subsection 7c77#a77;,a71 
or 9 a suit br\ght "u subp>agraph 7,b7  
or 7,c7 ( subsection 7c77#a71 t--  7,i7 
! manufactur] w\ld h tak5 ! actions     
reg>dless ( :e!r a g5]ic drug t ref]5ces
 ! li/$ drug or biosimil> biological    
product t ref]5ces ! ref]5ce product _h 
already ent]$ ! m>ket2 &  7,,ii7 7aa7 ) 
respect to a h>d swit* "u p>agraph      
7#a77;,a71 ! manufactur] took ! action =
 reasons relat+ to ! safety risk to     
pati5ts ( ! li/$ drug or ref]5ce        

product2  7bb7 ) respect to an action   
describ$ 9 item 7aa7 or 7bb7 ( p>agraph 
7#a77;,a77ii77,i71 !re is a supply      
disruption t-- 7,,aa7 is outside ( !    
control ( ! manufactur]2 7,,bb7 prev5ts 
! production or di/ribution ( !         
applicable li/$ drug or ref]5ce product2
 & 7,,cc7 _c be rem$i$ by reasonable    
ef=ts2 or  7cc7 ) respect to a s(t swit*
 "u p>agraph 7#a77;,b71 ! manufactur] _h
 legitimate pro-competitive reasons1    
ap>t f ! f9ancial effects ( r$uc$       
competition1 to take ! action4  7,b7    
,rule ( con/ruction ,no?+ 9 subp>agraph 
7,a7 may be con/ru$ to limit ! in=mation
 t ! ,commission may o!rwise obta9 9 any
 proce$+ or action in/itut$ ) respect to
 a violation ( ?is section4  7#c7       
,response ,) respect to a ju/ification  
(f]$ by a manufactur] "u p>agraph 7#b71 
! ,commission may-- 7,a7 rebut any      
evid5ce pres5t$ by a manufactur] dur+ t 
ju/ification2 or  7,b7 e/abli% by a     
prepond]ance ( ! evid5ce t1 on balance1 
! pro-competitive b5efits f ! conduct   

describ$ 9 subp>agraph 7,a7 or 7,b7 (   
p>agraph 7#a71 z applicable1 d n        
outweigh any anticompetitive effects ( !
 conduct1 ev5 9 consid]ation ( !        
ju/ification s (f]$4  7c7 ,en=cem5t     
7#a7 ,9 g5]al ,if ! ,commission has     
reason to believe t any manufactur] has 
violat$1 is violat+1 or is ab\t to      
violate ?is section1 ! ,commission may  
take any ( ! foll[+ actions3  7,a7      
,in/itute a proce$+-- 7i7 t1 except z   
provid$ 9 p>agraph 7#b71 complies ) !   
requirem5ts "u section #e7;b72 &  7ii7 9
 :i* ! ,commission may impose on !      
manufactur] any p5alty t ! ,commission  
may impose = a violation ( section #e4  
7,b7 ,9 ! same mann] & to ! same ext5t z
 provid$ 9 section #ac7;b71 br+ suit 9 a
 di/rict c\rt ( ! ,unit$ ,/ates to      
tempor>ily enjo9 ! action ( !           
manufactur]4  7,c7 ,br+ suit 9 a di/rict
 c\rt ( ! ,unit$ ,/ates1 9 :i* !        
,commission may seek-- 7i7 to p]man5tly 
enjo9 ! action ( ! manufactur]2  7ii7   
any ( ! rem$ies describ$ 9 p>agraph     

7#c72 &  7iii7 any o!r equitable rem$y1 
includ+ ancill>y equitable relief4  7#b7
 ,judicial review  7,a7 ,9 g5]al        
,not)/&+ any provision ( section #e1 any
 manufactur] t is subject to a f9al ord]
 ( ! ,commission t is issu$ 9 a proce$+ 
in/itut$ "u p>agraph 7#a77;,a7 may1 n   
lat] ?an #cj days aft] ! date on :i* !  
,commission issues ! ord]1 petition =   
review ( ! ord] 9-- 7i7 ! ,unit$ ,/ates 
,c\rt ( ,appeals = ! ,di/rict (         
,columbia ,circuit2 or  7ii7 ! c\rt (   
appeals ( ! ,unit$ ,/ates = ! circuit 9 
:i* ! ultimate p>5t entity ( !          
manufactur] is incorporat$4  7,b7       
,treatm5t ( f9d+s ,9 a review ( an ord] 
issu$ by ! ,commission conduct$ by a    
c\rt ( appeals ( ! ,unit$ ,/ates "u     
subp>agraph 7,a71 ! factual f9d+s ( !   
,commission %all be conclusive if ^?    
facts are support$ by ! evid5ce4  7#c7  
,equitable rem$ies  7,a7 ,disgorgem5t   
7i7 ,9 g5]al ,9 a suit br\ght "u        
p>agraph 7#a77;,c71 ! ,commission may   
seek1 & ! c\rt may ord]1 disgorgem5t (  

any unju/ enri*m5t t a p]son obta9$ z a 
result ( ! violation t gives rise to !  
suit4  7ii7 ,calculation ,any           
disgorgem5t t is ord]$ ) respect to a   
p]son "u clause 7i7 %all be (fset by any
 am\nt ( re/itution ord]$ "u subp>agraph
 7,b74  7iii7 ,limitations p]iod ,!     
,commission may seek disgorgem5t "u ?is 
subp>agraph n lat] ?an #e ye>s aft] !   
late/ date on :i* ! p]son f :i* !       
disgorgem5t is s\ght receives any unju/ 
enri*m5t f ! effects ( ! violation t    
gives rise to ! suit 9 :i* ! ,commission
 seeks ! disgorgem5t4  7,b7 ,re/itution 
7i7 ,9 g5]al ,9 a suit br\ght "u        
p>agraph 7#a77;,c71 ! ,commission may   
seek1 & ! c\rt may ord]1 re/itution )   
respect to ! violation t gives rise to !
 suit4  7ii7 ,limitations p]iod ,!      
,commission may seek re/itution "u ?is  
subp>agraph n lat] ?an #e ye>s aft] !   
late/ date on :i* ! p]son f :i* !       
re/itution is s\ght receives any unju/  
enri*m5t f ! effects ( ! violation t    
gives rise to ! suit 9 :i* ! ,commission

 seeks ! re/itution4  7#d7 ,rules (     
con/ruction ,no?+ 9 ?is subsection may  
be con/ru$ z--  7,a7 requir+ !          
,commission to br+ a suit seek+ a       
tempor>y injunction "u p>agraph         
7#a77;,b7 be=e br++ a suit seek+ a      
p]man5t injunction "u p>agraph          
7#a77;,c72 or  7,b7 affect+ any o!r     
au?ority ( ! ,commission "u ?is ,act to 
seek relief or obta9 a rem$y ) respect  
to a violation ( ?is ,act4  4  7b7      
,applicability ,section #bg ( ! ,f$]al  
,trade ,commission ,act1 z add$ by      
subsection 7a71 %all apply ) respect to 
any-- 7#a7 conduct t occurs on or aft] !
 date ( enactm5t ( ?is ,act2 &  7#b7    
action or proce$+ t is comm5c$ on or    
aft] ! date ( enactm5t ( ?is ,act4  7c7 
,antitru/ laws ,no?+ 9 ?is section1 or !
 am5dm5ts made by ?is section1 %all     
modify1 impair1 limit1 or sup]s$e !     
applicability ( ! antitru/ laws z def9$ 
9 subsection 7a7 ( ! fir/ section ( !   
,clayton ,act 7#ae ,u4,s4,c4 #ab7;a771 &
 ( section #e ( ! ,f$]al ,trade         

,commission ,act 7#ae ,u4,s4,c4 #de7 to 
! ext5t t x applies to unfair me?ods (  
competition4  7d7 ,rulemak+ ,! ,f$]al   
,trade ,commission may issue rules "u   
section #eec ( title #e1 ,unit$ ,/ates  
,code1 to c>ry out section #bg ( !      
,f$]al ,trade ,commission ,act1 z add$  
by subsection 7a71 includ+ by def9+ any 
t]ms us$ 9 su* section #bg 7o!r ?an t]ms
 t are def9$ 9 subsection 7a7 ( su*     
section #bg74  #djg4 ,promot+           
competition by limit+ pat5t ?ickets  7a7
 ,9 g5]al ,section #bga7;e7 ( title #ce1
 ,unit$ ,/ates ,code1 is am5d$--  7#a7 9
 p>agraph 7#b77;,c71 9 ! flu% text      
foll[+ clause 7ii71 by add+ at ! end !  
foll[+3 ,) respect to a submission      
describ$ 9 clause 7ii71 ! act (         
infr+em5t %all ext5d to any pat5t t     
claims ! biological product1 a me?od (  
us+ ! biological product1 or a me?od or 
product us$ to manufacture ! biological 
product42 &  7#b7 by add+ at ! end !    
foll[+3  7#g7  7,a7 ,subject to         
subp>agraphs 7,c71 7,d71 & 7,e71 if !   

sponsor ( an approv$ application = a    
ref]5ce product1 z def9$ 9 section      
#cea7;i7 ( ! ,public ,heal? ,s]vice ,act
 7#db ,u4,s4,c4 #bfb7;i77 7ref]r$ to 9  
?is p>agraph z ! ref]5ce product        
sponsor71 br+s an action = infr+em5t "u 
?is section aga9/ an applicant =        
approval ( a biological product "u      
section #cea7k7 ( su* ,act t ref]5ces t 
ref]5ce product 7ref]r$ to 9 ?is        
p>agraph z ! subsection 7k7 applicant71 
! ref]5ce product sponsor may ass]t 9 ! 
action a total ( n m ?an #bj pat5ts ( ! 
type describ$ 9 subp>agraph 7,b71 n m   
?an #aj ( :i* %all h issu$ aft] ! date  
specifi$ 9 section #cea7l77#g77;,a7 (   
su* ,act4  7,b7 ,! pat5ts describ$ 9 ?is
 subp>agraph are pat5ts t satisfy ea* ( 
! foll[+ requirem5ts3  7i7 ,pat5ts t    
claim ! biological product t is !       
subject ( an application "u section     
#cea7k7 ( ! ,public ,heal? ,s]vice ,act 
7#db ,u4,s4,c4 #bfb7k77 7or a use ( t   
product7 or a me?od or product us$ 9 !  
manufacture ( su* biological product4   

7ii7 ,pat5ts t are includ$ on ! li/ (   
pat5ts describ$ 9 section               
#cea7l77#c77;,a7 ( ! ,public ,heal?     
,s]vice ,act 7#db ,u4,s4,c4             
#bfb7l77#c77;,a771 includ+ z provid$ "u 
section #cea7l77#g7 ( su* ,act4  7iii7  
,pat5ts t-- 7,i7 h an actual fil+ date (
 m ?an #d ye>s aft] ! date on :i* !     
ref]5ce product is approv$2 or  7,,ii7  
include a claim to a me?od 9 a          
manufactur+ process t is n us$ by !     
ref]5ce product sponsor4  7,c7 ,! c\rt 9
 :i* an action describ$ 9 subp>agraph   
7,a7 is br\ght may increase ! numb] (   
pat5ts limit$ "u t subp>agraph--  7i7 if
 ! reque/ to increase t numb] is made   
)\t undue delay2 &  7ii7 7,i7 if !      
int]e/ ( ju/ice s requires2 or  7,,ii7 =
 good cause %[n1 :i*-- 7aa7 %all be     
e/abli%$ if ! subsection 7k7 applicant  
fails to provide in=mation requir$ "u   
section #cea7l77#b77;,a7 ( ! ,public    
,heal? ,s]vice ,act 7#db ,u4,s4,c4      
#bfb7l77#b77;,a77 t w\ld enable !       
ref]5ce product sponsor to =m a         

reasonable belief ) respect to :e!r a   
claim ( infr+em5t "u ?is section c\ld   
reasonably be ass]t$2 &  7bb7 may be    
e/abli%$-- 7,,aa7 if !re is a mat]ial   
*ange to ! biological product 7or       
process ) respect to ! biological       
product7 ( ! subsection 7k7 applicant t 
is ! subject ( ! application2 7,,bb7 if1
 ) respect to a pat5t on ! supplem5tal  
li/ describ$ 9 section #cea7l77#g77;,a7 
( ,public ,heal? ,s]vice ,act 7#db      
,u4,s4,c4 #bfb7l77#g77;,a771 ! pat5t    
w\ld h issu$ be=e ! date specifi$ 9 su* 
section #cea7l77#g77;,a7 b = ! failure (
 ! ,(fice to issue ! pat5t or a delay 9 
! issuance ( ! pat5t1 z describ$ 9      
p>agraph 7#a7 ( section #aed7;b7 &      
subject to ! limitations "u p>agraph    
7#b7 ( su* section #aed7;b72 or 7,,cc7 =
 ano!r reason t %[s good cause1 z       
det]m9$ appropriate by ! c\rt4  7,d7 ,9 
det]m9+ :e!r good cause has be5 %[n = ! 
purposes ( subp>agraph 7,c77ii77,,ii71 a
 c\rt may consid] :e!r ! ref]5ce product
 sponsor has provid$ a reasonable       

description ( ! id5tity & relevance (   
any in=mation beyond ! subsection 7k7   
application t ! c\rt believes is        
necess>y to enable ! c\rt to =m a belief
 ) respect to :e!r a claim ( infr+em5t  
"u ?is section c\ld reasonably be       
ass]t$4  7,e7 ,! limitation impos$ "u   
subp>agraph 7,a7--  7i7 %all apply only 
if ! subsection 7k7 applicant completes 
all actions requir$ "u p>agraphs        
7#b77;,a71 7#c77;,b77ii71 7#e71         
7#f77;,c77i71 7#g71 & 7#h77;,a7 (       
section #cea7l7 ( ! ,public ,heal?      
,s]vice ,act 7#db ,u4,s4,c4 #bfb7l772 & 
7ii7 %all n apply ) respect to any pat5t
 t claims1 ) respect to a biological    
product1 a me?od = us+ t product 9      
!rapy1 diagnosis1 or prophylaxis1 su* z 
an indication or me?od ( treatm5t or o!r
 condition ( use4  4  7b7 ,applicability
 ,! am5dm5ts made by subsection 7a7 %all
 apply ) respect to an application      
submitt$ "u section #cea7k7 ( ! ,public 
,heal? ,s]vice ,act 7#db ,u4,s4,c4      
#bfb7k77 on or aft] ! date ( enactm5t ( 

?is ,act4  ,v ,b5efici>y ,co/ ,%>+      
,fairness  #eja4 ,repeal+ ( rule by !   
,dep>tm5t ( ,heal? & ,human ,s]vices ,! 
f9al rule ( ! ,dep>tm5t ( ,heal? &      
,human ,s]vices titl$ ,fraud ,& ,abuse2 
,removal ( ,safe ,h>bor ,protection =   
,rebates ,involv+ ,prescription         
,ph>maceuticals ,& ,creation ( ,new     
,safe ,h>bor ,protection = ,c]ta9       
,po9t-(-,sale ,r$uctions 9 ,price on    
,prescription ,ph>maceuticals & ,c]ta9  
,ph>macy ,b5efit ,manag] ,s]vice ,fees2 
,additional ,delay$ ,effective ,date    
publi%$ on ,novemb] #cj1 #bjbj 7#he ,f$4
 ,reg4 #gffff-gfgca71 %all h no =ce or  
effect ( law4  #ejb4 ,def9+ co/ "u      
prescription drug plans "u "p ,d (      
,m$ic>e ,section                        
#ahfj;,d-#b7;b77#b77;,a7 ( ! ,social    
,security ,act 7#db ,u4,s4,c4           
#aciew-#ajb7;b77#b77;,a77 is am5d$--    
7#a7 9 clause 7i71 by ins]t+ ( ! net    
co/s to ! plan1 inclusive ( all direct &
 indirect remun]ation1 includ+ rebates  
paid by manufactur]s to ! plan sponsor1 

ei!r directly or ?r\gh a ph>macy b5efit 
manag] or o!r ?ird p>ty be=e !          
semicolon2 &  7#b7 9 clause 7ii71 by    
ins]t+ net be=e co/s4