Reduced Costs and Continued Cures Act
This bill establishes and alters several programs and requirements relating to the prices of prescription drugs.
For example, the bill establishes and alters several requirements under Medicare and Medicaid, including
The bill also makes changes relating to market exclusivities and manufacturer price concessions for prescription drugs, including
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5260 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 5260
To amend titles XI, XVIII, and XIX of the Social Security Act to lower
prescription drug prices in the Medicare and Medicaid programs, to
improve transparency related to pharmaceutical prices and transactions,
to lower patients' out-of-pocket costs, and to ensure accountability to
taxpayers, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 14, 2021
Mr. Peters (for himself, Mr. Schrader, Miss Rice of New York, Mrs.
Murphy of Florida, and Mr. Correa) introduced the following bill; which
was referred to the Committee on Energy and Commerce, and in addition
to the Committees on Ways and Means, and the Judiciary, for a period to
be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend titles XI, XVIII, and XIX of the Social Security Act to lower
prescription drug prices in the Medicare and Medicaid programs, to
improve transparency related to pharmaceutical prices and transactions,
to lower patients' out-of-pocket costs, and to ensure accountability to
taxpayers, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Reduced Costs and
Continued Cures Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--ESTABLISHMENT OF PART B PAYMENT RULES FOR NEGOTIATION-ELIGIBLE
DRUGS AND BIOLOGICALS
Sec. 101. Establishment of part B payment rules for negotiation-
eligible drugs and biologicals.
TITLE II--MEDICARE
Subtitle A--Part B
Sec. 201. Inclusion of value of coupons in determination of average
sales price for drugs and biologicals under
Medicare part B.
Sec. 202. Payment for biosimilar biological products during initial
period.
Sec. 203. Temporary increase in Medicare part B payment for biosimilar
biological products.
Sec. 204. Medicare part B rebate by manufacturers.
Sec. 205. Establishment of maximum add-on payment for drugs and
biologicals.
Sec. 206. GAO study and report on average sales price.
Sec. 207. Authority to use alternative payment for drugs and
biologicals to prevent potential drug
shortages.
Sec. 208. Change in definition of strength for the purposes of
determining interchangeability of
biological and biosimilar products.
Subtitle B--Part D
Sec. 209. Medicare part D modernization redesign.
Sec. 210. Public disclosure of drug discounts and other pharmacy
benefit manager (PBM) provisions.
Sec. 211. Public disclosure of direct and indirect remuneration review
and audit results.
Sec. 212. Improvements to provision of parts A and B claims data to
prescription drug plans.
Sec. 213. Medicare part D rebate by manufacturers.
Sec. 214. Prohibiting branding on part D benefit cards.
Sec. 215. Requiring prescription drug plans and MA-PD plans to report
potential fraud, waste, and abuse to the
Secretary of HHS.
Sec. 216. Establishment of pharmacy quality measures under Medicare
part D.
Sec. 217. Addition of new measures based on access to biosimilar
biological products to the 5-star rating
system under Medicare Advantage.
Sec. 218. HHS study and report on the influence of pharmaceutical
manufacturer third-party reimbursement hubs
on health care providers who prescribe
their drugs and biologicals.
Sec. 219. Establishing a monthly cap on beneficiary incurred costs for
insulin products and supplies under a
prescription drug plan or MA-PD plan.
Sec. 220. Monthly out-of-pocket cost sharing maximum for enrollees who
incur a significant portion of costs
towards annual out-of-pocket threshold.
Subtitle C--Miscellaneous
Sec. 221. Drug manufacturer price transparency.
Sec. 222. Strengthening and expanding pharmacy benefit managers
transparency requirements.
Sec. 223. Prescription drug pricing dashboards.
Sec. 224. Improving coordination between the Food and Drug
Administration and the Centers for Medicare
& Medicaid Services.
Sec. 225. Patient consultation in Medicare national and local coverage
determinations in order to mitigate
barriers to inclusion of such perspectives.
Sec. 226. GAO study on increases to Medicare and Medicaid spending due
to copayment coupons and other patient
assistance programs.
Sec. 227. MedPAC report on shifting coverage of certain Medicare part B
drugs to Medicare part D.
Sec. 228. Taking steps to fulfill treaty obligations to Tribal
communities.
TITLE III--MEDICAID
Sec. 301. Medicaid pharmacy and therapeutics committee improvements.
Sec. 302. Improving reporting requirements and developing standards for
the use of drug use review boards in State
Medicaid programs.
Sec. 303. GAO report on conflicts of interest in State Medicaid program
drug use review boards and pharmacy and
therapeutics (P&T) committees.
Sec. 304. Ensuring the accuracy of manufacturer price and drug product
information under the Medicaid drug rebate
program.
Sec. 305. T-MSIS drug data analytics reports.
Sec. 306. Risk-sharing value-based payment agreements for covered
outpatient drugs under Medicaid.
Sec. 307. Modification of maximum rebate amount under Medicaid drug
rebate program.
TITLE IV--ADDRESSING INTERMEDIARIES AND DRUG COMPETITION
Sec. 401. Health plan oversight of pharmacy benefit manager services.
Sec. 402. Study of pharmaceutical supply chain intermediaries and
merger activity.
Sec. 403. Requirement that direct-to-consumer advertisements for
prescription drugs and biological products
include truthful and non-misleading pricing
information.
Sec. 404. Change conditions of first generic exclusivity to spur access
and competition.
Sec. 405. Ending the practice preventing market competition known as
``Pay-for-Delay''.
Sec. 406. Empowering the FTC to prevent ``product hopping''.
Sec. 407. Promoting competition by limiting patent thickets.
TITLE V--BENEFICIARY COST SHARING FAIRNESS
Sec. 501. Repealing of rule by the Department of Health and Human
Services.
Sec. 502. Defining cost under prescription drug plans under part D of
Medicare.
TITLE I--ESTABLISHMENT OF PART B PAYMENT RULES FOR NEGOTIATION-ELIGIBLE
DRUGS AND BIOLOGICALS
SEC. 101. ESTABLISHMENT OF PART B PAYMENT RULES FOR NEGOTIATION-
ELIGIBLE DRUGS AND BIOLOGICALS.
Section 1847A of the Social Security Act (42 U.S.C. 1395w-3a) is
amended--
(1) in paragraph (1)--
(A) in the matter preceding subparagraph (A), by
striking ``Subject to paragraph (7)'' and inserting
``Subject to paragraphs (7) and (9)'';
(B) in subparagraph (B), by striking at the end
``or'';
(C) in subparagraph (C), by striking the period at
the end and inserting ``; or''; and
(D) by adding at the end the following new
subparagraph:
``(D) in the case of a negotiation-eligible drug or
biological, the maximum allowable cost determined under
paragraph (9).''; and
(2) by adding at the end the following new paragraph:
``(9) Rules for negotiation-eligible drugs and
biologicals.--
``(A) Notification of manufacturers of negotiation-
eligible drugs and biologicals.--
``(i) In general.--Not later than 180 days
after the date of the enactment of this
paragraph, the Secretary shall notify each
manufacturer of each negotiation-eligible drug
or biological that is subject to negotiation
for payment under this part.
``(ii) Negotiation-eligible drug or
biological.--In this paragraph, the term
`negotiation-eligible drug or biological' means
a single source drug or biological (as defined
in subparagraph (C)) for which each of the
following have expired:
``(I) The period of regulatory data
protections or exclusivity granted for
such drug or biological (including for
new chemical entities, biologics,
orphan drugs, pediatric formulations,
and clinical trials).
``(II) Subject to the succeeding
sentence, the period of any patents
issued for such drug or biological up
to 1 year after the approval of such
drug or biological. In the case of
small molecule product that is a such a
drug or biological, the period of any
patents listed in the publication,
Approved Drug Products With Therapeutic
Equivalence Evaluations (referred to as
the `Orange Book').
``(B) Negotiation.--
``(i) In general.--The Secretary and the
manufacturer of a negotiation-eligible drug or
biological shall during the negotiation period
negotiate a maximum allowable cost for such
drug or biological. In the case that the
Secretary and the manufacturer do not determine
a maximum allowable cost for such drug or
biological, the Secretary shall determine the
maximum allowable cost for such drug or
biological at an amount that is at least 65
percent and not more than 75 percent of the
average sales price of such drug or biological.
``(ii) Maximum allowable cost.--In this
subparagraph, the term `maximum allowable cost'
means the amount agreed to by the Secretary and
the manufacturer of a negotiation-eligible drug
or biological for a unit of such drug or
biological that is not less than 65 percent and
not more than 75 percent of the lowest average
sales price of such drug or biological for the
preceding 1-year period.
``(C) Single source drug or biological.--For
purposes of this paragraph, the term `single source
drug or biological' means--
``(i) a drug or drug product that--
``(I) is approved under section
505(c) of the Federal Food, Drug, and
Cosmetic Act and is marketed pursuant
to such approval; and
``(II) is not the listed drug for
any drug that is approved under section
505(j) and is marketed pursuant to such
approval; or
``(ii) a biological product that--
``(I) is licensed under section
351(a) of the Public Health Service
Act, including any product deemed to be
licensed under such section pursuant to
section 7002(e)(4) of the Biologics
Price Competition and Innovation Act
and is marketed pursuant to section 351
of the Public Health Service Act; and
``(II) is not the reference product
for any biological product that is
licensed and is marketed pursuant to
such section of such Act.''.
TITLE II--MEDICARE
Subtitle A--Part B
SEC. 201. INCLUSION OF VALUE OF COUPONS IN DETERMINATION OF AVERAGE
SALES PRICE FOR DRUGS AND BIOLOGICALS UNDER MEDICARE PART
B.
Section 1847A(c) of the Social Security Act (42 U.S.C. 1395w-3a(c))
is amended--
(1) in paragraph (3)--
(A) by striking ``discounts.--In calculating'' and
inserting ``discounts to purchasers and coupons
provided to privately insured individuals.--
``(A) Discounts to purchasers.--In calculating'';
and
(B) by adding at the end the following new
subparagraph:
``(B) Coupons provided to reduce cost-sharing.--For
calendar quarters beginning on or after July 1, 2024,
in calculating the manufacturer's average sales price
under this subsection, such price shall include the
value (as defined in paragraph (6)(J)) of any coupons
provided under a drug coupon program of a manufacturer
(as those terms are defined in subparagraphs (K) and
(L), respectively, of paragraph (6)).''; and
(2) in paragraph (6), by adding at the end the following
new subparagraphs:
``(J) Value.--The term `value' means, with respect
to a coupon (as defined in subparagraph (K)), the
difference, if any, between--
``(i) the amount of any reduction or
elimination of cost-sharing or other out-of-
pocket costs described in such subparagraph to
a patient as a result of the use of such
coupon; and
``(ii) any charge to the patient for the
use of such coupon.
``(K) Coupon.--The term `coupon' means any
financial support that is provided to a patient, either
directly to the patient or indirectly to the patient
through a physician, prescriber, pharmacy, or other
provider, under a drug coupon program of a manufacturer
(as defined in subparagraph (L)) that is used to reduce
or eliminate cost-sharing or other out-of-pocket costs
of the patient, including costs related to a
deductible, coinsurance, or copayment, with respect to
a drug or biological, including a biosimilar biological
product, of the manufacturer.
``(L) Drug coupon program.--
``(i) In general.--Subject to clause (ii),
the term `drug coupon program' means, with
respect to a manufacturer, a program through
which the manufacturer provides coupons to
patients as described in subparagraph (K).
``(ii) Exclusions.--Such term does not
include--
``(I) a patient assistance program
operated by a manufacturer that
provides free or discounted drugs or
biologicals, including biosimilar
biological products, (through in-kind
donations) to patients of low income;
or
``(II) a contribution by a
manufacturer to a nonprofit or
Foundation that provides free or
discounted drugs or biologicals,
including biosimilar biological
products, (through in-kind donations)
to patients of low income.''.
SEC. 202. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS DURING INITIAL
PERIOD.
Section 1847A(c)(4) of the Social Security Act (42 U.S.C. 1395w-
3a(c)(4)) is amended--
(1) in each of subparagraphs (A) and (B), by redesignating
clauses (i) and (ii) as subclauses (I) and (II), respectively,
and moving such subclauses 2 ems to the right;
(2) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii) and moving such clauses 2 ems to the right;
(3) by striking ``unavailable.--In the case'' and inserting
``unavailable.--
``(A) In general.--Subject to subparagraph (B), in
the case''; and
(4) by adding at the end the following new subparagraph:
``(B) Limitation on payment amount for biosimilar
biological products during initial period.--In the case
of a biosimilar biological product furnished on or
after July 1, 2023, in lieu of applying subparagraph
(A) during the initial period described in such
subparagraph with respect to the biosimilar biological
product, the amount payable under this section for the
biosimilar biological product is the lesser of the
following:
``(i) The amount determined under clause
(ii) of such subparagraph for the biosimilar
biological product.
``(ii) The amount determined under
subsection (b)(1)(B) for the reference
biological product.''.
SEC. 203. TEMPORARY INCREASE IN MEDICARE PART B PAYMENT FOR BIOSIMILAR
BIOLOGICAL PRODUCTS.
Section 1847A(b)(8) of the Social Security Act (42 U.S.C. 1395w-
3a(b)(8)) is amended--
(1) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively, and indenting appropriately;
(2) by striking ``product.--The amount'' and inserting the
following: ``product.--
``(A) In general.--Subject to subparagraph (B), the
amount''; and
(3) by adding at the end the following new subparagraph:
``(B) Temporary payment increase for biosimilar
biological products.--
``(i) In general.--Beginning January 1,
2023, in the case of a biosimilar biological
product described in paragraph (1)(C) that is
furnished during the applicable 5-year period
for such product, the amount specified in this
paragraph for such product is an amount equal
to the lesser of the following:
``(I) The amount specified in
subparagraph (A) for such product if
clause (ii) of such subparagraph was
applied by substituting `8 percent' for
`6 percent'.
``(II) The amount determined under
subsection (b)(1)(B) for the reference
biological product.
``(ii) Applicable 5-year period.--For
purposes of clause (i), the applicable 5-year
period for a biosimilar biological product is--
``(I) in the case of such a product
for which payment was made under this
paragraph as of December 31, 2012, the
5-year period beginning on January 1,
2023; and
``(II) in the case of such a
product that is not described in
subclause (I), the 5-year period
beginning on the first day of the first
calendar quarter in which payment was
made for such product under this
paragraph.''.
SEC. 204. MEDICARE PART B REBATE BY MANUFACTURERS.
(a) In General.--Section 1834 of the Social Security Act (42 U.S.C.
1395m) is amended by adding at the end the following new subsection:
``(x) Rebate by Manufacturers for Single Source Drugs With Prices
Increasing Faster Than Inflation.--
``(1) Requirements.--
``(A) Secretarial provision of information.--Not
later than 6 months after the end of each calendar
quarter beginning on or after July 1, 2024, the
Secretary shall, for each part B rebatable drug, report
to each manufacturer of such part B rebatable drug the
following for such calendar quarter:
``(i) Information on the total number of
units of the billing and payment code described
in subparagraph (A)(i) of paragraph (3) with
respect to such drug and calendar quarter.
``(ii) Information on the amount (if any)
of the excess average sales price increase
described in subparagraph (A)(ii) of such
paragraph for such drug and calendar quarter.
``(iii) The rebate amount specified under
such paragraph for such part B rebatable drug
and calendar quarter.
``(B) Manufacturer requirement.--For each calendar
quarter beginning on or after July 1, 2024, the
manufacturer of a part B rebatable drug shall, for such
drug, not later than 30 days after the date of receipt
from the Secretary of the information described in
subparagraph (A) for such calendar quarter, provide to
the Secretary a rebate that is equal to the amount
specified in paragraph (3) for such drug for such
calendar quarter.
``(2) Part b rebatable drug defined.--
``(A) In general.--In this subsection, the term
`part B rebatable drug' means a single source drug or
biological (as defined in subparagraph (D) of section
1847A(c)(6)), including a biosimilar biological product
(as defined in subparagraph (H) of such section), paid
for under this part, except such term shall not include
such a drug or biological--
``(i) if the average total allowed charges
for a year per individual that uses such a drug
or biological, as determined by the Secretary,
are less than, subject to subparagraph (B),
$100; or
``(ii) that is a vaccine described in
subparagraph (A) or (B) of section 1861(s)(10).
``(B) Increase.--The dollar amount applied under
subparagraph (A)(i)--
``(i) for 2025, shall be the dollar amount
specified under such subparagraph for 2024,
increased by the percentage increase in the
consumer price index for all urban consumers
(United States city average) for the 12-month
period ending with June of the previous year;
and
``(ii) for a subsequent year, shall be the
dollar amount specified in this clause (or
clause (i)) for the previous year, increased by
the percentage increase in the consumer price
index for all urban consumers (United States
city average) for the 12-month period ending
with June of the previous year.
Any dollar amount specified under this subparagraph
that is not a multiple of $10 shall be rounded to the
nearest multiple of $10.
``(3) Rebate amount.--
``(A) In general.--For purposes of paragraph (1),
the amount specified in this paragraph for a part B
rebatable drug assigned to a billing and payment code
for a calendar quarter is, subject to paragraph (4),
the amount equal to the product of--
``(i) subject to subparagraphs (B) and (G),
the total number of units of the billing and
payment code for such part B rebatable drug
furnished under this part during the calendar
quarter; and
``(ii) the amount (if any) by which--
``(I) the payment amount under
subparagraph (B) or (C) of section
1847A(b)(1), as applicable, for such
part B rebatable drug during the
calendar quarter; exceeds
``(II) the inflation-adjusted
payment amount determined under
subparagraph (C) for such part B
rebatable drug during the calendar
quarter.
``(B) Excluded units.--For purposes of subparagraph
(A)(i), the total number of units of the billing and
payment code for each part B rebatable drug furnished
during a calendar quarter shall not include--
``(i) units packaged into the payment for a
procedure or service under section 1833(t) or
under section 1833(i) (instead of separately
payable under such respective section);
``(ii) units included under the single
payment system for renal dialysis services
under section 1881(b)(14); or
``(iii) units of a part B rebatable drug of
a manufacturer furnished to an individual, if
such manufacturer, with respect to the
furnishing of such units of such drug, provides
for discounts under section 340B of the Public
Health Service Act or for rebates under section
1927.
``(C) Determination of inflation-adjusted payment
amount.--The inflation-adjusted payment amount
determined under this subparagraph for a part B
rebatable drug for a calendar quarter is--
``(i) the payment amount for the billing
and payment code for such drug in the payment
amount benchmark quarter (as defined in
subparagraph (D)); increased by
``(ii) the percentage by which the rebate
period CPI-U (as defined in subparagraph (F))
for the calendar quarter exceeds the benchmark
period CPI-U (as defined in subparagraph (E)).
``(D) Prospective payment amount benchmark
quarter.--The term `prospective payment amount
benchmark quarter' means the calendar quarter beginning
January 1, 2016.
``(E) Benchmark period cpi-u.--The term `benchmark
period CPI-U' means the consumer price index for all
urban consumers (United States city average) for July
2015.
``(F) Rebate period cpi-u.--The term `rebate period
CPI-U' means, with respect to a calendar quarter
described in subparagraph (C), the greater of the
benchmark period CPI-U and the consumer price index for
all urban consumers (United States city average) for
the first month of the calendar quarter that is two
calendar quarters prior to such described calendar
quarter.
``(G) Counting units.--
``(i) Cut-off period to count units.--For
purposes of subparagraph (A)(i), subject to
clause (ii), to count the total number of
billing units for a part B rebatable drug for a
quarter, the Secretary may use a cut-off period
in order to exclude from such total number of
billing units for such quarter claims for
services furnished during such quarter that
were not processed at an appropriate time prior
to the end of the cut-off period.
``(ii) Counting units for claims processed
after cut-off period.--If the Secretary uses a
cut-off period pursuant to clause (i), in the
case of units of a part B rebatable drug
furnished during a quarter but pursuant to
application of such cut-off period excluded for
purposes of subparagraph (A)(i) from the total
number of billing units for the drug for such
quarter, the Secretary shall count such units
of such drug so furnished in the total number
of billing units for such drug for a subsequent
quarter, as the Secretary determines
appropriate.
``(4) Special treatment of certain drugs and exemption.--
``(A) Subsequently approved drugs.--Subject to
subparagraph (B), in the case of a part B rebatable
drug first approved or licensed by the Food and Drug
Administration after July 1, 2015, clause (i) of
paragraph (3)(C) shall be applied as if the term
`payment amount benchmark quarter' were defined under
paragraph (3)(D) as the third full calendar quarter
after the day on which the drug was first marketed and
clause (ii) of paragraph (3)(C) shall be applied as if
the term `benchmark period CPI-U' were defined under
paragraph (3)(E) as if the reference to `July 2015'
under such paragraph were a reference to `the first
month of the first full calendar quarter after the day
on which the drug was first marketed'.
``(B) Timeline for provision of rebates for
subsequently approved drugs.--In the case of a part B
rebatable drug first approved or licensed by the Food
and Drug Administration after July 1, 2015, paragraph
(1)(B) shall be applied as if the reference to `July 1,
2024' under such paragraph were a reference to the
later of the 6th full calendar quarter after the day on
which the drug was first marketed or July 1, 2024.
``(C) Exemption for shortages.--The Secretary may
reduce or waive the rebate amount under paragraph
(1)(B) with respect to a part B rebatable drug that is
described as currently in shortage on the shortage list
in effect under section 506E of the Federal Food, Drug,
and Cosmetic Act or in the case of other exigent
circumstances, as determined by the Secretary.
``(D) Selected drugs.--In the case of a part B
rebatable drug that is a selected drug (as defined in
section 1192(c)) for a price applicability period (as
defined in section 1191(b)(2))--
``(i) for calendar quarters during such
period for which a maximum fair price (as
defined in section 1191(c)(2)) for such drug
has been determined and is applied under part E
of title XI, the rebate amount under paragraph
(1)(B) shall be waived; and
``(ii) in the case such drug is determined
(pursuant to such section 1192(c)) to no longer
be a selected drug, for each applicable year
beginning after the price applicability period
with respect to such drug, clause (i) of
paragraph (3)(C) shall be applied as if the
term `payment amount benchmark quarter' were
defined under paragraph (3)(D) as the calendar
quarter beginning January 1 of the last year
beginning during such price applicability
period with respect to such selected drug and
clause (ii) of paragraph (3)(C) shall be
applied as if the term `benchmark period CPI-U'
were defined under paragraph (3)(E) as if the
reference to `July 2015' under such paragraph
were a reference to the July of the year
preceding such last year.
``(5) Application to beneficiary coinsurance.--In the case
of a part B rebatable drug, if the payment amount for a quarter
exceeds the inflation adjusted payment for such quarter--
``(A) in computing the amount of any coinsurance
applicable under this title to an individual with
respect to such drug, the computation of such
coinsurance shall be based on the inflation-adjusted
payment amount determined under paragraph (3)(C) for
such part B rebatable drug; and
``(B) the amount of such coinsurance is equal to 20
percent of such inflation-adjusted payment amount so
determined.
``(6) Rebate deposits.--Amounts paid as rebates under
paragraph (1)(B) shall be deposited into the Federal
Supplementary Medical Insurance Trust Fund established under
section 1841.
``(7) Civil money penalty.--If a manufacturer of a part B
rebatable drug has failed to comply with the requirements under
paragraph (1)(B) for such drug for a calendar quarter, the
manufacturer shall be subject to, in accordance with a process
established by the Secretary pursuant to regulations, a civil
money penalty in an amount equal to at least 125 percent of the
amount specified in paragraph (3) for such drug for such
calendar quarter. The provisions of section 1128A (other than
subsections (a) (with respect to amounts of penalties or
additional assessments) and (b)) shall apply to a civil money
penalty under this paragraph in the same manner as such
provisions apply to a penalty or proceeding under section
1128A(a).
``(8) Study and report.--
``(A) Study.--The Secretary shall conduct a study
of the feasibility of and operational issues involved
with the following:
``(i) Including multiple source drugs (as
defined in section 1847A(c)(6)(C)) in the
rebate system under this subsection.
``(ii) Including drugs and biologicals paid
for under MA plans under part C in the rebate
system under this subsection.
``(iii) Including drugs excluded under
paragraph (2)(A) and units of the billing and
payment code of the drugs excluded under
paragraph (3)(B) in the rebate system under
this subsection.
``(B) Report.--Not later than 3 years after the
date of the enactment of this subsection, the Secretary
shall submit to Congress a report on the study
conducted under subparagraph (A).
``(9) Application to multiple source drugs.--The Secretary
may, based on the report submitted under paragraph (8) and
pursuant to rulemaking, apply the provisions of this subsection
to multiple source drugs (as defined in section
1847A(c)(6)(C)), including, for purposes of determining the
rebate amount under paragraph (3), by calculating manufacturer-
specific average sales prices for the benchmark period and the
rebate period.''.
(b) Amounts Payable; Cost-Sharing.--Section 1833 of the Social
Security Act (42 U.S.C. 1395l) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) in subparagraph (S), by striking ``with
respect to'' and inserting ``subject to
subparagraph (DD), with respect to'';
(ii) by striking ``and (CC)'' and inserting
``(CC)''; and
(iii) by inserting before the semicolon at
the end the following: ``, and (DD) with
respect to a part B rebatable drug (as defined
in paragraph (2) of section 1834(x)) for which
the payment amount for a calendar quarter under
paragraph (3)(A)(ii)(I) of such section for
such quarter exceeds the inflation-adjusted
payment under paragraph (3)(A)(ii)(II) of such
section for such quarter, the amounts paid
shall be the difference between (i) the payment
amount under paragraph (3)(A)(ii)(I) of such
section for such drug, and (ii) 20 percent of
the inflation-adjusted payment amount under
paragraph (3)(A)(ii)(II) of such section for
such drug''; and
(B) by adding at the end of the flush left matter
following paragraph (9) the following:
``For purposes of applying paragraph (1)(DD), subsections (i)(9)
and (t)(8)(F), and section 1834(x)(5), the Secretary shall make such
estimates and use such data as the Secretary determines appropriate,
and notwithstanding any other provision of law, may do so by program
instruction or otherwise.'';
(2) in subsection (i), by adding at the end the following
new paragraph:
``(9) In the case of a part B rebatable drug (as defined in
paragraph (2) of section 1834(x)) for which payment under this
subsection is not packaged into a payment for a covered OPD
service (as defined in subsection (t)(1)(B)) (or group of
services) furnished on or after July 1, 2024, under the system
under this subsection, in lieu of calculation of coinsurance
and the amount of payment otherwise applicable under this
subsection, the provisions of section 1834(x)(5), paragraph
(1)(DD) of subsection (a), and the flush left matter following
paragraph (9) of subsection (a), shall, as determined
appropriate by the Secretary, apply under this subsection in
the same manner as such provisions of section 1834(x)(5) and
subsection (a) apply under such section and subsection.''; and
(3) in subsection (t)(8), by adding at the end the
following new subparagraph:
``(F) Part b rebatable drugs.--In the case of a
part B rebatable drug (as defined in paragraph (2) of
section 1834(x)) for which payment under this part is
not packaged into a payment for a service furnished on
or after July 1, 2024, under the system under this
subsection, in lieu of calculation of coinsurance and
the amount of payment otherwise applicable under this
subsection, the provisions of section 1834(x)(5),
paragraph (1)(DD) of subsection (a), and the flush left
matter following paragraph (9) of subsection (a),
shall, as determined appropriate by the Secretary,
apply under this subsection in the same manner as such
provisions of section 1834(x)(5) and subsection (a)
apply under such section and subsection.''.
(c) Conforming Amendments.--
(1) To part b asp calculation.--Section 1847A(c)(3) of the
Social Security Act (42 U.S.C. 1395w-3a(c)(3)) is amended by
inserting ``or section 1834(x)'' after ``section 1927''.
(2) Excluding part b drug inflation rebate from best
price.--Section 1927(c)(1)(C)(ii)(I) of the Social Security Act
(42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)) is amended by inserting
``or section 1834(x)'' after ``this section''.
(3) Coordination with medicaid rebate information
disclosure.--Section 1927(b)(3)(D)(i) of the Social Security
Act (42 U.S.C. 1396r-8(b)(3)(D)(i)) is amended by striking ``or
to carry out section 1847B'' and inserting ``to carry out
section 1847B or section 1834(x)''.
SEC. 205. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT FOR DRUGS AND
BIOLOGICALS.
(a) In General.--Section 1847A of the Social Security Act (42
U.S.C. 1395w-3a) is amended--
(1) in subsection (b)--
(A) in paragraph (1), in the matter preceding
subparagraph (A), by striking ``paragraph (7)'' and
inserting ``paragraphs (7) and (9)''; and
(B) by adding at the end the following new
paragraph:
``(9) Maximum add-on payment amount.--
``(A) In general.--In determining the payment
amount under the provisions of subparagraph (A), (B),
or (C) of paragraph (1) of this subsection, subsection
(c)(4)(A)(ii), or subsection (d)(3)(C) for a drug or
biological furnished on or after January 1, 2024, if
the applicable add-on payment (as defined in
subparagraph (B)) for each drug or biological on a
claim for a date of service exceeds the maximum add-on
payment amount specified under subparagraph (C) for the
drug or biological, then the payment amount otherwise
determined for the drug or biological under those
provisions, as applicable, shall be reduced by the
amount of such excess.
``(B) Applicable add-on payment defined.--In this
paragraph, the term `applicable add-on payment' means
the following amounts, determined without regard to the
application of subparagraph (A):
``(i) In the case of a multiple source
drug, an amount equal to the difference
between--
``(I) the amount that would
otherwise be applied under paragraph
(1)(A); and
``(II) the amount that would be
applied under such paragraph if `100
percent' were substituted for `106
percent'.
``(ii) In the case of a single source drug
or biological, an amount equal to the
difference between--
``(I) the amount that would
otherwise be applied under paragraph
(1)(B); and
``(II) the amount that would be
applied under such paragraph if `100
percent' were substituted for `106
percent'.
``(iii) In the case of a biosimilar
biological product, the amount otherwise
determined under paragraph (8)(B).
``(iv) In the case of a drug or biological
during the initial period described in
subsection (c)(4)(A), an amount equal to the
difference between--
``(I) the amount that would
otherwise be applied under subsection
(c)(4)(A)(ii); and
``(II) the amount that would be
applied under such subsection if `100
percent' were substituted, as
applicable, for--
``(aa) `103 percent' in
subclause (I) of such
subsection; or
``(bb) any percent in
excess of 100 percent applied
under subclause (II) of such
subsection.
``(v) In the case of a drug or biological
to which subsection (d)(3)(C) applies, an
amount equal to the difference between--
``(I) the amount that would
otherwise be applied under such
subsection; and
``(II) the amount that would be
applied under such subsection if `100
percent' were substituted, as
applicable, for--
``(aa) any percent in
excess of 100 percent applied
under clause (i) of such
subsection; or
``(bb) `103 percent' in
clause (ii) of such subsection.
``(C) Maximum add-on payment amount specified.--For
purposes of subparagraph (A), the maximum add-on
payment amount specified in this subparagraph is--
``(i) for each of 2024 through 2031,
$1,000; and
``(ii) for a subsequent year, the amount
specified in this subparagraph for the
preceding year increased by the percentage
increase in the consumer price index for all
urban consumers (all items; United States city
average) for the 12-month period ending with
June of the previous year.
Any amount determined under this subparagraph that is
not a multiple of $10 shall be rounded to the nearest
multiple of $10.''; and
(2) in subsection (c)(4)(A)(ii), by striking ``in the
case'' and inserting ``subject to subsection (b)(9), in the
case''.
(b) Conforming Amendments Relating to Separately Payable Drugs.--
(1) OPPS.--Section 1833(t)(14) of the Social Security Act
(42 U.S.C. 1395l(t)(14)) is amended--
(A) in subparagraph (A)(iii)(II), by inserting ``,
subject to subparagraph (I)'' after ``are not
available''; and
(B) by adding at the end the following new
subparagraph:
``(I) Application of maximum add-on payment for
separately payable drugs and biologicals.--In
establishing the amount of payment under subparagraph
(A) for a specified covered outpatient drug that is
furnished as part of a covered OPD service (or group of
services) on or after January 1, 2024, if such payment
is determined based on the average price for the year
established under section 1847A pursuant to clause
(iii)(II) of such subparagraph, the provisions of
subsection (b)(9) of section 1847A shall apply to the
amount of payment so established in the same manner as
such provisions apply to the amount of payment under
section 1847A.''.
(2) ASC.--Section 1833(i)(2)(D) of the Social Security Act
(42 U.S.C. 1395l(i)(2)(D)) is amended--
(A) by moving clause (v) 6 ems to the left;
(B) by redesignating clause (vi) as clause (vii);
and
(C) by inserting after clause (v) the following new
clause:
``(vi) If there is a separate payment under the system described in
clause (i) for a drug or biological furnished on or after January 1,
2024, the provisions of subsection (t)(14)(I) shall apply to the
establishment of the amount of payment for the drug or biological under
such system in the same manner in which such provisions apply to the
establishment of the amount of payment under subsection (t)(14)(A).''.
SEC. 206. GAO STUDY AND REPORT ON AVERAGE SALES PRICE.
(a) Study.--
(1) In general.--The Comptroller General of the United
States (in this section referred to as the ``Comptroller
General'') shall conduct a study on spending for applicable
drugs under part B of title XVIII of the Social Security Act.
(2) Applicable drugs defined.--In this section, the term
``applicable drugs'' means drugs and biologicals--
(A) for which reimbursement under such part B is
based on the average sales price of the drug or
biological; and
(B) that account for the largest percentage of
total spending on drugs and biologicals under such part
B (as determined by the Comptroller General, but in no
case less that 25 drugs or biologicals).
(3) Requirements.--The study under paragraph (1) shall
include an analysis of the following:
(A) The extent to which each applicable drug is
paid for--
(i) under such part B for Medicare
beneficiaries; or
(ii) by private payers in the commercial
market.
(B) Any change in Medicare spending or Medicare
beneficiary cost-sharing that would occur if the
average sales price of an applicable drug was based
solely on payments by private payers in the commercial
market.
(C) The extent to which drug manufacturers provide
rebates, discounts, or other price concessions to
private payers in the commercial market for applicable
drugs, which the manufacturer includes in its average
sales price calculation, for--
(i) formulary placement;
(ii) utilization management considerations;
or
(iii) other purposes.
(D) Barriers to drug manufacturers providing such
price concessions for applicable drugs.
(E) Other areas determined appropriate by the
Comptroller General.
(b) Report.--Not later than 2 years after the date of the enactment
of this Act, the Comptroller General shall submit to Congress a report
on the study conducted under subsection (a), together with
recommendations for such legislation and administrative action as the
Secretary determines appropriate.
SEC. 207. AUTHORITY TO USE ALTERNATIVE PAYMENT FOR DRUGS AND
BIOLOGICALS TO PREVENT POTENTIAL DRUG SHORTAGES.
(a) In General.--Section 1847A(e) of the Social Security Act (42
U.S.C. 1395w-3a(e)) is amended--
(1) by striking ``Payment in Response to Public Health
Emergency.--In the case'' and inserting ``Payments.--
``(1) In response to public health emergency.--In the
case''; and
(2) by adding at the end the following new paragraph:
``(2) Preventing potential drug shortages.--
``(A) In general.--In the case of a drug or
biological that the Secretary determines is described
in subparagraph (B) for one or more quarters beginning
on or after January 1, 2024, the Secretary may use
wholesale acquisition cost (or other reasonable measure
of a drug or biological price) instead of the
manufacturer's average sales price for such quarters
and for subsequent quarters until the end of the
quarter in which such drug or biological is removed
from the drug shortage list under section 506E of the
Federal Food, Drug, and Cosmetic Act, or in the case of
a drug or biological described in subparagraph (B)(ii),
the date on which the Secretary determines that the
total manufacturing capacity or the total number of
manufacturers of such drug or biological is sufficient
to mitigate a potential shortage of the drug or
biological.
``(B) Drug or biological described.--For purposes
of subparagraph (A), a drug or biological described in
this subparagraph is a drug or biological--
``(i) that is listed on the drug shortage
list maintained by the Food and Drug
Administration pursuant to section 506E of the
Federal Food, Drug, and Cosmetic Act, and with
respect to which any manufacturer of such drug
or biological notifies the Secretary of a
permanent discontinuance or an interruption
that is likely to lead to a meaningful
disruption in the manufacturer's supply of that
drug pursuant to section 506C(a) of such Act;
or
``(ii) that--
``(I) is described in section
506C(a) of such Act;
``(II) was listed on the drug
shortage list maintained by the Food
and Drug Administration pursuant to
section 506E of such Act within the
preceding 5 years; and
``(III) for which the total
manufacturing capacity of all
manufacturers with an approved
application for such drug or biological
that is currently marketed or total
number of manufacturers with an
approved application for such drug or
biological that is currently marketed
declines during a 6-month period, as
determined by the Secretary.
``(C) Provision of additional information.--For
each quarter in which the amount of payment for a drug
or biological described in subparagraph (B) pursuant to
subparagraph (A) exceeds the amount of payment for the
drug or biological otherwise applicable under this
section, each manufacturer of such drug or biological
shall provide to the Secretary information related to
the potential cause or causes of the shortage and the
expected duration of the shortage with respect to such
drug.''.
(b) Tracking Shortage Drugs Through Claims.--The Secretary of
Health and Human Services (referred to in this section as the
``Secretary'') shall establish a mechanism (such as a modifier) for
purposes of tracking utilization under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.) of drugs and biologicals listed
on the drug shortage list maintained by the Food and Drug
Administration pursuant to section 506E of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 356e).
(c) HHS Report and Recommendations.--
(1) In general.--Not later than July 1, 2024, the Secretary
shall submit to Congress a report on shortages of drugs within
the Medicare program under title XVIII of the Social Security
Act (42 U.S.C. 1395 et seq.). The report shall include--
(A) an analysis of--
(i) the effect of drug shortages on
Medicare beneficiary access, quality, safety,
and out-of-pocket costs;
(ii) the effect of drug shortages on health
providers, including hospitals and physicians,
across the Medicare program;
(iii) the current role of the Centers for
Medicare & Medicaid Services (CMS) in
addressing drug shortages, including CMS's
working relationship and communication with
other Federal agencies and stakeholders;
(iv) the role of all actors in the drug
supply chain (including drug manufacturers,
distributors, wholesalers, secondary
wholesalers, group purchasing organizations,
hospitals, and physicians) on drug shortages
within the Medicare program; and
(v) payment structures and incentives under
parts A, B, C, and D of the Medicare program
and their effect, if any, on drug shortages;
and
(B) relevant findings and recommendations to
Congress.
(2) Public availability.--The report under this subsection
shall be made available to the public.
(3) Consultation.--The Secretary shall consult with the
drug shortage task force authorized under section 506D(a)(1)(A)
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
356d(a)(1)(A)) in preparing the report under this subsection,
as appropriate.
SEC. 208. CHANGE IN DEFINITION OF STRENGTH FOR THE PURPOSES OF
DETERMINING INTERCHANGEABILITY OF BIOLOGICAL AND
BIOSIMILAR PRODUCTS.
(a) Section 351(i) of the Public Health Service Act is amended by
inserting the following after paragraph (4):
``(5) The term `strength', in reference to a biological
product intended for administration by injection, means the
total content of drug substance in the dosage form without
regard to the concentration of drug substance or total volume
of the biological product.''.
(b) Section 351(k)(7)(C)(ii)(I) of the Public Health Service Act is
amended by inserting ``concentration,'' after ``delivery device,''.
Subtitle B--Part D
SEC. 209. MEDICARE PART D MODERNIZATION REDESIGN.
(a) Benefit Structure Redesign.--Section 1860D-2(b) of the Social
Security Act (42 U.S.C. 1395w- 102(b)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), in the matter preceding
clause (i), by inserting ``for a year preceding 2024
and for costs above the annual deductible specified in
paragraph (1) and up to the annual out-of-pocket
threshold specified in paragraph (4)(B) for 2024 and
each subsequent year'' after ``paragraph (3)'';
(B) in subparagraph (C)--
(i) in clause (i), in the matter preceding
subclause (I), by inserting ``for a year
preceding 2024,'' after ``paragraph (4),''; and
(ii) in clause (ii)(III), by striking ``and
each subsequent year'' and inserting ``, 2021,
2022, and 2023''; and
(C) in subparagraph (D)--
(i) in clause (i)--
(I) in the matter preceding
subclause (I), by inserting ``for a
year preceding 2024,'' after
``paragraph (4),''; and
(II) in subclause (I)(bb), by
striking ``a year after 2018'' and
inserting ``each of years 2018 through
2023''; and
(ii) in clause (ii)(V), by striking ``2019
and each subsequent year'' and inserting ``each
of years through 2023'';
(2) in paragraph (3)(A)--
(A) in the matter preceding clause (i), by
inserting ``for a year preceding 2024,'' after ``and
(4),''; and
(B) in clause (ii), by striking ``for a subsequent
year'' and inserting ``for each of years 2007 through
2023''; and
(3) in paragraph (4)--
(A) in subparagraph (A)--
(i) in clause (i)--
(I) by redesignating subclauses (I)
and (II) as items (aa) and (bb),
respectively, and indenting
appropriately;
(II) in the matter preceding item
(aa), as redesignated by subclause (I),
by striking ``is equal to the greater
of--'' and inserting ``is equal to--
``(I) for a year preceding 2024,
the greater of--'';
(III) by striking the period at the
end of item (bb), as redesignated by
subclause (I), and inserting ``; and'';
and
(IV) by adding at the end the
following:
``(II) for and each succeeding
year, $0.''; and
(ii) in clause (ii)--
(I) by striking ``clause (i)(I)''
and inserting ``clause (i)(I)(aa)'';
and
(II) by adding at the end the
following new sentence: ``The Secretary
shall continue to calculate the dollar
amounts specified in clause (i)(I)(aa),
including with the adjustment under
this clause, after 2023 for purposes of
section 1860D-14(a)(1)(D)(iii).'';
(B) in subparagraph (B)--
(i) in clause (i)--
(I) in subclause (V), by striking
``or'' at the end;
(II) in subclause (VI)--
(aa) by striking ``for a
subsequent year'' and inserting
``for 2021, 2022, and 2023'';
and
(bb) by striking the period
at the end and inserting a
semicolon; and
(III) by adding at the end the
following new subclauses:
``(VII) for 2024, is equal to--
``(aa) $3,100 for
beneficiaries determined to
have income that is over 400
percent of the Federal poverty
line applicable to a family of
the size involved;
``(bb) $1,800 for
beneficiaries determined to
have income that is between 300
to 400 percent of the Federal
poverty line applicable to a
family of the size involved; or
``(cc) $1,200 for
beneficiaries determined to
have income that is below 300
percent of the Federal poverty
line applicable to a family of
the size involved; or
``(VIII) for a subsequent year, is
equal to the amount specified in this
subparagraph for the previous year,
increased by the annual percentage
increase described in paragraph (6) for
the year involved.''; and
(ii) in clause (ii), by striking ``clause
(i)(II)'' and inserting ``clause (i)'';
(C) in subparagraph (C)(i), by striking ``and for
amounts'' and inserting ``and for a year preceding 2024
for amounts''; and
(D) in subparagraph (E), by striking ``In
applying'' and inserting ``For each of 2011 through
2023, in applying''.
(b) Decreasing Reinsurance Payment Amount.--Section 1860D-15(b) of
the Social Security Act (42 U.S.C. 1395w-115(b)) is amended--
(1) in paragraph (1)--
(A) by striking ``equal to 80 percent'' and
inserting ``equal to--
``(A) for a year preceding 2024, 80 percent'';
(B) in subparagraph (A), as added by paragraph (1),
by striking the period at the end and inserting ``;
and''; and
(C) by adding at the end the following new
subparagraph:
``(B) for 2024 and each subsequent year, the sum
of--
``(i) an amount equal to the applicable
percentage specified in paragraph (5)(A) of
such allowable reinsurance costs attributable
to that portion of gross prescription drug
costs as specified in paragraph (3) incurred in
the coverage year after such individual has
incurred costs that exceed the annual out-of-
pocket threshold specified in section 1860D-
2(b)(4)(B) with respect to applicable drugs (as
defined in section 1860D-14B(g)(2)); and
``(ii) an amount equal to the applicable
percentage specified in paragraph (5)(B) of
allowable reinsurance costs attributable to
that portion of gross prescription drug costs
as specified in paragraph (3) incurred in the
coverage year after such individual has
incurred costs that exceed the annual out-of-
pocket threshold specified in section 1860D-
2(b)(4)(B) with respect to covered part D drugs
that are not applicable drugs (as so
defined).''; and
(2) by adding at the end the following new paragraph:
``(5) Applicable percentage specified.--For purposes of
paragraph (1)(B), the applicable percentage specified in this
paragraph is--
``(A) with respect to applicable drugs (as defined
in section 1860D-14B(g)(2))--
``(i) for 2024, 60 percent;
``(ii) for 2025, 40 percent; and
``(iii) for 2026 and each subsequent year,
20 percent; and
``(B) with respect to covered part D drugs that are
not applicable drugs (as so defined)--
``(i) for 2024, 80 percent;
``(ii) for 2025, 60 percent; and
``(iii) for 2026 and each subsequent year,
40 percent.''.
(c) Manufacturer Discount Program During Initial and Catastrophic
Phases of Coverage.--
(1) In general.--Part D of title XVIII of the Social
Security Act is amended by inserting after section 1860D-14A
(42 U.S.C. 1495w-114) the following new section:
``SEC. 1860D-14B. MANUFACTURER DISCOUNT PROGRAM.
``(a) Establishment.--The Secretary shall establish a manufacturer
discount program (in this section referred to as the `program'). Under
the program, the Secretary shall enter into agreements described in
subsection (b) with manufacturers and provide for the performance of
the duties described in subsection (c). The Secretary shall establish a
model agreement for use under the program by not later than January 1,
2023, in consultation with manufacturers, and allow for comment on such
model agreement.
``(b) Terms of Agreement.--
``(1) In general.--
``(A) Agreement.--An agreement under this section
shall require the manufacturer to provide applicable
beneficiaries access to discounted prices for
applicable drugs of the manufacturer that are dispensed
on or after January 1, 2024.
``(B) Provision of discounted prices at the point-
of-sale.--The discounted prices described in
subparagraph (A) shall be provided to the applicable
beneficiary at the pharmacy or by the mail order
service at the point-of-sale of an applicable drug.
``(2) Provision of appropriate data.--Each manufacturer
with an agreement in effect under this section shall collect
and have available appropriate data, as determined by the
Secretary, to ensure that it can demonstrate to the Secretary
compliance with the requirements under the program.
``(3) Compliance with requirements for administration of
program.--Each manufacturer with an agreement in effect under
this section shall comply with requirements imposed by the
Secretary or a third party with a contract under subsection
(d)(3), as applicable, for purposes of administering the
program, including any determination under subparagraph (A) of
subsection (c)(1) or procedures established under such
subsection (c)(1).
``(4) Length of agreement.--
``(A) In general.--An agreement under this section
shall be effective for an initial period of not less
than 12 months and shall be automatically renewed for a
period of not less than 1 year unless terminated under
subparagraph (B).
``(B) Termination.--
``(i) By the secretary.--The Secretary may
provide for termination of an agreement under
this section for a knowing and willful
violation of the requirements of the agreement
or other good cause shown. Such termination
shall not be effective earlier than 30 days
after the date of notice to the manufacturer of
such termination. The Secretary shall provide,
upon request, a manufacturer with a hearing
concerning such a termination, and such hearing
shall take place prior to the effective date of
the termination with sufficient time for such
effective date to be repealed if the Secretary
determines appropriate.
``(ii) By a manufacturer.--A manufacturer
may terminate an agreement under this section
for any reason. Any such termination shall be
effective, with respect to a plan year--
``(I) if the termination occurs
before January 30 of a plan year, as of
the day after the end of the plan year;
and
``(II) if the termination occurs on
or after January 30 of a plan year, as
of the day after the end of the
succeeding plan year.
``(iii) Effectiveness of termination.--Any
termination under this subparagraph shall not
affect discounts for applicable drugs of the
manufacturer that are due under the agreement
before the effective date of its termination.
``(iv) Notice to third party.--The
Secretary shall provide notice of such
termination to a third party with a contract
under subsection (d)(3) within not less than 30
days before the effective date of such
termination.
``(5) Effective date of agreement.--An agreement under this
section shall take effect on a date determined appropriate by
the Secretary, which may be at the start of a calendar quarter.
``(c) Duties Described.--The duties described in this subsection
are the following:
``(1) Administration of program.--Administering the
program, including--
``(A) the determination of the amount of the
discounted price of an applicable drug of a
manufacturer;
``(B) the establishment of procedures under which
discounted prices are provided to applicable
beneficiaries at pharmacies or by mail order service at
the point-of-sale of an applicable drug;
``(C) the establishment of procedures to ensure
that, not later than the applicable number of calendar
days after the dispensing of an applicable drug by a
pharmacy or mail order service, the pharmacy or mail
order service is reimbursed for an amount equal to the
difference between--
``(i) the negotiated price of the
applicable drug; and
``(ii) the discounted price of the
applicable drug;
``(D) the establishment of procedures to ensure
that the discounted price for an applicable drug under
this section is applied before any coverage or
financial assistance under other health benefit plans
or programs that provide coverage or financial
assistance for the purchase or provision of
prescription drug coverage on behalf of applicable
beneficiaries as the Secretary may specify; and
``(E) providing a reasonable dispute resolution
mechanism to resolve disagreements between
manufacturers, applicable beneficiaries, and the third
party with a contract under subsection (d)(3).
``(2) Monitoring compliance.--
``(A) In general.--The Secretary shall monitor
compliance by a manufacturer with the terms of an
agreement under this section.
``(B) Notification.--If a third party with a
contract under subsection (d)(3) determines that the
manufacturer is not in compliance with such agreement,
the third party shall notify the Secretary of such
noncompliance for appropriate enforcement under
subsection (e).
``(3) Collection of data from prescription drug plans and
ma-pd plans.--The Secretary may collect appropriate data from
prescription drug plans and MA-PD plans in a timeframe that
allows for discounted prices to be provided for applicable
drugs under this section.
``(d) Administration.--
``(1) In general.--Subject to paragraph (2), the Secretary
shall provide for the implementation of this section, including
the performance of the duties described in subsection (c).
``(2) Limitation.--In providing for the implementation of
this section, the Secretary shall not receive or distribute any
funds of a manufacturer under the program.
``(3) Contract with third parties.--The Secretary shall
enter into a contract with 1 or more third parties to
administer the requirements established by the Secretary in
order to carry out this section. At a minimum, the contract
with a third party under the preceding sentence shall require
that the third party--
``(A) receive and transmit information between the
Secretary, manufacturers, and other individuals or
entities the Secretary determines appropriate;
``(B) receive, distribute, or facilitate the
distribution of funds of manufacturers to appropriate
individuals or entities in order to meet the
obligations of manufacturers under agreements under
this section;
``(C) provide adequate and timely information to
manufacturers, consistent with the agreement with the
manufacturer under this section, as necessary for the
manufacturer to fulfill its obligations under this
section; and
``(D) permit manufacturers to conduct periodic
audits, directly or through contracts, of the data and
information used by the third party to determine
discounts for applicable drugs of the manufacturer
under the program.
``(4) Performance requirements.--The Secretary shall
establish performance requirements for a third party with a
contract under paragraph (3) and safeguards to protect the
independence and integrity of the activities carried out by the
third party under the program under this section.
``(5) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to the program under this section.
``(6) Funding.--For purposes of carrying out this section,
the Secretary shall provide for the transfer, from the Federal
Supplementary Medical Insurance Trust Fund under section 1841
to the Centers for Medicare & Medicaid Services Program
Management Account, of $4,000,000 for each of fiscal years 2021
through 2024, to remain available until expended.
``(e) Enforcement.--
``(1) Audits.--Each manufacturer with an agreement in
effect under this section shall be subject to periodic audit by
the Secretary.
``(2) Civil money penalty.--
``(A) In general.--The Secretary shall impose a
civil money penalty on a manufacturer that fails to
provide applicable beneficiaries discounts for
applicable drugs of the manufacturer in accordance with
such agreement for each such failure in an amount the
Secretary determines is commensurate with the sum of--
``(i) the amount that the manufacturer
would have paid with respect to such discounts
under the agreement, which will then be used to
pay the discounts which the manufacturer had
failed to provide; and
``(ii) 25 percent of such amount.
``(B) Application.--The provisions of section 1128A
(other than subsections (a) and (b)) shall apply to a
civil money penalty under this paragraph in the same
manner as such provisions apply to a penalty or
proceeding under section 1128A(a).
``(f) Clarification Regarding Availability of Other Covered Part D
Drugs.--Nothing in this section shall prevent an applicable beneficiary
from purchasing a covered part D drug that is not an applicable drug
(including a generic drug or a drug that is not on the formulary of the
prescription drug plan or MA-PD plan that the applicable beneficiary is
enrolled in).
``(g) Definitions.--In this section:
``(1) Applicable beneficiary.--The term `applicable
beneficiary' means an individual who, on the date of dispensing
a covered part D drug--
``(A) is enrolled in a prescription drug plan or an
MA-PD plan;
``(B) is not enrolled in a qualified retiree
prescription drug plan; and
``(C) has incurred costs for covered part D drugs
in the year that are above the annual deductible
specified in section 1860D-2(b)(1) for such year.
``(2) Applicable drug.--The term `applicable drug' means,
with respect to an applicable beneficiary, a covered part D
drug--
``(A) approved under a new drug application under
section 505(c) of the Federal Food, Drug, and Cosmetic
Act or, in the case of a biologic product, licensed
under section 351 of the Public Health Service Act
(including a product licensed under subsection (k) of
such section 351); and
``(B)(i) if the PDP sponsor of the prescription
drug plan or the MA organization offering the MA-PD
plan uses a formulary, which is on the formulary of the
prescription drug plan or MA-PD plan that the
applicable beneficiary is enrolled in;
``(ii) if the PDP sponsor of the prescription drug
plan or the MA organization offering the MA-PD plan
does not use a formulary, for which benefits are
available under the prescription drug plan or MA-PD
plan that the applicable beneficiary is enrolled in; or
``(iii) is provided through an exception or appeal.
``(3) Applicable number of calendar days.--The term
`applicable number of calendar days' means--
``(A) with respect to claims for reimbursement
submitted electronically, 14 days; and
``(B) with respect to claims for reimbursement
submitted otherwise, 30 days.
``(4) Discounted price.--
``(A) In general.--Except as provided in
subparagraph (B), the term `discounted price' means 90
percent of the negotiated price of the applicable drug
of a manufacturer.
``(B) Phase-in for certain drugs dispensed for
subsidy eligible individuals.--
``(i) In general.--In the case of an
applicable drug of a specified manufacturer (as
defined in clause (ii)) that is dispensed for
an applicable beneficiary who is a subsidy
eligible individual (as defined in section
1860D-14(a)(3), the term `discounted price'
means the specified LIS percent (as defined in
clause (iii)) of the negotiated price of the
applicable drug of the manufacturer.
``(ii) Specified manufacturer.--In this
subparagraph, the term `specified manufacturer'
means a manufacturer of an applicable drug for
which, in the calendar year 2 years prior to
the current plan year (referred to in this
clause as the `applicable period'), the total
reimbursement under this title during the
applicable period represented less than 1
percent of the total reimbursement under this
title for all prescription drugs during such
period.
``(iii) Specified lis percent.--In this
subparagraph, the term `specified LIS percent'
means--
``(I) for 2024, 98 percent;
``(II) for 2025, 97 percent;
``(III) for 2026, 96 percent;
``(IV) for 2027, 95 percent;
``(V) for 2028, 94 percent;
``(VI) for 2029, 93 percent;
``(VII) for 2030, 92 percent;
``(VIII) for 2031, 91 percent; and
``(IX) for 2032 and each subsequent
year, 90 percent.
``(C) Clarification.--Nothing in this section shall
be construed as affecting the responsibility of an
applicable beneficiary for payment of a dispensing fee
for an applicable drug.
``(5) Manufacturer.--The term `manufacturer' means any
entity which is engaged in the production, preparation,
propagation, compounding, conversion, or processing of
prescription drug products, either directly or indirectly by
extraction from substances of natural origin, or independently
by means of chemical synthesis, or by a combination of
extraction and chemical synthesis. Such term does not include a
wholesale distributor of drugs or a retail pharmacy licensed
under State law.
``(6) Negotiated price.--The term `negotiated price' has
the meaning given such term in section 1860D-2(d)(1)(B), except
that such negotiated price shall not include any dispensing fee
for the applicable drug.
``(7) Qualified retiree prescription drug plan.--The term
`qualified retiree prescription drug plan' has the meaning
given such term in section 1860D-22(a)(2).''.
(2) Sunset of medicare coverage gap discount program.--
Section 1860D-14A of the Social Security Act (42 U.S.C. 1395-
114a) is amended--
(A) in subsection (a), in the first sentence, by
striking ``The Secretary'' and inserting ``Subject to
subsection (h), the Secretary''; and
(B) by adding at the end the following new
subsection:
``(h) Sunset of Program.--
``(1) In general.--The program shall not apply to
applicable drugs dispensed on or after January 1, 2024, and,
subject to paragraph (2), agreements under this section shall
be terminated as of such date.
``(2) Continued application for applicable drugs dispensed
prior to sunset.--The provisions of this section (including all
responsibilities and duties) shall continue to apply after
January 1, 2024, with respect to applicable drugs dispensed
prior to such date.''.
(3) Inclusion of actuarial value of manufacturer discounts
in bids.--Section 1860D-11 of the Social Security Act (42
U.S.C. 1395w-111) is amended--
(A) in subsection (b)(2)(C)(iii)--
(i) by striking ``assumptions regarding the
reinsurance'' and inserting ``an actuarial
valuation of--
``(I) the reinsurance''; and
(ii) by adding at the end the following:
``(II) for 2024 and each subsequent
year, the manufacturer discounts
provided under section 1860D-14B
subtracted from the actuarial value to
produce such bid; and''; and
(B) in subsection (c)(1)(C)--
(i) by striking ``an actuarial valuation of
the reinsurance'' and inserting ``an actuarial
valuation of--
``(i) the reinsurance'';
(ii) in clause (i), as added by clause (i)
of this subparagraph, by adding ``and'' at the
end; and
(iii) by adding at the end the following:
``(ii) for 2024 and each subsequent year,
the manufacturer discounts provided under
section 1860D-14B;''.
(4) Clarification regarding exclusion of manufacturer
discounts from troop.--Section 1860D-2(b)(4) of the Social
Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
(A) in subparagraph (C), by inserting ``and subject
to subparagraph (F)'' after ``subparagraph (E)''; and
(B) by adding at the end the following new
subparagraph:
``(F) Clarification regarding exclusion of
manufacturer discounts.--In applying subparagraph (A),
incurred costs shall not include any manufacturer
discounts provided under section 1860D-14B.''.
(d) Determination of Allowable Reinsurance Costs.--Section 1860D-
15(b) of the Social Security Act (42 U.S.C. 1395w-115(b)) is amended--
(1) in paragraph (2)--
(A) by striking ``costs.--For purposes'' and
inserting: ``costs.--
``(A) In general.--Subject to subparagraph (B), for
purposes''; and
(B) by adding at the end the following new
subparagraph:
``(B) Inclusion of manufacturer discounts on
applicable drugs.--For purposes of applying
subparagraph (A), the term `allowable reinsurance
costs' shall include the portion of the negotiated
price (as defined in section 1860D-14B(g)(6)) of an
applicable drug (as defined in section 1860D-14B(g)(2))
that was paid by a manufacturer under the manufacturer
discount program under section 1860D-14B.''; and
(2) in paragraph (3)--
(A) in the first sentence, by striking ``For
purposes'' and inserting ``Subject to paragraph (2)(B),
for purposes''; and
(B) in the second sentence, by inserting ``or, in
the case of an applicable drug, by a manufacturer''
after ``by the individual or under the plan''.
(e) Updating Risk Adjustment Methodologies To Account for Part D
Modernization Redesign.--Section 1860D-15(c) of the Social Security Act
(42 U.S.C. 1395w-115(c)) is amended by adding at the end the following
new paragraph:
``(3) Updating risk adjustment methodologies to account for
part d modernization redesign.--The Secretary shall update the
risk adjustment methodologies used to adjust bid amounts
pursuant to this subsection as appropriate to take into account
changes in benefits under this part pursuant to the amendments
made by section 2 of the Seniors Prescription Drug Relief
Act.''.
(f) Conditions for Coverage of Drugs Under This Part.--Section
1860D-43 of the Social Security Act (42 U.S.C. 1395w-153) is amended--
(1) in subsection (a)--
(A) in paragraph (2), by striking ``and'' at the
end;
(B) in paragraph (3), by striking the period at the
end and inserting a semicolon; and
(C) by adding at the end the following new
paragraphs:
``(4) participate in the manufacturer discount program
under section 1860D-14B;
``(5) have entered into and have in effect an agreement
described in subsection (b) of such section 1860D-14B with the
Secretary; and
``(6) have entered into and have in effect, under terms and
conditions specified by the Secretary, a contract with a third
party that the Secretary has entered into a contract with under
subsection (d)(3) of such section 1860D-14B.'';
(2) by striking subsection (b) and inserting the following:
``(b) Effective Date.--Paragraphs (1) through (3) of subsection (a)
shall apply to covered part D drugs dispensed under this part on or
after January 1, 2011, and before January 1, 2024, and paragraphs (4)
through (6) of such subsection shall apply to covered part D drugs
dispensed on or after January 1, 2024.''; and
(3) in subsection (c), by striking paragraph (2) and
inserting the following:
``(2) the Secretary determines that in the period beginning
on January 1, 2011, and ending on December 31, 2011 (with
respect to paragraphs (1) through (3) of subsection (a)), or
the period beginning on January 1, 2024, and ending December
31, 2024 (with respect to paragraphs (4) through (6) of such
subsection), there were extenuating circumstances.''.
(g) Conforming Amendments.--
(1) Section 1860D-2 of the Social Security Act (42 U.S.C.
1395w-102) is amended--
(A) in subsection (a)(2)(A)(i)(I), by striking ``,
or an increase in the initial'' and inserting ``or for
a year preceding 2024 an increase in the initial'';
(B) in subsection (c)(1)(C)--
(i) in the subparagraph heading, by
striking ``at initial coverage limit''; and
(ii) by inserting ``for a year preceding
2024 or the annual out-of-pocket threshold
specified in subsection (b)(4)(B) for the year
for 2024 and each subsequent year'' after
``subsection (b)(3) for the year'' each place
it appears; and
(C) in subsection (d)(1)(A), by striking ``or an
initial'' and inserting ``or for a year preceding 2024
an initial''.
(2) Section 1860D-4(a)(4)(B)(i) of the Social Security Act
(42 U.S.C. 1395w-104(a)(4)(B)(i)) is amended by striking ``the
initial'' and inserting ``for a year preceding 2024, the
initial''.
(3) Section 1860D-14(a) of the Social Security Act (42
U.S.C. 1395w-114(a)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (C), by striking ``The
continuation'' and inserting ``For a year
preceding 2024, the continuation'';
(ii) in subparagraph (D)(iii), by striking
``1860D-2(b)(4)(A)(i)(I)'' and inserting
``1860D-2(b)(4)(A)(i)(I)(aa)''; and
(iii) in subparagraph (E), by striking
``The elimination'' and inserting ``For a year
preceding 2024, the elimination''; and
(B) in paragraph (2)--
(i) in subparagraph (C), by striking ``The
continuation'' and inserting ``For a year
preceding 2024, the continuation''; and
(ii) in subparagraph (E)--
(I) by inserting ``for a year
preceding 2024,'' after ``subsection
(c)''; and
(II) by striking ``1860D-
2(b)(4)(A)(i)(I)'' and inserting
``1860D-2(b)(4)(A)(i)(I)(aa)''.
(4) Section 1860D-21(d)(7) of the Social Security Act (42
U.S.C. 1395w-131(d)(7)) is amended by striking ``section 1860D-
2(b)(B)(4)(B)(i)'' and inserting ``section 1860D-
2(b)(B)(4)(C)(i)''.
(5) Section 1860D-22(a)(2)(A) of the Social Security Act
(42 U.S.C. 1395w-132(a)(2)(A)) is amended--
(A) by striking ``the value of any discount'' and
inserting the following: ``the value of--
``(i) for years prior to 2024, any
discount'';
(B) in clause (i), as inserted by subparagraph (A)
of this paragraph, by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following new clause:
``(ii) for 2024 and each subsequent year,
any discount provided pursuant to section
1860D-14B.''.
(6) Section 1860D-41(a)(6) of the Social Security Act (42
U.S.C. 1395w-151(a)(6)) is amended--
(A) by inserting ``for a year before 2024'' after
``1860D-2(b)(3)''; and
(B) by inserting ``for such year'' before the
period.
(h) Effective Date.--The amendments made by this section shall
apply to plan year 2024 and subsequent plan years.
SEC. 210. PUBLIC DISCLOSURE OF DRUG DISCOUNTS AND OTHER PHARMACY
BENEFIT MANAGER (PBM) PROVISIONS.
(a) Public Disclosure of Drug Discounts.--
(1) In general.--Section 1150A of the Social Security Act
(42 U.S.C. 1320b-23) is amended--
(A) in subsection (c), in the matter preceding
paragraph (1), by striking ``this section'' and
inserting ``subsection (b)(1)''; and
(B) by adding at the end the following new
subsection:
``(e) Public Availability of Certain Information.--
``(1) In general.--Subject to paragraphs (2) and (3), in
order to allow patients and employers to compare PBMs' ability
to negotiate rebates, discounts, and price concessions and the
amount of such rebates, discounts, and price concessions that
are passed through to plan sponsors, not later than July 1,
2025, the Secretary shall make available on the Internet
website of the Department of Health and Human Services the
information provided to the Secretary and described in
paragraphs (2) and (3) of subsection (b) with respect to each
PBM.
``(2) Lag in data.--The information made available in a
plan year under paragraph (1) shall not include information
with respect to such plan year or the two preceding plan years.
``(3) Confidentiality.--The Secretary shall ensure that
such information is displayed in a manner that prevents the
disclosure of information on rebates, discounts, and price
concessions with respect to an individual drug or an individual
PDP sponsor, MA organization, or qualified health benefits
plan.''.
(2) Effective date.--The amendment made by paragraph (1)(A)
shall take effect on January 1, 2025.
(b) Plan Audit of Pharmacy Benefit Manager Data.--Section 1860D-
2(d)(3) of the Social Security Act (42 U.S.C. 1395w-102(d)(3)) is
amended--
(1) by striking ``Audits.--To protect'' and inserting the
following: ``Audits.--
``(A) Audits of plans by the secretary.--To
protect''; and
(2) by adding at the end the following new subparagraph:
``(B) Audits of pharmacy benefit managers by pdp
sponsors and ma organizations.--
``(i) In general.--Beginning January 1,
2025, in order to ensure that--
``(I) contracting terms between a
PDP sponsor offering a prescription
drug plan or an MA organization
offering an MA-PD plan and its
contracted or owned pharmacy benefit
manager are met; and
``(II) the PDP sponsor and MA
organization can account for the cost
of each covered part D drug net of all
direct and indirect remuneration,
the PDP sponsor or MA organization shall
conduct financial audits.
``(ii) Independent third party.--An audit
described in clause (i) shall--
``(I) be conducted by an
independent third party; and
``(II) account and reconcile flows
of funds that determine the net cost of
covered part D drugs, including direct
and indirect remuneration from drug
manufacturers and pharmacies or
provided to pharmacies.
``(iii) Rebate agreements.--A PDP sponsor
and an MA organization shall require pharmacy
benefit managers to make rebate contracts with
drug manufacturers made on their behalf
available under audits described in clause (i).
``(iv) Confidentiality agreements.--Audits
described in clause (i) shall be subject to
confidentiality agreements to prevent, except
as required under clause (vii), the
redisclosure of data transmitted under the
audit.
``(v) Frequency.--A financial audit under
clause (i) shall be conducted periodically (but
in no case less frequently than once every 2
years).
``(vi) Timeframe for pbm to provide
information.--A PDP sponsor and an MA
organization shall require that a pharmacy
benefit manager that is being audited under
clause (i) provide (as part of their
contracting agreement) the requested
information to the independent third party
conducting the audit within 45 days of the date
of the request.
``(vii) Submission of audit reports to the
secretary.--
``(I) In general.--A PDP sponsor
and an MA organization shall submit to
the Secretary the final report on any
audit conducted under clause (i) within
30 days of the PDP sponsor or MA
organization receiving the report from
the independent third party conducting
the audit.
``(II) Review.--The Secretary shall
review final reports submitted under
clause (i) to determine the extent to
which the goals specified in subclauses
(I) and (II) of subparagraph (B)(i) are
met.
``(III) Confidentiality.--
Notwithstanding any other provision of
law, information disclosed in a report
submitted under clause (i) related to
the net cost of a covered part D drug
is confidential and shall not be
disclosed by the Secretary or a
Medicare contractor.
``(viii) Notice of noncompliance.--A PDP
sponsor and an MA organization shall notify the
Secretary if any pharmacy benefit manager is
not complying with requests for access to
information required under an audit under
clause (i).
``(ix) Civil monetary penalties.--
``(I) In general.--Subject to
subclause (II), if the Secretary
determines that a PDP sponsor or an MA
organization has failed to conduct an
audit under clause (i), the Secretary
may impose a civil monetary penalty of
not more than $10,000 for each day of
such noncompliance.
``(II) Procedure.--The provisions
of section 1128A, other than
subsections (a) and (b) and the first
sentence of subsection (c)(1) of such
section, shall apply to civil monetary
penalties under this clause in the same
manner as such provisions apply to a
penalty or proceeding under section
1128A.''.
(c) Disclosure to Pharmacy of Post-Point-of-Sale Pharmacy Price
Concessions and Incentive Payments.--Section 1860D-2(d)(2) of the
Social Security Act (42 U.S.C. 1395w-102(d)(2)) is amended--
(1) by striking ``Disclosure.--A PDP sponsor'' and
inserting the following: ``Disclosure.--
``(A) To the secretary.--A PDP sponsor''; and
(2) by adding at the end the following new subparagraph:
``(B) To pharmacies.--
``(i) In general.--For plan year 2025 and
subsequent plan years, a PDP sponsor offering a
prescription drug plan and an MA organization
offering an MA-PD plan shall report any
pharmacy price concession or incentive payment
that occurs with respect to a pharmacy after
payment for covered part D drugs at the point-
of-sale, including by an intermediary
organization with which a PDP sponsor or MA
organization has contracted, to the pharmacy.
``(ii) Timing.--The reporting of price
concessions and incentive payments to a
pharmacy under clause (i) shall be made on a
periodic basis (but in no case less frequently
than annually).
``(iii) Claim level.--The reporting of
price concessions and incentive payments to a
pharmacy under clause (i) shall be at the claim
level or approximated at the claim level if the
price concession or incentive payment was
applied at a level other than at the claim
level.''.
(d) Disclosure of P&T Committee Conflicts of Interest.--
(1) In general.--Section 1860D-4(b)(3)(A) of the Social
Security Act (42 U.S.C. 1395w-104(b)(3)(A)) is amended by
adding at the end the following new clause:
``(iii) Disclosure of conflicts of
interest.--With respect to plan year 2025 and
subsequent plan years, a PDP sponsor of a
prescription drug plan and an MA organization
offering an MA-PD plan shall, as part of its
bid submission under section 1860D-11(b),
provide the Secretary with a completed
statement of financial conflicts of interest,
including with manufacturers, from each member
of any pharmacy and therapeutic committee used
by the sponsor or organization pursuant to this
paragraph.''.
(2) Inclusion in bid.--Section 1860D-11(b)(2) of the Social
Security Act (42 U.S.C. 1395w-111(b)(2)) is amended--
(A) by redesignating subparagraph (F) as
subparagraph (G); and
(B) by inserting after subparagraph (E) the
following new subparagraph:
``(F) P&T committee conflicts of interest.--The
information required to be disclosed under section
1860D-4(b)(3)(A)(iii).''.
(e) Information on Direct and Indirect Remuneration Required To Be
Included in Bid.--Section 1860D-11(b) of the Social Security Act (42
U.S.C. 1395w-111(b)) is amended--
(1) in paragraph (1), by adding at the end the following
new sentence: ``With respect to actual amounts of direct and
indirect remuneration submitted pursuant to clause (v) of
paragraph (2), such amounts shall be consistent with data
reported to the Secretary in a prior year.''; and
(2) in paragraph (2)(C)--
(A) in clause (iii), by striking ``and'' at the
end;
(B) in clause (iv), by striking the period at the
end and inserting the following: ``, and, with respect
to plan year 2025 and subsequent plan years, actual and
projected administrative expenses assumed in the bid,
categorized by the type of such expense, including
actual and projected price concessions retained by a
pharmacy benefit manager; and''; and
(C) by adding at the end the following new clause:
``(v) with respect to plan year 2025 and
subsequent plan years, actual and projected
direct and indirect remuneration, categorized
as received from each of the following:
``(I) A pharmacy.
``(II) A manufacturer.
``(III) A pharmacy benefit manager.
``(IV) Other entities, as
determined by the Secretary.''.
SEC. 211. PUBLIC DISCLOSURE OF DIRECT AND INDIRECT REMUNERATION REVIEW
AND AUDIT RESULTS.
Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152)
is amended by adding at the end the following new subsection:
``(e) Public Disclosure of Direct and Indirect Remuneration Review
and Financial Audit Results.--
``(1) DIR review results.--
``(A) In general.--Except as provided in
subparagraph (B), in 2023 and each subsequent year, the
Secretary shall make available to the public on the
Internet website of the Centers for Medicare & Medicaid
Services information on discrepancies related to
summary and detailed DIR reports submitted by PDP
sponsors pursuant to section 1860D-15 across all
prescription drug plans based on the most recent data
available. Information made available under this
subparagraph shall include the following:
``(i) The number of potential errors
identified by the Secretary for PDP sponsors to
review.
``(ii) The extent to which PDP sponsors
resubmitted DIR reports to make changes for
previous contract years.
``(iii) The extent to which resubmitted DIR
reports resulted in an increase or decrease in
DIR in a previous contract year.
``(B) Exclusion of certain submissions in
calculation.--The Secretary shall exclude any
information in DIR reports submitted with respect to
PACE programs under section 1894 (pursuant to section
1860D-21(f)) and qualified retiree prescription drug
plans (as defined in section 1860D-22(a)(2)) from the
information that is made available to the public under
subparagraph (A).
``(2) Financial audit results.--In 2023 and each subsequent
year, the Secretary shall make available to the public on the
Internet website of the Centers for Medicare & Medicaid
Services the results of DIR audits required under section
1860D-12(b)(3)(C). Information made available under this
paragraph shall include the following:
``(A) With respect to the year, the number of PDP
sponsors that received each of the following:
``(i) A notice of observations or findings
that required the sponsor to make DIR report
corrections.
``(ii) An unqualified audit opinion that
renders the audit closed.
``(iii) A qualified audit opinion that
requires the sponsor to submit a corrective
action plan to the Secretary.
``(iv) An adverse opinion, with a
description of the types of actions that the
Secretary takes when issuing an adverse
opinion.
``(B) With respect to a preceding year:
``(i) The number of PDP sponsors that
reopened a previously closed reconciliation as
a result of an audit, including as a result of
DIR changes.
``(ii) The extent to which the Secretary
recouped an overpayment or made an underpayment
as a result of a reopening of a previously
closed reconciliation.
``(3) Definition of dir.--For purposes of this subsection,
the term `DIR' means direct and indirect remuneration as
defined in section 423.308 of title 42, Code of Federal
Regulations, or any successor regulation.''.
SEC. 212. IMPROVEMENTS TO PROVISION OF PARTS A AND B CLAIMS DATA TO
PRESCRIPTION DRUG PLANS.
(a) Data Use.--
(1) In general.--Paragraph (6) of section 1860D-4(c) of the
Social Security Act (42 U.S.C. 1395w-104(c)), as added by
section 50354 of division E of the Bipartisan Budget Act of
2018 (Public Law 115-123), relating to providing prescription
drug plans with parts A and B claims data to promote the
appropriate use of medications and improve health outcomes, is
amended--
(A) in subparagraph (B)--
(i) by redesignating clauses (i), (ii), and
(iii) as subclauses (I), (II), and (III),
respectively, and moving such subclauses 2 ems
to the right;
(ii) by striking ``Purposes.--A PDP
sponsor'' and inserting ``Purposes.--
``(i) In general.--A PDP sponsor.''; and
(iii) by adding at the end the following
new clause:
``(ii) Clarification.--The limitation on
data use under subparagraph (C)(i) shall not
apply to the extent that the PDP sponsor is
using the data provided to carry out any of the
purposes described in clause (i).''; and
(B) in subparagraph (C)(i), by striking ``To
inform'' and inserting ``Subject to subparagraph
(B)(ii), to inform''.
(2) Effective date.--The amendments made by this subsection
shall apply to plan years beginning on or after January 1,
2025.
(b) Manner of Provision.--Subparagraph (D) of such paragraph (6) is
amended--
(1) by striking ``described.--The data described in this
clause'' and inserting ``described.--
``(i) In general.--The data described in
this subparagraph''; and
(2) by adding at the end the following new clause:
``(ii) Manner of provision.--
``(I) In general.--Such data may be
provided pursuant to this paragraph in
the same manner as data under the Part
D Enhanced Medication Therapy
Management model tested under section
1115A, through Application Programming
Interface, or in another manner as
determined by the Secretary.
``(II) Implementation.--
Notwithstanding any other provision of
law, the Secretary may implement this
clause by program instruction or
otherwise.''.
(c) Technical Correction.--Such paragraph (6) is redesignated as
paragraph (7).
SEC. 213. MEDICARE PART D REBATE BY MANUFACTURERS.
(a) In General.--Part D of title XVIII of the Social Security Act
is amended by inserting after section 1860D-14A (42 U.S.C. 1395w-114a)
the following new section:
``SEC. 1860D-14B. MANUFACTURER REBATE FOR CERTAIN DRUGS WITH PRICES
INCREASING FASTER THAN INFLATION.
``(a) In General.--
``(1) In general.--Subject to the provisions of this
section, in order for coverage to be available under this part
for a part D rebatable drug (as defined in subsection (h)(1))
of a manufacturer (as defined in section 1927(k)(5)) dispensed
during an applicable year, the manufacturer must have entered
into and have in effect an agreement described in subsection
(b).
``(2) Authorizing coverage for drugs not covered under
agreements.--Paragraph (1) shall not apply to the dispensing of
a covered part D drug if--
``(A) the Secretary has made a determination that
the availability of the drug is essential to the health
of beneficiaries under this part; or
``(B) the Secretary determines that in the period
beginning on January 1, 2025, and ending on December
31, 2025, there were extenuating circumstances.
``(3) Applicable year.--For purposes of this section the
term `applicable year' means a year beginning with 2025.
``(b) Agreements.--
``(1) Terms of agreement.--An agreement described in this
subsection, with respect to a manufacturer of a part D
rebatable drug, is an agreement under which the following shall
apply:
``(A) Secretarial provision of information.--Not
later than 9 months after the end of each applicable
year with respect to which the agreement is in effect,
the Secretary, for each part D rebatable drug of the
manufacturer, shall report to the manufacturer the
following for such year:
``(i) Information on the total number of
units (as defined in subsection (h)(2)) for
each dosage form and strength with respect to
such part D rebatable drug and year.
``(ii) Information on the amount (if any)
of the excess average manufacturer price
increase described in subsection (c)(1)(B) for
each dosage form and strength with respect to
such drug and year.
``(iii) The rebate amount specified under
subsection (c) for each dosage form and
strength with respect to such drug and year.
``(B) Manufacturer requirements.--For each
applicable year with respect to which the agreement is
in effect, the manufacturer of the part D rebatable
drug, for each dosage form and strength with respect to
such drug, not later than 30 days after the date of
receipt from the Secretary of the information described
in subparagraph (A) for such year, shall provide to the
Secretary a rebate that is equal to the amount
specified in subsection (c) for such dosage form and
strength with respect to such drug for such year.
``(2) Length of agreement.--
``(A) In general.--An agreement under this section,
with respect to a part D rebatable drug, shall be
effective for an initial period of not less than one
year and shall be automatically renewed for a period of
not less than one year unless terminated under
subparagraph (B).
``(B) Termination.--
``(i) By secretary.--The Secretary may
provide for termination of an agreement under
this section for violation of the requirements
of the agreement or other good cause shown.
Such termination shall not be effective earlier
than 30 days after the date of notice of such
termination. The Secretary shall provide, upon
request, a manufacturer with a hearing
concerning such a termination, but such hearing
shall not delay the effective date of the
termination.
``(ii) By a manufacturer.--A manufacturer
may terminate an agreement under this section
for any reason. Any such termination shall be
effective, with respect to a plan year--
``(I) if the termination occurs
before January 30 of the plan year, as
of the day after the end of the plan
year; and
``(II) if the termination occurs on
or after January 30 of the plan year,
as of the day after the end of the
succeeding plan year.
``(C) Effectiveness of termination.--Any
termination under this paragraph shall not affect
rebates due under the agreement under this section
before the effective date of its termination.
``(D) Delay before reentry.--In the case of any
agreement under this section with a manufacturer that
is terminated in a plan year, the Secretary may not
enter into another such agreement with the manufacturer
(or a successor manufacturer) before the subsequent
plan year, unless the Secretary finds good cause for an
earlier reinstatement of such an agreement.
``(c) Rebate Amount.--
``(1) In general.--For purposes of this section, the amount
specified in this subsection for a dosage form and strength
with respect to a part D rebatable drug and applicable year is,
subject to subparagraphs (B) and (C) of paragraph (5), the
amount equal to the product of--
``(A) the total number of units of such dosage form
and strength with respect to such part D rebatable drug
and year; and
``(B) the amount (if any) by which--
``(i) the annual manufacturer price (as
determined in paragraph (2)) paid for such
dosage form and strength with respect to such
part D rebatable drug for the year; exceeds
``(ii) the inflation-adjusted payment
amount determined under paragraph (3) for such
dosage form and strength with respect to such
part D rebatable drug for the year.
``(2) Determination of annual manufacturer price.--The
annual manufacturer price determined under this paragraph for a
dosage form and strength, with respect to a part D rebatable
drug and an applicable year, is the sum of the products of--
``(A) the average manufacturer price (as defined in
subsection (h)(6)) of such dosage form and strength, as
calculated for a unit of such drug, with respect to
each of the calendar quarters of such year; and
``(B) the ratio of--
``(i) the total number of units of such
dosage form and strength dispensed during each
such calendar quarter of such year; to
``(ii) the total number of units of such
dosage form and strength dispensed during such
year.
``(3) Determination of inflation-adjusted payment amount.--
The inflation-adjusted payment amount determined under this
paragraph for a dosage form and strength with respect to a part
D rebatable drug for an applicable year, subject to
subparagraphs (A) and (D) of paragraph (5), is--
``(A) the benchmark year manufacturer price
determined under paragraph (4) for such dosage form and
strength with respect to such drug and an applicable
year; increased by
``(B) the percentage by which the applicable year
CPI-U (as defined in subsection (h)(5)) for the
applicable year exceeds the benchmark period CPI-U (as
defined in subsection (h)(4)).
``(4) Determination of benchmark year manufacturer price.--
The benchmark year manufacturer price determined under this
paragraph for a dosage form and strength, with respect to a
part D rebatable drug and an applicable year, is the sum of the
products of--
``(A) the average manufacturer price (as defined in
subsection (h)(6)) of such dosage form and strength, as
calculated for a unit of such drug, with respect to
each of the calendar quarters of the payment amount
benchmark year (as defined in subsection (h)(3)); and
``(B) the ratio of--
``(i) the total number of units of such
dosage form and strength dispensed during each
such calendar quarter of such payment amount
benchmark year; to
``(ii) the total number of units of such
dosage form and strength dispensed during such
payment amount benchmark year.
``(5) Special treatment of certain drugs and exemption.--
``(A) Subsequently approved drugs.--In the case of
a part D rebatable drug first approved or licensed by
the Food and Drug Administration after January 1, 2016,
subparagraphs (A) and (B) of paragraph (4) shall be
applied as if the term `payment amount benchmark year'
were defined under subsection (h)(3) as the first
calendar year beginning after the day on which the drug
was first marketed by any manufacturer and subparagraph
(B) of paragraph (3) shall be applied as if the term
`benchmark period CPI-U' were defined under subsection
(h)(4) as if the reference to `January 2016' under such
subsection were a reference to `January of the first
year beginning after the date on which the drug was
first marketed by any manufacturer'.
``(B) Exemption for shortages.--The Secretary may
reduce or waive the rebate under paragraph (1) with
respect to a part D rebatable drug that is described as
currently in shortage on the shortage list in effect
under section 506E of the Federal Food, Drug, and
Cosmetic Act or in the case of other exigent
circumstances, as determined by the Secretary.
``(C) Treatment of new formulations.--
``(i) In general.--In the case of a part D
rebatable drug that is a line extension of a
part D rebatable drug that is an oral solid
dosage form, the Secretary shall establish a
formula for determining the amount specified in
this subsection with respect to such part D
rebatable drug and an applicable year with
consideration of the original part D rebatable
drug.
``(ii) Line extension defined.--In this
subparagraph, the term `line extension' means,
with respect to a part D rebatable drug, a new
formulation of the drug (as determined by the
Secretary), such as an extended release
formulation, but does not include an abuse-
deterrent formulation of the drug (as
determined by the Secretary), regardless of
whether such abuse-deterrent formulation is an
extended release formulation.
``(D) Selected drugs.--In the case of a part D
rebatable drug that is a selected drug (as defined in
section 1192(c)) for a price applicability period (as
defined in section 1191(b)(2))--
``(i) for plan years during such period for
which a maximum fair price (as defined in
section 1191(c)(2)) for such drug has been
determined and is applied under part E of title
XI, the rebate under subsection (b)(1)(B) shall
be waived; and
``(ii) in the case such drug is determined
(pursuant to such section 1192(c)) to no longer
be a selected drug, for each applicable year
beginning after the price applicability period
with respect to such drug, subparagraphs (A)
and (B) of paragraph (4) shall be applied as if
the term `payment amount benchmark year' were
defined under subsection (h)(3) as the last
year beginning during such price applicability
period with respect to such selected drug and
subparagraph (B) of paragraph (3) shall be
applied as if the term `benchmark period CPI-U'
were defined under subsection (h)(4) as if the
reference to `January 2016' under such
subsection were a reference to January of the
last year beginning during such price
applicability period with respect to such drug.
``(d) Rebate Deposits.--Amounts paid as rebates under subsection
(c) shall be deposited into the Medicare Prescription Drug Account in
the Federal Supplementary Medical Insurance Trust Fund established
under section 1841.
``(e) Information.--For purposes of carrying out this section, the
Secretary shall use information submitted by manufacturers under
section 1927(b)(3).
``(f) Civil Money Penalty.--In the case of a manufacturer of a part
D rebatable drug with an agreement in effect under this section who has
failed to comply with the terms of the agreement under subsection
(b)(1)(B) with respect to such drug for an applicable year, the
Secretary may impose a civil money penalty on such manufacturer in an
amount equal to 125 percent of the amount specified in subsection (c)
for such drug for such year. The provisions of section 1128A (other
than subsections (a) (with respect to amounts of penalties or
additional assessments) and (b)) shall apply to a civil money penalty
under this subsection in the same manner as such provisions apply to a
penalty or proceeding under section 1128A(a).
``(g) Judicial Review.--There shall be no judicial review of the
following:
``(1) The determination of units under this section.
``(2) The determination of whether a drug is a part D
rebatable drug under this section.
``(3) The calculation of the rebate amount under this
section.
``(h) Definitions.--In this section:
``(1) Part d rebatable drug defined.--
``(A) In general.--The term `part D rebatable drug'
means a drug or biological that would (without
application of this section) be a covered part D drug,
except such term shall, with respect to an applicable
year, not include such a drug or biological if the
average annual total cost under this part for such year
per individual who uses such a drug or biological, as
determined by the Secretary, is less than, subject to
subparagraph (B), $100, as determined by the Secretary
using the most recent data available or, if data is not
available, as estimated by the Secretary.
``(B) Increase.--The dollar amount applied under
subparagraph (A)--
``(i) for 2026, shall be the dollar amount
specified under such subparagraph for 2025,
increased by the percentage increase in the
consumer price index for all urban consumers
(United States city average) for the 12-month
period beginning with January of 2025; and
``(ii) for a subsequent year, shall be the
dollar amount specified in this subparagraph
for the previous year, increased by the
percentage increase in the consumer price index
for all urban consumers (United States city
average) for the 12-month period beginning with
January of the previous year.
Any dollar amount specified under this subparagraph
that is not a multiple of $10 shall be rounded to the
nearest multiple of $10.
``(2) Unit defined.--The term `unit' means, with respect to
a part D rebatable drug, the lowest identifiable quantity (such
as a capsule or tablet, milligram of molecules, or grams) of
the part D rebatable drug that is dispensed to individuals
under this part.
``(3) Payment amount benchmark year.--The term `payment
amount benchmark year' means the year beginning January 1,
2016.
``(4) Benchmark period cpi-u.--The term `benchmark period
CPI-U' means the consumer price index for all urban consumers
(United States city average) for January 2016.
``(5) Applicable year cpi-u.--The term `applicable year
CPI-U' means, with respect to an applicable year, the consumer
price index for all urban consumers (United States city
average) for January of such year.
``(6) Average manufacturer price.--The term `average
manufacturer price' has the meaning, with respect to a part D
rebatable drug of a manufacturer, given such term in section
1927(k)(1), with respect to a covered outpatient drug of a
manufacturer for a rebate period under section 1927.''.
(b) Conforming Amendments.--
(1) To part b asp calculation.--Section 1847A(c)(3) of the
Social Security Act (42 U.S.C. 1395w-3a(c)(3)), as amended by
section 201(c)(1), is further amended by striking ``section
1927 or section 1834(x)'' and inserting ``section 1927, section
1834(x), or section 1860D-14B''.
(2) Excluding part d drug inflation rebate from best
price.--Section 1927(c)(1)(C)(ii)(I) of the Social Security Act
(42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)), as amended by section
201(c)(2), is further amended by striking ``or section
1834(x)'' and inserting ``, section 1834(x), or section 1860D-
14B''.
(3) Coordination with medicaid rebate information
disclosure.--Section 1927(b)(3)(D)(i) of the Social Security
Act (42 U.S.C. 1396r-8(b)(3)(D)(i)), as amended by section
201(c)(3), is further amended by striking ``or section
1834(x)'' and inserting ``, section 1834(x), or section 1860D-
14B''.
SEC. 214. PROHIBITING BRANDING ON PART D BENEFIT CARDS.
(a) In General.--Section 1851(j)(2)(B) of the Social Security Act
(42 U.S.C. 1395w-21(j)(2)(B)) is amended by striking ``co-branded
network provider'' and inserting ``co-branded, co-owned, or affiliated
network provider, pharmacy, or pharmacy benefit manager''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to plan years beginning on or after January 1, 2025.
SEC. 215. REQUIRING PRESCRIPTION DRUG PLANS AND MA-PD PLANS TO REPORT
POTENTIAL FRAUD, WASTE, AND ABUSE TO THE SECRETARY OF
HHS.
Section 1860D-4 of the Social Security Act (42 U.S.C. 1395w-104),
as amended by section 225, is amended by adding at the end the
following new subsection:
``(p) Reporting Potential Fraud, Waste, and Abuse.--Beginning
January 1, 2024, the PDP sponsor of a prescription drug plan shall
report to the Secretary, as specified by the Secretary--
``(1) any substantiated or suspicious activities (as
defined by the Secretary) with respect to the program under
this part as it relates to fraud, waste, and abuse; and
``(2) any steps made by the PDP sponsor after identifying
such activities to take corrective actions.''.
SEC. 216. ESTABLISHMENT OF PHARMACY QUALITY MEASURES UNDER MEDICARE
PART D.
Section 1860D-4(c) of the Social Security Act (42 U.S.C. 1395w-
104(c)), as amended by section 226, is amended by adding at the end the
following new paragraph:
``(8) Application of pharmacy quality measures.--
``(A) In general.--A PDP sponsor that implements
incentive payments to a pharmacy or price concessions
paid by a pharmacy based on quality measures shall use
measures established or approved by the Secretary under
subparagraph (B) with respect to payment for covered
part D drugs dispensed by such pharmacy.
``(B) Standard pharmacy quality measures.--The
Secretary shall establish or approve standard quality
measures from a consensus and evidence-based
organization for payments described in subparagraph
(A). Such measures shall focus on patient health
outcomes and be based on proven criteria measuring
pharmacy performance.
``(C) Effective date.--The requirement under
subparagraph (A) shall take effect for plan years
beginning on or after January 1, 2026, or such earlier
date specified by the Secretary if the Secretary
determines there are sufficient measures established or
approved under subparagraph (B) to meet the requirement
under subparagraph (A).''.
SEC. 217. ADDITION OF NEW MEASURES BASED ON ACCESS TO BIOSIMILAR
BIOLOGICAL PRODUCTS TO THE 5-STAR RATING SYSTEM UNDER
MEDICARE ADVANTAGE.
(a) In General.--Section 1853(o)(4) of the Social Security Act (42
U.S.C. 1395w-23(o)(4)) is amended by adding at the end the following
new subparagraph:
``(E) Addition of new measures based on access to
biosimilar biological products.--
``(i) In general.--For 2028 and subsequent
years, the Secretary shall add a new set of
measures to the 5-star rating system based on
access to biosimilar biological products
covered under part B and, in the case of MA-PD
plans, such products that are covered part D
drugs. Such measures shall assess the impact a
plan's benefit structure may have on enrollees'
utilization of or ability to access biosimilar
biological products, including in comparison to
the reference biological product, and shall
include measures, as applicable, with respect
to the following:
``(I) Coverage.--Assessing whether
a biosimilar biological product is on
the plan formulary in lieu of or in
addition to the reference biological
product.
``(II) Preferencing.--Assessing
tier placement or cost-sharing for a
biosimilar biological product relative
to the reference biological product.
``(III) Utilization management
tools.--Assessing whether and how
utilization management tools are used
with respect to a biosimilar biological
product relative to the reference
biological product.
``(IV) Utilization.--Assessing the
percentage of enrollees prescribed the
biosimilar biological product and the
percentage of enrollees prescribed the
reference biological product when the
reference biological product is also on
the plan formulary.
``(ii) Definitions.--In this subparagraph,
the terms `biosimilar biological product' and
`reference biological product' have the meaning
given those terms in section 1847A(c)(6).
``(iii) Protecting patient interests.--In
developing such measures, the Secretary shall
ensure that each measure developed to address
coverage, preferencing, or utilization
management is constructed such that patients
retain access to appropriate therapeutic
options without undue administrative burden.''.
(b) Clarification Regarding Application to Prescription Drug
Plans.--To the extent the Secretary of Health and Human Services
applies the 5-star rating system under section 1853(o)(4) of the Social
Security Act (42 U.S.C. 1395w-23(o)(4)), or a similar system, to
prescription drug plans under part D of title XVIII of such Act, the
provisions of subparagraph (E) of such section, as added by subsection
(a) of this section, shall apply under the system with respect to such
plans in the same manner as such provisions apply to the 5-star rating
system under such section 1853(o)(4).
SEC. 218. HHS STUDY AND REPORT ON THE INFLUENCE OF PHARMACEUTICAL
MANUFACTURER THIRD-PARTY REIMBURSEMENT HUBS ON HEALTH
CARE PROVIDERS WHO PRESCRIBE THEIR DRUGS AND BIOLOGICALS.
(a) Study.--
(1) In general.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall
conduct a study on the influence of pharmaceutical manufacturer
distribution models that provide third-party reimbursement hub
services on health care providers who prescribe the
manufacturer's drugs and biologicals, including for Medicare
part D beneficiaries.
(2) Requirements.--The study under paragraph (1) shall
include an analysis of the following:
(A) The influence of pharmaceutical manufacturer
distribution models that provide third-party
reimbursement hub services to health care providers who
prescribe the manufacturer's drugs and biologicals,
including--
(i) the operations of pharmaceutical
manufacturer distribution models that provide
reimbursement hub services for health care
providers who prescribe the manufacturer's
products;
(ii) Federal laws affecting these
pharmaceutical manufacturer distribution
models; and
(iii) whether hub services could improperly
incentivize health care providers to deem a
drug or biological as medically necessary under
section 423.578 of title 42, Code of Federal
Regulations.
(B) Other areas determined appropriate by the
Secretary.
(b) Report.--Not later than January 1, 2024, the Secretary shall
submit to Congress a report on the study conducted under subsection
(a), together with recommendations for such legislation and
administrative action as the Secretary determines appropriate.
(c) Consultation.--In conducting the study under subsection (a) and
preparing the report under subsection (b), the Secretary shall consult
with the Attorney General.
SEC. 219. ESTABLISHING A MONTHLY CAP ON BENEFICIARY INCURRED COSTS FOR
INSULIN PRODUCTS AND SUPPLIES UNDER A PRESCRIPTION DRUG
PLAN OR MA-PD PLAN.
(a) In General.--Section 1860D-2 of the Social Security Act (42
U.S.C. 1395w-102), as amended by sections 121 and 133, is further
amended--
(1) in subsection (b)(2)--
(A) in subparagraph (A), by striking ``and (E)''
and inserting ``(E), and (F)'';
(B) in subparagraph (B), by striking ``and (D)''
and inserting ``(D), and (F)''; and
(C) by adding at the end the following new
subparagraph:
``(F) Cap on incurred costs for insulin products
and supplies.--
``(i) In general.--The coverage provides
benefits, for costs above the annual deductible
specified in paragraph (1) and up to the annual
out-of-pocket threshold described in paragraph
(4)(B) and with respect to a month (beginning
with January of 2022), with cost sharing that
is equal to $0 for a specified covered part D
drug (as defined in clause (iii)) furnished to
an individual who has incurred costs during
such month with respect to specified covered
part D drugs equal to--
``(I) for months occurring in 2022,
$50; or
``(II) for months occurring in a
subsequent year, the amount applicable
under this clause for months occurring
in the year preceding such subsequent
year, increased by the annual
percentage increase specified in
paragraph (6) for such subsequent year
and rounded to the nearest dollar.
``(ii) Application.--The provisions of
clauses (i) through (iii) of paragraph (4)(C)
shall apply with respect to the determination
of the incurred costs for specified covered
part D drugs for purposes of clause (i) in the
same manner as such provisions apply with
respect to the determination of incurred costs
for covered part D drugs for purposes of
paragraph (4)(A).
``(iii) Specified covered part d drug.--For
purposes of this subparagraph, the term
`specified covered part D drug' means a covered
part D drug that is--
``(I) insulin; or
``(II) a medical supply associated
with the injection of insulin (as
defined in regulations of the Secretary
promulgated pursuant to subsection
(e)(1)(B)).''; and
(2) in subsection (c), by adding at the end the following
new paragraph:
``(5) Same protection with respect to expenditures for
insulin and certain medical supplies.--The coverage provides
the coverage required under subsection (b)(2)(F).''.
(b) Conforming Amendments.--
(1) In general.--Section 1860D-14(a)(1)(D) of the Social
Security Act (42 U.S.C. 1395w-114(a)(1)(D)), as amended by
section 121, is further amended--
(A) in clause (ii), by striking ``section 1860D-
2(b)(2)'' and inserting ``section 1860D-2(b)(2)(A)'';
and
(B) in clause (iii), by striking ``section 1860D-
2(b)(2)'' and inserting ``section 1860D-2(b)(2)(A)''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply with respect to plan year 2022 and each subsequent
plan year.
SEC. 220. MONTHLY OUT-OF-POCKET COST SHARING MAXIMUM FOR ENROLLEES WHO
INCUR A SIGNIFICANT PORTION OF COSTS TOWARDS ANNUAL OUT-
OF-POCKET THRESHOLD.
(a) In General.--Section 1860D-2(b) of the Social Security Act (42
U.S.C. 1395w-102(b)), as amended by section 2, is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), by striking ``and (D)''
and inserting ``, (D), and (E)''; and
(B) by adding at the end the following new
subparagraph:
``(E) Monthly out-of-pocket cost sharing maximum
for enrollees who incur a significant portion of costs
towards annual out-of-pocket threshold.--
``(i) Establishment of process.--
``(I) In general.--For plan years
beginning on or after January 1, 2024,
the Secretary shall, through notice and
comment rulemaking, establish a process
under which each PDP sponsor offering a
prescription drug plan and each MA
organization offering an MA-PD plan
shall each plan year automatically
enroll applicable enrollees in the
option to have their monthly out-of-
pocket cost-sharing under the plan
capped and paid in monthly installments
in accordance with this subparagraph
(referred to in this subparagraph as
the `monthly out-of-pocket cost sharing
maximum option').
``(II) Opt out.--The process
established under this clause shall
permit an applicable enrollee, prior to
the beginning of the plan year or at
any point during the plan year, to opt
out of enrollment in the monthly out-
of-pocket cost sharing maximum option
and pay any out-of-pocket cost-sharing
otherwise applicable for any covered
part D drug in full at the time of the
dispensing of such drug (or at the time
of such opt out in the case of costs
incurred during such enrollment that
have not yet been billed to the
enrollee).
``(ii) Definitions.--
``(I) Applicable enrollee.--In this
subparagraph, the term `applicable
enrollee' means any enrollee in a
prescription drug plan or an MA-PD
plan, including an enrollee who is a
subsidy eligible individual (as defined
in paragraph (3) of section 1860D-
14(a)), who incurs or is likely to
incur a significant percentage of costs
for covered part D drugs.
``(II) Significant percentage.--For
purposes of subclause (I), the
Secretary shall, in the rulemaking
under clause (i), define the term
`significant percentage' with respect
to a percentage of the annual out-of-
pocket threshold specified in paragraph
(4)(B) but in no case shall the
`significant percentage' be less than
50 percent or more than 100 percent of
the annual out-of-pocket threshold.
``(iii) Determination of monthly out-of-
pocket cost sharing maximum.--For each month in
a plan year in which an applicable enrollee is
enrolled in the monthly out-of-pocket cost
sharing maximum option, the PDP sponsor or MA
organization shall determine a monthly out-of-
pocket cost sharing maximum (as defined in
clause (v)) for such enrollee.
``(iv) Beneficiary monthly payments.--With
respect to an applicable enrollee who is
enrolled in the monthly out-of-pocket cost
sharing maximum option, for each month
described in clause (iii), the PDP sponsor or
MA organization shall bill such enrollee an
amount (not to exceed the monthly out-of-pocket
cost sharing maximum) for the out-of-pocket
costs of such enrollee in such month.
``(v) Monthly out-of-pocket cost sharing
maximum defined.--In this subparagraph, the
term `monthly out-of-pocket cost sharing
maximum' means, with respect to an enrollee--
``(I) for the first month in which
this subparagraph applies, an amount
determined by calculating--
``(aa) the annual out-of-
pocket threshold specified in
paragraph (4)(B) minus the
incurred costs of the enrollee
as described in paragraph
(4)(C); divided by
``(bb) the number of months
remaining in the plan year; and
``(II) for a subsequent month, an
amount determined by calculating--
``(aa) the sum of any
remaining out-of-pocket costs
owed by the enrollee from a
previous month that have not
yet been billed to the enrollee
and any additional costs
incurred by the enrollee;
divided by
``(bb) the number of months
remaining in the plan year.
``(vi) Additional requirements.--The
following requirements shall apply with respect
to the monthly out-of-pocket cost sharing
maximum option under this subparagraph:
``(I) Secretarial
responsibilities.--The Secretary shall
provide information to part D eligible
individuals on the monthly out-of-
pocket cost sharing maximum option
through educational materials,
including through the notices provided
under section 1804(a).
``(II) PDP sponsor and ma
organization responsibilities.--Each
PDP sponsor offering a prescription
drug plan or MA organization offering
an MA-PD plan--
``(aa) shall not limit the
application of the monthly out-
of-pocket cost sharing maximum
option to certain covered part
D drugs;
``(bb) shall, prior to the
plan year, notify prospective
enrollees of such option,
including the availability of
the opt out under clause
(i)(II);
``(cc) shall include
information on such option in
enrollee educational materials,
including the availability of
the opt out under clause
(i)(II);
``(dd) shall have in place
a mechanism to notify a
pharmacy during the plan year
when an enrollee incurs out-of-
pocket costs with respect to
covered part D drugs that make
it likely the enrollee is an
applicable enrollee;
``(ee) shall provide that a
pharmacy, after receiving a
notification described in item
(dd) with respect to an
enrollee, informs the enrollee
of such notification;
``(ff) shall ensure that
the application of this
subparagraph has no effect on
the amount paid to pharmacies
(or the timing of such
payments) with respect to
covered part D drugs dispensed
to the enrollee; and
``(gg) shall have in place
a financial reconciliation
process to correct inaccuracies
in payments made by an enrollee
under this subparagraph with
respect to covered part D drugs
during the plan year.
``(III) Failure to pay amount
billed under monthly out-of-pocket cost
sharing maximum option.--If an
applicable enrollee fails to pay the
amount billed for a month as required
under this subparagraph, the applicable
enrollee's enrollment in the monthly
out-of-pocket cost sharing maximum
option shall be terminated and the
enrollee shall pay the cost-sharing
otherwise applicable for any covered
part D drugs subsequently dispensed to
the enrollee up to the annual out-of-
pocket threshold specified in paragraph
(4)(B).
``(IV) Clarification regarding past
due amounts.--Nothing in this
subparagraph shall be construed as
prohibiting a PDP sponsor or an MA
organization from billing an enrollee
for an amount owed under this
subparagraph.
``(V) Treatment of unsettled
balances.--Any unsettled balances with
respect to amounts owed under this
subparagraph shall be treated as plan
losses and the Secretary shall not be
liable for any such balances outside of
those assumed as losses estimated in
plan bids.''; and
(2) in paragraph (4)--
(A) in subparagraph (C), by striking ``and subject
to subparagraph (F)'' and inserting ``and subject to
subparagraphs (F) and (G)''; and
(B) by adding at the end the following new
subparagraph:
``(G) Inclusion of costs paid under monthly out-of-
pocket cost sharing maximum option.--In applying
subparagraph (A), with respect to an applicable
enrollee who is enrolled in the monthly out-of-pocket
cost sharing maximum option described in clause (i)(I)
of paragraph (2)(E), costs shall be treated as incurred
if such costs are paid by a PDP sponsor or an MA
organization under the process provided under such
paragraph.''.
(b) Application to Alternative Prescription Drug Coverage.--Section
1860D-2(c) of the Social Security Act (42 U.S.C. 1395w-102(c)) is
amended by adding at the end the following new paragraph:
``(4) Same monthly out-of-pocket cost sharing maximum.--For
plan years beginning on or after January 1, 2024, the monthly
out-of-pocket cost sharing maximum for applicable enrollees
under the process provided under subsection (b)(2)(E) shall
apply to such coverage.''.
Subtitle C--Miscellaneous
SEC. 221. DRUG MANUFACTURER PRICE TRANSPARENCY.
Title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is
amended by inserting after section 1128K the following new section:
``SEC. 1128L. DRUG MANUFACTURER PRICE TRANSPARENCY.
``(a) In General.--
``(1) Determinations.--Beginning July 1, 2025, the
Secretary shall make determinations as to whether a drug is an
applicable drug as described in subsection (b).
``(2) Required justification.--If the Secretary determines
under paragraph (1) that an applicable drug is described in
subsection (b), the manufacturer of the applicable drug shall
submit to the Secretary the justification described in
subsection (c) in accordance with the timing described in
subsection (d).
``(b) Applicable Drug Described.--
``(1) In general.--An applicable drug is described in this
subsection if it meets any of the following at the time of the
determination:
``(A) Large increase.--The drug (per dose)--
``(i) has a wholesale acquisition cost of
at least $10; and
``(ii) had an increase in the wholesale
acquisition cost, with respect to
determinations made--
``(I) during 2023, of at least 100
percent since the date of the enactment
of this section;
``(II) during 2024, of at least 100
percent in the preceding 12 months or
of at least 150 percent in the
preceding 24 months;
``(III) during 2025, of at least
100 percent in the preceding 12 months
or of at least 200 percent in the
preceding 36 months;
``(IV) during 2026, of at least 100
percent in the preceding 12 months or
of at least 250 percent in the
preceding 48 months; or
``(V) on or after January 1, 2027,
of at least 100 percent in the
preceding 12 months or of at least 300
percent in the preceding 60 months.
``(B) High spending with increase.--The drug--
``(i) was in the top 50th percentile of net
spending under title XVIII or XIX (to the
extent data is available) during any 12-month
period in the preceding 60 months; and
``(ii) per dose, had an increase in the
wholesale acquisition cost, with respect to
determinations made--
``(I) during 2023, of at least 15
percent since the date of the enactment
of this section;
``(II) during 2024, of at least 15
percent in the preceding 12 months or
of at least 20 percent in the preceding
24 months;
``(III) during 2025, of at least 15
percent in the preceding 12 months or
of at least 30 percent in the preceding
36 months;
``(IV) during 2026, of at least 15
percent in the preceding 12 months or
of at least 40 percent in the preceding
48 months; or
``(V) on or after January 1, 2027,
of at least 15 percent in the preceding
12 months or of at least 50 percent in
the preceding 60 months.
``(C) High launch price for new drugs.--In the case
of a drug that is marketed for the first time on or
after January 1, 2023, and for which the manufacturer
has established the first wholesale acquisition cost on
or after such date, such wholesale acquisition cost for
a year's supply or a course of treatment for such drug
exceeds the gross spending for covered part D drugs at
which the annual out-of-pocket threshold under section
1860D-2(b)(4)(B) would be met for the year.
``(2) Special rules.--
``(A) Authority of secretary to substitute
percentages within a de minimis range.--For purposes of
applying paragraph (1), the Secretary may substitute
for each percentage described in subparagraph (A) or
(B) of such paragraph (other than the percentile
described subparagraph (B)(i) of such paragraph) a
percentage within a de minimis range specified by the
Secretary below the percentage so described.
``(B) Drugs with high launch prices annually report
until a therapeutic equivalent is available.--In the
case of a drug that the Secretary determines is an
applicable drug described in subparagraph (C) of
paragraph (1), such drug shall remain described in such
subparagraph (C) (and the manufacturer of such drug
shall annually report the justification under
subsection (c)(2)) until the Secretary determines that
there is a therapeutic equivalent (as defined in
section 314.3 of title 21, Code of Federal Regulations,
or any successor regulation) for such drug.
``(3) Dose.--For purposes of applying paragraph (1), the
Secretary shall establish a definition of the term `dose'.
``(c) Justification Described.--
``(1) Increase in wac.--In the case of a drug that the
Secretary determines is an applicable drug described in
subparagraph (A) or (B) of subsection (b)(1), the justification
described in this subsection is all relevant, truthful, and
nonmisleading information and supporting documentation
necessary to justify the increase in the wholesale acquisition
cost of the applicable drug of the manufacturer, as determined
appropriate by the Secretary and which may include the
following:
``(A) The individual factors that have contributed
to the increase in the wholesale acquisition cost.
``(B) An explanation of the role of each factor in
contributing to such increase.
``(C) Total expenditures of the manufacturer on--
``(i) materials and manufacturing for such
drug;
``(ii) acquiring patents and licensing for
each drug of the manufacturer; and
``(iii) costs to purchase or acquire the
drug from another company, if applicable.
``(D) The percentage of total expenditures of the
manufacturer on research and development for such drug
that was derived from Federal funds.
``(E) The total expenditures of the manufacturer on
research and development for such drug.
``(F) The total revenue and net profit generated
from the applicable drug for each calendar year since
drug approval.
``(G) The total expenditures of the manufacturer
that are associated with marketing and advertising for
the applicable drug.
``(H) Additional information specific to the
manufacturer of the applicable drug, such as--
``(i) the total revenue and net profit of
the manufacturer for the period of such
increase, as determined by the Secretary;
``(ii) metrics used to determine executive
compensation; and
``(iii) any additional information related
to drug pricing decisions of the manufacturer,
such as total expenditures on--
``(I) drug research and
development; or
``(II) clinical trials on drugs
that failed to receive approval by the
Food and Drug Administration.
``(2) High launch price.--In the case of a drug that the
Secretary determines is an applicable drug described in
subparagraph (C) of subsection (b)(1), the justification
described in this subsection is all relevant, truthful, and
nonmisleading information and supporting documentation
necessary to justify the wholesale acquisition cost of the
applicable drug of the manufacturer, as determined by the
Secretary and which may include the items described in
subparagraph (C) through (H) of paragraph (1).
``(d) Timing.--
``(1) Notification.--Not later than 60 days after the date
on which the Secretary makes the determination that a drug is
an applicable drug under subsection (b), the Secretary shall
notify the manufacturer of the applicable drug of such
determination.
``(2) Submission of justification.--Not later than 180 days
after the date on which a manufacturer receives a notification
under paragraph (1), the manufacturer shall submit to the
Secretary the justification required under subsection (a).
``(3) Posting on internet website.--
``(A) In general.--Subject to subparagraph (B), not
later than 30 days after receiving the justification
under paragraph (2), the Secretary shall post on the
Internet website of the Centers for Medicare & Medicaid
Services the justification, together with a summary of
such justification that is written and formatted using
language that is easily understandable by beneficiaries
under titles XVIII and XIX.
``(B) Exclusion of proprietary information.--The
Secretary shall exclude proprietary information, such
as trade secrets and intellectual property, submitted
by the manufacturer in the justification under
paragraph (2) from the posting described in
subparagraph (A).
``(e) Exception to Requirement for Submission.--In the case of a
drug that the Secretary determines is an applicable drug described in
subparagraph (A) or (B) of subsection (b)(1), the requirement to submit
a justification under subsection (a) shall not apply where the
manufacturer, after receiving the notification under subsection (d)(1)
with respect to the applicable drug of the manufacturer, reduces the
wholesale acquisition cost of a drug so that it no longer is described
in such subparagraph (A) or (B) for at least a 4-month period, as
determined by the Secretary.
``(f) Penalties.--
``(1) Failure to submit timely justification.--If the
Secretary determines that a manufacturer has failed to submit a
justification as required under this section, including in
accordance with the timing and form required, with respect to
an applicable drug, the Secretary shall apply a civil monetary
penalty in an amount of $10,000 for each day the manufacturer
has failed to submit such justification as so required.
``(2) False information.--Any manufacturer that submits a
justification under this section and knowingly provides false
information in such justification is subject to a civil
monetary penalty in an amount not to exceed $100,000 for each
item of false information.
``(3) Application of procedures.--The provisions of section
1128A (other than subsections (a) and (b)) shall apply to a
civil monetary penalty under this subsection in the same manner
as such provisions apply to a penalty or proceeding under
section 1128A(a). Civil monetary penalties imposed under this
subsection are in addition to other penalties as may be
prescribed by law.
``(g) Definitions.--In this section:
``(1) Drug.--The term `drug' means a drug, as defined in
section 201(g) of the Federal Food, Drug, and Cosmetic Act,
that is intended for human use and subject to section 503(b)(1)
of such Act, including a product licensed under section 351 of
the Public Health Service Act.
``(2) Manufacturer.--The term `manufacturer' has the
meaning given that term in section 1847A(c)(6)(A).
``(3) Wholesale acquisition cost.--The term `wholesale
acquisition cost' has the meaning given that term in section
1847A(c)(6)(B).''.
SEC. 222. STRENGTHENING AND EXPANDING PHARMACY BENEFIT MANAGERS
TRANSPARENCY REQUIREMENTS.
Section 1150A of the Social Security Act (42 U.S.C. 1320b-23), as
amended by section 223, is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``or'' at then
end;
(B) in paragraph (2), by striking the comma at the
end and inserting ``; or''; and
(C) by inserting after paragraph (2) the following
new paragraph:
``(3) a State plan under title XIX, including a managed
care entity (as defined in section 1932(a)(1)(B)),'';
(2) in subsection (b)--
(A) in paragraph (2)--
(i) by striking ``(excluding bona fide''
and all that follows through ``patient
education programs))''; and
(ii) by striking ``aggregate amount of''
and inserting ``aggregate amount and percentage
of'';
(B) in paragraph (3), by striking ``aggregate
amount of'' and inserting ``aggregate amount and
percentage (defined as a share of gross drug costs)
of''; and
(C) by adding at the end the following new
paragraph:
``(4) The aggregate amount of bona fide service fees (which
include distribution service fees, inventory management fees,
product stocking allowances, and fees associated with
administrative services agreements and patient care programs
(such as medication compliance programs and patient education
programs)) the PBM received from--
``(A) PDP sponsors;
``(B) qualified health benefit plans;
``(C) managed care entities (as defined in section
1932(a)(1)(b)); and
``(D) drug manufacturers.'';
(3) in subsection (c), by adding at the end the following
new paragraphs:
``(5) To States to carry out their administration and
oversight of the State plan under title XIX.
``(6) To the Federal Trade Commission to carry out section
5(a) of the Federal Trade Commission Act (15 U.S.C. 45a) and
any other relevant consumer protection or antitrust authorities
enforced by such Commission, including reviewing proposed
mergers in the prescription drug sector.
``(7) To assist the Department of Justice to carry out its
antitrust authorities, including reviewing proposed mergers in
the prescription drug sector.''; and
(4) by adding at the end the following new subsection:
``(f) Annual OIG Evaluation and Report.--
``(1) Analysis.--The Inspector General of the Department of
Health and Human Services shall conduct an annual evaluation of
the information provided to the Secretary under this section.
Such evaluation shall include an analysis of--
``(A) PBM rebates;
``(B) administrative fees;
``(C) the difference between what plans pay PBMs
and what PBMs pay pharmacies;
``(D) generic dispensing rates; and
``(E) other areas determined appropriate by the
Inspector General.
``(2) Report.--Not later than July 1, 2023, and annually
thereafter, the Inspector General of the Department of Health
and Human Services shall submit to Congress a report containing
the results of the evaluation conducted under paragraph (1),
together with recommendations for such legislation and
administrative action as the Inspector General determines
appropriate. Such report shall not disclose the identity of a
specific PBM, plan, or price charged for a drug.''.
SEC. 223. PRESCRIPTION DRUG PRICING DASHBOARDS.
Part A of title XI of the Social Security Act is amended by adding
at the end the following new section:
``SEC. 1150C. PRESCRIPTION DRUG PRICING DASHBOARDS.
``(a) In General.--Beginning not later than January 1, 2023, the
Secretary shall establish, and annually update, internet website-based
dashboards, through which beneficiaries, clinicians, researchers, and
the public can review information on spending for, and utilization of,
prescription drugs and biologicals (and related supplies and mechanisms
of delivery) covered under each of parts B and D of title XVIII and
under a State program under title XIX, including information on trends
of such spending and utilization over time.
``(b) Medicare Part B Drug and Biological Dashboard.--
``(1) In general.--The dashboard established under
subsection (a) for part B of title XVIII shall provide the
information described in paragraph (2).
``(2) Information described.--The information described in
this paragraph is the following information with respect to
drug or biologicals covered under such part B:
``(A) The brand name and, if applicable, the
generic names of the drug or biological.
``(B) Consumer-friendly information on the uses and
clinical indications of the drug or biological.
``(C) The manufacturer or labeler of the drug or
biological.
``(D) To the extent feasible, the following
information:
``(i) Average total spending per dosage
unit of the drug or biological in the most
recent 2 calendar years for which data is
available.
``(ii) The percentage change in average
spending on the drug or biological per dosage
unit between the most recent calendar year for
which data is available and--
``(I) the preceding calendar year;
and
``(II) the preceding 5 and 10
calendar years.
``(iii) The annual growth rate in average
spending per dosage unit of the drug or
biological in the most recent 5 or 10 calendar
years for which data is available.
``(iv) Total spending for the drug or
biological for the most recent calendar year
for which data is available.
``(v) The number of beneficiaries receiving
the drug or biological in the most recent
calendar year for which data is available.
``(vi) Average spending on the drug per
beneficiary for the most recent calendar year
for which data is available.
``(E) The average sales price of the drug or
biological (as determined under section 1847A) for the
most recent quarter.
``(F) Consumer-friendly information about the
coinsurance amount for the drug or biological for
beneficiaries for the most recent quarter. Such
information shall not include coinsurance amounts for
qualified medicare beneficiaries (as defined in section
1905(p)(1)).
``(G) For the most recent calendar year for which
data is available--
``(i) the 15 drugs and biologicals with the
highest total spending under such part; and
``(ii) any drug or biological for which the
average annual per beneficiary spending exceeds
the gross spending for covered part D drugs at
which the annual out-of-pocket threshold under
section 1860D-2(b)(4)(B) would be met for the
year.
``(H) Other information (not otherwise prohibited
in law from being disclosed) that the Secretary
determines would provide beneficiaries, clinicians,
researchers, and the public with helpful information
about drug and biological spending and utilization
(including trends of such spending and utilization).
``(c) Medicare Covered Part D Drug Dashboard.--
``(1) In general.--The dashboard established under
subsection (a) for part D of title XVIII shall provide the
information described in paragraph (2).
``(2) Information described.--The information described in
this paragraph is the following information with respect to
covered part D drugs under such part D:
``(A) The information described in subparagraphs
(A) through (D) of subsection (b)(2).
``(B) Information on average annual beneficiary
out-of-pocket costs below and above the annual out-of-
pocket threshold under section 1860D-2(b)(4)(B) for the
current plan year. Such information shall not include
out-of-pocket costs for subsidy eligible individuals
under section 1860D-14.
``(C) Information on how to access resources as
described in sections 1860D-1(c) and 1851(d).
``(D) For the most recent calendar year for which
data is available--
``(i) the 15 covered part D drugs with the
highest total spending under such part; and
``(ii) any covered part D drug for which
the average annual per beneficiary spending
exceeds the gross spending for covered part D
drugs at which the annual out-of-pocket
threshold under section 1860D-2(b)(4)(B) would
be met for the year.
``(E) Other information (not otherwise prohibited
in law from being disclosed) that the Secretary
determines would provide beneficiaries, clinicians,
researchers, and the public with helpful information
about covered part D drug spending and utilization
(including trends of such spending and utilization).
``(d) Medicaid Covered Outpatient Drug Dashboard.--
``(1) In general.--The dashboard established under
subsection (a) for title XIX shall provide the information
described in paragraph (2).
``(2) Information described.--The information described in
this paragraph is the following information with respect to
covered outpatient drugs under such title:
``(A) The information described in subparagraphs
(A) through (D) of subsection (b)(2).
``(B) For the most recent calendar year for which
data is available, the 15 covered outpatient drugs with
the highest total spending under such title.
``(C) Other information (not otherwise prohibited
in law from being disclosed) that the Secretary
determines would provide beneficiaries, clinicians,
researchers, and the public with helpful information
about covered outpatient drug spending and utilization
(including trends of such spending and utilization).
``(e) Data Files.--The Secretary shall make available the
underlying data for each dashboard established under subsection (a) in
a machine-readable format.''.
SEC. 224. IMPROVING COORDINATION BETWEEN THE FOOD AND DRUG
ADMINISTRATION AND THE CENTERS FOR MEDICARE & MEDICAID
SERVICES.
(a) In General.--
(1) Public meeting.--
(A) In general.--Not later than 12 months after the
date of the enactment of this Act, the Secretary of
Health and Human Services (referred to in this section
as the ``Secretary'') shall convene a public meeting
for the purposes of discussing and providing input on
improvements to coordination between the Food and Drug
Administration and the Centers for Medicare & Medicaid
Services in preparing for the availability of novel
medical products described in subsection (c) on the
market in the United States.
(B) Attendees.--The public meeting shall include--
(i) representatives of relevant Federal
agencies, including representatives from each
of the medical product centers within the Food
and Drug Administration and representatives
from the coding, coverage, and payment offices
within the Centers for Medicare & Medicaid
Services;
(ii) stakeholders with expertise in the
research and development of novel medical
products, including manufacturers of such
products;
(iii) representatives of commercial health
insurance payers;
(iv) stakeholders with expertise in the
administration and use of novel medical
products, including physicians; and
(v) stakeholders representing patients and
with expertise in the utilization of patient
experience data in medical product development.
(C) Topics.--The public meeting shall include a
discussion of--
(i) the status of the drug and medical
device development pipeline related to the
availability of novel medical products;
(ii) the anticipated expertise necessary to
review the safety and effectiveness of such
products at the Food and Drug Administration
and current gaps in such expertise, if any;
(iii) the expertise necessary to make
coding, coverage, and payment decisions with
respect to such products within the Centers for
Medicare & Medicaid Services, and current gaps
in such expertise, if any;
(iv) trends in the differences in the data
necessary to determine the safety and
effectiveness of a novel medical product and
the data necessary to determine whether a novel
medical product meets the reasonable and
necessary requirements for coverage and payment
under title XVIII of the Social Security Act
pursuant to section 1862(a)(1)(A) of such Act
(42 U.S.C. 1395y(a)(1)(A));
(v) the availability of information for
sponsors of such novel medical products to meet
each of those requirements; and
(vi) the coordination of information
related to significant clinical improvement
over existing therapies for patients between
the Food and Drug Administration and the
Centers for Medicare & Medicaid Services with
respect to novel medical products.
(D) Trade secrets and confidential information.--No
information discussed as a part of the public meeting
under this paragraph shall be construed as authorizing
the Secretary to disclose any information that is a
trade secret or confidential information subject to
section 552(b)(4) of title 5, United States Code.
(2) Improving transparency of criteria for medicare
coverage.--
(A) Draft guidance.--Not later than 18 months after
the public meeting under paragraph (1), the Secretary
shall update the final guidance titled ``National
Coverage Determinations with Data Collection as a
Condition of Coverage: Coverage with Evidence
Development'' to address any opportunities to improve
the availability and coordination of information as
described in clauses (iv) through (vi) of paragraph
(1)(C).
(B) Final guidance.--Not later than 12 months after
issuing draft guidance under subparagraph (A), the
Secretary shall finalize the updated guidance to
address any such opportunities.
(b) Report on Coding, Coverage, and Payment Processes Under
Medicare for Novel Medical Products.--Not later than 12 months after
the date of the enactment of this Act, the Secretary shall publish a
report on the Internet website of the Department of Health and Human
Services regarding processes under the Medicare program under title
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) with respect
to the coding, coverage, and payment of novel medical products
described in subsection (c). Such report shall include the following:
(1) A description of challenges in the coding, coverage,
and payment processes under the Medicare program for novel
medical products.
(2) Recommendations to--
(A) incorporate patient experience data (such as
the impact of a disease or condition on the lives of
patients and patient treatment preferences) into the
coverage and payment processes within the Centers for
Medicare & Medicaid Services;
(B) decrease the length of time to make national
and local coverage determinations under the Medicare
program (as those terms are defined in subparagraph (A)
and (B), respectively, of section 1862(l)(6) of the
Social Security Act (42 U.S.C. 1395y(l)(6)));
(C) streamline the coverage process under the
Medicare program and incorporate input from relevant
stakeholders into such coverage determinations; and
(D) identify potential mechanisms to incorporate
novel payment designs similar to those in development
in commercial insurance plans and State plans under
title XIX of such Act (42 U.S.C. 1396 et seq.) into the
Medicare program.
(c) Novel Medical Products Described.--For purposes of this
section, a novel medical product described in this subsection is a
medical product, including a drug, biological (including gene and cell
therapy), or medical device, that has been designated as a breakthrough
therapy under section 506(a) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 356(a)), a breakthrough device under section 515B of
such Act (21 U.S.C. 360e-3), or a regenerative advanced therapy under
section 506(g) of such Act (21 U.S.C. 356(g)).
SEC. 225. PATIENT CONSULTATION IN MEDICARE NATIONAL AND LOCAL COVERAGE
DETERMINATIONS IN ORDER TO MITIGATE BARRIERS TO INCLUSION
OF SUCH PERSPECTIVES.
Section 1862(l) of the Social Security Act (42 U.S.C. 1395y(l)) is
amended by adding at the end the following new paragraph:
``(7) Patient consultation in national and local coverage
determinations.--The Secretary may consult with patients and
organizations representing patients in making national and
local coverage determinations.''.
SEC. 226. GAO STUDY ON INCREASES TO MEDICARE AND MEDICAID SPENDING DUE
TO COPAYMENT COUPONS AND OTHER PATIENT ASSISTANCE
PROGRAMS.
(a) Study.--The Comptroller General of the United States shall
conduct a study on the impact of copayment coupons and other patient
assistance programs on prescription drug pricing and expenditures
within the Medicare and Medicaid programs. The study shall assess the
following:
(1) The extent to which copayment coupons and other patient
assistance programs contribute to inflated prescription drug
prices under such programs.
(2) The impact copayment coupons and other patient
assistance programs have in the Medicare Part D program
established under part D of title XVIII of the Social Security
Act (42 U.S.C. 1395w-101 et seq.) on utilization of higher-cost
brand drugs and lower utilization of generic drugs in that
program.
(3) The extent to which manufacturers report or obtain tax
benefits, including deductions of business expenses and
charitable contributions, for any of the following:
(A) Offering copayment coupons or other patient
assistance programs.
(B) Sponsoring manufacturer patient assistance
programs.
(C) Paying for sponsorships at outreach and
advocacy events organized by patient assistance
programs.
(4) The efficacy of oversight conducted to ensure that
independent charity patient assistance programs adhere to
guidance from the Office of the Inspector General of the
Department of Health and Human Services on avoiding waste,
fraud, and abuse.
(b) Definitions.--In this section:
(1) Independent charity patient assistance program.--The
term ``independent charity patient assistance program'' means
any organization described in section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from taxation under section
501(a) of such Code and which is not a private foundation (as
defined in section 509(a) of such Code) that offers patient
assistance.
(2) Manufacturer.--The term ``manufacturer'' has the
meaning given that term in section 1927(k)(5) of the Social
Security Act (42 U.S.C. 1396r-8(k)(5)).
(3) Manufacturer patient assistance program.--The term
``manufacturer patient assistance program'' means an
organization, including a private foundation (as so defined),
that is sponsored by, or receives funding from, a manufacturer
and that offers patient assistance. Such term does not include
an independent charity patient assistance program.
(4) Patient assistance.--The term ``patient assistance''
means assistance provided to offset the cost of drugs for
individuals. Such term includes free products, coupons,
rebates, copay or discount cards, and other means of providing
assistance to individuals related to drug costs, as determined
by the Secretary of Health and Human Services.
(c) Report.--Not later than 24 months after the date of the
enactment of this Act, the Comptroller General of the United States
shall submit to Congress a report describing the findings of the study
required under subsection (a).
SEC. 227. MEDPAC REPORT ON SHIFTING COVERAGE OF CERTAIN MEDICARE PART B
DRUGS TO MEDICARE PART D.
(a) Study.--The Medicare Payment Advisory Commission (in this
section referred to as the ``Commission'') shall conduct a study on
shifting coverage of certain drugs and biologicals for which payment is
currently made under part B of title XVIII of the Social Security Act
(42 U.S.C. 1395j et seq.) to part D of such title (42 U.S.C. 1395w-21
et seq.). Such study shall include an analysis of--
(1) differences in program structures and payment methods
for drugs and biologicals covered under such parts B and D,
including effects of such a shift on program spending,
beneficiary cost-sharing liability, and utilization management
techniques for such drugs and biologicals; and
(2) the feasibility and policy implications of shifting
coverage of drugs and biologicals for which payment is
currently made under such part B to such part D.
(b) Report.--
(1) In general.--Not later than June 30, 2024, the
Commission shall submit to Congress a report containing the
results of the study conducted under subsection (a).
(2) Contents.--The report under paragraph (1) shall include
information, and recommendations as the Commission deems
appropriate, regarding--
(A) formulary design under such part D;
(B) the ability of the benefit structure under such
part D to control total spending on drugs and
biologicals for which payment is currently made under
such part B;
(C) changes to the bid process under such part D,
if any, that may be necessary to integrate coverage of
such drugs and biologicals into such part D; and
(D) any other changes to the program that Congress
should consider in determining whether to shift
coverage of such drugs and biologicals from such part B
to such part D.
SEC. 228. TAKING STEPS TO FULFILL TREATY OBLIGATIONS TO TRIBAL
COMMUNITIES.
(a) GAO Study.--The Comptroller General shall conduct a study
regarding access to, and the cost of, prescription drugs among Indians.
The study shall include--
(1) a review of what Indian health programs pay for
prescription drugs on reservations and in urban centers
relative to other consumers;
(2) recommendations to align the value of prescription drug
discounts available under the Medicaid drug rebate program
established under section 1927 of the Social Security Act (42
U.S.C. 1396r-8) with prescription drug discounts available to
Tribal communities through the purchased/referred care program
of the Indian Health Service for physician administered drugs;
and
(3) an examination of how Tribal communities and urban
Indian organizations utilize the Medicare part D program
established under title XVIII of the Social Security Act (42
U.S.C. 1395w-101 et seq.) and recommendations to improve
enrollment among Indians in that program.
(b) Report.--Not later than 18 months after the date of the
enactment of this Act, the Comptroller General shall submit to Congress
a report containing the results of the study conducted under subsection
(a), together with recommendations for such legislation and
administrative action as the Comptroller General determines
appropriate.
(c) Definitions.--In this section:
(1) Comptroller general.--The term ``Comptroller General''
means the Comptroller General of the United States.
(2) Indian; indian health program; indian tribe.--The terms
``Indian'', ``Indian health program'', and ``Indian tribe''
have the meanings given those terms in section 4 of the Indian
Health Care Improvement Act (25 U.S.C. 1603).
TITLE III--MEDICAID
SEC. 301. MEDICAID PHARMACY AND THERAPEUTICS COMMITTEE IMPROVEMENTS.
(a) In General.--Subparagraph (A) of section 1927(d)(4) of the
Social Security Act (42 U.S.C. 1396r-8(d)(4)) is amended to read as
follows:
``(A)(i) The formulary is developed and reviewed by
a pharmacy and therapeutics committee consisting of
physicians, pharmacists, and other appropriate
individuals appointed by the Governor of the State.
``(ii) Subject to clause (vi), the State
establishes and implements a conflict of interest
policy for the pharmacy and therapeutics committee
that--
``(I) is publicly accessible;
``(II) requires all committee members to
complete, on at least an annual basis, a
disclosure of relationships, associations, and
financial dealings that may affect their
independence of judgement in committee matters;
and
``(III) contains clear processes, such as
recusal from voting or discussion, for those
members who report a conflict of interest,
along with appropriate processes to address any
instance where a member fails to report a
conflict of interest.
``(iii) The membership of the pharmacy and
therapeutics committee--
``(I) includes at least 1 actively
practicing physician and at least 1 actively
practicing pharmacist, each of whom--
``(aa) is independent and free of
conflict with respect to manufacturers
and Medicaid participating plans or
subcontractors, including pharmacy
benefit managers; and
``(bb) has expertise in the care of
1 or more Medicaid-specific populations
such as elderly or disabled
individuals, children with complex
medical needs, or low-income
individuals with chronic illnesses; and
``(II) is made publicly available.
``(iv) At the option of the State, the State's drug
use review board established under subsection (g)(3)
may serve as the pharmacy and therapeutics committee
provided the State ensures that such board meets the
requirements of clauses (ii) and (iii).
``(v) The State reviews and has final approval of
the formulary established by the pharmacy and
therapeutics committee.
``(vi) If the Secretary determines it appropriate
or necessary based on the findings and recommendations
of the Comptroller General of the United States in the
report submitted to Congress under section 303 of the
Reduced Costs and Continued Cures Act, the Secretary
shall issue guidance that States must follow for
establishing conflict of interest policies for the
pharmacy and therapeutics committee in accordance with
the requirements of clause (ii), including appropriate
standards and requirements for identifying, addressing,
and reporting on conflicts of interest.''.
(b) Application to Medicaid Managed Care Organizations.--Clause
(xiii) of section 1903(m)(2)(A) of the Social Security Act (42 U.S.C.
1396b(m)(2)(A)) is amended--
(1) by striking ``and (III)'' and inserting ``(III)'';
(2) by striking the period at the end and inserting ``, and
(IV) any formulary used by the entity for covered outpatient
drugs dispensed to individuals eligible for medical assistance
who are enrolled with the entity is developed and reviewed by a
pharmacy and therapeutics committee that meets the requirements
of clauses (ii) and (iii) of section 1927(d)(4)(A).''; and
(3) by moving the left margin 2 ems to the left.
(c) Effective Date.--The amendments made by this section shall take
effect on the date that is 1 year after the date of enactment of this
Act.
SEC. 302. IMPROVING REPORTING REQUIREMENTS AND DEVELOPING STANDARDS FOR
THE USE OF DRUG USE REVIEW BOARDS IN STATE MEDICAID
PROGRAMS.
(a) In General.--Section 1927(g)(3) of the Social Security Act (42
U.S.C. 1396r-8(g)(3)) is amended--
(1) by amending subparagraph (B) to read as follows:
``(B) Membership.--
``(i) In general.--The membership of the
DUR Board shall include health care
professionals who have recognized knowledge and
expertise in one or more of the following:
``(I) The clinically appropriate
prescribing of covered outpatient
drugs.
``(II) The clinically appropriate
dispensing and monitoring of covered
outpatient drugs.
``(III) Drug use review,
evaluation, and intervention.
``(IV) Medical quality assurance.
``(ii) Membership requirements.--The
membership of the DUR Board shall--
``(I) be made up of at least \1/3\
but no more than 51 percent members who
are licensed and actively practicing
physicians and at least \1/3\ members
who are licensed and actively
practicing pharmacists;
``(II) include at least 1 licensed
and actively practicing physician and
at least 1 licensed and actively
practicing pharmacist, each of whom--
``(aa) is independent and
free of any conflict, including
with respect to manufacturers,
medicaid managed care entities,
or pharmacy benefit managers;
and
``(bb) has expertise in the
care of 1 or more categories of
individuals who are likely to
be eligible for benefits under
this title, including elderly
or disabled individuals,
children with complex medical
needs, or low-income
individuals with chronic
illnesses; and
``(III) be made publicly available.
``(iii) Conflict of interest policy.--The
State shall establish and implement a conflict
of interest policy for the DUR Board that--
``(I) is publicly accessible;
``(II) requires all board members
to complete, on at least an annual
basis, a disclosure of relationships,
associations, and financial dealings
that may affect their independence of
judgement in board matters; and
``(III) contains clear processes,
such as recusal from voting or
discussion, for those members who
report a conflict of interest, along
with appropriate processes to address
any instance where a member fails to
report a conflict of interest.''; and
(2) by adding at the end the following new subparagraph:
``(E) DUR board membership reports.--
``(i) DUR board reports.--Each State shall
require the DUR Board to prepare and submit to
the State an annual report on the DUR Board
membership. Each such report shall include any
conflicts of interest with respect to members
of the DUR Board that the DUR Board recorded or
was aware of during the period that is the
subject of the report, and the process applied
to address such conflicts of interest, in
addition to any other information required by
the State.
``(ii) Inclusion of dur board membership
information in state reports.--Each annual
State report to the Secretary required under
subparagraph (D) shall include--
``(I) the number of individuals
serving on the State's DUR Board;
``(II) the names and professions of
the individuals serving on such DUR
Board;
``(III) any conflicts of interest
or recusals with respect to members of
such DUR Board reported by the DUR
Board or that the State was aware of
during the period that is the subject
of the report; and
``(IV) whether the State has
elected for such DUR Board to serve as
the committee responsible for
developing a State formulary under
subsection (d)(4)(A).''.
(b) Managed Care Requirements.--Section 1932(i) of the Social
Security Act (42 U.S.C. 1396u-2(i)) is amended--
(1) by striking ``section 483.3(s)(4)'' and inserting
``section 438.3(s)(4)'';
(2) by striking ``483.3(s)(5)'' and inserting
``438.3(s)(5)''; and
(3) by adding at the end the following: ``Such a managed
care entity shall not be considered to be in compliance with
the requirement of such section 438.3(s)(5) that the entity
provide a detailed description of its drug utilization review
activities unless the entity includes a description of the
prospective drug review activities described in paragraph
(2)(A) of section 1927(g) and the activities listed in
paragraph (3)(C) of section 1927(g), makes the underlying drug
utilization review data available to the State and the
Secretary, and provides such other information as deemed
appropriate by the Secretary.''.
(c) Development of National Standards for Medicaid Drug Use
Review.--The Secretary of Health and Human Services may promulgate
regulations or guidance establishing national standards for Medicaid
drug use review programs under section 1927(g) of the Social Security
Act (42 U.S.C. 1396r-8) and drug utilization review activities and
requirements under section 1932(i) of such Act (42 U.S.C. 1396u-2(i)),
for the purpose of aligning review criteria for prospective and
retrospective drug use review across all State Medicaid programs.
(d) CMS Guidance.--Not later than 18 months after the date of
enactment of this Act, the Secretary of Health and Human Services shall
issue guidance--
(1) outlining steps that States must take to come into
compliance with statutory and regulatory requirements for
prospective and retrospective drug use review under section
1927(g) of the Social Security Act (42 U.S.C. 1396r-8(g)) and
drug utilization review activities and requirements under
section 1932(i) of such Act (42 U.S.C. 1396u-2(i)) (including
with respect to requirements that were in effect before the
date of enactment of this Act); and
(2) describing the actions that the Secretary will take to
enforce such requirements.
(e) Effective Date.--The amendments made by this section shall take
effect on the date that is 1 year after the date of enactment of this
Act.
SEC. 303. GAO REPORT ON CONFLICTS OF INTEREST IN STATE MEDICAID PROGRAM
DRUG USE REVIEW BOARDS AND PHARMACY AND THERAPEUTICS
(P&T) COMMITTEES.
(a) Investigation.--The Comptroller General of the United States
shall conduct an investigation of potential or existing conflicts of
interest among members of State Medicaid program State drug use review
boards (in this section referred to as ``DUR Boards'') and pharmacy and
therapeutics committees (in this section referred to as ``P&T
Committees'').
(b) Report.--Not later than 24 months after the date of enactment
of this Act, the Comptroller General shall submit to Congress a report
on the investigation conducted under subsection (a) that includes the
following:
(1) A description outlining how DUR Boards and P&T
Committees operate in States, including details with respect
to--
(A) the structure and operation of DUR Boards and
statewide P&T Committees;
(B) States that operate separate P&T Committees for
their fee-for-service Medicaid program and their
Medicaid managed care organizations or other Medicaid
managed care arrangements (collectively referred to in
this section as ``Medicaid MCOs)''; and
(C) States that allow Medicaid MCOs to have their
own P&T Committees and the extent to which pharmacy
benefit managers administer or participate in such P&T
Committees.
(2) A description outlining the differences between DUR
Boards established in accordance with section 1927(g)(3) of the
Social Security Act (42 U.S.C. 1396r(g)(3)) and P&T Committees.
(3) A description outlining the tools P&T Committees may
use to determine Medicaid drug coverage and utilization
management policies.
(4) An analysis of whether and how States or P&T Committees
establish participation and independence requirements for DUR
Boards and P&T Committees, including with respect to entities
with connections with drug manufacturers, State Medicaid
programs, managed care organizations, and other entities or
individuals in the pharmaceutical industry.
(5) A description outlining how States, DUR Boards, or P&T
Committees define conflicts of interest.
(6) A description of how DUR Boards and P&T Committees
address conflicts of interest, including who is responsible for
implementing such policies.
(7) A description of the tools, if any, States use to
ensure that there are no conflicts of interest on DUR Boards
and P&T Committees.
(8) An analysis of the effectiveness of tools States use to
ensure that there are no conflicts of interest on DUR Boards
and P&T Committees and, if applicable, recommendations as to
how such tools could be improved.
(9) A review of strategies States may use to guard against
conflicts of interest on DUR Boards and P&T Committees and to
ensure compliance with the requirements of titles XI and XIX of
the Social Security Act (42 U.S.C. 1301 et seq., 1396 et seq.)
and access to effective, clinically appropriate, and medically
necessary drug treatments for Medicaid beneficiaries, including
recommendations for such legislative and administrative actions
as the Comptroller General determines appropriate.
SEC. 304. ENSURING THE ACCURACY OF MANUFACTURER PRICE AND DRUG PRODUCT
INFORMATION UNDER THE MEDICAID DRUG REBATE PROGRAM.
(a) Audit of Manufacturer Price and Drug Product Information.--
(1) In general.--Subparagraph (B) of section 1927(b)(3) of
the Social Security Act (42 U.S.C. 1396r-8(b)(3)) is amended to
read as follows:
``(B) Audits and surveys of manufacturer price and
drug product information.--
``(i) Audits.--The Secretary shall conduct
ongoing audits of the price and drug product
information reported by manufacturers under
subparagraph (A) for the most recently ended
rebate period to ensure the accuracy and
timeliness of such information. In conducting
such audits, the Secretary may employ
evaluations, surveys, statistical sampling,
predictive analytics, and other relevant tools
and methods.
``(ii) Verifications surveys of average
manufacturer price and manufacturer's average
sales price.--In addition to the audits
required under clause (i), the Secretary may
survey wholesalers and manufacturers (including
manufacturers that directly distribute their
covered outpatient drugs (in this subparagraph
referred to as `direct sellers')), when
necessary, to verify manufacturer prices and
manufacturer's average sales prices (including
wholesale acquisition cost) to make payment
reported under subparagraph (A).
``(iii) Penalties.--In addition to other
penalties as may be prescribed by law,
including under subparagraph (C) of this
paragraph, the Secretary may impose a civil
monetary penalty in an amount not to exceed
$185,000 on an annual basis on a wholesaler,
manufacturer, or direct seller, if the
wholesaler, manufacturer, or direct seller of a
covered outpatient drug refuses a request for
information about charges or prices by the
Secretary in connection with an audit or survey
under this subparagraph or knowingly provides
false information. The provisions of section
1128A (other than subsections (a) (with respect
to amounts of penalties or additional
assessments) and (b)) shall apply to a civil
money penalty under this clause in the same
manner as such provisions apply to a penalty or
proceeding under section 1128A(a).
``(iv) Reports.--
``(I) Report to congress.--The
Secretary shall, not later than 18
months after date of enactment of this
subparagraph, submit a report to the
Committee on Energy and Commerce of the
House of Representatives and the
Committee on Finance of the Senate
regarding additional regulatory or
statutory changes that may be required
in order to ensure accurate and timely
reporting and oversight of manufacturer
price and drug product information,
including whether changes should be
made to reasonable assumption
requirements to ensure such assumptions
are reasonable and accurate or whether
another methodology for ensuring
accurate and timely reporting of price
and drug product information should be
considered to ensure the integrity of
the drug rebate program under this
section.
``(II) Annual reports.--The
Secretary shall, on at least an annual
basis, submit a report to the Committee
on Energy and Commerce of the House of
Representatives and the Committee on
Finance of the Senate summarizing the
results of the audits and surveys
conducted under this subparagraph
during the period that is the subject
of the report.
``(III) Content.--Each report
submitted under subclause (II) shall,
with respect to the period that is the
subject of the report, include
summaries of--
``(aa) error rates in the
price, drug product, and other
relevant information supplied
by manufacturers under
subparagraph (A);
``(bb) the timeliness with
which manufacturers,
wholesalers, and direct sellers
provide information required
under subparagraph (A) or under
clause (i) or (ii) of this
subparagraph;
``(cc) the number of
manufacturers, wholesalers, and
direct sellers and drug
products audited under this
subparagraph;
``(dd) the types of price
and drug product information
reviewed under the audits
conducted under this
subparagraph;
``(ee) the tools and
methodologies employed in such
audits;
``(ff) the findings of such
audits, including which
manufacturers, if any, were
penalized under this
subparagraph; and
``(gg) such other relevant
information as the Secretary
shall deem appropriate.
``(IV) Protection of information.--
In preparing a report required under
subclause (II), the Secretary shall
redact such proprietary information as
the Secretary determines appropriate to
prevent disclosure of, and to
safeguard, such information.
``(v) Appropriations.--Out of any funds in
the Treasury not otherwise appropriated, there
is appropriated to the Secretary $2,000,000 for
fiscal year 2023 and each fiscal year
thereafter to carry out this subparagraph.''.
(2) Effective date.--The amendments made by this subsection
shall take effect on the first day of the first fiscal quarter
that begins after the date of enactment of this Act.
(b) Increased Penalties for Noncompliance With Reporting
Requirements.--
(1) Increased penalty for late reporting of information.--
Section 1927(b)(3)(C)(i) of the Social Security Act (42 U.S.C.
1396r-8(b)(3)(C)(i)) is amended by striking ``increased by
$10,000 for each day in which such information has not been
provided and such amount shall be paid to the Treasury'' and
inserting ``, for each covered outpatient drug with respect to
which such information is not provided, $50,000 for the first
day that such information is not provided on a timely basis and
$19,000 for each subsequent day that such information is not
provided''.
(2) Increased penalty for knowingly reporting false
information.--Section 1927(b)(3)(C)(ii) of the Social Security
Act (42 U.S.C. 1396r-8(b)(3)(C)(ii)) is amended by striking
``$100,000'' and inserting ``$500,000''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the first day of the first fiscal quarter
that begins after the date of enactment of this Act.
SEC. 305. T-MSIS DRUG DATA ANALYTICS REPORTS.
(a) In General.--Not later than May 1 of each calendar year
beginning with calendar year 2024, the Secretary of Health and Human
Services (in this section referred to as the ``Secretary'') shall
publish on the Internet website of the Centers for Medicare & Medicaid
Services that is accessible to the public a report of the most recently
available data on provider prescribing patterns under the Medicaid
program.
(b) Content of Report.--
(1) Required content.--Each report required under
subsection (a) for a calendar year shall include the following
information with respect to each State (and, to the extent
available, with respect to Puerto Rico, the United States
Virgin Islands, Guam, the Northern Mariana Islands, and
American Samoa):
(A) A comparison of covered outpatient drug (as
defined in section 1927(k)(2) of the Social Security
Act (42 U.S.C. 1396r-8(k)(2))) prescribing patterns
under the State Medicaid plan or waiver of such plan
(including drugs prescribed on a fee-for-service basis
and drugs prescribed under managed care arrangements
under such plan or waiver)--
(i) across all forms or models of
reimbursement used under the plan or waiver;
(ii) within specialties and subspecialties,
as defined by the Secretary;
(iii) by episodes of care for--
(I) each chronic disease category,
as defined by the Secretary, that is
represented in the 10 conditions that
accounted for the greatest share of
total spending under the plan or waiver
during the year that is the subject of
the report;
(II) procedural groupings; and
(III) rare disease diagnosis codes;
(iv) by patient demographic
characteristics, including race (to the extent
that the Secretary determines that there is
sufficient data available with respect to such
characteristic in a majority of States),
gender, and age;
(v) by patient high-utilizer or risk
status; and
(vi) by high and low resource settings by
facility and place of service categories, as
determined by the Secretary.
(B) In the case of medical assistance for covered
outpatient drugs (as so defined) provided under a State
Medicaid plan or waiver of such plan in a managed care
setting, an analysis of the differences in managed care
prescribing patterns when a covered outpatient drug is
prescribed in a managed care setting as compared to
when the drug is prescribed in a fee-for-service
setting.
(2) Additional content.--A report required under subsection
(a) for a calendar year may include State-specific information
about prescription utilization management tools under State
Medicaid plans or waivers of such plans, including--
(A) a description of prescription utilization
management tools under State programs to provide long-
term services and supports under a State Medicaid plan
or a waiver of such plan;
(B) a comparison of prescription utilization
management tools applicable to populations covered
under a State Medicaid plan waiver under section 1115
of the Social Security Act (42 U.S.C. 1315) and the
models applicable to populations that are not covered
under the waiver;
(C) a comparison of the prescription utilization
management tools employed by different Medicaid managed
care organizations, pharmacy benefit managers, and
related entities within the State;
(D) a comparison of the prescription utilization
management tools applicable to each enrollment category
under a State Medicaid plan or waiver; and
(E) a comparison of the prescription utilization
management tools applicable under the State Medicaid
plan or waiver by patient high-utilizer or risk status.
(3) Additional analysis.--To the extent practicable, the
Secretary shall include in each report published under
subsection (a)--
(A) analyses of national, State, and local patterns
of Medicaid population-based prescribing behaviors; and
(B) recommendations for administrative or
legislative action to improve the effectiveness of, and
reduce costs for, covered outpatient drugs under
Medicaid while ensuring timely beneficiary access to
medically necessary covered outpatient drugs.
(c) Use of T-MSIS Data.--Each report required under subsection (a)
shall--
(1) be prepared using data and definitions from the
Transformed Medicaid Statistical Information System (``T-
MSIS'') data set (or a successor data set) that is not more
than 24 months old on the date that the report is published;
and
(2) as appropriate, include a description with respect to
each State of the quality and completeness of the data, as well
as any necessary caveats describing the limitations of the data
reported to the Secretary by the State that are sufficient to
communicate the appropriate uses for the information.
(d) Preparation of Report.--Each report required under subsection
(a) shall be prepared by the Administrator for the Centers for Medicare
& Medicaid Services.
(e) Appropriation.--For fiscal year 2023 and each fiscal year
thereafter, there is appropriated to the Secretary $2,000,000 to carry
out this section.
SEC. 306. RISK-SHARING VALUE-BASED PAYMENT AGREEMENTS FOR COVERED
OUTPATIENT DRUGS UNDER MEDICAID.
(a) In General.--Section 1927 of the Social Security Act (42 U.S.C.
1396r-8) is amended by adding at the end the following new subsection:
``(l) State Option To Pay for Covered Outpatient Drugs Through
Risk-Sharing Value-Based Agreements.--
``(1) In general.--Beginning January 1, 2025, a State shall
have the option to pay (whether on a fee-for-service or managed
care basis) for covered outpatient drugs that are potentially
curative treatments intended for one-time use that are
administered to individuals under this title by entering into a
risk-sharing value-based payment agreement with the
manufacturer of the drug in accordance with the requirements of
this subsection.
``(2) Secretarial approval.--
``(A) In general.--A State shall submit a request
to the Secretary to enter into a risk-sharing value
based payment agreement, and the Secretary shall not
approve a proposed risk-sharing value-based payment
agreement between a State and a manufacturer for
payment for a covered outpatient drug of the
manufacturer unless the following requirements are met:
``(i) Manufacturer is party to rebate
agreement and in compliance with
requirements.--The manufacturer has a rebate
agreement in effect as required under
subsections (a) and (b) of this section and is
in compliance with all applicable requirements
under this title.
``(ii) No increase to projected net federal
spending.--
``(I) In general.--The Chief
Actuary certifies that the projected
payments for each covered outpatient
drug under such proposed agreement
would not result in greater estimated
Federal spending under this title than
the net Federal spending that would
result in the absence of the agreement.
``(II) Net federal spending
defined.--For purposes of this
subsection, the term `net Federal
spending' means the amount of Federal
payments the Chief Actuary estimates
would be made under this title for
administering a covered outpatient drug
to an individual eligible for medical
assistance under a State plan or a
waiver of such plan, reduced by the
amount of all rebates the Chief Actuary
estimates would be paid with respect to
the administering of such drug,
including all rebates under this title
and any supplemental or other
additional rebates, in the absence of
such an agreement.
``(III) Information.--The Chief
Actuary shall make the certifications
required under this clause based on the
most recently available and reliable
drug pricing and product information.
The State and manufacturer shall
provide the Secretary and the Chief
Actuary with all necessary information
required to make the estimates needed
for such certifications.
``(iii) Launch and list price
justifications.--The manufacturer submits all
relevant information and supporting
documentation necessary for pricing decisions
as deemed appropriate by the Secretary, which
shall be truthful and non-misleading, including
manufacturer information and supporting
documentation for launch price or list price
increases, and any applicable justification
required under section 1128L.
``(iv) Confidentiality of information;
penalties.--The provisions of subparagraphs (C)
and (D) of subsection (b)(3) shall apply to a
manufacturer that fails to submit the
information and documentation required under
clauses (ii) and (iii) on a timely basis, or
that knowingly provides false or misleading
information, in the same manner as such
provisions apply to a manufacturer with a
rebate agreement under this section.
``(B) Consideration of state request for
approval.--
``(i) In general.--The Secretary shall
treat a State request for approval of a risk-
sharing value-based payment agreement in the
same manner that the Secretary treats a State
plan amendment, and subpart B of part 430 of
title 42, Code of Federal Regulations,
including, subject to clause (ii), the timing
requirements of section 430.16 of such title
(as in effect on the date of enactment of this
subsection), shall apply to a request for
approval of a risk-sharing value-based payment
agreement in the same manner as such subpart
applies to a State plan amendment.
``(ii) Timing.--The Secretary shall consult
with the Commissioner of Food and Drugs as
required under subparagraph (C) and make a
determination on whether to approve a request
from a State for approval of a proposed risk-
sharing value-based payment agreement (or
request additional information necessary to
allow the Secretary to make a determination
with respect to such request for approval)
within the time period, to the extent
practicable, specified in section 430.16 of
title 42, Code of Federal Regulations (as in
effect on the date of enactment of this
subsection), but in no case shall the Secretary
take more than 180 days after the receipt of
such request for approval or response to such
request for additional information to make such
a determination (or request additional
information).
``(C) Consultation with the commissioner of food
and drugs.--In considering whether to approve a risk-
sharing value-based payment agreement, the Secretary,
to the extent necessary, shall consult with the
Commissioner of Food and Drugs to determine whether the
relevant clinical parameters specified in such
agreement are appropriate.
``(3) Installment-based payment structure.--
``(A) In general.--A risk-sharing value-based
payment agreement shall provide for a payment structure
under which, for every installment year of the
agreement (subject to subparagraph (B)), the State
shall pay the total installment year amount in equal
installments to be paid at regular intervals over a
period of time that shall be specified in the
agreement.
``(B) Requirements for installment payments.--
``(i) Timing of first payment.--The State
shall make the first of the installment
payments described in subparagraph (A) for an
installment year not later than 30 days after
the end of such year.
``(ii) Length of installment period.--The
period of time over which the State shall make
the installment payments described in
subparagraph (A) for an installment year shall
not be longer than 5 years.
``(iii) Nonpayment or reduced payment of
installments following a failure to meet
clinical parameter.--If, prior to the payment
date (as specified in the agreement) of any
installment payment described in subparagraph
(A) or any other alternative date or time frame
(as otherwise specified in the agreement), the
covered outpatient drug which is subject to the
agreement fails to meet a relevant clinical
parameter of the agreement, the agreement shall
provide that--
``(I) the installment payment shall
not be made; or
``(II) the installment payment
shall be reduced by a percentage
specified in the agreement that is
based on the outcome achieved by the
drug relative to the relevant clinical
parameter.
``(4) Notice of intent.--
``(A) In general.--Subject to subparagraph (B), a
manufacturer of a covered outpatient drug shall not be
eligible to enter into a risk-sharing value-based
payment agreement under this subsection with respect to
such drug unless the manufacturer notifies the
Secretary that the manufacturer is interested in
entering into such an agreement with respect to such
drug. The decision to submit and timing of a request to
enter into a proposed risk-sharing value-based payment
agreement shall remain solely within the discretion of
the State and shall only be effective upon Secretarial
approval as required under this subsection.
``(B) Treatment of subsequently approved drugs.--
``(i) In general.--In the case of a
manufacturer of a covered outpatient drug
approved under section 505 of the Federal Food,
Drug, and Cosmetic Act or licensed under
section 351 of the Public Health Service Act
after the date of enactment of this subsection,
not more than 90 days after meeting with the
Food and Drug Administration following phase II
clinical trials for such drug (or, in the case
of a drug described in clause (ii), not later
than March 31, 2025), the manufacturer must
notify the Secretary of the manufacturer's
intent to enter into a risk-sharing value-based
payment agreement under this subsection with
respect to such drug. If no such meeting has
occurred, the Secretary may use discretion as
to whether a potentially curative treatment
intended for one-time use may qualify for a
risk-sharing value-based payment agreement
under this section. A manufacturer notification
of interest shall not have any influence on a
decision for approval by the Food and Drug
Administration.
``(ii) Application to certain subsequently
approved drugs.--A drug described in this
clause is a covered outpatient drug of a
manufacturer--
``(I) that is approved under
section 505 of the Federal Food, Drug,
and Cosmetic Act or licensed under
section 351 of the Public Health
Service Act after the date of enactment
of this subsection; and
``(II) with respect to which, as of
January 1, 2025, more than 90 days have
passed after the manufacturer's meeting
with the Food and Drug Administration
following phase II clinical trials for
such drug.
``(iii) Parallel approval.--The Secretary,
in coordination with the Administrator of the
Centers for Medicare & Medicaid Services and
the Commissioner of Food and Drugs, shall, to
the extent practicable, approve a State's
request to enter into a proposed risk-sharing
value-based payment agreement that otherwise
meets the requirements of this subsection at
the time that such a drug is approved by the
Food and Drug Administration to help provide
that no State that wishes to enter into such an
agreement is required to pay for the drug in
full at one time if the State is seeking to pay
over a period of time as outlined in the
proposed agreement.
``(iv) Rule of construction.--Nothing in
this paragraph shall be applied or construed to
modify or affect the timeframes or factors
involved in the Secretary's determination of
whether to approve or license a drug under
section 505 of the Federal Food, Drug, and
Cosmetic Act or section 351 of the Public
Health Service Act.
``(5) Special payment rules.--
``(A) In general.--Except as otherwise provided in
this paragraph, with respect to an individual who is
administered a unit of a covered outpatient drug that
is purchased under a State plan by a State Medicaid
agency under a risk-sharing value-based payment
agreement in an installment year, the State shall
remain liable to the manufacturer of such drug for
payment for such unit without regard to whether the
individual remains enrolled in the State plan under
this title (or a waiver of such plan) for each
installment year for which the State is to make
installment payments for covered outpatient drugs
purchased under the agreement in such year.
``(B) Death.--In the case of an individual
described in subparagraph (A) who dies during the
period described in such subparagraph, the State plan
shall not be liable for any remaining payment for the
unit of the covered outpatient drug administered to the
individual which is owed under the agreement described
in such subparagraph.
``(C) Withdrawal of approval.--In the case of a
covered outpatient drug that is the subject of a risk-
sharing value-based agreement between a State and a
manufacturer under this subsection, including a drug
approved in accordance with section 506(c) of the
Federal Food, Drug, and Cosmetic Act, and such drug is
the subject of an application that has been withdrawn
by the Secretary, the State plan shall not be liable
for any remaining payment that is owed under the
agreement.
``(D) Alternative arrangement under agreement.--
Subject to approval by the Secretary, the terms of a
proposed risk-sharing value-based payment agreement
submitted for approval by a State may provide that
subparagraph (A) shall not apply.
``(E) Guidance.--Not later than January 1, 2025,
the Secretary shall issue guidance to States
establishing a process for States to notify the
Secretary when an individual who is administered a unit
of a covered outpatient drug that is purchased by a
State plan under a risk-sharing value-based payment
agreement ceases to be enrolled under the State plan
under this title (or a waiver of such plan) or dies
before the end of the installment period applicable to
such unit under the agreement.
``(6) Treatment of payments under risk-sharing value-based
agreements for purposes of average manufacturer price; best
price.--The Secretary shall treat any payments made to the
manufacturer of a covered outpatient drug under a risk-sharing
value-based payment agreement under this subsection during a
rebate period in the same manner that the Secretary treats
payments made under a State supplemental rebate agreement under
sections 447.504(c)(19) and 447.505(c)(7) of title 42, Code of
Federal Regulations (or any successor regulations) for purposes
of determining average manufacturer price and best price under
this section with respect to the covered outpatient drug and a
rebate period and for purposes of offsets required under
subsection (b)(1)(B).
``(7) Assessments and report to congress.--
``(A) Assessments.--
``(i) In general.--Not later than 180 days
after the end of each assessment period of any
risk-sharing value-based payment agreement for
a State approved under this subsection, the
Secretary shall conduct an evaluation of such
agreement which shall include an evaluation by
the Chief Actuary to determine whether program
spending under the risk-sharing value-based
payment agreement aligned with the projections
for the agreement made under paragraph
(2)(A)(ii), including an assessment of whether
actual Federal spending under this title under
the agreement was less or more than net Federal
spending would have been in the absence of the
agreement.
``(ii) Assessment period.--For purposes of
clause (i)--
``(I) the first assessment period
for a risk-sharing value-based payment
agreement shall be the period of time
over which payments are scheduled to be
made under the agreement for the first
10 individuals who are administered
covered outpatient drugs under the
agreement except that such period shall
not exceed the 5-year period after the
date on which the Secretary approves
the agreement; and
``(II) each subsequent assessment
period for a risk-sharing value-based
payment agreement shall be the 5-year
period following the end of the
previous assessment period.
``(B) Results of assessments.--
``(i) Termination option.--If the Secretary
determines as a result of the assessment by the
Chief Actuary under subparagraph (A) that the
actual Federal spending under this title for
any covered outpatient drug that was the
subject of the State's risk-sharing value-based
payment agreement was greater than the net
Federal spending that would have resulted in
the absence of the agreement, the Secretary may
terminate approval of such agreement and shall
immediately conduct an assessment under this
paragraph of any other ongoing risk-sharing
value-based payment agreement to which the same
manufacturer is a party.
``(ii) Repayment required.--
``(I) In general.--If the Secretary
determines as a result of the
assessment by the Chief Actuary under
subparagraph (A) that the Federal
spending under the risk-sharing value-
based agreement for a covered
outpatient drug that was subject to
such agreement was greater than the net
Federal spending that would have
resulted in the absence of the
agreement, the manufacturer shall repay
the difference to the State and Federal
governments in a timely manner as
determined by the Secretary.
``(II) Termination for failure to
pay.--The failure of a manufacturer to
make repayments required under
subclause (I) in a timely manner shall
result in immediate termination of all
risk-sharing value-based agreements to
which the manufacturer is a party.
``(III) Additional penalties.--In
the case of a manufacturer that fails
to make repayments required under
subclause (I), the Secretary may treat
such manufacturer in the same manner as
a manufacturer that fails to pay
required rebates under this section,
and the Secretary may--
``(aa) suspend or terminate
the manufacturer's rebate
agreement under this section;
and
``(bb) pursue any other
remedy that would be available
if the manufacturer had failed
to pay required rebates under
this section.
``(C) Report to congress.--Not later than 5 years
after the first risk-sharing value-based payment
agreement is approved under this subsection, the
Secretary shall submit to Congress and make available
to the public a report that includes--
``(i) an assessment of the impact of risk-
sharing value-based payment agreements on
access for individuals who are eligible for
benefits under a State plan or waiver under
this title to medically necessary covered
outpatient drugs and related treatments;
``(ii) an analysis of the impact of such
agreements on overall State and Federal
spending under this title;
``(iii) an assessment of the impact of such
agreements on drug prices, including launch
price and price increases; and
``(iv) such recommendations to Congress as
the Secretary deems appropriate.
``(8) Guidance and regulations.--
``(A) In general.--Not later than January 1, 2025,
the Secretary shall issue guidance to States seeking to
enter into risk-sharing value-based payment agreements
under this subsection that includes a model template
for such agreements. The Secretary may issue any
additional guidance or promulgate regulations as
necessary to implement and enforce the provisions of
this subsection.
``(B) Model agreements.--
``(i) In general.--If a State expresses an
interest in pursuing a risk-sharing value-based
payment agreement under this subsection with a
manufacturer for the purchase of a covered
outpatient drug, the Secretary may share with
such State any risk-sharing value-based
agreement between a State and the manufacturer
for the purchase of such drug that has been
approved under this subsection. While such
shared agreement may serve as a template for a
State that wishes to propose, the use of a
previously approved agreement shall not affect
the submission and approval process for
approval of a proposed risk-sharing value-based
payment agreement under this subsection,
including the requirements under paragraph
(2)(A).
``(ii) Confidentiality.--In the case of a
risk-sharing value-based payment agreement that
is disclosed to a State by the Secretary under
this subparagraph and that is only in effect
with respect to a single State, the
confidentiality of information provisions
described in subsection (b)(3)(D) shall apply
to such information.
``(C) OIG consultation.--
``(i) In general.--The Secretary shall
consult with the Office of the Inspector
General of the Department of Health and Human
Services to determine whether there are
potential program integrity concerns with
agreement approvals or templates and address
accordingly.
``(ii) OIG policy updates as necessary.--
The Inspector General of the Department of
Health and Human Services shall review and
update, as necessary, any policies or
guidelines of the Office of the Inspector
General of the Department of Human Services
(including policies related to the enforcement
of section 1128B) to accommodate the use of
risk-sharing value-based payment agreements in
accordance with this section.
``(9) Rules of construction.--
``(A) Modifications.--Nothing in this subsection or
any regulations promulgated under this subsection shall
prohibit a State from requesting a modification from
the Secretary to the terms of a risk-sharing value-
based payment agreement. A modification that is
expected to result in any increase to projected net
State or Federal spending under the agreement shall be
subject to recertification by the Chief Actuary as
described in paragraph (2)(A)(ii) before the
modification may be approved.
``(B) Rebate agreements.--Nothing in this
subsection shall be construed as requiring a State to
enter into a risk-sharing value-based payment agreement
or as limiting or superseding the ability of a State to
enter into a supplemental rebate agreement for a
covered outpatient drug.
``(C) FFP for payments under risk-sharing value-
based payment agreements.--Federal financial
participation shall be available under this title for
any payment made by a State to a manufacturer for a
covered outpatient drug under a risk-sharing value-
based payment agreement in accordance with this
subsection, except that no Federal financial
participation shall be available for any payment made
by a State to a manufacturer under such an agreement on
and after the effective date of a disapproval of such
agreement by the Secretary.
``(D) Continued application of other provisions.--
Except as expressly provided in this subsection,
nothing in this subsection or in any regulations
promulgated under this subsection shall affect the
application of any other provision of this Act.
``(10) Appropriations.--For fiscal year 2023 and each
fiscal year thereafter, there are appropriated to the Secretary
$5,000,000 for the purpose of carrying out this subsection.
``(11) Definitions.--In this subsection:
``(A) Chief actuary.--The term `Chief Actuary'
means the Chief Actuary of the Centers for Medicare &
Medicaid Services.
``(B) Installment year.--The term `installment
year' means, with respect to a risk-sharing value-based
payment agreement, a 12-month period during which a
covered outpatient drug is administered under the
agreement.
``(C) Potentially curative treatment intended for
one-time use.--The term `potentially curative treatment
intended for one-time use' means a treatment that
consists of the administration of a covered outpatient
drug that--
``(i) is a form of gene therapy for a rare
disease, as defined by the Commissioner of Food
and Drugs, designated under section 526 of the
Federal Food, Drug, and Cosmetics Act, and
approved under section 505 of such Act or
licensed under subsection (a) or (k) of section
351 of the Public Health Service Act to treat a
serious or life-threatening disease or
condition;
``(ii) if administered in accordance with
the labeling of such drug, is expected to
result in either--
``(I) the cure of such disease or
condition; or
``(II) a reduction in the symptoms
of such disease or condition to the
extent that such disease or condition
is not expected to lead to early
mortality; and
``(iii) is expected to achieve a result
described in clause (ii), which may be achieved
over an extended period of time, after not more
than 3 administrations.
``(D) Relevant clinical parameter.--The term
`relevant clinical parameter' means, with respect to a
covered outpatient drug that is the subject of a risk-
sharing value-based payment agreement--
``(i) a clinical endpoint specified in the
drug's labeling or supported by one or more of
the compendia described in section
1861(t)(2)(B)(ii)(I) that--
``(I) is able to be measured or
evaluated on an annual basis for each
year of the agreement on an independent
basis by a provider or other entity;
and
``(II) is required to be achieved
(based on observed metrics in patient
populations) under the terms of the
agreement; or
``(ii) a surrogate endpoint (as defined in
section 507(e)(9) of the Federal Food, Drug,
and Cosmetic Act), including those developed by
patient-focused drug development tools, that--
``(I) is able to be measured or
evaluated on an annual basis for each
year of the agreement on an independent
basis by a provider or other entity;
and
``(II) has been qualified by the
Food and Drug Administration.
``(E) Risk-sharing value-based payment agreement.--
The term `risk-sharing value-based payment agreement'
means an agreement between a State plan and a
manufacturer--
``(i) for the purchase of a covered
outpatient drug of the manufacturer that is a
potentially curative treatment intended for
one-time use;
``(ii) under which payment for such drug
shall be made pursuant to an installment-based
payment structure that meets the requirements
of paragraph (3);
``(iii) which conditions payment on the
achievement of at least 2 relevant clinical
parameters (as defined in subparagraph (C));
``(iv) which provides that--
``(I) the State plan will directly
reimburse the manufacturer for the
drug; or
``(II) a third party will reimburse
the manufacture in a manner approved by
the Secretary; and
``(v) is approved by the Secretary in
accordance with paragraph (2).
``(F) Total installment year amount.--The term
`total installment year amount' means, with respect to
a risk-sharing value-based payment agreement for the
purchase of a covered outpatient drug and an
installment year, an amount equal to the product of--
``(i) the unit price of the drug charged
under the agreement; and
``(ii) the number of units of such drug
administered under the agreement during such
installment year.''.
(b) Conforming Amendments.--
(1) Section 1903(i)(10)(A) of the Social Security Act (42
U.S.C. 1396b(i)(10)(A)) is amended by striking ``or unless
section 1927(a)(3) applies'' and inserting ``, section
1927(a)(3) applies with respect to such drugs, or such drugs
are the subject of a risk-sharing value-based payment agreement
under section 1927(l)''.
(2) Section 1927(b) of the Social Security Act (42 U.S.C.
1396r-8(b)) is amended--
(A) in paragraph (1)(A), by inserting ``(except for
drugs for which payment is made by a State under a
risk-sharing value-based payment agreement under
subsection (l))'' after ``under the State plan for such
period''; and
(B) in paragraph (3)--
(i) in subparagraph (C)(i), by inserting
``or subsection (l)(2)(A)'' after
``subparagraph (A)''; and
(ii) in subparagraph (D), in the matter
preceding clause (i), by inserting ``, under
subsection (l)(2)(A),'' after ``under this
paragraph''.
SEC. 307. MODIFICATION OF MAXIMUM REBATE AMOUNT UNDER MEDICAID DRUG
REBATE PROGRAM.
(a) In General.--Subparagraph (D) of section 1927(c)(2) of the
Social Security Act (42 U.S.C. 1396r-8(c)(2)) is amended to read as
follows:
``(D) Maximum rebate amount.--
``(i) In general.--Except as provided in
clause (ii), in no case shall the sum of the
amounts applied under paragraph (1)(A)(ii) and
this paragraph with respect to each dosage form
and strength of a single source drug or an
innovator multiple source drug for a rebate
period exceed--
``(I) for rebate periods beginning
after December 31, 2009, and before
September 30, 2025, 100 percent of the
average manufacturer price of the drug;
and
``(II) for rebate periods beginning
on or after October 1, 2025, 125
percent of the average manufacturer
price of the drug.
``(ii) No maximum amount for drugs if amp
increases outpace inflation.--
``(I) In general.--If the average
manufacturer price with respect to each
dosage form and strength of a single
source drug or an innovator multiple
source drug increases on or after
October 1, 2024, and such increased
average manufacturer price exceeds the
inflation-adjusted average manufacturer
price determined with respect to such
drug under subclause (II) for the
rebate period, clause (i) shall not
apply and there shall be no limitation
on the sum of the amounts applied under
paragraph (1)(A)(ii) and this paragraph
for the rebate period with respect to
each dosage form and strength of the
single source drug or innovator
multiple source drug.
``(II) Inflation-adjusted average
manufacturer price defined.--In this
clause, the term `inflation-adjusted
average manufacturer price' means, with
respect to a single source drug or an
innovator multiple source drug and a
rebate period, the average manufacturer
price for each dosage form and strength
of the drug for the calendar quarter
beginning July 1, 1990 (without regard
to whether or not the drug has been
sold or transferred to an entity,
including a division or subsidiary of
the manufacturer, after the 1\st\ day
of such quarter), increased by the
percentage by which the consumer price
index for all urban consumers (United
States city average) for the month
before the month in which the rebate
period begins exceeds such index for
September 1990.''.
(b) Treatment of Subsequently Approved Drugs.--Section
1927(c)(2)(B) of the Social Security Act (42 U.S.C. 1396r-8(c)(2)(B))
is amended by inserting ``and clause (ii)(II) of subparagraph (D)''
after ``clause (ii)(II) of subparagraph (A)''.
(c) Technical Amendments.--Section 1927(c)(3)(C)(ii)(IV) of the
Social Security Act (42 U.S.C. 1396r-9(c)(3)(C)(ii)(IV)) is amended--
(1) by striking ``subparagraph (A)'' and inserting
``paragraph (3)(A)''; and
(2) by striking ``this subparagraph'' and inserting
``paragraph (3)(C)''.
TITLE IV--ADDRESSING INTERMEDIARIES AND DRUG COMPETITION
SEC. 401. HEALTH PLAN OVERSIGHT OF PHARMACY BENEFIT MANAGER SERVICES.
Subpart II of part A of title XXVII of the Public Health Service
Act (42 U.S.C. 300gg-11 et seq.) is amended by adding at the end the
following:
``SEC. 2729A. HEALTH PLAN OVERSIGHT OF PHARMACY BENEFIT MANAGER
SERVICES.
``(a) In General.--A group health plan or health insurance issuer
offering group or individual health insurance coverage or an entity or
subsidiary providing pharmacy benefits management services shall not
enter into a contract with a drug manufacturer, distributor,
wholesaler, subcontractor, rebate aggregator, or any associated third
party that limits the disclosure of information to plan sponsors in
such a manner that prevents the plan or coverage, or an entity or
subsidiary providing pharmacy benefits management services on behalf of
a plan or coverage from making the reports described in subsection (b).
``(b) Reports to Group Plan Sponsors.--
``(1) In general.--Beginning with the first plan year that
begins after the date of enactment of this section, not less
frequently than once every six months, a health insurance
issuer offering group health insurance coverage or an entity
providing pharmacy benefits management services on behalf of a
group health plan shall submit to the self-funded group health
plan and at the request of any other group health plan a report
in accordance with this subsection and make such report
available to the plan sponsor in a machine-readable format.
Each such report shall include, with respect to the applicable
group health plan or health insurance coverage--
``(A) information collected from drug manufacturers
by such issuer or entity on the total amount of
copayment assistance dollars paid, or copayment cards
applied, that were funded by the drug manufacturer with
respect to the enrollees in such plan or coverage;
``(B) a list of each covered drug dispensed during
the reporting period, including, with respect to each
such drug during the reporting period--
``(i) the brand name, chemical entity, and
National Drug Code;
``(ii) the number of enrollees for whom the
drug was filled during the plan year, the total
number of prescription fills for the drug
(including original prescriptions and refills),
and the total number of dosage units of the
drug dispensed across the plan year, including
whether the dispensing channel was by retail,
mail order, or specialty pharmacy;
``(iii) the wholesale acquisition cost,
listed as cost per days supply and cost per
pill, or in the case of a drug in another form,
per dose;
``(iv) the total out-of-pocket spending by
enrollees on such drug, including enrollee
spending through copayments, coinsurance, and
deductibles; and
``(v) for any drug for which gross spending
of the group health plan or health insurance
coverage exceeded $10,000 during the reporting
period--
``(I) a list of all other available
drugs in the same therapeutic category
or class, including brand name drugs
and biological products and generic
drugs or biosimilar biological products
that are in the same therapeutic
category or class; and
``(II) the rationale for preferred
formulary placement of a particular
drug or drugs in that therapeutic
category or class;
``(C) a list of each therapeutic category or class
of drugs that were dispensed under the health plan or
health insurance coverage during the reporting period,
and, with respect to each such therapeutic category or
class of drugs, during the reporting period--
``(i) total gross spending by the plan,
before manufacturer rebates, fees, or other
manufacturer remuneration;
``(ii) the number of enrollees who filled a
prescription for a drug in that category or
class;
``(iii) if applicable to that category or
class, a description of the formulary tiers and
utilization mechanisms (such as prior
authorization or step therapy) employed for
drugs in that category or class;
``(iv) the total out-of-pocket spending by
enrollees, including enrollee spending through
copayments, coinsurance, and deductibles; and
``(v) for each therapeutic category or
class under which three or more drugs are
marketed and available--
``(I) the amount received, or
expected to be received, from drug
manufacturers in rebates, fees,
alternative discounts, or other
remuneration--
``(aa) to be paid by drug
manufacturers for claims
incurred during the reporting
period; or
``(bb) that is related to
utilization of drugs, in such
therapeutic category or class;
``(II) the total net spending by
the health plan or health insurance
coverage on that category or class of
drugs; and
``(III) the net price per dosage
unit or course of treatment incurred by
the health plan or health insurance
coverage and its enrollees, after
manufacturer rebates, fees, and other
remuneration for drugs dispensed within
such therapeutic category or class
during the reporting period;
``(D) total gross spending on prescription drugs by
the plan or coverage during the reporting period,
before rebates and other manufacturer fees or
remuneration;
``(E) total amount received, or expected to be
received, by the health plan or health insurance
coverage in drug manufacturer rebates, fees,
alternative discounts, and all other remuneration
received from the manufacturer or any third party
related to utilization of drug or drug spending under
that health plan or health insurance coverage during
the reporting period;
``(F) the total net spending on prescription drugs
by the health plan or health insurance coverage during
the reporting period; and
``(G) amounts paid directly or indirectly in
rebates, fees, or any other type of remuneration to
brokers, consultants, advisors, or any other individual
or firm who referred the group health plan's or health
insurance issuer's business to the pharmacy benefit
manager.
``(2) Privacy requirements.--Health insurance issuers
offering group health insurance coverage and entities providing
pharmacy benefits management services on behalf of a group
health plan shall provide information under paragraph (1) in a
manner consistent with the privacy, security, and breach
notification regulations promulgated under section 264(c) of
the Health Insurance Portability and Accountability Act of 1996
(or successor regulations), and shall restrict the use and
disclosure of such information according to such privacy
regulations.
``(3) Disclosure and redisclosure.--
``(A) Limitation to business associates.--A group
health plan receiving a report under paragraph (1) may
disclose such information only to business associates
of such plan as defined in section 160.103 of title 45,
Code of Federal Regulations (or successor regulations).
``(B) Clarification regarding public disclosure of
information.--Nothing in this section prevents a health
insurance issuer offering group health insurance
coverage or an entity providing pharmacy benefits
management services on behalf of a group health plan
from placing reasonable restrictions on the public
disclosure of the information contained in a report
described in paragraph (1).
``(c) Enforcement.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Labor and the Secretary of the Treasury, shall
enforce this section.
``(2) Failure to provide timely information.--A health
insurance issuer or an entity providing pharmacy benefit
management services that violates subsection (a) or fails to
provide information required under subsection (b) or a drug
manufacturer that fails to provide information under subsection
(b)(1)(A), in a timely manner shall be subject to a civil
monetary penalty in the amount of $10,000 for each day during
which such violation continues or such information is not
disclosed or reported.
``(3) False information.--A health insurance issuer, entity
providing pharmacy benefit management services, or drug
manufacturer that knowingly provides false information under
this section shall be subject to a civil money penalty in an
amount not to exceed $100,000 for each item of false
information. Such civil money penalty shall be in addition to
other penalties as may be prescribed by law.
``(4) Procedure.--The provisions of section 1128A of the
Social Security Act, other than subsections (a) and (b) and the
first sentence of subsection (c)(1) of such section shall apply
to civil monetary penalties under this subsection in the same
manner as such provisions apply to a penalty or proceeding
under section 1128A of the Social Security Act.
``(5) Safe harbor.--The Secretary may waive penalties under
paragraph (2), or extend the period of time for compliance with
a requirement of this section, for an entity in violation of
this section that has made a good-faith effort to comply with
this section.
``(d) Rule of Construction.--Nothing in this section shall be
construed to prohibit entities providing pharmacy benefits management
services from retaining bona fide service fees, provided that such fees
are transparent to group health plans and health insurance issuers and
are not linked directly to the price or formulary placement or position
of a drug.
``(e) Definitions.--In this section--
``(1) the term `similarly situated pharmacy' means, with
respect to a particular pharmacy, another pharmacy that is
approximately the same size (as measured by the number of
prescription drugs dispensed), and that serves patients in the
same geographical area, whether through physical locations or
mail order;
``(2) the term `wholesale acquisition cost' has the meaning
given such term in section 1847A(c)(6)(B) of the Social
Security Act; and
``(3) the term `bona fide service fees' means fees paid by
a manufacturer, customer, or client (other than a group health
plan or health insurance issuer) of an entity providing
pharmacy benefit management services, to an entity providing
pharmacy benefit management services, that represent fair
market value for bona fide, itemized services actually
performed on behalf of the manufacturer, customer, or client
would otherwise perform or contract for in the absence of the
service arrangement, without prior consent for any specific
arrangements.''.
SEC. 402. STUDY OF PHARMACEUTICAL SUPPLY CHAIN INTERMEDIARIES AND
MERGER ACTIVITY.
(a) Initial Report.--Not later than 1 year after the date of
enactment of this Act, the Commission shall submit to the appropriate
committees of Congress a report that--
(1) addresses at minimum--
(A) whether pharmacy benefit managers--
(i) charge payers a higher price than the
reimbursement rate at which the pharmacy
benefit managers reimburse competing
pharmacies;
(ii) steer patients for anticompetitive
purposes to any pharmacies, including retail,
mail-order, or any other type of pharmacy, in
which the pharmacy benefit manager has an
ownership interest;
(iii) audit or review proprietary data,
including acquisition costs, patient
information, or dispensing information, of
competing pharmacies that can be used for
anticompetitive purposes; or
(iv) use formulary designs to increase the
market share of higher cost prescription drugs
and depress the market share of lower cost
prescription drugs (each net of rebates and
discounts);
(B) how companies and payers assess the benefits,
costs, and risks of contracting with intermediaries,
including pharmacy services administrative
organizations, and whether more information about the
roles of intermediaries should be available to
consumers and payers; and
(C) whether there are any specific legal or
regulatory obstacles the Commission currently faces in
ensuring a competitive and transparent marketplace in
the pharmaceutical supply chain, including the pharmacy
benefit manager marketplace and pharmacy services
administrative organizations; and
(2) provides--
(A) observations or conclusions drawn from the
November 2017 roundtable entitled ``Understanding
Competition in Prescription Drug Markets: Entry and
Supply Chain Dynamics'', and any similar efforts;
(B) specific actions the Commission intends to take
as a result of the November 2017 roundtable, and any
similar efforts, including a detailed description of
relevant forthcoming actions, additional research or
roundtable discussions, consumer education efforts, or
enforcement actions; and
(C) policy or legislative recommendations to--
(i) improve transparency and competition in
the pharmaceutical supply chain;
(ii) prevent and deter anticompetitive
behavior in the pharmaceutical supply chain;
and
(iii) best ensure that consumers benefit
from any cost savings or efficiencies that may
result from mergers and consolidations.
(b) Interim Report.--Not later than 180 days after the date of
enactment of this Act, the Commission shall submit to the appropriate
committees of Congress an interim report on the progress of the report
required by subsection (a), along with preliminary findings and
conclusions based on information collected to that date.
(c) Definitions.--In this section:
(1) Appropriate committees of congress.--The term
``appropriate committees of Congress'' means--
(A) the Committee on Energy and Commerce of the
House of Representatives;
(B) the Committee on the Judiciary of the Senate;
and
(C) the Committee on the Judiciary of the House of
Representatives.
(2) Commission.--The term ``Commission'' means the Federal
Trade Commission.
SEC. 403. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE
TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.
Part A of title XI of the Social Security Act is amended by adding
at the end the following new section:
``SEC. 1150D. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR
PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE
TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.
``(a) In General.--The Secretary shall require that each direct-to-
consumer advertisement for a prescription drug or biological product
for which payment is available under title XVIII or XIX includes an
appropriate disclosure of truthful and non-misleading pricing
information with respect to the drug or product.
``(b) Determination by CMS.--The Secretary, acting through the
Administrator of the Centers for Medicare & Medicaid Services, shall
determine the components of the requirement under subsection (a), such
as the forms of advertising, the manner of disclosure, the price point
listing, and the price information for disclosure.''.
SEC. 404. CHANGE CONDITIONS OF FIRST GENERIC EXCLUSIVITY TO SPUR ACCESS
AND COMPETITION.
Clause (iv) of section 505(j)(5)(B) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(5)(B)) is amended--
(1) in subclause (I), after ``180 days after the date of
the first commercial marketing of the drug (including the
commercial marketing of the listed drug) by any first
applicant'' by inserting ``or by an applicant whose application
is approved pursuant to subclause (III)''; and
(2) by adding at the end the following new subclause:
``(III) Applicant approval.--An application
containing a certification described in paragraph
(2)(A)(vii)(IV) that is for a drug for which a first
applicant has submitted an application containing such
a certification can be approved notwithstanding the
eligibility of a first applicant for the 180-day
exclusivity period described in subclause (II)(aa) if
each of the following conditions is met:
``(aa) The approval of such an application
could be made effective, but for the
eligibility of a first applicant for 180-day
exclusivity under this clause.
``(bb) At least 30 months have passed since
the date of submission of an application for
the drug by at least one first applicant.
``(cc) Approval of an application for the
drug submitted by at least one first applicant
is not precluded under clause (iii).
``(dd) No application for the drug
submitted by any first applicant is approved at
the time the conditions under items (aa), (bb),
and (cc) are all met, regardless of whether
such an application is subsequently
approved.''.
SEC. 405. ENDING THE PRACTICE PREVENTING MARKET COMPETITION KNOWN AS
``PAY-FOR-DELAY''.
(a) Congressional Findings and Declaration of Purposes.--
(1) Findings.--Congress finds the following:
(A) In 1984, the Drug Price Competition and Patent
Term Restoration Act (Public Law 98-417) (referred to
in this Act as the ``1984 Act''), was enacted with the
intent of facilitating the early entry of generic drugs
while preserving incentives for innovation.
(B) Prescription drugs make up approximately 10
percent of the national health care spending.
(C) Initially, the 1984 Act was successful in
facilitating generic competition to the benefit of
consumers and health care payers, although 88 percent
of all prescriptions dispensed in the United States are
generic drugs, they account for only 28 percent of all
expenditures.
(D) Generic drugs cost substantially less than
brand name drugs, with discounts off the brand price
averaging 80 to 85 percent.
(E) Federal dollars currently account for over 40
percent of the $325,000,000,000 spent on retail
prescription drugs, and this share is expected to rise
to 47 percent by 2025.
(F)(i) In recent years, the intent of the 1984 Act
has been subverted by certain settlement agreements in
which brand name companies transfer value to their
potential generic competitors to settle claims that the
generic company is infringing the branded company's
patents.
(ii) These ``reverse payment'' settlement
agreements--
(I) allow a branded company to share its
monopoly profits with the generic company as a
way to protect the branded company's monopoly;
and
(II) have unduly delayed the marketing of
low-cost generic drugs contrary to free
competition, the interests of consumers, and
the principles underlying antitrust law.
(iii) Because of the price disparity between brand
name and generic drugs, such agreements are more
profitable for both the brand and generic manufacturers
than competition and will become increasingly common
unless prohibited.
(iv) These agreements result in consumers losing
the benefits that the 1984 Act was intended to provide.
(G) In 2010, the Biologics Price Competition and
Innovation Act (Public Law 111-148) (referred to in
this Act as the ``BPCIA''), was enacted with the intent
of facilitating the early entry of biosimilar and
interchangeable follow-on versions of branded
biological products while preserving incentives for
innovation.
(H) Biological drugs play an important role in
treating many serious illnesses, from cancers to
genetic disorders. They are also expensive,
representing more than 40 percent of all prescription
drug spending.
(I) Competition from biosimilar and interchangeable
biological products promises to lower drug costs and
increase patient access to biological medicines. But
``reverse payment'' settlement agreements also threaten
to delay the entry of biosimilar and interchangeable
biological products, which would undermine the goals of
BPCIA.
(2) Purposes.--The purposes of this Act are--
(A) to enhance competition in the pharmaceutical
market by stopping anticompetitive agreements between
brand name and generic drug and biosimilar biological
product manufacturers that limit, delay, or otherwise
prevent competition from generic drugs and biosimilar
biological products; and
(B) to support the purpose and intent of antitrust
law by prohibiting anticompetitive practices in the
pharmaceutical industry that harm consumers.
(b) Unlawful Compensation for Delay.--
(1) In general.--The Federal Trade Commission Act (15
U.S.C. 44 et seq.) is amended by inserting after section 26 (15
U.S.C. 57c-2) the following:
``SEC. 27. PRESERVING ACCESS TO AFFORDABLE GENERICS AND BIOSIMILARS.
``(a) In General.--
``(1) Enforcement proceeding.--The Commission may initiate
a proceeding to enforce the provisions of this section against
the parties to any agreement resolving or settling, on a final
or interim basis, a patent claim, in connection with the sale
of a drug product or biological product.
``(2) Presumption and violation.--
``(A) In general.--Subject to subparagraph (B), in
such a proceeding, an agreement shall be presumed to
have anticompetitive effects and shall be a violation
of this section if--
``(i) an ANDA filer or a biosimilar
biological product application filer receives
anything of value, including an exclusive
license; and
``(ii) the ANDA filer or biosimilar
biological product application filer agrees to
limit or forgo research, development,
manufacturing, marketing, or sales of the ANDA
product or biosimilar biological product, as
applicable, for any period of time.
``(B) Exception.--Subparagraph (A) shall not apply
if the parties to such agreement demonstrate by clear
and convincing evidence that--
``(i) the value described in subparagraph
(A)(i) is compensation solely for other goods
or services that the ANDA filer or biosimilar
biological product application filer has
promised to provide; or
``(ii) the procompetitive benefits of the
agreement outweigh the anticompetitive effects
of the agreement.
``(b) Limitations.--In determining whether the settling parties
have met their burden under subsection (a)(2)(B), the fact finder shall
not presume--
``(1) that entry would not have occurred until the
expiration of the relevant patent or statutory exclusivity; or
``(2) that the agreement's provision for entry of the ANDA
product or biosimilar biological product prior to the
expiration of the relevant patent or statutory exclusivity
means that the agreement is procompetitive.
``(c) Exclusions.--Nothing in this section shall prohibit a
resolution or settlement of a patent infringement claim in which the
consideration that the ANDA filer or biosimilar biological product
application filer, respectively, receives as part of the resolution or
settlement includes only one or more of the following:
``(1) The right to market and secure final approval in the
United States for the ANDA product or biosimilar biological
product at a date, whether certain or contingent, prior to the
expiration of--
``(A) any patent that is the basis for the patent
infringement claim; or
``(B) any patent right or other statutory
exclusivity that would prevent the marketing of such
ANDA product or biosimilar biological product.
``(2) A payment for reasonable litigation expenses not to
exceed--
``(A) for calendar year 2021, $7,500,000; or
``(B) for calendar year 2022 and each subsequent
calendar year, the amount determined for the preceding
calendar year adjusted to reflect the percentage
increase (if any) in the Producer Price Index for Legal
Services published by the Bureau of Labor Statistics of
the Department of Labor for the most recent calendar
year.
``(3) A covenant not to sue on any claim that the ANDA
product or biosimilar biological product infringes a United
States patent.
``(d) Enforcement.--
``(1) Enforcement.--A violation of this section shall be
treated as an unfair method of competition under section
5(a)(1).
``(2) Judicial review.--
``(A) In general.--Any party that is subject to a
final order of the Commission, issued in an
administrative adjudicative proceeding under the
authority of subsection (a)(1), may, within 30 days of
the issuance of such order, petition for review of such
order in--
``(i) the United States Court of Appeals
for the District of Columbia Circuit;
``(ii) the United States Court of Appeals
for the circuit in which the ultimate parent
entity, as defined in section 801.1(a)(3) of
title 16, Code of Federal Regulations, or any
successor thereto, of the NDA holder or
biological product license holder is
incorporated as of the date that the NDA or
biological product license application, as
applicable, is filed with the Commissioner of
Food and Drugs; or
``(iii) the United States Court of Appeals
for the circuit in which the ultimate parent
entity of the ANDA filer or biosimilar
biological product application filer is
incorporated as of the date that the ANDA or
biosimilar biological product application is
filed with the Commissioner of Food and Drugs.
``(B) Treatment of findings.--In a proceeding for
judicial review of a final order of the Commission, the
findings of the Commission as to the facts, if
supported by evidence, shall be conclusive.
``(e) Antitrust Laws.--Nothing in this section shall modify,
impair, limit, or supersede the applicability of the antitrust laws as
defined in subsection (a) of the first section of the Clayton Act (15
U.S.C. 12(a)), and of section 5 of this Act to the extent that section
5 applies to unfair methods of competition. Nothing in this section
shall modify, impair, limit, or supersede the right of an ANDA filer or
biosimilar biological product application filer to assert claims or
counterclaims against any person, under the antitrust laws or other
laws relating to unfair competition.
``(f) Penalties.--
``(1) Forfeiture.--Each party that violates or assists in
the violation of this section shall forfeit and pay to the
United States a civil penalty sufficient to deter violations of
this section, but in no event greater than 3 times the value
received by the party that is reasonably attributable to the
violation of this section. If no such value has been received
by the NDA holder, the biological product license holder, the
ANDA filer, or the biosimilar biological product application
filer, the penalty to the NDA holder, the biological product
license holder, the ANDA filer, or the biosimilar biological
product application filer shall be sufficient to deter
violations, but in no event shall be greater than 3 times the
value given to an ANDA filer or biosimilar biological product
application filer reasonably attributable to the violation of
this section. Such penalty shall accrue to the United States
and may be recovered in a civil action brought by the
Commission, in its own name by any of its attorneys designated
by it for such purpose, in a district court of the United
States against any party that violates this section. In such
actions, the United States district courts are empowered to
grant mandatory injunctions and such other and further
equitable relief as they deem appropriate.
``(2) Cease and desist.--
``(A) In general.--If the Commission has issued a
cease and desist order with respect to a party in an
administrative adjudicative proceeding under the
authority of subsection (a)(1), an action brought
pursuant to paragraph (1) may be commenced against such
party at any time before the expiration of 1 year after
such order becomes final pursuant to section 5(g).
``(B) Exception.--In an action under subparagraph
(A), the findings of the Commission as to the material
facts in the administrative adjudicative proceeding
with respect to the violation of this section by a
party shall be conclusive unless--
``(i) the terms of such cease and desist
order expressly provide that the Commission's
findings shall not be conclusive; or
``(ii) the order became final by reason of
section 5(g)(1), in which case such finding
shall be conclusive if supported by evidence.
``(3) Civil penalty.--In determining the amount of the
civil penalty described in this section, the court shall take
into account--
``(A) the nature, circumstances, extent, and
gravity of the violation;
``(B) with respect to the violator, the degree of
culpability, any history of violations, the ability to
pay, any effect on the ability to continue doing
business, profits earned by the NDA holder, the
biological product license holder, the ANDA filer, or
the biosimilar biological product application filer,
compensation received by the ANDA filer or biosimilar
biological product application filer, and the amount of
commerce affected; and
``(C) other matters that justice requires.
``(4) Remedies in addition.--Remedies provided in this
subsection are in addition to, and not in lieu of, any other
remedy provided by Federal law. Nothing in this paragraph shall
be construed to affect any authority of the Commission under
any other provision of law.
``(g) Definitions.--In this section:
``(1) Agreement.--The term `agreement' means anything that
would constitute an agreement under section 1 of the Sherman
Act (15 U.S.C. 1) or section 5 of this Act.
``(2) Agreement resolving or settling a patent infringement
claim.--The term `agreement resolving or settling a patent
infringement claim' includes any agreement that is entered into
within 30 days of the resolution or the settlement of the
claim, or any other agreement that is contingent upon, provides
a contingent condition for, or is otherwise related to the
resolution or settlement of the claim.
``(3) ANDA.--The term `ANDA' means an abbreviated new drug
application filed under section 505(j) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355(j)) or a new drug
application filed under section 505(b)(2) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355(b)(2)).
``(4) ANDA filer.--The term `ANDA filer' means a party that
owns or controls an ANDA filed with the Food and Drug
Administration or has the exclusive rights under such ANDA to
distribute the ANDA product.
``(5) ANDA product.--The term `ANDA product' means the
product to be manufactured under the ANDA that is the subject
of the patent infringement claim.
``(6) Biological product.--The term `biological product'
has the meaning given such term in section 351(i)(1) of the
Public Health Service Act (42 U.S.C. 262(i)(1)).
``(7) Biological product license application.--The term
`biological product license application' means an application
under section 351(a) of the Public Health Service Act (42
U.S.C. 262(a)).
``(8) Biological product license holder.--The term
`biological product license holder' means--
``(A) the holder of an approved biological product
license application for a biological product;
``(B) a person owning or controlling enforcement of
any patents that claim the biological product that is
the subject of such approved application; or
``(C) the predecessors, subsidiaries, divisions,
groups, and affiliates controlled by, controlling, or
under common control with any of the entities described
in subparagraphs (A) and (B) (such control to be
presumed by direct or indirect share ownership of 50
percent or greater), as well as the licensees,
licensors, successors, and assigns of each of the
entities.
``(9) Biosimilar biological product.--The term `biosimilar
biological product' means the product to be manufactured under
the biosimilar biological product application that is the
subject of the patent infringement claim.
``(10) Biosimilar biological product application.--The term
`biosimilar biological product application' means an
application under section 351(k) of the Public Health Service
Act (42 U.S.C. 262(k)) for licensure of a biological product as
biosimilar to, or interchangeable with, a reference product.
``(11) Biosimilar biological product application filer.--
The term `biosimilar biological product application filer'
means a party that owns or controls a biosimilar biological
product application filed with the Food and Drug Administration
or has the exclusive rights under such application to
distribute the biosimilar biological product.
``(12) Drug product.--The term `drug product' has the
meaning given such term in section 314.3(b) of title 21, Code
of Federal Regulations (or any successor regulation).
``(13) Market.--The term `market' means the promotion,
offering for sale, selling, or distribution of a drug product.
``(14) NDA.--The term `NDA' means a new drug application
filed under section 505(b) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(b)).
``(15) NDA holder.--The term `NDA holder' means--
``(A) the holder of an approved NDA application for
a drug product;
``(B) a person owning or controlling enforcement of
the patent listed in the Approved Drug Products With
Therapeutic Equivalence Evaluations (commonly known as
the `FDA Orange Book') in connection with the NDA; or
``(C) the predecessors, subsidiaries, divisions,
groups, and affiliates controlled by, controlling, or
under common control with any of the entities described
in subparagraphs (A) and (B) (such control to be
presumed by direct or indirect share ownership of 50
percent or greater), as well as the licensees,
licensors, successors, and assigns of each of the
entities.
``(16) Party.--The term `party' means any person,
partnership, corporation, or other legal entity.
``(17) Patent infringement.--The term `patent infringement'
means infringement of any patent or of any filed patent
application, including any extension, reissue, renewal,
division, continuation, continuation in part, reexamination,
patent term restoration, patents of addition, and extensions
thereof.
``(18) Patent infringement claim.--The term `patent
infringement claim' means any allegation made to an ANDA filer
or biosimilar biological product application filer, whether or
not included in a complaint filed with a court of law, that its
ANDA or ANDA product, or biosimilar biological product license
application or biosimilar biological product, may infringe any
patent held by, or exclusively licensed to, the NDA holder,
biological product license holder, ANDA filer, or biosimilar
biological product application filer of the drug product or
biological product, as applicable.
``(19) Statutory exclusivity.--The term `statutory
exclusivity' means those prohibitions on the approval of drug
applications under clauses (ii) through (iv) of section
505(c)(3)(E) (5- and 3-year data exclusivity), section 527
(orphan drug exclusivity), or section 505A (pediatric
exclusivity) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355(c)(3)(E), 360cc, 355a), or on the licensing of
biological product applications under section 351(k)(7) (12-
year exclusivity) or paragraph (2) or (3) of section 351(m)
(pediatric exclusivity) of the Public Health Service Act (42
U.S.C. 262) or under section 527 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360cc) (orphan drug exclusivity).''.
(2) Effective date.--Section 27 of the Federal Trade
Commission Act, as added by this section, shall apply to all
agreements described in section 27(a)(1) of that Act entered
into on or after the date of enactment of this Act.
(c) Certification of Agreements.--
(1) Notice of all agreements.--Section 1111(7) of the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (21 U.S.C. 355 note) is amended by inserting ``, or the
owner of a patent for which a claim of infringement could
reasonably be asserted against any person for making, using,
offering to sell, selling, or importing into the United States
a biological product that is the subject of a biosimilar
biological product application'' before the period at the end.
(2) Certification of agreements.--Section 1112 of the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (21 U.S.C. 355 note) is amended by adding at the end
the following:
``(d) Certification.--The Chief Executive Officer or the company
official responsible for negotiating any agreement under subsection (a)
or (b) that is required to be filed under subsection (c), within 30
days after such filing, shall execute and file with the Assistant
Attorney General and the Commission a certification as follows: `I
declare that the following is true, correct, and complete to the best
of my knowledge: The materials filed with the Federal Trade Commission
and the Department of Justice under section 1112 of subtitle B of title
XI of the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003, with respect to the agreement referenced in this
certification--
```(1) represent the complete, final, and exclusive
agreement between the parties;
```(2) include any ancillary agreements that are contingent
upon, provide a contingent condition for, or are otherwise
related to, the referenced agreement; and
```(3) include written descriptions of any oral agreements,
representations, commitments, or promises between the parties
that are responsive to subsection (a) or (b) of such section
1112 and have not been reduced to writing.'.''.
(d) Notification of Agreements.--Section 1112 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (21
U.S.C. 355 note), as amended by section 4(b), is further amended by
adding at the end the following:
``(e) Rule of Construction.--
``(1) In general.--An agreement that is required under
subsection (a) or (b) shall include agreements resolving any
outstanding disputes, including agreements resolving or
settling a Patent Trial and Appeal Board proceeding.
``(2) Definition.--For purposes of subparagraph (A), the
term `Patent Trial and Appeal Board proceeding' means a
proceeding conducted by the Patent Trial and Appeal Board of
the United States Patent and Trademark Office, including an
inter partes review instituted under chapter 31 of title 35,
United States Code, a post-grant review instituted under
chapter 32 of that title (including a proceeding instituted
pursuant to the transitional program for covered business
method patents, as described in section 18 of the Leahy-Smith
America Invents Act (35 U.S.C. 321 note)), and a derivation
proceeding instituted under section 135 of that title.''.
(e) Forfeiture of 180-Day Exclusivity Period.--Section
505(j)(5)(D)(i)(V) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355(j)(5)(D)(i)(V)) is amended by inserting ``section 27 of the
Federal Trade Commission Act or'' after ``that the agreement has
violated''.
(f) Commission Litigation Authority.--Section 16(a)(2) of the
Federal Trade Commission Act (15 U.S.C. 56(a)(2)) is amended--
(1) in subparagraph (D), by striking ``or'' after the
semicolon;
(2) in subparagraph (E), by inserting ``or'' after the
semicolon; and
(3) inserting after subparagraph (E) the following:
``(F) under section 27,''.
(g) Report on Additional Exclusion.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Federal Trade Commission shall
submit to the Committee on the Judiciary of the Senate and the
Committee on the Judiciary of the House of Representatives a
recommendation, and the Commission's basis for such
recommendation, regarding a potential amendment to include in
section 27(c) of the Federal Trade Commission Act (as added by
section 3 of this Act) an additional exclusion for
consideration granted by an NDA holder to a ANDA filer or by a
biological product license holder to a biosimilar biological
product application filer as part of the resolution or
settlement, a release, waiver, or limitation of a claim for
damages or other monetary relief.
(2) Definitions.--In this section, the terms ``ANDA
filer'', ``biological product license holder'', ``biosimilar
biological product application filer'', and ``NDA holder'' have
the meanings given such terms in section 27(g) of the Federal
Trade Commission Act (as added by section 3 of this Act).
(h) Statute of Limitations.--The Federal Trade Commission shall
commence any enforcement proceeding described in section 27 of the
Federal Trade Commission Act, as added by section 3, except for an
action described in section 27(f)(2) of the Federal Trade Commission
Act, not later than 6 years after the date on which the parties to the
agreement file the certification under section 1112(d) of the Medicare
Prescription Drug Improvement and Modernization Act of 2003 (21 U.S.C.
355 note).
(i) Severability.--If any provision of this Act, an amendment made
by this Act, or the application of such provision or amendment to any
person or circumstance is held to be unconstitutional, the remainder of
this Act, the amendments made by this Act, and the application of the
provisions of such Act or amendments to any person or circumstance
shall not be affected.
SEC. 406. EMPOWERING THE FTC TO PREVENT ``PRODUCT HOPPING''.
(a) In General.--The Federal Trade Commission Act (15 U.S.C. 41 et
seq.) is amended by inserting after section 26 (15 U.S.C. 57c-2) the
following:
``SEC. 27. PRODUCT HOPPING.
``(a) Definitions.--In this section:
``(1) Abbreviated new drug application.--The term
`abbreviated new drug application' means an application under
subsection (b)(2) or (j) of section 505 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355).
``(2) Biosimilar biological product.--The term `biosimilar
biological product' means a biological product licensed under
section 351(k) of the Public Health Service Act (42 U.S.C.
262(k)).
``(3) Biosimilar biological product license application.--
The term `biosimilar biological product license application'
means an application submitted under section 351(k) of the
Public Health Service Act (42 U.S.C. 262(k)).
``(4) Follow-on product.--The term `follow-on product'--
``(A) means a drug approved through an application
or supplement to an application submitted under section
505(b) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355(b)) or a biological product licensed through
an application or supplement to an application
submitted under section 351(a) of the Public Health
Service Act (42 U.S.C. 262(a)) for a change,
modification, or reformulation to the same
manufacturer's previously approved drug or biological
product that treats the same medical condition; and
``(B) excludes such an application or supplement to
an application for a change, modification, or
reformulation of a drug or biological product that is
requested by the Secretary or necessary to comply with
law, including sections 505A and 505B of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355a, 355c).
``(5) Generic drug.--The term `generic drug' means a drug
approved under an application submitted under subsection (b)(2)
or (j) of section 505 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355).
``(6) Listed drug.--The term `listed drug' means a drug
listed under section 505(j)(7) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(7)).
``(7) Manufacturer.--The term `manufacturer' means the
holder, licensee, or assignee of--
``(A) an approved application for a drug under
section 505(c) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355(c)); or
``(B) a biological product license under section
351(a) of the Public Health Service Act (42 U.S.C.
262(a)).
``(8) Reference product.--The term `reference product' has
the meaning given the term in section 351(i) of the Public
Health Service Act (42 U.S.C. 262(i)).
``(9) Ultimate parent entity.--The term `ultimate parent
entity' has the meaning given the term in section 801.1 of
title 16, Code of Federal Regulations, or any successor
regulation.
``(b) Prohibition on Product Hopping.--
``(1) Prima facie.--Except as provided in paragraph (2), a
manufacturer of a reference product or listed drug shall be
considered to have engaged in an unfair method of competition
in or affecting commerce in violation of section 5(a) if the
Commission demonstrates by a preponderance of the evidence in a
proceeding initiated by the Commission under subsection
(c)(1)(A), or in a suit brought under subparagraph (B) or (C)
of subsection (c)(1), that, during the period beginning on the
date on which the manufacturer of the reference product or
listed drug first receives notice that an applicant has
submitted to the Commissioner of Food and Drugs an abbreviated
new drug application or biosimilar biological product license
application and ending on the date that is 180 days after the
date on which that generic drug or biosimilar biological
product is first marketed, the manufacturer engaged in either
of the following actions:
``(A) The manufacturer engaged in a hard switch,
which shall be established by demonstrating that the
manufacturer engaged in either of the following
actions:
``(i) Upon the request of the manufacturer
of the listed drug or reference product, the
Commissioner of Food and Drugs withdrew the
approval of the application for the listed drug
or reference product or placed the listed drug
or reference product on the discontinued
products list and the manufacturer marketed or
sold a follow-on product.
``(ii) The manufacturer of the listed drug
or reference product--
``(I)(aa) announced withdrawal of,
discontinuance of the manufacture of,
or intent to withdraw the application
with respect to the drug or reference
product in a manner that impedes
competition from a generic drug or a
biosimilar biological product, as
established by objective circumstances;
or
``(bb) destroyed the inventory of
the listed drug or reference product in
a manner that impedes competition from
a generic drug or a biosimilar
biological product, which may be
established by objective circumstances;
and
``(II) marketed or sold a follow-on
product.
``(B) The manufacturer engaged in a soft switch,
which shall be established by demonstrating that the
manufacturer engaged in both of the following actions:
``(i) The manufacturer took actions with
respect to the listed drug or reference product
other than those described in subparagraph (A)
that unfairly disadvantage the listed drug or
reference product relative to the follow-on
product described in clause (ii) in a manner
that impedes competition from a generic drug or
a biosimilar biological product that is highly
similar to, and has no clinically meaningful
difference with respect to safety, purity, and
potency from, the reference product, which may
be established by objective circumstances.
``(ii) The manufacturer marketed or sold a
follow-on product.
``(2) Justification.--
``(A) In general.--Subject to paragraph (3), the
actions described in paragraph (1) by a manufacturer of
a listed drug or reference product shall not be
considered to be an unfair method of competition in or
affecting commerce if--
``(i) the manufacturer demonstrates to the
Commission or a district court of the United
States, as applicable, by a preponderance of
the evidence in a proceeding initiated by the
Commission under subsection (c)(1)(A), or in a
suit brought under subparagraph (B) or (C) of
subsection (c)(1), that--
``(I) the manufacturer would have
taken the actions regardless of whether
a generic drug that references the
listed drug or biosimilar biological
product that references the reference
product had already entered the market;
and
``(II)(aa) with respect to a hard
switch under paragraph (1)(A), the
manufacturer took the action for
reasons relating to the safety risk to
patients of the listed drug or
reference product;
``(bb) with respect to an action
described in item (aa) or (bb) of
paragraph (1)(A)(ii)(I), there is a
supply disruption that--
``(AA) is outside of the
control of the manufacturer;
``(BB) prevents the
production or distribution of
the applicable listed drug or
reference product; and
``(CC) cannot be remedied
by reasonable efforts; or
``(cc) with respect to a soft
switch under paragraph (1)(B), the
manufacturer had legitimate pro-
competitive reasons, apart from the
financial effects of reduced
competition, to take the action.
``(B) Rule of construction.--Nothing in
subparagraph (A) may be construed to limit the
information that the Commission may otherwise obtain in
any proceeding or action instituted with respect to a
violation of this section.
``(3) Response.--With respect to a justification offered by
a manufacturer under paragraph (2), the Commission may--
``(A) rebut any evidence presented by a
manufacturer during that justification; or
``(B) establish by a preponderance of the evidence
that, on balance, the pro-competitive benefits from the
conduct described in subparagraph (A) or (B) of
paragraph (1), as applicable, do not outweigh any
anticompetitive effects of the conduct, even in
consideration of the justification so offered.
``(c) Enforcement.--
``(1) In general.--If the Commission has reason to believe
that any manufacturer has violated, is violating, or is about
to violate this section, the Commission may take any of the
following actions:
``(A) Institute a proceeding--
``(i) that, except as provided in paragraph
(2), complies with the requirements under
section 5(b); and
``(ii) in which the Commission may impose
on the manufacturer any penalty that the
Commission may impose for a violation of
section 5.
``(B) In the same manner and to the same extent as
provided in section 13(b), bring suit in a district
court of the United States to temporarily enjoin the
action of the manufacturer.
``(C) Bring suit in a district court of the United
States, in which the Commission may seek--
``(i) to permanently enjoin the action of
the manufacturer;
``(ii) any of the remedies described in
paragraph (3); and
``(iii) any other equitable remedy,
including ancillary equitable relief.
``(2) Judicial review.--
``(A) In general.--Notwithstanding any provision of
section 5, any manufacturer that is subject to a final
order of the Commission that is issued in a proceeding
instituted under paragraph (1)(A) may, not later than
30 days after the date on which the Commission issues
the order, petition for review of the order in--
``(i) the United States Court of Appeals
for the District of Columbia Circuit; or
``(ii) the court of appeals of the United
States for the circuit in which the ultimate
parent entity of the manufacturer is
incorporated.
``(B) Treatment of findings.--In a review of an
order issued by the Commission conducted by a court of
appeals of the United States under subparagraph (A),
the factual findings of the Commission shall be
conclusive if those facts are supported by the
evidence.
``(3) Equitable remedies.--
``(A) Disgorgement.--
``(i) In general.--In a suit brought under
paragraph (1)(C), the Commission may seek, and
the court may order, disgorgement of any unjust
enrichment that a person obtained as a result
of the violation that gives rise to the suit.
``(ii) Calculation.--Any disgorgement that
is ordered with respect to a person under
clause (i) shall be offset by any amount of
restitution ordered under subparagraph (B).
``(iii) Limitations period.--The Commission
may seek disgorgement under this subparagraph
not later than 5 years after the latest date on
which the person from which the disgorgement is
sought receives any unjust enrichment from the
effects of the violation that gives rise to the
suit in which the Commission seeks the
disgorgement.
``(B) Restitution.--
``(i) In general.--In a suit brought under
paragraph (1)(C), the Commission may seek, and
the court may order, restitution with respect
to the violation that gives rise to the suit.
``(ii) Limitations period.--The Commission
may seek restitution under this subparagraph
not later than 5 years after the latest date on
which the person from which the restitution is
sought receives any unjust enrichment from the
effects of the violation that gives rise to the
suit in which the Commission seeks the
restitution.
``(4) Rules of construction.--Nothing in this subsection
may be construed as--
``(A) requiring the Commission to bring a suit
seeking a temporary injunction under paragraph (1)(B)
before bringing a suit seeking a permanent injunction
under paragraph (1)(C); or
``(B) affecting any other authority of the
Commission under this Act to seek relief or obtain a
remedy with respect to a violation of this Act.''.
(b) Applicability.--Section 27 of the Federal Trade Commission Act,
as added by subsection (a), shall apply with respect to any--
(1) conduct that occurs on or after the date of enactment
of this Act; and
(2) action or proceeding that is commenced on or after the
date of enactment of this Act.
(c) Antitrust Laws.--Nothing in this section, or the amendments
made by this section, shall modify, impair, limit, or supersede the
applicability of the antitrust laws as defined in subsection (a) of the
first section of the Clayton Act (15 U.S.C. 12(a)), and of section 5 of
the Federal Trade Commission Act (15 U.S.C. 45) to the extent that it
applies to unfair methods of competition.
(d) Rulemaking.--The Federal Trade Commission may issue rules under
section 553 of title 5, United States Code, to carry out section 27 of
the Federal Trade Commission Act, as added by subsection (a), including
by defining any terms used in such section 27 (other than terms that
are defined in subsection (a) of such section 27).
SEC. 407. PROMOTING COMPETITION BY LIMITING PATENT THICKETS.
(a) In General.--Section 271(e) of title 35, United States Code, is
amended--
(1) in paragraph (2)(C), in the flush text following clause
(ii), by adding at the end the following: ``With respect to a
submission described in clause (ii), the act of infringement
shall extend to any patent that claims the biological product,
a method of using the biological product, or a method or
product used to manufacture the biological product.''; and
(2) by adding at the end the following:
``(7)(A) Subject to subparagraphs (C), (D), and (E), if the sponsor
of an approved application for a reference product, as defined in
section 351(i) of the Public Health Service Act (42 U.S.C. 262(i))
(referred to in this paragraph as the `reference product sponsor'),
brings an action for infringement under this section against an
applicant for approval of a biological product under section 351(k) of
such Act that references that reference product (referred to in this
paragraph as the `subsection (k) applicant'), the reference product
sponsor may assert in the action a total of not more than 20 patents of
the type described in subparagraph (B), not more than 10 of which shall
have issued after the date specified in section 351(l)(7)(A) of such
Act.
``(B) The patents described in this subparagraph are patents that
satisfy each of the following requirements:
``(i) Patents that claim the biological product that is the
subject of an application under section 351(k) of the Public
Health Service Act (42 U.S.C. 262(k)) (or a use of that
product) or a method or product used in the manufacture of such
biological product.
``(ii) Patents that are included on the list of patents
described in section 351(l)(3)(A) of the Public Health Service
Act (42 U.S.C. 262(l)(3)(A)), including as provided under
section 351(l)(7) of such Act.
``(iii) Patents that--
``(I) have an actual filing date of more than 4
years after the date on which the reference product is
approved; or
``(II) include a claim to a method in a
manufacturing process that is not used by the reference
product sponsor.
``(C) The court in which an action described in subparagraph (A) is
brought may increase the number of patents limited under that
subparagraph--
``(i) if the request to increase that number is made
without undue delay; and
``(ii)(I) if the interest of justice so requires; or
``(II) for good cause shown, which--
``(aa) shall be established if the subsection (k)
applicant fails to provide information required under
section 351(l)(2)(A) of the Public Health Service Act
(42 U.S.C. 262(l)(2)(A)) that would enable the
reference product sponsor to form a reasonable belief
with respect to whether a claim of infringement under
this section could reasonably be asserted; and
``(bb) may be established--
``(AA) if there is a material change to the
biological product (or process with respect to
the biological product) of the subsection (k)
applicant that is the subject of the
application;
``(BB) if, with respect to a patent on the
supplemental list described in section
351(l)(7)(A) of Public Health Service Act (42
U.S.C. 262(l)(7)(A)), the patent would have
issued before the date specified in such
section 351(l)(7)(A) but for the failure of the
Office to issue the patent or a delay in the
issuance of the patent, as described in
paragraph (1) of section 154(b) and subject to
the limitations under paragraph (2) of such
section 154(b); or
``(CC) for another reason that shows good
cause, as determined appropriate by the court.
``(D) In determining whether good cause has been shown for the
purposes of subparagraph (C)(ii)(II), a court may consider whether the
reference product sponsor has provided a reasonable description of the
identity and relevance of any information beyond the subsection (k)
application that the court believes is necessary to enable the court to
form a belief with respect to whether a claim of infringement under
this section could reasonably be asserted.
``(E) The limitation imposed under subparagraph (A)--
``(i) shall apply only if the subsection (k) applicant
completes all actions required under paragraphs (2)(A),
(3)(B)(ii), (5), (6)(C)(i), (7), and (8)(A) of section 351(l)
of the Public Health Service Act (42 U.S.C. 262(l)); and
``(ii) shall not apply with respect to any patent that
claims, with respect to a biological product, a method for
using that product in therapy, diagnosis, or prophylaxis, such
as an indication or method of treatment or other condition of
use.''.
(b) Applicability.--The amendments made by subsection (a) shall
apply with respect to an application submitted under section 351(k) of
the Public Health Service Act (42 U.S.C. 262(k)) on or after the date
of enactment of this Act.
TITLE V--BENEFICIARY COST SHARING FAIRNESS
SEC. 501. REPEALING OF RULE BY THE DEPARTMENT OF HEALTH AND HUMAN
SERVICES.
The final rule of the Department of Health and Human Services
titled ``Fraud And Abuse; Removal of Safe Harbor Protection for Rebates
Involving Prescription Pharmaceuticals And Creation of New Safe Harbor
Protection for Certain Point-of-Sale Reductions in Price on
Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager
Service Fees; Additional Delayed Effective Date'' published on November
30, 2020 (85 Fed. Reg. 76666-76731), shall have no force or effect of
law.
SEC. 502. DEFINING COST UNDER PRESCRIPTION DRUG PLANS UNDER PART D OF
MEDICARE.
Section 1860D-2(b)(2)(A) of the Social Security Act (42 U.S.C.
1395w-102(b)(2)(A)) is amended--
(1) in clause (i), by inserting ``of the net costs to the
plan, inclusive of all direct and indirect remuneration,
including rebates paid by manufacturers to the plan sponsor,
either directly or through a pharmacy benefit manager or other
third party'' before the semicolon; and
(2) in clause (ii), by inserting ``net'' before ``costs''.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law.
Referred to the Subcommittee on Courts, Intellectual Property, and the Internet.
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