Sec. 106. Medicare part B rebate by manufacturers for drugs or biologicals with prices increasing faster than inflation
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Section 1847A of the Social Security Act ( 42 U.S.C. 1395w–3a ) is amended by adding at the end the following new subsection: Not later than 6 months after the end of each rebate period (as defined in paragraph (2)(A)) beginning on or after January 1, 2021, the Secretary shall, for each rebatable drug (as defined in paragraph (2)(B)), report to each manufacturer of such rebatable drug the following for such rebate period: 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 rebatable drug and rebate period. Information on the amount (if any) of the excess average sales price increase described in subparagraph (A)(ii) of such paragraph for such rebatable drug and rebate period. The rebate amount specified under such paragraph for such rebatable drug and rebate period. Subject to clause (ii), for each rebate period beginning on or after January 1, 2021, the manufacturer of a rebatable drug shall, for such drug, not later than 30 days after the date of receipt from the Secretary of the information and rebate amount pursuant to subparagraph
(A)for such rebate period, provide to the Secretary a rebate that is equal to the amount specified in paragraph
(3)for such drug for such rebate period. The Secretary may reduce or waive the rebate under this subparagraph with respect to a rebatable drug that is listed on the drug shortage list maintained by the Food and Drug Administration pursuant to section 506E of the Federal Food, Drug, and Cosmetic Act . The Secretary shall establish procedures under which a manufacturer of a rebatable drug may request a reconsideration by the Secretary of the rebate amount specified under paragraph
(3)for such rebatable drug and rebate period, as reported to the manufacturer pursuant to subparagraph (A)(iii). In this subsection: The term rebate period means a calendar quarter beginning on or after January 1, 2021. The term rebatable drug means a single source drug or biological (other than a biosimilar biological product)— described in section 1842(o)(1)(C) for which the payment amount is provided under this section; or for which payment is made separately under section 1833(i) or section 1833(t) and for which the payment amount is calculated based on the payment amount under this section. For purposes of paragraph (1)(B), the amount specified in this paragraph for a rebatable drug assigned to a billing and payment code for a rebate period is, subject to paragraph (4), the amount equal to the product of— subject to subparagraph (B), the total number of units of the billing and payment code for such rebatable drug furnished during the rebate period; and the amount (if any) by which— the amount determined under subsection (b)(4) for such rebatable drug during the rebate period; exceeds the inflation-adjusted base payment amount determined under subparagraph
(C)of this paragraph for such rebatable drug during the rebate period. For purposes of subparagraph (A)(i), the total number of units of the billing and payment code for rebatable drugs furnished during a rebate period shall not include units with respect to which the manufacturer provides a discount under the program under section 340B of the Public Health Service Act or a rebate under section 1927. The inflation-adjusted payment amount determined under this subparagraph for a rebatable drug for a rebate period is— the amount determined under subsection (b)(4) for such rebatable drug in the payment amount benchmark quarter (as defined in subparagraph (D)); increased by the percentage by which the rebate period CPI–U (as defined in subparagraph (F)) for the rebate period exceeds the benchmark period CPI–U (as defined in subparagraph (E)). The term payment amount benchmark quarter means the calendar quarter beginning July 1, 2019. The term benchmark period CPI–U means the consumer price index for all urban consumers (United States city average) for July 2019. The term rebate period CPI–U means, with respect to a rebate period, the consumer price index for all urban consumers (United States city average) for the last month of the calendar quarter that is two calendar quarters prior to the rebate period. In the case of a rebatable drug first approved or licensed by the Food and Drug Administration after July 1, 2019, the following shall apply: For quarters during the initial period in which the payment amount for such drug is determined using the methodology described in subsection (c)(4)— clause (ii)(I) of paragraph (3)(A) shall be applied as if the reference to the amount determined under subsection (b)(4), were a reference to the wholesale acquisition cost applicable under subsection (c)(4) ; clause
(i)of paragraph (3)(C) shall be applied— as if the reference to the amount determined under subsection (b)(4), were a reference to the wholesale acquisition cost applicable under subsection (c)(4) ; and as if the term payment amount benchmark quarter were defined under paragraph (3)(D) as the first 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 (4)(E) as if the reference to July 2019 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 . For quarters beginning after such initial period— 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 first full calendar quarter for which the Secretary is able to compute an average sales price for the rebatable drug; and clause
(ii)of paragraph (3)(C) shall be applied as if the term benchmark period CPI–U were defined under paragraph (4)(E) as if the reference to July 2019 under such paragraph were a reference to the first month of the first full calendar quarter for which the Secretary is able to compute an average sales price for the rebatable drug . Amounts paid as rebates under paragraph (1)(B) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under section 1841. The Secretary shall impose a civil money penalty on a manufacturer that fails to comply with the requirements under paragraph (1)(B) with respect to providing a rebate for a rebatable drug for a rebate period for each such failure in an amount equal to the sum of— the rebate amount specified pursuant to paragraph
(3)for such drug for such rebate period; and 25 percent of such amount. 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 subparagraph in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). If the manufacturer of a rebatable drug fails to pay a civil money penalty under subparagraph
(A)with respect to the failure to provide a rebate for a rebatable drug for a rebate period by a date specified by the Secretary after the imposition of such penalty, no payment shall be available under this part for such rebatable drug for calendar quarters beginning on or after such date until the Secretary determines the manufacturer has paid the penalty due under such subparagraph. . Section 1847A(g) of the Social Security Act ( 42 U.S.C. 1395w–3(g) ) is amended— in paragraph (4), by striking and at the end; in paragraph (5), by striking the period at the end and inserting ; and ; and by adding at the end the following new paragraph: determination of the rebate amount for a rebatable drug under paragraph
(3)of subsection (h), including with respect to a new drug pursuant to paragraph
(4)of such subsection, including— a decision by the Secretary with respect to a request for reconsideration under paragraph (1)(C); and the determination of— the total number of units of the billing and payment code under paragraph (3)(A)(i); and the inflation-adjusted payment amount under paragraph (3)(C). . Section 1847A(c)(3) of the Social Security Act (42 U.S.C. 1395w–3a(c)(3)) is amended by inserting or subsection
(h)after section 1927 .
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- 42 USC 1395w–3a
- 42 USC 1395w–3(g)
- 42 USC 1395w–3a(c)(3)
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Sec. 106
Medicare part B rebate by manufacturers for drugs or biologicals with prices increasing faster than inflation
Cite42 USC 1395w–3a
Cite42 USC 1395w–3(g)
Cite42 USC 1395w–3a(c)(3)
Cites 3Cited by 0 across 0 sources