Sec. 112. Authority to use alternative payment for drugs and biologicals to prevent potential drug shortages
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Section 1847A(e) of the Social Security Act (42 U.S.C. 1395w–3a(e)) is amended— by striking and inserting “ Payment in Response to Public Health Emergency .—In the case Payments .— In the case ; and by adding at the end the following new paragraph: 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, 2021, 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. For purposes of subparagraph (A), a drug or biological described in this subparagraph is a drug or biological— 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 that— is described in section 506C(a) of such Act; 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 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. 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. . 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 ). Not later than July 1, 2021, 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— an analysis of— the effect of drug shortages on Medicare beneficiary access, quality, safety, and out-of-pocket costs; the effect of drug shortages on health providers, including hospitals and physicians, across the Medicare program; 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; 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 payment structures and incentives under parts A, B, C, and D of the Medicare program and their effect, if any, on drug shortages; and relevant findings and recommendations to Congress. The report under this subsection shall be made available to the public. 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.
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- 42 USC 1395w–3a(e)
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Sec. 112
Authority to use alternative payment for drugs and biologicals to prevent potential drug shortages
Cite42 USC 1395w–3a(e)
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