Sec. 128. Medicare part D rebate by manufacturers for certain drugs with prices increasing faster than inflation
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Subpart 2 of part D of title XVIII of the Social Security Act is amended by inserting after section 1860D–14B, as added by section 121, the following new section: Subject to subparagraph (B), not later than 6 months after the end of each rebate period (as defined in paragraph (4)(A)) beginning on or after January 1, 2022, the Secretary shall, for each rebatable covered part D drug (as defined in paragraph (4)(B)), report to each manufacturer (as defined in paragraph (4)(C)) of such rebatable covered part D drug the following for the rebate period:
Information on the total number of units (as defined in paragraph (4)(D)) of each dosage form and strength described in paragraph (1)(A) of subsection
(b)for such rebatable covered part D drug and rebate period. Information on the amount (if any) of the excess price described in paragraph (1)(B) of such subsection for such rebatable covered part D drug and rebate period. The rebate amount specified under such subsection for such rebatable covered part D drug and rebate period. Other information determined appropriate by the Secretary. Notwithstanding subparagraph (A), the Secretary may, for each rebatable covered part D drug, delay the timeframe for reporting the information and rebate amount described in clauses (i), (ii), (iii), and
(iv)of such subparagraph for rebate periods in 2022 until not later than December 31, 2023. Subject to subparagraph (B), for each rebate period beginning on or after January 1, 2022, each manufacturer of a rebatable covered part D drug shall, not later than 30 days after the date of receipt from the Secretary of the information and rebate amount pursuant to paragraph (1), provide to the Secretary a rebate that is equal to the amount specified in subsection
(b)for such drug for such rebate period. The Secretary may reduce or waive the rebate under this paragraph with respect to a rebatable covered part D 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 covered part D drug may request a reconsideration by the Secretary of the rebate amount specified under subsection
(b)for such drug and rebate period, as reported to the manufacturer pursuant to paragraph (1). Timing for a reconsideration shall be coordinated with the timing of reconciliation, as described in subsection (b)(6) and as determined appropriate by the Secretary. In this section: Subject to clause (ii), the term rebate period means, with respect to a year, each of the six month periods that begin on January 1 and July 1 of the year. In the case of a rebatable covered part D drug described in subsection (c), the initial rebate period for which a rebate amount is determined for such rebatable covered part D drug pursuant to such subsection shall be the period beginning with the first month after the last day of the six month period that begins on the day on which the drug was first marketed and ending on the last day of the first full rebate period under clause
(i)that begins after the last day of such six month period. The term rebatable covered part D drug means a covered part D drug 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(a) of the Public Health Service Act. The term manufacturer has the meaning given such term in section 1860D—14A(g). The term units means, with respect to a rebatable covered part D drug, the lowest common quantity (such as the number of capsules or tablets, milligrams of molecules, or grams) of such drug dispensed to individuals under this part. The term price means, with respect to a rebatable covered part D drug, the wholesale acquisition cost (as defined in section 1847A(c)(6)(B)) for such drug. Subject to subsection (e)(2), the amount of the rebate specified in this subsection for a rebate period, with respect to each dosage form and strength of a rebatable covered part D drug, is the amount equal to the product of— the total number of units of such dosage form and strength for each rebatable covered part D drug during the rebate period; and the amount (if any) by which— the unit-weighted average price for such dosage form and strength of the drug determined under paragraph
(2)for the rebate period; exceeds the inflation-adjusted price for such dosage form and strength determined under paragraph
(3)for the rebate period. The unit-weighted average price determined under this paragraph for a rebate period, with respect to each dosage form and strength of a rebatable covered Part D drug, is the sum of the products of— the weighted average price determined under subparagraph
(B)with respect to each package size of such dosage form and strength dispensed during the rebate period; and the ratio of— the total number of units of such package size dispensed during the rebate period; to the total number of units of such dosage form and strength of such drug dispensed during such rebate period. The weighted average price, with respect to each package size of such dosage form and strength of a rebatable covered part D drug dispensed during a rebate period, is the sum of the products of— each price, as calculated for a unit of such drug, applicable to each package size of such dosage form and strength of such drug during the rebate period; and the ratio of— the number of days for which each such price is applicable during the rebate period; to the total number of days in such rebate period. The inflation-adjusted price determined under this paragraph for a rebate period, with respect to each dosage form and strength of a rebatable covered part D drug, is— the benchmark unit-weighted price determined under subparagraph
(B)for the rebate period; increased by the percentage by which the rebate period CPI–U (as defined in paragraph (4)) for the rebate period exceeds the benchmark CPI–U (as defined in paragraph (5)). The benchmark unit-weighted price determined under this subparagraph for a rebate period, with respect to each dosage form and strength of a rebatable covered part D drug, is the sum of the products of— each price, as calculated for a unit of such drug, applicable to each package size of such dosage form and strength of such drug on July 1, 2019; and the ratio of— the total number of units of such package size dispensed on July 1, 2019; to the total number of units of such dosage form and strength dispensed on July 1, 2019. The term benchmark 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 rebate period. The Secretary shall, on an annual basis, conduct a one-time reconciliation of the rebate amounts owed by a manufacturer under this section based on any changes submitted by a PDP sponsor of a prescription drug plan or an MA organization offering an MA–PD plan to the number of units of a rebatable covered part D drug dispensed during the preceding year. Such reconciliation shall be completed not later than 6 months after the date by which the Secretary reconciles payment for covered part D drugs with PDP sponsors of prescription drug plans or MA organizations offering MA–PD plans. Subject to subsection (e)(2), in the case of a rebatable covered part D drug first approved or licensed by the Food and Drug Administration after July 1, 2019— subparagraph (A)(ii) of subsection (b)(3) shall be applied as if the term benchmark CPI–U were defined under subsection (b)(4) as if the reference to July 2019 under such subsection were a reference to the first month after the last day of the six month period that begins on the day on which the drug was first marketed ; and subsection (b)(3) shall be applied by substituting, for the benchmark unit-weighted price otherwise determined under subparagraph
(B)of such subsection, the benchmark unit-weighted average price determined under paragraph
(3)for the rebate period; the benchmark unit-weighted average price determined under this paragraph for a rebate period, with respect to each dosage form and strength of a rebatable covered part D drug, is the sum of the products of— the new drug weighted average price determined under paragraph
(4)with respect to each package size of such dosage form and strength of such drug dispensed during the six month period that begins on the day on which the drug was first marketed; and the ratio of— the total number of units of such package size dispensed during the six month period that begins on the day on which the drug was first marketed; to the total number of units of such dosage form and strength of such drug dispensed during such six month period; and the new drug weighted average price, with respect to each package size of such dosage form and strength of such rebatable covered part D drug dispensed during the six month period that begins on the day on which the drug was first marketed, is the sum of the products of— each price, as calculated for a unit of such drug, applicable to each package size of such dosage form and strength of such drug during the six month period that begins on the day on which the drug was first marketed; and the ratio of— the number of days for which each such price is applicable during such six month period; to the total number of days in such six month period. Amounts paid as rebates under subsection
(b)shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under section 1841. The Secretary shall permit a manufacturer of a rebatable covered part D drug to conduct periodic audits, directly or through contracts, of the data and information used to determine the rebate amount for such drug under this section. In the case that the benchmark unit-weighted price of a dosage form and strength of a rebatable covered part D drug is determined under subsection (b)(3)(B) to be $0 due to no units of such dosage form and strength of such drug being dispensed on July 1, 2019, the Secretary may use a calculation, as determined appropriate by the Secretary, to determine the benchmark-unit weighted price for such dosage form and strength of such drug that is different than the calculation described in such subsection. In the case that the benchmark unit-weighted average price of a dosage form and strength of a rebatable covered part D drug described under subsection
(c)is determined under paragraph
(3)of such subsection to be $0 due to no units of such dosage form and strength of such drug being dispensed during the six month period that begins on the day on which the drug was first marketed, the Secretary may use a calculation, as determined appropriate by the Secretary, to determine the benchmark-unit weighted average price for such dosage form and strength of such drug that is different than the calculation described in such paragraph. Chapter 35 of title 44, United States Code, shall not apply to the program under this section. There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of the determination of the rebate amount under subsection (b), including with respect to a subsequently approved drug pursuant to subsection (c), including— the determination of— the total number of units of each rebatable covered part D drug under subsection (b)(1)(A); the unit-weighted average price under subsection (b)(2); the inflation-adjusted price under subsection (b)(3); the benchmark unit-weighted average price under subsection (c)(3); and the new drug weighted average price under subsection (c)(4); and the application of special rules for calculation of benchmark unit-weighted price and benchmark unit-weighted average price under paragraph
(2)of this subsection. The Secretary shall impose a civil money penalty on a manufacturer that fails to comply with the requirements under subsection (a)(2) with respect to providing a rebate for a rebatable covered part D drug for a rebate period for each such failure in an amount equal to the sum of— the rebate amount determined pursuant to subsection
(b)for such drug for such rebate period; and 25 percent of such amount. The provisions of section 1128A (other than subsections
(a)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). Nothing in this section shall be construed as having any effect on— any formulary design under section 1860D–4(b)(3); or any discounts provided under the coverage gap discount program under section 1860D–14A or the manufacturer catastrophic discount program under section 1860D–14B. The Secretary shall enter into agreements described in paragraph
(2)with manufacturers. A rebate agreement under this paragraph shall require the manufacturer to provide to the Secretary rebates required under subsection (a)(2)(A) with respect to a rebate period. Each manufacturer with an agreement in effect under this subsection shall report to the Secretary, with respect to each rebatable covered part D drug of the manufacturer, at a time specified by the Secretary— for each calendar month under the rebate agreement— each wholesale acquisition cost (as defined in section 1847A(c)(6)) applicable during the month, applicable to each National Drug Code for the dosage form and strength of such rebatable covered part D drug; and the number of days with respect to which each wholesale acquisition cost reported was applicable; the wholesale acquisition cost (as so defined) applicable on July 1, 2019, applicable to each National Drug Code for the dosage form and strength of such rebatable covered part D drug (or, in the case of a rebatable covered part D drug first approved or licensed by the Food and Drug Administration after July 1, 2019, each wholesale acquisition cost applicable to each National Drug Code of each dosage form and strength of the rebatable covered part D drug of the manufacturer during the six month period that begins on the day on which the drug was first marketed); and such other information as the Secretary shall require. Information reported under this subparagraph is subject to audit by the Inspector General of the Department of Health and Human Services. The provisions of subparagraph
(C)of section 1927(b)(3) shall apply with respect to information required pursuant to paragraph (2)(B) of this subsection and the failure to provide such information in the same manner and to the same extent as such provisions apply with respect to information required under subparagraph
(A)of such section 1927(b)(3) and the failure to provide such information. The Secretary may coordinate rebate agreements required under this subsection with agreements required under section 1860D–14B. There are appropriated to the Secretary, from the Federal Supplementary Medical Insurance Trust Fund established under section 1841— for each of calendar years 2020 through 2025, $4,000,000; and for each subsequent calendar year, such sums as are necessary to carry out this section. Amounts appropriated under paragraph
(1)shall remain available until expended. . Section 1860D–43(a) of the Social Security Act ( 42 U.S.C. 1395w–153(a) ), as amended by section 121(f)(7), is amended— in paragraph (2), by striking and at the end; in paragraph (3), by striking the period at the end and inserting ; and ; and by adding at the end the following new paragraph: for 2022 and each subsequent year, have entered into and have in effect an agreement described in section 1860D–14C(h)(2) with the Secretary . Section 1927(c)(1)(C)(VI) of the Social Security Act ( 42 U.S.C. 1396r–8(c)(1)(C)(VI) ) is amended— by striking or any discounts and inserting any discounts ; and by inserting , or any rebates under section 1860D–14C before the period.
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- 42 USC 1395w–153(a)
- 42 USC 1396r–8(c)(1)(C)(VI)
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Sec. 128
Medicare part D rebate by manufacturers for certain drugs with prices increasing faster than inflation
Cite42 USC 1395w–153(a)
Cite42 USC 1396r–8(c)(1)(C)(VI)
Cites 2Cited by 0 across 0 sources