Sec. 2. Negotiation of prices for certain covered part D drugs following period of exclusivity

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Section 1860D–11 of the Social Security Act ( 42 U.S.C. 1395w–111 ) is amended— in subsection (i), by striking In order and inserting Except as provided in subsection (k), in order ; and by adding at the end the following new subsection: Notwithstanding any other provision of law, subject to paragraph (2), the Secretary shall, for plan years beginning on or after the date on which the applicable period with respect to an applicable covered part D drug (as those terms are defined in paragraph (3)) expires— negotiate directly with pharmaceutical manufacturers the prices that may be charged to PDP sponsors and MA organizations for such applicable covered part D drug; and complete such negotiations not later than 3 months prior to the beginning of each such plan year.

In the case where the Secretary is not able to reach an agreement under paragraph

(1)with respect to an applicable covered part D drug for a plan year by the date specified in paragraph (1)(B), the price that a pharmaceutical manufacturer may charge to PDP sponsors and MA organizations for such applicable covered part D drug for the plan year shall be determined using the methodology used to determine the best price of a covered outpatient drug under section 1927(c)(1)(C). In this subsection: The term applicable covered part D drug means a covered part D drug for which there is in effect— in the case of a drug approved under section 505 of the Federal Food, Drug, and Cosmetic Act, a patent on an active ingredient of the drug; or in the case of a biological product, a patent on the structure of the biological product. A patent shall be considered to be in effect for purposes of this subparagraph during any extension of the patent term under section 156 of title 35, United States Code. The term applicable period means, with respect to an applicable covered part D drug, any applicable patent described in subparagraph (A). Subject to subparagraph (B), in order for coverage to be available under this part for an applicable covered part D drug (as defined in section 1860D–2(e)) of a manufacturer with respect to a plan year beginning on or after the date on which the applicable period with respect to such covered part D drug expires, the manufacturer must provide such applicable covered part D drug to PDP sponsors and MA organizations at the price negotiated under paragraph

(1)or the price determined under paragraph (2), if applicable, for the plan year. Subparagraph

(A)shall not apply to the dispensing of a covered part D drug if the Secretary has made a determination that the availability of the drug is essential to the health of beneficiaries under this part. . The amendments made by this section shall apply to covered part D drugs dispensed on or after January 1, 2021.

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42 USC 1395w–111

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Sec. 2

Negotiation of prices for certain covered part D drugs following period of exclusivity

Cite42 USC 1395w–111

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