Sec. 11002. Special rule to delay selection and negotiation of biologics for biosimilar market entry
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Part E of title XI of the Social Security Act, as added by section 11001, is amended— in section 1192— in subsection (a), in the flush matter following paragraph (4), by inserting and subsection (b)(3) after the previous sentence ; in subsection (b)— in paragraph (1), by adding at the end the following new subparagraph: In the case of a biological product for which the inclusion of the biological product as a selected drug on a list published under subsection
(a)has been delayed under subsection (f)(2), remove such biological product from the rankings under subparagraph
(A)before making the selections under subparagraph (B). ; and by adding at the end the following new paragraph: Pursuant to subparagraphs (B)(ii)(I) and (C)(i) of subsection (f)(2), the Secretary shall select and include on the list published under subsection
(a)the biological products described in such subparagraphs. Such biological products shall count towards the required number of drugs to be selected under subsection (a)(1). ; and by adding at the end the following new subsection: Subject to subparagraph (B), in the case of a biological product that would (but for this subsection) be an extended-monopoly drug (as defined in section 1194(c)(4)) included as a selected drug on the list published under subsection
(a)with respect to an initial price applicability year, the rules described in paragraph
(2)shall apply if the Secretary determines that there is a high likelihood (as described in paragraph (3)) that a biosimilar biological product (for which such biological product will be the reference product) will be licensed and marketed under section 351(k) of the Public Health Service Act before the date that is 2 years after the selected drug publication date with respect to such initial price applicability year. The Secretary shall not provide for a delay under— paragraph (2)(A) unless a request is made for such a delay by a manufacturer of a biosimilar biological product prior to the selected drug publication date for the list published under subsection
(a)with respect to the initial price applicability year for which the biological product may have been included as a selected drug on such list but for subparagraph (2)(A); or paragraph (2)(B)(iii) unless a request is made for such a delay by such a manufacturer prior to the selected drug publication date for the list published under subsection
(a)with respect to the initial price applicability year that is 1 year after the initial price applicability year for which the biological product described in subsection
(a)would have been included as a selected drug on such list but for paragraph (2)(A). A request made under clause
(i)shall be submitted to the Secretary by such manufacturer at a time and in a form and manner specified by the Secretary, and contain— information and documents necessary for the Secretary to make determinations under this subsection, as specified by the Secretary and including, to the extent available, items described in subclause (III); and all agreements related to the biosimilar biological product filed with the Federal Trade Commission or the Assistant Attorney General pursuant to subsections
(a)and
(c)of section 1112 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. After the Secretary has reviewed the request and materials submitted under subclause (I), the manufacturer shall submit any additional information and documents requested by the Secretary necessary to make determinations under this subsection. The items described in this clause are the following: The manufacturing schedule for such biosimilar biological product submitted to the Food and Drug Administration during its review of the application under such section 351(k). Disclosures (in filings by the manufacturer of such biosimilar biological product with the Securities and Exchange Commission required under section 12(b), 12(g), 13(a), or 15(d) of the Securities Exchange Act of 1934 about capital investment, revenue expectations, and actions taken by the manufacturer that are typical of the normal course of business in the year (or the 2 years, as applicable) before marketing of a biosimilar biological product) that pertain to the marketing of such biosimilar biological product, or comparable documentation that is distributed to the shareholders of privately held companies. All persons treated as a single employer under subsection
(a)or
(b)of section 52 of the Internal Revenue Code of 1986, or in a partnership, shall be treated as one manufacturer for purposes of paragraph (2)(D)(iv). In clause (i), the term partnership means a syndicate, group, pool, joint venture, or other organization through or by means of which any business, financial operation, or venture is carried on by the manufacturer of the biological product and the manufacturer of the biosimilar biological product. The rules described in this paragraph are the following: If a determination of high likelihood is made under paragraph (3), the Secretary shall delay the inclusion of the biological product as a selected drug on the list published under subsection
(a)until such list is published with respect to the initial price applicability year that is 1 year after the initial price applicability year for which the biological product would have been included as a selected drug on such list. If, during the time period between the selected drug publication date on which the biological product would have been included on the list as a selected drug pursuant to subsection
(a)but for subparagraph
(A)and the selected drug publication date with respect to the initial price applicability year that is 1 year after the initial price applicability year for which such biological product would have been included as a selected drug on such list, the Secretary determines that the biosimilar biological product for which the manufacturer submitted the request under paragraph (1)(B)(i)(II) (and for which the Secretary previously made a high likelihood determination under paragraph (3)) has not been licensed and marketed under section 351(k) of the Public Health Service Act, the Secretary shall, at the request of such manufacturer— reevaluate whether there is a high likelihood (as described in paragraph (3)) that such biosimilar biological product will be licensed and marketed under such section 351(k) before the date that is 2 years after the selected drug publication date for which such biological product would have been included as a selected drug on such list published but for subparagraph (A); and evaluate whether, on the basis of clear and convincing evidence, the manufacturer of such biosimilar biological product has made a significant amount of progress (as determined by the Secretary) towards both such licensure and the marketing of such biosimilar biological product (based on information from items described in subclauses (I)(bb) and
(II)of paragraph (1)(B)(ii)) since the receipt by the Secretary of the request made by such manufacturer under paragraph (1)(B)(i)(I). If the Secretary determines that there is not a high likelihood that such biosimilar biological product will be licensed and marketed as described in clause (i)(I) or there has not been a significant amount of progress as described in clause (i)(II)— the Secretary shall include the biological product as a selected drug on the list published under subsection
(a)with respect to the initial price applicability year that is 1 year after the initial price applicability year for which such biological product would have been included as a selected drug on such list but for subparagraph (A); and the manufacturer of such biological product shall pay a rebate under paragraph
(4)with respect to the year for which such manufacturer would have provided access to a maximum fair price for such biological product but for subparagraph (A). If the Secretary determines that there is a high likelihood that such biosimilar biological product will be licensed and marketed (as described in clause (i)(I)) and a significant amount of progress has been made by the manufacturer of such biosimilar biological product towards such licensure and marketing (as described in clause (i)(II)), the Secretary shall delay the inclusion of the biological product as a selected drug on the list published under subsection
(a)until the selected drug publication date of such list with respect to the initial price applicability year that is 2 years after the initial price applicability year for which such biological product would have been included as a selected drug on such list but for this subsection. If, during the time period between the selected drug publication date of the list for which the biological product would have been included as a selected drug but for subparagraph (B)(iii) and the selected drug publication date with respect to the initial price applicability year that is 2 years after the initial price applicability year for which such biological product would have been included as a selected drug on such list but for this subsection, the Secretary determines that such biosimilar biological product has not been licensed and marketed— the Secretary shall include such biological product as a selected drug on such list with respect to the initial price applicability year that is 2 years after the initial price applicability year for which such biological product would have been included as a selected drug on such list; and the manufacturer of such biological product shall pay a rebate under paragraph
(4)with respect to the years for which such manufacturer would have provided access to a maximum fair price for such biological product but for this subsection. In no case shall the Secretary delay the inclusion of a biological product on the list published under subsection
(a)for more than 2 years. In the case of a biological product for which the inclusion on the list published pursuant to subsection
(a)was delayed by 1 year under subparagraph
(A)and for which there would have been a change in status to a long-monopoly drug (as defined in section 1194(c)(5)) if such biological product had been a selected drug, in no case may the Secretary provide for a second 1-year delay under subparagraph (B)(iii). In no case shall the Secretary delay the inclusion of a biological product on the list published under subsection
(a)if more than 1 year has elapsed since the biosimilar biological product has been licensed under section 351(k) of the Public Health Service Act and marketing has not commenced for such biosimilar biological product. In no case shall the Secretary delay the inclusion of a biological product as a selected drug on the list published under subsection
(a)if Secretary determined that the manufacturer of the biosimilar biological product described in paragraph (1)(A)— is the same as the manufacturer of the reference product described in such paragraph or is treated as being the same pursuant to paragraph (1)(C); or has, based on information from items described in paragraph (1)(B)(ii)(I)(bb), entered into any agreement described in such paragraph with the manufacturer of the reference product described in paragraph (1)(A) that— requires or incentivizes the manufacturer of the biosimilar biological product to submit a request described in paragraph (1)(B); or restricts the quantity (either directly or indirectly) of the biosimilar biological product that may be sold in the United States over a specified period of time. For purposes of this subsection, there is a high likelihood described in paragraph
(1)or paragraph (2), as applicable, if the Secretary finds that— an application for licensure under section 351(k) of the Public Health Service Act for the biosimilar biological product has been accepted for review or approved by the Food and Drug Administration; and information from items described in sub clauses (I)(bb) and
(III)of paragraph (1)(B)(ii) submitted to the Secretary by the manufacturer requesting a delay under such paragraph provides clear and convincing evidence that such biosimilar biological product will, within the time period specified under paragraph (1)(A) or (2)(B)(i)(I), be marketed. For purposes of subparagraphs (B)(ii)(II) and (C)(ii) of paragraph (2), in the case of a biological product for which the inclusion on the list under subsection
(a)was delayed under this subsection and for which the Secretary has negotiated and entered into an agreement under section 1193 with respect to such biological product, the manufacturer shall be required to pay a rebate to the Secretary at such time and in such manner as determined by the Secretary. Subject to subparagraph (C), the amount of the rebate under subparagraph
(A)with respect to a biological product shall be equal to the estimated amount— in the case of a biological product that is a covered part D drug (as defined in section 1860D–2(e)), that is the sum of the products of— 75 percent of the amount by which— the average manufacturer price, as reported by the manufacturer of such covered part D drug under section 1927 (or, if not reported by such manufacturer under section 1927, as reported by such manufacturer to the Secretary pursuant to the agreement under section 1193(a)) for such biological product, with respect to each of the calendar quarters of the price applicability period that would have applied but for this subsection; exceeds in the initial price applicability year that would have applied but for a delay under— paragraph (2)(A), the maximum fair price negotiated under section 1194 for such biological product under such agreement; or paragraph (2)(B)(iii), such maximum fair price, increased as described in section 1195(b)(1)(A); and the number of units dispensed under part D of title XVIII for such covered part D drug during each such calendar quarter of such price applicability period; and in the case of a biological product for which payment may be made under part B of title XVIII, that is the sum of the products of— 80 percent of the amount by which— the payment amount for such biological product under section 1847A(b), with respect to each of the calendar quarters of the price applicability period that would have applied but for this subsection; exceeds in the initial price applicability year that would have applied but for a delay under— paragraph (2)(A), the maximum fair price negotiated under section 1194 for such biological product under such agreement; or paragraph (2)(B)(iii), such maximum fair price, increased as described in section 1195(b)(1)(A); and the number of units (excluding units that are packaged into the payment amount for an item or service and are not separately payable under such part B) of the billing and payment code of such biological product administered or furnished under such part B during each such calendar quarter of such price applicability period. In the case of a biological product with respect to which a rebate is required to be paid under this paragraph, if such biological product qualifies as a long-monopoly drug (as defined in section 1194(c)(5)) at the time of its inclusion on the list published under subsection (a), in determining the amount of the rebate for such biological product under subparagraph (B), the amount described in clause
(ii)shall be substituted for the maximum fair price described in clause (i)(I) or (ii)(I) of such subparagraph (B), as applicable. The amount described in this clause is an amount equal to 65 percent of the average non-Federal average manufacturer price for the biological product for 2021 (or, in the case that there is not an average non-Federal average manufacturer price available for such biological product for 2021, for the first full year following the market entry for such biological product), increased by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) from September 2021 (or December of such first full year following the market entry), as applicable, to September of the year prior to the selected drug publication date with respect to the initial price applicability year that would have applied but for this subsection. Amounts paid as rebates under this paragraph shall be deposited into— in the case payment is made for such biological product under part B of title XVIII, the Federal Supplementary Medical Insurance Trust Fund established under section 1841; and in the case such biological product is a covered part D drug (as defined in section 1860D–2(e)), the Medicare Prescription Drug Account under section 1860D–16 in such Trust Fund. In this subsection, the term biosimilar biological product has the meaning given such term in section 1847A(c)(6). ; in section 1193(a)(4)— in the matter preceding subparagraph (A), by inserting , and for section 1192(f), after section 1194(f)) ; in subparagraph (A), by striking and at the end; by adding at the end the following new subparagraph: information that the Secretary requires to carry out section 1192(f), including rebates under paragraph
(4)of such section; and ; in section 1196(a)(7), by striking section 1192(d)(2)(B) and inserting subsections (d)(2)(B) and (f)(1)(C) of section 1192 ; in section 1197— by redesignating subsections (b), (c), and
(d)as subsections (c), (d), and (e), respectively; and by inserting after subsection
(a)the following new subsection: Any manufacturer that fails to comply with the rebate requirements under section 1192(f)(4) shall be subject to a civil monetary penalty equal to 10 times the amount of the rebate the manufacturer failed to pay under such section. ; and in section 1198(b)(2), by inserting the application of section 1192(f), after section 1192(e) . 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 or to carry out section 1847B or section 1192(f), including rebates under paragraph
(4)of such section . The Secretary of Health and Human Services shall implement this section, including the amendments made by this section, for 2026, 2027, and 2028 by program instruction or other forms of program guidance.
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- 42 USC 1396r–8(b)(3)(D)(i)
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Sec. 11002
Special rule to delay selection and negotiation of biologics for biosimilar market entry
Cite42 USC 1396r–8(b)(3)(D)(i)
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