§ 1320f. Establishment of program

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(a)In general The Secretary shall establish a Drug Price Negotiation Program (in this part referred to as the “program”). Under the program, with respect to each price applicability period, the Secretary shall—

(1)publish a list of selected drugs in accordance with section 1320f–1 of this title;

(2)enter into agreements with manufacturers of selected drugs with respect to such period, in accordance with section 1320f–2 of this title;

(3)negotiate and, if applicable, renegotiate maximum fair prices for such selected drugs, in accordance with section 1320f–3 of this title; 1

(4)carry out the publication and administrative duties and compliance monitoring in accordance with sections 1320f–4 and 1320f–5 of this title.

(b)Definitions relating to timing For purposes of this part:

(1)Initial price applicability year The term “initial price applicability year” means a year (beginning with 2026).

(2)Price applicability period The term “price applicability period” means, with respect to a qualifying single source drug, the period beginning with the first initial price applicability year with respect to which such drug is a selected drug and ending with the last year during which the drug is a selected drug.

(3)Selected drug publication date The term “selected drug publication date” means, with respect to each initial price applicability year, February 1 of the year that begins 2 years prior to such year.

(4)Negotiation period The term “negotiation period” means, with respect to an initial price applicability year with respect to a selected drug, the period—

(A)beginning on the sooner of—

(i)the date on which the manufacturer of the drug and the Secretary enter into an agreement under section 1320f–2 of this title with respect to such drug; or

(ii)February 28 following the selected drug publication date with respect to such selected drug; and

(B)ending on November 1 of the year that begins 2 years prior to the initial price applicability year.

(c)Other definitions For purposes of this part:

(1)Manufacturer The term “manufacturer” has the meaning given that term in section 1395w–3a(c)(6)(A) of this title.

(2)Maximum fair price eligible individual The term “maximum fair price eligible individual” means, with respect to a selected drug—

(A)in the case such drug is dispensed to the individual at a pharmacy, by a mail order service, or by another dispenser, an individual who is enrolled in a prescription drug plan under part D of subchapter XVIII or an MA–PD plan under part C of such subchapter if coverage is provided under such plan for such selected drug; and

(B)in the case such drug is furnished or administered to the individual by a hospital, physician, or other provider of services or supplier, an individual who is enrolled under part B of subchapter XVIII, including an individual who is enrolled in an MA plan under part C of such subchapter, if payment may be made under part B for such selected drug.

(3)Maximum fair price The term “maximum fair price” means, with respect to a year during a price applicability period and with respect to a selected drug (as defined in section 1320f–1(c) of this title) with respect to such period, the price negotiated pursuant to section 1320f–3 of this title, and updated pursuant to section 1320f–4(b) of this title, as applicable, for such drug and year.

(4)Reference product The term “reference product” has the meaning given such term in section 262(i) of this title.

(5)Total expenditures The term “total expenditures” includes, in the case of expenditures with respect to part D of subchapter XVIII, the total gross covered prescription drug costs (as defined in section 1395w–115(b)(3) of this title). The term “total expenditures” excludes, in the case of expenditures with respect to part B of such subchapter, expenditures for a drug or biological product that are bundled or packaged into the payment for another service.

(6)Unit The term “unit” means, with respect to a drug or biological product, the lowest identifiable amount (such as a capsule or tablet, milligram of molecules, or grams) of the drug or biological product that is dispensed or furnished.

(d)Timing for initial price applicability year 2026 Notwithstanding the provisions of this part, in the case of initial price applicability year 2026, the following rules shall apply for purposes of implementing the program:

(1)Subsection (b)(3) shall be applied by substituting “September 1, 2023” for “, with respect to each initial price applicability year, February 1 of the year that begins 2 years prior to such year”.

(2)Subsection (b)(4) shall be applied—

(A)in subparagraph (A)(ii), by substituting “October 1, 2023” for “February 28 following the selected drug publication date with respect to such selected drug”; and

(B)in subparagraph (B), by substituting “August 1, 2024” for “November 1 of the year that begins 2 years prior to the initial price applicability year”.

(3)Section 1320f–1 of this title shall be applied—

(A)in subsection (b)(1)(A), by substituting “during the period beginning on June 1, 2022, and ending on May 31, 2023” for “during the most recent period of 12 months prior to the selected drug publication date (but ending not later than October 31 of the year prior to the year of such drug publication date), with respect to such year, for which data are available”; and

(B)in subsection (d)(1)(A), by substituting “during the period beginning on June 1, 2022, and ending on May 31, 2023” for “during the most recent period for which data are available of at least 12 months prior to the selected drug publication date (but ending no later than October 31 of the year prior to the year of such drug publication date), with respect to such year”.2

(4)Section 1320f–2(a) of this title shall be applied by substituting “October 1, 2023” for “February 28 following the selected drug publication date with respect to such selected drug”.

(5)Section 1320f–3(b)(2) of this title shall be applied—

(A)in subparagraph (A), by substituting “October 2, 2023” for “March 1 of the year of the selected drug publication date, with respect to the selected drug”;

(B)in subparagraph (B), by substituting “February 1, 2024” for “the June 1 following the selected drug publication date”; and

(C)in subparagraph (E), by substituting “August 1, 2024” for “the first day of November following the selected drug publication date, with respect to the initial price applicability year”.

(6)Section 1320f–4(a)(1) of this title shall be applied by substituting “September 1, 2024” for “November 30 of the year that is 2 years prior to such initial price applicability year”.

(Aug. 14, 1935, ch. 531, title XI, § 1191, as added Pub. L. 117–169, title I, § 11001(a), Aug. 16, 2022, 136 Stat. 1833.)

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