I 

117TH CONGRESS 

1ST SESSION H. R. 19 

To provide for certain reforms with respect to the Medicare program under 

title XVIII of the Social Security Act, the Medicaid program under 

title XIX of such Act, the Food and Drug Administration, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 21, 2021 

Mrs. RODGERS of Washington (for herself, Mr. BRADY, Ms. FOXX, Mr. GUTHRIE, Mr. NUNES, and Mr. ALLEN) introduced the following bill; which 

was referred to the Committee on Energy and Commerce, and in addition 

to the Committees on Ways and Means, and the Judiciary, for a period 

to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee 

concerned 

A BILL 

To provide for certain reforms with respect to the Medicare 

program under title XVIII of the Social Security Act, 

the Medicaid program under title XIX of such Act, the 

Food and Drug Administration, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Lower Costs, More 

5 Cures Act of 2021’’. 


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1 SEC. 2. TABLE OF CONTENTS. 

2 The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—MEDICARE PARTS B AND D 

Subtitle A—Medicare Part B Provisions 

Sec. 101. Improvements to Medicare site-of-service transparency. 

Sec. 102. Requiring manufacturers of certain single-dose container or single-use 

package drugs payable under part B of the Medicare program 

to provide refunds with respect to discarded amounts of such 

drugs. 

Sec. 103. Providing for variation in payment for certain drugs covered under 

part B of the Medicare program. 

Sec. 104. Establishment of maximum add-on payment for drugs and 

biologicals. 

Sec. 105. Treatment of drug administration services furnished by certain excepted off-campus outpatient departments of a provider. 

Subtitle B—Drug Price Transparency 

Sec. 111. Reporting on explanation for drug price increases. 

Sec. 112. Public disclosure of drug discounts. 

Sec. 113. Study of pharmaceutical supply chain intermediaries and merger activity. 

Sec. 114. Making prescription drug marketing sample information reported by 

manufacturers available to certain individuals and entities. 

Sec. 115. Sense of Congress regarding the need to expand commercially available drug pricing comparison platforms. 

Subtitle C—Medicare Part D Benefit Redesign 

Sec. 121. Medicare part D benefit redesign. 

Subtitle D—Other Medicare Part D Provisions 

Sec. 131. Allowing the offering of additional prescription drug plans under 

Medicare part D. 

Sec. 132. Allowing certain enrollees of prescription drug plans and MA–PD 

plans under Medicare program to spread out cost-sharing 

under certain circumstances. 

Sec. 133. Establishing a monthly cap on beneficiary incurred costs for insulin 

products and supplies under a prescription drug plan or MA– 

PD plan. 

Sec. 134. Growth rate of Medicare part D out-of-pocket cost threshold. 

TITLE II—MEDICAID 

Sec. 201. Medicaid pharmacy and therapeutics committee improvements. 

Sec. 202. GAO report on conflicts of interest in State Medicaid program drug 

use review boards and pharmacy and therapeutics (P&T) committees. 

Sec. 203. Ensuring the accuracy of manufacturer price and drug product information under the Medicaid drug rebate program. 


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Sec. 204. Improving transparency and preventing the use of abusive spread 

pricing and related practices in Medicaid. 

Sec. 205. T–MSIS drug data analytics reports. 

Sec. 206. Risk-sharing value-based payment agreements for covered outpatient 

drugs under Medicaid. 

Sec. 207. Applying Medicaid drug rebate requirement to drugs provided as part 

of outpatient hospital services. 

TITLE III—FOOD AND DRUG ADMINISTRATION 

Subtitle A—Pay-for-Delay 

Sec. 301. Unlawful agreements. 

Sec. 302. Notice and certification of agreements. 

Sec. 303. Forfeiture of 180-day exclusivity period. 

Sec. 304. Commission litigation authority. 

Sec. 305. Statute of limitations. 

Subtitle B—Advancing Education on Biosimilars 

Sec. 321. Education on biological products. 

Subtitle C—Other Provisions 

Sec. 331. Clarifying the meaning of new chemical entity. 

TITLE IV—REVENUE PROVISION 

Sec. 401. Safe harbor for high deductible health plans without deductible for 

insulin. 

TITLE V—MISCELLANEOUS 

Sec. 501. Payment for biosimilar biological products during initial period. 

Sec. 502. GAO study and report on average sales price. 

Sec. 503. Requiring prescription drug plans and MA–PD plans to report potential fraud, waste, and abuse to the Secretary of HHS. 

Sec. 504. Establishment of pharmacy quality measures under Medicare part D. 

Sec. 505. Improving coordination between the Food and Drug Administration 

and the Centers for Medicare & Medicaid Services. 

Sec. 506. Patient consultation in Medicare national and local coverage determinations in order to mitigate barriers to inclusion of such perspectives. 

Sec. 507. MedPAC report on shifting coverage of certain Medicare part B 

drugs to Medicare part D. 

Sec. 508. Requirement that direct-to-consumer advertisements for prescription 

drugs and biological products include truthful and non-misleading pricing information. 

Sec. 509. Chief Pharmaceutical Negotiator at the Office of the United States 

Trade Representative. 


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1 TITLE I—MEDICARE PARTS B 

2 AND D 

3 Subtitle A—Medicare Part B 

4 Provisions 

5 SEC. 101. IMPROVEMENTS TO MEDICARE SITE-OF-SERVICE 

6 TRANSPARENCY. 

7 Section 1834(t) of the Social Security Act (42 U.S.C. 

8 1395m(t)) is amended— 

9 (1) in paragraph (1)— 

10 (A) in the heading, by striking ‘‘IN GEN11 ERAL’’ and inserting ‘‘SITE PAYMENT’’; 

12 (B) in the matter preceding subparagraph 

13 (A)— 

14 (i) by striking ‘‘or to’’ and inserting ‘‘, 

15 to’’; 

16 (ii) by inserting ‘‘, or to a physician 

17 for services furnished in a physician’s of18 fice’’ after ‘‘surgical center’’; and 

19 (iii) by inserting ‘‘(or 2022 with re20 spect to a physician for services furnished 

21 in a physician’s office)’’ after ‘‘2018’’; and 

22 (C) in subparagraph (A)— 

23 (i) by striking ‘‘and the’’ and insert24 ing ‘‘, the’’; and 


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1 (ii) by inserting ‘‘, and the physician 

2 fee schedule under section 1848 (with re3 spect to the practice expense component of 

4 such payment amount)’’ after ‘‘such sec5 tion’’; 

6 (2) by redesignating paragraphs (2) through 

7 (4) as paragraphs (3) through (5), respectively; and 

8 (3) by inserting after paragraph (1) the fol9 lowing new paragraph: 

10 ‘‘(2) PHYSICIAN PAYMENT.—Beginning in 

11 2022, the Secretary shall expand the information in12 cluded on the Internet website described in para13 graph (1) to include— 

14 ‘‘(A) the amount paid to a physician under 

15 section 1848 for an item or service for the set16 tings described in paragraph (1); and 

17 ‘‘(B) the estimated amount of beneficiary 

18 liability applicable to the item or service.’’. 


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1 SEC. 102. REQUIRING MANUFACTURERS OF CERTAIN SIN2 GLE-DOSE CONTAINER OR SINGLE-USE PACK3 AGE DRUGS PAYABLE UNDER PART B OF THE 

4 MEDICARE PROGRAM TO PROVIDE REFUNDS 

5 WITH RESPECT TO DISCARDED AMOUNTS OF 

6 SUCH DRUGS. 

7 Section 1847A of the Social Security Act (42 U.S.C. 

8 1395w–3a) is amended by adding at the end the following 

9 new subsection: 

10 ‘‘(i) REFUND FOR CERTAIN DISCARDED SINGLE11 DOSE CONTAINER OR SINGLE-USE PACKAGE DRUGS.— 

12 ‘‘(1) SECRETARIAL PROVISION OF INFORMA13 TION.— 

14 ‘‘(A) IN GENERAL.—For each calendar 

15 quarter beginning on or after January 1, 2022, 

16 the Secretary shall, with respect to a refundable 

17 single-dose container or single-use package drug 

18 (as defined in paragraph (8)), report to each 

19 manufacturer (as defined in subsection 

20 (c)(6)(A)) of such refundable single-dose con21 tainer or single-use package drug the following 

22 for the calendar quarter: 

23 ‘‘(i) Subject to subparagraph (C), in24 formation on the total number of units of 

25 the billing and payment code of such drug, 

26 if any, that were discarded during such 


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1 quarter, as determined using a mechanism 

2 such as the JW modifier used as of the 

3 date of enactment of this subsection (or 

4 any such successor modifier that includes 

5 such data as determined appropriate by 

6 the Secretary). 

7 ‘‘(ii) The refund amount that the 

8 manufacturer is liable for pursuant to 

9 paragraph (3). 

10 ‘‘(B) DETERMINATION OF DISCARDED

11 AMOUNTS.—For purposes of subparagraph 

12 (A)(i), with respect to a refundable single-dose 

13 container or single-use package drug furnished 

14 during a quarter, the amount of such drug that 

15 was discarded shall be determined based on the 

16 amount of such drug that was unused and dis17 carded for each drug on the date of service. 

18 ‘‘(C) EXCLUSION OF UNITS OF PACKAGED

19 DRUGS.—The total number of units of the bill20 ing and payment code of a refundable single21 dose container or single-use package drug of a 

22 manufacturer furnished during a calendar quar23 ter for purposes of subparagraph (A)(i), and 

24 the determination of the estimated total allowed 

25 charges for the drug in the quarter for purposes 


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1 of paragraph (3)(A)(ii), shall not include such 

2 units that are packaged into the payment 

3 amount for an item or service and are not sepa4 rately payable. 

5 ‘‘(2) MANUFACTURER REQUIREMENT.—For 

6 each calendar quarter beginning on or after January 

7 1, 2022, the manufacturer of a refundable single8 dose container or single-use package drug shall, for 

9 such drug, provide to the Secretary a refund that is 

10 equal to the amount specified in paragraph (3) for 

11 such drug for such quarter. 

12 ‘‘(3) REFUND AMOUNT.— 

13 ‘‘(A) IN GENERAL.—The amount of the re14 fund specified in this paragraph is, with respect 

15 to a refundable single-dose container or single16 use package drug of a manufacturer assigned to 

17 a billing and payment code for a calendar quar18 ter beginning on or after January 1, 2022, an 

19 amount equal to the estimated amount (if any) 

20 by which— 

21 ‘‘(i) the product of— 

22 ‘‘(I) the total number of units of 

23 the billing and payment code for such 

24 drug that were discarded during such 


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1 quarter (as determined under para2 graph (1)); and 

3 ‘‘(II)(aa) in the case of a refund4 able single-dose container or single5 use package drug that is a single 

6 source drug or biological, the amount 

7 of payment determined for such drug 

8 or biological under subsection 

9 (b)(1)(B) for such quarter; or 

10 ‘‘(bb) in the case of a refundable 

11 single-dose container or single-use 

12 package drug that is a biosimilar bio13 logical product, the amount of pay14 ment determined for such product 

15 under subsection (b)(1)(C) for such 

16 quarter; exceeds 

17 ‘‘(ii) an amount equal to the applica18 ble percentage (as defined in subparagraph 

19 (B)) of the estimated total allowed charges 

20 for such drug under this part during the 

21 quarter. 

22 ‘‘(B) APPLICABLE PERCENTAGE DE23 FINED.— 


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1 ‘‘(i) IN GENERAL.—For purposes of 

2 subparagraph (A)(ii), the term ‘applicable 

3 percentage’ means— 

4 ‘‘(I) subject to subclause (II), 10 

5 percent; and 

6 ‘‘(II) if applicable, in the case of 

7 a refundable single-dose container or 

8 single-use package drug described in 

9 clause (ii), a percentage specified by 

10 the Secretary pursuant to such clause. 

11 ‘‘(ii) TREATMENT OF DRUGS THAT

12 HAVE UNIQUE CIRCUMSTANCES.—In the 

13 case of a refundable single-dose container 

14 or single-use package drug that has unique 

15 circumstances involving similar loss of 

16 product as that described in paragraph 

17 (8)(B)(ii), the Secretary, through notice 

18 and comment rulemaking, may increase 

19 the applicable percentage otherwise appli20 cable under clause (i)(I) as determined ap21 propriate by the Secretary. 

22 ‘‘(4) FREQUENCY.—Amounts required to be re23 funded pursuant to paragraph (2) shall be paid in 

24 regular intervals (as determined appropriate by the 

25 Secretary). 


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1 ‘‘(5) REFUND DEPOSITS.—Amounts paid as re2 funds pursuant to paragraph (2) shall be deposited 

3 into the Federal Supplementary Medical Insurance 

4 Trust Fund established under section 1841. 

5 ‘‘(6) ENFORCEMENT.— 

6 ‘‘(A) AUDITS.— 

7 ‘‘(i) MANUFACTURER AUDITS.—Each 

8 manufacturer of a refundable single-dose 

9 container or single-use package drug that 

10 is required to provide a refund under this 

11 subsection shall be subject to periodic 

12 audit with respect to such drug and such 

13 refunds by the Secretary. 

14 ‘‘(ii) PROVIDER AUDITS.—The Sec15 retary shall conduct periodic audits of 

16 claims submitted under this part with re17 spect to refundable single-dose container or 

18 single-use package drugs in accordance 

19 with the authority under section 1833(e) to 

20 ensure compliance with the requirements 

21 applicable under this subsection. 

22 ‘‘(B) CIVIL MONEY PENALTY.— 

23 ‘‘(i) IN GENERAL.—The Secretary 

24 shall impose a civil money penalty on a 

25 manufacturer of a refundable single-dose 


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1 container or single-use package drug who 

2 has failed to comply with the requirement 

3 under paragraph (2) for such drug for a 

4 calendar quarter in an amount equal to the 

5 sum of— 

6 ‘‘(I) the amount that the manu7 facturer would have paid under such 

8 paragraph with respect to such drug 

9 for such quarter; and 

10 ‘‘(II) 25 percent of such amount. 

11 ‘‘(ii) APPLICATION.—The provisions 

12 of section 1128A (other than subsections 

13 (a) and (b)) shall apply to a civil money 

14 penalty under this subparagraph in the 

15 same manner as such provisions apply to a 

16 penalty or proceeding under section 

17 1128A(a). 

18 ‘‘(7) IMPLEMENTATION.—The Secretary shall 

19 implement this subsection through notice and com20 ment rulemaking. 

21 ‘‘(8) DEFINITION OF REFUNDABLE SINGLE22 DOSE CONTAINER OR SINGLE-USE PACKAGE DRUG.— 

23 ‘‘(A) IN GENERAL.—Except as provided in 

24 subparagraph (B), in this subsection, the term 

25 ‘refundable single-dose container or single-use 


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1 package drug’ means a single source drug or bi2 ological (as defined in section 1847A(c)(6)(D)) 

3 or a biosimilar biological product (as defined in 

4 section 1847A(c)(6)(H)) for which payment is 

5 made under this part and that is furnished 

6 from a single-dose container or single-use pack7 age. 

8 ‘‘(B) EXCLUSIONS.—The term ‘refundable 

9 single-dose container or single-use package 

10 drug’ does not include— 

11 ‘‘(i) a drug or biological that is either 

12 a radiopharmaceutical or an imaging 

13 agent; 

14 ‘‘(ii) a drug or biological approved by 

15 the Food and Drug Administration for 

16 which dosage and administration instruc17 tions included in the labeling require filtra18 tion during the drug preparation process, 

19 prior to dilution and administration, and 

20 require that any unused portion of such 

21 drug after the filtration process be dis22 carded after the completion of such filtra23 tion process; or 

24 ‘‘(iii) a drug or biological approved by 

25 the Food and Drug Administration on or 


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1 after the date of enactment of this sub2 section and with respect to which payment 

3 has been made under this part for fewer 

4 than 18 months. 

5 ‘‘(9) REPORT TO CONGRESS.—Not later than 3 

6 years after the date of enactment of this subsection, 

7 the Office of the Inspector General, after consulta8 tion with the Centers for Medicare & Medicaid Serv9 ices and the Food and Drug Administration, shall 

10 submit to the Committee on Energy and Commerce 

11 and the Committee on Ways and Means of the 

12 House of Representatives and the Committee on Fi13 nance in the Senate, a report on any impact this 

14 section is reported to have on the licensure, market 

15 entry, market retention, or marketing of biosimilar 

16 biological products. Such report shall be updated pe17 riodically at the direction of the Committee on En18 ergy and Commerce and the Committee on Ways 

19 and Means of the House of Representatives and the 

20 Committee on Finance in the Senate.’’. 

21 SEC. 103. PROVIDING FOR VARIATION IN PAYMENT FOR 

22 CERTAIN DRUGS COVERED UNDER PART B 

23 OF THE MEDICARE PROGRAM. 

24 (a) IN GENERAL.—Section 1847A(b) of the Social 

25 Security Act (42 U.S.C. 1395w–3a(b)) is amended— 


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1 (1) in paragraph (1)— 

2 (A) in subparagraph (A), by inserting after 

3 ‘‘or 106 percent’’ the following: ‘‘(or, for a mul4 tiple source drug (other than autologous cellular 

5 immunotherapy) furnished on or after January 

6 1, 2022, the applicable percent specified in 

7 paragraph (9)(A) for the drug and quarter in8 volved)’’; and 

9 (B) in subparagraph (B) of paragraph (1), 

10 by inserting after ‘‘106 percent’’ the following: 

11 ‘‘(or, for a single source drug or biological 

12 (other than autologous cellular immunotherapy) 

13 furnished on or after January 1, 2022, the ap14 plicable percent specified in paragraph (9)(A) 

15 for the drug or biological and quarter in16 volved)’’; and 

17 (2) by adding at the end the following new 

18 paragraph: 

19 ‘‘(9) APPLICATION OF VARIABLE PERCENTAGES

20 BASED ON PERCENTILE RANKING OF PER BENE21 FICIARY ALLOWED CHARGES.— 

22 ‘‘(A) APPLICABLE PERCENT TO BE AP23 PLIED.— 

24 ‘‘(i) IN GENERAL.—Subject to clauses 

25 (ii), with respect to a drug or biological 


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1 furnished in a calendar quarter beginning 

2 on or after January 1, 2022, if the Sec3 retary determines that the percentile rank 

4 of a drug or biological under subparagraph 

5 (B)(i)(III), with respect to per beneficiary 

6 allowed charges for all such drugs or 

7 biologicals, is— 

8 ‘‘(I) at least equal to the 85th 

9 percentile, the applicable percent for 

10 the drug for such quarter under this 

11 subparagraph is 104 percent; 

12 ‘‘(II) at least equal to the 70th 

13 percentile, but less than the 85th per14 centile, such applicable percent is 106 

15 percent; 

16 ‘‘(III) at least equal to the 50th 

17 percentile, but less than the 70th per18 centile, such applicable percent is 108 

19 percent; or 

20 ‘‘(IV) less than the 50th per21 centile, such applicable percent is 110 

22 percent. 

23 ‘‘(ii) CASES WHERE DATA NOT SUFFI24 CIENTLY AVAILABLE TO COMPUTE PER

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1 ject to clause (iii), in the case of a drug or 

2 biological furnished for which the amount 

3 of payment is determined under subpara4 graph (A) or (B) of paragraph (1) and not 

5 under subsection (c)(4), for calendar quar6 ters during a period in which data are not 

7 sufficiently available to compute a per ben8 eficiary allowed charges for the drug or bi9 ological, the applicable percent is 106 per10 cent. 

11 ‘‘(B) DETERMINATION OF PERCENTILE

12 RANK OF PER BENEFICIARY ALLOWED CHARGES

13 OF DRUGS.— 

14 ‘‘(i) IN GENERAL.—With respect to a 

15 calendar quarter beginning on or after 

16 January 1, 2022, for drugs and biologicals 

17 for which the amount of payment is deter18 mined under subparagraph (A) or (B) of 

19 paragraph (1), except for drugs or 

20 biologicals for which data are not suffi21 ciently available, the Secretary shall— 

22 ‘‘(I) compute the per beneficiary 

23 allowed charges (as defined in sub24 paragraph (C)) for each such drug or 

25 biological; 


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1 ‘‘(II) adjust such per beneficiary 

2 allowed charges for the quarter, to the 

3 extent provided under subparagraph 

4 (D); and 

5 ‘‘(III) array such adjusted per 

6 beneficiary allowed charges for all 

7 such drugs or biologicals from high to 

8 low and rank such drugs or biologicals 

9 by percentile of such arrayed per ben10 eficiary allowed charges. 

11 ‘‘(ii) FREQUENCY.—The Secretary 

12 shall make the computations under clause 

13 (i)(I) every 6 months (or, if necessary, as 

14 determined by the Secretary, every 9 or 12 

15 months) and such computations shall apply 

16 to succeeding calendar quarters until a 

17 new computation has been made. 

18 ‘‘(iii) APPLICABLE DATA PERIOD.— 

19 For purposes of this paragraph, the term 

20 ‘applicable data period’ means the most re21 cent period for which the data necessary 

22 for making the computations under clause 

23 (i) are available, as determined by the Sec24 retary. 


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1 ‘‘(C) PER BENEFICIARY ALLOWED

2 CHARGES DEFINED.—In this paragraph, the 

3 term ‘per beneficiary allowed charges’ means, 

4 with respect to a drug or biological for which 

5 the amount of payment is determined under 

6 subparagraph (A) or (B) of paragraph (1)— 

7 ‘‘(i) the allowed charges for the drug 

8 or biological for which payment is so made 

9 for the applicable data period, as estimated 

10 by the Secretary; divided by 

11 ‘‘(ii) the number of individuals for 

12 whom any payment for the drug or biologi13 cal was made under paragraph (1) for the 

14 applicable data period, as estimated by the 

15 Secretary. 

16 ‘‘(D) ADJUSTMENT TO REFLECT CHANGES

17 IN AVERAGE SALES PRICE.—In applying this 

18 paragraph for a particular calendar quarter, the 

19 Secretary shall adjust the per beneficiary al20 lowed charges for a drug or biological by multi21 plying such per beneficiary allowed charges 

22 under subparagraph (C) for the applicable data 

23 period by the ratio of— 

24 ‘‘(i) the average sales price for the 

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1 endar quarter used under subsection 

2 (c)(5)(B); to 

3 ‘‘(ii) the average sales price for the 

4 drug or biological for the calendar quarter 

5 (or the weighted average for the quarters 

6 involved) included in the applicable data 

7 period.’’. 

8 (b) APPLICATION OF JUDICIAL REVIEW PROVI9 SIONS.—Section 1847A(g) of the Social Security Act is 

10 amended— 

11 (1) by striking ‘‘and’’ at the end of paragraph 

12 (4); 

13 (2) by striking the period at the end of para14 graph (5) and inserting ‘‘; and’’; and 

15 (3) by adding at the end the following new 

16 paragraph: 

17 ‘‘(6) the determination of per beneficiary al18 lowed charges of drugs or biologicals and ranking of 

19 such charges under subsection (b)(9).’’. 

20 SEC. 104. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT 

21 FOR DRUGS AND BIOLOGICALS. 

22 (a) IN GENERAL.—Section 1847A of the Social Secu23 rity Act (42 U.S.C. 1395w–3a), as amended by section 

24 103, is further amended— 

25 (1) in subsection (b)— 


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1 (A) in paragraph (1), in the matter pre2 ceding subparagraph (A), by striking ‘‘para3 graph (7)’’ and inserting ‘‘paragraphs (7) and 

4 (10)’’; and 

5 (B) by adding at the end the following new 

6 paragraph: 

7 ‘‘(10) MAXIMUM ADD-ON PAYMENT AMOUNT.— 

8 ‘‘(A) IN GENERAL.—In determining the 

9 payment amount under the provisions of sub10 paragraph (A), (B), or (C) of paragraph (1) of 

11 this subsection, subsection (c)(4)(A)(ii), or sub12 section (d)(3)(C) for a drug or biological fur13 nished on or after January 1, 2022, if the ap14 plicable add-on payment (as defined in subpara15 graph (B)) for each drug or biological on a 

16 claim for a date of service exceeds the max17 imum add-on payment amount specified under 

18 subparagraph (C) for the drug or biological, 

19 then the payment amount otherwise determined 

20 for the drug or biological under those provi21 sions, as applicable, shall be reduced by the 

22 amount of such excess. 

23 ‘‘(B) APPLICABLE ADD-ON PAYMENT DE24 FINED.—In this paragraph, the term ‘applicable 

25 add-on payment’ means the following amounts, 


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1 determined without regard to the application of 

2 subparagraph (A): 

3 ‘‘(i) In the case of a multiple source 

4 drug, an amount equal to the difference 

5 between— 

6 ‘‘(I) the amount that would oth7 erwise be applied under paragraph 

8 (1)(A); and 

9 ‘‘(II) the amount that would be 

10 applied under such paragraph if ‘100 

11 percent’ were substituted for the ap12 plicable percent (as defined in para13 graph (9)) for such drug. 

14 ‘‘(ii) In the case of a single source 

15 drug or biological, an amount equal to the 

16 difference between— 

17 ‘‘(I) the amount that would oth18 erwise be applied under paragraph 

19 (1)(B); and 

20 ‘‘(II) the amount that would be 

21 applied under such paragraph if ‘100 

22 percent’ were substituted for the ap23 plicable percent (as defined in para24 graph (9)) for such drug or biological. 


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1 ‘‘(iii) In the case of a biosimilar bio2 logical product, the amount otherwise de3 termined under paragraph (8)(B). 

4 ‘‘(iv) In the case of a drug or biologi5 cal during the initial period described in 

6 subsection (c)(4)(A), an amount equal to 

7 the difference between— 

8 ‘‘(I) the amount that would oth9 erwise be applied under subsection 

10 (c)(4)(A)(ii); and 

11 ‘‘(II) the amount that would be 

12 applied under such subsection if ‘100 

13 percent’ were substituted, as applica14 ble, for— 

15 ‘‘(aa) ‘103 percent’ in sub16 clause (I) of such subsection; or 

17 ‘‘(bb) any percent in excess 

18 of 100 percent applied under 

19 subclause (II) of such subsection. 

20 ‘‘(v) In the case of a drug or biologi21 cal to which subsection (d)(3)(C) applies, 

22 an amount equal to the difference be23 tween— 


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1 ‘‘(I) the amount that would oth2 erwise be applied under such sub3 section; and 

4 ‘‘(II) the amount that would be 

5 applied under such subsection if ‘100 

6 percent’ were substituted, as applica7 ble, for— 

8 ‘‘(aa) any percent in excess 

9 of 100 percent applied under 

10 clause (i) of such subsection; or 

11 ‘‘(bb) ‘103 percent’ in clause 

12 (ii) of such subsection. 

13 ‘‘(C) MAXIMUM ADD-ON PAYMENT AMOUNT

14 SPECIFIED.—For purposes of subparagraph 

15 (A), the maximum add-on payment amount 

16 specified in this subparagraph is— 

17 ‘‘(i) with respect to a drug or biologi18 cal (other than autologous cellular 

19 immunotherapy)— 

20 ‘‘(I) for each of 2022 through 

21 2029, $1,000; and 

22 ‘‘(II) for a subsequent year, the 

23 amount specified in this subparagraph 

24 for the preceding year increased by 

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1 sumer price index for all urban con2 sumers (all items; United States city 

3 average) for the 12-month period end4 ing with June of the previous year; or 

5 ‘‘(ii) with respect to a drug or biologi6 cal consisting of autologous cellular 

7 immunotherapy— 

8 ‘‘(I) for each of 2022 through 

9 2029, $2,000; and 

10 ‘‘(II) for a subsequent year, the 

11 amount specified in this subparagraph 

12 for the preceding year increased by 

13 the percentage increase in the con14 sumer price index for all urban con15 sumers (all items; United States city 

16 average) for the 12-month period end17 ing with June of the previous year. 

18 Any amount determined under this subpara19 graph that is not a multiple of $10 shall be 

20 rounded to the nearest multiple of $10.’’; and 

21 (2) in subsection (c)(4)(A)(ii), by striking ‘‘in 

22 the case’’ and inserting ‘‘subject to subsection 

23 (b)(10), in the case’’. 

24 (b) CONFORMING AMENDMENTS RELATING TO SEPA25 RATELY PAYABLE DRUGS.— 


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1 (1) OPPS.—Section 1833(t)(14) of the Social 

2 Security Act (42 U.S.C. 1395l(t)(14)) is amended— 

3 (A) in subparagraph (A)(iii)(II), by insert4 ing ‘‘, subject to subparagraph (I)’’ after ‘‘are 

5 not available’’; and 

6 (B) by adding at the end the following new 

7 subparagraph: 

8 ‘‘(I) APPLICATION OF MAXIMUM ADD-ON

9 PAYMENT FOR SEPARATELY PAYABLE DRUGS

10 AND BIOLOGICALS.—In establishing the amount 

11 of payment under subparagraph (A) for a speci12 fied covered outpatient drug that is furnished 

13 as part of a covered OPD service (or group of 

14 services) on or after January 1, 2022, if such 

15 payment is determined based on the average 

16 price for the year established under section 

17 1847A pursuant to clause (iii)(II) of such sub18 paragraph, the provisions of subsection (b)(10) 

19 of section 1847A shall apply to the amount of 

20 payment so established in the same manner as 

21 such provisions apply to the amount of payment 

22 under section 1847A.’’. 

23 (2) ASC.—Section 1833(i)(2)(D) of the Social 

24 Security Act (42 U.S.C. 1395l(i)(2)(D)) is amend25 ed— 


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1 (A) by moving clause (v) 6 ems to the left; 

2 (B) by redesignating clause (vi) as clause 

3 (vii); and 

4 (C) by inserting after clause (v) the fol5 lowing new clause: 

6 ‘‘(vi) If there is a separate payment 

7 under the system described in clause (i) for 

8 a drug or biological furnished on or after 

9 January 1, 2022, the provisions of sub10 section (t)(14)(I) shall apply to the estab11 lishment of the amount of payment for the 

12 drug or biological under such system in the 

13 same manner in which such provisions 

14 apply to the establishment of the amount 

15 of payment under subsection (t)(14)(A).’’. 

16 SEC. 105. TREATMENT OF DRUG ADMINISTRATION SERV17 ICES FURNISHED BY CERTAIN EXCEPTED 

18 OFF-CAMPUS OUTPATIENT DEPARTMENTS OF 

19 A PROVIDER. 

20 Section 1833(t)(16) of the Social Security Act (42 

21 U.S.C. 1395l(t)(16)) is amended by adding at the end the 

22 following new subparagraph: 

23 ‘‘(G) SPECIAL PAYMENT RULE FOR DRUG

24 ADMINISTRATION SERVICES FURNISHED BY AN

25 EXCEPTED DEPARTMENT OF A PROVIDER.— 


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1 ‘‘(i) IN GENERAL.—In the case of a 

2 covered OPD service that is a drug admin3 istration service (as defined by the Sec4 retary) furnished by a department of a 

5 provider described in clause (ii) or (iv) of 

6 paragraph (21)(B), the payment amount 

7 for such service furnished on or after Jan8 uary 1, 2022, shall be the same payment 

9 amount (as determined in paragraph 

10 (21)(C)) that would apply if the drug ad11 ministration service was furnished by an 

12 off-campus outpatient department of a pro13 vider (as defined in paragraph (21)(B)). 

14 ‘‘(ii) APPLICATION WITHOUT REGARD

15 TO BUDGET NEUTRALITY.—The reductions 

16 made under this subparagraph— 

17 ‘‘(I) shall not be considered an 

18 adjustment under paragraph (2)(E); 

19 and 

20 ‘‘(II) shall not be implemented in 

21 a budget neutral manner.’’. 


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1 Subtitle B—Drug Price 

2 Transparency 

3 SEC. 111. REPORTING ON EXPLANATION FOR DRUG PRICE 

4 INCREASES. 

5 (a) IN GENERAL.—Title III of the Public Health 

6 Service Act (42 U.S.C. 241 et seq.) is amended by adding 

7 at the end the following: 

8 ‘‘PART W—DRUG PRICE REPORTING; DRUG 

9 VALUE FUND 

10 ‘‘SEC. 399OO. REPORTING ON EXPLANATION FOR DRUG 

11 PRICE INCREASES. 

12 ‘‘(a) DEFINITIONS.—In this section: 

13 ‘‘(1) MANUFACTURER.—The term ‘manufac14 turer’ means the person— 

15 ‘‘(A) that holds the application for a drug 

16 approved under section 505 of the Federal 

17 Food, Drug, and Cosmetic Act or licensed 

18 under section 351 of this Act; or 

19 ‘‘(B) who is responsible for setting the 

20 wholesale acquisition cost for the drug. 

21 ‘‘(2) QUALIFYING DRUG.—The term ‘qualifying 

22 drug’ means any drug that is approved under sub23 section (c) or (j) of section 505 of the Federal Food, 

24 Drug, and Cosmetic Act or licensed under subsection 

25 (a) or (k) of section 351 of this Act— 


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1 ‘‘(A) that has a wholesale acquisition cost 

2 of $100 or more, adjusted for inflation occur3 ring after the date of enactment of this section, 

4 for a month’s supply or a typical course of 

5 treatment that lasts less than a month, and 

6 is— 

7 ‘‘(i) subject to section 503(b)(1) of 

8 the Federal Food, Drug, and Cosmetic 

9 Act; 

10 ‘‘(ii) administered or otherwise dis11 pensed to treat a disease or condition af12 fecting more than 200,000 persons in the 

13 United States; and 

14 ‘‘(iii) not a vaccine; and 

15 ‘‘(B) for which, during the previous cal16 endar year, at least 1 dollar of the total amount 

17 of sales were for individuals enrolled under the 

18 Medicare program under title XVIII of the So19 cial Security Act (42 U.S.C. 1395 et seq.) or 

20 under a State Medicaid plan under title XIX of 

21 such Act (42 U.S.C. 1396 et seq.) or under a 

22 waiver of such plan. 

23 ‘‘(3) WHOLESALE ACQUISITION COST.—The 

24 term ‘wholesale acquisition cost’ has the meaning 


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1 given that term in section 1847A(c)(6)(B) of the So2 cial Security Act (42 U.S.C. 1395w–3a(c)(6)(B)). 

3 ‘‘(b) REPORT.— 

4 ‘‘(1) REPORT REQUIRED.—The manufacturer of 

5 a qualifying drug shall submit a report to the Sec6 retary for each increase in the price of a qualifying 

7 drug that results in an increase in the wholesale ac8 quisition cost of that drug that is equal to— 

9 ‘‘(A) 10 percent or more within a single 

10 calendar year beginning on or after January 1, 

11 2021; or 

12 ‘‘(B) 25 percent or more within three con13 secutive calendar years for which the first such 

14 calendar year begins on or after January 1, 

15 2021. 

16 ‘‘(2) REPORT DEADLINE.—Each report de17 scribed in paragraph (1) shall be submitted to the 

18 Secretary— 

19 ‘‘(A) in the case of a report with respect 

20 to an increase in the price of a qualifying drug 

21 that occurs during the period beginning on Jan22 uary 1, 2021, and ending on the day that is 60 

23 days after the date of enactment of this section, 

24 not later than 90 days after such date of enact25 ment; and 


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1 ‘‘(B) in the case of a report with respect 

2 to an increase in the price of a qualifying drug 

3 that occurs after the period described in sub4 paragraph (A), not later than 30 days prior to 

5 the planned effective date of such price increase 

6 for such qualifying drug. 

7 ‘‘(c) CONTENTS.—A report under subsection (b), con8 sistent with the standard for disclosures described in sec9 tion 213.3(d) of title 12, Code of Federal Regulations (as 

10 in effect on the date of enactment of this section), shall, 

11 at a minimum, include— 

12 ‘‘(1) with respect to the qualifying drug— 

13 ‘‘(A) the percentage by which the manufac14 turer will raise the wholesale acquisition cost of 

15 the drug within the calendar year or three con16 secutive calendar years as described in sub17 section (b)(1)(A) or (b)(1)(B), if applicable, and 

18 the effective date of such price increase; 

19 ‘‘(B) an explanation for, and description 

20 of, each price increase for such drug that will 

21 occur during the calendar year period described 

22 in subsection (b)(1)(A) or the three consecutive 

23 calendar year period described in subsection 

24 (b)(1)(B), as applicable; 


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1 ‘‘(C) if known and different from the man2 ufacturer of the qualifying drug, the identity 

3 of— 

4 ‘‘(i) the sponsor or sponsors of any in5 vestigational new drug applications under 

6 section 505(i) of the Federal Food, Drug, 

7 and Cosmetic Act for clinical investigations 

8 with respect to such drug, for which the 

9 full reports are submitted as part of the 

10 application— 

11 ‘‘(I) for approval of the drug 

12 under section 505 of such Act; or 

13 ‘‘(II) for licensure of the drug 

14 under section 351 of this Act; and 

15 ‘‘(ii) the sponsor of an application for 

16 the drug approved under such section 505 

17 of the Federal Food, Drug, and Cosmetic 

18 Act or licensed under section 351 of this 

19 Act; 

20 ‘‘(D) a description of the history of the 

21 manufacturer’s price increases for the drug 

22 since the approval of the application for the 

23 drug under section 505 of the Federal Food, 

24 Drug, and Cosmetic Act or the issuance of the 

25 license for the drug under section 351 of this 


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1 Act, or since the manufacturer acquired such 

2 approved application or license, if applicable; 

3 ‘‘(E) the current wholesale acquisition cost 

4 of the drug; 

5 ‘‘(F) the total expenditures of the manu6 facturer on— 

7 ‘‘(i) materials and manufacturing for 

8 such drug; and 

9 ‘‘(ii) acquiring patents and licensing 

10 for such drug; 

11 ‘‘(G) the percentage of total expenditures 

12 of the manufacturer on research and develop13 ment for such drug that was derived from Fed14 eral funds; 

15 ‘‘(H) the total expenditures of the manu16 facturer on research and development for such 

17 drug that is necessary to demonstrate that it 

18 meets applicable statutory standards for ap19 proval under section 505 of the Federal Food, 

20 Drug, and Cosmetic Act or licensure under sec21 tion 351 of this Act, as applicable; 

22 ‘‘(I) the total expenditures of the manufac23 turer on pursuing new or expanded indications 

24 or dosage changes for such drug under section 


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1 505 of the Federal Food, Drug, and Cosmetic 

2 Act or section 351 of this Act; 

3 ‘‘(J) the total expenditures of the manufac4 turer on carrying out postmarket requirements 

5 related to such drug, including under section 

6 505(o)(3) of the Federal Food, Drug, and Cos7 metic Act; 

8 ‘‘(K) the total revenue and the net profit 

9 generated from the qualifying drug for each cal10 endar year since the approval of the application 

11 for the drug under section 505 of the Federal 

12 Food, Drug, and Cosmetic Act or the issuance 

13 of the license for the drug under section 351, 

14 or since the manufacturer acquired such ap15 proved application or license; and 

16 ‘‘(L) the total costs associated with mar17 keting and advertising for the qualifying drug; 

18 ‘‘(2) with respect to the manufacturer— 

19 ‘‘(A) the total revenue and the net profit 

20 of the manufacturer for each of the 1-year pe21 riod described in subsection (b)(1)(A) or the 3- 

22 year period described in subsection (b)(1)(B), 

23 as applicable; 

24 ‘‘(B) all stock-based performance metrics 

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1 tive compensation for each of the 1-year period 

2 described in subsection (b)(1)(A) or the 3-year 

3 period described in subsection (b)(1)(B), as ap4 plicable; and 

5 ‘‘(C) any additional information the manu6 facturer chooses to provide related to drug pric7 ing decisions, such as total expenditures on— 

8 ‘‘(i) drug research and development; 

9 or 

10 ‘‘(ii) clinical trials, including on drugs 

11 that failed to receive approval by the Food 

12 and Drug Administration; and 

13 ‘‘(3) such other related information as the Sec14 retary considers appropriate and as specified by the 

15 Secretary through notice-and-comment rulemaking. 

16 ‘‘(d) INFORMATION PROVIDED.—The manufacturer 

17 of a qualifying drug that is required to submit a report 

18 under subsection (b), shall ensure that such report and 

19 any explanation for, and description of, each price increase 

20 described in subsection (c)(1)(B) shall be truthful, not 

21 misleading, and accurate. 

22 ‘‘(e) CIVIL MONETARY PENALTY.—Any manufac23 turer of a qualifying drug that fails to submit a report 

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1 facturer is not in compliance with this section, shall be 

2 subject to a civil monetary penalty of $75,000 for each 

3 day on which the violation continues. 

4 ‘‘(f) FALSE INFORMATION.—Any manufacturer that 

5 submits a report for a drug as required by this section 

6 that knowingly provides false information in such report 

7 is subject to a civil monetary penalty in an amount not 

8 to exceed $75,000 for each item of false information. 

9 ‘‘(g) PUBLIC POSTING.— 

10 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

11 the Secretary shall post each report submitted under 

12 subsection (b) on the public website of the Depart13 ment of Health and Human Services the day the 

14 price increase of a qualifying drug is scheduled to go 

15 into effect. 

16 ‘‘(2) FORMAT.—In developing the format in 

17 which reports will be publicly posted under para18 graph (1), the Secretary shall consult with stake19 holders, including beneficiary groups, and shall seek 

20 feedback from consumer advocates and readability 

21 experts on the format and presentation of the con22 tent of such reports to ensure that such reports 

23 are— 

24 ‘‘(A) user-friendly to the public; and 


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1 ‘‘(B) written in plain language that con2 sumers can readily understand. 

3 ‘‘(3) PROTECTED INFORMATION.—Nothing in 

4 this section shall be construed to authorize the pub5 lic disclosure of information submitted by a manu6 facturer that is prohibited from disclosure by appli7 cable laws concerning the protection of trade secrets, 

8 commercial information, and other information cov9 ered under such laws. 

10 ‘‘SEC. 399OO–1. ANNUAL REPORT TO CONGRESS. 

11 ‘‘(a) IN GENERAL.—Subject to subsection (b), the 

12 Secretary shall submit to Congress, and post on the public 

13 website of the Department of Health and Human Services 

14 in a way that is user-friendly to the public and written 

15 in plain language that consumers can readily understand, 

16 an annual report— 

17 ‘‘(1) summarizing the information reported pur18 suant to section 399OO; 

19 ‘‘(2) including copies of the reports and sup20 porting detailed economic analyses submitted pursu21 ant to such section; 

22 ‘‘(3) detailing the costs and expenditures in23 curred by the Department of Health and Human 

24 Services in carrying out section 399OO; and 


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1 ‘‘(4) explaining how the Department of Health 

2 and Human Services is improving consumer and 

3 provider information about drug value and drug 

4 price transparency. 

5 ‘‘(b) PROTECTED INFORMATION.—Nothing in this 

6 section shall be construed to authorize the public disclo7 sure of information submitted by a manufacturer that is 

8 prohibited from disclosure by applicable laws concerning 

9 the protection of trade secrets, commercial information, 

10 and other information covered under such laws.’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 subsection (a) takes effect on the date of enactment of 

13 this Act. 

14 SEC. 112. PUBLIC DISCLOSURE OF DRUG DISCOUNTS. 

15 Section 1150A of the Social Security Act (42 U.S.C. 

16 1320b–23) is amended— 

17 (1) in subsection (c), in the matter preceding 

18 paragraph (1), by inserting ‘‘(other than as per19 mitted under subsection (e))’’ after ‘‘disclosed by the 

20 Secretary’’; and 

21 (2) by adding at the end the following new sub22 section: 

23 ‘‘(e) PUBLIC AVAILABILITY OF CERTAIN INFORMA24 TION.— 


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1 ‘‘(1) IN GENERAL.—In order to allow the com2 parison of PBMs’ ability to negotiate rebates, dis3 counts, direct and indirect remuneration fees, ad4 ministrative fees, and price concessions and the 

5 amount of such rebates, discounts, direct and indi6 rect remuneration fees, administrative fees, and 

7 price concessions that are passed through to plan 

8 sponsors, beginning January 1, 2022, the Secretary 

9 shall make available on the Internet website of the 

10 Department of Health and Human Services the in11 formation with respect to the second preceding cal12 endar year provided to the Secretary on generic dis13 pensing rates (as described in paragraph (1) of sub14 section (b)) and information provided to the Sec15 retary under paragraphs (2) and (3) of such sub16 section that, as determined by the Secretary, is with 

17 respect to each PBM. 

18 ‘‘(2) AVAILABILITY OF DATA.—In carrying out 

19 paragraph (1), the Secretary shall ensure the fol20 lowing: 

21 ‘‘(A) CONFIDENTIALITY.—The information 

22 described in such paragraph is displayed in a 

23 manner that prevents the disclosure of informa24 tion, with respect to an individual drug or an 

25 individual plan, on rebates, discounts, direct 


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1 and indirect remuneration fees, administrative 

2 fees, and price concessions. 

3 ‘‘(B) CLASS OF DRUG.—The information 

4 described in such paragraph is made available 

5 by class of drug, using an existing classification 

6 system, but only if the class contains such num7 ber of drugs, as specified by the Secretary (but 

8 not fewer than three drugs), to ensure confiden9 tiality of proprietary information or other infor10 mation that is prevented to be disclosed under 

11 subparagraph (A).’’. 

12 SEC. 113. STUDY OF PHARMACEUTICAL SUPPLY CHAIN 

13 INTERMEDIARIES AND MERGER ACTIVITY. 

14 (a) INITIAL REPORT.—Not later than 1 year after 

15 the date of enactment of this Act, the Commission shall 

16 submit to the appropriate committees of Congress a report 

17 that— 

18 (1) addresses at minimum— 

19 (A) whether pharmacy benefit managers— 

20 (i) charge payers a higher price than 

21 the reimbursement rate at which the phar22 macy benefit managers reimburse com23 peting pharmacies; 

24 (ii) steer patients for anticompetitive 

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1 tail, mail-order, or any other type of phar2 macy, in which the pharmacy benefit man3 ager has an ownership interest; 

4 (iii) audit or review proprietary data, 

5 including acquisition costs, patient infor6 mation, or dispensing information, of com7 peting pharmacies that can be used for 

8 anticompetitive purposes; or 

9 (iv) use formulary designs to increase 

10 the market share of higher cost prescrip11 tion drugs and depress the market share of 

12 lower cost prescription drugs (each net of 

13 rebates and discounts); 

14 (B) how companies and payers assess the 

15 benefits, costs, and risks of contracting with 

16 intermediaries, including pharmacy services ad17 ministrative organizations, and whether more 

18 information about the roles of intermediaries 

19 should be available to consumers and payers; 

20 and 

21 (C) whether there are any specific legal or 

22 regulatory obstacles the Commission currently 

23 faces in ensuring a competitive and transparent 

24 marketplace in the pharmaceutical supply 

25 chain, including the pharmacy benefit manager 


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1 marketplace and pharmacy services administra2 tive organizations; and 

3 (2) provides— 

4 (A) observations or conclusions drawn 

5 from the November 2017 roundtable entitled 

6 ‘‘Understanding Competition in Prescription 

7 Drug Markets: Entry and Supply Chain Dy8 namics’’, and any similar efforts; 

9 (B) specific actions the Commission in10 tends to take as a result of the November 2017 

11 roundtable, and any similar efforts, including a 

12 detailed description of relevant forthcoming ac13 tions, additional research or roundtable discus14 sions, consumer education efforts, or enforce15 ment actions; and 

16 (C) policy or legislative recommendations 

17 to— 

18 (i) improve transparency and competi19 tion in the pharmaceutical supply chain; 

20 (ii) prevent and deter anticompetitive 

21 behavior in the pharmaceutical supply 

22 chain; and 

23 (iii) best ensure that consumers ben24 efit from any cost savings or efficiencies 


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1 that may result from mergers and consoli2 dations. 

3 (b) INTERIM REPORT.—Not later than 180 days 

4 after the date of enactment of this Act, the Commission 

5 shall submit to the appropriate committees of Congress 

6 an interim report on the progress of the report required 

7 by subsection (a), along with preliminary findings and 

8 conclusions based on information collected to that date. 

9 (c) DEFINITIONS.—In this section: 

10 (1) APPROPRIATE COMMITTEES OF CON11 GRESS.—The term ‘‘appropriate committees of Con12 gress’’ means— 

13 (A) the Committee on Energy and Com14 merce of the House of Representatives; 

15 (B) the Committee on the Judiciary of the 

16 Senate; and 

17 (C) the Committee on the Judiciary of the 

18 House of Representatives. 

19 (2) COMMISSION.—The term ‘‘Commission’’ 

20 means the Federal Trade Commission. 


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1 SEC. 114. MAKING PRESCRIPTION DRUG MARKETING SAM2 PLE INFORMATION REPORTED BY MANUFAC3 TURERS AVAILABLE TO CERTAIN INDIVID4 UALS AND ENTITIES. 

5 (a) IN GENERAL.—Section 1128H of the Social Secu6 rity Act (42 U.S.C. 1320a–7i) is amended— 

7 (1) by redesignating subsection (b) as sub8 section (e); and 

9 (2) by inserting after subsection (a) the fol10 lowing new subsections: 

11 ‘‘(b) DATA SHARING AGREEMENTS.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall enter 

13 into agreements with the specified data sharing indi14 viduals and entities described in paragraph (2) 

15 under which— 

16 ‘‘(A) upon request of such an individual or 

17 entity, as applicable, the Secretary makes avail18 able to such individual or entity the information 

19 submitted under subsection (a) by manufactur20 ers and authorized distributors of record; and 

21 ‘‘(B) such individual or entity agrees to 

22 not disclose publicly or to another individual or 

23 entity any information that identifies a par24 ticular practitioner or health care facility. 

25 ‘‘(2) SPECIFIED DATA SHARING INDIVIDUALS

26 AND ENTITIES.—For purposes of paragraph (1), the 


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1 specified data sharing individuals and entities de2 scribed in this paragraph are the following: 

3 ‘‘(A) OVERSIGHT AGENCIES.—Health over4 sight agencies (as defined in section 164.501 of 

5 title 45, Code of Federal Regulations), includ6 ing the Centers for Medicare & Medicaid Serv7 ices, the Office of the Inspector General of the 

8 Department of Health and Human Services, the 

9 Government Accountability Office, the Congres10 sional Budget Office, the Medicare Payment 

11 Advisory Commission, and the Medicaid and 

12 CHIP Payment and Access Commission. 

13 ‘‘(B) RESEARCHERS.—Individuals who 

14 conduct scientific research (as defined in sec15 tion 164.501 of title 45, Code of Federal Regu16 lations) in relevant areas as determined by the 

17 Secretary. 

18 ‘‘(C) PAYERS.—Private and public health 

19 care payers, including group health plans, 

20 health insurance coverage offered by health in21 surance issuers, Federal health programs, and 

22 State health programs. 

23 ‘‘(3) EXEMPTION FROM FREEDOM OF INFORMA24 TION ACT.—Except as described in paragraph (1), 

25 the Secretary may not be compelled to disclose the 


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1 information submitted under subsection (a) to any 

2 individual or entity. For purposes of section 552 of 

3 title 5, United States Code (commonly referred to as 

4 the Freedom of Information Act), this paragraph 

5 shall be considered a statute described in subsection 

6 (b)(3)(B) of such section. 

7 ‘‘(c) PENALTIES.— 

8 ‘‘(1) DATA SHARING AGREEMENTS.—Subject to 

9 paragraph (3), any specified data sharing individual 

10 or entity described in subsection (b)(2) that violates 

11 the terms of a data sharing agreement the individual 

12 or entity has with the Secretary under subsection 

13 (b)(1) shall be subject to a civil money penalty of 

14 not less than $1,000, but not more than $10,000, 

15 for each such violation. Such penalty shall be im16 posed and collected in the same manner as civil 

17 money penalties under subsection (a) of section 

18 1128A are imposed and collected under that section. 

19 ‘‘(2) FAILURE TO REPORT.—Subject to para20 graph (3), any manufacturer or authorized dis21 tributor of record of an applicable drug under sub22 section (a) that fails to submit information required 

23 under such subsection in a timely manner in accord24 ance with rules or regulations promulgated to carry 

25 out such subsection shall be subject to a civil money 


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1 penalty of not less than $1,000, but not more than 

2 $10,000, for each such failure. Such penalty shall be 

3 imposed and collected in the same manner as civil 

4 money penalties under subsection (a) of section 

5 1128A are imposed and collected under that section. 

6 ‘‘(3) LIMITATION.—The total amount of civil 

7 money penalties imposed under paragraph (1) or (2) 

8 with respect to a year and an individual or entity de9 scribed in paragraph (1) or a manufacturer or dis10 tributor described in paragraph (2), respectively, 

11 shall not exceed $150,000. 

12 ‘‘(d) DRUG SAMPLE DISTRIBUTION INFORMATION.— 

13 ‘‘(1) IN GENERAL.—Not later than January 1 

14 of each year (beginning with 2022), the Secretary 

15 shall maintain a list containing information related 

16 to the distribution of samples of applicable drugs. 

17 Such list shall provide the following information with 

18 respect to the preceding year: 

19 ‘‘(A) The name of the manufacturer or au20 thorized distributor of record of an applicable 

21 drug for which samples were requested or dis22 tributed under this section. 

23 ‘‘(B) The quantity and class of drug sam24 ples requested. 


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1 ‘‘(C) The quantity and class of drug sam2 ples distributed. 

3 ‘‘(2) PUBLIC AVAILABILITY.—The Secretary 

4 shall make the information in such list available to 

5 the public on the Internet website of the Food and 

6 Drug Administration.’’. 

7 (b) FDA MAINTENANCE OF INFORMATION.—The 

8 Food and Drug Administration shall maintain information 

9 available to affected reporting companies to ensure their 

10 ability to fully comply with the requirements of section 

11 1128H of the Social Security Act. 

12 (c) PROHIBITION ON DISTRIBUTION OF SAMPLES OF

13 OPIOIDS.—Section 503(d) of the Federal Food, Drug, and 

14 Cosmetic Act (21 U.S.C. 353(d)) is amended— 

15 (1) by moving the margin of paragraph (4) 2 

16 ems to the left; and 

17 (2) by adding at the end the following: 

18 ‘‘(5) No person may distribute a drug sample of a 

19 drug that is— 

20 ‘‘(A) an applicable drug (as defined in section 

21 1128H(e) of the Social Security Act); 

22 ‘‘(B) a controlled substance (as defined in sec23 tion 102 of the Controlled Substances Act) for which 

24 the findings required under section 202(b)(2) of 

25 such Act have been made; and 


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1 ‘‘(C) approved under section 505 for use in the 

2 management or treatment of pain (other than for 

3 the management or treatment of a substance use 

4 disorder).’’. 

5 (d) MEDPAC REPORT.—Not later than 3 years after 

6 the date of the enactment of this Act, the Medicare Pay7 ment Advisory Commission shall conduct a study on the 

8 impact of drug samples on provider prescribing practices 

9 and health care costs and may, as the Commission deems 

10 appropriate, make recommendations on such study. 

11 SEC. 115. SENSE OF CONGRESS REGARDING THE NEED TO 

12 EXPAND COMMERCIALLY AVAILABLE DRUG 

13 PRICING COMPARISON PLATFORMS. 

14 It is the sense of Congress that— 

15 (1) commercially available drug pricing com16 parison platforms can, at no cost, help patients find 

17 the lowest price for their medications at their local 

18 pharmacy; 

19 (2) such platforms should be integrated, to the 

20 maximum extent possible, in the health care delivery 

21 ecosystem; and 

22 (3) pharmacy benefit managers should work to 

23 disclose generic and brand name drug prices to such 

24 platforms to ensure that— 


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1 (A) patients can benefit from the lowest 

2 possible price available to them; and 

3 (B) overall drug prices can be reduced as 

4 more educated purchasing decisions are made 

5 based on price transparency. 

6 Subtitle C—Medicare Part D 

7 Benefit Redesign 

8 SEC. 121. MEDICARE PART D BENEFIT REDESIGN. 

9 (a) BENEFIT STRUCTURE REDESIGN.—Section 

10 1860D–2(b) of the Social Security Act (42 U.S.C. 1395w– 

11 102(b)) is amended— 

12 (1) in paragraph (2)— 

13 (A) in subparagraph (A)— 

14 (i) in the matter preceding clause (i), 

15 by inserting ‘‘for a year preceding 2022 

16 and for costs above the annual deductible 

17 specified in paragraph (1) and up to the 

18 annual out-of-pocket threshold specified in 

19 paragraph (4)(B) for 2022 and each subse20 quent year’’ after ‘‘paragraph (3)’’; 

21 (ii) in clause (i), by inserting after 

22 ‘‘25 percent’’ the following: ‘‘(or, for 2022 

23 and each subsequent year, 15 percent)’’; 

24 and 


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1 (iii) in clause (ii), by inserting ‘‘(or, 

2 for 2022 and each subsequent year, 15 

3 percent)’’ after ‘‘25 percent’’; 

4 (B) in subparagraph (C)— 

5 (i) in clause (i), in the matter pre6 ceding subclause (I), by inserting ‘‘for a 

7 year preceding 2022,’’ after ‘‘paragraph 

8 (4),’’; and 

9 (ii) in clause (ii)(III), by striking 

10 ‘‘and each subsequent year’’ and inserting 

11 ‘‘and 2021’’; and 

12 (C) in subparagraph (D)— 

13 (i) in clause (i)— 

14 (I) in the matter preceding sub15 clause (I), by inserting ‘‘for a year 

16 preceding 2022,’’ after ‘‘paragraph 

17 (4),’’; and 

18 (II) in subclause (I)(bb), by 

19 striking ‘‘a year after 2018’’ and in20 serting ‘‘each of years 2018 through 

21 2021’’; and 

22 (ii) in clause (ii)(V), by striking 

23 ‘‘2019 and each subsequent year’’ and in24 serting ‘‘each of years 2019 through 

25 2021’’; 


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1 (2) in paragraph (3)(A)— 

2 (A) in the matter preceding clause (i), by 

3 inserting ‘‘for a year preceding 2022,’’ after 

4 ‘‘and (4),’’; and 

5 (B) in clause (ii), by striking ‘‘for a subse6 quent year’’ and inserting ‘‘for each of years 

7 2007 through 2021’’; 

8 (3) in paragraph (4)— 

9 (A) in subparagraph (A)— 

10 (i) in clause (i)— 

11 (I) by redesignating subclauses 

12 (I) and (II) as items (aa) and (bb), 

13 respectively, and indenting appro14 priately; 

15 (II) in the matter preceding item 

16 (aa), as redesignated by subclause (I), 

17 by striking ‘‘is equal to the greater 

18 of—’’ and inserting ‘‘is equal to— 

19 ‘‘(I) for a year preceding 2022, 

20 the greater of—’’; 

21 (III) by striking the period at the 

22 end of item (bb), as redesignated by 

23 subclause (I), and inserting ‘‘; and’’; 

24 and 


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1 (IV) by adding at the end the fol2 lowing: 

3 ‘‘(II) for 2022 and each suc4 ceeding year, $0.’’; and 

5 (ii) in clause (ii)— 

6 (I) by striking ‘‘clause (i)(I)’’ and 

7 inserting ‘‘clause (i)(I)(aa)’’; and 

8 (II) by adding at the end the fol9 lowing new sentence: ‘‘The Secretary 

10 shall continue to calculate the dollar 

11 amounts specified in clause (i)(I)(aa), 

12 including with the adjustment under 

13 this clause, after 2021 for purposes of 

14 section 1860D–14(a)(1)(D)(iii).’’; 

15 (B) in subparagraph (B)— 

16 (i) in clause (i)— 

17 (I) in subclause (V), by striking 

18 ‘‘or’’ at the end; 

19 (II) in subclause (VI)— 

20 (aa) by striking ‘‘for a sub21 sequent year’’ and inserting ‘‘for 

22 2021’’; and 

23 (bb) by striking the period 

24 at the end and inserting a semi25 colon; and 


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1 (III) by adding at the end the 

2 following new subclauses: 

3 ‘‘(VII) for 2022, is equal to 

4 $3,100; or 

5 ‘‘(VIII) for a subsequent year, is 

6 equal to the amount specified in this 

7 subparagraph for the previous year, 

8 increased by the annual percentage in9 crease described in paragraph (6) for 

10 the year involved.’’; and 

11 (ii) in clause (ii), by striking ‘‘clause 

12 (i)(II)’’ and inserting ‘‘clause (i)’’; 

13 (C) in subparagraph (C)(i), by striking 

14 ‘‘and for amounts’’ and inserting ‘‘and for a 

15 year preceding 2022 for amounts’’; and 

16 (D) in subparagraph (E), by striking ‘‘In 

17 applying’’ and inserting ‘‘For each of 2011 

18 through 2021, in applying’’. 

19 (b) DECREASING REINSURANCE PAYMENT

20 AMOUNT.—Section 1860D–15(b)(1) of the Social Security 

21 Act (42 U.S.C. 1395w–115(b)(1)) is amended— 

22 (1) by striking ‘‘equal to 80 percent’’ and in23 serting ‘‘equal to– 

24 ‘‘(A) for a year preceding 2022, 80 per25 cent’’; 


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1 (2) in subparagraph (A), as added by para2 graph (1), by striking the period at the end and in3 serting ‘‘; and’’; and 

4 (3) by adding at the end the following new sub5 paragraph: 

6 ‘‘(B) for 2022 and each subsequent year, 

7 the sum of— 

8 ‘‘(i) an amount equal to 20 percent of 

9 the allowable reinsurance costs (as speci10 fied in paragraph (2)) attributable to that 

11 portion of gross covered prescription drug 

12 costs as specified in paragraph (3) in13 curred in the coverage year after such indi14 vidual has incurred costs that exceed the 

15 annual out-of-pocket threshold specified in 

16 section 1860D–2(b)(4)(B) with respect to 

17 applicable drugs (as defined in section 

18 1860D–14B(g)(2)); and 

19 ‘‘(ii) an amount equal to 30 percent of 

20 the allowable reinsurance costs (as speci21 fied in paragraph (2)) attributable to that 

22 portion of gross covered prescription drug 

23 costs as specified in paragraph (3) in24 curred in the coverage year after such indi25 vidual has incurred costs that exceed the 


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1 annual out-of-pocket threshold specified in 

2 section 1860D–2(b)(4)(B) with respect to 

3 covered part D drugs that are not applica4 ble drugs (as so defined).’’. 

5 (c) MANUFACTURER DISCOUNT PROGRAM.— 

6 (1) IN GENERAL.—Part D of title XVIII of the 

7 Social Security Act is amended by inserting after 

8 section 1860D–14A (42 U.S.C. 1495w–114) the fol9 lowing new section: 

10 ‘‘SEC. 1860D–14B. MANUFACTURER DISCOUNT PROGRAM. 

11 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab12 lish a manufacturer discount program (in this section re13 ferred to as the ‘program’). Under the program, the Sec14 retary shall enter into agreements described in subsection 

15 (b) with manufacturers and provide for the performance 

16 of the duties described in subsection (c). The Secretary 

17 shall establish a model agreement for use under the pro18 gram by not later than January 1, 2023, in consultation 

19 with manufacturers, and allow for comment on such model 

20 agreement. 

21 ‘‘(b) TERMS OF AGREEMENT.— 

22 ‘‘(1) IN GENERAL.— 

23 ‘‘(A) AGREEMENT.—An agreement under 

24 this section shall require the manufacturer to 

25 provide applicable beneficiaries access to disVerDate Sep 11 2014 00:26 Apr 24, 2021 Jkt 019200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 counted prices for applicable drugs of the man2 ufacturer that are dispensed on or after Janu3 ary 1, 2024. 

4 ‘‘(B) PROVISION OF DISCOUNTED PRICES

5 AT THE POINT-OF-SALE.—The discounted prices 

6 described in subparagraph (A) shall be provided 

7 to the applicable beneficiary at the pharmacy or 

8 by the mail order service at the point-of-sale of 

9 an applicable drug. 

10 ‘‘(2) PROVISION OF APPROPRIATE DATA.—Each 

11 manufacturer with an agreement in effect under this 

12 section shall collect and have available appropriate 

13 data, as determined by the Secretary, to ensure that 

14 it can demonstrate to the Secretary compliance with 

15 the requirements under the program. 

16 ‘‘(3) COMPLIANCE WITH REQUIREMENTS FOR

17 ADMINISTRATION OF PROGRAM.—Each manufac18 turer with an agreement in effect under this section 

19 shall comply with requirements imposed by the Sec20 retary or a third party with a contract under sub21 section (d)(3), as applicable, for purposes of admin22 istering the program, including any determination 

23 under subparagraph (A) of subsection (c)(1) or pro24 cedures established under such subsection (c)(1). 

25 ‘‘(4) LENGTH OF AGREEMENT.— 


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1 ‘‘(A) IN GENERAL.—An agreement under 

2 this section shall be effective for an initial pe3 riod of not less than 12 months and shall be 

4 automatically renewed for a period of not less 

5 than 1 year unless terminated under subpara6 graph (B). 

7 ‘‘(B) TERMINATION.— 

8 ‘‘(i) BY THE SECRETARY.—The Sec9 retary may provide for termination of an 

10 agreement under this section for a knowing 

11 and willful violation of the requirements of 

12 the agreement or other good cause shown. 

13 Such termination shall not be effective ear14 lier than 30 days after the date of notice 

15 to the manufacturer of such termination. 

16 The Secretary shall provide, upon request, 

17 a manufacturer with a hearing concerning 

18 such a termination, and such hearing shall 

19 take place prior to the effective date of the 

20 termination with sufficient time for such 

21 effective date to be repealed if the Sec22 retary determines appropriate. 

23 ‘‘(ii) BY A MANUFACTURER.—A man24 ufacturer may terminate an agreement 

25 under this section for any reason. Any 


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1 such termination shall be effective, with re2 spect to a plan year— 

3 ‘‘(I) if the termination occurs be4 fore January 30 of a plan year, as of 

5 the day after the end of the plan year; 

6 and 

7 ‘‘(II) if the termination occurs on 

8 or after January 30 of a plan year, as 

9 of the day after the end of the suc10 ceeding plan year. 

11 ‘‘(iii) EFFECTIVENESS OF TERMI12 NATION.—Any termination under this sub13 paragraph shall not affect discounts for 

14 applicable drugs of the manufacturer that 

15 are due under the agreement before the ef16 fective date of its termination. 

17 ‘‘(iv) NOTICE TO THIRD PARTY.—The 

18 Secretary shall provide notice of such ter19 mination to a third party with a contract 

20 under subsection (d)(3) within not less 

21 than 30 days before the effective date of 

22 such termination. 

23 ‘‘(5) EFFECTIVE DATE OF AGREEMENT.—An 

24 agreement under this section shall take effect on a 


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1 date determined appropriate by the Secretary, which 

2 may be at the start of a calendar quarter. 

3 ‘‘(c) DUTIES DESCRIBED.—The duties described in 

4 this subsection are the following: 

5 ‘‘(1) ADMINISTRATION OF PROGRAM.—Admin6 istering the program, including— 

7 ‘‘(A) the determination of the amount of 

8 the discounted price of an applicable drug of a 

9 manufacturer; 

10 ‘‘(B) the establishment of procedures 

11 under which discounted prices are provided to 

12 applicable beneficiaries at pharmacies or by 

13 mail order service at the point-of-sale of an ap14 plicable drug; 

15 ‘‘(C) the establishment of procedures to 

16 ensure that, not later than the applicable num17 ber of calendar days after the dispensing of an 

18 applicable drug by a pharmacy or mail order 

19 service, the pharmacy or mail order service is 

20 reimbursed for an amount equal to the dif21 ference between— 

22 ‘‘(i) the negotiated price of the appli23 cable drug; and 

24 ‘‘(ii) the discounted price of the appli25 cable drug; 


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1 ‘‘(D) the establishment of procedures to 

2 ensure that the discounted price for an applica3 ble drug under this section is applied before any 

4 coverage or financial assistance under other 

5 health benefit plans or programs that provide 

6 coverage or financial assistance for the pur7 chase or provision of prescription drug coverage 

8 on behalf of applicable beneficiaries as the Sec9 retary may specify; and 

10 ‘‘(E) providing a reasonable dispute resolu11 tion mechanism to resolve disagreements be12 tween manufacturers, applicable beneficiaries, 

13 and the third party with a contract under sub14 section (d)(3). 

15 ‘‘(2) MONITORING COMPLIANCE.— 

16 ‘‘(A) IN GENERAL.—The Secretary shall 

17 monitor compliance by a manufacturer with the 

18 terms of an agreement under this section. 

19 ‘‘(B) NOTIFICATION.—If a third party 

20 with a contract under subsection (d)(3) deter21 mines that the manufacturer is not in compli22 ance with such agreement, the third party shall 

23 notify the Secretary of such noncompliance for 

24 appropriate enforcement under subsection (e). 


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1 ‘‘(3) COLLECTION OF DATA FROM PRESCRIP2 TION DRUG PLANS AND MA–PD PLANS.—The Sec3 retary may collect appropriate data from prescrip4 tion drug plans and MA–PD plans in a timeframe 

5 that allows for discounted prices to be provided for 

6 applicable drugs under this section. 

7 ‘‘(d) ADMINISTRATION.— 

8 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

9 the Secretary shall provide for the implementation of 

10 this section, including the performance of the duties 

11 described in subsection (c). 

12 ‘‘(2) LIMITATION.—In providing for the imple13 mentation of this section, the Secretary shall not re14 ceive or distribute any funds of a manufacturer 

15 under the program. 

16 ‘‘(3) CONTRACT WITH THIRD PARTIES.—The 

17 Secretary shall enter into a contract with 1 or more 

18 third parties to administer the requirements estab19 lished by the Secretary in order to carry out this 

20 section. At a minimum, the contract with a third 

21 party under the preceding sentence shall require 

22 that the third party— 

23 ‘‘(A) receive and transmit information be24 tween the Secretary, manufacturers, and other 


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1 individuals or entities the Secretary determines 

2 appropriate; 

3 ‘‘(B) receive, distribute, or facilitate the 

4 distribution of funds of manufacturers to ap5 propriate individuals or entities in order to 

6 meet the obligations of manufacturers under 

7 agreements under this section; 

8 ‘‘(C) provide adequate and timely informa9 tion to manufacturers, consistent with the 

10 agreement with the manufacturer under this 

11 section, as necessary for the manufacturer to 

12 fulfill its obligations under this section; and 

13 ‘‘(D) permit manufacturers to conduct 

14 periodic audits, directly or through contracts, of 

15 the data and information used by the third 

16 party to determine discounts for applicable 

17 drugs of the manufacturer under the program. 

18 ‘‘(4) PERFORMANCE REQUIREMENTS.—The 

19 Secretary shall establish performance requirements 

20 for a third party with a contract under paragraph 

21 (3) and safeguards to protect the independence and 

22 integrity of the activities carried out by the third 

23 party under the program under this section. 


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1 ‘‘(5) ADMINISTRATION.—Chapter 35 of title 44, 

2 United States Code, shall not apply to the program 

3 under this section. 

4 ‘‘(e) ENFORCEMENT.— 

5 ‘‘(1) AUDITS.—Each manufacturer with an 

6 agreement in effect under this section shall be sub7 ject to periodic audit by the Secretary. 

8 ‘‘(2) CIVIL MONEY PENALTY.— 

9 ‘‘(A) IN GENERAL.—The Secretary shall 

10 impose a civil money penalty on a manufacturer 

11 that fails to provide applicable beneficiaries dis12 counts for applicable drugs of the manufacturer 

13 in accordance with such agreement for each 

14 such failure in an amount the Secretary deter15 mines is commensurate with the sum of— 

16 ‘‘(i) the amount that the manufac17 turer would have paid with respect to such 

18 discounts under the agreement, which will 

19 then be used to pay the discounts which 

20 the manufacturer had failed to provide; 

21 and 

22 ‘‘(ii) 25 percent of such amount. 

23 ‘‘(B) APPLICATION.—The provisions of 

24 section 1128A (other than subsections (a) and 

25 (b)) shall apply to a civil money penalty under 


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1 this paragraph in the same manner as such 

2 provisions apply to a penalty or proceeding 

3 under section 1128A(a). 

4 ‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF

5 OTHER COVERED PART D DRUGS.—Nothing in this sec6 tion shall prevent an applicable beneficiary from pur7 chasing a covered part D drug that is not on the formulary 

8 of the prescription drug plan or MA–PD plan that the 

9 applicable beneficiary is enrolled in. 

10 ‘‘(g) DEFINITIONS.—In this section: 

11 ‘‘(1) APPLICABLE BENEFICIARY.—The term 

12 ‘applicable beneficiary’ means an individual who, on 

13 the date of dispensing a covered part D drug— 

14 ‘‘(A) is enrolled in a prescription drug plan 

15 or an MA–PD plan; 

16 ‘‘(B) is not enrolled in a qualified retiree 

17 prescription drug plan; and 

18 ‘‘(C) has incurred costs for covered part D 

19 drugs in the year that are equal to or exceed 

20 the annual deductible specified in section 

21 1860D–2(b)(1) for such year. 

22 ‘‘(2) APPLICABLE DRUG.—The term ‘applicable 

23 drug’ means, with respect to an applicable bene24 ficiary, a covered part D drug— 


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1 ‘‘(A) approved under a new drug applica2 tion under section 505(c) of the Federal Food, 

3 Drug, and Cosmetic Act or, in the case of a bio4 logic product, licensed under section 351 of the 

5 Public Health Service Act (including a product 

6 licensed under subsection (k) of such section); 

7 and 

8 ‘‘(B)(i) if the PDP sponsor of the prescrip9 tion drug plan or the MA organization offering 

10 the MA–PD plan uses a formulary, which is on 

11 the formulary of the prescription drug plan or 

12 MA–PD plan that the applicable beneficiary is 

13 enrolled in; 

14 ‘‘(ii) if the PDP sponsor of the prescrip15 tion drug plan or the MA organization offering 

16 the MA–PD plan does not use a formulary, for 

17 which benefits are available under the prescrip18 tion drug plan or MA–PD plan that the appli19 cable beneficiary is enrolled in; or 

20 ‘‘(iii) is provided through an exception or 

21 appeal. 

22 ‘‘(3) APPLICABLE NUMBER OF CALENDAR

23 DAYS.—The term ‘applicable number of calendar 

24 days’ means— 


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1 ‘‘(A) with respect to claims for reimburse2 ment submitted electronically, 14 days; and 

3 ‘‘(B) with respect to claims for reimburse4 ment submitted otherwise, 30 days. 

5 ‘‘(4) DISCOUNTED PRICE.— 

6 ‘‘(A) IN GENERAL.—The term ‘discounted 

7 price’ means, with respect to an applicable drug 

8 of a manufacturer furnished during a year to 

9 an applicable beneficiary, 90 percent of the ne10 gotiated price of such drug. 

11 ‘‘(B) CLARIFICATION.—Nothing in this 

12 section shall be construed as affecting the re13 sponsibility of an applicable beneficiary for pay14 ment of a dispensing fee for an applicable drug. 

15 ‘‘(C) SPECIAL CASE FOR CLAIMS SPANNING

16 DEDUCTIBLE.—In the case where the entire 

17 amount of the negotiated price of an individual 

18 claim for an applicable drug with respect to an 

19 applicable beneficiary does not fall at or above 

20 the annual deductible specified in section 

21 1860D–2(b)(1) for the year, the manufacturer 

22 of the applicable drug shall provide the dis23 counted price under this section on only the 

24 portion of the negotiated price of the applicable 


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1 drug that falls at or above such annual deduct2 ible. 

3 ‘‘(5) MANUFACTURER.—The term ‘manufac4 turer’ means any entity which is engaged in the pro5 duction, preparation, propagation, compounding, 

6 conversion, or processing of prescription drug prod7 ucts, either directly or indirectly by extraction from 

8 substances of natural origin, or independently by 

9 means of chemical synthesis, or by a combination of 

10 extraction and chemical synthesis. Such term does 

11 not include a wholesale distributor of drugs or a re12 tail pharmacy licensed under State law. 

13 ‘‘(6) NEGOTIATED PRICE.—The term ‘nego14 tiated price’ has the meaning given such term in sec15 tion 1860D–2(d)(1)(B), except that such negotiated 

16 price shall not include any dispensing fee for an ap17 plicable drug. 

18 ‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG

19 PLAN.—The term ‘qualified retiree prescription drug 

20 plan’ has the meaning given such term in section 

21 11860D–22(a)(2).’’. 

22 (2) SUNSET OF MEDICARE COVERAGE GAP DIS23 COUNT PROGRAM.—Section 1860D–14A of the So24 cial Security Act (42 U.S.C. 1395–114a) is amend25 ed— 


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1 (A) in subsection (a), in the first sentence, 

2 by striking ‘‘The Secretary’’ and inserting 

3 ‘‘Subject to subsection (h), the Secretary’’; and 

4 (B) by adding at the end the following new 

5 subsection: 

6 ‘‘(h) SUNSET OF PROGRAM.— 

7 ‘‘(1) IN GENERAL.—The program shall not 

8 apply to applicable drugs dispensed on or after Jan9 uary 1, 2024, and, subject to paragraph (2), agree10 ments under this section shall be terminated as of 

11 such date. 

12 ‘‘(2) CONTINUED APPLICATION FOR APPLICA13 BLE DRUGS DISPENSED PRIOR TO SUNSET.—The 

14 provisions of this section (including all responsibil15 ities and duties) shall continue to apply after Janu16 ary 1, 2024, with respect to applicable drugs dis17 pensed prior to such date.’’. 

18 (3) INCLUSION OF ACTUARIAL VALUE OF MANU19 FACTURER DISCOUNTS IN BIDS.—Section 1860D–11 

20 of the Social Security Act (42 U.S.C. 1395w–111) 

21 is amended— 

22 (A) in subsection (b)(2)(C)(iii)— 

23 (i) by striking ‘‘assumptions regarding 

24 the reinsurance’’ and inserting ‘‘assump25 tions regarding— 


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1 ‘‘(I) the reinsurance’’; and 

2 (ii) by adding at the end the fol3 lowing: 

4 ‘‘(II) for 2024 and each subse5 quent year, the manufacturer dis6 counts provided under section 1860D– 

7 14B subtracted from the actuarial 

8 value to produce such bid; and’’; and 

9 (B) in subsection (c)(1)(C)— 

10 (i) by striking ‘‘an actuarial valuation 

11 of the reinsurance’’ and inserting ‘‘an ac12 tuarial valuation of— 

13 ‘‘(i) the reinsurance’’; 

14 (ii) in clause (i), as added by clause 

15 (i) of this subparagraph, by adding ‘‘and’’ 

16 at the end; and 

17 (iii) by adding at the end the fol18 lowing: 

19 ‘‘(ii) for 2024 and each subsequent 

20 year, the manufacturer discounts provided 

21 under section 1860D–14B;’’. 

22 (4) CLARIFICATION REGARDING EXCLUSION OF

23 MANUFACTURER DISCOUNTS FROM TROOP.—Section 

24 1860D–2(b)(4) of the Social Security Act (42 

25 U.S.C. 1395w–102(b)(4)) is amended— 


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1 (A) in subparagraph (C), by inserting ‘‘and 

2 subject to subparagraph (F)’’ after ‘‘subpara3 graph (E)’’; and 

4 (B) by adding at the end the following new 

5 subparagraph: 

6 ‘‘(F) CLARIFICATION REGARDING EXCLU7 SION OF MANUFACTURER DISCOUNTS.—In ap8 plying subparagraph (A), incurred costs shall 

9 not include any manufacturer discounts pro10 vided under section 1860D–14B.’’. 

11 (d) DETERMINATION OF ALLOWABLE REINSURANCE

12 COSTS.—Section 1860D–15(b) of the Social Security Act 

13 (42 U.S.C. 1395w–115(b)) is amended— 

14 (1) in paragraph (2)— 

15 (A) by striking ‘‘COSTS.—For purposes’’ 

16 and inserting ‘‘COSTS.— 

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), for purposes’’; and 

19 (B) by adding at the end the following new 

20 subparagraph: 

21 ‘‘(B) INCLUSION OF MANUFACTURER DIS22 COUNTS ON APPLICABLE DRUGS.—For purposes 

23 of applying subparagraph (A), the term ‘allow24 able reinsurance costs’ shall include the portion 

25 of the negotiated price (as defined in section 


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1 1860D–14B(g)(6)) of an applicable drug (as 

2 defined in section 1860D–14(g)(2)) that was 

3 paid by a manufacturer under the manufacturer 

4 discount program under section 1860D–14B.’’; 

5 and 

6 (2) in paragraph (3)— 

7 (A) in the first sentence, by striking ‘‘For 

8 purposes’’ and inserting ‘‘Subject to paragraph 

9 (2)(B), for purposes’’; and 

10 (B) in the second sentence, by inserting 

11 ‘‘or, in the case of an applicable drug, by a 

12 manufacturer’’ after ‘‘by the individual or 

13 under the plan’’. 

14 (e) UPDATING RISK ADJUSTMENT METHODOLOGIES

15 TO ACCOUNT FOR PART D MODERNIZATION REDESIGN.— 

16 Section 1860D–15(c) of the Social Security Act (42 

17 U.S.C. 1395w–115(c)) is amended by adding at the end 

18 the following new paragraph: 

19 ‘‘(3) UPDATING RISK ADJUSTMENT METH20 ODOLOGIES TO ACCOUNT FOR PART D MODERNIZA21 TION REDESIGN.—The Secretary shall update the 

22 risk adjustment model used to adjust bid amounts 

23 pursuant to this subsection as appropriate to take 

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1 suant to the amendments made by section 121 of 

2 the Lower Costs, More Cures Act of 2021.’’. 

3 (f) CONDITIONS FOR COVERAGE OF DRUGS UNDER

4 THIS PART.—Section 1860D–43 of the Social Security 

5 Act (42 U.S.C. 1395w–153) is amended— 

6 (1) in subsection (a)— 

7 (A) in paragraph (2), by striking ‘‘and’’ at 

8 the end; 

9 (B) in paragraph (3), by striking the pe10 riod at the end and inserting a semicolon; and 

11 (C) by adding at the end the following new 

12 paragraphs: 

13 ‘‘(4) participate in the manufacturer discount 

14 program under section 1860D–14B; 

15 ‘‘(5) have entered into and have in effect an 

16 agreement described in subsection (b) of such sec17 tion 1860D–14B with the Secretary; and 

18 ‘‘(6) have entered into and have in effect, under 

19 terms and conditions specified by the Secretary, a 

20 contract with a third party that the Secretary has 

21 entered into a contract with under subsection (d)(3) 

22 of such section 1860D–14B.’’; 

23 (2) by striking subsection (b) and inserting the 

24 following: 


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1 ‘‘(b) EFFECTIVE DATE.—Paragraphs (1) through (3) 

2 of subsection (a) shall apply to covered part D drugs dis3 pensed under this part on or after January 1, 2011, and 

4 before January 1, 2024, and paragraphs (4) through (6) 

5 of such subsection shall apply to covered part D drugs 

6 dispensed on or after January 1, 2024.’’; and 

7 (3) in subsection (c), by striking paragraph (2) 

8 and inserting the following: 

9 ‘‘(2) the Secretary determines that in the period 

10 beginning on January 1, 2011, and ending on De11 cember 31, 2011 (with respect to paragraphs (1) 

12 through (3) of subsection (a)) or the period begin13 ning on January 1, 2024, and ending December 31, 

14 2024 (with respect to paragraphs (4) through (6) of 

15 such subsection), there were extenuating cir16 cumstances.’’. 

17 (g) CONFORMING AMENDMENTS.— 

18 (1) Section 1860D–2 of the Social Security Act 

19 (42 U.S.C. 1395w–102) is amended— 

20 (A) in subsection (a)(2)(A)(i)(I), by strik21 ing ‘‘, or an increase in the initial’’ and insert22 ing ‘‘or for a year preceding 2024 an increase 

23 in the initial’’; 

24 (B) in subsection (c)(1)(C)— 


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1 (i) in the subparagraph heading, by 

2 striking ‘‘AT INITIAL COVERAGE LIMIT’’; 

3 and 

4 (ii) by inserting ‘‘for a year preceding 

5 2024 or the annual out-of-pocket threshold 

6 specified in subsection (b)(4)(B) for the 

7 year for 2024 and each subsequent year’’ 

8 after ‘‘subsection (b)(3) for the year’’ each 

9 place it appears; and 

10 (C) in subsection (d)(1)(A), by striking ‘‘or 

11 an initial’’ and inserting ‘‘or for a year pre12 ceding 2024, an initial’’. 

13 (2) Section 1860D–4(a)(4)(B)(i) of the Social 

14 Security Act (42 U.S.C. 1395w–104(a)(4)(B)(i)) is 

15 amended by striking ‘‘the initial’’ and inserting ‘‘for 

16 a year preceding 2024, the initial’’. 

17 (3) Section 1860D–14(a) of the Social Security 

18 Act (42 U.S.C. 1395w–114(a)) is amended— 

19 (A) in paragraph (1)— 

20 (i) in subparagraph (C), by striking 

21 ‘‘The continuation’’ and inserting ‘‘For a 

22 year preceding 2024, the continuation’’; 

23 (ii) in subparagraph (D)(iii), by strik24 ing ‘‘1860D–2(b)(4)(A)(i)(I)’’ and insert25 ing ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’; and 


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1 (iii) in subparagraph (E), by striking 

2 ‘‘The elimination’’ and inserting ‘‘For a 

3 year preceding 2024, the elimination’’; and 

4 (B) in paragraph (2)— 

5 (i) in subparagraph (C), by striking 

6 ‘‘The continuation’’ and inserting ‘‘For a 

7 year preceding 2024, the continuation’’; 

8 and 

9 (ii) in subparagraph (E)— 

10 (I) by inserting ‘‘for a year pre11 ceding 2024,’’ after ‘‘subsection (c)’’; 

12 and 

13 (II) by striking ‘‘1860D– 

14 2(b)(4)(A)(i)(I)’’ and inserting 

15 ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’. 

16 (4) Section 1860D–21(d)(7) of the Social Secu17 rity Act (42 U.S.C. 1395w–131(d)(7)) is amended 

18 by striking ‘‘section 1860D–2(b)(4)(B)(i)’’ and in19 serting ‘‘section 1860D–2(b)(4)(C)(i)’’. 

20 (5) Section 1860D–22(a)(2)(A) of the Social 

21 Security Act (42 U.S.C. 1395w–132(a)(2)(A)) is 

22 amended— 

23 (A) by striking ‘‘the value of any discount’’ 

24 and inserting the following: ‘‘the value of— 


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1 ‘‘(i) for years prior to 2024, any dis2 count’’; 

3 (B) in clause (i), as inserted by subpara4 graph (A) of this paragraph, by striking the pe5 riod at the end and inserting ‘‘; and’’; and 

6 (C) by adding at the end the following new 

7 clause: 

8 ‘‘(ii) for 2024 and each subsequent 

9 year, any discount provided pursuant to 

10 section 1860D–14B.’’. 

11 (6) Section 1860D–41(a)(6) of the Social Secu12 rity Act (42 U.S.C. 1395w–151(a)(6)) is amended— 

13 (A) by inserting ‘‘for a year before 2024’’ 

14 after ‘‘1860D–2(b)(3)’’; and 

15 (B) by inserting ‘‘for such year’’ before the 

16 period. 

17 (h) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to plan year 2024 and subsequent 

19 plan years. 


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1 Subtitle D—Other Medicare Part D 

2 Provisions 

3 SEC. 131. ALLOWING THE OFFERING OF ADDITIONAL PRE4 SCRIPTION DRUG PLANS UNDER MEDICARE 

5 PART D. 

6 (a) RESCINDING AND ISSUANCE OF NEW GUID7 ANCE.—Not later than one year after the date of the en8 actment of this Act, the Secretary of Health and Human 

9 Services (in this section referred to as the ‘‘Secretary’’) 

10 shall— 

11 (1) rescind sections of any sub-regulatory guid12 ance that limit the number of prescription drug 

13 plans in each PDP region that may be offered by a 

14 PDP sponsor under part D of title XVIII of the So15 cial Security Act (42 U.S.C. 1395w–101 et seq.); 

16 and 

17 (2) issue new guidance specifying that a PDP 

18 sponsor may offer up to 4 (or a greater number if 

19 determined appropriate by the Secretary) prescrip20 tion drug plans in each PDP region, except in cases 

21 where the PDP sponsor may offer up to 2 additional 

22 plans in a PDP region pursuant to section 1860D– 

23 11(d)(4) of the Social Security Act (42 U.S.C. 

24 1395w–111(d)(4)), as added by subsection (b). 


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1 (b) OFFERING OF ADDITIONAL PLANS.—Section 

2 1860D–11(d) of the Social Security Act (42 U.S.C. 

3 1395w–111(d)) is amended by adding at the end the fol4 lowing new paragraph: 

5 ‘‘(4) OFFERING OF ADDITIONAL PLANS.— 

6 ‘‘(A) IN GENERAL.—For plan year 2022 

7 and each subsequent plan year, a PDP sponsor 

8 may offer up to 2 additional prescription drug 

9 plans in a PDP region (in addition to any limit 

10 established by the Secretary under this part) 

11 provided that the PDP sponsor complies with 

12 subparagraph (B) with respect to at least one 

13 such prescription drug plan. 

14 ‘‘(B) REQUIREMENTS.—In order to be eli15 gible to offer up to 2 additional plans in a PDP 

16 region pursuant to subparagraph (A), a PDP 

17 sponsor must ensure that, with respect to at 

18 least one such prescription drug plan, the spon19 sor or any entity that provides pharmacy bene20 fits management services under a contract with 

21 any such sponsor or plan does not receive direct 

22 or indirect remuneration, as defined in section 

23 423.308 of title 42, Code of Federal Regula24 tions (or any successor regulation), unless at 

25 least 25 percent of the aggregate reductions in 


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1 price or other remuneration received by the 

2 PDP sponsor or entity from drug manufactur3 ers with respect to the plan and plan year— 

4 ‘‘(i) are reflected at the point-of-sale 

5 to the enrollee; or 

6 ‘‘(ii) are used to reduce total bene7 ficiary cost-sharing estimated by the PDP 

8 sponsor for prescription drug coverage 

9 under the plan in the annual bid submitted 

10 by the PDP sponsor under section 1860D– 

11 11(b). 

12 ‘‘(C) DEFINITION OF REDUCTIONS IN

13 PRICE.—For purposes of subparagraph (B), the 

14 term ‘reductions in price’ refers only to collect15 ible amounts, as determined by the Secretary, 

16 which excludes amounts which after adjudica17 tion and reconciliation with pharmacies and 

18 manufacturers are duplicate in nature, contrary 

19 to other contractual clauses, or otherwise ineli20 gible (such as due to beneficiary disenrollment 

21 or coordination of benefits).’’. 

22 (c) RULE OF CONSTRUCTION.—Nothing in the provi23 sions of, or amendments made by, this section shall be 

24 construed as limiting the ability of the Secretary to in25 crease any limit otherwise applicable on the number of 


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1 prescription drug plans that a PDP sponsor may offer, 

2 at the discretion of the PDP sponsor, in a PDP region 

3 under part D of title XVIII of the Social Security Act (42 

4 U.S.C. 1395w–101 et seq.). 

5 SEC. 132. ALLOWING CERTAIN ENROLLEES OF PRESCRIP6 TION DRUG PLANS AND MA–PD PLANS UNDER 

7 MEDICARE PROGRAM TO SPREAD OUT COST8 SHARING UNDER CERTAIN CIRCUMSTANCES. 

9 (a) STANDARD PRESCRIPTION DRUG COVERAGE.— 

10 Section 1860D–2(b)(2) of the Social Security Act (42 

11 U.S.C. 1395w–102(b)(2)), as amended by section 121, is 

12 further amended— 

13 (1) in subparagraph (A), by striking ‘‘Subject 

14 to subparagraphs (C) and (D)’’ and inserting ‘‘Sub15 ject to subparagraphs (C), (D), and (E)’’; and 

16 (2) by adding at the end the following new sub17 paragraph: 

18 ‘‘(E) ENROLLEE OPTION REGARDING

19 SPREADING COST-SHARING.— 

20 ‘‘(i) IN GENERAL.—The Secretary 

21 shall establish by regulation a process 

22 under which, with respect to plan year 

23 2022 and subsequent plan years, a pre24 scription drug plan or an MA–PD plan 

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1 vidual enrolled with such plan for such 

2 plan year with respect to whom the plan 

3 projects that the dispensing of a covered 

4 part D drug to such individual will result 

5 in the individual incurring costs within a 

6 30-day period that are equal to a signifi7 cant percentage (as specified by the Sec8 retary pursuant to such regulation) of the 

9 annual out-of-pocket threshold specified in 

10 paragraph (4)(B) for such plan year, pro11 vide such individual with the option to 

12 make the coinsurance payment required 

13 under subparagraph (A) for such costs in 

14 the form of equal monthly installments 

15 over the remainder of such plan year. 

16 ‘‘(ii) SIGNIFICANT PERCENTAGE LIMI17 TATIONS.—In specifying a significant per18 centage pursuant to the regulation estab19 lished by the Secretary under clause (i), 

20 the Secretary may not specify a percentage 

21 that is less than 30 percent or greater 

22 than 100 percent.’’. 

23 (b) ALTERNATIVE PRESCRIPTION DRUG COV24 ERAGE.—Section 1860D–2(c) of the Social Security Act 


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1 (42 U.S.C. 1395w–102(c)) is amended by adding at the 

2 end the following new paragraph: 

3 ‘‘(4) SAME ENROLLEE OPTION REGARDING

4 SPREADING COST-SHARING.—For plan year 2022 

5 and subsequent plan years, the coverage provides the 

6 enrollee option regarding spreading cost-sharing de7 scribed in and required under subsection 

8 (b)(2)(E).’’. 

9 SEC. 133. ESTABLISHING A MONTHLY CAP ON BENEFICIARY 

10 INCURRED COSTS FOR INSULIN PRODUCTS 

11 AND SUPPLIES UNDER A PRESCRIPTION 

12 DRUG PLAN OR MA–PD PLAN. 

13 (a) IN GENERAL.—Section 1860D–2 of the Social 

14 Security Act (42 U.S.C. 1395w–102), as amended by sec15 tions 121 and 133, is further amended— 

16 (1) in subsection (b)(2)— 

17 (A) in subparagraph (A), by striking ‘‘and 

18 (E)’’ and inserting ‘‘(E), and (F)’’; 

19 (B) in subparagraph (B), by striking ‘‘and 

20 (D)’’ and inserting ‘‘(D), and (F)’’; and 

21 (C) by adding at the end the following new 

22 subparagraph: 

23 ‘‘(F) CAP ON INCURRED COSTS FOR INSU24 LIN PRODUCTS AND SUPPLIES.— 


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1 ‘‘(i) IN GENERAL.—The coverage pro2 vides benefits, for costs above the annual 

3 deductible specified in paragraph (1) and 

4 up to the annual out-of-pocket threshold 

5 described in paragraph (4)(B) and with re6 spect to a month (beginning with January 

7 of 2022), with cost sharing that is equal to 

8 $0 for a specified covered part D drug (as 

9 defined in clause (iii)) furnished to an indi10 vidual who has incurred costs during such 

11 month with respect to specified covered 

12 part D drugs equal to— 

13 ‘‘(I) for months occurring in 

14 2022, $50; or 

15 ‘‘(II) for months occurring in a 

16 subsequent year, the amount applica17 ble under this clause for months oc18 curring in the year preceding such 

19 subsequent year, increased by the an20 nual percentage increase specified in 

21 paragraph (6) for such subsequent 

22 year and rounded to the nearest dol23 lar. 

24 ‘‘(ii) APPLICATION.—The provisions 

25 of clauses (i) through (iii) of paragraph 


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1 (4)(C) shall apply with respect to the de2 termination of the incurred costs for speci3 fied covered part D drugs for purposes of 

4 clause (i) in the same manner as such pro5 visions apply with respect to the deter6 mination of incurred costs for covered part 

7 D drugs for purposes of paragraph (4)(A). 

8 ‘‘(iii) SPECIFIED COVERED PART D

9 DRUG.—For purposes of this subpara10 graph, the term ‘specified covered part D 

11 drug’ means a covered part D drug that 

12 is— 

13 ‘‘(I) insulin; or 

14 ‘‘(II) a medical supply associated 

15 with the injection of insulin (as de16 fined in regulations of the Secretary 

17 promulgated pursuant to subsection 

18 (e)(1)(B)).’’; and 

19 (2) in subsection (c), by adding at the end the 

20 following new paragraph: 

21 ‘‘(5) SAME PROTECTION WITH RESPECT TO EX22 PENDITURES FOR INSULIN AND CERTAIN MEDICAL

23 SUPPLIES.—The coverage provides the coverage re24 quired under subsection (b)(2)(F).’’. 

25 (b) CONFORMING AMENDMENTS.— 


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1 (1) IN GENERAL.—Section 1860D–14(a)(1)(D) 

2 of the Social Security Act (42 U.S.C. 1395w– 

3 114(a)(1)(D)), as amended by section 121, is fur4 ther amended— 

5 (A) in clause (ii), by striking ‘‘section 

6 1860D–2(b)(2)’’ and inserting ‘‘section 1860D– 

7 2(b)(2)(A)’’; and 

8 (B) in clause (iii), by striking ‘‘section 

9 1860D–2(b)(2)’’ and inserting ‘‘section 1860D– 

10 2(b)(2)(A)’’. 

11 (2) EFFECTIVE DATE.—The amendments made 

12 by paragraph (1) shall apply with respect to plan 

13 year 2022 and each subsequent plan year. 

14 SEC. 134. GROWTH RATE OF MEDICARE PART D OUT-OF15 POCKET COST THRESHOLD. 

16 (a) PROVIDING MEDICARE PART D BENEFICIARIES

17 WITH CERTAIN 2020 OFFSET PAYMENTS.—Section 

18 1860D–2(b)(4) of the Social Security Act (42 U.S.C. 

19 1395w–102(b)(4)) is amended by adding at the end the 

20 following new subparagraph: 

21 ‘‘(F) 2020 OFFSET PAYMENTS.— 

22 ‘‘(i) IN GENERAL.—Subject to clause 

23 (iv), the Secretary shall provide for pay24 ment from the Medicare Prescription Drug 

25 Account as follows: 


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1 ‘‘(I) In the case of a specified in2 dividual (as defined in clause (ii)(I)) 

3 who as of the last day of a calendar 

4 quarter in 2020 has incurred costs for 

5 covered part D drugs so that the indi6 vidual has exceeded the annual out-of7 pocket threshold applied under sub8 paragraph (B)(i)(V) for 2020, pay9 ment to the individual by not later 

10 than 15th day of the third month fol11 lowing the end of such quarter of the 

12 amount by which such threshold so 

13 applied exceeded the target threshold 

14 for 2020. 

15 ‘‘(II) In the case of a specified 

16 individual who is not described in sub17 clause (I) and who as of the last day 

18 of 2020 has incurred costs for covered 

19 part D drugs so that the individual 

20 has exceeded the target threshold for 

21 2020, payment to the individual by 

22 not later than December 31, 2021, of 

23 the amount by which such incurred 

24 costs exceeded the target threshold for 

25 2020. 


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1 ‘‘(ii) DEFINITIONS.—For purposes of 

2 this subparagraph: 

3 ‘‘(I) SPECIFIED INDIVIDUAL.— 

4 The term ‘specified individual’ means 

5 an individual who— 

6 ‘‘(aa) is enrolled in a pre7 scription drug plan or an MA– 

8 PD plan; 

9 ‘‘(bb) is not enrolled in a 

10 qualified retiree prescription drug 

11 plan; and 

12 ‘‘(cc) is not entitled to an in13 come-related subsidy under sec14 tion 1860D–14(a). 

15 ‘‘(II) TARGET THRESHOLD FOR

16 2020.—The term ‘target threshold for 

17 2020’ means the annual out-of-pocket 

18 threshold that would have been ap19 plied under subparagraph (B)(i) for 

20 2020 if such threshold had been de21 termined in accordance with subclause 

22 (IV) of such subparagraph instead of 

23 subclause (V) of such subparagraph. 

24 ‘‘(iii) NOTIFICATION.—In the case of 

25 any specified individual who during 2020 


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1 has incurred costs for covered part D 

2 drugs so that the individual has exceeded 

3 the target threshold for 2020, the Sec4 retary shall, not later than September 30, 

5 2021, provide to such individual a notifica6 tion informing such individual of such indi7 vidual’s right to a payment described in 

8 clause (i) and the estimated timing of such 

9 payment. 

10 ‘‘(iv) CLARIFICATION.—The Secretary 

11 shall provide only 1 payment under this 

12 subparagraph with respect to any indi13 vidual. 

14 ‘‘(v) IMPLEMENTATION.—The Sec15 retary may implement this subparagraph 

16 by program instruction or otherwise.’’. 

17 (b) REDUCED GROWTH RATE FOR 2021 OF MEDI18 CARE PART D OUT-OF-POCKET COST THRESHOLD.—Sec19 tion 1860D–2(b)(4)(B)(i) of the Social Security Act (42 

20 U.S.C. 1395w–102(b)(4)(B)(i)) is amended— 

21 (1) in subclause (V), by striking at the end 

22 ‘‘or’’; 

23 (2) by redesignating subclause (VI) as sub24 clause (VIII); and 


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1 (3) by inserting after subclause (V) the fol2 lowing new subclauses: 

3 ‘‘(VI) for 2021, is equal to the 

4 amount that would have been applied 

5 under this subparagraph for 2020 if 

6 such amount had been determined in 

7 accordance with subclause (IV) in8 stead of subclause (V), increased by 

9 the lesser of— 

10 ‘‘(aa) the annual percentage 

11 increase described in paragraph 

12 (7) for 2021, plus 2 percentage 

13 points; or 

14 ‘‘(bb) the annual percentage 

15 increase described in paragraph 

16 (6) for 2021; 

17 ‘‘(VII) for 2022, is equal to the 

18 amount that would have been applied 

19 under this subparagraph for 2022 if 

20 the amendments made by section 

21 1101(d)(1) of the Health Care and 

22 Education Reconciliation Act of 2010 

23 and by section 134 of the Lower 

24 Costs, More Cures Act of 2021 had 

25 not been enacted; or’’. 


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1 TITLE II—MEDICAID 

2 SEC. 201. MEDICAID PHARMACY AND THERAPEUTICS COM3 MITTEE IMPROVEMENTS. 

4 (a) IN GENERAL.—Subparagraph (A) of section 

5 1927(d)(4) of the Social Security Act (42 U.S.C. 1396r– 

6 8(d)(4)) is amended to read as follows: 

7 ‘‘(A)(i) The formulary is developed and re8 viewed by a pharmacy and therapeutics com9 mittee consisting of physicians, pharmacists, 

10 and other appropriate individuals appointed by 

11 the Governor of the State. 

12 ‘‘(ii) Subject to clause (vi), the State estab13 lishes and implements a conflict of interest pol14 icy for the pharmacy and therapeutics com15 mittee that— 

16 ‘‘(I) is publicly accessible; 

17 ‘‘(II) requires all committee members 

18 to complete, on at least an annual basis, a 

19 disclosure of relationships, associations, 

20 and financial dealings that may affect their 

21 independence of judgement in committee 

22 matters; and 

23 ‘‘(III) contains clear processes, such 

24 as recusal from voting or discussion, for 

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1 terest, along with appropriate processes to 

2 address any instance where a member fails 

3 to report a conflict of interest. 

4 ‘‘(iii) The membership of the pharmacy 

5 and therapeutics committee— 

6 ‘‘(I) includes at least 1 actively prac7 ticing physician and at least 1 actively 

8 practicing pharmacist, each of whom— 

9 ‘‘(aa) is independent and free of 

10 conflict with respect to manufacturers 

11 and Medicaid participating plans or 

12 subcontractors, including pharmacy 

13 benefit managers; and 

14 ‘‘(bb) has expertise in the care of 

15 1 or more Medicaid-specific popu16 lations such as elderly or disabled in17 dividuals, children with complex med18 ical needs, or low-income individuals 

19 with chronic illnesses; and 

20 ‘‘(II) is made publicly available. 

21 ‘‘(iv) At the option of the State, the 

22 State’s drug use review board established under 

23 subsection (g)(3) may serve as the pharmacy 

24 and therapeutics committee provided the State 


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1 ensures that such board meets the requirements 

2 of clauses (ii) and (iii). 

3 ‘‘(v) The State reviews and has final ap4 proval of the formulary established by the phar5 macy and therapeutics committee. 

6 ‘‘(vi) If the Secretary determines it appro7 priate or necessary based on the findings and 

8 recommendations of the Comptroller General of 

9 the United States in the report submitted to 

10 Congress under section 203 of the Lower Costs, 

11 More Cures Act of 2021, the Secretary shall 

12 issue guidance that States must follow for es13 tablishing conflict of interest policies for the 

14 pharmacy and therapeutics committee in ac15 cordance with the requirements of clause (ii), 

16 including appropriate standards and require17 ments for identifying, addressing, and reporting 

18 on conflicts of interest.’’. 

19 (b) APPLICATION TO MEDICAID MANAGED CARE OR20 GANIZATIONS.—Clause (xiii) of section 1903(m)(2)(A) of 

21 the Social Security Act (42 U.S.C. 1396b(m)(2)(A)) is 

22 amended— 

23 (1) by striking ‘‘and (III)’’ and inserting 

24 ‘‘(III)’’; 


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1 (2) by striking the period at the end and insert2 ing ‘‘, and (IV) any formulary used by the entity for 

3 covered outpatient drugs dispensed to individuals eli4 gible for medical assistance who are enrolled with 

5 the entity is developed and reviewed by a pharmacy 

6 and therapeutics committee that meets the require7 ments of clauses (ii) and (iii) of section 

8 1927(d)(4)(A).’’; and 

9 (3) by moving the left margin 2 ems to the left. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall take effect on the date that is 1 year 

12 after the date of enactment of this Act. 

13 SEC. 202. GAO REPORT ON CONFLICTS OF INTEREST IN 

14 STATE MEDICAID PROGRAM DRUG USE RE15 VIEW BOARDS AND PHARMACY AND THERA16 PEUTICS (P&T) COMMITTEES. 

17 (a) INVESTIGATION.—The Comptroller General of the 

18 United States shall conduct an investigation of potential 

19 or existing conflicts of interest among members of State 

20 Medicaid program State drug use review boards (in this 

21 section referred to as ‘‘DUR Boards’’) and pharmacy and 

22 therapeutics committees (in this section referred to as 

23 ‘‘P&T Committees’’). 

24 (b) REPORT.—Not later than 24 months after the 

25 date of enactment of this Act, the Comptroller General 


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1 shall submit to Congress a report on the investigation con2 ducted under subsection (a) that includes the following: 

3 (1) A description outlining how DUR Boards 

4 and P&T Committees operate in States, including 

5 details with respect to— 

6 (A) the structure and operation of DUR 

7 Boards and statewide P&T Committees; 

8 (B) States that operate separate P&T 

9 Committees for their fee-for-service Medicaid 

10 program and their Medicaid managed care or11 ganizations or other Medicaid managed care ar12 rangements (collectively referred to in this sec13 tion as ‘‘Medicaid MCOs)’’; and 

14 (C) States that allow Medicaid MCOs to 

15 have their own P&T Committees and the extent 

16 to which pharmacy benefit managers administer 

17 or participate in such P&T Committees. 

18 (2) A description outlining the differences be19 tween DUR Boards established in accordance with 

20 section 1927(g)(3) of the Social Security Act (42 

21 U.S.C. 1396r(g)(3)) and P&T Committees. 

22 (3) A description outlining the tools P&T Com23 mittees may use to determine Medicaid drug cov24 erage and utilization management policies. 


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1 (4) An analysis of whether and how States or 

2 P&T Committees establish participation and inde3 pendence requirements for DUR Boards and P&T 

4 Committees, including with respect to entities with 

5 connections with drug manufacturers, State Med6 icaid programs, managed care organizations, and 

7 other entities or individuals in the pharmaceutical 

8 industry. 

9 (5) A description outlining how States, DUR 

10 Boards, or P&T Committees define conflicts of inter11 est. 

12 (6) A description of how DUR Boards and P&T 

13 Committees address conflicts of interest, including 

14 who is responsible for implementing such policies. 

15 (7) A description of the tools, if any, States use 

16 to ensure that there are no conflicts of interest on 

17 DUR Boards and P&T Committees. 

18 (8) An analysis of the effectiveness of tools 

19 States use to ensure that there are no conflicts of 

20 interest on DUR Boards and P&T Committees and, 

21 if applicable, recommendations as to how such tools 

22 could be improved. 

23 (9) A review of strategies States may use to 

24 guard against conflicts of interest on DUR Boards 

25 and P&T Committees and to ensure compliance with 


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1 the requirements of titles XI and XIX of the Social 

2 Security Act (42 U.S.C. 1301 et seq., 1396 et seq.) 

3 and access to effective, clinically appropriate, and 

4 medically necessary drug treatments for Medicaid 

5 beneficiaries, including recommendations for such 

6 legislative and administrative actions as the Comp7 troller General determines appropriate. 

8 SEC. 203. ENSURING THE ACCURACY OF MANUFACTURER 

9 PRICE AND DRUG PRODUCT INFORMATION 

10 UNDER THE MEDICAID DRUG REBATE PRO11 GRAM. 

12 (a) AUDIT OF MANUFACTURER PRICE AND DRUG

13 PRODUCT INFORMATION.— 

14 (1) IN GENERAL.—Subparagraph (B) of section 

15 1927(b)(3) of the Social Security Act (42 U.S.C. 

16 1396r–8(b)(3)) is amended to read as follows: 

17 ‘‘(B) AUDITS AND SURVEYS OF MANUFAC18 TURER PRICE AND DRUG PRODUCT INFORMA19 TION.— 

20 ‘‘(i) AUDITS.—The Secretary shall 

21 conduct ongoing audits of the price and 

22 drug product information reported by man23 ufacturers under subparagraph (A) for the 

24 most recently ended rebate period to en25 sure the accuracy and timeliness of such 


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1 information. In conducting such audits, the 

2 Secretary may employ evaluations, surveys, 

3 statistical sampling, predictive analytics 

4 and other relevant tools and methods. 

5 ‘‘(ii) VERIFICATIONS SURVEYS OF AV6 ERAGE MANUFACTURER PRICE AND MANU7 FACTURER’S AVERAGE SALES PRICE.—In 

8 addition to the audits required under 

9 clause (i), the Secretary may survey whole10 salers and manufacturers (including manu11 facturers that directly distribute their cov12 ered outpatient drugs (in this subpara13 graph referred to as ‘direct sellers’)), when 

14 necessary, to verify manufacturer prices 

15 and manufacturer’s average sales prices 

16 (including wholesale acquisition cost) to 

17 make payment reported under subpara18 graph (A). 

19 ‘‘(iii) PENALTIES.—In addition to 

20 other penalties as may be prescribed by 

21 law, including under subparagraph (C) of 

22 this paragraph, the Secretary may impose 

23 a civil monetary penalty in an amount not 

24 to exceed $185,000 on an annual basis on 

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1 er, if the wholesaler, manufacturer, or di2 rect seller of a covered outpatient drug re3 fuses a request for information about 

4 charges or prices by the Secretary in con5 nection with an audit or survey under this 

6 subparagraph or knowingly provides false 

7 information. The provisions of section 

8 1128A (other than subsections (a) (with 

9 respect to amounts of penalties or addi10 tional assessments) and (b)) shall apply to 

11 a civil money penalty under this clause in 

12 the same manner as such provisions apply 

13 to a penalty or proceeding under section 

14 1128A(a). 

15 ‘‘(iv) REPORTS.— 

16 ‘‘(I) REPORT TO CONGRESS.— 

17 The Secretary shall, not later than 18 

18 months after date of enactment of 

19 this subparagraph, submit a report to 

20 the Committee on Energy and Com21 merce of the House of Representatives 

22 and the Committee on Finance of the 

23 Senate regarding additional regulatory 

24 or statutory changes that may be re25 quired in order to ensure accurate and 


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1 timely reporting and oversight of 

2 manufacturer price and drug product 

3 information, including whether 

4 changes should be made to reasonable 

5 assumption requirements to ensure 

6 such assumptions are reasonable and 

7 accurate or whether another method8 ology for ensuring accurate and timely 

9 reporting of price and drug product 

10 information should be considered to 

11 ensure the integrity of the drug rebate 

12 program under this section. 

13 ‘‘(II) ANNUAL REPORTS.—The 

14 Secretary shall, on at least an annual 

15 basis, submit a report to the Com16 mittee on Energy and Commerce of 

17 the House of Representatives and the 

18 Committee on Finance of the Senate 

19 summarizing the results of the audits 

20 and surveys conducted under this sub21 paragraph during the period that is 

22 the subject of the report. 

23 ‘‘(III) CONTENT.—Each report 

24 submitted under subclause (II) shall, 

25 with respect to the period that is the 


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1 subject of the report, include sum2 maries of— 

3 ‘‘(aa) error rates in the 

4 price, drug product, and other 

5 relevant information supplied by 

6 manufacturers under subpara7 graph (A); 

8 ‘‘(bb) the timeliness with 

9 which manufacturers, whole10 salers, and direct sellers provide 

11 information required under sub12 paragraph (A) or under clause (i) 

13 or (ii) of this subparagraph; 

14 ‘‘(cc) the number of manu15 facturers, wholesalers, and direct 

16 sellers and drug products audited 

17 under this subparagraph; 

18 ‘‘(dd) the types of price and 

19 drug product information re20 viewed under the audits con21 ducted under this subparagraph; 

22 ‘‘(ee) the tools and meth23 odologies employed in such au24 dits; 


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1 ‘‘(ff) the findings of such 

2 audits, including which manufac3 turers, if any, were penalized 

4 under this subparagraph; and 

5 ‘‘(gg) such other relevant in6 formation as the Secretary shall 

7 deem appropriate. 

8 ‘‘(IV) PROTECTION OF INFORMA9 TION.—In preparing a report required 

10 under subclause (II), the Secretary 

11 shall redact such proprietary informa12 tion as the Secretary determines ap13 propriate to prevent disclosure of, and 

14 to safeguard, such information. 

15 ‘‘(v) APPROPRIATIONS.—Out of any 

16 funds in the Treasury not otherwise appro17 priated, there is appropriated to the Sec18 retary $2,000,000 for fiscal year 2022 and 

19 each fiscal year thereafter to carry out this 

20 subparagraph.’’. 

21 (2) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall take effect on the first day 

23 of the first fiscal quarter that begins after the date 

24 of enactment of this Act. 


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1 (b) INCREASED PENALTIES FOR NONCOMPLIANCE

2 WITH REPORTING REQUIREMENTS.— 

3 (1) INCREASED PENALTY FOR LATE REPORTING

4 OF INFORMATION.—Section 1927(b)(3)(C)(i) of the 

5 Social Security Act (42 U.S.C. 1396r–8(b)(3)(C)(i)) 

6 is amended by striking ‘‘increased by $10,000 for 

7 each day in which such information has not been 

8 provided and such amount shall be paid to the 

9 Treasury’’ and inserting ‘‘, for each covered out10 patient drug with respect to which such information 

11 is not provided, $50,000 for the first day that such 

12 information is not provided on a timely basis and 

13 $19,000 for each subsequent day that such informa14 tion is not provided’’. 

15 (2) INCREASED PENALTY FOR KNOWINGLY RE16 PORTING FALSE INFORMATION.—Section 

17 1927(b)(3)(C)(ii) of the Social Security Act (42 

18 U.S.C. 1396r–8(b)(3)(C)(ii)) is amended by striking 

19 ‘‘$100,000’’ and inserting ‘‘$500,000’’. 

20 (3) EFFECTIVE DATE.—The amendments made 

21 by this subsection shall take effect on the first day 

22 of the first fiscal quarter that begins after the date 

23 of enactment of this Act. 


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1 SEC. 204. IMPROVING TRANSPARENCY AND PREVENTING 

2 THE USE OF ABUSIVE SPREAD PRICING AND 

3 RELATED PRACTICES IN MEDICAID. 

4 (a) PASS-THROUGH PRICING REQUIRED.— 

5 (1) IN GENERAL.—Section 1927(e) of the So6 cial Security Act (42 U.S.C. 1396r–8(e)) is amended 

7 by adding at the end the following: 

8 ‘‘(6) PASS-THROUGH PRICING REQUIRED.—A 

9 contract between the State and a pharmacy benefit 

10 manager (referred to in this paragraph as a ‘PBM’), 

11 or a contract between the State and a managed care 

12 entity or other specified entity (as such terms are 

13 defined in section 1903(m)(9)(D)) that includes pro14 visions making the entity responsible for coverage of 

15 covered outpatient drugs dispensed to individuals en16 rolled with the entity, shall require that payment for 

17 such drugs and related administrative services (as 

18 applicable), including payments made by a PBM on 

19 behalf of the State or entity, is based on a pass20 through pricing model under which— 

21 ‘‘(A) any payment made by the entity of 

22 the PBM (as applicable) for such a drug— 

23 ‘‘(i) is limited to— 

24 ‘‘(I) ingredient cost; and 

25 ‘‘(II) a professional dispensing 

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1 sional dispensing fee that the State 

2 plan or waiver would pay if the plan 

3 or waiver was making the payment di4 rectly; 

5 ‘‘(ii) is passed through in its entirety 

6 by the entity or PBM to the pharmacy 

7 that dispenses the drug; and 

8 ‘‘(iii) is made in a manner that is con9 sistent with section 1902(a)(30)(A) and 

10 sections 447.512, 447.514, and 447.518 of 

11 title 42, Code of Federal Regulations (or 

12 any successor regulation), as if such re13 quirements applied directly to the entity or 

14 the PBM; 

15 ‘‘(B) payment to the entity or the PBM 

16 (as applicable) for administrative services per17 formed by the entity or PBM is limited to a 

18 reasonable administrative fee that covers the 

19 reasonable cost of providing such services; 

20 ‘‘(C) the entity or the PBM (as applicable) 

21 shall make available to the State, and the Sec22 retary upon request, all costs and payments re23 lated to covered outpatient drugs and accom24 panying administrative services incurred, re25 ceived, or made by the entity or the PBM, inVerDate Sep 11 2014 00:26 Apr 24, 2021 Jkt 019200 PO 00000 Frm 00106 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 cluding ingredient costs, professional dispensing 

2 fees, administrative fees, post-sale and post-in3 voice fees. Discounts, or related adjustments 

4 such as direct and indirect remuneration fees, 

5 and any and all remuneration; and 

6 ‘‘(D) any form of spread pricing whereby 

7 any amount charged or claimed by the entity or 

8 the PBM (as applicable) is in excess of the 

9 amount paid to the pharmacies on behalf of the 

10 entity, including any post-sale or post-invoice 

11 fees, discounts, or related adjustments such as 

12 direct and indirect remuneration fees or assess13 ments (after allowing for a reasonable adminis14 trative fee as described in subparagraph (B)) is 

15 not allowable for purposes of claiming Federal 

16 matching payments under this title.’’. 

17 (2) CONFORMING AMENDMENT.—Clause (xiii) 

18 of section 1903(m)(2)(A) of such Act (42 U.S.C. 

19 1396b(m)(2)(A)), as amended by section 202, is fur20 ther amended— 

21 (A) by striking ‘‘and (IV)’’ and inserting 

22 ‘‘(IV)’’; and 

23 (B) by inserting before the period at the 

24 end the following: ‘‘, and (V) pharmacy benefit 

25 management services provided by the entity, or 


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1 provided by a pharmacy benefit manager on be2 half of the entity under a contract or other ar3 rangement between the entity and the phar4 macy benefit manager, shall comply with the re5 quirements of section 1927(e)(6)’’. 

6 (3) EFFECTIVE DATE.—The amendments made 

7 by this subsection apply to contracts between States 

8 and managed care entities, other specified entities, 

9 or pharmacy benefits managers that are entered into 

10 or renewed on or after the date that is 18 months 

11 after the date of enactment of this Act. 

12 (b) SURVEY OF RETAIL PRICES.— 

13 (1) IN GENERAL.—Section 1927(f) of the Social 

14 Security Act (42 U.S.C. 1396r–8(f)) is amended— 

15 (A) by striking ‘‘and’’ after the semicolon 

16 at the end of paragraph (1)(A)(i) and all that 

17 precedes it through ‘‘(1)’’ and inserting the fol18 lowing: 

19 ‘‘(1) SURVEY OF RETAIL PRICES.—The Sec20 retary shall conduct a survey of retail community 

21 drug prices, to include at least the national average 

22 drug acquisition cost, as follows: 

23 ‘‘(A) USE OF VENDOR.—The Secretary 

24 may contract services for— 


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1 ‘‘(i) with respect to retail community 

2 pharmacies, the determination on a month3 ly basis of retail survey prices of the na4 tional average drug acquisition cost for 

5 covered outpatient drugs for such phar6 macies, net of all discounts and rebates (to 

7 the extent any information with respect to 

8 such discounts and rebates is available), 

9 the average reimbursement received for 

10 such drugs by such pharmacies from all 

11 sources of payment, including third par12 ties, and, to the extent available, the usual 

13 and customary charges to consumers for 

14 such drugs; and’’; 

15 (B) by adding at the end of paragraph (1) 

16 the following: 

17 ‘‘(F) SURVEY REPORTING.—In order to 

18 meet the requirement of section 1902(a)(54), a 

19 State shall require that any retail community 

20 pharmacy in the State that receives any pay21 ment, administrative fee, discount, or rebate re22 lated to the dispensing of covered outpatient 

23 drugs to individuals receiving benefits under 

24 this title, regardless of whether such payment, 

25 fee, discount, or rebate is received from the 


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1 State or a managed care entity directly or from 

2 a pharmacy benefit manager or another entity 

3 that has a contract with the State or a man4 aged care entity, shall respond to surveys of re5 tail prices conducted under this subsection. 

6 ‘‘(G) SURVEY INFORMATION.—Information 

7 on retail community prices obtained under this 

8 paragraph shall be made publicly available and 

9 shall include at least the following: 

10 ‘‘(i) The monthly response rate of the 

11 survey including a list of pharmacies not in 

12 compliance with subparagraph (F). 

13 ‘‘(ii) The sampling frame and number 

14 of pharmacies sampled monthly. 

15 ‘‘(iii) Characteristics of reporting 

16 pharmacies, including type (such as inde17 pendent or chain), geographic or regional 

18 location, and dispensing volume. 

19 ‘‘(iv) Reporting of a separate national 

20 average drug acquisition cost for each drug 

21 for independent retail pharmacies and 

22 chain operated pharmacies. 

23 ‘‘(v) Information on price concessions 

24 including on and off invoice discounts, re25 bates, and other price concessions. 


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1 ‘‘(vi) Information on average profes2 sional dispensing fees paid. 

3 ‘‘(H) PENALTIES.— 

4 ‘‘(i) FAILURE TO PROVIDE TIMELY IN5 FORMATION.—A retail community phar6 macy that fails to respond to a survey con7 ducted under this subsection on a timely 

8 basis may be subject to a civil monetary 

9 penalty in the amount of $10,000 for each 

10 day in which such information has not 

11 been provided. 

12 ‘‘(ii) FALSE INFORMATION.—A retail 

13 community pharmacy that knowingly pro14 vides false information in response to a 

15 survey conducted under this subsection 

16 may be subject to a civil money penalty in 

17 an amount not to exceed $100,000 for 

18 each item of false information. 

19 ‘‘(iii) OTHER PENALTIES.—Any civil 

20 money penalties imposed under this sub21 paragraph shall be in addition to other 

22 penalties as may be prescribed by law. The 

23 provisions of section 1128A (other than 

24 subsections (a) and (b)) shall apply to a 

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1 graph in the same manner as such provi2 sions apply to a penalty or proceedings 

3 under section 1128A(a). 

4 ‘‘(I) REPORT ON SPECIALTY PHAR5 MACIES.— 

6 ‘‘(i) IN GENERAL.—Not later than 1 

7 year after the effective date of this sub8 paragraph, the Secretary shall submit a re9 port to Congress examining specialty drug 

10 coverage and reimbursement under this 

11 title. 

12 ‘‘(ii) CONTENT OF REPORT.—Such re13 port shall include a description of how 

14 State Medicaid programs define specialty 

15 drugs, how much State Medicaid programs 

16 pay for specialty drugs, how States and 

17 managed care plans determine payment for 

18 specialty drugs, the settings in which spe19 cialty drugs are dispensed (such as retail 

20 community pharmacies or specialty phar21 macies), whether acquisition costs for spe22 cialty drugs are captured in the national 

23 average drug acquisition cost survey, and 

24 recommendations as to whether specialty 

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1 vey of retail prices to ensure national aver2 age drug acquisition costs capture drugs 

3 sold at specialty pharmacies and how such 

4 specialty pharmacies should be defined.’’; 

5 (C) in paragraph (2)— 

6 (i) in subparagraph (A), by inserting 

7 ‘‘, including payments rates under Med8 icaid managed care plans,’’ after ‘‘under 

9 this title’’; and 

10 (ii) in subparagraph (B), by inserting 

11 ‘‘and the basis for such dispensing fees’’ 

12 before the semicolon; and 

13 (D) in paragraph (4), by inserting ‘‘, and 

14 $5,000,000 for fiscal year 2022 and each fiscal 

15 year thereafter,’’ after ‘‘2010’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by this subsection take effect on the 1st day of the 

18 1st quarter that begins on or after the date that is 

19 18 months after the date of enactment of this Act. 

20 (c) MANUFACTURER REPORTING OF WHOLESALE

21 ACQUISITION COST.—Section 1927(b)(3) of such Act (42 

22 U.S.C. 1396r–8(b)(3)), as amended by section 141, is fur23 ther amended— 

24 (1) in subparagraph (A)(i)— 


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1 (A) in subclause (I), by striking ‘‘and’’ 

2 after the semicolon; 

3 (B) in subclause (II), by adding ‘‘and’’ 

4 after the semicolon; 

5 (C) by moving the left margins of sub6 clauses (I) and (II) 2 ems to the right; and 

7 (D) by adding at the end the following: 

8 ‘‘(III) in the case of rebate peri9 ods that begin on or after the date of 

10 enactment of this subclause, on the 

11 wholesale acquisition cost (as defined 

12 in section 1847A(c)(6)(B)) for cov13 ered outpatient drugs for the rebate 

14 period under the agreement (including 

15 for all such drugs that are sold under 

16 a new drug application approved 

17 under section 505(c) of the Federal 

18 Food, Drug, and Cosmetic Act);’’; and 

19 (2) in subparagraph (D)— 

20 (A) in the matter preceding clause (i), by 

21 inserting ‘‘and clause (vii) of this subpara22 graph’’ after ‘‘1847A’’; 

23 (B) in clause (vi), by striking ‘‘and’’ after 

24 the comma; 


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1 (C) in clause (vii), by striking the period 

2 and inserting ‘‘, and’’; and 

3 (D) by inserting after clause (vii) the fol4 lowing: 

5 ‘‘(viii) to the Secretary to disclose 

6 (through a website accessible to the public) 

7 the most recently reported wholesale acqui8 sition cost (as defined in section 

9 1847A(c)(6)(B)) for each covered out10 patient drug (including for all such drugs 

11 that are sold under a new drug application 

12 approved under section 505(c) of the Fed13 eral Food, Drug, and Cosmetic Act), as re14 ported under subparagraph (A)(i)(III).’’. 

15 SEC. 205. T–MSIS DRUG DATA ANALYTICS REPORTS. 

16 (a) IN GENERAL.—Not later than May 1 of each cal17 endar year beginning with calendar year 2023, the Sec18 retary of Health and Human Services (in this section re19 ferred to as the ‘‘Secretary’’) shall publish on a website 

20 of the Centers for Medicare & Medicaid Services that is 

21 accessible to the public a report of the most recently avail22 able data on provider prescribing patterns under the Med23 icaid program. 

24 (b) CONTENT OF REPORT.— 


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1 (1) REQUIRED CONTENT.—Each report re2 quired under subsection (a) for a calendar year shall 

3 include the following information with respect to 

4 each State (and, to the extent available, with respect 

5 to Puerto Rico, the United States Virgin Islands, 

6 Guam, the Northern Mariana Islands, and American 

7 Samoa): 

8 (A) A comparison of covered outpatient 

9 drug (as defined in section 1927(k)(2) of the 

10 Social Security Act (42 U.S.C. 1396r–8(k)(2))) 

11 prescribing patterns under the State Medicaid 

12 plan or waiver of such plan (including drugs 

13 prescribed on a fee-for-service basis and drugs 

14 prescribed under managed care arrangements 

15 under such plan or waiver)— 

16 (i) across all forms or models of reim17 bursement used under the plan or waiver; 

18 (ii) within specialties and subspecial19 ties, as defined by the Secretary; 

20 (iii) by episodes of care for— 

21 (I) each chronic disease category, 

22 as defined by the Secretary, that is 

23 represented in the 10 conditions that 

24 accounted for the greatest share of 

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1 er during the year that is the subject 

2 of the report; 

3 (II) procedural groupings; and 

4 (III) rare disease diagnosis codes; 

5 (iv) by patient demographic character6 istics, including race (to the extent that 

7 the Secretary determines that there is suf8 ficient data available with respect to such 

9 characteristic in a majority of States), gen10 der, and age; 

11 (v) by patient high-utilizer or risk sta12 tus; and 

13 (vi) by high and low resource settings 

14 by facility and place of service categories, 

15 as determined by the Secretary. 

16 (B) In the case of medical assistance for 

17 covered outpatient drugs (as so defined) pro18 vided under a State Medicaid plan or waiver of 

19 such plan in a managed care setting, an anal20 ysis of the differences in managed care pre21 scribing patterns when a covered outpatient 

22 drug is prescribed in a managed care setting as 

23 compared to when the drug is prescribed in a 

24 fee-for-service setting. 


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1 (2) ADDITIONAL CONTENT.—A report required 

2 under subsection (a) for a calendar year may include 

3 State-specific information about prescription utiliza4 tion management tools under State Medicaid plans 

5 or waivers of such plans, including— 

6 (A) a description of prescription utilization 

7 management tools under State programs to pro8 vide long-term services and supports under a 

9 State Medicaid plan or a waiver of such plan; 

10 (B) a comparison of prescription utilization 

11 management tools applicable to populations cov12 ered under a State Medicaid plan waiver under 

13 section 1115 of the Social Security Act (42 

14 U.S.C. 1315) and the models applicable to pop15 ulations that are not covered under the waiver; 

16 (C) a comparison of the prescription utili17 zation management tools employed by different 

18 Medicaid managed care organizations, phar19 macy benefit managers, and related entities 

20 within the State; 

21 (D) a comparison of the prescription utili22 zation management tools applicable to each en23 rollment category under a State Medicaid plan 

24 or waiver; and 


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1 (E) a comparison of the prescription utili2 zation management tools applicable under the 

3 State Medicaid plan or waiver by patient high4 utilizer or risk status. 

5 (3) ADDITIONAL ANALYSIS.—To the extent 

6 practicable, the Secretary shall include in each re7 port published under subsection (a)— 

8 (A) analyses of national, State, and local 

9 patterns of Medicaid population-based pre10 scribing behaviors; and 

11 (B) recommendations for administrative or 

12 legislative action to improve the effectiveness of, 

13 and reduce costs for, covered outpatient drugs 

14 under Medicaid while ensuring timely bene15 ficiary access to medically necessary covered 

16 outpatient drugs. 

17 (c) USE OF T–MSIS DATA.—Each report required 

18 under subsection (a) shall— 

19 (1) be prepared using data and definitions from 

20 the Transformed Medicaid Statistical Information 

21 System (T–MSIS) data set (or a successor data set) 

22 that is not more than 24 months old on the date 

23 that the report is published; and 

24 (2) as appropriate, include a description with 

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1 ness of the data, as well as any necessary caveats 

2 describing the limitations of the data reported to the 

3 Secretary by the State that are sufficient to commu4 nicate the appropriate uses for the information. 

5 (d) PREPARATION OF REPORT.—Each report re6 quired under subsection (a) shall be prepared by the Ad7 ministrator for the Centers for Medicare & Medicaid Serv8 ices. 

9 (e) APPROPRIATION.—For fiscal year 2022 and each 

10 fiscal year thereafter, there is appropriated to the Sec11 retary $2,000,000 to carry out this section. 

12 SEC. 206. RISK-SHARING VALUE-BASED PAYMENT AGREE13 MENTS FOR COVERED OUTPATIENT DRUGS 

14 UNDER MEDICAID. 

15 (a) IN GENERAL.—Section 1927 of the Social Secu16 rity Act (42 U.S.C. 1396r–8) is amended by adding at 

17 the end the following new subsection: 

18 ‘‘(l) STATE OPTION TO PAY FOR COVERED OUT19 PATIENT DRUGS THROUGH RISK-SHARING VALUE-BASED

20 AGREEMENTS.— 

21 ‘‘(1) IN GENERAL.—Beginning January 1, 

22 2022, a State shall have the option to pay (whether 

23 on a fee-for-service or managed care basis) for cov24 ered outpatient drugs that are potentially curative 

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1 ministered to individuals under this title by entering 

2 into a risk-sharing value-based payment agreement 

3 with the manufacturer of the drug in accordance 

4 with the requirements of this subsection. 

5 ‘‘(2) SECRETARIAL APPROVAL.— 

6 ‘‘(A) IN GENERAL.—A State shall submit a 

7 request to the Secretary to enter into a risk8 sharing value based payment agreement, and 

9 the Secretary shall not approve a proposed risk10 sharing value-based payment agreement be11 tween a State and a manufacturer for payment 

12 for a covered outpatient drug of the manufac13 turer unless the following requirements are met: 

14 ‘‘(i) MANUFACTURER IS PARTY TO RE15 BATE AGREEMENT AND IN COMPLIANCE

16 WITH REQUIREMENTS.—The manufacturer 

17 has a rebate agreement in effect as re18 quired under subsections (a) and (b) of 

19 this section and is in compliance with all 

20 applicable requirements under this title. 

21 ‘‘(ii) NO INCREASE TO PROJECTED

22 NET FEDERAL SPENDING.— 

23 ‘‘(I) IN GENERAL.—The Chief 

24 Actuary certifies that the projected 

25 payments for each covered outpatient 


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1 drug under such proposed agreement 

2 would not result in greater estimated 

3 Federal spending under this title than 

4 the net Federal spending that would 

5 result in the absence of the agree6 ment. 

7 ‘‘(II) NET FEDERAL SPENDING

8 DEFINED.—For purposes of this sub9 section, the term ‘net Federal spend10 ing’ means the amount of Federal 

11 payments the Chief Actuary estimates 

12 would be made under this title for ad13 ministering a covered outpatient drug 

14 to an individual eligible for medical 

15 assistance under a State plan or a 

16 waiver of such plan, reduced by the 

17 amount of all rebates the Chief Actu18 ary estimates would be paid with re19 spect to the administering of such 

20 drug, including all rebates under this 

21 title and any supplemental or other 

22 additional rebates, in the absence of 

23 such an agreement. 

24 ‘‘(III) INFORMATION.—The Chief 

25 Actuary shall make the certifications 


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1 required under this clause based on 

2 the most recently available and reli3 able drug pricing and product infor4 mation. The State and manufacturer 

5 shall provide the Secretary and the 

6 Chief Actuary with all necessary infor7 mation required to make the estimates 

8 needed for such certifications. 

9 ‘‘(iii) LAUNCH AND LIST PRICE JUS10 TIFICATIONS.—The manufacturer submits 

11 all relevant information and supporting 

12 documentation necessary for pricing deci13 sions as deemed appropriate by the Sec14 retary, which shall be truthful and non15 misleading, including manufacturer infor16 mation and supporting documentation for 

17 launch price or list price increases, and 

18 any applicable justification required under 

19 section 1128L. 

20 ‘‘(iv) CONFIDENTIALITY OF INFORMA21 TION; PENALTIES.—The provisions of sub22 paragraphs (C) and (D) of subsection 

23 (b)(3) shall apply to a manufacturer that 

24 fails to submit the information and docu25 mentation required under clauses (ii) and 


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1 (iii) on a timely basis, or that knowingly 

2 provides false or misleading information, in 

3 the same manner as such provisions apply 

4 to a manufacturer with a rebate agreement 

5 under this section. 

6 ‘‘(B) CONSIDERATION OF STATE REQUEST

7 FOR APPROVAL.— 

8 ‘‘(i) IN GENERAL.—The Secretary 

9 shall treat a State request for approval of 

10 a risk-sharing value-based payment agree11 ment in the same manner that the Sec12 retary treats a State plan amendment, and 

13 subpart B of part 430 of title 42, Code of 

14 Federal Regulations, including, subject to 

15 clause (ii), the timing requirements of sec16 tion 430.16 of such title (as in effect on 

17 the date of enactment of this subsection), 

18 shall apply to a request for approval of a 

19 risk-sharing value-based payment agree20 ment in the same manner as such subpart 

21 applies to a State plan amendment. 

22 ‘‘(ii) TIMING.—The Secretary shall 

23 consult with the Commissioner of Food 

24 and Drugs as required under subpara25 graph (C) and make a determination on 


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1 whether to approve a request from a State 

2 for approval of a proposed risk-sharing 

3 value-based payment agreement (or request 

4 additional information necessary to allow 

5 the Secretary to make a determination 

6 with respect to such request for approval) 

7 within the time period, to the extent prac8 ticable, specified in section 430.16 of title 

9 42, Code of Federal Regulations (as in ef10 fect on the date of enactment of this sub11 section), but in no case shall the Secretary 

12 take more than 180 days after the receipt 

13 of such request for approval or response to 

14 such request for additional information to 

15 make such a determination (or request ad16 ditional information). 

17 ‘‘(C) CONSULTATION WITH THE COMMIS18 SIONER OF FOOD AND DRUGS.—In considering 

19 whether to approve a risk-sharing value-based 

20 payment agreement, the Secretary, to the ex21 tent necessary, shall consult with the Commis22 sioner of Food and Drugs to determine whether 

23 the relevant clinical parameters specified in 

24 such agreement are appropriate. 


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1 ‘‘(3) INSTALLMENT-BASED PAYMENT STRUC2 TURE.— 

3 ‘‘(A) IN GENERAL.—A risk-sharing value4 based payment agreement shall provide for a 

5 payment structure under which, for every in6 stallment year of the agreement (subject to sub7 paragraph (B)), the State shall pay the total in8 stallment year amount in equal installments to 

9 be paid at regular intervals over a period of 

10 time that shall be specified in the agreement. 

11 ‘‘(B) REQUIREMENTS FOR INSTALLMENT

12 PAYMENTS.— 

13 ‘‘(i) TIMING OF FIRST PAYMENT.— 

14 The State shall make the first of the in15 stallment payments described in subpara16 graph (A) for an installment year not later 

17 than 30 days after the end of such year. 

18 ‘‘(ii) LENGTH OF INSTALLMENT PE19 RIOD.—The period of time over which the 

20 State shall make the installment payments 

21 described in subparagraph (A) for an in22 stallment year shall not be longer than 5 

23 years. 

24 ‘‘(iii) NONPAYMENT OR REDUCED

25 PAYMENT OF INSTALLMENTS FOLLOWING


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1 A FAILURE TO MEET CLINICAL PARAM2 ETER.—If, prior to the payment date (as 

3 specified in the agreement) of any install4 ment payment described in subparagraph 

5 (A) or any other alternative date or time 

6 frame (as otherwise specified in the agree7 ment), the covered outpatient drug which 

8 is subject to the agreement fails to meet a 

9 relevant clinical parameter of the agree10 ment, the agreement shall provide that— 

11 ‘‘(I) the installment payment 

12 shall not be made; or 

13 ‘‘(II) the installment payment 

14 shall be reduced by a percentage spec15 ified in the agreement that is based 

16 on the outcome achieved by the drug 

17 relative to the relevant clinical param18 eter. 

19 ‘‘(4) NOTICE OF INTENT.— 

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graph (B), a manufacturer of a covered out22 patient drug shall not be eligible to enter into 

23 a risk-sharing value-based payment agreement 

24 under this subsection with respect to such drug 

25 unless the manufacturer notifies the Secretary 


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1 that the manufacturer is interested in entering 

2 into such an agreement with respect to such 

3 drug. The decision to submit and timing of a 

4 request to enter into a proposed risk-sharing 

5 value-based payment agreement shall remain 

6 solely within the discretion of the State and 

7 shall only be effective upon Secretarial approval 

8 as required under this subsection. 

9 ‘‘(B) TREATMENT OF SUBSEQUENTLY AP10 PROVED DRUGS.— 

11 ‘‘(i) IN GENERAL.—In the case of a 

12 manufacturer of a covered outpatient drug 

13 approved under section 505 of the Federal 

14 Food, Drug, and Cosmetic Act or licensed 

15 under section 351 of the Public Health 

16 Service Act after the date of enactment of 

17 this subsection, not more than 90 days 

18 after meeting with the Food and Drug Ad19 ministration following phase II clinical 

20 trials for such drug (or, in the case of a 

21 drug described in clause (ii), not later than 

22 March 31, 2022), the manufacturer must 

23 notify the Secretary of the manufacturer’s 

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1 section with respect to such drug. If no 

2 such meeting has occurred, the Secretary 

3 may use discretion as to whether a poten4 tially curative treatment intended for one5 time use may qualify for a risk-sharing 

6 value-based payment agreement under this 

7 section. A manufacturer notification of in8 terest shall not have any influence on a de9 cision for approval by the Food and Drug 

10 Administration. 

11 ‘‘(ii) APPLICATION TO CERTAIN SUB12 SEQUENTLY APPROVED DRUGS.—A drug 

13 described in this clause is a covered out14 patient drug of a manufacturer— 

15 ‘‘(I) that is approved under sec16 tion 505 of the Federal Food, Drug, 

17 and Cosmetic Act or licensed under 

18 section 351 of the Public Health Serv19 ice Act after the date of enactment of 

20 this subsection; and 

21 ‘‘(II) with respect to which, as of 

22 January 1, 2022, more than 90 days 

23 have passed after the manufacturer’s 

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1 ministration following phase II clinical 

2 trials for such drug. 

3 ‘‘(iii) PARALLEL APPROVAL.—The 

4 Secretary, in coordination with the Admin5 istrator of the Centers for Medicare & 

6 Medicaid Services and the Commissioner of 

7 Food and Drugs, shall, to the extent prac8 ticable, approve a State’s request to enter 

9 into a proposed risk-sharing value-based 

10 payment agreement that otherwise meets 

11 the requirements of this subsection at the 

12 time that such a drug is approved by the 

13 Food and Drug Administration to help 

14 provide that no State that wishes to enter 

15 into such an agreement is required to pay 

16 for the drug in full at one time if the State 

17 is seeking to pay over a period of time as 

18 outlined in the proposed agreement. 

19 ‘‘(iv) RULE OF CONSTRUCTION.— 

20 Nothing in this paragraph shall be applied 

21 or construed to modify or affect the time22 frames or factors involved in the Sec23 retary’s determination of whether to ap24 prove or license a drug under section 505 

25 of the Federal Food, Drug, and Cosmetic 


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1 Act or section 351 of the Public Health 

2 Service Act. 

3 ‘‘(5) SPECIAL PAYMENT RULES.— 

4 ‘‘(A) IN GENERAL.—Except as otherwise 

5 provided in this paragraph, with respect to an 

6 individual who is administered a unit of a cov7 ered outpatient drug that is purchased under a 

8 State plan by a State Medicaid agency under a 

9 risk-sharing value-based payment agreement in 

10 an installment year, the State shall remain lia11 ble to the manufacturer of such drug for pay12 ment for such unit without regard to whether 

13 the individual remains enrolled in the State 

14 plan under this title (or a waiver of such plan) 

15 for each installment year for which the State is 

16 to make installment payments for covered out17 patient drugs purchased under the agreement 

18 in such year. 

19 ‘‘(B) DEATH.—In the case of an individual 

20 described in subparagraph (A) who dies during 

21 the period described in such subparagraph, the 

22 State plan shall not be liable for any remaining 

23 payment for the unit of the covered outpatient 

24 drug administered to the individual which is 


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1 owed under the agreement described in such 

2 subparagraph. 

3 ‘‘(C) WITHDRAWAL OF APPROVAL.—In the 

4 case of a covered outpatient drug that is the 

5 subject of a risk-sharing value-based agreement 

6 between a State and a manufacturer under this 

7 subsection, including a drug approved in ac8 cordance with section 506(c) of the Federal 

9 Food, Drug, and Cosmetic Act, and such drug 

10 is the subject of an application that has been 

11 withdrawn by the Secretary, the State plan 

12 shall not be liable for any remaining payment 

13 that is owed under the agreement. 

14 ‘‘(D) ALTERNATIVE ARRANGEMENT UNDER

15 AGREEMENT.—Subject to approval by the Sec16 retary, the terms of a proposed risk-sharing 

17 value-based payment agreement submitted for 

18 approval by a State may provide that subpara19 graph (A) shall not apply. 

20 ‘‘(E) GUIDANCE.—Not later than January 

21 1, 2022, the Secretary shall issue guidance to 

22 States establishing a process for States to no23 tify the Secretary when an individual who is ad24 ministered a unit of a covered outpatient drug 

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1 sharing value-based payment agreement ceases 

2 to be enrolled under the State plan under this 

3 title (or a waiver of such plan) or dies before 

4 the end of the installment period applicable to 

5 such unit under the agreement. 

6 ‘‘(6) TREATMENT OF PAYMENTS UNDER RISK7 SHARING VALUE-BASED AGREEMENTS FOR PUR8 POSES OF AVERAGE MANUFACTURER PRICE; BEST

9 PRICE.—The Secretary shall treat any payments 

10 made to the manufacturer of a covered outpatient 

11 drug under a risk-sharing value-based payment 

12 agreement under this subsection during a rebate pe13 riod in the same manner that the Secretary treats 

14 payments made under a State supplemental rebate 

15 agreement under sections 447.504(c)(19) and 

16 447.505(c)(7) of title 42, Code of Federal Regula17 tions (or any successor regulations), for purposes of 

18 determining average manufacturer price and best 

19 price under this section with respect to the covered 

20 outpatient drug and a rebate period and for pur21 poses of offsets required under subsection (b)(1)(B). 

22 ‘‘(7) ASSESSMENTS AND REPORT TO CON23 GRESS.— 

24 ‘‘(A) ASSESSMENTS.— 


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1 ‘‘(i) IN GENERAL.—Not later than 

2 180 days after the end of each assessment 

3 period of any risk-sharing value-based pay4 ment agreement for a State approved 

5 under this subsection, the Secretary shall 

6 conduct an evaluation of such agreement 

7 which shall include an evaluation by the 

8 Chief Actuary to determine whether pro9 gram spending under the risk-sharing 

10 value-based payment agreement aligned 

11 with the projections for the agreement 

12 made under paragraph (2)(A)(ii), including 

13 an assessment of whether actual Federal 

14 spending under this title under the agree15 ment was less or more than net Federal 

16 spending would have been in the absence 

17 of the agreement. 

18 ‘‘(ii) ASSESSMENT PERIOD.—For pur19 poses of clause (i)— 

20 ‘‘(I) the first assessment period 

21 for a risk-sharing value-based pay22 ment agreement shall be the period of 

23 time over which payments are sched24 uled to be made under the agreement 

25 for the first 10 individuals who are 


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1 administered covered outpatient drugs 

2 under the agreement except that such 

3 period shall not exceed the 5-year pe4 riod after the date on which the Sec5 retary approves the agreement; and 

6 ‘‘(II) each subsequent assessment 

7 period for a risk-sharing value-based 

8 payment agreement shall be the 5- 

9 year period following the end of the 

10 previous assessment period. 

11 ‘‘(B) RESULTS OF ASSESSMENTS.— 

12 ‘‘(i) TERMINATION OPTION.—If the 

13 Secretary determines as a result of the as14 sessment by the Chief Actuary under sub15 paragraph (A) that the actual Federal 

16 spending under this title for any covered 

17 outpatient drug that was the subject of the 

18 State’s risk-sharing value-based payment 

19 agreement was greater than the net Fed20 eral spending that would have resulted in 

21 the absence of the agreement, the Sec22 retary may terminate approval of such 

23 agreement and shall immediately conduct 

24 an assessment under this paragraph of any 

25 other ongoing risk-sharing value-based 


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1 payment agreement to which the same 

2 manufacturer is a party. 

3 ‘‘(ii) REPAYMENT REQUIRED.— 

4 ‘‘(I) IN GENERAL.—If the Sec5 retary determines as a result of the 

6 assessment by the Chief Actuary 

7 under subparagraph (A) that the Fed8 eral spending under the risk-sharing 

9 value-based agreement for a covered 

10 outpatient drug that was subject to 

11 such agreement was greater than the 

12 net Federal spending that would have 

13 resulted in the absence of the agree14 ment, the manufacturer shall repay 

15 the difference to the State and Fed16 eral governments in a timely manner 

17 as determined by the Secretary. 

18 ‘‘(II) TERMINATION FOR FAIL19 URE TO PAY.—The failure of a manu20 facturer to make repayments required 

21 under subclause (I) in a timely man22 ner shall result in immediate termi23 nation of all risk-sharing value-based 

24 agreements to which the manufacturer 

25 is a party. 


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1 ‘‘(III) ADDITIONAL PEN2 ALTIES.—In the case of a manufac3 turer that fails to make repayments 

4 required under subclause (I), the Sec5 retary may treat such manufacturer 

6 in the same manner as a manufac7 turer that fails to pay required re8 bates under this section, and the Sec9 retary may— 

10 ‘‘(aa) suspend or terminate 

11 the manufacturer’s rebate agree12 ment under this section; and 

13 ‘‘(bb) pursue any other rem14 edy that would be available if the 

15 manufacturer had failed to pay 

16 required rebates under this sec17 tion. 

18 ‘‘(C) REPORT TO CONGRESS.—Not later 

19 than 5 years after the first risk-sharing value20 based payment agreement is approved under 

21 this subsection, the Secretary shall submit to 

22 Congress and make available to the public a re23 port that includes— 

24 ‘‘(i) an assessment of the impact of 

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1 ments on access for individuals who are eli2 gible for benefits under a State plan or 

3 waiver under this title to medically nec4 essary covered outpatient drugs and re5 lated treatments; 

6 ‘‘(ii) an analysis of the impact of such 

7 agreements on overall State and Federal 

8 spending under this title; 

9 ‘‘(iii) an assessment of the impact of 

10 such agreements on drug prices, including 

11 launch price and price increases; and 

12 ‘‘(iv) such recommendations to Con13 gress as the Secretary deems appropriate. 

14 ‘‘(8) GUIDANCE AND REGULATIONS.— 

15 ‘‘(A) IN GENERAL.—Not later than Janu16 ary 1, 2022, the Secretary shall issue guidance 

17 to States seeking to enter into risk-sharing 

18 value-based payment agreements under this 

19 subsection that includes a model template for 

20 such agreements. The Secretary may issue any 

21 additional guidance or promulgate regulations 

22 as necessary to implement and enforce the pro23 visions of this subsection. 

24 ‘‘(B) MODEL AGREEMENTS.— 


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1 ‘‘(i) IN GENERAL.—If a State ex2 presses an interest in pursuing a risk-shar3 ing value-based payment agreement under 

4 this subsection with a manufacturer for 

5 the purchase of a covered outpatient drug, 

6 the Secretary may share with such State 

7 any risk-sharing value-based agreement be8 tween a State and the manufacturer for 

9 the purchase of such drug that has been 

10 approved under this subsection. While such 

11 shared agreement may serve as a template 

12 for a State that wishes to propose, the use 

13 of a previously approved agreement shall 

14 not affect the submission and approval 

15 process for approval of a proposed risk16 sharing value-based payment agreement 

17 under this subsection, including the re18 quirements under paragraph (2)(A). 

19 ‘‘(ii) CONFIDENTIALITY.—In the case 

20 of a risk-sharing value-based payment 

21 agreement that is disclosed to a State by 

22 the Secretary under this subparagraph and 

23 that is only in effect with respect to a sin24 gle State, the confidentiality of information 


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1 provisions described in subsection 

2 (b)(3)(D) shall apply to such information. 

3 ‘‘(C) OIG CONSULTATION.— 

4 ‘‘(i) IN GENERAL.—The Secretary 

5 shall consult with the Office of the Inspec6 tor General of the Department of Health 

7 and Human Services to determine whether 

8 there are potential program integrity con9 cerns with agreement approvals or tem10 plates and address accordingly. 

11 ‘‘(ii) OIG POLICY UPDATES AS NEC12 ESSARY.—The Inspector General of the 

13 Department of Health and Human Serv14 ices shall review and update, as necessary, 

15 any policies or guidelines of the Office of 

16 the Inspector General of the Department 

17 of Human Services (including policies re18 lated to the enforcement of section 1128B) 

19 to accommodate the use of risk-sharing 

20 value-based payment agreements in accord21 ance with this section. 

22 ‘‘(9) RULES OF CONSTRUCTION.— 

23 ‘‘(A) MODIFICATIONS.—Nothing in this 

24 subsection or any regulations promulgated 

25 under this subsection shall prohibit a State 


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1 from requesting a modification from the Sec2 retary to the terms of a risk-sharing value3 based payment agreement. A modification that 

4 is expected to result in any increase to pro5 jected net State or Federal spending under the 

6 agreement shall be subject to recertification by 

7 the Chief Actuary as described in paragraph 

8 (2)(A)(ii) before the modification may be ap9 proved. 

10 ‘‘(B) REBATE AGREEMENTS.—Nothing in 

11 this subsection shall be construed as requiring 

12 a State to enter into a risk-sharing value-based 

13 payment agreement or as limiting or super14 seding the ability of a State to enter into a sup15 plemental rebate agreement for a covered out16 patient drug. 

17 ‘‘(C) FFP FOR PAYMENTS UNDER RISK18 SHARING VALUE-BASED PAYMENT AGREE19 MENTS.—Federal financial participation shall 

20 be available under this title for any payment 

21 made by a State to a manufacturer for a cov22 ered outpatient drug under a risk-sharing 

23 value-based payment agreement in accordance 

24 with this subsection, except that no Federal fi25 nancial participation shall be available for any 


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1 payment made by a State to a manufacturer 

2 under such an agreement on and after the ef3 fective date of a disapproval of such agreement 

4 by the Secretary. 

5 ‘‘(D) CONTINUED APPLICATION OF OTHER

6 PROVISIONS.—Except as expressly provided in 

7 this subsection, nothing in this subsection or in 

8 any regulations promulgated under this sub9 section shall affect the application of any other 

10 provision of this Act. 

11 ‘‘(10) APPROPRIATIONS.—For fiscal year 2022 

12 and each fiscal year thereafter, there are appro13 priated to the Secretary $5,000,000 for the purpose 

14 of carrying out this subsection. 

15 ‘‘(11) DEFINITIONS.—In this subsection: 

16 ‘‘(A) CHIEF ACTUARY.—The term ‘Chief 

17 Actuary’ means the Chief Actuary of the Cen18 ters for Medicare & Medicaid Services. 

19 ‘‘(B) INSTALLMENT YEAR.—The term ‘in20 stallment year’ means, with respect to a risk21 sharing value-based payment agreement, a 12- 

22 month period during which a covered outpatient 

23 drug is administered under the agreement. 

24 ‘‘(C) POTENTIALLY CURATIVE TREATMENT

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1 tentially curative treatment intended for one2 time use’ means a treatment that consists of 

3 the administration of a covered outpatient drug 

4 that— 

5 ‘‘(i) is a form of gene therapy for a 

6 rare disease, as defined by the Commis7 sioner of Food and Drugs, designated 

8 under section 526 of the Federal Food, 

9 Drug, and Cosmetics Act, and approved 

10 under section 505 of such Act or licensed 

11 under subsection (a) or (k) of section 351 

12 of the Public Health Service Act to treat 

13 a serious or life-threatening disease or con14 dition; 

15 ‘‘(ii) if administered in accordance 

16 with the labeling of such drug, is expected 

17 to result in either— 

18 ‘‘(I) the cure of such disease or 

19 condition; or 

20 ‘‘(II) a reduction in the symp21 toms of such disease or condition to 

22 the extent that such disease or condi23 tion is not expected to lead to early 

24 mortality; and 


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1 ‘‘(iii) is expected to achieve a result 

2 described in clause (ii), which may be 

3 achieved over an extended period of time, 

4 after not more than 3 administrations. 

5 ‘‘(D) RELEVANT CLINICAL PARAMETER.— 

6 The term ‘relevant clinical parameter’ means, 

7 with respect to a covered outpatient drug that 

8 is the subject of a risk-sharing value-based pay9 ment agreement— 

10 ‘‘(i) a clinical endpoint specified in the 

11 drug’s labeling or supported by one or 

12 more of the compendia described in section 

13 1861(t)(2)(B)(ii)(I) that— 

14 ‘‘(I) is able to be measured or 

15 evaluated on an annual basis for each 

16 year of the agreement on an inde17 pendent basis by a provider or other 

18 entity; and 

19 ‘‘(II) is required to be achieved 

20 (based on observed metrics in patient 

21 populations) under the terms of the 

22 agreement; or 

23 ‘‘(ii) a surrogate endpoint (as defined 

24 in section 507(e)(9) of the Federal Food, 

25 Drug, and Cosmetic Act), including those 


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1 developed by patient-focused drug develop2 ment tools, that— 

3 ‘‘(I) is able to be measured or 

4 evaluated on an annual basis for each 

5 year of the agreement on an inde6 pendent basis by a provider or other 

7 entity; and 

8 ‘‘(II) has been qualified by the 

9 Food and Drug Administration. 

10 ‘‘(E) RISK-SHARING VALUE-BASED PAY11 MENT AGREEMENT.—The term ‘risk-sharing 

12 value-based payment agreement’ means an 

13 agreement between a State plan and a manu14 facturer— 

15 ‘‘(i) for the purchase of a covered out16 patient drug of the manufacturer that is a 

17 potentially curative treatment intended for 

18 one-time use; 

19 ‘‘(ii) under which payment for such 

20 drug shall be made pursuant to an install21 ment-based payment structure that meets 

22 the requirements of paragraph (3); 

23 ‘‘(iii) which conditions payment on the 

24 achievement of at least 2 relevant clinical 


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1 parameters (as defined in subparagraph 

2 (C)); 

3 ‘‘(iv) which provides that— 

4 ‘‘(I) the State plan will directly 

5 reimburse the manufacturer for the 

6 drug; or 

7 ‘‘(II) a third party will reimburse 

8 the manufacture in a manner ap9 proved by the Secretary; and 

10 ‘‘(v) is approved by the Secretary in 

11 accordance with paragraph (2). 

12 ‘‘(F) TOTAL INSTALLMENT YEAR

13 AMOUNT.—The term ‘total installment year 

14 amount’ means, with respect to a risk-sharing 

15 value-based payment agreement for the pur16 chase of a covered outpatient drug and an in17 stallment year, an amount equal to the product 

18 of— 

19 ‘‘(i) the unit price of the drug charged 

20 under the agreement; and 

21 ‘‘(ii) the number of units of such drug 

22 administered under the agreement during 

23 such installment year.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Section 1903(i)(10)(A) of the Social Secu2 rity Act (42 U.S.C. 1396b(i)(10)(A)) is amended by 

3 striking ‘‘or unless section 1927(a)(3) applies’’ and 

4 inserting ‘‘, section 1927(a)(3) applies with respect 

5 to such drugs, or such drugs are the subject of a 

6 risk-sharing value-based payment agreement under 

7 section 1927(l)’’. 

8 (2) Section 1927(b) of the Social Security Act 

9 (42 U.S.C. 1396r–8(b)) is amended— 

10 (A) in paragraph (1)(A), by inserting ‘‘(ex11 cept for drugs for which payment is made by a 

12 State under a risk-sharing value-based payment 

13 agreement under subsection (l))’’ after ‘‘under 

14 the State plan for such period’’; and 

15 (B) in paragraph (3)— 

16 (i) in subparagraph (C)(i), by insert17 ing ‘‘or subsection (l)(2)(A)’’ after ‘‘sub18 paragraph (A)’’; and 

19 (ii) in subparagraph (D), in the mat20 ter preceding clause (i), by inserting ‘‘, 

21 under subsection (l)(2)(A),’’ after ‘‘under 

22 this paragraph’’. 


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1 SEC. 207. APPLYING MEDICAID DRUG REBATE REQUIRE2 MENT TO DRUGS PROVIDED AS PART OF OUT3 PATIENT HOSPITAL SERVICES. 

4 (a) IN GENERAL.—Section 1927(k)(3) of the Social 

5 Security Act (42 U.S.C. 1396r–8(k)(3)) is amended to 

6 read as follows: 

7 ‘‘(3) LIMITING DEFINITION.— 

8 ‘‘(A) IN GENERAL.—The term ‘covered 

9 outpatient drug’ does not include any drug, bio10 logical product, or insulin provided as part of, 

11 or as incident to and in the same setting as, 

12 any of the following (and for which payment 

13 may be made under this title as part of pay14 ment for the following and not as direct reim15 bursement for the drug): 

16 ‘‘(i) Inpatient hospital services. 

17 ‘‘(ii) Hospice services. 

18 ‘‘(iii) Dental services, except that 

19 drugs for which the State plan authorizes 

20 direct reimbursement to the dispensing 

21 dentist are covered outpatient drugs. 

22 ‘‘(iv) Physicians’ services. 

23 ‘‘(v) Outpatient hospital services. 

24 ‘‘(vi) Nursing facility services and 

25 services provided by an intermediate care 

26 facility for the mentally retarded. 


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1 ‘‘(vii) Other laboratory and x-ray serv2 ices. 

3 ‘‘(viii) Renal dialysis. 

4 ‘‘(B) OTHER EXCLUSIONS.—Such term 

5 also does not include any such drug or product 

6 for which a National Drug Code number is not 

7 required by the Food and Drug Administration 

8 or a drug or biological used for a medical indi9 cation which is not a medically accepted indica10 tion. 

11 ‘‘(C) STATE OPTION.—At the option of a 

12 State, such term may include any drug, biologi13 cal product, or insulin for which the State is 

14 the primary payer under this title or a dem15 onstration project concerning this title, and that 

16 is provided on an outpatient basis as part of, or 

17 as incident to and in the same setting as, de18 scribed in clause (iv) or (v) of subparagraph (A) 

19 and for which payment is made as part of pay20 ment for such services. 

21 ‘‘(D) NO EFFECT ON BEST PRICE.—Any 

22 drug, biological product, or insulin excluded 

23 from the definition of such term as a result of 

24 this paragraph shall be treated as a covered 

25 outpatient drug for purposes of determining the 


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1 best price (as defined in subsection (c)(1)(C)) 

2 for such drug, biological product, or insulin.’’. 

3 (b) EFFECTIVE DATE; IMPLEMENTATION GUID4 ANCE.— 

5 (1) IN GENERAL.—The amendment made by 

6 subsection (a) shall take effect on the date that is 

7 1 year after the date of enactment of this Act. 

8 (2) IMPLEMENTATION AND GUIDANCE.—Not 

9 later than 1 year after the date of enactment of this 

10 Act, the Secretary of Health and Human Services 

11 shall issue guidance and relevant informational bul12 letins for States, manufacturers (as defined in sec13 tion 1927(k)(5) of the Social Security Act (42 

14 U.S.C. 1396r–8(k)(5))), and other relevant stake15 holders, including health care providers, regarding 

16 implementation of the amendment made by sub17 section (a). 

18 TITLE III—FOOD AND DRUG 

19 ADMINISTRATION 

20 Subtitle A—Pay-for-Delay 

21 SEC. 301. UNLAWFUL AGREEMENTS. 

22 (a) AGREEMENTS PROHIBITED.—Subject to sub23 sections (b) and (c), it shall be unlawful for an NDA or 

24 BLA holder and a subsequent filer (or for two subsequent 

25 filers) to enter into, or carry out, an agreement resolving 


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1 or settling a covered patent infringement claim on a final 

2 or interim basis if under such agreement— 

3 (1) a subsequent filer directly or indirectly re4 ceives from such holder (or in the case of such an 

5 agreement between two subsequent filers, the other 

6 subsequent filer) anything of value, including a li7 cense; and 

8 (2) the subsequent filer agrees to limit or fore9 go research on, or development, manufacturing, 

10 marketing, or sales, for any period of time, of the 

11 covered product that is the subject of the application 

12 described in subparagraph (A) or (B) of subsection 

13 (g)(8). 

14 (b) EXCLUSION.—It shall not be unlawful under sub15 section (a) if a party to an agreement described in such 

16 subsection demonstrates by clear and convincing evidence 

17 that the value described in subsection (a)(1) is compensa18 tion solely for other goods or services that the subsequent 

19 filer has promised to provide. 

20 (c) LIMITATION.—Nothing in this section shall pro21 hibit an agreement resolving or settling a covered patent 

22 infringement claim in which the consideration granted by 

23 the NDA or BLA holder to the subsequent filer (or from 

24 one subsequent filer to another) as part of the resolution 

25 or settlement includes only one or more of the following: 


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1 (1) The right to market the covered product 

2 that is the subject of the application described in 

3 subparagraph (A) or (B) of subsection (g)(8) in the 

4 United States before the expiration of— 

5 (A) any patent that is the basis of the cov6 ered patent infringement claim; or 

7 (B) any patent right or other statutory ex8 clusivity that would prevent the marketing of 

9 such covered product. 

10 (2) A payment for reasonable litigation ex11 penses not to exceed $7,500,000 in the aggregate. 

12 (3) A covenant not to sue on any claim that 

13 such covered product infringes a patent. 

14 (d) ENFORCEMENT BY FEDERAL TRADE COMMIS15 SION.— 

16 (1) GENERAL APPLICATION.—The requirements 

17 of this section apply, according to their terms, to an 

18 NDA or BLA holder or subsequent filer that is— 

19 (A) a person, partnership, or corporation 

20 over which the Commission has authority pur21 suant to section 5(a)(2) of the Federal Trade 

22 Commission Act (15 U.S.C. 45(a)(2)); or 

23 (B) a person, partnership, or corporation 

24 over which the Commission would have author25 ity pursuant to such section but for the fact 


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1 that such person, partnership, or corporation is 

2 not organized to carry on business for its own 

3 profit or that of its members. 

4 (2) UNFAIR OR DECEPTIVE ACTS OR PRACTICES

5 ENFORCEMENT AUTHORITY.— 

6 (A) IN GENERAL.—A violation of this sec7 tion shall be treated as an unfair or deceptive 

8 act or practice in violation of section 5(a)(1) of 

9 the Federal Trade Commission Act (15 U.S.C. 

10 45(a)(1)). 

11 (B) POWERS OF COMMISSION.—Except as 

12 provided in subparagraph (C) and paragraphs 

13 (1)(B) and (3)— 

14 (i) the Commission shall enforce this 

15 section in the same manner, by the same 

16 means, and with the same jurisdiction, 

17 powers, and duties as though all applicable 

18 terms and provisions of the Federal Trade 

19 Commission Act (15 U.S.C. 41 et seq.) 

20 were incorporated into and made a part of 

21 this section; and 

22 (ii) any NDA or BLA holder or subse23 quent filer that violates this section shall 

24 be subject to the penalties and entitled to 


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1 the privileges and immunities provided in 

2 the Federal Trade Commission Act. 

3 (C) JUDICIAL REVIEW.—In the case of a 

4 cease and desist order issued by the Commis5 sion under section 5 of the Federal Trade Com6 mission Act (15 U.S.C. 45) for violation of this 

7 section, a party to such order may obtain judi8 cial review of such order as provided in such 

9 section 5, except that— 

10 (i) such review may only be obtained 

11 in— 

12 (I) the United States Court of 

13 Appeals for the District of Columbia 

14 Circuit; 

15 (II) the United States Court of 

16 Appeals for the circuit in which the 

17 ultimate parent entity, as defined in 

18 section 801.1(a)(3) of title 16, Code 

19 of Federal Regulations, or any suc20 cessor thereto, of the NDA or BLA 

21 holder (if any such holder is a party 

22 to such order) is incorporated as of 

23 the date that the application described 

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1 tion that is deemed to be a license for 

2 a biological product under section 

3 351(k) of the Public Health Service 

4 Act (42 U.S.C. 262(k)) pursuant to 

5 section 7002(e)(4) of the Biologics 

6 Price Competition and Innovation Act 

7 of 2009 (Public Law 111–148; 124 

8 Stat. 817) is submitted to the Com9 missioner of Food and Drugs; or 

10 (III) the United States Court of 

11 Appeals for the circuit in which the 

12 ultimate parent entity, as so defined, 

13 of any subsequent filer that is a party 

14 to such order is incorporated as of the 

15 date that the application described in 

16 subparagraph (A) or (B) of subsection 

17 (g)(8) is submitted to the Commis18 sioner of Food and Drugs; and 

19 (ii) the petition for review shall be 

20 filed in the court not later than 30 days 

21 after such order is served on the party 

22 seeking review. 

23 (3) ADDITIONAL ENFORCEMENT AUTHORITY.— 

24 (A) CIVIL PENALTY.—The Commission 

25 may commence a civil action to recover a civil 


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1 penalty in a district court of the United States 

2 against any NDA or BLA holder or subsequent 

3 filer that violates this section. 

4 (B) SPECIAL RULE FOR RECOVERY OF

5 PENALTY IF CEASE AND DESIST ORDER

6 ISSUED.— 

7 (i) IN GENERAL.—If the Commission 

8 has issued a cease and desist order in a 

9 proceeding under section 5 of the Federal 

10 Trade Commission Act (15 U.S.C. 45) for 

11 violation of this section— 

12 (I) the Commission may com13 mence a civil action under subpara14 graph (A) to recover a civil penalty 

15 against any party to such order at 

16 any time before the expiration of the 

17 1-year period beginning on the date 

18 on which such order becomes final 

19 under section 5(g) of such Act (15 

20 U.S.C. 45(g)); and 

21 (II) in such civil action, the find22 ings of the Commission as to the ma23 terial facts in such proceeding shall be 

24 conclusive, unless— 


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1 (aa) the terms of such order 

2 expressly provide that the Com3 mission’s findings shall not be 

4 conclusive; or 

5 (bb) such order became final 

6 by reason of section 5(g)(1) of 

7 such Act (15 U.S.C. 45(g)(1)), in 

8 which case such findings shall be 

9 conclusive if supported by evi10 dence. 

11 (ii) RELATIONSHIP TO PENALTY FOR

12 VIOLATION OF AN ORDER.—The penalty 

13 provided in clause (i) for violation of this 

14 section is separate from and in addition to 

15 any penalty that may be incurred for viola16 tion of an order of the Commission under 

17 section 5(l) of the Federal Trade Commis18 sion Act (15 U.S.C. 45(l)). 

19 (C) AMOUNT OF PENALTY.— 

20 (i) IN GENERAL.—The amount of a 

21 civil penalty imposed in a civil action under 

22 subparagraph (A) on a party to an agree23 ment described in subsection (a) shall be 

24 sufficient to deter violations of this section, 

25 but in no event greater than— 


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1 (I) if such party is the NDA or 

2 BLA holder (or, in the case of an 

3 agreement between two subsequent fil4 ers, the subsequent filer who gave the 

5 value described in subsection (a)(1)), 

6 the greater of— 

7 (aa) 3 times the value re8 ceived by such NDA or BLA 

9 holder (or by such subsequent 

10 filer) that is reasonably attrib11 utable to the violation of this sec12 tion; or 

13 (bb) 3 times the value given 

14 to the subsequent filer (or to the 

15 other subsequent filer) reason16 ably attributable to the violation 

17 of this section; and 

18 (II) if such party is the subse19 quent filer (or, in the case of an 

20 agreement between two subsequent fil21 ers, the subsequent filer who received 

22 the value described in subsection 

23 (a)(1)), 3 times the value received by 

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1 ably attributable to the violation of 

2 this section. 

3 (ii) FACTORS FOR CONSIDERATION.— 

4 In determining such amount, the court 

5 shall take into account— 

6 (I) the nature, circumstances, ex7 tent, and gravity of the violation; 

8 (II) with respect to the violator, 

9 the degree of culpability, any history 

10 of violations, the ability to pay, any 

11 effect on the ability to continue doing 

12 business, profits earned by the NDA 

13 or BLA holder (or, in the case of an 

14 agreement between two subsequent fil15 ers, the subsequent filer who gave the 

16 value described in subsection (a)(1)), 

17 compensation received by the subse18 quent filer (or, in the case of an 

19 agreement between two subsequent fil20 ers, the subsequent filer who received 

21 the value described in subsection 

22 (a)(1)), and the amount of commerce 

23 affected; and 

24 (III) other matters that justice 

25 requires. 


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1 (D) INJUNCTIONS AND OTHER EQUITABLE

2 RELIEF.—In a civil action under subparagraph 

3 (A), the United States district courts are em4 powered to grant mandatory injunctions and 

5 such other and further equitable relief as they 

6 deem appropriate. 

7 (4) REMEDIES IN ADDITION.—Remedies pro8 vided in this subsection are in addition to, and not 

9 in lieu of, any other remedy provided by Federal 

10 law. 

11 (5) PRESERVATION OF AUTHORITY OF COMMIS12 SION.—Nothing in this section shall be construed to 

13 affect any authority of the Commission under any 

14 other provision of law. 

15 (e) FEDERAL TRADE COMMISSION RULEMAKING.— 

16 The Commission may, in its discretion, by rule promul17 gated under section 553 of title 5, United States Code, 

18 exempt from this section certain agreements described in 

19 subsection (a) if the Commission finds such agreements 

20 to be in furtherance of market competition and for the 

21 benefit of consumers. 

22 (f) ANTITRUST LAWS.—Nothing in this section shall 

23 modify, impair, limit, or supersede the applicability of the 

24 antitrust laws as defined in subsection (a) of the first sec25 tion of the Clayton Act (15 U.S.C. 12(a)), and of section 


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1 5 of the Federal Trade Commission Act (15 U.S.C. 45) 

2 to the extent that such section 5 applies to unfair methods 

3 of competition. Nothing in this section shall modify, im4 pair, limit, or supersede the right of a subsequent filer 

5 to assert claims or counterclaims against any person, 

6 under the antitrust laws or other laws relating to unfair 

7 competition. 

8 (g) DEFINITIONS.—In this section: 

9 (1) AGREEMENT RESOLVING OR SETTLING A

10 COVERED PATENT INFRINGEMENT CLAIM.—The 

11 term ‘‘agreement resolving or settling a covered pat12 ent infringement claim’’ means any agreement 

13 that— 

14 (A) resolves or settles a covered patent in15 fringement claim; or 

16 (B) is contingent upon, provides for a con17 tingent condition for, or is otherwise related to 

18 the resolution or settlement of a covered patent 

19 infringement claim. 

20 (2) COMMISSION.—The term ‘‘Commission’’ 

21 means the Federal Trade Commission. 

22 (3) COVERED PATENT INFRINGEMENT CLAIM.— 

23 The term ‘‘covered patent infringement claim’’ 

24 means an allegation made by the NDA or BLA hold25 er to a subsequent filer (or, in the case of an agreeVerDate Sep 11 2014 00:26 Apr 24, 2021 Jkt 019200 PO 00000 Frm 00161 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 ment between two subsequent filers, by one subse2 quent filer to another), whether or not included in 

3 a complaint filed with a court of law, that— 

4 (A) the submission of the application de5 scribed in subparagraph (A) or (B) of para6 graph (9), or the manufacture, use, offering for 

7 sale, sale, or importation into the United States 

8 of a covered product that is the subject of such 

9 an application— 

10 (i) in the case of an agreement be11 tween an NDA or BLA holder and a sub12 sequent filer, infringes any patent owned 

13 by, or exclusively licensed to, the NDA or 

14 BLA holder of the covered product; or 

15 (ii) in the case of an agreement be16 tween two subsequent filers, infringes any 

17 patent owned by the subsequent filer; or 

18 (B) in the case of an agreement between 

19 an NDA or BLA holder and a subsequent filer, 

20 the covered product to be manufactured under 

21 such application uses a covered product as 

22 claimed in a published patent application. 

23 (4) COVERED PRODUCT.—The term ‘‘covered 

24 product’’ means a drug (as defined in section 201(g) 

25 of the Federal Food, Drug, and Cosmetic Act (21 


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1 U.S.C. 321(g))), including a biological product (as 

2 defined in section 351(i) of the Public Health Serv3 ice Act (42 U.S.C. 262(i))). 

4 (5) NDA OR BLA HOLDER.—The term ‘‘NDA 

5 or BLA holder’’ means— 

6 (A) the holder of— 

7 (i) an approved new drug application 

8 filed under section 505(b)(1) of the Fed9 eral Food, Drug, and Cosmetic Act (21 

10 U.S.C. 355(b)(1)) for a covered product; 

11 or 

12 (ii) a biologics license application filed 

13 under section 351(a) of the Public Health 

14 Service Act (42 U.S.C. 262(a)) with re15 spect to a biological product; 

16 (B) a person owning or controlling enforce17 ment of the patent on— 

18 (i) the list published under section 

19 505(j)(7) of the Federal Food, Drug, and 

20 Cosmetic Act (21 U.S.C. 355(j)(7)) in con21 nection with the application described in 

22 subparagraph (A)(i); or 

23 (ii) any list published under section 

24 351 of the Public Health Service Act (42 

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1 ated with biologics license applications filed 

2 under section 351(a) of such Act (42 

3 U.S.C. 262(a)); or 

4 (C) the predecessors, subsidiaries, divi5 sions, groups, and affiliates controlled by, con6 trolling, or under common control with any en7 tity described in subparagraph (A) or (B) (such 

8 control to be presumed by direct or indirect 

9 share ownership of 50 percent or greater), as 

10 well as the licensees, licensors, successors, and 

11 assigns of each of the entities. 

12 (6) PATENT.—The term ‘‘patent’’ means a pat13 ent issued by the United States Patent and Trade14 mark Office. 

15 (7) STATUTORY EXCLUSIVITY.—The term 

16 ‘‘statutory exclusivity’’ means those prohibitions on 

17 the submission or approval of drug applications 

18 under clauses (ii) through (iv) of section 

19 505(c)(3)(E) (5- and 3-year exclusivity), clauses (ii) 

20 through (iv) of section 505(j)(5)(F) (5-year and 3- 

21 year exclusivity), section 505(j)(5)(B)(iv) (180-day 

22 exclusivity), section 527 (orphan drug exclusivity), 

23 section 505A (pediatric exclusivity), or section 505E 

24 (qualified infectious disease product exclusivity) of 

25 the Federal Food, Drug, and Cosmetic Act (21 


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1 U.S.C. 355(c)(3)(E), 355(j)(5)(B)(iv), 355(j)(5)(F), 

2 360cc, 355a, 355f), or prohibitions on the submis3 sion or licensing of biologics license applications 

4 under section 351(k)(6) (interchangeable biological 

5 product exclusivity) or section 351(k)(7) (biological 

6 product reference product exclusivity) of the Public 

7 Health Service Act (42 U.S.C. 262(k)(6), (7)). 

8 (8) SUBSEQUENT FILER.—The term ‘‘subse9 quent filer’’ means— 

10 (A) in the case of a drug, a party that 

11 owns or controls an abbreviated new drug appli12 cation submitted pursuant to section 505(j) of 

13 the Federal Food, Drug, and Cosmetic Act (21 

14 U.S.C. 355(j)) or a new drug application sub15 mitted pursuant to section 505(b)(2) of the 

16 Federal Food, Drug, and Cosmetic Act (21 

17 U.S.C. 355(b)(2)) and filed under section 

18 505(b)(1) of such Act (21 U.S.C. 355(b)(1)) or 

19 has the exclusive rights to distribute the cov20 ered product that is the subject of such applica21 tion; or 

22 (B) in the case of a biological product, a 

23 party that owns or controls an application filed 

24 with the Food and Drug Administration under 

25 section 351(k) of the Public Health Service Act 


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1 (42 U.S.C. 262(k)) or has the exclusive rights 

2 to distribute the biological product that is the 

3 subject of such application. 

4 (h) EFFECTIVE DATE.—This section applies with re5 spect to agreements described in subsection (a) entered 

6 into on or after the date of the enactment of this Act. 

7 SEC. 302. NOTICE AND CERTIFICATION OF AGREEMENTS. 

8 (a) NOTICE OF ALL AGREEMENTS.—Section 1111(7) 

9 of the Medicare Prescription Drug, Improvement, and 

10 Modernization Act of 2003 (21 U.S.C. 355 note) is 

11 amended by inserting ‘‘or the owner of a patent for which 

12 a claim of infringement could reasonably be asserted 

13 against any person for making, using, offering to sell, sell14 ing, or importing into the United States a biological prod15 uct that is the subject of a biosimilar biological product 

16 application’’ before the period at the end. 

17 (b) CERTIFICATION OF AGREEMENTS.—Section 1112 

18 of such Act (21 U.S.C. 355 note) is amended by adding 

19 at the end the following: 

20 ‘‘(d) CERTIFICATION.—The Chief Executive Officer 

21 or the company official responsible for negotiating any 

22 agreement under subsection (a) or (b) that is required to 

23 be filed under subsection (c) shall, within 30 days of such 

24 filing, execute and file with the Assistant Attorney General 

25 and the Commission a certification as follows:‘I declare 


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1 that the following is true, correct, and complete to the best 

2 of my knowledge: The materials filed with the Federal 

3 Trade Commission and the Department of Justice under 

4 section 1112 of the Medicare Prescription Drug, Improve5 ment, and Modernization Act of 2003, with respect to the 

6 agreement referenced in this certification—’ ‘ 

7 ‘‘ ‘(1) represent the complete, final, and exclu8 sive agreement between the parties; 

9 ‘‘ ‘(2) include any ancillary agreements that are 

10 contingent upon, provide a contingent condition for, 

11 were entered into within 30 days of, or are otherwise 

12 related to, the referenced agreement; and 

13 ‘‘ ‘(3) include written descriptions of any oral 

14 agreements, representations, commitments, or prom15 ises between the parties that are responsive to sub16 section (a) or (b) of such section 1112 and have not 

17 been reduced to writing.’ ’’. 

18 SEC. 303. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD. 

19 Section 505(j)(5)(D)(i)(V) of the Federal Food, 

20 Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) 

21 is amended by inserting ‘‘section 301 of the Lower Costs, 

22 More Cures Act of 2021 or’’ after ‘‘that the agreement 

23 has violated’’. 


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1 SEC. 304. COMMISSION LITIGATION AUTHORITY. 

2 Section 16(a)(2) of the Federal Trade Commission 

3 Act (15 U.S.C. 56(a)(2)) is amended— 

4 (1) in subparagraph (D), by striking ‘‘or’’ after 

5 the semicolon; 

6 (2) in subparagraph (E), by moving the margin 

7 2 ems to the left and inserting ‘‘or’’ after the semi8 colon; and 

9 (3) by inserting after subparagraph (E) the fol10 lowing: 

11 ‘‘(F) under section 301(d)(3)(A) of the Lower 

12 Costs, More Cures Act of 2021;’’. 

13 SEC. 305. STATUTE OF LIMITATIONS. 

14 (a) IN GENERAL.—Except as provided in subsection 

15 (b), the Commission shall commence any administrative 

16 proceeding or civil action to enforce section 301 of this 

17 Act not later than 6 years after the date on which the 

18 parties to the agreement file the Notice of Agreement as 

19 provided by section 1112(c)(2) and (d) of the Medicare 

20 Prescription Drug, Improvement, and Modernization Act 

21 of 2003 (21 U.S.C. 355 note). 

22 (b) CIVIL ACTION AFTER ISSUANCE OF CEASE AND

23 DESIST ORDER.—If the Commission has issued a cease 

24 and desist order under section 5 of the Federal Trade 

25 Commission Act (15 U.S.C. 45) for violation of section 

26 301 of this Act and the proceeding for the issuance of 


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1 such order was commenced within the period required by 

2 subsection (a) of this section, such subsection does not 

3 prohibit the commencement, after such period, of a civil 

4 action under section 301(d)(3)(A) against a party to such 

5 order or a civil action under subsection (l) of such section 

6 5 for violation of such order. 

7 Subtitle B—Advancing Education 

8 on Biosimilars 

9 SEC. 321. EDUCATION ON BIOLOGICAL PRODUCTS. 

10 (a) WEBSITE; CONTINUING EDUCATION.—Subpart 1 

11 of part F of title III of the Public Health Service Act (42 

12 U.S.C. 262 et seq.) is amended by adding at the end the 

13 following: 

14 ‘‘SEC. 352A. EDUCATION ON BIOLOGICAL PRODUCTS. 

15 ‘‘(a) INTERNET WEBSITE.— 

16 ‘‘(1) IN GENERAL.—The Secretary shall main17 tain and operate an internet website to provide edu18 cational materials for health care providers, patients, 

19 and caregivers, regarding the meaning of the terms, 

20 and the standards for review and licensing of, bio21 logical products, including biosimilar biological prod22 ucts and interchangeable biosimilar biological prod23 ucts. 

24 ‘‘(2) CONTENT.—Educational materials pro25 vided under paragraph (1) may include— 


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1 ‘‘(A) explanations of key statutory and 

2 regulatory terms, including ‘biosimilar’ and 

3 ‘interchangeable’, and clarification regarding 

4 the use of interchangeable biosimilar biological 

5 products; 

6 ‘‘(B) information related to development 

7 programs for biological products, including bio8 similar biological products and interchangeable 

9 biosimilar biological products and relevant clin10 ical considerations for prescribers, which may 

11 include, as appropriate and applicable, informa12 tion related to the comparability of such biologi13 cal products; 

14 ‘‘(C) an explanation of the process for re15 porting adverse events for biological products, 

16 including biosimilar biological products and 

17 interchangeable biosimilar biological products; 

18 and 

19 ‘‘(D) an explanation of the relationship be20 tween biosimilar biological products and inter21 changeable biosimilar biological products li22 censed under section 351(k) and reference 

23 products (as defined in section 351(i)), includ24 ing the standards for review and licensing of 

25 each such type of biological product. 


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1 ‘‘(3) FORMAT.—The educational materials pro2 vided under paragraph (1) may be— 

3 ‘‘(A) in formats such as webinars, con4 tinuing medical education modules, videos, fact 

5 sheets, infographics, stakeholder toolkits, or 

6 other formats as appropriate and applicable; 

7 and 

8 ‘‘(B) tailored for the unique needs of 

9 health care providers, patients, caregivers, and 

10 other audiences, as the Secretary determines 

11 appropriate. 

12 ‘‘(4) OTHER INFORMATION.—In addition to the 

13 information described in paragraph (2), the Sec14 retary shall continue to publish the following infor15 mation: 

16 ‘‘(A) The action package of each biological 

17 product licensed under subsection (a) or (k). 

18 ‘‘(B) The summary review of each biologi19 cal product licensed under subsection (a) or (k). 

20 ‘‘(5) CONFIDENTIAL AND TRADE SECRET IN21 FORMATION.—This subsection does not authorize 

22 the disclosure of any trade secret, confidential com23 mercial or financial information, or other matter de24 scribed in section 552(b) of title 5. 


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1 ‘‘(b) CONTINUING EDUCATION.—The Secretary shall 

2 advance education and awareness among health care pro3 viders regarding biological products, including biosimilar 

4 biological products and interchangeable biosimilar biologi5 cal products, as appropriate, including by developing or 

6 improving continuing education programs that advance 

7 the education of such providers on the prescribing of, and 

8 relevant clinical considerations with respect to, biological 

9 products, including biosimilar biological products and 

10 interchangeable biosimilar biological products.’’. 

11 (b) APPLICATION UNDER THE MEDICARE MERIT12 BASED INCENTIVE PAYMENT SYSTEM.—Section 

13 1848(q)(5)(C) of the Social Security Act (42 U.S.C. 

14 1395w–4(q)(5)(C)) is amended by adding at the end the 

15 following new clause: 

16 ‘‘(iv) CLINICAL MEDICAL EDUCATION

17 PROGRAM ON BIOSIMILAR BIOLOGICAL

18 PRODUCTS.—Completion of a clinical med19 ical education program developed or im20 proved under section 352A(b) of the Public 

21 Health Service Act by a MIPS eligible pro22 fessional during a performance period shall 

23 earn such eligible professional one-half of 

24 the highest potential score for the perform25 ance category described in paragraph 


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1 (2)(A)(iii) for such performance period. A 

2 MIPS eligible professional may only count 

3 the completion of such a program for pur4 poses of such category one time during the 

5 eligible professional’s lifetime.’’. 

6 Subtitle C—Other Provisions 

7 SEC. 331. CLARIFYING THE MEANING OF NEW CHEMICAL 

8 ENTITY. 

9 Chapter V of the Federal Food, Drug, and Cosmetic 

10 Act is amended— 

11 (1) in section 505 (21 U.S.C. 355)— 

12 (A) in subsection (c)(3)(E)— 

13 (i) in clause (ii), by striking ‘‘active 

14 ingredient (including any ester or salt of 

15 the active ingredient)’’ and inserting ‘‘ac16 tive moiety (as defined by the Secretary in 

17 section 314.3 of title 21, Code of Federal 

18 Regulations (or any successor regula19 tions))’’; and 

20 (ii) in clause (iii), by striking ‘‘active 

21 ingredient (including any ester or salt of 

22 the active ingredient)’’ and inserting ‘‘ac23 tive moiety (as defined by the Secretary in 

24 section 314.3 of title 21, Code of Federal 


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1 Regulations (or any successor regula2 tions))’’; 

3 (B) in subsection (j)(5)(F)— 

4 (i) in clause (ii), by striking ‘‘active 

5 ingredient (including any ester or salt of 

6 the active ingredient)’’ and inserting ‘‘ac7 tive moiety (as defined by the Secretary in 

8 section 314.3 of title 21, Code of Federal 

9 Regulations (or any successor regula10 tions))’’; and 

11 (ii) in clause (iii), by striking ‘‘active 

12 ingredient (including any ester or salt of 

13 the active ingredient)’’ and inserting ‘‘ac14 tive moiety (as defined by the Secretary in 

15 section 314.3 of title 21, Code of Federal 

16 Regulations (or any successor regula17 tions))’’; 

18 (C) in subsection (l)(2)(A)(i), by striking 

19 ‘‘active ingredient (including any ester or salt of 

20 the active ingredient)’’ and inserting ‘‘active 

21 moiety (as defined by the Secretary in section 

22 314.3 of title 21, Code of Federal Regulations 

23 (or any successor regulations))’’; 

24 (D) in subsection (s), in the matter pre25 ceding paragraph (1), by striking ‘‘active ingreVerDate Sep 11 2014 00:26 Apr 24, 2021 Jkt 019200 PO 00000 Frm 00174 Fmt 6652 Sfmt 6201 E:\BILLS\H19.IH H19

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1 dient (including any ester or salt of the active 

2 ingredient)’’ and inserting ‘‘active moiety (as 

3 defined by the Secretary in section 314.3 of 

4 title 21, Code of Federal Regulations (or any 

5 successor regulations))’’; and 

6 (E) in subsection (u)(1), in the matter pre7 ceding subparagraph (A)— 

8 (i) by striking ‘‘active ingredient (in9 cluding any ester or salt of the active in10 gredient)’’ and inserting ‘‘active moiety (as 

11 defined by the Secretary in section 314.3 

12 of title 21, Code of Federal Regulations (or 

13 any successor regulations))’’; and 

14 (ii) by striking ‘‘same active ingre15 dient’’ and inserting ‘‘same active moiety’’; 

16 (2) in section 512(c)(2)(F) (21 U.S.C. 

17 360b(c)(2)(F))— 

18 (A) in clause (i), by striking ‘‘active ingre19 dient (including any ester or salt of the active 

20 ingredient)’’ and inserting ‘‘active moiety (as 

21 defined by the Secretary in section 314.3 of 

22 title 21, Code of Federal Regulations (or any 

23 successor regulations))’’; 

24 (B) in clause (ii), by striking ‘‘active ingre25 dient (including any ester or salt of the active 


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1 ingredient)’’ and inserting ‘‘active moiety (as 

2 defined by the Secretary in section 314.3 of 

3 title 21, Code of Federal Regulations (or any 

4 successor regulations))’’; and 

5 (C) in clause (v), by striking ‘‘active ingre6 dient (including any ester or salt of the active 

7 ingredient)’’ and inserting ‘‘active moiety (as 

8 defined by the Secretary in section 314.3 of 

9 title 21, Code of Federal Regulations (or any 

10 successor regulations))’’; 

11 (3) in section 524(a)(4)(C) (21 U.S.C. 

12 360n(a)(4)(C)), by striking ‘‘active ingredient (in13 cluding any ester or salt of the active ingredient)’’ 

14 and inserting ‘‘active moiety (as defined by the Sec15 retary in section 314.3 of title 21, Code of Federal 

16 Regulations (or any successor regulations))’’; 

17 (4) in section 529(a)(4)(A)(ii) (21 U.S.C. 

18 360ff(a)(4)(A)(ii)), by striking ‘‘active ingredient 

19 (including any ester or salt of the active ingredient)’’ 

20 and inserting ‘‘active moiety (as defined by the Sec21 retary in section 314.3 of title 21, Code of Federal 

22 Regulations (or any successor regulations))’’; and 

23 (5) in section 565A(a)(4)(D) (21 U.S.C. 

24 360bbb–4a(a)(4)(D)), by striking ‘‘active ingredient 

25 (including any ester or salt of the active ingredient)’’ 


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1 and inserting ‘‘active moiety (as defined by the Sec2 retary in section 314.3 of title 21, Code of Federal 

3 Regulations (or any successor regulations))’’. 

4 TITLE IV—REVENUE PROVISION 

5 SEC. 401. SAFE HARBOR FOR HIGH DEDUCTIBLE HEALTH 

6 PLANS WITHOUT DEDUCTIBLE FOR INSULIN. 

7 (a) IN GENERAL.—Section 223(c)(2)(C) of the Inter8 nal Revenue Code of 1986 is amended by inserting ‘‘or 

9 for insulin or any device for the delivery of insulin’’ before 

10 the period at the end. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply to months beginning after the date 

13 of the enactment of this Act. 

14 TITLE V—MISCELLANEOUS 

15 SEC. 501. PAYMENT FOR BIOSIMILAR BIOLOGICAL PROD16 UCTS DURING INITIAL PERIOD. 

17 Section 1847A(c)(4) of the Social Security Act (42 

18 U.S.C. 1395w–3a(c)(4)) is amended— 

19 (1) in each of subparagraphs (A) and (B), by 

20 redesignating clauses (i) and (ii) as subclauses (I) 

21 and (II), respectively, and moving such subclauses 2 

22 ems to the right; 

23 (2) by redesignating subparagraphs (A) and 

24 (B) as clauses (i) and (ii) and moving such clauses 

25 2 ems to the right; 


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1 (3) by striking ‘‘UNAVAILABLE.—In the case’’ 

2 and inserting ‘‘UNAVAILABLE.— 

3 ‘‘(A) IN GENERAL.—Subject to subpara4 graph (B), in the case’’; and 

5 (4) by adding at the end the following new sub6 paragraph: 

7 ‘‘(B) LIMITATION ON PAYMENT AMOUNT

8 FOR BIOSIMILAR BIOLOGICAL PRODUCTS DUR9 ING INITIAL PERIOD.—In the case of a bio10 similar biological product furnished on or after 

11 July 1, 2023, in lieu of applying subparagraph 

12 (A) during the initial period described in such 

13 subparagraph with respect to the biosimilar bio14 logical product, the amount payable under this 

15 section for the biosimilar biological product is 

16 the lesser of the following: 

17 ‘‘(i) The amount determined under 

18 clause (ii) of such subparagraph for the 

19 biosimilar biological product. 

20 ‘‘(ii) The amount determined under 

21 subsection (b)(1)(B) for the reference bio22 logical product.’’. 

23 SEC. 502. GAO STUDY AND REPORT ON AVERAGE SALES 

24 PRICE. 

25 (a) STUDY.— 


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1 (1) IN GENERAL.—The Comptroller General of 

2 the United States (in this section referred to as the 

3 ‘‘Comptroller General’’) shall conduct a study on 

4 spending for applicable drugs under part B of title 

5 XVIII of the Social Security Act. 

6 (2) APPLICABLE DRUGS DEFINED.—In this sec7 tion, the term ‘‘applicable drugs’’ means drugs and 

8 biologicals— 

9 (A) for which reimbursement under such 

10 part B is based on the average sales price of 

11 the drug or biological; and 

12 (B) that account for the largest percentage 

13 of total spending on drugs and biologicals under 

14 such part B (as determined by the Comptroller 

15 General, but in no case less than 25 drugs or 

16 biologicals). 

17 (3) REQUIREMENTS.—The study under para18 graph (1) shall include an analysis of the following: 

19 (A) The extent to which each applicable 

20 drug is paid for— 

21 (i) under such part B for Medicare 

22 beneficiaries; or 

23 (ii) by private payers in the commer24 cial market. 


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1 (B) Any change in Medicare spending or 

2 Medicare beneficiary cost-sharing that would 

3 occur if the average sales price of an applicable 

4 drug was based solely on payments by private 

5 payers in the commercial market. 

6 (C) The extent to which drug manufactur7 ers provide rebates, discounts, or other price 

8 concessions to private payers in the commercial 

9 market for applicable drugs, which the manu10 facturer includes in its average sales price cal11 culation, for— 

12 (i) formulary placement; 

13 (ii) utilization management consider14 ations; or 

15 (iii) other purposes. 

16 (D) Barriers to drug manufacturers pro17 viding such price concessions for applicable 

18 drugs. 

19 (E) Other areas determined appropriate by 

20 the Comptroller General. 

21 (b) REPORT.—Not later than 2 years after the date 

22 of the enactment of this Act, the Comptroller General shall 

23 submit to Congress a report on the study conducted under 

24 subsection (a), together with recommendations for such 


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1 legislation and administrative action as the Secretary de2 termines appropriate. 

3 SEC. 503. REQUIRING PRESCRIPTION DRUG PLANS AND 

4 MA–PD PLANS TO REPORT POTENTIAL 

5 FRAUD, WASTE, AND ABUSE TO THE SEC6 RETARY OF HHS. 

7 Section 1860D–4 of the Social Security Act (42 

8 U.S.C. 1395w–104) is amended by adding at the end the 

9 following new subsection: 

10 ‘‘(p) REPORTING POTENTIAL FRAUD, WASTE, AND

11 ABUSE.—Beginning January 1, 2022, the PDP sponsor 

12 of a prescription drug plan shall report to the Secretary, 

13 as specified by the Secretary— 

14 ‘‘(1) any substantiated or suspicious activities 

15 (as defined by the Secretary) with respect to the 

16 program under this part as it relates to fraud, 

17 waste, and abuse; and 

18 ‘‘(2) any steps made by the PDP sponsor after 

19 identifying such activities to take corrective ac20 tions.’’. 

21 SEC. 504. ESTABLISHMENT OF PHARMACY QUALITY MEAS22 URES UNDER MEDICARE PART D. 

23 Section 1860D–4(c) of the Social Security Act (42 

24 U.S.C. 1395w–104(c)) is amended by adding at the end 

25 the following new paragraph: 


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1 ‘‘(8) APPLICATION OF PHARMACY QUALITY

2 MEASURES.— 

3 ‘‘(A) IN GENERAL.—A PDP sponsor that 

4 implements incentive payments to a pharmacy 

5 or price concessions paid by a pharmacy based 

6 on quality measures shall use measures estab7 lished or approved by the Secretary under sub8 paragraph (B) with respect to payment for cov9 ered part D drugs dispensed by such pharmacy. 

10 ‘‘(B) STANDARD PHARMACY QUALITY

11 MEASURES.—The Secretary shall establish or 

12 approve standard quality measures from a con13 sensus and evidence-based organization for pay14 ments described in subparagraph (A). Such 

15 measures shall focus on patient health outcomes 

16 and be based on proven criteria measuring 

17 pharmacy performance. 

18 ‘‘(C) EFFECTIVE DATE.—The requirement 

19 under subparagraph (A) shall take effect for 

20 plan years beginning on or after January 1, 

21 2023, or such earlier date specified by the Sec22 retary if the Secretary determines there are suf23 ficient measures established or approved under 

24 subparagraph (B) to meet the requirement 

25 under subparagraph (A).’’. 


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1 SEC. 505. IMPROVING COORDINATION BETWEEN THE FOOD 

2 AND DRUG ADMINISTRATION AND THE CEN3 TERS FOR MEDICARE & MEDICAID SERVICES. 

4 (a) IN GENERAL.— 

5 (1) PUBLIC MEETING.— 

6 (A) IN GENERAL.—Not later than 12 

7 months after the date of the enactment of this 

8 Act, the Secretary of Health and Human Serv9 ices (referred to in this section as the ‘‘Sec10 retary’’) shall convene a public meeting for the 

11 purposes of discussing and providing input on 

12 improvements to coordination between the Food 

13 and Drug Administration and the Centers for 

14 Medicare & Medicaid Services in preparing for 

15 the availability of novel medical products de16 scribed in subsection (c) on the market in the 

17 United States. 

18 (B) ATTENDEES.—The public meeting 

19 shall include— 

20 (i) representatives of relevant Federal 

21 agencies, including representatives from 

22 each of the medical product centers within 

23 the Food and Drug Administration and 

24 representatives from the coding, coverage, 

25 and payment offices within the Centers for 

26 Medicare & Medicaid Services; 


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1 (ii) stakeholders with expertise in the 

2 research and development of novel medical 

3 products, including manufacturers of such 

4 products; 

5 (iii) representatives of commercial 

6 health insurance payers; 

7 (iv) stakeholders with expertise in the 

8 administration and use of novel medical 

9 products, including physicians; and 

10 (v) stakeholders representing patients 

11 and with expertise in the utilization of pa12 tient experience data in medical product 

13 development. 

14 (C) TOPICS.—The public meeting shall in15 clude a discussion of— 

16 (i) the status of the drug and medical 

17 device development pipeline related to the 

18 availability of novel medical products; 

19 (ii) the anticipated expertise necessary 

20 to review the safety and effectiveness of 

21 such products at the Food and Drug Ad22 ministration and current gaps in such ex23 pertise, if any; 

24 (iii) the expertise necessary to make 

25 coding, coverage, and payment decisions 


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1 with respect to such products within the 

2 Centers for Medicare & Medicaid Services, 

3 and current gaps in such expertise, if any; 

4 (iv) trends in the differences in the 

5 data necessary to determine the safety and 

6 effectiveness of a novel medical product 

7 and the data necessary to determine 

8 whether a novel medical product meets the 

9 reasonable and necessary requirements for 

10 coverage and payment under title XVIII of 

11 the Social Security Act pursuant to section 

12 1862(a)(1)(A) of such Act (42 U.S.C. 

13 1395y(a)(1)(A)); 

14 (v) the availability of information for 

15 sponsors of such novel medical products to 

16 meet each of those requirements; and 

17 (vi) the coordination of information 

18 related to significant clinical improvement 

19 over existing therapies for patients between 

20 the Food and Drug Administration and the 

21 Centers for Medicare & Medicaid Services 

22 with respect to novel medical products. 

23 (D) TRADE SECRETS AND CONFIDENTIAL

24 INFORMATION.—No information discussed as a 

25 part of the public meeting under this paragraph 


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1 shall be construed as authorizing the Secretary 

2 to disclose any information that is a trade se3 cret or confidential information subject to sec4 tion 552(b)(4) of title 5, United States Code. 

5 (2) IMPROVING TRANSPARENCY OF CRITERIA

6 FOR MEDICARE COVERAGE.— 

7 (A) DRAFT GUIDANCE.—Not later than 18 

8 months after the public meeting under para9 graph (1), the Secretary shall update the final 

10 guidance titled ‘‘National Coverage Determina11 tions with Data Collection as a Condition of 

12 Coverage: Coverage with Evidence Develop13 ment’’ to address any opportunities to improve 

14 the availability and coordination of information 

15 as described in clauses (iv) through (vi) of para16 graph (1)(C). 

17 (B) FINAL GUIDANCE.—Not later than 12 

18 months after issuing draft guidance under sub19 paragraph (A), the Secretary shall finalize the 

20 updated guidance to address any such opportu21 nities. 

22 (b) REPORT ON CODING, COVERAGE, AND PAYMENT

23 PROCESSES UNDER MEDICARE FOR NOVEL MEDICAL

24 PRODUCTS.—Not later than 12 months after the date of 

25 the enactment of this Act, the Secretary shall publish a 


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1 report on the internet website of the Department of 

2 Health and Human Services regarding processes under 

3 the Medicare program under title XVIII of the Social Se4 curity Act (42 U.S.C. 1395 et seq.) with respect to the 

5 coding, coverage, and payment of novel medical products 

6 described in subsection (c). Such report shall include the 

7 following: 

8 (1) A description of challenges in the coding, 

9 coverage, and payment processes under the Medicare 

10 program for novel medical products. 

11 (2) Recommendations to— 

12 (A) incorporate patient experience data 

13 (such as the impact of a disease or condition on 

14 the lives of patients and patient treatment pref15 erences) into the coverage and payment proc16 esses within the Centers for Medicare & Med17 icaid Services; 

18 (B) decrease the length of time to make 

19 national and local coverage determinations 

20 under the Medicare program (as those terms 

21 are defined in subparagraph (A) and (B), re22 spectively, of section 1862(l)(6) of the Social 

23 Security Act (42 U.S.C. 1395y(l)(6))); 

24 (C) streamline the coverage process under 

25 the Medicare program and incorporate input 


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1 from relevant stakeholders into such coverage 

2 determinations; and 

3 (D) identify potential mechanisms to incor4 porate novel payment designs similar to those 

5 in development in commercial insurance plans 

6 and State plans under title XIX of such Act 

7 (42 U.S.C. 1396 et seq.) into the Medicare pro8 gram. 

9 (c) NOVEL MEDICAL PRODUCTS DESCRIBED.—For 

10 purposes of this section, a novel medical product described 

11 in this subsection is a medical product, including a drug, 

12 biological (including gene and cell therapy), or medical de13 vice, that has been designated as a breakthrough therapy 

14 under section 506(a) of the Federal Food, Drug, and Cos15 metic Act (21 U.S.C. 356(a)), a breakthrough device 

16 under section 515B of such Act (21 U.S.C. 360e–3), or 

17 a regenerative advanced therapy under section 506(g) of 

18 such Act (21 U.S.C. 356(g)). 

19 SEC. 506. PATIENT CONSULTATION IN MEDICARE NA20 TIONAL AND LOCAL COVERAGE DETERMINA21 TIONS IN ORDER TO MITIGATE BARRIERS TO 

22 INCLUSION OF SUCH PERSPECTIVES. 

23 Section 1862(l) of the Social Security Act (42 U.S.C. 

24 1395y(l)) is amended by adding at the end the following 

25 new paragraph: 


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1 ‘‘(7) PATIENT CONSULTATION IN NATIONAL

2 AND LOCAL COVERAGE DETERMINATIONS.—The Sec3 retary may consult with patients and organizations 

4 representing patients in making national and local 

5 coverage determinations.’’. 

6 SEC. 507. MEDPAC REPORT ON SHIFTING COVERAGE OF 

7 CERTAIN MEDICARE PART B DRUGS TO MEDI8 CARE PART D. 

9 (a) STUDY.—The Medicare Payment Advisory Com10 mission (in this section referred to as the ‘‘Commission’’) 

11 shall conduct a study on shifting coverage of certain drugs 

12 and biologicals for which payment is currently made under 

13 part B of title XVIII of the Social Security Act (42 U.S.C. 

14 1395j et seq.) to part D of such title (42 U.S.C. 1395w– 

15 21 et seq.). Such study shall include an analysis of— 

16 (1) differences in program structures and pay17 ment methods for drugs and biologicals covered 

18 under such parts B and D, including effects of such 

19 a shift on program spending, beneficiary cost-shar20 ing liability, and utilization management techniques 

21 for such drugs and biologicals; and 

22 (2) the feasibility and policy implications of 

23 shifting coverage of drugs and biologicals for which 

24 payment is currently made under such part B to 

25 such part D. 


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1 (b) REPORT.— 

2 (1) IN GENERAL.—Not later than June 30, 

3 2023, the Commission shall submit to Congress a re4 port containing the results of the study conducted 

5 under subsection (a). 

6 (2) CONTENTS.—The report under paragraph 

7 (1) shall include information, and recommendations 

8 as the Commission deems appropriate, regarding— 

9 (A) formulary design under such part D; 

10 (B) the ability of the benefit structure 

11 under such part D to control total spending on 

12 drugs and biologicals for which payment is cur13 rently made under such part B; 

14 (C) changes to the bid process under such 

15 part D, if any, that may be necessary to inte16 grate coverage of such drugs and biologicals 

17 into such part D; 

18 (D) any other changes to the program that 

19 Congress should consider in determining wheth20 er to shift coverage of such drugs and 

21 biologicals from such part B to such part D; 

22 and 

23 (E) the feasibility and policy implications 

24 of creating a methodology to preserve the 


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1 healthcare provider’s ability to take title of the 

2 drug, including a methodology under which— 

3 (i) prescription drug plans negotiate 

4 reimbursement rates and other arrange5 ments with drug manufacturers on behalf 

6 of a wholesaler; 

7 (ii) wholesalers purchase the drugs 

8 from the manufacturers at the negotiated 

9 rate and ship them through distributors to 

10 physicians to administer to patients; 

11 (iii) physicians and hospitals purchase 

12 the drug from the wholesaler via the dis13 tributor; 

14 (iv) after administering the drug, the 

15 physician submits a claim to the MAC for 

16 their drug administration fee; 

17 (v) to be reimbursed for the purchase 

18 of the drug from the distributor, the physi19 cian furnishes the claim for the drug itself 

20 to the wholesaler and the wholesaler would 

21 refund the cost of the drug to the physi22 cian; and 

23 (vi) the wholesaler passes this claim to 

24 the PDP to receive reimbursement. 


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1 SEC. 508. REQUIREMENT THAT DIRECT-TO-CONSUMER AD2 VERTISEMENTS FOR PRESCRIPTION DRUGS 

3 AND BIOLOGICAL PRODUCTS INCLUDE 

4 TRUTHFUL AND NON-MISLEADING PRICING 

5 INFORMATION. 

6 Part A of title XI of the Social Security Act is 

7 amended by adding at the end the following new section: 

8 ‘‘SEC. 1150C. REQUIREMENT THAT DIRECT-TO-CONSUMER 

9 ADVERTISEMENTS FOR PRESCRIPTION 

10 DRUGS AND BIOLOGICAL PRODUCTS IN11 CLUDE TRUTHFUL AND NON-MISLEADING 

12 PRICING INFORMATION. 

13 ‘‘(a) IN GENERAL.—The Secretary shall require that 

14 each direct-to-consumer advertisement for a prescription 

15 drug or biological product for which payment is available 

16 under title XVIII or XIX includes an appropriate disclo17 sure of truthful and non-misleading pricing information 

18 with respect to the drug or product. 

19 ‘‘(b) DETERMINATION BY CMS.—The Secretary, act20 ing through the Administrator of the Centers for Medicare 

21 & Medicaid Services, shall determine the components of 

22 the requirement under subsection (a), such as the forms 

23 of advertising, the manner of disclosure, the price point 

24 listing, and the price information for disclosure.’’. 


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1 SEC. 509. CHIEF PHARMACEUTICAL NEGOTIATOR AT THE 

2 OFFICE OF THE UNITED STATES TRADE REP3 RESENTATIVE. 

4 (a) IN GENERAL.—Section 141 of the Trade Act of 

5 1974 (19 U.S.C. 2171) is amended— 

6 (1) in subsection (b)(2)— 

7 (A) by striking ‘‘and one Chief Innovation 

8 and Intellectual Property Negotiator’’ and in9 serting ‘‘one Chief Innovation and Intellectual 

10 Property Negotiator, and one Chief Pharma11 ceutical Negotiator’’; 

12 (B) by striking ‘‘or the Chief Innovation 

13 and Intellectual Property Negotiator’’ and in14 serting ‘‘the Chief Innovation and Intellectual 

15 Property Negotiator, or the Chief Pharma16 ceutical Negotiator’’; and 

17 (C) by striking ‘‘and the Chief Innovation 

18 and Intellectual Property Negotiator’’ and in19 serting ‘‘the Chief Innovation and Intellectual 

20 Property Negotiator, and the Chief Pharma21 ceutical Negotiator’’; and 

22 (2) in subsection (c), by adding at the end the 

23 following new paragraph: 

24 ‘‘(7) The principal function of the Chief Phar25 maceutical Negotiator shall be to conduct trade ne26 gotiations and to enforce trade agreements relating 


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1 to United States pharmaceutical products and serv2 ices. The Chief Pharmaceutical Negotiator shall be 

3 a vigorous advocate on behalf of United States phar4 maceutical interests. The Chief Pharmaceutical Ne5 gotiator shall perform such other functions as the 

6 United States Trade Representative may direct.’’. 

7 (b) COMPENSATION.—Section 5314 of title 5, United 

8 States Code, is amended by striking ‘‘Chief Innovation 

9 and Intellectual Property Negotiator, Office of the United 

10 States Trade Representative.’’ and inserting the following: 

11 ‘‘Chief Innovation and Intellectual Property Ne12 gotiator, Office of the United States Trade Rep13 resentative. 

14 ‘‘Chief Pharmaceutical Negotiator, Office of the 

15 United States Trade Representative.’’. 

16 (c) REPORT REQUIRED.—Not later than the date 

17 that is one year after the appointment of the first Chief 

18 Pharmaceutical Negotiator pursuant to paragraph (2) of 

19 section 141(b) of the Trade Act of 1974, as amended by 

20 subsection (a), and annually thereafter, the United States 

21 Trade Representative shall submit to the Committee on 

22 Finance of the Senate and the Committee on Ways and 

23 Means of the House of Representatives a report describing 

24 in detail— 


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1 (1) enforcement actions taken by the United 

2 States Trade Representative during the one-year pe3 riod preceding the submission of the report to en4 sure the protection of United States pharmaceutical 

5 products and services; and 

6 (2) other actions taken by the United States 

7 Trade Representative to advance United States 

8 pharmaceutical products and services. 

Æ 


pamtmann on DSKBC07HB2PROD with BILLS