I 

117TH CONGRESS 

1ST SESSION H. R. 2139 

To amend title XVIII of the Social Security Act to provide for the negotiation 

of lower covered part D drug prices on behalf of Medicare beneficiaries 

and the establishment and application of a formulary by the Secretary 

of Health and Human Services under Medicare part D, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 23, 2021 

Mr. DOGGETT (for himself, Mr. WELCH, Ms. BUSH, Mr. KHANNA, Mr. 

POCAN, Ms. JAYAPAL, Mr. COHEN, Ms. DELAURO, Ms. TLAIB, Ms. 

WASSERMAN SCHULTZ, Mr. NEGUSE, Ms. OMAR, Ms. SCHAKOWSKY, and 

Mr. DEFAZIO) introduced the following bill; which was referred to the 

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

on Ways and Means, 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 amend title XVIII of the Social Security Act to provide 

for the negotiation of lower covered part D drug prices 

on behalf of Medicare beneficiaries and the establishment 

and application of a formulary by the Secretary of 

Health and Human Services under Medicare part D, 

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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Medicare Drug Price 

3 Negotiation Act’’. 

4 SEC. 2. NEGOTIATION OF LOWER COVERED PART D DRUG 

5 PRICES ON BEHALF OF MEDICARE BENE6 FICIARIES; ESTABLISHMENT AND APPLICA7 TION OF FORMULARY BY THE SECRETARY OF 

8 HEALTH AND HUMAN SERVICES UNDER 

9 MEDICARE PART D. 

10 (a) IN GENERAL.—Section 1860D–11 of the Social 

11 Security Act (42 U.S.C. 1395w–111) is amended by strik12 ing subsection (i) (relating to noninterference) and insert13 ing the following: 

14 ‘‘(i) NEGOTIATION OF LOWER DRUG PRICES; ESTAB15 LISHMENT AND APPLICATION OF FORMULARY.— 

16 ‘‘(1) NEGOTIATION.— 

17 ‘‘(A) IN GENERAL.—Notwithstanding any 

18 other provision of law, subject to subparagraph 

19 (B), the Secretary shall, for plan years begin20 ning with plan year 2023— 

21 ‘‘(i) negotiate with pharmaceutical 

22 manufacturers the prices (including dis23 counts, rebates, and all other price conces24 sions) that may be charged to PDP spon25 sors and MA organizations for covered 

26 part D drugs furnished to enrollees; and 


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1 ‘‘(ii) complete such negotiations for a 

2 plan year not less than 30 days before the 

3 first day of the application review process 

4 for such plan year for new contracts or ex5 panding existing contracts with PDP spon6 sors and MA organizations to offer pre7 scription drug plans or MA–PD plans, re8 spectively. 

9 ‘‘(B) USE OF FALLBACK IF NEGOTIATIONS

10 FAIL.— 

11 ‘‘(i) IN GENERAL.—If, after negotia12 tions under subparagraph (A), the Sec13 retary is not successful in obtaining a rea14 sonable price for covered part D drugs in 

15 accordance with clause (iii), the price that 

16 may be charged to PDP sponsors and MA 

17 organizations for such covered part D 

18 drugs furnished to enrollees shall be the 

19 lowest of the following: 

20 ‘‘(I) The price applied pursuant 

21 to section 8126 of title 38, United 

22 States Code, for such drug for the 

23 year. 

24 ‘‘(II) The median price available, 

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1 riod for which data is available from 

2 the manufacturer to any wholesaler, 

3 retailer, provider, health maintenance 

4 organization, nonprofit entity, or gov5 ernmental entity in Canada, the 

6 United Kingdom, Germany, France, 

7 and Japan. 

8 ‘‘(III) The average manufacturer 

9 price (as defined in subsection (k) of 

10 section 1927) for such drug for the 

11 most recent rebate period (as defined 

12 in such subsection) applicable to such 

13 plan year, reduced by the sum of the 

14 applicable rebate factors for the drug 

15 and rebate period. 

16 ‘‘(ii) APPLICABLE REBATE FACTOR.— 

17 For purposes of clause (i)(III), the term 

18 ‘applicable rebate factor’ means, with re19 spect to a covered part D drug and a re20 bate period (as defined in section 1927(k)), 

21 a dollar amount that applies for purposes 

22 of determining the amount of a rebate that 

23 is applicable to such drug for such rebate 

24 period under— 


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1 ‘‘(I) paragraph (1)(A)(ii) of sec2 tion 1927(c); 

3 ‘‘(II) paragraph (2)(A)(ii) of 

4 such section; 

5 ‘‘(III) paragraph (2)(B) of such 

6 section; 

7 ‘‘(IV) paragraph (2)(C) of such 

8 section; 

9 ‘‘(V) paragraph (3)(A)(i) of such 

10 section; or 

11 ‘‘(VI) paragraph (3)(C) of such 

12 section. 

13 ‘‘(iii) GUIDANCE.—Not later than 60 

14 days after the date of enactment of this 

15 subsection, the Secretary shall issue guid16 ance on criteria to be considered for pur17 poses of determining under clause (i) 

18 whether or not the Secretary is successful 

19 in obtaining a reasonable price for a cov20 ered part D drug. Such criteria shall in21 clude at least the following: 

22 ‘‘(I) The comparative clinical ef23 fectiveness and cost effectiveness, if 

24 available, of such covered part D 

25 drug. 


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1 ‘‘(II) The budgetary impact of 

2 providing coverage under this part for 

3 such covered part D drug. 

4 ‘‘(III) The number of similarly 

5 effective drug or alternative treatment 

6 regimens for each approved use of 

7 such covered part D drug. 

8 ‘‘(IV) Associated unmet need or 

9 severity of illness. 

10 ‘‘(C) IDENTIFICATION OF COVERED PART

11 D DRUGS SUBJECT TO NEGOTIATION AND AP12 PLICATION OF NEGOTIATED PRICE.— 

13 ‘‘(i) IDENTIFICATION.—The Secretary 

14 shall, for each plan year, in accordance 

15 with the subsequent clauses of this sub16 paragraph, and pursuant to rulemaking, 

17 identify covered part D drugs for which ne18 gotiations under subparagraph (A) shall be 

19 conducted. 

20 ‘‘(ii) APPLICATION OF NEGOTIATED

21 PRICE.—Except as provided in clause (iii), 

22 the negotiated price of a covered Part D 

23 drug shall be in effect for each subsequent 

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1 crease in the consumer price index for all 

2 urban consumers over the preceding year. 

3 ‘‘(iii) PROCESS FOR RENEGOTI4 ATION.—The Secretary may establish a 

5 process whereby stakeholders may petition 

6 for the negotiated price of a covered Part 

7 D to be renegotiated after an appropriate 

8 length of time and only if evidence justi9 fying the need for such renegotiation is 

10 provided. 

11 ‘‘(iv) REASONABLE NOTIFICATION.— 

12 The Secretary shall carry out this subpara13 graph in such manner as to provide for 

14 public notification of the covered part D 

15 drugs subject to negotiations for a plan 

16 year within a reasonable period before the 

17 beginning of such negotiations. 

18 ‘‘(D) PRIORITIZATION OF CERTAIN COV19 ERED PART D DRUGS.—For purposes of sub20 paragraph (C)(i), the Secretary shall prioritize 

21 negotiating the prices of covered part D 

22 drugs— 

23 ‘‘(i) that are among— 

24 ‘‘(I) the 40 covered part D drugs 

25 that are utilized by at least 1,000 


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1 Medicare part D beneficiaries and 

2 with respect to which there were the 

3 highest total expenditures under this 

4 part during the most recent 12-month 

5 period for which data is available; 

6 ‘‘(II) the 40 covered part D 

7 drugs that are utilized by at least 

8 1,000 Medicare part D beneficiaries 

9 with respect to whom the total annual 

10 spending per such a beneficiary under 

11 this part for coverage of such a drug 

12 is at least $10,000; or 

13 ‘‘(III) the 20 covered part D 

14 drugs that are utilized by at least 

15 1,000 Medicare part D beneficiaries 

16 and with respect to which there are 

17 unit cost increases at or above the 

18 95th percentile of overall covered part 

19 D drug unit cost increases during the 

20 most recent 12-month period for 

21 which data is available; 

22 ‘‘(ii) with respect to which the cost of 

23 such a drug to the part D eligible indi24 vidual involved would exceed the annual 

25 out-of-pocket threshold applicable under 


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1 section 1860D–2(b)(4)(B) for such plan 

2 year, if the drug were prescribed to the in3 dividual for the period of the year or with 

4 respect to which a single treatment regi5 men is priced above such annual out-of6 pocket threshold applicable under such sec7 tion 1860D–2(b)(4)(B) for the year; or 

8 ‘‘(iii) that are single-source drugs or 

9 biologicals (as defined in section 

10 1847A(c)(6)(D)) and that satisfy at least 

11 one other criterion described in a previous 

12 clause of this subparagraph. 

13 ‘‘(E) ANNUAL REPORT TO CONGRESS.— 

14 Not later than 30 days after the date on which 

15 the Secretary completes negotiations under this 

16 paragraph for the first plan year and each sub17 sequent plan year, the Secretary shall submit to 

18 Congress and make available to the public a re19 port describing the negotiations during the pre20 ceding year, including— 

21 ‘‘(i) the number of covered part D 

22 drug prices negotiated; 

23 ‘‘(ii) the magnitude of savings 

24 achieved as a result of such negotiations; 


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1 ‘‘(iii) the number of times price nego2 tiations failed (based on the criteria in3 cluded in the guidance issued pursuant to 

4 clause (iii) of subparagraph (B)) and re5 sulted in the use of fallback prices under 

6 clause (i) of such subparagraph, and the 

7 rationale for any such decisions; 

8 ‘‘(iv) the progress made toward nego9 tiating the prices of covered part D drugs 

10 that are prioritized under subparagraph 

11 (D); and 

12 ‘‘(v) the barriers, if any, to achieving 

13 savings through negotiations. 

14 ‘‘(F) EVALUATION.—Not later than De15 cember 31, 2026, the Inspector General of the 

16 Department of Health and Human Services 

17 shall submit to Congress a report evaluating the 

18 negotiations conducted by the Secretary under 

19 this paragraph, including a description and 

20 analysis of— 

21 ‘‘(i) the extent to which such price ne22 gotiations are achieving lower prices for 

23 covered part D drugs for enrollees; 

24 ‘‘(ii) the parties benefitting from such 

25 lower prices, such as enrollees, the Federal 


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1 Government, States, prescription drug 

2 plans and MA–PD plans, or other entities; 

3 ‘‘(iii) how such price negotiations are 

4 affecting— 

5 ‘‘(I) the list price of covered part 

6 D drugs; and 

7 ‘‘(II) drug prices in the private 

8 market; and 

9 ‘‘(iv) recommendations for improving 

10 price negotiations, if applicable. 

11 ‘‘(2) ESTABLISHMENT AND APPLICATION OF

12 FORMULARY BY THE SECRETARY OR CHANGES IN

13 FORMULARIES TO BE REQUIRED BY SECRETARY.— 

14 ‘‘(A) IN GENERAL.—The Secretary shall, 

15 for plan years beginning with plan year 2023— 

16 ‘‘(i) subject to subparagraphs (B) and 

17 (C), establish and apply a formulary for 

18 required use by sponsors of prescription 

19 drug plans and organizations offering MA– 

20 PD plans under this part; or 

21 ‘‘(ii) require changes, as necessary, in 

22 the covered part D drugs included on 

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1 ing status of such a drug) to take into ac2 count negotiations carried out by the Sec3 retary pursuant to paragraph (1), regard4 less of whether such a covered part D drug 

5 is the subject of such negotiations. 

6 ‘‘(B) REQUIRED INCLUSION OF DRUGS IN

7 ALL THERAPEUTIC CATEGORIES.—A formulary 

8 established and applied under subparagraph 

9 (A)(i) shall include at least two covered part D 

10 drugs in each category and class of covered part 

11 D drugs as described in section 

12 423.120(b)(2)(i) of title 42, Code of Federal 

13 Regulations (as in effect on January 1, 2019). 

14 ‘‘(C) APPLICATION OF DEVELOPMENT AND

15 REVISION REQUIREMENTS AND REQUIRED IN16 CLUSION OF ALL DRUGS IN CERTAIN CAT17 EGORIES AND CLASSES.—The requirements de18 scribed in subparagraphs (A) and (B) of section 

19 1860D–4(b)(3) (relating to development and re20 vision requirements of the formulary) and sub21 paragraph (G) of such section (relating to re22 quired inclusion of all drugs in certain cat23 egories and classes) shall apply to a formulary 

24 established and applied under subparagraph 

25 (A)(i) of this paragraph. 


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1 ‘‘(3) PLAN FLEXIBILITY TO NEGOTIATE GREAT2 ER DISCOUNTS.—Nothing in this subsection shall be 

3 construed as preventing the sponsor of a prescrip4 tion drug plan, or an organization offering an MA– 

5 PD plan, from obtaining a discount or reduction of 

6 the price for a covered part D drug below the price 

7 negotiated under paragraph (1), if applicable, in8 cluding through the use of preferred or tiered cost9 sharing status. 

10 ‘‘(4) ENSURING BENEFICIARY ACCESS TO

11 NEEDED DRUGS.—Beginning with plan year 2023, 

12 each PDP sponsor of a prescription drug plan and 

13 organization offering an MA–PD plan shall have in 

14 place a process under which an enrollee in the plan 

15 may request coverage under the plan for a covered 

16 part D drug that is not on the formulary, or is sub17 ject to utilization management controls, such as 

18 tiered pricing, prior authorization, or step therapy.’’. 

19 (b) CONFORMING AMENDMENTS.— 

20 (1) IN GENERAL.—Section 1860D–4 of the So21 cial Security Act (42 U.S.C. 1395w–104) is amend22 ed— 

23 (A) in subsection (b)(3), in the matter pre24 ceding subparagraph (A), by striking ‘‘If a 


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1 PDP’’ and inserting ‘‘Subject to section 

2 1860D–11(i)(2), if a PDP’’; 

3 (B) in subsection (g)— 

4 (i) in paragraph (1), by inserting be5 fore the period at the end the following: ‘‘, 

6 except that the PDP sponsor of a prescrip7 tion drug plan shall treat the presentation 

8 of a prescription to a participating phar9 macy, which is transmitted to the plan by 

10 the pharmacy, as a request for a coverage 

11 determination (including with respect to 

12 prior authorization, step therapy, or quan13 tity limits) and, in applying such para14 graphs of section 1852(g), the response to 

15 such transmittal shall be treated as a de16 termination by the sponsor’’; and 

17 (ii) in paragraph (2), in the first sen18 tence, by inserting ‘‘(or a participating 

19 pharmacy, on behalf of such individual, 

20 through transmission of a prescription as 

21 described in paragraph (1))’’ after ‘‘a part 

22 D eligible individual who is enrolled in the 

23 plan’’; and 

24 (C) in subsection (h)— 


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1 (i) in paragraph (1), in the second 

2 sentence, by inserting ‘‘(or a participating 

3 pharmacy, on behalf of such individual)’’ 

4 after ‘‘the part D eligible individual’’; and 

5 (ii) in paragraph (2), by inserting 

6 ‘‘(or a participating pharmacy, on behalf of 

7 such individual)’’ after ‘‘A part D eligible 

8 individual who is enrolled in a prescription 

9 drug plan offered by a PDP sponsor’’. 

10 (2) EFFECTIVE DATE.—The amendments made 

11 by subparagraphs (B) and (C) of paragraph (1) 

12 shall apply to plan years beginning on or after Janu13 ary 1, 2023. 

14 SEC. 3. REQUIRING DRUG MANUFACTURERS TO PROVIDE 

15 DRUG REBATES FOR DRUGS DISPENSED TO 

16 LOW-INCOME INDIVIDUALS. 

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

18 Security Act (42 U.S.C. 1395w–102) is amended— 

19 (1) in subsection (e)(1), in the matter preceding 

20 subparagraph (A), by inserting ‘‘and subsection (f)’’ 

21 after ‘‘this subsection’’; and 

22 (2) by adding at the end the following new sub23 section: 

24 ‘‘(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR

25 REBATE ELIGIBLE INDIVIDUALS.— 


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1 ‘‘(1) REQUIREMENT.— 

2 ‘‘(A) IN GENERAL.—For plan years begin3 ning on or after January 1, 2023, in this part, 

4 the term ‘covered part D drug’ does not include 

5 any drug or biological product that is manufac6 tured by a manufacturer that has not entered 

7 into and have in effect a rebate agreement de8 scribed in paragraph (2). 

9 ‘‘(B) 2023 PLAN YEAR REQUIREMENT.— 

10 Any drug or biological product manufactured by 

11 a manufacturer that declines to enter into a re12 bate agreement described in paragraph (2) for 

13 the period beginning on January 1, 2023, and 

14 ending on December 31, 2023, shall not be in15 cluded as a ‘covered part D drug’ for the subse16 quent plan year. 

17 ‘‘(2) REBATE AGREEMENT.—A rebate agree18 ment under this subsection shall require the manu19 facturer to provide to the Secretary a rebate for 

20 each rebate period (as defined in paragraph (6)(B)) 

21 ending after December 31, 2022, in the amount 

22 specified in paragraph (3) for any covered part D 

23 drug of the manufacturer dispensed after December 

24 31, 2022, to any rebate eligible individual (as de25 fined in paragraph (6)(A)) for which payment was 


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1 made by a PDP sponsor or MA organization under 

2 this part for such period, including payments passed 

3 through the low-income and reinsurance subsidies 

4 under sections 1860D–14 and 1860D–15(b), respec5 tively. Such rebate shall be paid by the manufac6 turer to the Secretary not later than 30 days after 

7 the date of receipt of the information described in 

8 section 1860D–12(b)(8), including as such section is 

9 applied under section 1857(f)(3), or 30 days after 

10 the receipt of information under subparagraph (D) 

11 of paragraph (3), as determined by the Secretary. 

12 Insofar as not inconsistent with this subsection, the 

13 Secretary shall establish terms and conditions of 

14 such agreement relating to compliance, penalties, 

15 and program evaluations, investigations, and audits 

16 that are similar to the terms and conditions for re17 bate agreements under paragraphs (3) and (4) of 

18 section 1927(b). 

19 ‘‘(3) REBATE FOR REBATE ELIGIBLE MEDICARE

20 DRUG PLAN ENROLLEES.— 

21 ‘‘(A) IN GENERAL.—The amount of the re22 bate specified under this paragraph for a manu23 facturer for a rebate period, with respect to 

24 each dosage form and strength of any covered 

25 part D drug provided by such manufacturer 


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1 and dispensed to a rebate eligible individual, 

2 shall be equal to the product of— 

3 ‘‘(i) the total number of units of such 

4 dosage form and strength of the drug so 

5 provided and dispensed for which payment 

6 was made by a PDP sponsor or an MA or7 ganization under this part for the rebate 

8 period, including payments passed through 

9 the low-income and reinsurance subsidies 

10 under sections 1860D–14 and 1860D– 

11 15(b), respectively; and 

12 ‘‘(ii) the amount (if any) by which— 

13 ‘‘(I) the Medicaid rebate amount 

14 (as defined in subparagraph (B)) for 

15 such form, strength, and period, ex16 ceeds 

17 ‘‘(II) the average Medicare drug 

18 program rebate eligible rebate amount 

19 (as defined in subparagraph (C)) for 

20 such form, strength, and period. 

21 ‘‘(B) MEDICAID REBATE AMOUNT.—For 

22 purposes of this paragraph, the term ‘Medicaid 

23 rebate amount’ means, with respect to each 

24 dosage form and strength of a covered part D 


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1 drug provided by the manufacturer for a rebate 

2 period— 

3 ‘‘(i) in the case of a single source 

4 drug or an innovator multiple source drug, 

5 the amount specified in paragraph 

6 (1)(A)(ii)(II) or (2)(C) of section 1927(c) 

7 plus the amount, if any, specified in sub8 paragraph (A)(ii) of paragraph (2) of such 

9 section, for such form, strength, and pe10 riod; or 

11 ‘‘(ii) in the case of any other covered 

12 outpatient drug, the amount specified in 

13 paragraph (3)(A)(i) of such section for 

14 such form, strength, and period. 

15 ‘‘(C) AVERAGE MEDICARE DRUG PROGRAM

16 REBATE ELIGIBLE REBATE AMOUNT.—For pur17 poses of this subsection, the term ‘average 

18 Medicare drug program rebate eligible rebate 

19 amount’ means, with respect to each dosage 

20 form and strength of a covered part D drug 

21 provided by a manufacturer for a rebate period, 

22 the sum, for all PDP sponsors under part D 

23 and MA organizations administering an MA– 

24 PD plan under part C, of— 


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1 ‘‘(i) the product, for each such spon2 sor or organization, of— 

3 ‘‘(I) the sum of all rebates, dis4 counts, or other price concessions (not 

5 taking into account any rebate pro6 vided under paragraph (2) or any dis7 counts under the program under sec8 tion 1860D–14A) for such dosage 

9 form and strength of the drug dis10 pensed, calculated on a per-unit basis, 

11 but only to the extent that any such 

12 rebate, discount, or other price con13 cession applies equally to drugs dis14 pensed to rebate eligible Medicare 

15 drug plan enrollees and drugs dis16 pensed to PDP and MA–PD enrollees 

17 who are not rebate eligible individuals; 

18 and 

19 ‘‘(II) the number of the units of 

20 such dosage and strength of the drug 

21 dispensed during the rebate period to 

22 rebate eligible individuals enrolled in 

23 the prescription drug plans adminis24 tered by the PDP sponsor or the MA– 


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1 PD plans administered by the MA or2 ganization; divided by 

3 ‘‘(ii) the total number of units of such 

4 dosage and strength of the drug dispensed 

5 during the rebate period to rebate eligible 

6 individuals enrolled in all prescription drug 

7 plans administered by PDP sponsors and 

8 all MA–PD plans administered by MA or9 ganizations. 

10 ‘‘(D) USE OF ESTIMATES.—The Secretary 

11 may establish a methodology for estimating the 

12 average Medicare drug program rebate eligible 

13 rebate amounts for each rebate period based on 

14 bid and utilization information under this part 

15 and may use these estimates as the basis for 

16 determining the rebates under this section. If 

17 the Secretary elects to estimate the average 

18 Medicare drug program rebate eligible rebate 

19 amounts, the Secretary shall establish a rec20 onciliation process for adjusting manufacturer 

21 rebate payments not later than 3 months after 

22 the date that manufacturers receive the infor23 mation collected under section 1860D– 

24 12(b)(8)(B). 


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1 ‘‘(4) LENGTH OF AGREEMENT.—The provisions 

2 of paragraph (4) of section 1927(b) (other than 

3 clauses (iv) and (v) of subparagraph (B)) shall apply 

4 to rebate agreements under this subsection in the 

5 same manner as such paragraph applies to a rebate 

6 agreement under such section. 

7 ‘‘(5) OTHER TERMS AND CONDITIONS.—The 

8 Secretary shall establish other terms and conditions 

9 of the rebate agreement under this subsection, in10 cluding terms and conditions related to compliance, 

11 that are consistent with this subsection. 

12 ‘‘(6) DEFINITIONS.—In this subsection and sec13 tion 1860D–12(b)(8): 

14 ‘‘(A) REBATE ELIGIBLE INDIVIDUAL.—The 

15 term ‘rebate eligible individual’ means— 

16 ‘‘(i) a subsidy eligible individual (as 

17 defined in section 1860D–14(a)(3)(A)); 

18 ‘‘(ii) a Medicaid beneficiary treated as 

19 a subsidy eligible individual under clause 

20 (v) of section 1860D–14(a)(3)(B); and 

21 ‘‘(iii) any part D eligible individual 

22 not described in clause (i) or (ii) who is de23 termined for purposes of the State plan 

24 under title XIX to be eligible for medical 


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1 assistance under clause (i), (iii), or (iv) of 

2 section 1902(a)(10)(E). 

3 ‘‘(B) REBATE PERIOD.—The term ‘rebate 

4 period’ has the meaning given such term in sec5 tion 1927(k)(8).’’. 

6 (b) REPORTING REQUIREMENT FOR THE DETER7 MINATION AND PAYMENT OF REBATES BY MANUFACTUR8 ERS RELATED TO REBATE FOR REBATE ELIGIBLE MEDI9 CARE DRUG PLAN ENROLLEES.— 

10 (1) REQUIREMENTS FOR PDP SPONSORS.—Sec11 tion 1860D–12(b) of the Social Security Act (42 

12 U.S.C. 1395w–112(b)) is amended by adding at the 

13 end the following new paragraph: 

14 ‘‘(8) REPORTING REQUIREMENT FOR THE DE15 TERMINATION AND PAYMENT OF REBATES BY MANU16 FACTURERS RELATED TO REBATE FOR REBATE ELI17 GIBLE MEDICARE DRUG PLAN ENROLLEES.— 

18 ‘‘(A) IN GENERAL.—For purposes of the 

19 rebate under section 1860D–2(f) for contract 

20 years beginning on or after January 1, 2023, 

21 each contract entered into with a PDP sponsor 

22 under this part with respect to a prescription 

23 drug plan shall require that the sponsor comply 

24 with subparagraphs (B) and (C). 


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1 ‘‘(B) REPORT FORM AND CONTENTS.—Not 

2 later than a date specified by the Secretary, a 

3 PDP sponsor of a prescription drug plan under 

4 this part shall report to each manufacturer— 

5 ‘‘(i) information (by National Drug 

6 Code number) on the total number of units 

7 of each dosage, form, and strength of each 

8 drug of such manufacturer dispensed to re9 bate eligible Medicare drug plan enrollees 

10 under any prescription drug plan operated 

11 by the PDP sponsor during the rebate pe12 riod; 

13 ‘‘(ii) information on the price dis14 counts, price concessions, and rebates for 

15 such drugs for such form, strength, and 

16 period; 

17 ‘‘(iii) information on the extent to 

18 which such price discounts, price conces19 sions, and rebates apply equally to rebate 

20 eligible Medicare drug plan enrollees and 

21 PDP enrollees who are not rebate eligible 

22 Medicare drug plan enrollees; and 

23 ‘‘(iv) any additional information that 

24 the Secretary determines is necessary to 

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1 age Medicare drug program rebate eligible 

2 rebate amount (as defined in paragraph 

3 (3)(C) of such section), and to determine 

4 the amount of the rebate required under 

5 this section, for such form, strength, and 

6 period. 

7 Such report shall be in a form consistent with 

8 a standard reporting format established by the 

9 Secretary. 

10 ‘‘(C) SUBMISSION TO SECRETARY.—Each 

11 PDP sponsor shall promptly transmit a copy of 

12 the information reported under subparagraph 

13 (B) to the Secretary for the purpose of audit 

14 oversight and evaluation. 

15 ‘‘(D) CONFIDENTIALITY OF INFORMA16 TION.—The provisions of subparagraph (D) of 

17 section 1927(b)(3), relating to confidentiality of 

18 information, shall apply to information reported 

19 by PDP sponsors under this paragraph in the 

20 same manner that such provisions apply to in21 formation disclosed by manufacturers or whole22 salers under such section, except— 

23 ‘‘(i) that any reference to ‘this sec24 tion’ in clause (i) of such subparagraph 


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1 shall be treated as being a reference to this 

2 section; 

3 ‘‘(ii) the reference to the Director of 

4 the Congressional Budget Office in clause 

5 (iii) of such subparagraph shall be treated 

6 as including a reference to the Medicare 

7 Payment Advisory Commission; and 

8 ‘‘(iii) clause (iv) of such subparagraph 

9 shall not apply. 

10 ‘‘(E) OVERSIGHT.—Information reported 

11 under this paragraph may be used by the In12 spector General of the Department of Health 

13 and Human Services for the statutorily author14 ized purposes of audit, investigation, and eval15 uations. 

16 ‘‘(F) PENALTIES FOR FAILURE TO PRO17 VIDE TIMELY INFORMATION AND PROVISION OF

18 FALSE INFORMATION.—In the case of a PDP 

19 sponsor— 

20 ‘‘(i) that fails to provide information 

21 required under subparagraph (B) on a 

22 timely basis, the sponsor is subject to a 

23 civil money penalty in the amount of 

24 $10,000 for each day in which such infor25 mation has not been provided; or 


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1 ‘‘(ii) that knowingly (as defined in 

2 section 1128A(i)) provides false informa3 tion under such subparagraph, the sponsor 

4 is subject to a civil money penalty in an 

5 amount not to exceed $100,000 for each 

6 item of false information. 

7 Such civil money penalties are in addition to 

8 other penalties as may be prescribed by law. 

9 The provisions of section 1128A (other than 

10 subsections (a) and (b)) shall apply to a civil 

11 money penalty under this subparagraph in the 

12 same manner as such provisions apply to a pen13 alty or proceeding under section 1128A(a).’’. 

14 (2) APPLICATION TO MA ORGANIZATIONS.—Sec15 tion 1857(f)(3) of the Social Security Act (42 

16 U.S.C. 1395w–27(f)(3)) is amended by adding at 

17 the end the following: 

18 ‘‘(E) REPORTING REQUIREMENT RELATED

19 TO REBATE FOR REBATE ELIGIBLE MEDICARE

20 DRUG PLAN ENROLLEES.—Section 1860D– 

21 12(b)(8).’’. 

22 (c) DEPOSIT OF REBATES INTO MEDICARE PRE23 SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) of the 

24 Social Security Act (42 U.S.C. 1395w–116(c)) is amended 

25 by adding at the end the following new paragraph: 


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1 ‘‘(6) REBATE FOR REBATE ELIGIBLE MEDICARE

2 DRUG PLAN ENROLLEES.—Amounts paid under a re3 bate agreement under section 1860D–2(f) shall be 

4 deposited into the Account.’’. 

5 (d) EXCLUSION FROM DETERMINATION OF BEST

6 PRICE AND AVERAGE MANUFACTURER PRICE UNDER

7 MEDICAID.— 

8 (1) EXCLUSION FROM BEST PRICE DETERMINA9 TION.—Section 1927(c)(1)(C)(ii)(I) of the Social Se10 curity Act (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is 

11 amended by inserting ‘‘and amounts paid under a 

12 rebate agreement under section 1860D–2(f)’’ after 

13 ‘‘this section’’. 

14 (2) EXCLUSION FROM AVERAGE MANUFAC15 TURER PRICE DETERMINATION.—Section 

16 1927(k)(1)(B)(i) of the Social Security Act (42 

17 U.S.C. 1396r–8(k)(1)(B)(i)) is amended— 

18 (A) in subclause (IV), by striking ‘‘and’’ 

19 after the semicolon; 

20 (B) in subclause (V), by striking the period 

21 at the end and inserting ‘‘; and’’; and 

22 (C) by adding at the end the following: 


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1 ‘‘(VI) amounts paid under a re2 bate agreement under section 1860D– 

3 2(f).’’. 

Æ 


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