II 

117TH CONGRESS 

1ST SESSION S. 2327 

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

part D modernization redesign and to establish a monthly out-of-pocket 

cost sharing maximum for enrollees who incur a significant portion 

of costs towards the annual out-of-pocket threshold under Medicare part 

D. 

IN THE SENATE OF THE UNITED STATES 

JULY 13, 2021 

Mr. CASSIDY (for himself and Mr. MENENDEZ) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for a Medicare part D modernization redesign and to 

establish a monthly out-of-pocket cost sharing maximum 

for enrollees who incur a significant portion of costs 

towards the annual out-of-pocket threshold under Medicare part D. 

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 ‘‘Seniors Prescription 

5 Drug Relief Act’’. 


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1 SEC. 2. MEDICARE PART D MODERNIZATION REDESIGN. 

2 (a) BENEFIT STRUCTURE REDESIGN.—Section 

3 1860D–2(b) of the Social Security Act (42 U.S.C. 1395w– 

4 102(b)) is amended— 

5 (1) in paragraph (2)— 

6 (A) in subparagraph (A), in the matter 

7 preceding clause (i), by inserting ‘‘for a year 

8 preceding 2024 and for costs above the annual 

9 deductible specified in paragraph (1) and up to 

10 the annual out-of-pocket threshold specified in 

11 paragraph (4)(B) for 2024 and each subsequent 

12 year’’ after ‘‘paragraph (3)’’; 

13 (B) in subparagraph (C)— 

14 (i) in clause (i), in the matter pre15 ceding subclause (I), by inserting ‘‘for a 

16 year preceding 2024,’’ after ‘‘paragraph 

17 (4),’’; and 

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

19 ‘‘and each subsequent year’’ and inserting 

20 ‘‘, 2021, 2022, and 2023’’; and 

21 (C) in subparagraph (D)— 

22 (i) in clause (i)— 

23 (I) in the matter preceding sub24 clause (I), by inserting ‘‘for a year 

25 preceding 2024,’’ after ‘‘paragraph 

26 (4),’’; and 


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

2 striking ‘‘a year after 2018’’ and in3 serting ‘‘each of years 2018 through 

4 2023’’; and 

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

6 ‘‘2019 and each subsequent year’’ and in7 serting ‘‘each of years 2019 through 

8 2023’’; 

9 (2) in paragraph (3)(A)— 

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

11 inserting ‘‘for a year preceding 2024,’’ after 

12 ‘‘and (4),’’; and 

13 (B) in clause (ii), by striking ‘‘for a subse14 quent year’’ and inserting ‘‘for each of years 

15 2007 through 2023’’; 

16 (3) in paragraph (4)— 

17 (A) in subparagraph (A)— 

18 (i) in clause (i)— 

19 (I) by redesignating subclauses 

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

21 respectively, and indenting appro22 priately; 

23 (II) in the matter preceding item 

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


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1 by striking ‘‘is equal to the greater 

2 of—’’ and inserting ‘‘is equal to— 

3 ‘‘(I) for a year preceding 2024, 

4 the greater of—’’; 

5 (III) by striking the period at the 

6 end of item (bb), as redesignated by 

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

8 and 

9 (IV) by adding at the end the fol10 lowing: 

11 ‘‘(II) for 2024 and each suc12 ceeding year, $0.’’; and 

13 (ii) in clause (ii)— 

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

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

16 (II) by adding at the end the fol17 lowing new sentence: ‘‘The Secretary 

18 shall continue to calculate the dollar 

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

20 including with the adjustment under 

21 this clause, after 2023 for purposes of 

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

23 (B) in subparagraph (B)— 

24 (i) in clause (i)— 


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

2 ‘‘or’’ at the end; 

3 (II) in subclause (VI)— 

4 (aa) by striking ‘‘for a sub5 sequent year’’ and inserting ‘‘for 

6 2021, 2022, and 2023’’; and 

7 (bb) by striking the period 

8 at the end and inserting a semi9 colon; and 

10 (III) by adding at the end the 

11 following new subclauses: 

12 ‘‘(VII) for 2024, is equal to 

13 $3,100; or 

14 ‘‘(VIII) for a subsequent year, is 

15 equal to the amount specified in this 

16 subparagraph for the previous year, 

17 increased by the annual percentage in18 crease described in paragraph (6) for 

19 the year involved.’’; and 

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

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

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

23 ‘‘and for amounts’’ and inserting ‘‘and for a 

24 year preceding 2024 for amounts’’; and 


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

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

3 through 2023, in applying’’. 

4 (b) REDUCTION IN BENEFICIARY COINSURANCE.— 

5 (1) IN GENERAL.—Section 1860D–2(b)(2)(A) 

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

7 102(b)(2)(A)), as amended by subsection (a), is 

8 amended— 

9 (A) by redesignating clauses (i) and (ii) as 

10 subclauses (I) and (II) and moving such sub11 clauses 2 ems to the right; 

12 (B) by striking ‘‘25 PERCENT COINSUR13 ANCE.—Subject to’’ and inserting ‘‘COINSUR14 ANCE.— 

15 ‘‘(i) IN GENERAL.—Subject to’’; 

16 (C) in each of subclauses (I) and (II), as 

17 redesignated by subparagraph (A), by striking 

18 ‘‘25 percent’’ and inserting ‘‘the applicable per19 centage (as defined in clause (ii))’’; and 

20 (D) by adding at the end the following new 

21 clause: 

22 ‘‘(ii) APPLICABLE PERCENTAGE DE23 FINED.—For purposes of clause (i), the 

24 term ‘applicable percentage’ means— 


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1 ‘‘(I) for a year preceding 2024, 

2 25 percent; and 

3 ‘‘(II) for 2024 and each subse4 quent year, 20 percent.’’. 

5 (2) CONFORMING AMENDMENT.—Section 

6 1860D–14(a)(2)(D) of the Social Security Act (42 

7 U.S.C. 1395w–114(a)(2)(D)) is amended by striking 

8 ‘‘25 percent’’ and inserting ‘‘the applicable percent9 age’’. 

10 (c) DECREASING REINSURANCE PAYMENT

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

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

13 (1) in paragraph (1)— 

14 (A) by striking ‘‘equal to 80 percent’’ and 

15 inserting ‘‘equal to— 

16 ‘‘(A) for a year preceding 2024, 80 per17 cent’’; 

18 (B) in subparagraph (A), as added by 

19 paragraph (1), by striking the period at the end 

20 and inserting ‘‘; and’’; and 

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

22 subparagraph: 

23 ‘‘(B) for 2024 and each subsequent year, 

24 the sum of— 


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1 ‘‘(i) an amount equal to the applicable 

2 percentage specified in paragraph (5)(A) of 

3 such allowable reinsurance costs attrib4 utable to that portion of gross prescription 

5 drug costs as specified in paragraph (3) in6 curred in the coverage year after such indi7 vidual has incurred costs that exceed the 

8 annual out-of-pocket threshold specified in 

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

10 applicable drugs (as defined in section 

11 1860D–14B(g)(2)); and 

12 ‘‘(ii) an amount equal to the applica13 ble percentage specified in paragraph 

14 (5)(B) of allowable reinsurance costs at15 tributable to that portion of gross prescrip16 tion drug costs as specified in paragraph 

17 (3) incurred in the coverage year after 

18 such individual has incurred costs that ex19 ceed the annual out-of-pocket threshold 

20 specified in section 1860D–2(b)(4)(B) with 

21 respect to covered part D drugs that are 

22 not applicable drugs (as so defined).’’; and 

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

24 paragraph: 


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1 ‘‘(5) APPLICABLE PERCENTAGE SPECIFIED.— 

2 For purposes of paragraph (1)(B), the applicable 

3 percentage specified in this paragraph is— 

4 ‘‘(A) with respect to applicable drugs (as 

5 defined in section 1860D–14B(g)(2))— 

6 ‘‘(i) for 2024, 60 percent; 

7 ‘‘(ii) for 2025, 40 percent; and 

8 ‘‘(iii) for 2026 and each subsequent 

9 year, 20 percent; and 

10 ‘‘(B) with respect to covered part D drugs 

11 that are not applicable drugs (as so defined)— 

12 ‘‘(i) for 2024, 80 percent; 

13 ‘‘(ii) for 2025, 60 percent; and 

14 ‘‘(iii) for 2026 and each subsequent 

15 year, 40 percent.’’. 

16 (d) MANUFACTURER DISCOUNT PROGRAM DURING

17 INITIAL AND CATASTROPHIC PHASES OF COVERAGE.— 

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

19 Social Security Act is amended by inserting after 

20 section 1860D–14A (42 U.S.C. 1495w–114) the fol21 lowing new section: 

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

23 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab24 lish a manufacturer discount program (in this section re25 ferred to as the ‘program’). Under the program, the SecVerDate Sep 11 2014 05:09 Jul 16, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2327.IS S2327

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1 retary shall enter into agreements described in subsection 

2 (b) with manufacturers and provide for the performance 

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

4 shall establish a model agreement for use under the pro5 gram by not later than January 1, 2023, in consultation 

6 with manufacturers, and allow for comment on such model 

7 agreement. 

8 ‘‘(b) TERMS OF AGREEMENT.— 

9 ‘‘(1) IN GENERAL.— 

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

11 this section shall require the manufacturer to 

12 provide applicable beneficiaries access to dis13 counted prices for applicable drugs of the man14 ufacturer that are dispensed on or after Janu15 ary 1, 2024. 

16 ‘‘(B) PROVISION OF DISCOUNTED PRICES

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

18 described in subparagraph (A) shall be provided 

19 to the applicable beneficiary at the pharmacy or 

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

21 an applicable drug. 

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

23 manufacturer with an agreement in effect under this 

24 section shall collect and have available appropriate 

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


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1 it can demonstrate to the Secretary compliance with 

2 the requirements under the program. 

3 ‘‘(3) COMPLIANCE WITH REQUIREMENTS FOR

4 ADMINISTRATION OF PROGRAM.—Each manufac5 turer with an agreement in effect under this section 

6 shall comply with requirements imposed by the Sec7 retary or a third party with a contract under sub8 section (d)(3), as applicable, for purposes of admin9 istering the program, including any determination 

10 under subparagraph (A) of subsection (c)(1) or pro11 cedures established under such subsection (c)(1). 

12 ‘‘(4) LENGTH OF AGREEMENT.— 

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

14 this section shall be effective for an initial pe15 riod of not less than 12 months and shall be 

16 automatically renewed for a period of not less 

17 than 1 year unless terminated under subpara18 graph (B). 

19 ‘‘(B) TERMINATION.— 

20 ‘‘(i) BY THE SECRETARY.—The Sec21 retary may provide for termination of an 

22 agreement under this section for a knowing 

23 and willful violation of the requirements of 

24 the agreement or other good cause shown. 

25 Such termination shall not be effective earVerDate Sep 11 2014 05:09 Jul 16, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2327.IS S2327

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1 lier than 30 days after the date of notice 

2 to the manufacturer of such termination. 

3 The Secretary shall provide, upon request, 

4 a manufacturer with a hearing concerning 

5 such a termination, and such hearing shall 

6 take place prior to the effective date of the 

7 termination with sufficient time for such 

8 effective date to be repealed if the Sec9 retary determines appropriate. 

10 ‘‘(ii) BY A MANUFACTURER.—A man11 ufacturer may terminate an agreement 

12 under this section for any reason. Any 

13 such termination shall be effective, with re14 spect to a plan year— 

15 ‘‘(I) if the termination occurs be16 fore January 30 of a plan year, as of 

17 the day after the end of the plan year; 

18 and 

19 ‘‘(II) if the termination occurs on 

20 or after January 30 of a plan year, as 

21 of the day after the end of the suc22 ceeding plan year. 

23 ‘‘(iii) EFFECTIVENESS OF TERMI24 NATION.—Any termination under this sub25 paragraph shall not affect discounts for 


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1 applicable drugs of the manufacturer that 

2 are due under the agreement before the ef3 fective date of its termination. 

4 ‘‘(iv) NOTICE TO THIRD PARTY.—The 

5 Secretary shall provide notice of such ter6 mination to a third party with a contract 

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

8 than 30 days before the effective date of 

9 such termination. 

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

11 agreement under this section shall take effect on a 

12 date determined appropriate by the Secretary, which 

13 may be at the start of a calendar quarter. 

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

15 this subsection are the following: 

16 ‘‘(1) ADMINISTRATION OF PROGRAM.—Admin17 istering the program, including— 

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

19 the discounted price of an applicable drug of a 

20 manufacturer; 

21 ‘‘(B) the establishment of procedures 

22 under which discounted prices are provided to 

23 applicable beneficiaries at pharmacies or by 

24 mail order service at the point-of-sale of an ap25 plicable drug; 


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1 ‘‘(C) the establishment of procedures to 

2 ensure that, not later than the applicable num3 ber of calendar days after the dispensing of an 

4 applicable drug by a pharmacy or mail order 

5 service, the pharmacy or mail order service is 

6 reimbursed for an amount equal to the dif7 ference between— 

8 ‘‘(i) the negotiated price of the appli9 cable drug; and 

10 ‘‘(ii) the discounted price of the appli11 cable drug; 

12 ‘‘(D) the establishment of procedures to 

13 ensure that the discounted price for an applica14 ble drug under this section is applied before any 

15 coverage or financial assistance under other 

16 health benefit plans or programs that provide 

17 coverage or financial assistance for the pur18 chase or provision of prescription drug coverage 

19 on behalf of applicable beneficiaries as the Sec20 retary may specify; and 

21 ‘‘(E) providing a reasonable dispute resolu22 tion mechanism to resolve disagreements be23 tween manufacturers, applicable beneficiaries, 

24 and the third party with a contract under sub25 section (d)(3). 


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1 ‘‘(2) MONITORING COMPLIANCE.— 

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

3 monitor compliance by a manufacturer with the 

4 terms of an agreement under this section. 

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

6 with a contract under subsection (d)(3) deter7 mines that the manufacturer is not in compli8 ance with such agreement, the third party shall 

9 notify the Secretary of such noncompliance for 

10 appropriate enforcement under subsection (e). 

11 ‘‘(3) COLLECTION OF DATA FROM PRESCRIP12 TION DRUG PLANS AND MA–PD PLANS.—The Sec13 retary may collect appropriate data from prescrip14 tion drug plans and MA–PD plans in a timeframe 

15 that allows for discounted prices to be provided for 

16 applicable drugs under this section. 

17 ‘‘(d) ADMINISTRATION.— 

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

19 the Secretary shall provide for the implementation of 

20 this section, including the performance of the duties 

21 described in subsection (c). 

22 ‘‘(2) LIMITATION.—In providing for the imple23 mentation of this section, the Secretary shall not re24 ceive or distribute any funds of a manufacturer 

25 under the program. 


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

2 Secretary shall enter into a contract with 1 or more 

3 third parties to administer the requirements estab4 lished by the Secretary in order to carry out this 

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

6 party under the preceding sentence shall require 

7 that the third party— 

8 ‘‘(A) receive and transmit information be9 tween the Secretary, manufacturers, and other 

10 individuals or entities the Secretary determines 

11 appropriate; 

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

13 distribution of funds of manufacturers to ap14 propriate individuals or entities in order to 

15 meet the obligations of manufacturers under 

16 agreements under this section; 

17 ‘‘(C) provide adequate and timely informa18 tion to manufacturers, consistent with the 

19 agreement with the manufacturer under this 

20 section, as necessary for the manufacturer to 

21 fulfill its obligations under this section; and 

22 ‘‘(D) permit manufacturers to conduct 

23 periodic audits, directly or through contracts, of 

24 the data and information used by the third 


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1 party to determine discounts for applicable 

2 drugs of the manufacturer under the program. 

3 ‘‘(4) PERFORMANCE REQUIREMENTS.—The 

4 Secretary shall establish performance requirements 

5 for a third party with a contract under paragraph 

6 (3) and safeguards to protect the independence and 

7 integrity of the activities carried out by the third 

8 party under the program under this section. 

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

10 United States Code, shall not apply to the program 

11 under this section. 

12 ‘‘(6) FUNDING.—For purposes of carrying out 

13 this section, the Secretary shall provide for the 

14 transfer, from the Federal Supplementary Medical 

15 Insurance Trust Fund under section 1841 to the 

16 Centers for Medicare & Medicaid Services Program 

17 Management Account, of $4,000,000 for each of fis18 cal years 2021 through 2024, to remain available 

19 until expended.’’. 

20 ‘‘(e) ENFORCEMENT.— 

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

22 agreement in effect under this section shall be sub23 ject to periodic audit by the Secretary. 

24 ‘‘(2) CIVIL MONEY PENALTY.— 


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

2 impose a civil money penalty on a manufacturer 

3 that fails to provide applicable beneficiaries dis4 counts for applicable drugs of the manufacturer 

5 in accordance with such agreement for each 

6 such failure in an amount the Secretary deter7 mines is commensurate with the sum of— 

8 ‘‘(i) the amount that the manufac9 turer would have paid with respect to such 

10 discounts under the agreement, which will 

11 then be used to pay the discounts which 

12 the manufacturer had failed to provide; 

13 and 

14 ‘‘(ii) 25 percent of such amount. 

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

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

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

18 this paragraph in the same manner as such 

19 provisions apply to a penalty or proceeding 

20 under section 1128A(a). 

21 ‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF

22 OTHER COVERED PART D DRUGS.—Nothing in this sec23 tion shall prevent an applicable beneficiary from pur24 chasing a covered part D drug that is not an applicable 

25 drug (including a generic drug or a drug that is not on 


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1 the formulary of the prescription drug plan or MA–PD 

2 plan that the applicable beneficiary is enrolled in). 

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

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

5 ‘applicable beneficiary’ means an individual who, on 

6 the date of dispensing a covered part D drug— 

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

8 or an MA–PD plan; 

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

10 prescription drug plan; and 

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

12 drugs in the year that are above the annual de13 ductible specified in section 1860D–2(b)(1) for 

14 such year. 

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

16 drug’ means, with respect to an applicable bene17 ficiary, a covered part D drug— 

18 ‘‘(A) approved under a new drug applica19 tion under section 505(c) of the Federal Food, 

20 Drug, and Cosmetic Act or, in the case of a bio21 logic product, licensed under section 351 of the 

22 Public Health Service Act (including a product 

23 licensed under subsection (k) of such section 

24 351); and 


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1 ‘‘(B)(i) if the PDP sponsor of the prescrip2 tion drug plan or the MA organization offering 

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

4 the formulary of the prescription drug plan or 

5 MA–PD plan that the applicable beneficiary is 

6 enrolled in; 

7 ‘‘(ii) if the PDP sponsor of the prescrip8 tion drug plan or the MA organization offering 

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

10 which benefits are available under the prescrip11 tion drug plan or MA–PD plan that the appli12 cable beneficiary is enrolled in; or 

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

14 appeal. 

15 ‘‘(3) APPLICABLE NUMBER OF CALENDAR

16 DAYS.—The term ‘applicable number of calendar 

17 days’ means— 

18 ‘‘(A) with respect to claims for reimburse19 ment submitted electronically, 14 days; and 

20 ‘‘(B) with respect to claims for reimburse21 ment submitted otherwise, 30 days. 

22 ‘‘(4) DISCOUNTED PRICE.— 

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

24 subparagraph (B), the term ‘discounted price’ 


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1 means 90 percent of the negotiated price of the 

2 applicable drug of a manufacturer. 

3 ‘‘(B) PHASE-IN FOR CERTAIN DRUGS DIS4 PENSED FOR SUBSIDY ELIGIBLE INDIVID5 UALS.— 

6 ‘‘(i) IN GENERAL.—In the case of an 

7 applicable drug of a specified manufacturer 

8 (as defined in clause (ii)) that is dispensed 

9 for an applicable beneficiary who is a sub10 sidy eligible individual (as defined in sec11 tion 1860D–14(a)(3)), the term ‘dis12 counted price’ means the specified LIS 

13 percent (as defined in clause (iii)) of the 

14 negotiated price of the applicable drug of 

15 the manufacturer. 

16 ‘‘(ii) SPECIFIED MANUFACTURER.—In 

17 this subparagraph, the term ‘specified 

18 manufacturer’ means a manufacturer of an 

19 applicable drug for which, in the calendar 

20 year 2 years prior to the current plan year 

21 (referred to in this clause as the ‘applicable 

22 period’), the total reimbursement under 

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1 imbursement under this title for all pre2 scription drugs during such period. 

3 ‘‘(iii) SPECIFIED LIS PERCENT.—In 

4 this subparagraph, the term ‘specified LIS 

5 percent’ means— 

6 ‘‘(I) for 2024, 98 percent; 

7 ‘‘(II) for 2025, 97 percent; 

8 ‘‘(III) for 2026, 96 percent; 

9 ‘‘(IV) for 2027, 95 percent; 

10 ‘‘(V) for 2028, 94 percent; 

11 ‘‘(VI) for 2029, 93 percent; 

12 ‘‘(VII) for 2030, 92 percent; 

13 ‘‘(VIII) for 2031, 91 percent; 

14 and 

15 ‘‘(IX) for 2032 and each subse16 quent year, 90 percent. 

17 ‘‘(C) CLARIFICATION.—Nothing in this 

18 section shall be construed as affecting the re19 sponsibility of an applicable beneficiary for pay20 ment of a dispensing fee for an applicable drug. 

21 ‘‘(5) MANUFACTURER.—The term ‘manufac22 turer’ means any entity which is engaged in the pro23 duction, preparation, propagation, compounding, 

24 conversion, or processing of prescription drug prod25 ucts, either directly or indirectly by extraction from 


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1 substances of natural origin, or independently by 

2 means of chemical synthesis, or by a combination of 

3 extraction and chemical synthesis. Such term does 

4 not include a wholesale distributor of drugs or a re5 tail pharmacy licensed under State law. 

6 ‘‘(6) NEGOTIATED PRICE.—The term ‘nego7 tiated price’ has the meaning given such term in sec8 tion 1860D–2(d)(1)(B), except that such negotiated 

9 price shall not include any dispensing fee for the ap10 plicable drug. 

11 ‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG

12 PLAN.—The term ‘qualified retiree prescription drug 

13 plan’ has the meaning given such term in section 

14 1860D–22(a)(2).’’. 

15 (2) SUNSET OF MEDICARE COVERAGE GAP DIS16 COUNT PROGRAM.—Section 1860D–14A of the So17 cial Security Act (42 U.S.C. 1395–114a) is amend18 ed— 

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

20 by striking ‘‘The Secretary’’ and inserting 

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

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

23 subsection: 

24 ‘‘(h) SUNSET OF PROGRAM.— 


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

2 apply to applicable drugs dispensed on or after Jan3 uary 1, 2024, and, subject to paragraph (2), agree4 ments under this section shall be terminated as of 

5 such date. 

6 ‘‘(2) CONTINUED APPLICATION FOR APPLICA7 BLE DRUGS DISPENSED PRIOR TO SUNSET.—The 

8 provisions of this section (including all responsibil9 ities and duties) shall continue to apply after Janu10 ary 1, 2024, with respect to applicable drugs dis11 pensed prior to such date.’’. 

12 (3) INCLUSION OF ACTUARIAL VALUE OF MANU13 FACTURER DISCOUNTS IN BIDS.—Section 1860D–11 

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

15 is amended— 

16 (A) in subsection (b)(2)(C)(iii)— 

17 (i) by striking ‘‘assumptions regarding 

18 the reinsurance’’ and inserting ‘‘assump19 tions regarding— 

20 ‘‘(I) the reinsurance’’; and 

21 (ii) by adding at the end the fol22 lowing: 

23 ‘‘(II) for 2024 and each subse24 quent year, the manufacturer dis25 counts provided under section 1860D– 


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1 14B subtracted from the actuarial 

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

3 (B) in subsection (c)(1)(C)— 

4 (i) by striking ‘‘an actuarial valuation 

5 of the reinsurance’’ and inserting ‘‘an ac6 tuarial valuation of— 

7 ‘‘(i) the reinsurance’’; 

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

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

10 at the end; and 

11 (iii) by adding at the end the fol12 lowing: 

13 ‘‘(ii) for 2024 and each subsequent 

14 year, the manufacturer discounts provided 

15 under section 1860D–14B;’’. 

16 (4) CLARIFICATION REGARDING EXCLUSION OF

17 MANUFACTURER DISCOUNTS FROM TROOP.—Section 

18 1860D–2(b)(4) of the Social Security Act (42 

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

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

21 subject to subparagraph (F)’’ after ‘‘subpara22 graph (E)’’; and 

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

24 subparagraph: 


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1 ‘‘(F) CLARIFICATION REGARDING EXCLU2 SION OF MANUFACTURER DISCOUNTS.—In ap3 plying subparagraph (A), incurred costs shall 

4 not include any manufacturer discounts pro5 vided under section 1860D–14B.’’. 

6 (e) DETERMINATION OF ALLOWABLE REINSURANCE

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

8 (42 U.S.C. 1395w–115(b)) is amended— 

9 (1) in paragraph (2)— 

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

11 and inserting ‘‘COSTS.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (B), for purposes’’; and 

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

15 subparagraph: 

16 ‘‘(B) INCLUSION OF MANUFACTURER DIS17 COUNTS ON APPLICABLE DRUGS.—For purposes 

18 of applying subparagraph (A), the term ‘allow19 able reinsurance costs’ shall include the portion 

20 of the negotiated price (as defined in section 

21 1860D–14B(g)(6)) of an applicable drug (as 

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

23 paid by a manufacturer under the manufacturer 

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

25 and 


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1 (2) in paragraph (3)— 

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

3 purposes’’ and inserting ‘‘Subject to paragraph 

4 (2)(B), for purposes’’; and 

5 (B) in the second sentence, by inserting 

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

7 manufacturer’’ after ‘‘by the individual or 

8 under the plan’’. 

9 (f) UPDATING RISK ADJUSTMENT METHODOLOGIES

10 TO ACCOUNT FOR PART D MODERNIZATION REDE11 SIGN.—Section 1860D–15(c) of the Social Security Act 

12 (42 U.S.C. 1395w–115(c)) is amended by adding at the 

13 end the following new paragraph: 

14 ‘‘(3) UPDATING RISK ADJUSTMENT METH15 ODOLOGIES TO ACCOUNT FOR PART D MODERNIZA16 TION REDESIGN.—The Secretary shall update the 

17 risk adjustment methodologies used to adjust bid 

18 amounts pursuant to this subsection as appropriate 

19 to take into account changes in benefits under this 

20 part pursuant to the amendments made by section 

21 2 of the Seniors Prescription Drug Relief Act.’’. 

22 (g) CONDITIONS FOR COVERAGE OF DRUGS UNDER

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

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

25 (1) in subsection (a)— 


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

2 the end; 

3 (B) in paragraph (3), by striking the pe4 riod at the end and inserting a semicolon; and 

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

6 paragraphs: 

7 ‘‘(4) participate in the manufacturer discount 

8 program under section 1860D–14B; 

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

10 agreement described in subsection (b) of such sec11 tion 1860D–14B with the Secretary; and 

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

13 terms and conditions specified by the Secretary, a 

14 contract with a third party that the Secretary has 

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

16 of such section 1860D–14B.’’; 

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

18 following: 

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

20 of subsection (a) shall apply to covered part D drugs dis21 pensed under this part on or after January 1, 2011, and 

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

23 of such subsection shall apply to covered part D drugs 

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


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

2 and inserting the following: 

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

4 beginning on January 1, 2011, and ending on De5 cember 31, 2011 (with respect to paragraphs (1) 

6 through (3) of subsection (a)), or the period begin7 ning on January 1, 2024, and ending December 31, 

8 2024 (with respect to paragraphs (4) through (6) of 

9 such subsection), there were extenuating cir10 cumstances.’’. 

11 (h) CONFORMING AMENDMENTS.— 

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

13 (42 U.S.C. 1395w–102) is amended— 

14 (A) in subsection (a)(2)(A)(i)(I), by strik15 ing ‘‘, or an increase in the initial’’ and insert16 ing ‘‘or for a year preceding 2024 an increase 

17 in the initial’’; 

18 (B) in subsection (c)(1)(C)— 

19 (i) in the subparagraph heading, by 

20 striking ‘‘AT INITIAL COVERAGE LIMIT’’; 

21 and 

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

23 2024 or the annual out-of-pocket threshold 

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

25 year for 2024 and each subsequent year’’ 


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

2 place it appears; and 

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

4 an initial’’ and inserting ‘‘or for a year pre5 ceding 2024 an initial’’. 

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

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

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

9 a year preceding 2024, the initial’’. 

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

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

12 (A) in paragraph (1)— 

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

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

15 year preceding 2024, the continuation’’; 

16 (ii) in subparagraph (D)(iii), by strik17 ing ‘‘1860D–2(b)(4)(A)(i)(I)’’ and insert18 ing ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’; and 

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

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

21 year preceding 2024, the elimination’’; and 

22 (B) in paragraph (2)— 

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

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


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1 year preceding 2024, the continuation’’; 

2 and 

3 (ii) in subparagraph (E)— 

4 (I) by inserting ‘‘for a year pre5 ceding 2024,’’ after ‘‘subsection (c)’’; 

6 and 

7 (II) by striking ‘‘1860D– 

8 2(b)(4)(A)(i)(I)’’ and inserting 

9 ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’. 

10 (4) Section 1860D–21(d)(7) of the Social Secu11 rity Act (42 U.S.C. 1395w–131(d)(7)) is amended 

12 by striking ‘‘section 1860D–2(b)(B)(4)(B)(i)’’ and 

13 inserting ‘‘section 1860D–2(b)(B)(4)(C)(i)’’. 

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

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

16 amended— 

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

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

19 ‘‘(i) for years prior to 2024, any dis20 count’’; 

21 (B) in clause (i), as inserted by subpara22 graph (A) of this paragraph, by striking the pe23 riod at the end and inserting ‘‘; and’’; and 

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

25 clause: 


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1 ‘‘(ii) for 2024 and each subsequent 

2 year, any discount provided pursuant to 

3 section 1860D–14B.’’. 

4 (6) Section 1860D–41(a)(6) of the Social Secu5 rity Act (42 U.S.C. 1395w–151(a)(6)) is amended— 

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

7 after ‘‘1860D–2(b)(3)’’; and 

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

9 period. 

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

11 this section shall apply to plan year 2024 and subsequent 

12 plan years. 

13 SEC. 3. MONTHLY OUT-OF-POCKET COST SHARING MAX14 IMUM FOR ENROLLEES WHO INCUR A SIG15 NIFICANT PORTION OF COSTS TOWARDS AN16 NUAL OUT-OF-POCKET THRESHOLD. 

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

18 Security Act (42 U.S.C. 1395w–102(b)), as amended by 

19 section 2, is amended— 

20 (1) in paragraph (2)— 

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

22 (D)’’ and inserting ‘‘, (D), and (E)’’; and 

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

24 subparagraph: 


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1 ‘‘(E) MONTHLY OUT-OF-POCKET COST

2 SHARING MAXIMUM FOR ENROLLEES WHO

3 INCUR A SIGNIFICANT PORTION OF COSTS TO4 WARDS ANNUAL OUT-OF-POCKET THRESH5 OLD.— 

6 ‘‘(i) ESTABLISHMENT OF PROCESS.— 

7 ‘‘(I) IN GENERAL.—For plan 

8 years beginning on or after January 

9 1, 2024, the Secretary shall, through 

10 notice and comment rulemaking, es11 tablish a process under which each 

12 PDP sponsor offering a prescription 

13 drug plan and each MA organization 

14 offering an MA–PD plan shall each 

15 plan year automatically enroll applica16 ble enrollees in the option to have 

17 their monthly out-of-pocket cost-shar18 ing under the plan capped and paid in 

19 monthly installments in accordance 

20 with this subparagraph (referred to in 

21 this subparagraph as the ‘monthly 

22 out-of-pocket cost sharing maximum 

23 option’). 

24 ‘‘(II) OPT OUT.—The process es25 tablished under this clause shall perVerDate Sep 11 2014 05:09 Jul 16, 2021 Jkt 019200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S2327.IS S2327

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1 mit an applicable enrollee, prior to the 

2 beginning of the plan year or at any 

3 point during the plan year, to opt out 

4 of enrollment in the monthly out-of5 pocket cost sharing maximum option 

6 and pay any out-of-pocket cost-shar7 ing otherwise applicable for any cov8 ered part D drug in full at the time 

9 of the dispensing of such drug (or at 

10 the time of such opt out in the case 

11 of costs incurred during such enroll12 ment that have not yet been billed to 

13 the enrollee). 

14 ‘‘(ii) DEFINITIONS.— 

15 ‘‘(I) APPLICABLE ENROLLEE.— 

16 In this subparagraph, the term ‘appli17 cable enrollee’ means any enrollee in a 

18 prescription drug plan or an MA–PD 

19 plan, including an enrollee who is a 

20 subsidy eligible individual (as defined 

21 in paragraph (3) of section 1860D– 

22 14(a)), who incurs or is likely to incur 

23 a significant percentage of costs for 

24 covered part D drugs. 


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1 ‘‘(II) SIGNIFICANT PERCENT2 AGE.—For purposes of subclause (I), 

3 the Secretary shall, in the rulemaking 

4 under clause (i), define the term ‘sig5 nificant percentage’ with respect to a 

6 percentage of the annual out-of-pocket 

7 threshold specified in paragraph 

8 (4)(B) but in no case shall the ‘sig9 nificant percentage’ be less than 50 

10 percent or more than 100 percent of 

11 the annual out-of-pocket threshold. 

12 ‘‘(iii) DETERMINATION OF MONTHLY

13 OUT-OF-POCKET COST SHARING MAX14 IMUM.—For each month in a plan year in 

15 which an applicable enrollee is enrolled in 

16 the monthly out-of-pocket cost sharing 

17 maximum option, the PDP sponsor or MA 

18 organization shall determine a monthly 

19 out-of-pocket cost sharing maximum (as 

20 defined in clause (v)) for such enrollee. 

21 ‘‘(iv) BENEFICIARY MONTHLY PAY22 MENTS.—With respect to an applicable en23 rollee who is enrolled in the monthly out24 of-pocket cost sharing maximum option, 

25 for each month described in clause (iii), 


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1 the PDP sponsor or MA organization shall 

2 bill such enrollee an amount (not to exceed 

3 the monthly out-of-pocket cost sharing 

4 maximum) for the out-of-pocket costs of 

5 such enrollee in such month. 

6 ‘‘(v) MONTHLY OUT-OF-POCKET COST

7 SHARING MAXIMUM DEFINED.—In this 

8 subparagraph, the term ‘monthly out-of9 pocket cost sharing maximum’ means, with 

10 respect to an enrollee— 

11 ‘‘(I) for the first month in which 

12 this subparagraph applies, an amount 

13 determined by calculating— 

14 ‘‘(aa) the annual out-of15 pocket threshold specified in 

16 paragraph (4)(B) minus the in17 curred costs of the enrollee as de18 scribed in paragraph (4)(C); di19 vided by 

20 ‘‘(bb) the number of months 

21 remaining in the plan year; and 

22 ‘‘(II) for a subsequent month, an 

23 amount determined by calculating— 

24 ‘‘(aa) the sum of any re25 maining out-of-pocket costs owed 


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1 by the enrollee from a previous 

2 month that have not yet been 

3 billed to the enrollee and any ad4 ditional costs incurred by the en5 rollee; divided by 

6 ‘‘(bb) the number of months 

7 remaining in the plan year. 

8 ‘‘(vi) ADDITIONAL REQUIREMENTS.— 

9 The following requirements shall apply 

10 with respect to the monthly out-of-pocket 

11 cost sharing maximum option under this 

12 subparagraph: 

13 ‘‘(I) SECRETARIAL RESPONSIBIL14 ITIES.—The Secretary shall provide 

15 information to part D eligible individ16 uals on the monthly out-of-pocket cost 

17 sharing maximum option through edu18 cational materials, including through 

19 the notices provided under section 

20 1804(a). 

21 ‘‘(II) PDP SPONSOR AND MA OR22 GANIZATION RESPONSIBILITIES.— 

23 Each PDP sponsor offering a pre24 scription drug plan or MA organiza25 tion offering an MA–PD plan— 


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1 ‘‘(aa) shall not limit the ap2 plication of the monthly out-of3 pocket cost sharing maximum op4 tion to certain covered part D 

5 drugs; 

6 ‘‘(bb) shall, prior to the plan 

7 year, notify prospective enrollees 

8 of such option, including the 

9 availability of the opt out under 

10 clause (i)(II); 

11 ‘‘(cc) shall include informa12 tion on such option in enrollee 

13 educational materials, including 

14 the availability of the opt out 

15 under clause (i)(II); 

16 ‘‘(dd) shall have in place a 

17 mechanism to notify a pharmacy 

18 during the plan year when an en19 rollee incurs out-of-pocket costs 

20 with respect to covered part D 

21 drugs that make it likely the en22 rollee is an applicable enrollee; 

23 ‘‘(ee) shall provide that a 

24 pharmacy, after receiving a noti25 fication described in item (dd) 


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1 with respect to an enrollee, in2 forms the enrollee of such notifi3 cation; 

4 ‘‘(ff) shall ensure that the 

5 application of this subparagraph 

6 has no effect on the amount paid 

7 to pharmacies (or the timing of 

8 such payments) with respect to 

9 covered part D drugs dispensed 

10 to the enrollee; and 

11 ‘‘(gg) shall have in place a 

12 financial reconciliation process to 

13 correct inaccuracies in payments 

14 made by an enrollee under this 

15 subparagraph with respect to 

16 covered part D drugs during the 

17 plan year. 

18 ‘‘(III) FAILURE TO PAY AMOUNT

19 BILLED UNDER MONTHLY OUT-OF20 POCKET COST SHARING MAXIMUM OP21 TION.—If an applicable enrollee fails 

22 to pay the amount billed for a month 

23 as required under this subparagraph, 

24 the applicable enrollee’s enrollment in 

25 the monthly out-of-pocket cost sharing 


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1 maximum option shall be terminated 

2 and the enrollee shall pay the cost3 sharing otherwise applicable for any 

4 covered part D drugs subsequently 

5 dispensed to the enrollee up to the an6 nual out-of-pocket threshold specified 

7 in paragraph (4)(B). 

8 ‘‘(IV) CLARIFICATION REGARD9 ING PAST DUE AMOUNTS.—Nothing in 

10 this subparagraph shall be construed 

11 as prohibiting a PDP sponsor or an 

12 MA organization from billing an en13 rollee for an amount owed under this 

14 subparagraph. 

15 ‘‘(V) TREATMENT OF UNSET16 TLED BALANCES.—Any unsettled bal17 ances with respect to amounts owed 

18 under this subparagraph shall be 

19 treated as plan losses and the Sec20 retary shall not be liable for any such 

21 balances outside of those assumed as 

22 losses estimated in plan bids.’’; and 

23 (2) in paragraph (4)— 

24 (A) in subparagraph (C), by striking ‘‘and 

25 subject to subparagraph (F)’’ and inserting 


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1 ‘‘and subject to subparagraphs (F) and (G)’’; 

2 and 

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

4 subparagraph: 

5 ‘‘(G) INCLUSION OF COSTS PAID UNDER

6 MONTHLY OUT-OF-POCKET COST SHARING MAX7 IMUM OPTION.—In applying subparagraph (A), 

8 with respect to an applicable enrollee who is en9 rolled in the monthly out-of-pocket cost sharing 

10 maximum option described in clause (i)(I) of 

11 paragraph (2)(E), costs shall be treated as in12 curred if such costs are paid by a PDP sponsor 

13 or an MA organization under the process pro14 vided under such paragraph.’’. 

15 (b) APPLICATION TO ALTERNATIVE PRESCRIPTION

16 DRUG COVERAGE.—Section 1860D–2(c) of the Social Se17 curity Act (42 U.S.C. 1395w–102(c)) is amended by add18 ing at the end the following new paragraph: 

19 ‘‘(4) SAME MONTHLY OUT-OF-POCKET COST

20 SHARING MAXIMUM.—For plan years beginning on 

21 or after January 1, 2024, the monthly out-of-pocket 

22 cost sharing maximum for applicable enrollees under 

23 the process provided under subsection (b)(2)(E) 

24 shall apply to such coverage.’’. 

Æ 


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