II 

117TH CONGRESS 

1ST SESSION S. 908 

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 SENATE OF THE UNITED STATES 

MARCH 23, 2021 

Mr. SANDERS (for himself, Mr. BLUMENTHAL, Mr. BOOKER, Mrs. GILLIBRAND, Mr. LEAHY, Mr. PADILLA, Mr. REED, Ms. SMITH, and Ms. WARREN) 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 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, 

3 SECTION 1. SHORT TITLE. 

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

5 Negotiation Act’’. 


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

2 PRICES ON BEHALF OF MEDICARE BENE3 FICIARIES; ESTABLISHMENT AND APPLICA4 TION OF FORMULARY BY THE SECRETARY OF 

5 HEALTH AND HUMAN SERVICES UNDER 

6 MEDICARE PART D. 

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

8 Security Act (42 U.S.C. 1395w–111) is amended by strik9 ing subsection (i) (relating to noninterference) and insert10 ing the following: 

11 ‘‘(i) NEGOTIATION OF LOWER DRUG PRICES; ESTAB12 LISHMENT AND APPLICATION OF FORMULARY.— 

13 ‘‘(1) NEGOTIATION.— 

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

15 other provision of law, subject to subparagraph 

16 (B), the Secretary shall, for plan years begin17 ning with plan year 2023— 

18 ‘‘(i) negotiate with pharmaceutical 

19 manufacturers the prices (including dis20 counts, rebates, and all other price conces21 sions) that may be charged to PDP spon22 sors and MA organizations for covered 

23 part D drugs furnished to enrollees; and 

24 ‘‘(ii) complete such negotiations for a 

25 plan year not less than 30 days before the 

26 first day of the application review process 


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1 for such plan year for new contracts or ex2 panding existing contracts with PDP spon3 sors and MA organizations to offer pre4 scription drug plans or MA–PD plans, re5 spectively. 

6 ‘‘(B) USE OF FALLBACK IF NEGOTIATIONS

7 FAIL.— 

8 ‘‘(i) IN GENERAL.—If, after negotia9 tions under subparagraph (A), the Sec10 retary is not successful in obtaining a rea11 sonable price for covered part D drugs in 

12 accordance with clause (iii), the price that 

13 may be charged to PDP sponsors and MA 

14 organizations for such covered part D 

15 drugs furnished to enrollees shall be the 

16 lowest of the following: 

17 ‘‘(I) The price applied pursuant 

18 to section 8126 of title 38, United 

19 States Code, for such drug for the 

20 year. 

21 ‘‘(II) The median price available, 

22 during the most recent 12-month pe23 riod for which data is available from 

24 the manufacturer to any wholesaler, 

25 retailer, provider, health maintenance 


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1 organization, nonprofit entity, or gov2 ernmental entity in Canada, the 

3 United Kingdom, Germany, France, 

4 and Japan. 

5 ‘‘(III) The average manufacturer 

6 price (as defined in subsection (k) of 

7 section 1927) for such drug for the 

8 most recent rebate period (as defined 

9 in such subsection) applicable to such 

10 plan year, reduced by the sum of the 

11 applicable rebate factors for the drug 

12 and rebate period. 

13 ‘‘(ii) APPLICABLE REBATE FACTOR.— 

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

15 ‘applicable rebate factor’ means, with re16 spect to a covered part D drug and a re17 bate period (as defined in section 1927(k)), 

18 a dollar amount that applies for purposes 

19 of determining the amount of a rebate that 

20 is applicable to such drug for such rebate 

21 period under— 

22 ‘‘(I) paragraph (1)(A)(ii) of sec23 tion 1927(c); 

24 ‘‘(II) paragraph (2)(A)(ii) of 

25 such section; 


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1 ‘‘(III) paragraph (2)(B) of such 

2 section; 

3 ‘‘(IV) paragraph (2)(C) of such 

4 section; 

5 ‘‘(V) paragraph (3)(A)(i) of such 

6 section; or 

7 ‘‘(VI) paragraph (3)(C) of such 

8 section. 

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

10 days after the date of enactment of this 

11 subsection, the Secretary shall issue guid12 ance on criteria to be considered for pur13 poses of determining under clause (i) 

14 whether or not the Secretary is successful 

15 in obtaining a reasonable price for a cov16 ered part D drug. Such criteria shall in17 clude at least the following: 

18 ‘‘(I) The comparative clinical ef19 fectiveness and cost effectiveness, if 

20 available, of such covered part D 

21 drug. 

22 ‘‘(II) The budgetary impact of 

23 providing coverage under this part for 

24 such covered part D drug. 


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1 ‘‘(III) The number of similarly 

2 effective drug or alternative treatment 

3 regimens for each approved use of 

4 such covered part D drug. 

5 ‘‘(IV) Associated unmet need or 

6 severity of illness. 

7 ‘‘(C) IDENTIFICATION OF COVERED PART

8 D DRUGS SUBJECT TO NEGOTIATION AND AP9 PLICATION OF NEGOTIATED PRICE.— 

10 ‘‘(i) IDENTIFICATION.—The Secretary 

11 shall, for each plan year, in accordance 

12 with the subsequent clauses of this sub13 paragraph, and pursuant to rulemaking, 

14 identify covered part D drugs for which ne15 gotiations under subparagraph (A) shall be 

16 conducted. 

17 ‘‘(ii) APPLICATION OF NEGOTIATED

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

19 the negotiated price of a covered Part D 

20 drug shall be in effect for each subsequent 

21 plan year, and may be adjusted for infla22 tion, as measured by the percentage in23 crease in the consumer price index for all 

24 urban consumers over the preceding year. 


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1 ‘‘(iii) PROCESS FOR RENEGOTI2 ATION.—The Secretary may establish a 

3 process whereby stakeholders may petition 

4 for the negotiated price of a covered Part 

5 D to be renegotiated after an appropriate 

6 length of time and only if evidence justi7 fying the need for such renegotiation is 

8 provided. 

9 ‘‘(iv) REASONABLE NOTIFICATION.— 

10 The Secretary shall carry out this subpara11 graph in such manner as to provide for 

12 public notification of the covered part D 

13 drugs subject to negotiations for a plan 

14 year within a reasonable period before the 

15 beginning of such negotiations. 

16 ‘‘(D) PRIORITIZATION OF CERTAIN COV17 ERED PART D DRUGS.—For purposes of sub18 paragraph (C)(i), the Secretary shall prioritize 

19 negotiating the prices of covered part D 

20 drugs— 

21 ‘‘(i) that are among— 

22 ‘‘(I) the 40 covered part D drugs 

23 that are utilized by at least 1,000 

24 Medicare part D beneficiaries and 

25 with respect to which there were the 


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1 highest total expenditures under this 

2 part during the most recent 12-month 

3 period for which data is available; 

4 ‘‘(II) the 40 covered part D 

5 drugs that are utilized by at least 

6 1,000 Medicare part D beneficiaries 

7 with respect to whom the total annual 

8 spending per such a beneficiary under 

9 this part for coverage of such a drug 

10 is at least $10,000; or 

11 ‘‘(III) the 20 covered part D 

12 drugs that are utilized by at least 

13 1,000 Medicare part D beneficiaries 

14 and with respect to which there are 

15 unit cost increases at or above the 

16 95th percentile of overall covered part 

17 D drug unit cost increases during the 

18 most recent 12-month period for 

19 which data is available; 

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

21 such a drug to the part D eligible indi22 vidual involved would exceed the annual 

23 out-of-pocket threshold applicable under 

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

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1 dividual for the period of the year or with 

2 respect to which a single treatment regi3 men is priced above such annual out-of4 pocket threshold applicable under such sec5 tion 1860D–2(b)(4)(B) for the year; or 

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

7 biologicals (as defined in section 

8 1847A(c)(6)(D)) and that satisfy at least 

9 one other criterion described in a previous 

10 clause of this subparagraph. 

11 ‘‘(E) ANNUAL REPORT TO CONGRESS.— 

12 Not later than 30 days after the date on which 

13 the Secretary completes negotiations under this 

14 paragraph for the first plan year and each sub15 sequent plan year, the Secretary shall submit to 

16 Congress and make available to the public a re17 port describing the negotiations during the pre18 ceding year, including— 

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

20 drug prices negotiated; 

21 ‘‘(ii) the magnitude of savings 

22 achieved as a result of such negotiations; 

23 ‘‘(iii) the number of times price nego24 tiations failed (based on the criteria in25 cluded in the guidance issued pursuant to 


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1 clause (iii) of subparagraph (B)) and re2 sulted in the use of fallback prices under 

3 clause (i) of such subparagraph, and the 

4 rationale for any such decisions; 

5 ‘‘(iv) the progress made toward nego6 tiating the prices of covered part D drugs 

7 that are prioritized under subparagraph 

8 (D); and 

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

10 savings through negotiations. 

11 ‘‘(F) EVALUATION.—Not later than De12 cember 31, 2026, the Inspector General of the 

13 Department of Health and Human Services 

14 shall submit to Congress a report evaluating the 

15 negotiations conducted by the Secretary under 

16 this paragraph, including a description and 

17 analysis of— 

18 ‘‘(i) the extent to which such price ne19 gotiations are achieving lower prices for 

20 covered part D drugs for enrollees; 

21 ‘‘(ii) the parties benefitting from such 

22 lower prices, such as enrollees, the Federal 

23 Government, States, prescription drug 

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


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1 ‘‘(iii) how such price negotiations are 

2 affecting— 

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

4 D drugs; and 

5 ‘‘(II) drug prices in the private 

6 market; and 

7 ‘‘(iv) recommendations for improving 

8 price negotiations, if applicable. 

9 ‘‘(2) ESTABLISHMENT AND APPLICATION OF

10 FORMULARY BY THE SECRETARY OR CHANGES IN

11 FORMULARIES TO BE REQUIRED BY SECRETARY.— 

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

13 for plan years beginning with plan year 2023— 

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

15 (C), establish and apply a formulary for 

16 required use by sponsors of prescription 

17 drug plans and organizations offering MA– 

18 PD plans under this part; or 

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

20 the covered part D drugs included on 

21 formularies of PDP sponsors of prescrip22 tion drug plans (including changes, as nec23 essary, in the preferred or tiered cost-shar24 ing status of such a drug) to take into ac25 count negotiations carried out by the SecVerDate Sep 11 2014 23:19 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S908.IS S908

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1 retary pursuant to paragraph (1), regard2 less of whether such a covered part D drug 

3 is the subject of such negotiations. 

4 ‘‘(B) REQUIRED INCLUSION OF DRUGS IN

5 ALL THERAPEUTIC CATEGORIES.—A formulary 

6 established and applied under subparagraph 

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

8 drugs in each category and class of covered part 

9 D drugs as described in section 

10 423.120(b)(2)(i) of title 42, Code of Federal 

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

12 ‘‘(C) APPLICATION OF DEVELOPMENT AND

13 REVISION REQUIREMENTS AND REQUIRED IN14 CLUSION OF ALL DRUGS IN CERTAIN CAT15 EGORIES AND CLASSES.—The requirements de16 scribed in subparagraphs (A) and (B) of section 

17 1860D–4(b)(3) (relating to development and re18 vision requirements of the formulary) and sub19 paragraph (G) of such section (relating to re20 quired inclusion of all drugs in certain cat21 egories and classes) shall apply to a formulary 

22 established and applied under subparagraph 

23 (A)(i) of this paragraph. 

24 ‘‘(3) PLAN FLEXIBILITY TO NEGOTIATE GREAT25 ER DISCOUNTS.—Nothing in this subsection shall be 


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1 construed as preventing the sponsor of a prescrip2 tion drug plan, or an organization offering an MA– 

3 PD plan, from obtaining a discount or reduction of 

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

5 negotiated under paragraph (1), if applicable, in6 cluding through the use of preferred or tiered cost7 sharing status. 

8 ‘‘(4) ENSURING BENEFICIARY ACCESS TO

9 NEEDED DRUGS.—Beginning with plan year 2023, 

10 each PDP sponsor of a prescription drug plan and 

11 organization offering an MA–PD plan shall have in 

12 place a process under which an enrollee in the plan 

13 may request coverage under the plan for a covered 

14 part D drug that is not on the formulary, or is sub15 ject to utilization management controls, such as 

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

17 (b) CONFORMING AMENDMENTS.— 

18 (1) IN GENERAL.—Section 1860D–4 of the So19 cial Security Act (42 U.S.C. 1395w–104) is amend20 ed— 

21 (A) in subsection (b)(3), in the matter pre22 ceding subparagraph (A), by striking ‘‘If a 

23 PDP’’ and inserting ‘‘Subject to section 

24 1860D–11(i)(2), if a PDP’’; 

25 (B) in subsection (g)— 


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1 (i) in paragraph (1), by inserting be2 fore the period at the end the following: ‘‘, 

3 except that the PDP sponsor of a prescrip4 tion drug plan shall treat the presentation 

5 of a prescription to a participating phar6 macy, which is transmitted to the plan by 

7 the pharmacy, as a request for a coverage 

8 determination (including with respect to 

9 prior authorization, step therapy, or quan10 tity limits) and, in applying such para11 graphs of section 1852(g), the response to 

12 such transmittal shall be treated as a de13 termination by the sponsor’’; and 

14 (ii) in paragraph (2), in the first sen15 tence, by inserting ‘‘(or a participating 

16 pharmacy, on behalf of such individual, 

17 through transmission of a prescription as 

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

19 D eligible individual who is enrolled in the 

20 plan’’; and 

21 (C) in subsection (h)— 

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

23 sentence, by inserting ‘‘(or a participating 

24 pharmacy, on behalf of such individual)’’ 

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


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

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

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

4 individual who is enrolled in a prescription 

5 drug plan offered by a PDP sponsor’’. 

6 (2) EFFECTIVE DATE.—The amendments made 

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

8 shall apply to plan years beginning on or after Janu9 ary 1, 2023. 

10 SEC. 3. REQUIRING DRUG MANUFACTURERS TO PROVIDE 

11 DRUG REBATES FOR DRUGS DISPENSED TO 

12 LOW-INCOME INDIVIDUALS. 

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

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

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

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

17 after ‘‘this subsection’’; and 

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR

21 REBATE ELIGIBLE INDIVIDUALS.— 

22 ‘‘(1) REQUIREMENT.— 

23 ‘‘(A) IN GENERAL.—For plan years begin24 ning on or after January 1, 2023, in this part, 

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


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1 any drug or biological product that is manufac2 tured by a manufacturer that has not entered 

3 into and have in effect a rebate agreement de4 scribed in paragraph (2). 

5 ‘‘(B) 2023 PLAN YEAR REQUIREMENT.— 

6 Any drug or biological product manufactured by 

7 a manufacturer that declines to enter into a re8 bate agreement described in paragraph (2) for 

9 the period beginning on January 1, 2023, and 

10 ending on December 31, 2023, shall not be in11 cluded as a ‘covered part D drug’ for the subse12 quent plan year. 

13 ‘‘(2) REBATE AGREEMENT.—A rebate agree14 ment under this subsection shall require the manu15 facturer to provide to the Secretary a rebate for 

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

17 ending after December 31, 2022, in the amount 

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

19 drug of the manufacturer dispensed after December 

20 31, 2022, to any rebate eligible individual (as de21 fined in paragraph (6)(A)) for which payment was 

22 made by a PDP sponsor or MA organization under 

23 this part for such period, including payments passed 

24 through the low-income and reinsurance subsidies 

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1 tively. Such rebate shall be paid by the manufac2 turer to the Secretary not later than 30 days after 

3 the date of receipt of the information described in 

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

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

6 the receipt of information under subparagraph (D) 

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

8 Insofar as not inconsistent with this subsection, the 

9 Secretary shall establish terms and conditions of 

10 such agreement relating to compliance, penalties, 

11 and program evaluations, investigations, and audits 

12 that are similar to the terms and conditions for re13 bate agreements under paragraphs (3) and (4) of 

14 section 1927(b). 

15 ‘‘(3) REBATE FOR REBATE ELIGIBLE MEDICARE

16 DRUG PLAN ENROLLEES.— 

17 ‘‘(A) IN GENERAL.—The amount of the re18 bate specified under this paragraph for a manu19 facturer for a rebate period, with respect to 

20 each dosage form and strength of any covered 

21 part D drug provided by such manufacturer 

22 and dispensed to a rebate eligible individual, 

23 shall be equal to the product of— 

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

25 dosage form and strength of the drug so 


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1 provided and dispensed for which payment 

2 was made by a PDP sponsor or an MA or3 ganization under this part for the rebate 

4 period, including payments passed through 

5 the low-income and reinsurance subsidies 

6 under sections 1860D–14 and 1860D– 

7 15(b), respectively; and 

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

9 ‘‘(I) the Medicaid rebate amount 

10 (as defined in subparagraph (B)) for 

11 such form, strength, and period, ex12 ceeds 

13 ‘‘(II) the average Medicare drug 

14 program rebate eligible rebate amount 

15 (as defined in subparagraph (C)) for 

16 such form, strength, and period. 

17 ‘‘(B) MEDICAID REBATE AMOUNT.—For 

18 purposes of this paragraph, the term ‘Medicaid 

19 rebate amount’ means, with respect to each 

20 dosage form and strength of a covered part D 

21 drug provided by the manufacturer for a rebate 

22 period— 

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

24 drug or an innovator multiple source drug, 

25 the amount specified in paragraph 


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

2 plus the amount, if any, specified in sub3 paragraph (A)(ii) of paragraph (2) of such 

4 section, for such form, strength, and pe5 riod; or 

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

7 outpatient drug, the amount specified in 

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

9 such form, strength, and period. 

10 ‘‘(C) AVERAGE MEDICARE DRUG PROGRAM

11 REBATE ELIGIBLE REBATE AMOUNT.—For pur12 poses of this subsection, the term ‘average 

13 Medicare drug program rebate eligible rebate 

14 amount’ means, with respect to each dosage 

15 form and strength of a covered part D drug 

16 provided by a manufacturer for a rebate period, 

17 the sum, for all PDP sponsors under part D 

18 and MA organizations administering an MA– 

19 PD plan under part C, of— 

20 ‘‘(i) the product, for each such spon21 sor or organization, of— 

22 ‘‘(I) the sum of all rebates, dis23 counts, or other price concessions (not 

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1 counts under the program under sec2 tion 1860D–14A) for such dosage 

3 form and strength of the drug dis4 pensed, calculated on a per-unit basis, 

5 but only to the extent that any such 

6 rebate, discount, or other price con7 cession applies equally to drugs dis8 pensed to rebate eligible Medicare 

9 drug plan enrollees and drugs dis10 pensed to PDP and MA–PD enrollees 

11 who are not rebate eligible individuals; 

12 and 

13 ‘‘(II) the number of the units of 

14 such dosage and strength of the drug 

15 dispensed during the rebate period to 

16 rebate eligible individuals enrolled in 

17 the prescription drug plans adminis18 tered by the PDP sponsor or the MA– 

19 PD plans administered by the MA or20 ganization; divided by 

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

22 dosage and strength of the drug dispensed 

23 during the rebate period to rebate eligible 

24 individuals enrolled in all prescription drug 

25 plans administered by PDP sponsors and 


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1 all MA–PD plans administered by MA or2 ganizations. 

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

4 may establish a methodology for estimating the 

5 average Medicare drug program rebate eligible 

6 rebate amounts for each rebate period based on 

7 bid and utilization information under this part 

8 and may use these estimates as the basis for 

9 determining the rebates under this section. If 

10 the Secretary elects to estimate the average 

11 Medicare drug program rebate eligible rebate 

12 amounts, the Secretary shall establish a rec13 onciliation process for adjusting manufacturer 

14 rebate payments not later than 3 months after 

15 the date that manufacturers receive the infor16 mation collected under section 1860D– 

17 12(b)(8)(B). 

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

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

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

21 to rebate agreements under this subsection in the 

22 same manner as such paragraph applies to a rebate 

23 agreement under such section. 

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

25 Secretary shall establish other terms and conditions 


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1 of the rebate agreement under this subsection, in2 cluding terms and conditions related to compliance, 

3 that are consistent with this subsection. 

4 ‘‘(6) DEFINITIONS.—In this subsection and sec5 tion 1860D–12(b)(8): 

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

7 term ‘rebate eligible individual’ means— 

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

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

10 ‘‘(ii) a Medicaid beneficiary treated as 

11 a subsidy eligible individual under clause 

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

13 ‘‘(iii) any part D eligible individual 

14 not described in clause (i) or (ii) who is de15 termined for purposes of the State plan 

16 under title XIX to be eligible for medical 

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

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

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

20 period’ has the meaning given such term in sec21 tion 1927(k)(8).’’. 

22 (b) REPORTING REQUIREMENT FOR THE DETER23 MINATION AND PAYMENT OF REBATES BY MANUFACTUR24 ERS RELATED TO REBATE FOR REBATE ELIGIBLE MEDI25 CARE DRUG PLAN ENROLLEES.— 


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1 (1) REQUIREMENTS FOR PDP SPONSORS.—Sec2 tion 1860D–12(b) of the Social Security Act (42 

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

4 end the following new paragraph: 

5 ‘‘(8) REPORTING REQUIREMENT FOR THE DE6 TERMINATION AND PAYMENT OF REBATES BY MANU7 FACTURERS RELATED TO REBATE FOR REBATE ELI8 GIBLE MEDICARE DRUG PLAN ENROLLEES.— 

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

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

11 years beginning on or after January 1, 2023, 

12 each contract entered into with a PDP sponsor 

13 under this part with respect to a prescription 

14 drug plan shall require that the sponsor comply 

15 with subparagraphs (B) and (C). 

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

17 later than a date specified by the Secretary, a 

18 PDP sponsor of a prescription drug plan under 

19 this part shall report to each manufacturer— 

20 ‘‘(i) information (by National Drug 

21 Code number) on the total number of units 

22 of each dosage, form, and strength of each 

23 drug of such manufacturer dispensed to re24 bate eligible Medicare drug plan enrollees 

25 under any prescription drug plan operated 


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1 by the PDP sponsor during the rebate pe2 riod; 

3 ‘‘(ii) information on the price dis4 counts, price concessions, and rebates for 

5 such drugs for such form, strength, and 

6 period; 

7 ‘‘(iii) information on the extent to 

8 which such price discounts, price conces9 sions, and rebates apply equally to rebate 

10 eligible Medicare drug plan enrollees and 

11 PDP enrollees who are not rebate eligible 

12 Medicare drug plan enrollees; and 

13 ‘‘(iv) any additional information that 

14 the Secretary determines is necessary to 

15 enable the Secretary to calculate the aver16 age Medicare drug program rebate eligible 

17 rebate amount (as defined in paragraph 

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

19 the amount of the rebate required under 

20 this section, for such form, strength, and 

21 period. 

22 Such report shall be in a form consistent with 

23 a standard reporting format established by the 

24 Secretary. 


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

2 PDP sponsor shall promptly transmit a copy of 

3 the information reported under subparagraph 

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

5 oversight and evaluation. 

6 ‘‘(D) CONFIDENTIALITY OF INFORMA7 TION.—The provisions of subparagraph (D) of 

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

9 information, shall apply to information reported 

10 by PDP sponsors under this paragraph in the 

11 same manner that such provisions apply to in12 formation disclosed by manufacturers or whole13 salers under such section, except— 

14 ‘‘(i) that any reference to ‘this sec15 tion’ in clause (i) of such subparagraph 

16 shall be treated as being a reference to this 

17 section; 

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

19 the Congressional Budget Office in clause 

20 (iii) of such subparagraph shall be treated 

21 as including a reference to the Medicare 

22 Payment Advisory Commission; and 

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

24 shall not apply. 


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1 ‘‘(E) OVERSIGHT.—Information reported 

2 under this paragraph may be used by the In3 spector General of the Department of Health 

4 and Human Services for the statutorily author5 ized purposes of audit, investigation, and eval6 uations. 

7 ‘‘(F) PENALTIES FOR FAILURE TO PRO8 VIDE TIMELY INFORMATION AND PROVISION OF

9 FALSE INFORMATION.—In the case of a PDP 

10 sponsor— 

11 ‘‘(i) that fails to provide information 

12 required under subparagraph (B) on a 

13 timely basis, the sponsor is subject to a 

14 civil money penalty in the amount of 

15 $10,000 for each day in which such infor16 mation has not been provided; or 

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

18 section 1128A(i)) provides false informa19 tion under such subparagraph, the sponsor 

20 is subject to a civil money penalty in an 

21 amount not to exceed $100,000 for each 

22 item of false information. 

23 Such civil money penalties are in addition to 

24 other penalties as may be prescribed by law. 

25 The provisions of section 1128A (other than 


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•S 908 IS

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

2 money penalty under this subparagraph in the 

3 same manner as such provisions apply to a pen4 alty or proceeding under section 1128A(a).’’. 

5 (2) APPLICATION TO MA ORGANIZATIONS.—Sec6 tion 1857(f)(3) of the Social Security Act (42 

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

8 the end the following: 

9 ‘‘(E) REPORTING REQUIREMENT RELATED

10 TO REBATE FOR REBATE ELIGIBLE MEDICARE

11 DRUG PLAN ENROLLEES.—Section 1860D– 

12 12(b)(8).’’. 

13 (c) DEPOSIT OF REBATES INTO MEDICARE PRE14 SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) of the 

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

16 by adding at the end the following new paragraph: 

17 ‘‘(6) REBATE FOR REBATE ELIGIBLE MEDICARE

18 DRUG PLAN ENROLLEES.—Amounts paid under a re19 bate agreement under section 1860D–2(f) shall be 

20 deposited into the Account.’’. 

21 (d) EXCLUSION FROM DETERMINATION OF BEST

22 PRICE AND AVERAGE MANUFACTURER PRICE UNDER

23 MEDICAID.— 

24 (1) EXCLUSION FROM BEST PRICE DETERMINA25 TION.—Section 1927(c)(1)(C)(ii)(I) of the Social SeVerDate Sep 11 2014 23:19 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S908.IS S908

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1 curity Act (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is 

2 amended by inserting ‘‘and amounts paid under a 

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

4 ‘‘this section’’. 

5 (2) EXCLUSION FROM AVERAGE MANUFAC6 TURER PRICE DETERMINATION.—Section 

7 1927(k)(1)(B)(i) of the Social Security Act (42 

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

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

10 after the semicolon; 

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

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

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

14 ‘‘(VI) amounts paid under a re15 bate agreement under section 1860D– 

16 2(f).’’. 

Æ 


pbinns on DSKJLVW7X2PROD with BILLS