I 

116TH CONGRESS 

1ST SESSION H. R. 448 

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 

JANUARY 10, 2019 

Mr. CUMMINGS (for himself, Mr. WELCH, Mr. DOGGETT, Mr. SEAN PATRICK

MALONEY of New York, Mr. POCAN, Ms. DELAURO, Ms. GABBARD, Ms. 

BONAMICI, Ms. OMAR, Mr. KHANNA, Ms. NORTON, Ms. JAYAPAL, Ms. 

SCHAKOWSKY, Mr. HIGGINS of New York, Mr. NEGUSE, Mr. COHEN, Mr. 

KRISHNAMOORTHI, and Ms. TLAIB) 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, with respect to an ap20 plicable period (as defined in subparagraph 

21 (H))— 

22 ‘‘(i) during the negotiation year (as 

23 defined in such subparagraph) for such pe24 riod, negotiate with pharmaceutical manu25 facturers the prices (including discounts, 

26 rebates, and all other price concessions) 


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1 that may be charged to PDP sponsors and 

2 MA organizations for applicable covered 

3 part D drugs (as defined in such subpara4 graph) furnished to enrollees during such 

5 period; and 

6 ‘‘(ii) complete such negotiations not 

7 less than 30 days before the first day of 

8 the application review process for the first 

9 plan year during the applicable period for 

10 new contracts or expanding existing con11 tracts with PDP sponsors and MA organi12 zations to offer prescription drug plans or 

13 MA–PD plans, respectively. 

14 ‘‘(B) USE OF FALLBACK IF NEGOTIATIONS

15 FAIL.— 

16 ‘‘(i) IN GENERAL.—If, after negotia17 tions under subparagraph (A) with respect 

18 to an applicable period, the Secretary is 

19 not successful in obtaining an appropriate 

20 price for applicable covered part D drugs 

21 in accordance with clause (ii), the price 

22 that may be charged to PDP sponsors and 

23 MA organizations for applicable covered 

24 part D drugs furnished to enrollees during 


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1 such period shall be the lowest of the fol2 lowing: 

3 ‘‘(I) The contract price applied 

4 pursuant to section 8126 of title 38, 

5 United States Code, for such drug for 

6 the contract year (as defined in such 

7 section 8126). 

8 ‘‘(II) The average of the prices 

9 available, during the most recent 12- 

10 month period for which data is avail11 able from the manufacturer to any 

12 wholesaler, retailer, provider, health 

13 maintenance organization, nonprofit 

14 entity, or governmental entity in Can15 ada, the United Kingdom, Germany, 

16 France, and Japan. 

17 ‘‘(III) The best price determined 

18 under section 1927(c)(1)(C) for such 

19 drug for the most recent rebate period 

20 (as defined in section 1927(k)(8)) ap21 plicable to such first plan year of the 

22 applicable period. 

23 ‘‘(ii) GUIDANCE.—Not later than 6 

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1 spect to the first applicable period, the 

2 Secretary shall issue guidance on criteria 

3 to be considered for purposes of deter4 mining under clause (i) whether or not the 

5 Secretary is successful in obtaining an ap6 propriate price for an applicable covered 

7 part D drug. Such criteria shall include at 

8 least the following: 

9 ‘‘(I) The comparative clinical ef10 fectiveness and cost effectiveness, if 

11 available, of such covered part D 

12 drug. 

13 ‘‘(II) The budgetary impact of 

14 providing coverage under this part for 

15 such covered part D drug. 

16 ‘‘(III) The number of similarly 

17 effective drug or alternative treatment 

18 regimens for each approved use of 

19 such covered part D drug. 

20 ‘‘(IV) Associated unmet need or 

21 severity of illness. 

22 ‘‘(C) IDENTIFICATION OF APPLICABLE

23 COVERED PART D DRUGS.— 

24 ‘‘(i) IN GENERAL.—The Secretary 

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1 ance with the subsequent clauses of this 

2 subparagraph, and pursuant to rule3 making, identify applicable covered part D 

4 drugs for which negotiations under sub5 paragraph (A) shall be conducted during 

6 the negotiation year for such period. In 

7 this paragraph, all such covered part D 

8 drugs so identified for an applicable period 

9 are collectively referred to as applicable 

10 covered part D drugs with respect to such 

11 period. 

12 ‘‘(ii) IDENTIFICATION OF PRIORITIZED

13 DRUGS.—In carrying out clause (i), except 

14 as provided under clause (iii), the Sec15 retary may not identify a covered part D 

16 drug that is not a drug prioritized pursu17 ant to subparagraph (D) as an applicable 

18 covered part D drug until all covered part 

19 D drugs that are so prioritized have been 

20 identified as an applicable covered part D 

21 drug for the applicable period or for a pre22 vious applicable period for which the nego23 tiated price of such drug has not expired. 

24 ‘‘(iii) DRUG INCLUSIONS FOR PRICE

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1 ered part D drug that is identified as an 

2 applicable covered part D drug for an ap3 plicable period, such covered part D drug 

4 shall be identified as an applicable covered 

5 part D drug for each subsequent third ne6 gotiation year. 

7 ‘‘(iv) REASONABLE NOTIFICATION.— 

8 The Secretary shall carry out this subpara9 graph in such manner as to provide for 

10 public notification of applicable covered 

11 part D drugs for the applicable period 

12 within a reasonable period before the be13 ginning of the negotiation year for such 

14 period. 

15 ‘‘(D) PRIORITIZATION OF CERTAIN COV16 ERED PART D DRUGS.—For purposes of sub17 paragraph (C)(ii), the Secretary shall prioritize 

18 covered part D drugs— 

19 ‘‘(i) that are among— 

20 ‘‘(I) the 40 covered part D drugs 

21 that are utilized by at least 1,000 

22 Medicare part D beneficiaries and 

23 with respect to which there were the 

24 highest total expenditures under this 


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1 part during the most recent 12-month 

2 period for which data is available; 

3 ‘‘(II) the 40 covered part D 

4 drugs that are utilized by at least 

5 1,000 Medicare part D beneficiaries 

6 with respect to whom the total annual 

7 spending per such a beneficiary under 

8 this part for coverage of such a drug 

9 is at least $10,000; or 

10 ‘‘(III) the 20 covered part D 

11 drugs that are utilized by at least 

12 1,000 Medicare part D beneficiaries 

13 and with respect to which there are 

14 unit cost increases at or above the 

15 95th percentile of overall covered part 

16 D drug unit cost increases during the 

17 most recent 12-month period prior to 

18 the beginning of such negotiation year 

19 for 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 nego25 tiation year, if the drug were prescribed to 


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1 the individual for the period of the year or 

2 with respect to which a single treatment 

3 regimen is priced above such annual out4 of-pocket threshold applicable under such 

5 section 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 negotiation year and 

15 each year thereafter, the Secretary shall submit 

16 to Congress and make available to the public a 

17 report describing the negotiations during the 

18 preceding negotiation year, including— 

19 ‘‘(i) the number of applicable covered 

20 part D 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 (ii) 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) GAO REPORT.—Not later than De12 cember 31, 2024, the Comptroller General of 

13 the United States shall submit to Congress a 

14 report on the negotiations conducted by the 

15 Secretary under this paragraph, including a de16 scription and analysis of— 

17 ‘‘(i) the extent to which such price ne18 gotiations are achieving lower prices for 

19 covered part D drugs for enrollees; 

20 ‘‘(ii) the parties benefitting from such 

21 lower prices, such as enrollees, the Federal 

22 government, States, prescription drug 

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

24 ‘‘(iii) how such price negotiations are 

25 affecting— 


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

2 D drugs; and 

3 ‘‘(II) drug prices in the private 

4 market; and 

5 ‘‘(iv) recommendations for improving 

6 price negotiations, if applicable. 

7 ‘‘(G) DEFINITIONS.—For purposes of this 

8 paragraph: 

9 ‘‘(i) APPLICABLE COVERED PART D

10 DRUGS.—The term ‘applicable covered part 

11 D drugs’ means, for an applicable period, 

12 covered part D drugs identified by the Sec13 retary under subparagraph (C) for such 

14 period. 

15 ‘‘(ii) APPLICABLE PERIOD.—The term 

16 ‘applicable period’ means, with respect to a 

17 negotiation year and applicable covered 

18 part D drugs, the 3-plan year period be19 ginning with the first plan year beginning 

20 after the negotiation year for such covered 

21 part D drugs. 

22 ‘‘(iii) NEGOTIATION YEAR.—The term 

23 ‘negotiation year’ means, with respect to 

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1 ning with 2020, prior to the first plan year 

2 of the applicable period. 

3 ‘‘(2) ESTABLISHMENT AND APPLICATION OF

4 FORMULARY BY THE SECRETARY OR CHANGES IN

5 FORMULARIES TO BE REQUIRED BY SECRETARY.— 

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

7 for plan years beginning with plan year 2020— 

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

9 (C), establish and apply a formulary for 

10 required use by sponsors of prescription 

11 drug plans and organizations offering MA– 

12 PD plans under this part; or 

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

14 the covered part D drugs included on 

15 formularies of PDP sponsors of prescrip16 tion drug plans (including changes, as nec17 essary, in the preferred or tiered cost-shar18 ing status of such a drug) to take into ac19 count negotiations carried out by the Sec20 retary pursuant to paragraph (1), regard21 less of whether such a covered part D drug 

22 is the subject of such negotiations. 

23 ‘‘(B) REQUIRED INCLUSION OF DRUGS IN

24 ALL THERAPEUTIC CATEGORIES.—A formulary 

25 established and applied under subparagraph 


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

2 drugs in each category and class of covered part 

3 D drugs as described in section 

4 423.120(b)(2)(i) of title 42, Code of Federal 

5 Regulations (as in effect on January 1, 2017). 

6 ‘‘(C) APPLICATION OF DEVELOPMENT AND

7 REVISION REQUIREMENTS AND REQUIRED IN8 CLUSION OF ALL DRUGS IN CERTAIN CAT9 EGORIES AND CLASSES.—The requirements de10 scribed in subparagraphs (A) and (B) of section 

11 1860D–4(b)(3) (relating to development and re12 vision requirements of the formulary) and sub13 paragraph (G) of such section (relating to re14 quired inclusion of all drugs in certain cat15 egories and classes) shall apply to a formulary 

16 established and applied under subparagraph 

17 (A)(i) of this paragraph. 

18 ‘‘(3) PLAN FLEXIBILITY TO NEGOTIATE GREAT19 ER DISCOUNTS.—Nothing in this subsection shall be 

20 construed as preventing the sponsor of a prescrip21 tion drug plan, or an organization offering an MA– 

22 PD plan, from obtaining a discount or reduction of 

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

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1 cluding through the use of preferred or tiered cost2 sharing status. 

3 ‘‘(4) ENSURING BENEFICIARY ACCESS TO

4 NEEDED DRUGS.—Beginning with plan year 2020, 

5 each PDP sponsor of a prescription drug plan and 

6 organization offering an MA–PD plan shall have in 

7 place a process under which an enrollee in the plan 

8 may request coverage under the plan for a covered 

9 part D drug that is not on the formulary, or is sub10 ject to utilization management controls, such as 

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

12 (b) CONFORMING AMENDMENTS.— 

13 (1) IN GENERAL.—Section 1860D–4 of the So14 cial Security Act (42 U.S.C. 1395w–104) is amend15 ed— 

16 (A) in subsection (b)(3), in the matter pre17 ceding subparagraph (A), by striking ‘‘If a 

18 PDP’’ and inserting ‘‘Subject to section 

19 1860D–11(i)(2), if a PDP’’; 

20 (B) in subsection (g)— 

21 (i) in paragraph (1), by inserting be22 fore the period at the end the following: ‘‘, 

23 except that the PDP sponsor of a prescrip24 tion drug plan shall treat the presentation 

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1 macy, which is transmitted to the plan by 

2 the pharmacy, as a request for a coverage 

3 determination (including with respect to 

4 prior authorization, step therapy, or quan5 tity limits) and, in applying such para6 graphs of section 1852(g), the response to 

7 such transmittal shall be treated as a de8 termination by the sponsor’’; and 

9 (ii) in paragraph (2), in the first sen10 tence, by inserting ‘‘(or a participating 

11 pharmacy, on behalf of such individual, 

12 through transmission of a prescription as 

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

14 D eligible individual who is enrolled in the 

15 plan’’; and 

16 (C) in subsection (h)— 

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

18 sentence, by inserting ‘‘(or a participating 

19 pharmacy, on behalf of such individual)’’ 

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

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

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

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

24 individual who is enrolled in a prescription 

25 drug plan offered by a PDP sponsor’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

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

3 shall apply to plans years beginning on or after Jan4 uary 1, 2020. 

5 SEC. 3. REQUIRING DRUG MANUFACTURERS TO PROVIDE 

6 DRUG REBATES FOR DRUGS DISPENSED TO 

7 LOW-INCOME INDIVIDUALS. 

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

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

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

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

12 after ‘‘this subsection’’; and 

13 (2) by adding at the end the following new sub14 section: 

15 ‘‘(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR

16 REBATE ELIGIBLE INDIVIDUALS.— 

17 ‘‘(1) REQUIREMENT.— 

18 ‘‘(A) IN GENERAL.—For plan years begin19 ning on or after January 1, 2020, in this part, 

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

21 any drug or biological product that is manufac22 tured by a manufacturer that has not entered 

23 into and have in effect a rebate agreement de24 scribed in paragraph (2). 


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1 ‘‘(B) 2020 PLAN YEAR REQUIREMENT.— 

2 Any drug or biological product manufactured by 

3 a manufacturer that declines to enter into a re4 bate agreement described in paragraph (2) for 

5 the period beginning on January 1, 2020, and 

6 ending on December 31, 2020, shall not be in7 cluded as a ‘covered part D drug’ for the subse8 quent plan year. 

9 ‘‘(2) REBATE AGREEMENT.—A rebate agree10 ment under this subsection shall require the manu11 facturer to provide to the Secretary a rebate for 

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

13 ending after December 31, 2019, in the amount 

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

15 drug of the manufacturer dispensed after December 

16 31, 2019, to any rebate eligible individual (as de17 fined in paragraph (6)(A)) for which payment was 

18 made by a PDP sponsor or MA organization under 

19 this part for such period, including payments passed 

20 through the low-income and reinsurance subsidies 

21 under sections 1860D–14 and 1860D–15(b), respec22 tively. Such rebate shall be paid by the manufac23 turer to the Secretary not later than 30 days after 

24 the date of receipt of the information described in 

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


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

2 the receipt of information under subparagraph (D) 

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

4 Insofar as not inconsistent with this subsection, the 

5 Secretary shall establish terms and conditions of 

6 such agreement relating to compliance, penalties, 

7 and program evaluations, investigations, and audits 

8 that are similar to the terms and conditions for re9 bate agreements under paragraphs (3) and (4) of 

10 section 1927(b). 

11 ‘‘(3) REBATE FOR REBATE ELIGIBLE MEDICARE

12 DRUG PLAN ENROLLEES.— 

13 ‘‘(A) IN GENERAL.—The amount of the re14 bate specified under this paragraph for a manu15 facturer for a rebate period, with respect to 

16 each dosage form and strength of any covered 

17 part D drug provided by such manufacturer 

18 and dispensed to a rebate eligible individual, 

19 shall be equal to the product of— 

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

21 dosage form and strength of the drug so 

22 provided and dispensed for which payment 

23 was made by a PDP sponsor or an MA or24 ganization under this part for the rebate 

25 period, including payments passed through 


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1 the low-income and reinsurance subsidies 

2 under sections 1860D–14 and 1860D– 

3 15(b), respectively; and 

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

5 ‘‘(I) the Medicaid rebate amount 

6 (as defined in subparagraph (B)) for 

7 such form, strength, and period, ex8 ceeds 

9 ‘‘(II) the average Medicare drug 

10 program rebate eligible rebate amount 

11 (as defined in subparagraph (C)) for 

12 such form, strength, and period. 

13 ‘‘(B) MEDICAID REBATE AMOUNT.—For 

14 purposes of this paragraph, the term ‘Medicaid 

15 rebate amount’ means, with respect to each 

16 dosage form and strength of a covered part D 

17 drug provided by the manufacturer for a rebate 

18 period— 

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

20 drug or an innovator multiple source drug, 

21 the amount specified in paragraph 

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

23 plus the amount, if any, specified in sub24 paragraph (A)(ii) of paragraph (2) of such 


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1 section, for such form, strength, and pe2 riod; or 

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

4 outpatient drug, the amount specified in 

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

6 such form, strength, and period. 

7 ‘‘(C) AVERAGE MEDICARE DRUG PROGRAM

8 REBATE ELIGIBLE REBATE AMOUNT.—For pur9 poses of this subsection, the term ‘average 

10 Medicare drug program rebate eligible rebate 

11 amount’ means, with respect to each dosage 

12 form and strength of a covered part D drug 

13 provided by a manufacturer for a rebate period, 

14 the sum, for all PDP sponsors under part D 

15 and MA organizations administering an MA– 

16 PD plan under part C, of— 

17 ‘‘(i) the product, for each such spon18 sor or organization, of— 

19 ‘‘(I) the sum of all rebates, dis20 counts, or other price concessions (not 

21 taking into account any rebate pro22 vided under paragraph (2) or any dis23 counts under the program under sec24 tion 1860D–14A) for such dosage 

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1 pensed, calculated on a per-unit basis, 

2 but only to the extent that any such 

3 rebate, discount, or other price con4 cession applies equally to drugs dis5 pensed to rebate eligible Medicare 

6 drug plan enrollees and drugs dis7 pensed to PDP and MA–PD enrollees 

8 who are not rebate eligible individuals; 

9 and 

10 ‘‘(II) the number of the units of 

11 such dosage and strength of the drug 

12 dispensed during the rebate period to 

13 rebate eligible individuals enrolled in 

14 the prescription drug plans adminis15 tered by the PDP sponsor or the MA– 

16 PD plans administered by the MA or17 ganization; divided by 

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

19 dosage and strength of the drug dispensed 

20 during the rebate period to rebate eligible 

21 individuals enrolled in all prescription drug 

22 plans administered by PDP sponsors and 

23 all MA–PD plans administered by MA or24 ganizations. 


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

2 may establish a methodology for estimating the 

3 average Medicare drug program rebate eligible 

4 rebate amounts for each rebate period based on 

5 bid and utilization information under this part 

6 and may use these estimates as the basis for 

7 determining the rebates under this section. If 

8 the Secretary elects to estimate the average 

9 Medicare drug program rebate eligible rebate 

10 amounts, the Secretary shall establish a rec11 onciliation process for adjusting manufacturer 

12 rebate payments not later than 3 months after 

13 the date that manufacturers receive the infor14 mation collected under section 1860D– 

15 12(b)(8)(B). 

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

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

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

19 to rebate agreements under this subsection in the 

20 same manner as such paragraph applies to a rebate 

21 agreement under such section. 

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

23 Secretary shall establish other terms and conditions 

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1 cluding terms and conditions related to compliance, 

2 that are consistent with this subsection. 

3 ‘‘(6) DEFINITIONS.—In this subsection and sec4 tion 1860D–12(b)(8): 

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

6 term ‘rebate eligible individual’ means— 

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

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

9 ‘‘(ii) a Medicaid beneficiary treated as 

10 a subsidy eligible individual under clause 

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

12 ‘‘(iii) any part D eligible individual 

13 not described in clause (i) or (ii) who is de14 termined for purposes of the State plan 

15 under title XIX to be eligible for medical 

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

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

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

19 period’ has the meaning given such term in sec20 tion 1927(k)(8).’’. 

21 (b) REPORTING REQUIREMENT FOR THE DETER22 MINATION AND PAYMENT OF REBATES BY MANUFACTUR23 ERS RELATED TO REBATE FOR REBATE ELIGIBLE MEDI24 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, 2020, 

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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•HR 448 IH

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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•HR 448 IH

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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•HR 448 IH

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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•HR 448 IH

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 22:55 Jan 24, 2019 Jkt 089200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\H448.IH H448

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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 


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