Pharmaceutical Rebates for Excessive Pricing Above Inflation Act

To amend title XVIII of the Social Security Act to require drug manufacturers to pay a Medicare part D rebate for certain drugs if the price of such drugs increases faster than inflation. 1. Short title This Act may be cited as the Pharmaceutical Rebates for Excessive Pricing Above Inflation Act Pharmaceutical REPAI Act 2. Medicare part D prescription drug inflation rebate by manufacturers Part D of title XVIII of the Social Security Act is amended by inserting after section 1860D–14A ( 42 U.S.C. 1395w–114a 1860D–14B. Manufacturer rebate for certain drugs with prices increasing faster than inflation (a) In general Subject to the provisions of this section, in order for coverage to be available under this part for a part D rebatable drug of a manufacturer dispensed during an applicable year, the manufacturer must have entered into and have in effect an agreement described in subsection (b). For purposes of this section the term applicable year (b) Agreements (1) Terms of agreement An agreement described in this subsection, with respect to a manufacturer of a part D rebatable drug, is an agreement under which the following applies: (A) Secretarial provision of information Not later than 9 months after the end of each applicable year with respect to which the agreement is in effect, the Secretary, for the part D rebatable drug of the manufacturer, reports to the manufacturer the following for such year: (i) Information on the total units (as defined in subsection (g)(2)) dispensed for each dosage form and strength with respect to such part D rebatable drug and year. (ii) Information on the amount (if any) of the excess average manufacturer price increase described in subsection (c)(1)(B) for each dosage form and strength with respect to such drug and year. (iii) The rebate amount specified under subsection (c) for each dosage form and strength with respect to such drug and year. (B) Manufacturer requirements For each applicable year with respect to which the agreement is in effect, the manufacturer of the part D rebatable drug, for each dosage form and strength with respect to such drug, not later than 30 days after the date of receipt from the Secretary of the information described in subparagraph (A) for such year, provides to the Secretary a rebate that is equal to the amount specified in subsection (c) for such dosage form and strength with respect to such drug for such year. (2) Length of agreement (A) In general An agreement under this section, with respect to a part D rebatable drug, shall be effective for an initial period of not less than one year and shall be automatically renewed for a period of not less than one year unless terminated under subparagraph (B). (B) Termination (i) By Secretary The Secretary may provide for termination of an agreement under this section for violation of the requirements of the agreement or other good cause shown. Such termination shall not be effective earlier than 60 days after the date of notice of such termination. The Secretary shall provide, upon request, a manufacturer with a hearing concerning such a termination, but such hearing shall not delay the effective date of the termination. (ii) By a manufacturer A manufacturer may terminate an agreement under this section for any reason. Any such termination shall not be effective until the year beginning at least 60 days after the date the manufacturer provides notice to the Secretary. (C) Effectiveness of termination Any termination under this paragraph shall not affect rebates due under the agreement under this section before the effective date of its termination. (D) Delay before reentry In the case of any agreement under this section with a manufacturer which is terminated in a plan year, another such agreement with the manufacturer (or a successor manufacturer) may not be entered into before the subsequent plan year, unless the Secretary finds good cause for an earlier reinstatement of such an agreement. (3) Information For purposes of carrying out this section, the Secretary shall use information submitted by manufacturers under section 1927(b)(3). (c) Rebate amount (1) In general For purposes of this section, the amount specified in this subsection for a dosage form and strength with respect to a part D rebatable drug and applicable year is, subject to subparagraphs (B) and (C) of paragraph (3), the amount equal to the product of— (A) the total average number of units weighted by, and dispensed for, such dosage form and strength with respect to such part D rebatable drug and year; and (B) the amount (if any) by which— (i) the average manufacturer price (as defined in subsection (g)) paid for such dosage form and strength with respect to such part D rebatable drug during the year; exceeds (ii) the inflation-adjusted payment amount determined under paragraph (2) for such dosage form and strength with respect to such part D rebatable drug during the year. (2) Determination of inflation-adjusted payment amount The inflation-adjusted payment amount determined under this paragraph for a dosage form and strength with respect to a part D rebatable drug for an applicable year, subject to subparagraphs (A) and (D) of paragraph (3), is— (A) the average manufacturer price paid for such dosage form and strength with respect to such drug in the payment amount benchmark year (as defined in subsection (g)(3)); increased by (B) the percentage by which the rebate period CPI–U (as defined in subsection (g)(5)) for the applicable year exceeds the benchmark period CPI–U (as defined in subsection (g)(4)). (3) Special treatment of certain drugs and exemption (A) Subsequently approved drugs In the case of a part D rebatable drug first approved by the Food and Drug Administration after January 1, 2016, subparagraph (A) of paragraph (2) shall be applied as if the term payment amount benchmark year benchmark period CPI–U January 2016 January of the first year beginning after the date on which the drug was first marketed by any manufacturer (B) Exemption for shortages The Secretary may reduce or waive the rebate under paragraph (1) with respect to a part D re­ba­ta­ble drug in the case of a shortage of such drug or other exigent circumstances, as determined by the Secretary. (C) Treatment of new formulations (i) In general In the case of a part D rebatable drug that is a line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form, the Secretary shall establish a formula for determining the amount specified in this subsection with respect to such part D rebatable drug and an applicable year with consideration of the single source drug or an innovator multiple source drug. (ii) Line extension defined In this subparagraph, the term line extension (d) Rebate deposits Amounts paid as rebates under subsection (c) shall be deposited into the Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund established under section 1841. (e) Civil money penalty In the case of a manufacturer of a part D rebatable drug with an agreement in effect under this section who has failed to comply with the terms of the agreement under subsection (b)(1)(B) with respect to such drug for an applicable year, the Secretary may impose a civil money penalty on such manufacturer in an amount equal to 125 percent of the amount specified in subsection (c) for such drug for such year. The provisions of section 1128A (other than subsections (a) (with respect to amounts of penalties or additional assessments) and (b)) shall apply to a civil money penalty under this subsection in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). (f) Judicial review There shall be no judicial review of the following: (1) The determination of units under this section. (2) The determination of whether a drug is a part D rebatable drug under this section. (3) The calculation of the rebate amount under this section. (g) Definitions In this section: (1) Part D rebatable drug defined (A) In general The term part D rebatable drug (B) Increase The dollar amount applied under subparagraph (A)— (i) for 2023, shall be the dollar amount specified under such subparagraph for 2022, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) as of January of 2022; and (ii) for a subsequent year, shall be the dollar amount specified in this subparagraph (or subparagraph (A)) for the previous year, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) as of January of the previous year. Any dollar amount specified under this subparagraph that is not a multiple of $10 shall be rounded to the nearest multiple of $10. (2) Unit defined The term unit (3) Payment amount benchmark year The term payment amount benchmark year (4) Benchmark period CPI–U The term benchmark period CPI–U (5) Rebate period CPI–U The term rebate period CPI–U (6) Average manufacturer price The term average manufacturer price .

Summary: Pharmaceutical Rebates for Excessive Pricing Above Inflation Act or the Pharmaceutical REPAI Act This bill requires drug manufacturers, subject to civil penalties, to issue rebates to the Centers for Medicare & Medicaid Services for covered drugs under the Medicare prescription drug benefit that cost $100 or more and for which the average manufacturer price increases faster than inflation.