Lower Drug Costs for Families Act

To amend title XVIII of the Social Security Act to apply prescription drug inflation rebates to drugs furnished in the commercial market and to change the base year for rebate calculations. 1. Short title This Act may be cited as the Lower Drug Costs for Families Act 2. Application of prescription drug inflation rebates to drugs furnished in the commercial market; change of base year for rebate calculations (a) Part B drugs (1) Application of prescription drug inflation rebates to drugs furnished in the commercial market Section 1847A(i) of the Social Security Act (42 U.S.C. 1395w–3a(i)) is amended— (A) in paragraph (1)(A)(i), by striking units billing units (B) in paragraph (2)(A), by striking for which payment is made under this part that would be payable under this part if such drug were furnished to an individual enrolled under this part (C) in paragraph (3)— (i) in subparagraph (A)(i), by striking units billing units (ii) by striking subparagraph (B) and inserting the following: (B) Total number of billing units For purposes of subparagraph (A)(i), the total number of billing units with respect to a part B rebatable drug is determined as follows: (i) Determine the total number of units equal to— (I) the total number of units, as reported under subsection (c)(1)(B) for each National Drug Code of such drug during the calendar quarter that is two calendar quarters prior to the calendar quarter as described in subparagraph (A), minus (II) the total number of units with respect to each National Drug Code of such drug for which payment was made under a State plan under title XIX (or waiver of such plan), as reported by States under section 1927(b)(2)(A) for the rebate period that is the same calendar quarter as described in subclause (I). (ii) Convert the units determined under clause (i) to billing units for the billing and payment code of such drug, using a methodology similar to the methodology used under this section, by dividing the units determined under clause (i) for each National Drug Code of such drug by the billing unit for the billing and payment code of such drug. (iii) Compute the sum of the billing units for each National Drug Code of such drug in clause (ii). . (2) Change of base year for rebate calculation Section 1847A(i) of the Social Security Act (42 U.S.C. 1395w–3a(i)) is amended— (A) in paragraph (3)— (i) in subparagraph (D), by striking July 1, 2021 July 1, 2016 (ii) in subparagraph (E), by striking January 2021 January 2016 (B) in paragraph (4)— (i) in subparagraph (A)— (I) by striking December 1, 2020 December 31, 2015 (II) by striking January 2021 January 2016 (ii) in subparagraph (B), by striking December 1, 2020 December 31, 2015 (iii) in subparagraph (C), by striking January 2021 January 2016 (3) Effective date The amendments made by this subsection shall take effect as if included in the enactment of section 11101 of Public Law 117–169 (b) Covered part D drugs (1) Application of prescription drug inflation rebates to drugs furnished in the commercial market Section 1860D–14B of the Social Security Act ( 42 U.S.C. 1395w–114b (A) in subsection (b)— (i) in paragraph (1)— (I) in subparagraph (A)(i), by striking the total number of units the total number of units that are used to calculate the average manufacturer price of such dosage form and strength with respect to such part D rebatable drug, as reported by the manufacturer of such drug under section 1927 for each month, with respect to such period; (II) by striking subparagraph (B) and inserting the following: (B) Excluded units For purposes of subparagraph (A)(i), the Secretary shall exclude from the total number of units for a dosage form and strength with respect to a part D rebatable drug, with respect to an applicable period, the following: (i) Units of each dosage form and strength of such part D rebatable drug for which payment was made under a State plan under title XIX (or waiver of such plan), as reported by States under section 1927(b)(2)(A). (ii) Units of each dosage form and strength of such part D rebatable drug for which a rebate is paid under section 1847A(i). (iii) Beginning with plan year 2026, units of each dosage form and strength of such part D rebatable drug for which the manufacturer provides a discount under the program under section 340B of the Public Health Service Act. ; and (ii) in paragraph (6), by striking information rebatable covered part D drug dispensed AMP reports (B) by striking subsection (d) and inserting the following: (d) Information For purposes of carrying out this section, the Secretary shall use information submitted by manufacturers under section 1927(b)(3) and information submitted by States under section 1927(b)(2)(A). . (2) Change of base year for rebate calculation Section 1860D–14B of the Social Security Act ( 42 U.S.C. 1395w–114b (A) in subsection (b)(5)— (i) in subparagraph (A)— (I) by striking October 1, 2021 October 1, 2016 (II) by striking January 2021 January 2016 (ii) in subparagraph (C), by striking January 2021 January 2016 (B) in subsection (g)— (i) in paragraph (3)— (I) by striking January 1, 2021 January 1, 2016 (II) by striking October 1, 2021 October 1, 2016 (ii) in paragraph (4), by striking January 2021 January 2016 (3) Effective date The amendments made by this subsection shall take effect as if included in the enactment of section 11102 of Public Law 117–169

Summary: Lower Drug Costs for Families Act This bill applies certain Medicare prescription drug rebate requirements to prescription drugs that are available under private health insurance. Current law requires drug manufacturers to issue rebates to the Centers for Medicare & Medicaid Services for brand-name drugs without generic equivalents under Medicare that (1) cost $100 or more per year per individual, and (2) for which prices increase faster than inflation. Manufacturers that fail to comply are subject to civil penalties. The bill applies these requirements to prescription drugs that are available in the commercial market under private health insurance. It also indexes rebate calculations to drug prices in 2016 (as opposed to 2021).