H. R. 3590—684 
‘‘(e) PROCEDURE.—The provisions of section 1128A (other than 
subsections (a) and (b) and the second sentence of subsection (f)) 
shall apply to a civil money penalty or exclusion under this section 
in the same manner as such provisions apply to a penalty or 
proceeding under section 1128A(a). 
‘‘(f) DEFINITIONS.—In this section, the terms ‘elder justice’, ‘long- 
term care facility’, and ‘law enforcement’ have the meanings given 
those terms in section 2011.’’. 
(c) NATIONAL NURSE AIDE REGISTRY.— 
(1) DEFINITION OF NURSE AIDE.—In this subsection, the 
term ‘‘nurse aide’’ has the meaning given that term in sections 
1819(b)(5)(F) and 1919(b)(5)(F) of the Social Security Act (42 
U.S.C. 1395i–3(b)(5)(F); 1396r(b)(5)(F)). 
(2) STUDY AND REPORT.— 
(A) IN GENERAL.—The Secretary, in consultation with 
appropriate government agencies and private sector 
organizations, shall conduct a study on establishing a 
national nurse aide registry. 
(B) AREAS
EVALUATED.—The study conducted under 
this subsection shall include an evaluation of— 
(i) who should be included in the registry; 
(ii) how such a registry would comply with Federal 
and State privacy laws and regulations; 
(iii) how data would be collected for the registry; 
(iv) what entities and individuals would have 
access to the data collected; 
(v) how the registry would provide appropriate 
information regarding violations of Federal and State 
law by individuals included in the registry; 
(vi) how the functions of a national nurse aide 
registry would be coordinated with the nationwide pro-
gram for national and State background checks on 
direct patient access employees of long-term care facili-
ties and providers under section 4301; and 
(vii) how the information included in State nurse 
aide registries developed and maintained under sec-
tions 1819(e)(2) and 1919(e)(2) of the Social Security 
Act (42 U.S.C. 1395i–3(e)(2); 1396r(e)(2)(2)) would be 
provided as part of a national nurse aide registry. 
(C) CONSIDERATIONS.—In conducting the study and 
preparing the report required under this subsection, the 
Secretary shall take into consideration the findings and 
conclusions 
of 
relevant 
reports 
and 
other 
relevant 
resources, including the following: 
(i) The Department of Health and Human Services 
Office of Inspector General Report, Nurse Aide Reg-
istries: State Compliance and Practices (February 
2005). 
(ii) The General Accounting Office (now known 
as the Government Accountability Office) Report, 
Nursing Homes: More Can Be Done to Protect Resi-
dents from Abuse (March 2002). 
(iii) The Department of Health and Human Serv-
ices Office of the Inspector General Report, Nurse Aide 
Registries: Long-Term Care Facility Compliance and 
Practices (July 2005).
H. R. 3590—685 
(iv) The Department of Health and Human Serv-
ices Health Resources and Services Administration 
Report, Nursing Aides, Home Health Aides, and 
Related Health Care Occupations—National and Local 
Workforce Shortages and Associated Data Needs (2004) 
(in particular with respect to chapter 7 and appendix 
F). 
(v) The 2001 Report to CMS from the School of 
Rural Public Health, Texas A&M University, Pre-
venting Abuse and Neglect in Nursing Homes: The 
Role of Nurse Aide Registries. 
(vi) Information included in State nurse aide reg-
istries developed and maintained under sections 
1819(e)(2) and 1919(e)(2) of the Social Security Act 
(42 U.S.C. 1395i–3(e)(2); 1396r(e)(2)(2)). 
(D) REPORT.—Not later than 18 months after the date 
of enactment of this Act, the Secretary shall submit to 
the Elder Justice Coordinating Council established under 
section 2021 of the Social Security Act, as added by section 
1805(a), the Committee on Finance of the Senate, and 
the Committee on Ways and Means and the Committee 
on Energy and Commerce of the House of Representatives 
a report containing the findings and recommendations of 
the study conducted under this paragraph. 
(E) FUNDING LIMITATION.—Funding for the study con-
ducted under this subsection shall not exceed $500,000. 
(3) CONGRESSIONAL
ACTION.—After receiving the report 
submitted by the Secretary under paragraph (2)(D), the Com-
mittee on Finance of the Senate and the Committee on Ways 
and Means and the Committee on Energy and Commerce of 
the House of Representatives shall, as they deem appropriate, 
take action based on the recommendations contained in the 
report. 
(4) AUTHORIZATION OF APPROPRIATIONS.—There are author-
ized to be appropriated such sums as are necessary for the 
purpose of carrying out this subsection. 
(d) CONFORMING AMENDMENTS.— 
(1) TITLE XX.—Title XX of the Social Security Act (42 U.S.C. 
1397 et seq.), as amended by section 6703(a), is amended— 
(A) in the heading of section 2001, by striking ‘‘TITLE’’ 
and inserting ‘‘SUBTITLE’’; and 
(B) in subtitle 1, by striking ‘‘this title’’ each place 
it appears and inserting ‘‘this subtitle’’. 
(2) TITLE IV.—Title IV of the Social Security Act (42 U.S.C. 
601 et seq.) is amended— 
(A) in section 404(d)— 
(i) in paragraphs (1)(A), (2)(A), and (3)(B), by 
inserting ‘‘subtitle 1 of’’ before ‘‘title XX’’ each place 
it appears; 
(ii) in the heading of paragraph (2), by inserting 
‘‘SUBTITLE 1 OF’’ before ‘‘TITLE XX’’; and 
(iii) in the heading of paragraph (3)(B), by inserting 
‘‘SUBTITLE 1 OF’’ before ‘‘TITLE XX’’; and 
(B) in sections 422(b), 471(a)(4), 472(h)(1), and 
473(b)(2), by inserting ‘‘subtitle 1 of’’ before ‘‘title XX’’ each 
place it appears.
H. R. 3590—686 
(3) TITLE XI.—Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended— 
(A) in section 1128(h)(3)— 
(i) by inserting ‘‘subtitle 1 of’’ before ‘‘title XX’’; 
and 
(ii) by striking ‘‘such title’’ and inserting ‘‘such 
subtitle’’; and 
(B) in section 1128A(i)(1), by inserting ‘‘subtitle 1 of’’ 
before ‘‘title XX’’. 
Subtitle I—Sense of the Senate Regarding 
Medical Malpractice 
SEC. 6801. SENSE OF THE SENATE REGARDING MEDICAL MAL-
PRACTICE. 
It is the sense of the Senate that— 
(1) health care reform presents an opportunity to address 
issues related to medical malpractice and medical liability 
insurance; 
(2) States should be encouraged to develop and test alter-
natives to the existing civil litigation system as a way of 
improving patient safety, reducing medical errors, encouraging 
the efficient resolution of disputes, increasing the availability 
of prompt and fair resolution of disputes, and improving access 
to liability insurance, while preserving an individual’s right 
to seek redress in court; and 
(3) Congress should consider establishing a State dem-
onstration program to evaluate alternatives to the existing 
civil litigation system with respect to the resolution of medical 
malpractice claims. 
TITLE VII—IMPROVING ACCESS TO 
INNOVATIVE MEDICAL THERAPIES 
Subtitle A—Biologics Price Competition 
and Innovation 
SEC. 7001. SHORT TITLE. 
(a) IN GENERAL.—This subtitle may be cited as the ‘‘Biologics 
Price Competition and Innovation Act of 2009’’. 
(b) SENSE OF THE SENATE.—It is the sense of the Senate that 
a biosimilars pathway balancing innovation and consumer interests 
should be established. 
SEC. 7002. APPROVAL PATHWAY FOR BIOSIMILAR BIOLOGICAL PROD-
UCTS. 
(a) LICENSURE
OF BIOLOGICAL PRODUCTS
AS BIOSIMILAR
OR 
INTERCHANGEABLE.—Section 351 of the Public Health Service Act 
(42 U.S.C. 262) is amended— 
(1) in subsection (a)(1)(A), by inserting ‘‘under this sub-
section or subsection (k)’’ after ‘‘biologics license’’; and 
(2) by adding at the end the following:
H. R. 3590—687 
‘‘(k) LICENSURE OF BIOLOGICAL PRODUCTS AS BIOSIMILAR OR 
INTERCHANGEABLE.— 
‘‘(1) IN GENERAL.—Any person may submit an application 
for licensure of a biological product under this subsection. 
‘‘(2) CONTENT.— 
‘‘(A) IN GENERAL.— 
‘‘(i) REQUIRED INFORMATION.—An application sub-
mitted under this subsection shall include information 
demonstrating that— 
‘‘(I) the biological product is biosimilar to a 
reference product based upon data derived from— 
‘‘(aa) analytical studies that demonstrate 
that the biological product is highly similar 
to the reference product notwithstanding 
minor differences in clinically inactive compo-
nents; 
‘‘(bb) animal studies (including the assess-
ment of toxicity); and 
‘‘(cc) a clinical study or studies (including 
the 
assessment 
of 
immunogenicity 
and 
pharmacokinetics or pharmacodynamics) that 
are sufficient to demonstrate safety, purity, 
and potency in 1 or more appropriate condi-
tions of use for which the reference product 
is licensed and intended to be used and for 
which licensure is sought for the biological 
product; 
‘‘(II) the biological product and reference 
product utilize the same mechanism or mecha-
nisms of action for the condition or conditions of 
use prescribed, recommended, or suggested in the 
proposed labeling, but only to the extent the 
mechanism or mechanisms of action are known 
for the reference product; 
‘‘(III) the condition or conditions of use pre-
scribed, recommended, or suggested in the labeling 
proposed for the biological product have been pre-
viously approved for the reference product; 
‘‘(IV) the route of administration, the dosage 
form, and the strength of the biological product 
are the same as those of the reference product; 
and 
‘‘(V) the facility in which the biological product 
is manufactured, processed, packed, or held meets 
standards designed to assure that the biological 
product continues to be safe, pure, and potent. 
‘‘(ii) DETERMINATION
BY
SECRETARY.—The Sec-
retary may determine, in the Secretary’s discretion, 
that an element described in clause (i)(I) is unnecessary 
in an application submitted under this subsection. 
‘‘(iii) ADDITIONAL
INFORMATION.—An application 
submitted under this subsection— 
‘‘(I) shall include publicly-available informa-
tion regarding the Secretary’s previous determina-
tion that the reference product is safe, pure, and 
potent; and
H. R. 3590—688 
‘‘(II) may include any additional information 
in support of the application, including publicly- 
available information with respect to the reference 
product or another biological product. 
‘‘(B) 
INTERCHANGEABILITY.—An 
application 
(or 
a 
supplement to an application) submitted under this sub-
section may include information demonstrating that the 
biological product meets the standards described in para-
graph (4). 
‘‘(3) EVALUATION
BY
SECRETARY.—Upon review of an 
application (or a supplement to an application) submitted under 
this subsection, the Secretary shall license the biological 
product under this subsection if— 
‘‘(A) the Secretary determines that the information sub-
mitted in the application (or the supplement) is sufficient 
to show that the biological product— 
‘‘(i) is biosimilar to the reference product; or 
‘‘(ii) meets the standards described in paragraph 
(4), and therefore is interchangeable with the reference 
product; and 
‘‘(B) the applicant (or other appropriate person) con-
sents to the inspection of the facility that is the subject 
of the application, in accordance with subsection (c). 
‘‘(4) SAFETY STANDARDS FOR DETERMINING INTERCHANGE-
ABILITY.—Upon review of an application submitted under this 
subsection or any supplement to such application, the Secretary 
shall determine the biological product to be interchangeable 
with the reference product if the Secretary determines that 
the information submitted in the application (or a supplement 
to such application) is sufficient to show that— 
‘‘(A) the biological product— 
‘‘(i) is biosimilar to the reference product; and 
‘‘(ii) can be expected to produce the same clinical 
result as the reference product in any given patient; 
and 
‘‘(B) for a biological product that is administered more 
than once to an individual, the risk in terms of safety 
or diminished efficacy of alternating or switching between 
use of the biological product and the reference product 
is not greater than the risk of using the reference product 
without such alternation or switch. 
‘‘(5) GENERAL RULES.— 
‘‘(A) ONE
REFERENCE
PRODUCT
PER
APPLICATION.—A 
biological product, in an application submitted under this 
subsection, may not be evaluated against more than 1 
reference product. 
‘‘(B) REVIEW.—An application submitted under this 
subsection shall be reviewed by the division within the 
Food and Drug Administration that is responsible for the 
review and approval of the application under which the 
reference product is licensed. 
‘‘(C) RISK EVALUATION AND MITIGATION STRATEGIES.— 
The authority of the Secretary with respect to risk evalua-
tion and mitigation strategies under the Federal Food, 
Drug, and Cosmetic Act shall apply to biological products 
licensed under this subsection in the same manner as
H. R. 3590—690 
in a new indication, route of administration, dosing 
schedule, dosage form, delivery system, delivery 
device, or strength; or 
‘‘(II) a modification to the structure of the 
biological product that does not result in a change 
in safety, purity, or potency. 
‘‘(8) GUIDANCE DOCUMENTS.— 
‘‘(A) IN
GENERAL.—The Secretary may, after oppor-
tunity for public comment, issue guidance in accordance, 
except as provided in subparagraph (B)(i), with section 
701(h) of the Federal Food, Drug, and Cosmetic Act with 
respect to the licensure of a biological product under this 
subsection. Any such guidance may be general or specific. 
‘‘(B) PUBLIC COMMENT.— 
‘‘(i) IN GENERAL.—The Secretary shall provide the 
public an opportunity to comment on any proposed 
guidance issued under subparagraph (A) before issuing 
final guidance. 
‘‘(ii) INPUT
REGARDING
MOST
VALUABLE
GUID-
ANCE.—The Secretary shall establish a process through 
which the public may provide the Secretary with input 
regarding priorities for issuing guidance. 
‘‘(C) NO
REQUIREMENT
FOR
APPLICATION
CONSIDER-
ATION.—The issuance (or non-issuance) of guidance under 
subparagraph (A) shall not preclude the review of, or action 
on, an application submitted under this subsection. 
‘‘(D) REQUIREMENT FOR PRODUCT CLASS-SPECIFIC GUID-
ANCE.—If the Secretary issues product class-specific guid-
ance under subparagraph (A), such guidance shall include 
a description of— 
‘‘(i) the criteria that the Secretary will use to deter-
mine whether a biological product is highly similar 
to a reference product in such product class; and 
‘‘(ii) the criteria, if available, that the Secretary 
will use to determine whether a biological product 
meets the standards described in paragraph (4). 
‘‘(E) CERTAIN PRODUCT CLASSES.— 
‘‘(i) GUIDANCE.—The Secretary may indicate in a 
guidance document that the science and experience, 
as of the date of such guidance, with respect to a 
product or product class (not including any recom-
binant protein) does not allow approval of an applica-
tion for a license as provided under this subsection 
for such product or product class. 
‘‘(ii) MODIFICATION OR REVERSAL.—The Secretary 
may issue a subsequent guidance document under 
subparagraph (A) to modify or reverse a guidance docu-
ment under clause (i). 
‘‘(iii) NO EFFECT ON ABILITY TO DENY LICENSE.— 
Clause (i) shall not be construed to require the Sec-
retary to approve a product with respect to which 
the Secretary has not indicated in a guidance document 
that the science and experience, as described in clause 
(i), does not allow approval of such an application. 
‘‘(l) PATENTS.— 
‘‘(1) CONFIDENTIAL
ACCESS
TO
SUBSECTION (k) APPLICA-
TION.—
H. R. 3590—691 
‘‘(A) APPLICATION
OF
PARAGRAPH.—Unless otherwise 
agreed to by a person that submits an application under 
subsection (k) (referred to in this subsection as the ‘sub-
section (k) applicant’) and the sponsor of the application 
for the reference product (referred to in this subsection 
as the ‘reference product sponsor’), the provisions of this 
paragraph shall apply to the exchange of information 
described in this subsection. 
‘‘(B) IN GENERAL.— 
‘‘(i) PROVISION OF CONFIDENTIAL INFORMATION.— 
When a subsection (k) applicant submits an application 
under subsection (k), such applicant shall provide to 
the persons described in clause (ii), subject to the terms 
of this paragraph, confidential access to the informa-
tion required to be produced pursuant to paragraph 
(2) and any other information that the subsection (k) 
applicant determines, in its sole discretion, to be appro-
priate (referred to in this subsection as the ‘confidential 
information’). 
‘‘(ii) RECIPIENTS
OF
INFORMATION.—The persons 
described in this clause are the following: 
‘‘(I) OUTSIDE COUNSEL.—One or more attorneys 
designated by the reference product sponsor who 
are employees of an entity other than the reference 
product sponsor (referred to in this paragraph as 
the ‘outside counsel’), provided that such attorneys 
do not engage, formally or informally, in patent 
prosecution relevant or related to the reference 
product. 
‘‘(II) IN-HOUSE COUNSEL.—One attorney that 
represents the reference product sponsor who is 
an employee of the reference product sponsor, pro-
vided that such attorney does not engage, formally 
or informally, in patent prosecution relevant or 
related to the reference product. 
‘‘(iii) PATENT OWNER ACCESS.—A representative of 
the owner of a patent exclusively licensed to a reference 
product sponsor with respect to the reference product 
and who has retained a right to assert the patent 
or participate in litigation concerning the patent may 
be provided the confidential information, provided that 
the representative informs the reference product 
sponsor and the subsection (k) applicant of his or her 
agreement to be subject to the confidentiality provi-
sions set forth in this paragraph, including those under 
clause (ii). 
‘‘(C) LIMITATION
ON
DISCLOSURE.—No person that 
receives confidential information pursuant to subparagraph 
(B) shall disclose any confidential information to any other 
person or entity, including the reference product sponsor 
employees, outside scientific consultants, or other outside 
counsel retained by the reference product sponsor, without 
the prior written consent of the subsection (k) applicant, 
which shall not be unreasonably withheld. 
‘‘(D) USE OF CONFIDENTIAL INFORMATION.—Confidential 
information shall be used for the sole and exclusive purpose 
of determining, with respect to each patent assigned to
H. R. 3590—692 
or exclusively licensed by the reference product sponsor, 
whether a claim of patent infringement could reasonably 
be asserted if the subsection (k) applicant engaged in the 
manufacture, use, offering for sale, sale, or importation 
into the United States of the biological product that is 
the subject of the application under subsection (k). 
‘‘(E) OWNERSHIP OF CONFIDENTIAL INFORMATION.—The 
confidential information disclosed under this paragraph is, 
and shall remain, the property of the subsection (k) 
applicant. By providing the confidential information pursu-
ant to this paragraph, the subsection (k) applicant does 
not provide the reference product sponsor or the outside 
counsel any interest in or license to use the confidential 
information, for purposes other than those specified in 
subparagraph (D). 
‘‘(F) EFFECT OF INFRINGEMENT ACTION.—In the event 
that the reference product sponsor files a patent infringe-
ment suit, the use of confidential information shall continue 
to be governed by the terms of this paragraph until such 
time as a court enters a protective order regarding the 
information. Upon entry of such order, the subsection (k) 
applicant may redesignate confidential information in 
accordance with the terms of that order. No confidential 
information shall be included in any publicly-available com-
plaint or other pleading. In the event that the reference 
product sponsor does not file an infringement action by 
the date specified in paragraph (6), the reference product 
sponsor shall return or destroy all confidential information 
received under this paragraph, provided that if the ref-
erence product sponsor opts to destroy such information, 
it will confirm destruction in writing to the subsection 
(k) applicant. 
‘‘(G) RULE OF CONSTRUCTION.—Nothing in this para-
graph shall be construed— 
‘‘(i) as an admission by the subsection (k) applicant 
regarding the validity, enforceability, or infringement 
of any patent; or 
‘‘(ii) as an agreement or admission by the sub-
section (k) applicant with respect to the competency, 
relevance, or materiality of any confidential informa-
tion. 
‘‘(H) EFFECT OF VIOLATION.—The disclosure of any con-
fidential information in violation of this paragraph shall 
be deemed to cause the subsection (k) applicant to suffer 
irreparable harm for which there is no adequate legal 
remedy and the court shall consider immediate injunctive 
relief to be an appropriate and necessary remedy for any 
violation or threatened violation of this paragraph. 
‘‘(2) SUBSECTION (k) APPLICATION INFORMATION.—Not later 
than 20 days after the Secretary notifies the subsection (k) 
applicant that the application has been accepted for review, 
the subsection (k) applicant— 
‘‘(A) shall provide to the reference product sponsor 
a copy of the application submitted to the Secretary under 
subsection (k), and such other information that describes 
the process or processes used to manufacture the biological 
product that is the subject of such application; and
H. R. 3590—693 
‘‘(B) may provide to the reference product sponsor addi-
tional information requested by or on behalf of the reference 
product sponsor. 
‘‘(3) LIST AND DESCRIPTION OF PATENTS.— 
‘‘(A) LIST BY REFERENCE PRODUCT SPONSOR.—Not later 
than 60 days after the receipt of the application and 
information under paragraph (2), the reference product 
sponsor shall provide to the subsection (k) applicant— 
‘‘(i) a list of patents for which the reference product 
sponsor believes a claim of patent infringement could 
reasonably be asserted by the reference product 
sponsor, or by a patent owner that has granted an 
exclusive license to the reference product sponsor with 
respect to the reference product, if a person not licensed 
by the reference product sponsor engaged in the 
making, using, offering to sell, selling, or importing 
into the United States of the biological product that 
is the subject of the subsection (k) application; and 
‘‘(ii) an identification of the patents on such list 
that the reference product sponsor would be prepared 
to license to the subsection (k) applicant. 
‘‘(B) LIST
AND
DESCRIPTION
BY
SUBSECTION
(k) 
APPLICANT.—Not later than 60 days after receipt of the 
list under subparagraph (A), the subsection (k) applicant— 
‘‘(i) may provide to the reference product sponsor 
a list of patents to which the subsection (k) applicant 
believes a claim of patent infringement could reason-
ably be asserted by the reference product sponsor if 
a person not licensed by the reference product sponsor 
engaged in the making, using, offering to sell, selling, 
or importing into the United States of the biological 
product that is the subject of the subsection (k) applica-
tion; 
‘‘(ii) shall provide to the reference product sponsor, 
with respect to each patent listed by the reference 
product sponsor under subparagraph (A) or listed by 
the subsection (k) applicant under clause (i)— 
‘‘(I) a detailed statement that describes, on 
a claim by claim basis, the factual and legal basis 
of the opinion of the subsection (k) applicant that 
such patent is invalid, unenforceable, or will not 
be infringed by the commercial marketing of the 
biological product that is the subject of the sub-
section (k) application; or 
‘‘(II) a statement that the subsection (k) 
applicant does not intend to begin commercial mar-
keting of the biological product before the date 
that such patent expires; and 
‘‘(iii) shall provide to the reference product sponsor 
a response regarding each patent identified by the 
reference product sponsor under subparagraph (A)(ii). 
‘‘(C) DESCRIPTION BY REFERENCE PRODUCT SPONSOR.— 
Not later than 60 days after receipt of the list and state-
ment under subparagraph (B), the reference product 
sponsor shall provide to the subsection (k) applicant a 
detailed statement that describes, with respect to each 
patent described in subparagraph (B)(ii)(I), on a claim by
H. R. 3590—694 
claim basis, the factual and legal basis of the opinion 
of the reference product sponsor that such patent will be 
infringed by the commercial marketing of the biological 
product that is the subject of the subsection (k) application 
and a response to the statement concerning validity and 
enforceability provided under subparagraph (B)(ii)(I). 
‘‘(4) PATENT RESOLUTION NEGOTIATIONS.— 
‘‘(A) IN GENERAL.—After receipt by the subsection (k) 
applicant of the statement under paragraph (3)(C), the 
reference product sponsor and the subsection (k) applicant 
shall engage in good faith negotiations to agree on which, 
if any, patents listed under paragraph (3) by the subsection 
(k) applicant or the reference product sponsor shall be 
the subject of an action for patent infringement under 
paragraph (6). 
‘‘(B) FAILURE TO REACH AGREEMENT.—If, within 15 days 
of beginning negotiations under subparagraph (A), the sub-
section (k) applicant and the reference product sponsor 
fail to agree on a final and complete list of which, if 
any, patents listed under paragraph (3) by the subsection 
(k) applicant or the reference product sponsor shall be 
the subject of an action for patent infringement under 
paragraph (6), the provisions of paragraph (5) shall apply 
to the parties. 
‘‘(5) PATENT RESOLUTION IF NO AGREEMENT.— 
‘‘(A) 
NUMBER
OF
PATENTS.—The 
subsection 
(k) 
applicant shall notify the reference product sponsor of the 
number of patents that such applicant will provide to the 
reference product sponsor under subparagraph (B)(i)(I). 
‘‘(B) EXCHANGE OF PATENT LISTS.— 
‘‘(i) IN GENERAL.—On a date agreed to by the sub-
section (k) applicant and the reference product sponsor, 
but in no case later than 5 days after the subsection 
(k) applicant notifies the reference product sponsor 
under subparagraph (A), the subsection (k) applicant 
and the reference product sponsor shall simultaneously 
exchange— 
‘‘(I) the list of patents that the subsection (k) 
applicant believes should be the subject of an 
action for patent infringement under paragraph 
(6); and 
‘‘(II) the list of patents, in accordance with 
clause (ii), that the reference product sponsor 
believes should be the subject of an action for 
patent infringement under paragraph (6). 
‘‘(ii) NUMBER OF PATENTS LISTED BY REFERENCE 
PRODUCT SPONSOR.— 
‘‘(I) IN
GENERAL.—Subject to subclause (II), 
the number of patents listed by the reference 
product sponsor under clause (i)(II) may not exceed 
the number of patents listed by the subsection 
(k) applicant under clause (i)(I). 
‘‘(II) EXCEPTION.—If a subsection (k) applicant 
does not list any patent under clause (i)(I), the 
reference product sponsor may list 1 patent under 
clause (i)(II). 
‘‘(6) IMMEDIATE PATENT INFRINGEMENT ACTION.—
H. R. 3590—698 
‘‘(D) the court shall order a permanent injunction prohib-
iting any infringement of the patent by the biological product 
involved in the infringement until a date which is not earlier 
than the date of the expiration of the patent that has been 
infringed under paragraph (2)(C), provided the patent is the 
subject of a final court decision, as defined in section 351(k)(6) 
of the Public Health Service Act, in an action for infringement 
of the patent under section 351(l)(6) of such Act, and the 
biological product has not yet been approved because of section 
351(k)(7) of such Act.’’; and 
(iv) in the matter following subparagraph (D) (as 
added by clause (iii)), by striking ‘‘and (C)’’ and 
inserting ‘‘(C), and (D)’’; and 
(C) by adding at the end the following: 
‘‘(6)(A) Subparagraph (B) applies, in lieu of paragraph (4), in 
the case of a patent— 
‘‘(i) that is identified, as applicable, in the list of patents 
described in section 351(l)(4) of the Public Health Service Act 
or the lists of patents described in section 351(l)(5)(B) of such 
Act with respect to a biological product; and 
‘‘(ii) for which an action for infringement of the patent 
with respect to the biological product— 
‘‘(I) was brought after the expiration of the 30-day 
period described in subparagraph (A) or (B), as applicable, 
of section 351(l)(6) of such Act; or 
‘‘(II) was brought before the expiration of the 30-day 
period described in subclause (I), but which was dismissed 
without prejudice or was not prosecuted to judgment in 
good faith. 
‘‘(B) In an action for infringement of a patent described in 
subparagraph (A), the sole and exclusive remedy that may be 
granted by a court, upon a finding that the making, using, offering 
to sell, selling, or importation into the United States of the biological 
product that is the subject of the action infringed the patent, shall 
be a reasonable royalty. 
‘‘(C) The owner of a patent that should have been included 
in the list described in section 351(l)(3)(A) of the Public Health 
Service Act, including as provided under section 351(l)(7) of such 
Act for a biological product, but was not timely included in such 
list, may not bring an action under this section for infringement 
of the patent with respect to the biological product.’’. 
(2) CONFORMING
AMENDMENT
UNDER
TITLE 28.—Section 
2201(b) of title 28, United States Code, is amended by inserting 
before the period the following: ‘‘, or section 351 of the Public 
Health Service Act’’. 
(d) CONFORMING AMENDMENTS UNDER
THE FEDERAL FOOD, 
DRUG, AND COSMETIC ACT.— 
(1) CONTENT
AND
REVIEW
OF
APPLICATIONS.—Section 
505(b)(5)(B) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355(b)(5)(B)) is amended by inserting before the period 
at the end of the first sentence the following: ‘‘or, with respect 
to an applicant for approval of a biological product under section 
351(k) of the Public Health Service Act, any necessary clinical 
study or studies’’. 
(2) NEW ACTIVE INGREDIENT.—Section 505B of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 355c) is amended 
by adding at the end the following:
H. R. 3590—699 
‘‘(n) NEW ACTIVE INGREDIENT.— 
‘‘(1) 
NON-INTERCHANGEABLE
BIOSIMILAR
BIOLOGICAL 
PRODUCT.—A biological product that is biosimilar to a reference 
product under section 351 of the Public Health Service Act, 
and that the Secretary has not determined to meet the stand-
ards described in subsection (k)(4) of such section for inter-
changeability with the reference product, shall be considered 
to have a new active ingredient under this section. 
‘‘(2) INTERCHANGEABLE BIOSIMILAR BIOLOGICAL PRODUCT.— 
A biological product that is interchangeable with a reference 
product under section 351 of the Public Health Service Act 
shall not be considered to have a new active ingredient under 
this section.’’. 
(e) PRODUCTS PREVIOUSLY APPROVED UNDER SECTION 505.— 
(1) REQUIREMENT TO FOLLOW SECTION 351.—Except as pro-
vided in paragraph (2), an application for a biological product 
shall be submitted under section 351 of the Public Health 
Service Act (42 U.S.C. 262) (as amended by this Act). 
(2) EXCEPTION.—An application for a biological product may 
be submitted under section 505 of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 355) if— 
(A) such biological product is in a product class for 
which a biological product in such product class is the 
subject of an application approved under such section 505 
not later than the date of enactment of this Act; and 
(B) such application— 
(i) has been submitted to the Secretary of Health 
and Human Services (referred to in this subtitle as 
the ‘‘Secretary’’) before the date of enactment of this 
Act; or 
(ii) is submitted to the Secretary not later than 
the date that is 10 years after the date of enactment 
of this Act. 
(3) 
LIMITATION.—Notwithstanding 
paragraph 
(2), 
an 
application for a biological product may not be submitted under 
section 505 of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355) if there is another biological product approved 
under subsection (a) of section 351 of the Public Health Service 
Act that could be a reference product with respect to such 
application (within the meaning of such section 351) if such 
application were submitted under subsection (k) of such section 
351. 
(4) DEEMED APPROVED UNDER SECTION 351.—An approved 
application for a biological product under section 505 of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) shall 
be deemed to be a license for the biological product under 
such section 351 on the date that is 10 years after the date 
of enactment of this Act. 
(5) DEFINITIONS.—For purposes of this subsection, the term 
‘‘biological product’’ has the meaning given such term under 
section 351 of the Public Health Service Act (42 U.S.C. 262) 
(as amended by this Act). 
(f) FOLLOW-ON BIOLOGICS USER FEES.— 
(1) DEVELOPMENT OF USER FEES FOR BIOSIMILAR BIOLOGICAL 
PRODUCTS.— 
(A) IN GENERAL.—Beginning not later than October 
1, 2010, the Secretary shall develop recommendations to
H. R. 3590—700 
present to Congress with respect to the goals, and plans 
for meeting the goals, for the process for the review of 
biosimilar biological product applications submitted under 
section 351(k) of the Public Health Service Act (as added 
by this Act) for the first 5 fiscal years after fiscal year 
2012. In developing such recommendations, the Secretary 
shall consult with— 
(i) the Committee on Health, Education, Labor, 
and Pensions of the Senate; 
(ii) the Committee on Energy and Commerce of 
the House of Representatives; 
(iii) scientific and academic experts; 
(iv) health care professionals; 
(v) representatives of patient and consumer 
advocacy groups; and 
(vi) the regulated industry. 
(B) PUBLIC REVIEW OF RECOMMENDATIONS.—After nego-
tiations with the regulated industry, the Secretary shall— 
(i) present the recommendations developed under 
subparagraph (A) to the Congressional committees 
specified in such subparagraph; 
(ii) publish such recommendations in the Federal 
Register; 
(iii) provide for a period of 30 days for the public 
to provide written comments on such recommendations; 
(iv) hold a meeting at which the public may present 
its views on such recommendations; and 
(v) after consideration of such public views and 
comments, revise such recommendations as necessary. 
(C) TRANSMITTAL
OF
RECOMMENDATIONS.—Not later 
than January 15, 2012, the Secretary shall transmit to 
Congress the revised recommendations under subpara-
graph (B), a summary of the views and comments received 
under such subparagraph, and any changes made to the 
recommendations in response to such views and comments. 
(2) ESTABLISHMENT OF USER FEE PROGRAM.—It is the sense 
of the Senate that, based on the recommendations transmitted 
to Congress by the Secretary pursuant to paragraph (1)(C), 
Congress should authorize a program, effective on October 1, 
2012, for the collection of user fees relating to the submission 
of biosimilar biological product applications under section 
351(k) of the Public Health Service Act (as added by this 
Act). 
(3) TRANSITIONAL
PROVISIONS
FOR
USER
FEES
FOR
BIO-
SIMILAR BIOLOGICAL PRODUCTS.— 
(A) APPLICATION OF THE PRESCRIPTION DRUG USER FEE 
PROVISIONS.—Section 735(1)(B) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 379g(1)(B)) is amended by 
striking ‘‘section 351’’ and inserting ‘‘subsection (a) or (k) 
of section 351’’. 
(B) EVALUATION OF COSTS OF REVIEWING BIOSIMILAR 
BIOLOGICAL
PRODUCT
APPLICATIONS.—During the period 
beginning on the date of enactment of this Act and ending 
on October 1, 2010, the Secretary shall collect and evaluate 
data regarding the costs of reviewing applications for 
biological products submitted under section 351(k) of the
H. R. 3590—701 
Public Health Service Act (as added by this Act) during 
such period. 
(C) AUDIT.— 
(i) IN GENERAL.—On the date that is 2 years after 
first receiving a user fee applicable to an application 
for a biological product under section 351(k) of the 
Public Health Service Act (as added by this Act), and 
on a biennial basis thereafter until October 1, 2013, 
the Secretary shall perform an audit of the costs of 
reviewing such applications under such section 351(k). 
Such an audit shall compare— 
(I) the costs of reviewing such applications 
under such section 351(k) to the amount of the 
user fee applicable to such applications; and 
(II)(aa) such ratio determined under subclause 
(I); to 
(bb) the ratio of the costs of reviewing applica-
tions for biological products under section 351(a) 
of such Act (as amended by this Act) to the amount 
of the user fee applicable to such applications 
under such section 351(a). 
(ii) ALTERATION OF USER FEE.—If the audit per-
formed under clause (i) indicates that the ratios com-
pared under subclause (II) of such clause differ by 
more than 5 percent, then the Secretary shall alter 
the user fee applicable to applications submitted under 
such section 351(k) to more appropriately account for 
the costs of reviewing such applications. 
(iii) ACCOUNTING STANDARDS.—The Secretary shall 
perform an audit under clause (i) in conformance with 
the accounting principles, standards, and requirements 
prescribed by the Comptroller General of the United 
States under section 3511 of title 31, United State 
Code, to ensure the validity of any potential variability. 
(4) AUTHORIZATION OF APPROPRIATIONS.—There is author-
ized to be appropriated to carry out this subsection such sums 
as may be necessary for each of fiscal years 2010 through 
2012. 
(g) PEDIATRIC STUDIES OF BIOLOGICAL PRODUCTS.— 
(1) IN GENERAL.—Section 351 of the Public Health Service 
Act (42 U.S.C. 262) is amended by adding at the end the 
following: 
‘‘(m) PEDIATRIC STUDIES.— 
‘‘(1) APPLICATION OF CERTAIN PROVISIONS.—The provisions 
of subsections (a), (d), (e), (f), (i), (j), (k), (l), (p), and (q) of 
section 505A of the Federal Food, Drug, and Cosmetic Act 
shall apply with respect to the extension of a period under 
paragraphs (2) and (3) to the same extent and in the same 
manner as such provisions apply with respect to the extension 
of a period under subsection (b) or (c) of section 505A of the 
Federal Food, Drug, and Cosmetic Act. 
‘‘(2) MARKET
EXCLUSIVITY
FOR
NEW
BIOLOGICAL
PROD-
UCTS.—If, prior to approval of an application that is submitted 
under subsection (a), the Secretary determines that information 
relating to the use of a new biological product in the pediatric 
population may produce health benefits in that population, 
the Secretary makes a written request for pediatric studies
H. R. 3590—702 
(which shall include a timeframe for completing such studies), 
the applicant agrees to the request, such studies are completed 
using appropriate formulations for each age group for which 
the study is requested within any such timeframe, and the 
reports thereof are submitted and accepted in accordance with 
section 505A(d)(3) of the Federal Food, Drug, and Cosmetic 
Act— 
‘‘(A) the periods for such biological product referred 
to in subsection (k)(7) are deemed to be 4 years and 6 
months rather than 4 years and 12 years and 6 months 
rather than 12 years; and 
‘‘(B) if the biological product is designated under section 
526 for a rare disease or condition, the period for such 
biological product referred to in section 527(a) is deemed 
to be 7 years and 6 months rather than 7 years. 
‘‘(3) 
MARKET
EXCLUSIVITY
FOR
ALREADY-MARKETED 
BIOLOGICAL
PRODUCTS.—If the Secretary determines that 
information relating to the use of a licensed biological product 
in the pediatric population may produce health benefits in 
that population and makes a written request to the holder 
of an approved application under subsection (a) for pediatric 
studies (which shall include a timeframe for completing such 
studies), the holder agrees to the request, such studies are 
completed using appropriate formulations for each age group 
for which the study is requested within any such timeframe, 
and the reports thereof are submitted and accepted in accord-
ance with section 505A(d)(3) of the Federal Food, Drug, and 
Cosmetic Act— 
‘‘(A) the periods for such biological product referred 
to in subsection (k)(7) are deemed to be 4 years and 6 
months rather than 4 years and 12 years and 6 months 
rather than 12 years; and 
‘‘(B) if the biological product is designated under section 
526 for a rare disease or condition, the period for such 
biological product referred to in section 527(a) is deemed 
to be 7 years and 6 months rather than 7 years. 
‘‘(4) EXCEPTION.—The Secretary shall not extend a period 
referred to in paragraph (2)(A), (2)(B), (3)(A), or (3)(B) if the 
determination under section 505A(d)(3) is made later than 9 
months prior to the expiration of such period.’’. 
(2) STUDIES REGARDING PEDIATRIC RESEARCH.— 
(A) PROGRAM FOR PEDIATRIC STUDY OF DRUGS.—Sub-
section (a)(1) of section 409I of the Public Health Service 
Act (42 U.S.C. 284m) is amended by inserting ‘‘, biological 
products,’’ after ‘‘including drugs’’. 
(B) INSTITUTE OF MEDICINE STUDY.—Section 505A(p) 
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355b(p)) is amended by striking paragraphs (4) and (5) 
and inserting the following: 
‘‘(4) review and assess the number and importance of 
biological products for children that are being tested as a result 
of the amendments made by the Biologics Price Competition 
and Innovation Act of 2009 and the importance for children, 
health care providers, parents, and others of labeling changes 
made as a result of such testing;
H. R. 3590—703 
‘‘(5) review and assess the number, importance, and 
prioritization of any biological products that are not being tested 
for pediatric use; and 
‘‘(6) offer recommendations for ensuring pediatric testing 
of biological products, including consideration of any incentives, 
such as those provided under this section or section 351(m) 
of the Public Health Service Act.’’. 
(h) ORPHAN PRODUCTS.—If a reference product, as defined in 
section 351 of the Public Health Service Act (42 U.S.C. 262) (as 
amended by this Act) has been designated under section 526 of 
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for 
a rare disease or condition, a biological product seeking approval 
for such disease or condition under subsection (k) of such section 
351 as biosimilar to, or interchangeable with, such reference product 
may be licensed by the Secretary only after the expiration for 
such reference product of the later of— 
(1) the 7-year period described in section 527(a) of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)); 
and 
(2) the 12-year period described in subsection (k)(7) of 
such section 351. 
SEC. 7003. SAVINGS. 
(a) DETERMINATION.—The Secretary of the Treasury, in con-
sultation with the Secretary of Health and Human Services, shall 
for each fiscal year determine the amount of savings to the Federal 
Government as a result of the enactment of this subtitle. 
(b) USE.—Notwithstanding any other provision of this subtitle 
(or an amendment made by this subtitle), the savings to the Federal 
Government generated as a result of the enactment of this subtitle 
shall be used for deficit reduction. 
Subtitle B—More Affordable Medicines for 
Children and Underserved Communities 
SEC. 7101. EXPANDED PARTICIPATION IN 340B PROGRAM. 
(a) EXPANSION OF COVERED ENTITIES RECEIVING DISCOUNTED 
PRICES.—Section 340B(a)(4) of the Public Health Service Act (42 
U.S.C. 256b(a)(4)) is amended by adding at the end the following: 
‘‘(M) A children’s hospital excluded from the Medicare 
prospective 
payment 
system 
pursuant 
to 
section 
1886(d)(1)(B)(iii) of the Social Security Act, or a free- 
standing cancer hospital excluded from the Medicare 
prospective 
payment 
system 
pursuant 
to 
section 
1886(d)(1)(B)(v) of the Social Security Act, that would meet 
the requirements of subparagraph (L), including the dis-
proportionate share adjustment percentage requirement 
under clause (ii) of such subparagraph, if the hospital were 
a subsection (d) hospital as defined by section 1886(d)(1)(B) 
of the Social Security Act. 
‘‘(N) An entity that is a critical access hospital (as 
determined under section 1820(c)(2) of the Social Security 
Act), and that meets the requirements of subparagraph 
(L)(i). 
‘‘(O) An entity that is a rural referral center, as defined 
by section 1886(d)(5)(C)(i) of the Social Security Act, or
H. R. 3590—704 
a sole community hospital, as defined by section 
1886(d)(5)(C)(iii) of such Act, and that both meets the 
requirements of subparagraph (L)(i) and has a dispropor-
tionate share adjustment percentage equal to or greater 
than 8 percent.’’. 
(b) EXTENSION
OF DISCOUNT
TO INPATIENT DRUGS.—Section 
340B of the Public Health Service Act (42 U.S.C. 256b) is amended— 
(1) in paragraphs (2), (5), (7), and (9) of subsection (a), 
by striking ‘‘outpatient’’ each place it appears; and 
(2) in subsection (b)— 
(A) by striking ‘‘OTHER DEFINITION’’ and all that follows 
through ‘‘In this section’’ and inserting the following: 
‘‘OTHER DEFINITIONS.— 
‘‘(1) IN GENERAL.—In this section’’; and 
(B) by adding at the end the following new paragraph: 
‘‘(2) COVERED
DRUG.—In this section, the term ‘covered 
drug’— 
‘‘(A) means a covered outpatient drug (as defined in 
section 1927(k)(2) of the Social Security Act); and 
‘‘(B) includes, notwithstanding paragraph (3)(A) of sec-
tion 1927(k) of such Act, a drug used in connection with 
an inpatient or outpatient service provided by a hospital 
described in subparagraph (L), (M), (N), or (O) of subsection 
(a)(4) that is enrolled to participate in the drug discount 
program under this section.’’. 
(c) PROHIBITION ON GROUP PURCHASING ARRANGEMENTS.—Sec-
tion 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)) 
is amended— 
(1) in paragraph (4)(L)— 
(A) in clause (i), by adding ‘‘and’’ at the end; 
(B) in clause (ii), by striking ‘‘; and’’ and inserting 
a period; and 
(C) by striking clause (iii); and 
(2) in paragraph (5), as amended by subsection (b)— 
(A) by redesignating subparagraphs (C) and (D) as 
subparagraphs (D) and (E); respectively; and 
(B) by inserting after subparagraph (B), the following: 
‘‘(C) PROHIBITION
ON
GROUP
PURCHASING
ARRANGE-
MENTS.— 
‘‘(i) IN GENERAL.—A hospital described in subpara-
graph (L), (M), (N), or (O) of paragraph (4) shall not 
obtain covered outpatient drugs through a group pur-
chasing organization or other group purchasing 
arrangement, except as permitted or provided for 
pursuant to clauses (ii) or (iii). 
‘‘(ii) INPATIENT DRUGS.—Clause (i) shall not apply 
to drugs purchased for inpatient use. 
‘‘(iii) EXCEPTIONS.—The Secretary shall establish 
reasonable exceptions to clause (i)— 
‘‘(I) with respect to a covered outpatient drug 
that is unavailable to be purchased through the 
program under this section due to a drug shortage 
problem, manufacturer noncompliance, or any 
other circumstance beyond the hospital’s control; 
‘‘(II) to facilitate generic substitution when a 
generic covered outpatient drug is available at a 
lower price; or
H. R. 3590—705 
‘‘(III) to reduce in other ways the administra-
tive burdens of managing both inventories of drugs 
subject to this section and inventories of drugs 
that are not subject to this section, so long as 
the exceptions do not create a duplicate discount 
problem in violation of subparagraph (A) or a 
diversion problem in violation of subparagraph (B). 
‘‘(iv) PURCHASING ARRANGEMENTS FOR INPATIENT 
DRUGS.—The Secretary shall ensure that a hospital 
described in subparagraph (L), (M), (N), or (O) of sub-
section (a)(4) that is enrolled to participate in the drug 
discount program under this section shall have mul-
tiple 
options 
for 
purchasing 
covered 
drugs 
for 
inpatients, including by utilizing a group purchasing 
organization or other group purchasing arrangement, 
establishing and utilizing its own group purchasing 
program, purchasing directly from a manufacturer, and 
any other purchasing arrangements that the Secretary 
determines is appropriate to ensure access to drug 
discount pricing under this section for inpatient drugs 
taking into account the particular needs of small and 
rural hospitals.’’. 
(d) MEDICAID CREDITS
ON INPATIENT DRUGS.—Section 340B 
of the Public Health Service Act (42 U.S.C. 256b) is amended 
by striking subsection (c) and inserting the following: 
‘‘(c) MEDICAID CREDIT.—Not later than 90 days after the date 
of filing of the hospital’s most recently filed Medicare cost report, 
the hospital shall issue a credit as determined by the Secretary 
to the State Medicaid program for inpatient covered drugs provided 
to Medicaid recipients.’’. 
(e) EFFECTIVE DATES.— 
(1) IN GENERAL.—The amendments made by this section 
and section 7102 shall take effect on January 1, 2010, and 
shall apply to drugs purchased on or after January 1, 2010. 
(2) EFFECTIVENESS.—The amendments made by this section 
and section 7102 shall be effective and shall be taken into 
account in determining whether a manufacturer is deemed 
to meet the requirements of section 340B(a) of the Public Health 
Service Act (42 U.S.C. 256b(a)), notwithstanding any other 
provision of law. 
SEC. 7102. IMPROVEMENTS TO 340B PROGRAM INTEGRITY. 
(a) INTEGRITY IMPROVEMENTS.—Subsection (d) of section 340B 
of the Public Health Service Act (42 U.S.C. 256b) is amended 
to read as follows: 
‘‘(d) IMPROVEMENTS IN PROGRAM INTEGRITY.— 
‘‘(1) MANUFACTURER COMPLIANCE.— 
‘‘(A) IN GENERAL.—From amounts appropriated under 
paragraph (4), the Secretary shall provide for improve-
ments in compliance by manufacturers with the require-
ments of this section in order to prevent overcharges and 
other violations of the discounted pricing requirements 
specified in this section. 
‘‘(B) IMPROVEMENTS.—The improvements described in 
subparagraph (A) shall include the following:
H. R. 3590—706 
‘‘(i) The development of a system to enable the 
Secretary to verify the accuracy of ceiling prices cal-
culated by manufacturers under subsection (a)(1) and 
charged to covered entities, which shall include the 
following: 
‘‘(I) Developing and publishing through an 
appropriate policy or regulatory issuance, precisely 
defined standards and methodology for the calcula-
tion of ceiling prices under such subsection. 
‘‘(II) Comparing regularly the ceiling prices 
calculated by the Secretary with the quarterly 
pricing data that is reported by manufacturers 
to the Secretary. 
‘‘(III) Performing spot checks of sales trans-
actions by covered entities. 
‘‘(IV) Inquiring into the cause of any pricing 
discrepancies that may be identified and either 
taking, or requiring manufacturers to take, such 
corrective action as is appropriate in response to 
such price discrepancies. 
‘‘(ii) The establishment of procedures for manufac-
turers to issue refunds to covered entities in the event 
that there is an overcharge by the manufacturers, 
including the following: 
‘‘(I) Providing the Secretary with an expla-
nation of why and how the overcharge occurred, 
how the refunds will be calculated, and to whom 
the refunds will be issued. 
‘‘(II) Oversight by the Secretary to ensure that 
the refunds are issued accurately and within a 
reasonable period of time, both in routine instances 
of retroactive adjustment to relevant pricing data 
and exceptional circumstances such as erroneous 
or intentional overcharging for covered drugs. 
‘‘(iii) The provision of access through the Internet 
website of the Department of Health and Human Serv-
ices to the applicable ceiling prices for covered drugs 
as calculated and verified by the Secretary in accord-
ance with this section, in a manner (such as through 
the use of password protection) that limits such access 
to covered entities and adequately assures security 
and 
protection 
of 
privileged 
pricing 
data 
from 
unauthorized re-disclosure. 
‘‘(iv) The development of a mechanism by which— 
‘‘(I) rebates and other discounts provided by 
manufacturers to other purchasers subsequent to 
the sale of covered drugs to covered entities are 
reported to the Secretary; and 
‘‘(II) appropriate credits and refunds are issued 
to covered entities if such discounts or rebates 
have the effect of lowering the applicable ceiling 
price for the relevant quarter for the drugs 
involved. 
‘‘(v) Selective auditing of manufacturers and whole-
salers to ensure the integrity of the drug discount 
program under this section.