(1) TO
PART
B
ASP
CALCULATION.—Section 
1847A(c)(3) of the Social Security Act (42 U.S.C. 
1395w–3a(c)(3)) is amended by inserting ‘‘or section 
1834(z)’’ after ‘‘section 1927’’. 
(2) EXCLUDING PARTS B DRUG INFLATION RE-
BATE
FROM
BEST
PRICE.—Section 
1927(c)(1)(C)(ii)(I) of the Social Security Act (42 
U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is amended by in-
serting ‘‘or section 1834(z)’’ after ‘‘this section’’. 
(3) COORDINATION WITH MEDICAID REBATE IN-
FORMATION DISCLOSURE.—Section 1927(b)(3)(D)(i) 
of the Social Security Act (42 U.S.C. 1396r– 
8(b)(3)(D)(i)) is amended by striking ‘‘or to carry 
out section 1847B’’ and inserting ‘‘to carry out sec-
tion 1847B or section 1834(z)’’. 
SEC. 202. MEDICARE PART D REBATE BY MANUFACTURERS. 
(a) IN GENERAL.—Part D of title XVIII of the Social 
Security Act is amended by inserting after section 1860D– 
14A (42 U.S.C. 1395w–114a) the following new section: 
‘‘SEC. 1860D–14B. MANUFACTURER REBATE FOR CERTAIN 
DRUGS WITH PRICES INCREASING FASTER 
THAN INFLATION. 
‘‘(a) IN GENERAL.— 
‘‘(1) IN GENERAL.—Subject to the provisions of 
this section, in order for coverage to be available 
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under this part for a part D rebatable drug (as de-
fined in subsection (h)(1)) of a manufacturer (as de-
fined in section 1927(k)(5)) dispensed during an ap-
plicable year, the manufacturer must have entered 
into and have in effect an agreement described in 
subsection (b). 
‘‘(2) AUTHORIZING COVERAGE FOR DRUGS NOT 
COVERED
UNDER
AGREEMENTS.—Paragraph (1) 
shall not apply to the dispensing of a covered part 
D drug if— 
‘‘(A) the Secretary has made a determina-
tion that the availability of the drug is essential 
to the health of beneficiaries under this part; or 
‘‘(B) the Secretary determines that in the 
period beginning on January 1, 2023, and end-
ing on December 31, 2023, there were extenu-
ating circumstances. 
‘‘(3) APPLICABLE YEAR.—For purposes of this 
section the term ‘applicable year’ means a year be-
ginning with 2023. 
‘‘(b) AGREEMENTS.— 
‘‘(1) TERMS OF AGREEMENT.—An agreement 
described in this subsection, with respect to a manu-
facturer of a part D rebatable drug, is an agreement 
under which the following shall apply: 
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‘‘(A) SECRETARIAL PROVISION OF INFOR-
MATION.—Not later than 9 months after the 
end of each applicable year with respect to 
which the agreement is in effect, the Secretary, 
for each part D rebatable drug of the manufac-
turer, shall report to the manufacturer the fol-
lowing for such year: 
‘‘(i) Information on the total number 
of units (as defined in subsection (h)(2)) 
for each dosage form and strength with re-
spect 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 
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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, shall pro-
vide 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 automati-
cally 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 agree-
ment under this section for violation of the 
requirements of the agreement or other 
good cause shown. Such termination shall 
not be effective earlier than 30 days after 
the date of notice of such termination. The 
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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 termi-
nation. 
‘‘(ii) BY A MANUFACTURER.—A man-
ufacturer may terminate an agreement 
under this section for any reason. Any 
such termination shall be effective, with re-
spect to a plan year— 
‘‘(I) if the termination occurs be-
fore January 30 of the plan year, as 
of the day after the end of the plan 
year; and 
‘‘(II) if the termination occurs on 
or after January 30 of the plan year, 
as of the day after the end of the suc-
ceeding plan year. 
‘‘(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 ter-
mination. 
‘‘(D) DELAY
BEFORE
REENTRY.—In the 
case of any agreement under this section with 
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a manufacturer that is terminated in a plan 
year, the Secretary may not enter into another 
such agreement with the manufacturer (or a 
successor manufacturer) before the subsequent 
plan year, unless the Secretary finds good cause 
for an earlier reinstatement of such an agree-
ment. 
‘‘(c) REBATE AMOUNT.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, 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 sub-
paragraphs (B) and (C) of paragraph (5), the 
amount equal to the product of— 
‘‘(A) the total number of units of such dos-
age form and strength with respect to such part 
D rebatable drug and year; and 
‘‘(B) the amount (if any) by which— 
‘‘(i) the annual manufacturer price 
(as determined in paragraph (2)) paid for 
such dosage form and strength with re-
spect to such part D rebatable drug for the 
year; exceeds 
‘‘(ii) the inflation-adjusted payment 
amount determined under paragraph (3) 
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for such dosage form and strength with re-
spect to such part D rebatable drug for the 
year. 
‘‘(2) DETERMINATION OF ANNUAL MANUFAC-
TURER PRICE.—The annual manufacturer price de-
termined under this paragraph for a dosage form 
and strength, with respect to a part D rebatable 
drug and an applicable year, is the sum of the prod-
ucts of— 
‘‘(A) the average manufacturer price (as 
defined in subsection (h)(6)) of such dosage 
form and strength, as calculated for a unit of 
such drug, with respect to each of the calendar 
quarters of such year; and 
‘‘(B) the ratio of— 
‘‘(i) the total number of units of such 
dosage form and strength dispensed during 
each such calendar quarter of such year; to 
‘‘(ii) the total number of units of such 
dosage form and strength dispensed during 
such year. 
‘‘(3) DETERMINATION OF INFLATION-ADJUSTED 
PAYMENT AMOUNT.—The inflation-adjusted payment 
amount determined under this paragraph for a dos-
age form and strength with respect to a part D 
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‘‘(i) the total number of units of such 
dosage form and strength dispensed during 
each such calendar quarter of such pay-
ment amount benchmark year; to 
‘‘(ii) the total number of units of such 
dosage form and strength dispensed during 
such payment amount benchmark year. 
‘‘(5) SPECIAL TREATMENT OF CERTAIN DRUGS 
AND EXEMPTION.— 
‘‘(A) SUBSEQUENTLY APPROVED DRUGS.— 
In the case of a part D rebatable drug first ap-
proved or licensed by the Food and Drug Ad-
ministration after January 1, 2016, subpara-
graphs (A) and (B) of paragraph (4) shall be 
applied as if the term ‘payment amount bench-
mark year’ were defined under subsection 
(h)(3) as the first calendar year beginning after 
the day on which the drug was first marketed 
by any manufacturer and subparagraph (B) of 
paragraph (3) shall be applied as if the term 
‘benchmark period CPI–U’ were defined under 
subsection (h)(4) as if the reference to ‘January 
2016’ under such subsection were a reference to 
‘January of the first year beginning after the 
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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 that is described as currently in 
shortage on the shortage list in effect under 
section 506E of the Federal Food, Drug, and 
Cosmetic Act or in the case of other exigent cir-
cumstances, as determined by the Secretary. 
‘‘(C) TREATMENT
OF
NEW
FORMULA-
TIONS.— 
‘‘(i) IN GENERAL.—In the case of a 
part D rebatable drug that is a line exten-
sion of a part D rebatable 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 original part D rebatable drug. 
‘‘(ii) LINE EXTENSION DEFINED.—In 
this subparagraph, the term ‘line exten-
sion’ means, with respect to a part D 
rebatable drug, a new formulation of the 
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drug (as determined by the Secretary), 
such as an extended release formulation, 
but does not include an abuse-deterrent 
formulation of the drug (as determined by 
the Secretary), regardless of whether such 
abuse-deterrent formulation is an extended 
release formulation. 
‘‘(D) SELECTED DRUGS.—In the case of a 
part D rebatable drug that is a selected drug 
(as defined in section 1192(c)) for a price appli-
cability 
period 
(as 
defined 
in 
section 
1191(b)(2))— 
‘‘(i) for plan years during such period 
for which a maximum fair price (as defined 
in section 1191(c)(2)) for such drug has 
been determined and is applied under part 
E of title XI, the rebate under subsection 
(b)(1)(B) shall be waived; and 
‘‘(ii) in the case such drug is deter-
mined (pursuant to such section 1192(c)) 
to no longer be a selected drug, for each 
applicable year beginning after the price 
applicability period with respect to such 
drug, subparagraphs (A) and (B) of para-
graph (4) shall be applied as if the term 
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‘payment amount benchmark year’ were 
defined under subsection (h)(3) as the last 
year beginning during such price applica-
bility period with respect to such selected 
drug and subparagraph (B) of paragraph 
(3) shall be applied as if the term ‘bench-
mark period CPI–U’ were defined under 
subsection (h)(4) as if the reference to 
‘January 2016’ under such subsection were 
a reference to January of the last year be-
ginning during such price applicability pe-
riod with respect to such drug. 
‘‘(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) INFORMATION.—For purposes of carrying out 
this section, the Secretary shall use information submitted 
by manufacturers under section 1927(b)(3). 
‘‘(f) CIVIL MONEY PENALTY.—In the case of a man-
ufacturer 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 Sec-
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retary may impose a civil money penalty on such manufac-
turer 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 as-
sessments) and (b)) shall apply to a civil money penalty 
under this subsection in the same manner as such provi-
sions apply to a penalty or proceeding under section 
1128A(a). 
‘‘(g) JUDICIAL REVIEW.—There shall be no judicial 
review of the following: 
‘‘(1) The determination of units under this sec-
tion. 
‘‘(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. 
‘‘(h) DEFINITIONS.—In this section: 
‘‘(1) PART D REBATABLE DRUG DEFINED.— 
‘‘(A) IN
GENERAL.—The term ‘part D 
rebatable drug’ means a drug or biological that 
would (without application of this section) be a 
covered part D drug, except such term shall, 
with respect to an applicable year, not include 
such a drug or biological if the average annual 
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total cost under this part for such year per in-
dividual who uses such a drug or biological, as 
determined by the Secretary, is less than, sub-
ject to subparagraph (B), $100, as determined 
by the Secretary using the most recent data 
available or, if data is not available, as esti-
mated by the Secretary. 
‘‘(B) INCREASE.—The dollar amount ap-
plied under subparagraph (A)— 
‘‘(i) for 2024, shall be the dollar 
amount specified under such subparagraph 
for 2023, increased by the percentage in-
crease in the consumer price index for all 
urban consumers (United States city aver-
age) for the 12-month period beginning 
with January of 2023; and 
‘‘(ii) for a subsequent year, shall be 
the dollar amount specified in this sub-
paragraph for the previous year, increased 
by the percentage increase in the consumer 
price index for all urban consumers 
(United States city average) for the 12- 
month period beginning with January of 
the previous year. 
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100 
Any dollar amount specified under this sub-
paragraph that is not a multiple of $10 shall be 
rounded to the nearest multiple of $10. 
‘‘(2) UNIT DEFINED.—The term ‘unit’ means, 
with respect to a part D rebatable drug, the lowest 
identifiable quantity (such as a capsule or tablet, 
milligram of molecules, or grams) of the part D 
rebatable drug that is dispensed to individuals under 
this part. 
‘‘(3) PAYMENT AMOUNT BENCHMARK YEAR.— 
The term ‘payment amount benchmark year’ means 
the year beginning January 1, 2016. 
‘‘(4) BENCHMARK
PERIOD
CPI–U.—The term 
‘benchmark period CPI–U’ means the consumer 
price index for all urban consumers (United States 
city average) for January 2016. 
‘‘(5) APPLICABLE YEAR CPI–U.—The term ‘ap-
plicable year CPI–U’ means, with respect to an ap-
plicable year, the consumer price index for all urban 
consumers (United States city average) for January 
of such year. 
‘‘(6) AVERAGE
MANUFACTURER
PRICE.—The 
term ‘average manufacturer price’ has the meaning, 
with respect to a part D rebatable drug of a manu-
facturer, given such term in section 1927(k)(1), with 
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102 
SEC. 203. PROVISION REGARDING INFLATION REBATES 
FOR GROUP HEALTH PLANS AND GROUP 
HEALTH INSURANCE COVERAGE. 
(a) IN GENERAL.—Not later than December 31, 
2023, the Secretary of Labor, in consultation with the 
Secretary of Health and Human Services and the Sec-
retary of the Treasury, shall submit to Congress a report 
on— 
(1) potential models for an agreement process 
with manufacturers of prescription drugs under 
which such manufacturers provide for inflation re-
bates with respect to such drugs that are furnished 
or dispensed to participants and beneficiaries of 
group health plans and health insurance coverage of-
fered in the group market in a manner similar to 
how manufacturers provide for rebates under section 
1834(z) of the Social Security Act, as added by sec-
tion 201, and section 1860D–14B of such Act, as 
added by section 202, with respect to prescription 
drugs that are furnished or dispensed under part B 
of title XVIII of such Act and part D of such title, 
respectively; and 
(2) potential models for enforcement mecha-
nisms with respect to such an agreement process 
that ensure that such inflation rebates are propor-
tionally distributed, with respect to costs, to group 
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103 
health plans and health insurance issuers offering 
health insurance coverage in the group market, to 
participants and beneficiaries of such plans and cov-
erage, or to both. 
(b) REGULATIONS.—Not later than December 31, 
2024, the Secretary of Labor shall, in consultation with 
the Secretary of Health and Human Services and the Sec-
retary of the Treasury, promulgate regulations to imple-
ment a model described in subsection (a)(1) and a model 
described in subsection (a)(2), if the Secretary determines 
that— 
(1) the prices of a sufficient number (as deter-
mined by the Secretary) of drugs described in sub-
section (a)(1) have increased over a period of time 
(as determined by the Secretary) at a percentage 
that exceeds the percentage by which the consumer 
price index for all urban consumers (United States 
city average) has increased over such period; and 
(2) such model described in subsection (a)(1) 
and such model described in subsection (a)(2) are 
feasible. 
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104 
SEC. 204. ANNUAL REPORT ON DRUG COSTS IN GROUP 
HEALTH PLANS AND GROUP HEALTH INSUR-
ANCE COVERAGE. 
(a) INITIAL REPORT.—Not later than December 31, 
2023, the Secretary of Labor shall, in consultation with 
the Secretary of Health and Human Services and the Sec-
retary of the Treasury, submit to Congress a report, with 
respect to a period (as determined by the Secretary of 
Labor), on— 
(1) whether the prices of prescription drugs 
that are furnished or dispensed to participants and 
beneficiaries of group health plans and health insur-
ance coverage offered in the group market during 
such period have increased at a percentage that ex-
ceeds the percentage by which the consumer price 
index for all urban consumers (United States city 
average) increased for such period; and 
(2) whether there are mechanisms by which 
manufacturers of prescription drugs have attempted 
to recover rebate payments required of such manu-
facturers under section 1834(z) of the Social Secu-
rity Act, as added by section 201, and section 
1860D–14B of such Act, as added by section 202, 
with respect to prescription drugs that are furnished 
or dispensed under part B of title XVIII of such Act 
and part D of such title, respectively, through in-
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105 
creased prices charged with respect to drugs that are 
furnished or dispensed to participants and bene-
ficiaries of group health plans and health insurance 
coverage offered in the group market during such 
period. 
(b) ANNUAL REPORT.—Not later than December 31 
of each year following 2023, the Secretary of Labor shall, 
in consultation with the Secretary of Health and Human 
Services and the Secretary of the Treasury, submit to 
Congress a report updating the information and analysis 
included in the report required under subsection (a), re-
flecting, in part, new price and cost information and data 
for the 12-month period after the period on which the 
prior year’s report was based. 
SEC. 205. COLLECTION OF DATA. 
(a) MANUFACTURERS OF PRESCRIPTION DRUGS.— 
Manufacturers of prescription drugs shall submit to the 
Secretary of Health and Human Services, the Secretary 
of Labor, and the Secretary of the Treasury appropriate 
data as necessary for the Secretaries to obtain information 
needed to provide the reports under sections 203 and 204. 
(b) GROUP HEALTH PLANS AND HEALTH INSUR-
ANCE ISSUERS OFFERING HEALTH INSURANCE COV-
ERAGE IN THE GROUP MARKET.—Group health plans and 
health insurance issuers offering health insurance cov-
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106 
erage in the group market shall submit to the Secretary 
of Health and Human Services, the Secretary of Labor, 
and the Secretary of the Treasury appropriate data as 
necessary for the Secretaries to obtain information needed 
to provide the reports under sections 203 and 204. 
TITLE 
III—PART 
D 
IMPROVE-
MENTS AND MAXIMUM OUT- 
OF-POCKET CAP FOR MEDI-
CARE BENEFICIARIES 
SEC. 301. MEDICARE PART D BENEFIT REDESIGN. 
(a) 
BENEFIT
STRUCTURE
REDESIGN.—Section 
1860D–2(b) of the Social Security Act (42 U.S.C. 1395w– 
102(b)) is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (A), in the matter 
preceding clause (i), by inserting ‘‘for a year 
preceding 2024 and for costs above the annual 
deductible specified in paragraph (1) and up to 
the annual out-of-pocket threshold specified in 
paragraph (4)(B) for 2024 and each subsequent 
year’’ after ‘‘paragraph (3)’’; 
(B) in subparagraph (C)— 
(i) in clause (i), in the matter pre-
ceding subclause (I), by inserting ‘‘for a 
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107 
year preceding 2024,’’ after ‘‘paragraph 
(4),’’; and 
(ii) in clause (ii)(III), by striking 
‘‘and each subsequent year’’ and inserting 
‘‘through 2023’’; and 
(C) in subparagraph (D)— 
(i) in clause (i)— 
(I) in the matter preceding sub-
clause (I), by inserting ‘‘for a year 
preceding 2024,’’ after ‘‘paragraph 
(4),’’; and 
(II) in subclause (I)(bb), by 
striking ‘‘a year after 2018’’ and in-
serting ‘‘each of years 2018 through 
2023’’; and 
(ii) in clause (ii)(V), by striking 
‘‘2019 and each subsequent year’’ and in-
serting ‘‘each of years 2019 through 
2023’’; 
(2) in paragraph (3)(A)— 
(A) in the matter preceding clause (i), by 
inserting ‘‘for a year preceding 2024,’’ after 
‘‘and (4),’’; and 
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108 
(B) in clause (ii), by striking ‘‘for a subse-
quent year’’ and inserting ‘‘for each of years 
2007 through 2023’’; and 
(3) in paragraph (4)— 
(A) in subparagraph (A)— 
(i) in clause (i)— 
(I) by redesignating subclauses 
(I) and (II) as items (aa) and (bb), 
respectively, and moving the margin 
of each such redesignated item 2 ems 
to the right; 
(II) in the matter preceding item 
(aa), as redesignated by subclause (I), 
by striking ‘‘is equal to the greater 
of—’’ and inserting ‘‘is equal to— 
‘‘(I) for a year preceding 2024, 
the greater of—’’; 
(III) by striking the period at the 
end of item (bb), as redesignated by 
subclause (I), and inserting ‘‘; and’’; 
and 
(IV) by adding at the end the fol-
lowing: 
‘‘(II) for 2024 and each suc-
ceeding year, $0.’’; and 
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(ii) in clause (ii), by striking ‘‘clause 
(i)(I)’’ and inserting ‘‘clause (i)(I)(aa)’’; 
(B) in subparagraph (B)— 
(i) in clause (i)— 
(I) in subclause (V), by striking 
‘‘or’’ at the end; 
(II) in subclause (VI)— 
(aa) by striking ‘‘for a sub-
sequent year’’ and inserting ‘‘for 
each of years 2021 through 
2023’’; and 
(bb) by striking the period 
at the end and inserting a semi-
colon; and 
(III) by adding at the end the 
following new subclauses: 
‘‘(VII) for 2024, is equal to 
$2,000; or 
‘‘(VIII) for a subsequent year, is 
equal to the amount specified in this 
subparagraph for the previous year, 
increased by the annual percentage in-
crease described in paragraph (6) for 
the year involved.’’; and 
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(ii) in clause (ii), by striking ‘‘clause 
(i)(II)’’ and inserting ‘‘clause (i)’’; 
(C) in subparagraph (C)(i), by striking 
‘‘and for amounts’’ and inserting ‘‘and, for a 
year preceding 2024, for amounts’’; and 
(D) in subparagraph (E), by striking ‘‘In 
applying’’ and inserting ‘‘For each of years 
2011 through 2023, in applying’’. 
(b) 
DECREASING
REINSURANCE
PAYMENT 
AMOUNT.—Section 1860D–15(b)(1) of the Social Security 
Act (42 U.S.C. 1395w–115(b)(1)) is amended by inserting 
after ‘‘80 percent’’ the following: ‘‘(or, with respect to a 
coverage year after 2023, 20 percent)’’. 
(c) MANUFACTURER DISCOUNT PROGRAM.— 
(1) IN GENERAL.—Part D of title XVIII of the 
Social Security Act (42 U.S.C. 1395w–101 et seq.), 
as amended by section 202, is further amended by 
inserting after section 1860D–14B the following new 
section: 
‘‘SEC. 1860D–14C. MANUFACTURER DISCOUNT PROGRAM. 
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish a manufacturer discount program (in this section re-
ferred to as the ‘program’). Under the program, the Sec-
retary shall enter into agreements described in subsection 
(b) with manufacturers and provide for the performance 
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of the duties described in subsection (c). The Secretary 
shall establish a model agreement for use under the pro-
gram by not later than January 1, 2023, in consultation 
with manufacturers, and allow for comment on such model 
agreement. 
‘‘(b) TERMS OF AGREEMENT.— 
‘‘(1) IN GENERAL.— 
‘‘(A) AGREEMENT.—An agreement under 
this section shall require the manufacturer to 
provide applicable beneficiaries access to dis-
counted prices for applicable drugs of the man-
ufacturer that are dispensed on or after Janu-
ary 1, 2024. 
‘‘(B) PROVISION OF DISCOUNTED PRICES 
AT THE POINT-OF-SALE.—The discounted prices 
described in subparagraph (A) shall be provided 
to the applicable beneficiary at the pharmacy or 
by the mail order service at the point-of-sale of 
an applicable drug. 
‘‘(C) TIMING OF AGREEMENT.— 
‘‘(i) SPECIAL
RULE
FOR
2024.—In 
order for an agreement with a manufac-
turer to be in effect under this section with 
respect to the period beginning on January 
1, 2024, and ending on December 31, 
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112 
2024, the manufacturer shall enter into 
such agreement not later than 30 days 
after the date of the establishment of a 
model agreement under subsection (a). 
‘‘(ii) 
2025 
AND
SUBSEQUENT 
YEARS.—In order for an agreement with a 
manufacturer to be in effect under this 
section with respect to plan year 2025 or 
a subsequent plan year, the manufacturer 
shall enter into such agreement (or such 
agreement shall be renewed under para-
graph (4)(A)) not later than January 30 of 
the preceding year. 
‘‘(2) PROVISION OF APPROPRIATE DATA.—Each 
manufacturer with an agreement in effect under this 
section shall collect and have available appropriate 
data, as determined by the Secretary, to ensure that 
it can demonstrate to the Secretary compliance with 
the requirements under the program. 
‘‘(3) COMPLIANCE
WITH
REQUIREMENTS
FOR 
ADMINISTRATION
OF
PROGRAM.—Each manufac-
turer with an agreement in effect under this section 
shall comply with requirements imposed by the Sec-
retary or a third party with a contract under sub-
section (d)(3), as applicable, for purposes of admin-
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istering the program, including any determination 
under subparagraph (A) of subsection (c)(1) or pro-
cedures established under such subsection (c)(1). 
‘‘(4) LENGTH OF AGREEMENT.— 
‘‘(A) IN GENERAL.—An agreement under 
this section shall be effective for an initial pe-
riod of not less than 12 months and shall be 
automatically renewed for a period of not less 
than 1 year unless terminated under subpara-
graph (B). 
‘‘(B) TERMINATION.— 
‘‘(i) BY THE SECRETARY.—The Sec-
retary may provide for termination of an 
agreement under this section for a knowing 
and willful violation of the requirements of 
the agreement or other good cause shown. 
Such termination shall not be effective ear-
lier than 30 days after the date of notice 
to the manufacturer of such termination. 
The Secretary shall provide, upon request, 
a manufacturer with a hearing concerning 
such a termination, and such hearing shall 
take place prior to the effective date of the 
termination with sufficient time for such 
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effective date to be repealed if the Sec-
retary determines appropriate. 
‘‘(ii) BY A MANUFACTURER.—A man-
ufacturer may terminate an agreement 
under this section for any reason. Any 
such termination shall be effective, with re-
spect to a plan year— 
‘‘(I) if the termination occurs be-
fore January 30 of a plan year, as of 
the day after the end of the plan year; 
and 
‘‘(II) if the termination occurs on 
or after January 30 of a plan year, as 
of the day after the end of the suc-
ceeding plan year. 
‘‘(iii) EFFECTIVENESS
OF
TERMI-
NATION.—Any termination under this sub-
paragraph shall not affect discounts for 
applicable drugs of the manufacturer that 
are due under the agreement before the ef-
fective date of its termination. 
‘‘(iv) NOTICE TO THIRD PARTY.—The 
Secretary shall provide notice of such ter-
mination to a third party with a contract 
under subsection (d)(3) within not less 
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than 30 days before the effective date of 
such termination. 
‘‘(c) DUTIES DESCRIBED.—The duties described in 
this subsection are the following: 
‘‘(1) ADMINISTRATION OF PROGRAM.—Admin-
istering the program, including— 
‘‘(A) the determination of the amount of 
the discounted price of an applicable drug of a 
manufacturer; 
‘‘(B) the establishment of procedures 
under which discounted prices are provided to 
applicable beneficiaries at pharmacies or by 
mail order service at the point-of-sale of an ap-
plicable drug; 
‘‘(C) the establishment of procedures to 
ensure that, not later than the applicable num-
ber of calendar days after the dispensing of an 
applicable drug by a pharmacy or mail order 
service, the pharmacy or mail order service is 
reimbursed for an amount equal to the dif-
ference between— 
‘‘(i) the negotiated price of the appli-
cable drug; and 
‘‘(ii) the discounted price of the appli-
cable drug; 
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‘‘(D) the establishment of procedures to 
ensure that the discounted price for an applica-
ble drug under this section is applied before any 
coverage or financial assistance under other 
health benefit plans or programs that provide 
coverage or financial assistance for the pur-
chase or provision of prescription drug coverage 
on behalf of applicable beneficiaries as the Sec-
retary may specify; and 
‘‘(E) providing a reasonable dispute resolu-
tion mechanism to resolve disagreements be-
tween manufacturers, applicable beneficiaries, 
and the third party with a contract under sub-
section (d)(3). 
‘‘(2) MONITORING COMPLIANCE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
monitor compliance by a manufacturer with the 
terms of an agreement under this section. 
‘‘(B) NOTIFICATION.—If a third party 
with a contract under subsection (d)(3) deter-
mines that the manufacturer is not in compli-
ance with such agreement, the third party shall 
notify the Secretary of such noncompliance for 
appropriate enforcement under subsection (e). 
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‘‘(3) COLLECTION OF DATA FROM PRESCRIP-
TION DRUG PLANS AND MA–PD PLANS.—The Sec-
retary may collect appropriate data from prescrip-
tion drug plans and MA–PD plans in a timeframe 
that allows for discounted prices to be provided for 
applicable drugs under this section. 
‘‘(d) ADMINISTRATION.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
the Secretary shall provide for the implementation of 
this section, including the performance of the duties 
described in subsection (c). 
‘‘(2) LIMITATION.—In providing for the imple-
mentation of this section, the Secretary shall not re-
ceive or distribute any funds of a manufacturer 
under the program. 
‘‘(3) CONTRACT
WITH
THIRD
PARTIES.—The 
Secretary shall enter into a contract with 1 or more 
third parties to administer the requirements estab-
lished by the Secretary in order to carry out this 
section. At a minimum, the contract with a third 
party under the preceding sentence shall require 
that the third party— 
‘‘(A) receive and transmit information be-
tween the Secretary, manufacturers, and other 
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118 
individuals or entities the Secretary determines 
appropriate; 
‘‘(B) receive, distribute, or facilitate the 
distribution of funds of manufacturers to ap-
propriate individuals or entities in order to 
meet the obligations of manufacturers under 
agreements under this section; 
‘‘(C) provide adequate and timely informa-
tion to manufacturers, consistent with the 
agreement with the manufacturer under this 
section, as necessary for the manufacturer to 
fulfill its obligations under this section; and 
‘‘(D) permit manufacturers to conduct 
periodic audits, directly or through contracts, of 
the data and information used by the third 
party to determine discounts for applicable 
drugs of the manufacturer under the program. 
‘‘(4) 
PERFORMANCE
REQUIREMENTS.—The 
Secretary shall establish performance requirements 
for a third party with a contract under paragraph 
(3) and safeguards to protect the independence and 
integrity of the activities carried out by the third 
party under the program under this section. 
‘‘(5) IMPLEMENTATION.—Notwithstanding any 
other provision of law, the Secretary may implement 
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119 
the program under this section by program instruc-
tion or otherwise. 
‘‘(6) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to the program 
under this section. 
‘‘(e) ENFORCEMENT.— 
‘‘(1) AUDITS.—Each manufacturer with an 
agreement in effect under this section shall be sub-
ject to periodic audit by the Secretary. 
‘‘(2) CIVIL MONEY PENALTY.— 
‘‘(A) IN
GENERAL.—The Secretary may 
impose a civil money penalty on a manufacturer 
that fails to provide applicable beneficiaries dis-
counts for applicable drugs of the manufacturer 
in accordance with such agreement for each 
such failure in an amount the Secretary deter-
mines is equal to the sum of— 
‘‘(i) the amount that the manufac-
turer would have paid with respect to such 
discounts under the agreement, which will 
then be used to pay the discounts which 
the manufacturer had failed to provide; 
and 
‘‘(ii) 25 percent of such amount. 
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‘‘(B) APPLICATION.—The provisions of 
section 1128A (other than subsections (a) and 
(b)) shall apply to a civil money penalty under 
this paragraph in the same manner as such 
provisions apply to a penalty or proceeding 
under section 1128A(a). 
‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF 
OTHER COVERED PART D DRUGS.—Nothing in this sec-
tion shall prevent an applicable beneficiary from pur-
chasing a covered part D drug that is not an applicable 
drug (including a generic drug or a drug that is not on 
the formulary of the prescription drug plan or MA–PD 
plan that the applicable beneficiary is enrolled in). 
‘‘(g) DEFINITIONS.—In this section: 
‘‘(1) APPLICABLE
BENEFICIARY.—The term 
‘applicable beneficiary’ means an individual who, on 
the date of dispensing a covered part D drug— 
‘‘(A) is enrolled in a prescription drug plan 
or an MA–PD plan; 
‘‘(B) is not enrolled in a qualified retiree 
prescription drug plan; and 
‘‘(C) has incurred costs, as determined in 
accordance with section 1860D–2(b)(4)(C), for 
covered part D drugs in the year that exceed 
the annual deductible with respect to such indi-
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121 
vidual for such year, as specified in section 
1860D–2(b)(1), section 1860D–14(a)(1)(B), or 
section 1860D–14(a)(2)(B), as applicable. 
‘‘(2) APPLICABLE DRUG.—The term ‘applicable 
drug’, with respect to an applicable beneficiary— 
‘‘(A) means a covered part D drug— 
‘‘(i) approved under a new drug appli-
cation under section 505(c) of the Federal 
Food, Drug, and Cosmetic Act or, in the 
case of a biologic product, licensed under 
section 351 of the Public Health Service 
Act; and 
‘‘(ii)(I) if the PDP sponsor of the pre-
scription drug plan or the MA organization 
offering the MA–PD plan uses a for-
mulary, which is on the formulary of the 
prescription drug plan or MA–PD plan 
that the applicable beneficiary is enrolled 
in; 
‘‘(II) if the PDP sponsor of the pre-
scription drug plan or the MA organization 
offering the MA–PD plan does not use a 
formulary, for which benefits are available 
under the prescription drug plan or MA– 
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PD plan that the applicable beneficiary is 
enrolled in; or 
‘‘(III) is provided through an excep-
tion or appeal; and 
‘‘(B) does not include a selected drug (as 
defined in section 1192(c)) during a price appli-
cability 
period 
(as 
defined 
in 
section 
1191(b)(2)) with respect to such drug. 
‘‘(3) APPLICABLE
NUMBER
OF
CALENDAR 
DAYS.—The term ‘applicable number of calendar 
days’ means— 
‘‘(A) with respect to claims for reimburse-
ment submitted electronically, 14 days; and 
‘‘(B) with respect to claims for reimburse-
ment submitted otherwise, 30 days. 
‘‘(4) DISCOUNTED PRICE.— 
‘‘(A) IN GENERAL.—The term ‘discounted 
price’ means, with respect to an applicable drug 
of a manufacturer dispensed during a year to 
an applicable beneficiary— 
‘‘(i) who has not incurred costs, as de-
termined 
in 
accordance 
with 
section 
1860D–2(b)(4)(C), for covered part D 
drugs in the year that are equal to or ex-
ceed the annual out-of-pocket threshold 
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specified in section 1860D–2(b)(4)(B)(i) 
for the year, 90 percent of the negotiated 
price of such drug; and 
‘‘(ii) who has incurred such costs, as 
so determined, in the year that are equal 
to or exceed such threshold for the year, 
70 percent of the negotiated price of such 
drug. 
‘‘(B) CLARIFICATION.—Nothing in this 
section shall be construed as affecting the re-
sponsibility of an applicable beneficiary for pay-
ment of a dispensing fee for an applicable drug. 
‘‘(C) 
SPECIAL
CASE
FOR
CERTAIN 
CLAIMS.— 
‘‘(i) 
CLAIMS
SPANNING
DEDUCT-
IBLE.—In the case where the entire 
amount of the negotiated price of an indi-
vidual claim for an applicable drug with re-
spect to an applicable beneficiary does not 
fall above the annual deductible specified 
in section 1860D–2(b)(1) for the year, the 
manufacturer of the applicable drug shall 
provide the discounted price under this 
section on only the portion of the nego-
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tiated price of the applicable drug that 
falls above such annual deductible. 
‘‘(ii) CLAIMS SPANNING OUT-OF-POCK-
ET THRESHOLD.—In the case where the 
entire amount of the negotiated price of an 
individual claim for an applicable drug 
with respect to an applicable beneficiary 
does not fall entirely below or entirely 
above the annual out-of-pocket threshold 
specified in section 1860D–2(b)(4)(B)(i) 
for the year, the manufacturer of the ap-
plicable drug shall provide the discounted 
price— 
‘‘(I) in accordance with subpara-
graph (A)(i) on the portion of the ne-
gotiated price of the applicable drug 
that falls below such threshold; and 
‘‘(II) in accordance with subpara-
graph (A)(ii) on the portion of such 
price of such drug that falls at or 
above such threshold. 
‘‘(5) MANUFACTURER.—The term ‘manufac-
turer’ means any entity which is engaged in the pro-
duction, preparation, propagation, compounding, 
conversion, or processing of prescription drug prod-
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ucts, either directly or indirectly by extraction from 
substances of natural origin, or independently by 
means of chemical synthesis, or by a combination of 
extraction and chemical synthesis. Such term does 
not include a wholesale distributor of drugs or a re-
tail pharmacy licensed under State law. 
‘‘(6) NEGOTIATED
PRICE.—The term ‘nego-
tiated price’ has the meaning given such term in sec-
tion 423.100 of title 42, Code of Federal Regula-
tions (or any successor regulation), except that, with 
respect to an applicable drug, such negotiated price 
shall not include any dispensing fee for the applica-
ble drug. 
‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG 
PLAN.—The term ‘qualified retiree prescription drug 
plan’ has the meaning given such term in section 
1860D–22(a)(2).’’. 
(2) SUNSET OF MEDICARE COVERAGE GAP DIS-
COUNT PROGRAM.—Section 1860D–14A of the So-
cial Security Act (42 U.S.C. 1395–114a) is amend-
ed— 
(A) in subsection (a), in the first sentence, 
by striking ‘‘The Secretary’’ and inserting 
‘‘Subject to subsection (h), the Secretary’’; and 
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126 
(B) by adding at the end the following new 
subsection: 
‘‘(h) SUNSET OF PROGRAM.— 
‘‘(1) IN
GENERAL.—The program shall not 
apply with respect to applicable drugs dispensed on 
or after January 1, 2024, and, subject to paragraph 
(2), agreements under this section shall be termi-
nated as of such date. 
‘‘(2) CONTINUED APPLICATION FOR APPLICA-
BLE
DRUGS
DISPENSED
PRIOR
TO
SUNSET.—The 
provisions of this section (including all responsibil-
ities and duties) shall continue to apply after Janu-
ary 1, 2024, with respect to applicable drugs dis-
pensed prior to such date.’’. 
(3) INCLUSION OF ACTUARIAL VALUE OF MANU-
FACTURER DISCOUNTS IN BIDS.—Section 1860D–11 
of the Social Security Act (42 U.S.C. 1395w–111) 
is amended— 
(A) in subsection (b)(2)(C)(iii)— 
(i) by striking ‘‘assumptions regarding 
the reinsurance’’ and inserting ‘‘assump-
tions regarding— 
‘‘(I) the reinsurance’’; and 
(ii) by adding at the end the fol-
lowing: 
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127 
‘‘(II) for 2024 and each subse-
quent year, the manufacturer dis-
counts provided under section 1860D– 
14C subtracted from the actuarial 
value to produce such bid; and’’; and 
(B) in subsection (c)(1)(C)— 
(i) by striking ‘‘an actuarial valuation 
of the reinsurance’’ and inserting ‘‘an ac-
tuarial valuation of— 
‘‘(i) the reinsurance’’; 
(ii) in clause (i), as inserted by clause 
(i) of this subparagraph, by adding ‘‘and’’ 
at the end; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(ii) for 2024 and each subsequent 
year, the manufacturer discounts provided 
under section 1860D–14C;’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 1860D–2 of the Social Security Act 
(42 U.S.C. 1395w–102) is amended— 
(A) in subsection (a)(2)(A)(i)(I), by strik-
ing ‘‘, or an increase in the initial’’ and insert-
ing ‘‘or, for a year preceding 2024, an increase 
in the initial’’; 
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128 
(B) in subsection (c)(1)(C)— 
(i) in the subparagraph heading, by 
striking ‘‘AT
INITIAL
COVERAGE
LIMIT’’; 
and 
(ii) by inserting ‘‘for a year preceding 
2024 or the annual out-of-pocket threshold 
specified in subsection (b)(4)(B) for the 
year for 2024 and each subsequent year’’ 
after ‘‘subsection (b)(3) for the year’’ each 
place it appears; and 
(C) in subsection (d)(1)(A), by striking ‘‘or 
an initial’’ and inserting ‘‘or, for a year pre-
ceding 2024, an initial’’. 
(2) Section 1860D–4(a)(4)(B)(i) of the Social 
Security Act (42 U.S.C. 1395w–104(a)(4)(B)(i)) is 
amended by striking ‘‘the initial’’ and inserting ‘‘for 
a year preceding 2024, the initial’’. 
(3) Section 1860D–14(a) of the Social Security 
Act (42 U.S.C. 1395w–114(a)) is amended— 
(A) in paragraph (1)— 
(i) in subparagraph (C), by striking 
‘‘The continuation’’ and inserting ‘‘For a 
year preceding 2024, the continuation’’; 
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129 
(ii) in subparagraph (D)(iii), by strik-
ing ‘‘1860D–2(b)(4)(A)(i)(I)’’ and insert-
ing ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’; and 
(iii) in subparagraph (E), by striking 
‘‘The elimination’’ and inserting ‘‘For a 
year preceding 2024, the elimination’’; and 
(B) in paragraph (2)— 
(i) in subparagraph (C), by striking 
‘‘The continuation’’ and inserting ‘‘For a 
year preceding 2024, the continuation’’; 
and 
(ii) in subparagraph (E), by striking 
‘‘1860D–2(b)(4)(A)(i)(I)’’ and inserting 
‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’. 
(4) Section 1860D–21(d)(7) of the Social Secu-
rity Act (42 U.S.C. 1395w–131(d)(7)) is amended 
by striking ‘‘section 1860D–2(b)(4)(B)(i)’’ and in-
serting ‘‘section 1860D–2(b)(4)(C)(i)’’. 
(5) Section 1860D–22(a)(2)(A) of the Social 
Security Act (42 U.S.C. 1395w–132(a)(2)(A)) is 
amended— 
(A) by striking ‘‘the value of any discount’’ 
and inserting the following: ‘‘the value of— 
‘‘(i) for years prior to 2024, any dis-
count’’; 
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130 
(B) in clause (i), as inserted by subpara-
graph (A) of this paragraph, by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(ii) for 2024 and each subsequent 
year, any discount provided pursuant to 
section 1860D–14C.’’. 
(6) Section 1860D–41(a)(6) of the Social Secu-
rity Act (42 U.S.C. 1395w–151(a)(6)) is amended— 
(A) by inserting ‘‘for a year before 2024’’ 
after ‘‘1860D–2(b)(3)’’; and 
(B) by inserting ‘‘for such year’’ before the 
period. 
(7) Section 1860D–43 of the Social Security 
Act (42 U.S.C. 1395w–153) is amended— 
(A) in subsection (a)— 
(i) by striking paragraph (1) and in-
serting the following: 
‘‘(1) participate in— 
‘‘(A) for 2011 through 2023, the Medicare 
coverage gap discount program under section 
1860D–14A; and 
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131 
‘‘(B) for 2024 and each subsequent year, 
the manufacturer discount program under sec-
tion 1860D–14C;’’; 
(ii) by striking paragraph (2) and in-
serting the following: 
‘‘(2) have entered into and have in effect— 
‘‘(A) for 2011 through 2023, an agreement 
described in subsection (b) of section 1860D– 
14A with the Secretary; and 
‘‘(B) for 2024 and each subsequent year, 
an agreement described in subsection (b) of sec-
tion 1860D–14C with the Secretary; and’’; and 
(iii) by striking paragraph (3) and in-
serting the following: 
‘‘(3) have entered into and have in effect, under 
terms and conditions specified by the Secretary— 
‘‘(A) for 2011 through 2023, a contract 
with a third party that the Secretary has en-
tered into a contract with under subsection 
(d)(3) of section 1860D–14A; and 
‘‘(B) for 2024 and each subsequent year, 
a contract with a third party that the Secretary 
has entered into a contract with under sub-
section (d)(3) of section 1860D–14C.’’; and 
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132 
(B) by striking subsection (b) and insert-
ing the following: 
‘‘(b) EFFECTIVE DATE.—Paragraphs (1)(A), (2)(A), 
and (3)(A) of subsection (a) shall apply to covered part 
D drugs dispensed under this part on or after January 
1, 2011, and before January 1, 2024, and paragraphs 
(1)(B), (2)(B), and (3)(B) of such subsection shall apply 
to covered part D drugs dispensed under this part on or 
after January 1, 2024.’’. 
(8) Section 1927 of the Social Security Act (42 
U.S.C. 1396r–8) is amended— 
(A) in subsection (c)(1)(C)(i)(VI), by in-
serting before the period at the end the fol-
lowing: ‘‘or under the manufacturer discount 
program under section 1860D–14C’’; and 
(B) in subsection (k)(1)(B)(i)(V), by in-
serting before the period at the end the fol-
lowing: ‘‘or under section 1860D–14C’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plan year 2024 and 
subsequent plan years. 
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133 
SEC. 302. ALLOWING CERTAIN ENROLLEES OF PRESCRIP-
TION DRUG PLANS AND MA–PD PLANS UNDER 
MEDICARE PROGRAM TO SPREAD OUT COST- 
SHARING UNDER CERTAIN CIRCUMSTANCES. 
Section 1860D–2(b)(2) of the Social Security Act (42 
U.S.C. 1395w–102(b)(2)), as amended by section 301, is 
further amended— 
(1) in subparagraph (A), by striking ‘‘Subject 
to subparagraphs (C) and (D)’’ and inserting ‘‘Sub-
ject to subparagraphs (C), (D), and (E)’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(E) 
ENROLLEE
OPTION
REGARDING 
SPREADING
COST-SHARING.—The 
Secretary 
shall establish by regulation a process under 
which, with respect to plan year 2024 and sub-
sequent plan years, a prescription drug plan or 
an MA–PD plan shall, in the case of a part D 
eligible individual enrolled with such plan for 
such plan year who is not a subsidy eligible in-
dividual (as defined in section 1860D–14(a)(3)) 
and with respect to whom the plan projects that 
the dispensing of the first fill of a covered part 
D drug to such individual will result in the indi-
vidual incurring costs that are equal to or above 
the annual out-of-pocket threshold specified in 
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134 
paragraph (4)(B) for such plan year, provide 
such individual with the option to make the co-
insurance payment required under subpara-
graph (A) (for the portion of such costs that 
are not above such annual out-of-pocket thresh-
old) in the form of periodic installments over 
the remainder of such plan year.’’. 
SEC. 303. ESTABLISHMENT OF PHARMACY QUALITY MEAS-
URES UNDER MEDICARE PART D. 
Section 1860D–4(c) of the Social Security Act (42 
U.S.C. 1395w–104(c)) is amended— 
(1) by redesignating the paragraph (6), as 
added by section 50354 of division E of the Bipar-
tisan Budget Act of 2018 (Public Law 115–123), as 
paragraph (7); and 
(2) by adding at the end the following new 
paragraph: 
‘‘(8) APPLICATION
OF
PHARMACY
QUALITY 
MEASURES.— 
‘‘(A) IN GENERAL.—A PDP sponsor that 
implements incentive payments to a pharmacy 
or price concessions paid by a pharmacy based 
on quality measures shall use measures estab-
lished or approved by the Secretary under sub-
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135 
paragraph (B) with respect to payment for cov-
ered part D drugs dispensed by such pharmacy. 
‘‘(B) 
STANDARD
PHARMACY
QUALITY 
MEASURES.—The Secretary shall establish or 
approve standard quality measures from a con-
sensus and evidence-based organization for pay-
ments described in subparagraph (A). Such 
measures shall focus on patient health outcomes 
and be based on proven criteria measuring 
pharmacy performance. 
‘‘(C) EFFECTIVE DATE.—The requirement 
under subparagraph (A) shall take effect for 
plan years beginning on or after January 1, 
2024, or such earlier date specified by the Sec-
retary if the Secretary determines there are suf-
ficient measures established or approved under 
subparagraph (B) to meet the requirement 
under subparagraph (A).’’. 
TITLE IV—DRUG PRICE 
TRANSPARENCY 
SEC. 401. DRUG PRICE TRANSPARENCY. 
Part A of title XI of the Social Security Act is 
amended by adding at the end the following new sections: 
‘‘SEC. 1150D. REPORTING ON DRUG PRICES. 
‘‘(a) DEFINITIONS.—In this section: 
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136 
‘‘(1) MANUFACTURER.—The term ‘manufac-
turer’ means the person— 
‘‘(A) that holds the application for a drug 
approved under section 505 of the Federal 
Food, Drug, and Cosmetic Act or licensed 
under section 351 of the Public Health Service 
Act; or 
‘‘(B) who is responsible for setting the 
wholesale acquisition cost for the drug. 
‘‘(2) QUALIFYING DRUG.—The term ‘qualifying 
drug’ means any drug that is approved under sub-
section (c) or (j) of section 505 of the Federal Food, 
Drug, and Cosmetic Act or licensed under subsection 
(a) or (k) of section 351 of the Public Health Serv-
ice Act— 
‘‘(A) that has a wholesale acquisition cost 
of $100 or more, adjusted for inflation occur-
ring after the date of enactment of this section, 
for a month’s supply or a typical course of 
treatment that lasts less than a month, and 
is— 
‘‘(i) subject to section 503(b)(1) of 
the Federal Food, Drug, and Cosmetic 
Act; and 
‘‘(ii) not a preventative vaccine; and 
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‘‘(B) for which, during the previous cal-
endar year, at least 1 dollar of the total amount 
of sales were for individuals enrolled under the 
Medicare program under title XVIII or under a 
State Medicaid plan under title XIX or under 
a waiver of such plan. 
‘‘(3) WHOLESALE
ACQUISITION
COST.—The 
term ‘wholesale acquisition cost’ has the meaning 
given that term in section 1847A(c)(6)(B). 
‘‘(b) REPORT.— 
‘‘(1) REPORT REQUIRED.—The manufacturer of 
a qualifying drug shall submit a report to the Sec-
retary if, with respect to the qualifying drug— 
‘‘(A) there is an increase in the price of 
the qualifying drug that results in an increase 
in the wholesale acquisition cost of that drug 
that is equal to— 
‘‘(i) 10 percent or more within a 12- 
month period beginning on or after Janu-
ary 1, 2021; or 
‘‘(ii) 25 percent or more within a 36- 
month period beginning on or after Janu-
ary 1, 2021; 
‘‘(B) the estimated price of the qualifying 
drug or spending per individual or per user of 
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138 
such drug (as estimated by the Secretary) for 
the applicable year (or per course of treatment 
in such applicable year as determined by the 
Secretary) is at least $26,000 beginning on or 
after January 1, 2023; or 
‘‘(C) there was an increase in the price of 
the qualifying drug that resulted in an increase 
in the wholesale acquisition cost of that drug 
that is equal to— 
‘‘(i) 10 percent or more within a 12- 
month period that begins and ends during 
the 5-year period preceding January 1, 
2023; or 
‘‘(ii) 25 percent or more within a 36- 
month period that begins and ends during 
the 5-year period preceding January 1, 
2023. 
‘‘(2) REPORT
DEADLINE.—Each report de-
scribed in paragraph (1) shall be submitted to the 
Secretary— 
‘‘(A) in the case of a report with respect 
to an increase in the price of a qualifying drug 
that occurs during the period beginning on Jan-
uary 1, 2021, and ending on the day that is 60 
days after the date of the enactment of this sec-
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139 
tion, not later than 90 days after such date of 
enactment; 
‘‘(B) in the case of a report with respect 
to an increase in the price of a qualifying drug 
that occurs after the period described in sub-
paragraph (A), not later than 30 days prior to 
the planned effective date of such price increase 
for such qualifying drug; 
‘‘(C) in the case of a report with respect 
to a qualifying drug that meets the criteria 
under paragraph (1)(B), not later than 30 days 
after such drug meets such criteria; and 
‘‘(D) in the case of a report with respect 
to an increase in the price of a qualifying drug 
that occurs during a 12-month or 36-month pe-
riod described in paragraph (1)(C), not later 
than April 1, 2023. 
‘‘(c) CONTENTS.—A report under subsection (b), con-
sistent with the standard for disclosures described in sec-
tion 213.3(d) of title 12, Code of Federal Regulations (as 
in effect on the date of enactment of this section), shall, 
at a minimum, include— 
‘‘(1) with respect to the qualifying drug— 
‘‘(A) the percentage by which the manufac-
turer will raise the wholesale acquisition cost of 
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the drug within the 12-month period or 36- 
month period as described in subsection 
(b)(1)(A)(i), 
(b)(1)(A)(ii), 
(b)(1)(C)(i), 
or 
(b)(1)(C)(ii), as applicable, and the effective 
date of such price increase or the cost associ-
ated with a qualifying drug if such drug meets 
the criteria under subsection (b)(1)(B) and the 
effective date at which such drug meets such 
criteria; 
‘‘(B) an explanation for, and description 
of, each price increase for such drug that will 
occur during the 12-month period or the 36- 
month 
period 
described 
in 
subsection 
(b)(1)(A)(i), 
(b)(1)(A)(ii), 
(b)(1)(C)(i), 
or 
(b)(1)(C)(ii), as applicable; 
‘‘(C) an explanation for, and description 
of, the cost associated with a qualifying drug if 
such drug meets the criteria under subsection 
(b)(1)(B), as applicable; 
‘‘(D) if known and different from the man-
ufacturer of the qualifying drug, the identity 
of— 
‘‘(i) the sponsor or sponsors of any in-
vestigational new drug applications under 
section 505(i) of the Federal Food, Drug, 
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141 
and Cosmetic Act for clinical investigations 
with respect to such drug, for which the 
full reports are submitted as part of the 
application— 
‘‘(I) for approval of the drug 
under section 505 of such Act; or 
‘‘(II) for licensure of the drug 
under section 351 of the Public 
Health Service Act; and 
‘‘(ii) the sponsor of an application for 
the drug approved under such section 505 
of the Federal Food, Drug, and Cosmetic 
Act or licensed under section 351 of the 
Public Health Service Act; 
‘‘(E) a description of the history of the 
manufacturer’s price increases for the drug 
since the approval of the application for the 
drug under section 505 of the Federal Food, 
Drug, and Cosmetic Act or the issuance of the 
license for the drug under section 351 of the 
Public Health Service Act, or since the manu-
facturer acquired such approved application or 
license, if applicable; 
‘‘(F) the current wholesale acquisition cost 
of the drug; 
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142 
‘‘(G) the total expenditures of the manu-
facturer on— 
‘‘(i) materials and manufacturing for 
such drug; 
‘‘(ii) acquiring patents and licensing 
for such drug; and 
‘‘(iii) purchasing or acquiring such 
drug from another manufacturer, if appli-
cable; 
‘‘(H) the percentage of total expenditures 
of the manufacturer on research and develop-
ment for such drug that was derived from Fed-
eral funds; 
‘‘(I) the total expenditures of the manufac-
turer on research and development for such 
drug that is necessary to demonstrate that it 
meets applicable statutory standards for ap-
proval under section 505 of the Federal Food, 
Drug, and Cosmetic Act or licensure under sec-
tion 351 of the Public Health Service Act, as 
applicable; 
‘‘(J) the total expenditures of the manufac-
turer on pursuing new or expanded indications 
or dosage changes for such drug under section 
505 of the Federal Food, Drug, and Cosmetic 
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143 
Act or section 351 of the Public Health Service 
Act; 
‘‘(K) the total expenditures of the manu-
facturer on carrying out postmarket require-
ments related to such drug, including under 
section 505(o)(3) of the Federal Food, Drug, 
and Cosmetic Act; 
‘‘(L) the total revenue and the net profit 
generated from the qualifying drug for each cal-
endar year since the approval of the application 
for the drug under section 505 of the Federal 
Food, Drug, and Cosmetic Act or the issuance 
of the license for the drug under section 351 of 
the Public Health Service Act, or since the 
manufacturer acquired such approved applica-
tion or license; and 
‘‘(M) the total costs associated with mar-
keting and advertising for the qualifying drug; 
‘‘(2) with respect to the manufacturer— 
‘‘(A) the total revenue and the net profit 
of the manufacturer for each of the 12-month 
period described in subsection (b)(1)(A)(i) or 
(b)(1)(C)(i) or the 36-month period described in 
subsection (b)(1)(A)(ii) or (b)(1)(C)(ii), as ap-
plicable; 
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