‘‘(3) the Secretary shall apply the provisions of 
such part E to such plan, issuer, and coverage, and 
such participants and beneficiaries so enrolled in 
such plans. 
‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION 
IN DRUG PRICE NEGOTIATION PROGRAM.—A group 
health plan or a health insurance issuer offering group 
health insurance coverage shall publicly disclose in a man-
ner and in accordance with a process specified by the Sec-
retary any election made under section 1197 of the Social 
Security Act by the plan or issuer to not participate in 
the Drug Price Negotiation Program under part E of title 
XI of such Act with respect to a selected drug (as defined 
in section 1192(c) of such Act) for which coverage is pro-
vided under such plan or coverage before the beginning 
of the plan year for which such election was made.’’. 
(B) APPLICATION TO RETIREE AND CER-
TAIN SMALL GROUP HEALTH PLANS.—Section 
732(a) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1191a(a)) is 
amended by striking ‘‘section 711’’ and insert-
ing ‘‘sections 711 and 726’’. 
(C) CLERICAL AMENDMENT.—The table of 
sections for subpart B of part 7 of subtitle B 
of title I of the Employee Retirement Income 
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Security Act of 1974 is amended by adding at 
the end the following: 
‘‘Sec. 726. Drug Price Negotiation Program and application of maximum fair 
prices.’’. 
(3) IRC.— 
(A) IN GENERAL.—Subchapter B of chap-
ter 100 of the Internal Revenue Code of 1986 
is amended by adding at the end the following 
new section: 
‘‘SEC. 9826. DRUG PRICE NEGOTIATION PROGRAM AND AP-
PLICATION OF MAXIMUM FAIR PRICES. 
‘‘(a) IN GENERAL.—In the case of a group health 
plan that is treated under section 1197 of the Social Secu-
rity Act as having in effect an agreement with the Sec-
retary of Health and Human Services under the Drug 
Price Negotiation Program under part E of title XI of 
such Act, with respect to a price applicability period (as 
defined in section 1191(b) of such Act) and a selected 
drug (as defined in section 1192(c) of such Act) with re-
spect to such period for which coverage is provided under 
such plan— 
‘‘(1) the provisions of such part shall apply, as 
applicable— 
‘‘(A) if coverage of such selected drug is 
provided under such plan if the drug is fur-
nished or dispensed at a pharmacy or by a mail 
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order service, to the plan, and to the partici-
pants and beneficiaries enrolled under such 
plan during such period, with respect to such 
selected drug, in the same manner as such pro-
visions apply to prescription drug plans and 
MA–PD plans, and to participants and bene-
ficiaries enrolled under such prescription drug 
plans and MA–PD plans during such period; 
and 
‘‘(B) if coverage of such selected drug is 
provided under such plan if the drug is fur-
nished or administered by a hospital, physician, 
or other provider of services or supplier, to the 
plan, to the participants and beneficiaries en-
rolled under such plan, and to hospitals, physi-
cians, and other providers of services and sup-
pliers during such period, with respect to such 
drug in the same manner as such provisions 
apply to the Secretary of Health and Human 
Services, to participants and beneficiaries enti-
tled to benefits under part A of title XVIII or 
enrolled under part B of such title, and to hos-
pitals, physicians, and other providers and sup-
pliers participating under title XVIII during 
such period; 
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‘‘(2) the plan shall apply any cost-sharing re-
sponsibilities under such plan, with respect to such 
selected drug, by substituting an amount not more 
than the maximum fair price negotiated under such 
part E of title XI for such drug in lieu of the drug 
price upon which the cost-sharing would have other-
wise applied, and such cost-sharing responsibilities 
with respect to such selected drug may not exceed 
such maximum fair price; and 
‘‘(3) the Secretary shall apply the provisions of 
such part E to such plan and such participants and 
beneficiaries so enrolled in such plan. 
‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION 
IN DRUG PRICE NEGOTIATION PROGRAM.—A group 
health plan shall publicly disclose in a manner and in ac-
cordance with a process specified by the Secretary any 
election made under section 1197 of the Social Security 
Act by the plan to not participate in the Drug Price Nego-
tiation Program under part E of title XI of such Act with 
respect to a selected drug (as defined in section 1192(c) 
of such Act) for which coverage is provided under such 
plan before the beginning of the plan year for which such 
election was made.’’. 
(B) APPLICATION TO RETIREE AND CER-
TAIN SMALL GROUP HEALTH PLANS.—Section 
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9831(a)(2) of the Internal Revenue Code of 
1986 is amended by inserting ‘‘other than with 
respect to section 9826,’’ before ‘‘any group 
health plan’’. 
(C) CLERICAL AMENDMENT.—The table of 
sections for subchapter B of chapter 100 of 
such Code is amended by adding at the end the 
following new item: 
‘‘Sec. 9826. Drug Price Negotiation Program and application of maximum fair 
prices.’’. 
SEC. 3. APPLICATION OF PRESCRIPTION DRUG INFLATION 
REBATES TO DRUGS FURNISHED IN THE 
COMMERCIAL MARKET. 
(a) PART B DRUGS.— 
(1) APPLICATION OF PRESCRIPTION DRUG IN-
FLATION REBATES TO DRUGS FURNISHED IN THE 
COMMERCIAL MARKET.—Section 1847A(i) of the So-
cial Security Act (42 U.S.C. 1395w–3a(i)) is amend-
ed— 
(A) in paragraph (1)(A)(i), by striking 
‘‘units’’ and inserting ‘‘billing units’’; 
(B) in paragraph (2)(A), by striking ‘‘for 
which payment is made under this part’’ and 
inserting ‘‘that would be payable under this 
part if such drug were furnished to an indi-
vidual enrolled under this part’’; and 
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(C) in paragraph (3)— 
(i) in subparagraph (A)(i), by striking 
‘‘units’’ and inserting ‘‘billing units’’; and 
(ii) by striking subparagraph (B) and 
inserting the following: 
‘‘(B) 
TOTAL
NUMBER
OF
BILLING 
UNITS.—For purposes of subparagraph (A)(i), 
the total number of billing units with respect to 
a part B rebatable drug is determined as fol-
lows: 
‘‘(i) Determine the total number of 
units equal to— 
‘‘(I) the total number of units, as 
reported under subsection (c)(1)(B) 
for each National Drug Code of such 
drug during the calendar quarter that 
is two calendar quarters prior to the 
calendar quarter as described in sub-
paragraph (A), minus 
‘‘(II) the total number of units 
with respect to each National Drug 
Code of such drug for which payment 
was made under a State plan under 
title XIX (or waiver of such plan), as 
reported by States under section 
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1927(b)(2)(A) for the rebate period 
that is the same calendar quarter as 
described in subclause (I). 
‘‘(ii) Convert the units determined 
under clause (i) to billing units for the bill-
ing and payment code of such drug, using 
a methodology similar to the methodology 
used under this section, by dividing the 
units determined under clause (i) for each 
National Drug Code of such drug by the 
billing unit for the billing and payment 
code of such drug. 
‘‘(iii) Compute the sum of the billing 
units for each National Drug Code of such 
drug in clause (ii).’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply with respect to cal-
endar quarters beginning after the date of the enact-
ment of this Act. 
(b) COVERED PART D DRUGS.— 
(1) APPLICATION OF PRESCRIPTION DRUG IN-
FLATION REBATES TO DRUGS FURNISHED IN THE 
COMMERCIAL MARKET.—Section 1860D–14B of the 
Social Security Act (42 U.S.C. 1395w–114b) is 
amended— 
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(A) in subsection (b)— 
(i) in paragraph (1)— 
(I) in subparagraph (A)(i), by 
striking ‘‘the total number of units’’ 
and all that follows through the semi-
colon and inserting the following: ‘‘the 
total number of units that are used to 
calculate the average manufacturer 
price of such dosage form and 
strength with respect to such part D 
rebatable drug, as reported by the 
manufacturer of such drug under sec-
tion 1927 for each month, with re-
spect to such period;’’; and 
(II) by striking subparagraph (B) 
and inserting the following: 
‘‘(B) EXCLUDED UNITS.—For purposes of 
subparagraph (A)(i), the Secretary shall exclude 
from the total number of units for a dosage 
form and strength with respect to a part D 
rebatable drug, with respect to an applicable pe-
riod, the following: 
‘‘(i) Units of each dosage form and 
strength of such part D rebatable drug for 
which payment was made under a State 
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plan under title XIX (or waiver of such 
plan), as reported by States under section 
1927(b)(2)(A). 
‘‘(ii) Units of each dosage form and 
strength of such part D rebatable drug for 
which a rebate is paid under section 
1847A(i). 
‘‘(iii) Beginning with plan year 2026, 
units of each dosage form and strength of 
such part D rebatable drug for which the 
manufacturer provides a discount under 
the program under section 340B of the 
Public Health Service Act.’’; and 
(ii) in paragraph (6), by striking ‘‘IN-
FORMATION.—The Secretary’’ and all that 
follows through ‘‘rebatable covered part D 
drug dispensed’’ and inserting the fol-
lowing: ‘‘AMP REPORTS.—The Secretary 
shall provide for a method and process 
under which, in the case of a manufacturer 
of a part D rebatable drug that submits 
revisions to information submitted under 
section 1927 by the manufacturer with re-
spect to such drug’’; and 
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(B) by striking subsection (d) and insert-
ing the following: 
‘‘(d) INFORMATION.—For purposes of carrying out 
this section, the Secretary shall use information submitted 
by manufacturers under section 1927(b)(3) and informa-
tion submitted by States under section 1927(b)(2)(A).’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply with respect to appli-
cable periods (as defined in section 1860D– 
14B(g)(7) of the Social Security Act (42 U.S.C. 
1395w–114b(g)(7))) beginning after the date of the 
enactment of this Act. 
Æ 
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