‘‘(iii) PART D PRICE DEFINED.—For 
purposes of this paragraph, the term ‘part 
D price’ means, with respect to a covered 
part D drug, the price (including dis-
counts, rebates, and other price conces-
sions) that may be charged to PDP spon-
sors and MA organizations for such drug 
for part D eligible individuals who are en-
rolled under a prescription drug plan or 
under an MA–PD plan. 
‘‘(iv) REGULATIONS FOR IDENTIFICA-
TION
OF
SPECIFIED
DRUGS.—The Sec-
retary, not later than one year after the 
date of the enactment of this paragraph, 
shall promulgate regulations regarding the 
identification of single source drugs and 
biologicals as specified drugs. 
‘‘(v) PROCESS
TO
PETITION
THAT 
DRUG IS NO LONGER A SPECIFIED DRUG.— 
The Secretary shall establish a process 
under which a manufacturer for a specified 
drug may petition the Secretary for the re-
scinding of a previous identification of a 
drug as a specified drug under clause (ii) 
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based upon the drug involved no longer 
being a specified drug. 
‘‘(B) PRICE DETERMINATION PROCESS.— 
For purposes of subparagraph (A), the process 
described in this subparagraph, with respect to 
the part D price for a specified drug for a plan 
year, is the following: 
‘‘(i) LIMITED PERIOD FOR NEGOTIA-
TION FOR FIRST PLAN YEAR.— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall negotiate such price with 
the drug manufacturer involved for a 
period of not more than 90 days be-
ginning on the date of identification 
of the drug as a specified drug for 
such plan year by the Secretary. 
‘‘(II) 
SUCCESSFUL
NEGOTIA-
TIONS.—In the case that such nego-
tiation with respect to such 90-day pe-
riod results in a price that is agreed 
to by both the Secretary and manu-
facturer, such price shall be the max-
imum part D price for such specified 
drug through the end of the plan year 
beginning after such period. 
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‘‘(ii) SECRETARY
SETS
PRICE
FOR 
FIRST PLAN YEAR IN CASE OF FAILURE TO 
NEGOTIATE PRICE.—In the case that nego-
tiations under clause (i), with respect to a 
specified drug, do not result in a price for 
such specified drug that is so agreed to by 
the Secretary and drug manufacturer, the 
Secretary shall determine a price for such 
drug based on— 
‘‘(I) the information provided to 
the Secretary by the drug manufac-
turer during the 90-day period de-
scribed in clause (i)(I) regarding costs 
associated with such drug that are ap-
plicable with respect to such drug 
manufacturer; 
‘‘(II) in the case that payment is 
made for such drug by the Depart-
ment of Veterans Affairs or under 
title XIX, the net priced paid for such 
drug by such Department or under 
such title, as applicable; 
‘‘(III) ensuring affordability of 
such drug, and accessibility to such 
drug, for individuals entitled to bene-
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fits under part A or enrolled under 
part B; and 
‘‘(IV) such other factors as the 
Secretary determines appropriate. 
The price determined under this clause 
shall be the maximum part D price for 
such specified drug through the end of the 
plan year beginning after such determina-
tion of such price. 
‘‘(iii) PRICE
IN
SUBSEQUENT
PLAN 
YEARS.—For each plan year that is subse-
quent to the plan year for which a price is 
determined for a specified drug under 
clause (i) or (ii) and in which, on the first 
day of such subsequent plan year, the iden-
tification of such drug as a specified drug 
still applies, the maximum price for such 
drug shall be the maximum part D price 
for the previous year determined under 
clause (i) or (ii), as applicable, increased 
by the percentage increase in the consumer 
price index for all urban consumers (all 
items; U.S. city average) for the 12-month 
period ending with June of the year before 
such subsequent plan year. 
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‘‘(iv) 
CONSULTATION.—In 
deter-
mining a price for a specified drug under 
clause (ii), the Secretary may consult with 
the Comptroller General, the Medicare 
Payment Advisory Commission, the Med-
icaid and CHIP Payment and Access Com-
mission, or other outside, independent ex-
perts. 
‘‘(C) 
NO
CHANGE
IN
RULES
FOR 
FORMULARIES.— 
‘‘(i) IN
GENERAL.—Nothing in sub-
paragraph (A) or (B) shall be construed to 
authorize the Secretary to establish or re-
quire a particular formulary. 
‘‘(ii) 
CONSTRUCTION.—Clause 
(i) 
shall not be construed as affecting the Sec-
retary’s authority to ensure appropriate 
and adequate access to covered part D 
drugs under prescription drug plans and 
under MA–PD plans, including compliance 
of such plans with formulary requirements 
under section 1860D–4(b)(3). 
‘‘(D) CONSTRUCTION.—Nothing in this 
paragraph shall be construed as— 
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‘‘(i) preventing the sponsor of a pre-
scription drug plan, or an organization of-
fering an MA–PD plan, from obtaining a 
discount or reduction of the price for a 
covered part D drug described in subpara-
graph (A) below the price negotiated under 
such subparagraph or determined under 
subparagraph (B); or 
‘‘(ii) permitting the Secretary to make 
proprietary data available to the public. 
‘‘(E) DEFINITIONS.—In this paragraph: 
‘‘(i) 
DRUG
MANUFACTURER.—The 
term ‘drug manufacturer’ has the meaning 
given the term ‘manufacturer’ in section 
1860D–14A(g)(5). 
‘‘(ii) SINGLE SOURCE DRUG OR BIO-
LOGICAL.—The term ‘single source drug or 
biological’ has the meaning given such 
term in section 1847A(c)(6)(D).’’. 
(b) REQUIRING PARTICIPATION
IN NEGOTIATION 
PROCESS AS CONDITION OF PART D DRUG COVERAGE.— 
Section 1860D–14A(b) of the Social Security Act (42 
U.S.C. 1395w–114a(b)) is amended by adding at the end 
the following new paragraph: 
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‘‘(5) PARTICIPATION
IN
NEGOTIATION
PROC-
ESS.—Each agreement under this subsection shall 
include, with respect to plans years beginning with 
plan year 2017, an agreement by the manufacturer, 
with respect to each specified drug of such manufac-
turer under section 1860d–11(i)(2), to participate in 
the negotiation process under such section for such 
drug, including accepting the price resulting from 
the negotiation (or, in the case that such negotiation 
does not result in a price for such drug that is 
agreed to by the Secretary and the manufacturer, 
the price resulting from the application of subpara-
graph (B)(ii) of such section) as the maximum price 
for such drug for the period provided under such 
section.’’. 
SEC. 3. STUDY AND REPORT. 
(a) STUDY.—The Secretary of Health and Human 
Services shall conduct a study examining— 
(1) the impact of the amendments made by sec-
tion 2 on— 
(A) the cost of single source drugs and 
biologicals 
(as 
defined 
in 
section 
1847A(c)(6)(D) of the Social Security Act (42 
U.S.C. 1395w–3a(c)(6)(D))) for which payment 
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is made under part B of title XVIII of such 
Act; and 
(B) the accessibility of such drugs and 
biologicals for individuals entitled to benefits 
under part A of such title or enrolled under 
part B of such title; and 
(2) options that would permit or require the 
Secretary to create and implement, not later than 
one year after the date of the report described in 
subsection (b)— 
(A) a method to apply to such single 
source drugs and biologicals for which the Sec-
retary determines appropriate— 
(i) an authority similar to the author-
ity granted to the Secretary under sub-
paragraph (A) of section 1860D–11(i)(2) 
of such Act (relating to negotiating with 
drug manufacturers the part D prices for 
certain specified drugs); and 
(ii) a negotiation process similar to 
the process under subparagraph (B) of 
such section; and 
(B) a method, such as a rebate program, 
to incorporate the rate negotiated for such 
drugs and biologicals pursuant to the authority 
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described in subparagraph (A) into payments 
for such drugs and biologicals under part B of 
such Act. 
(b) REPORT.—Not later than one year after the date 
of the enactment of this Act, the Secretary of Health and 
Human Services shall submit a report to Congress on the 
results of the study conducted under subsection (a). Such 
report shall include recommendations regarding the op-
tions examined pursuant to paragraph (2) of such sub-
section. 
Æ 
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