the Secretary elects to estimate the average 
Medicare drug program rebate eligible rebate 
amounts, the Secretary shall establish a rec-
onciliation process for adjusting manufacturer 
rebate payments not later than 3 months after 
the date that manufacturers receive the infor-
mation 
collected 
under 
section 
1860D– 
12(b)(7)(B). 
‘‘(4) LENGTH OF AGREEMENT.—The provisions 
of paragraph (4) of section 1927(b) (other than 
clauses (iv) and (v) of subparagraph (B)) shall apply 
to rebate agreements under this subsection in the 
same manner as such paragraph applies to a rebate 
agreement under such section. 
‘‘(5) OTHER
TERMS
AND
CONDITIONS.—The 
Secretary shall establish other terms and conditions 
of the rebate agreement under this subsection, in-
cluding terms and conditions related to compliance, 
that are consistent with this subsection. 
‘‘(6) DEFINITIONS.—In this subsection and sec-
tion 1860D–12(b)(7): 
‘‘(A) REBATE ELIGIBLE INDIVIDUAL.—The 
term ‘rebate eligible individual’ means— 
‘‘(i) a subsidy eligible individual (as 
defined in section 1860D–14(a)(3)(A)); 
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‘‘(ii) a Medicaid beneficiary treated as 
a subsidy eligible individual under clause 
(v) of section 1860D–14(a)(3)(B); and 
‘‘(iii) any part D eligible individual 
not described in clause (i) or (ii) who is de-
termined for purposes of the State plan 
under title XIX to be eligible for medical 
assistance under clause (i), (iii), or (iv) of 
section 1902(a)(10)(E). 
‘‘(B) REBATE PERIOD.—The term ‘rebate 
period’ has the meaning given such term in sec-
tion 1927(k)(8).’’. 
(b) REPORTING REQUIREMENT
FOR
THE DETER-
MINATION AND PAYMENT OF REBATES BY MANUFAC-
TURES RELATED TO REBATE FOR REBATE ELIGIBLE 
MEDICARE DRUG PLAN ENROLLEES.— 
(1) REQUIREMENTS FOR PDP SPONSORS.—Sec-
tion 1860D–12(b) of the Social Security Act (42 
U.S.C. 1395w–112(b)) is amended by adding at the 
end the following new paragraph: 
‘‘(7) REPORTING REQUIREMENT FOR THE DE-
TERMINATION AND PAYMENT OF REBATES BY MANU-
FACTURERS RELATED TO REBATE FOR REBATE ELI-
GIBLE MEDICARE DRUG PLAN ENROLLEES.— 
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‘‘(A) IN GENERAL.—For purposes of the 
rebate under section 1860D–2(f) for contract 
years beginning on or after January 1, 2013, 
each contract entered into with a PDP sponsor 
under this part with respect to a prescription 
drug plan shall require that the sponsor comply 
with subparagraphs (B) and (C). 
‘‘(B) REPORT FORM AND CONTENTS.—Not 
later than a date specified by the Secretary, a 
PDP sponsor of a prescription drug plan under 
this part shall report to each manufacturer— 
‘‘(i) information (by National Drug 
Code number) on the total number of units 
of each dosage, form, and strength of each 
drug of such manufacturer dispensed to re-
bate eligible Medicare drug plan enrollees 
under any prescription drug plan operated 
by the PDP sponsor during the rebate pe-
riod; 
‘‘(ii) information on the price dis-
counts, price concessions, and rebates for 
such drugs for such form, strength, and 
period; 
‘‘(iii) information on the extent to 
which such price discounts, price conces-
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sions, and rebates apply equally to rebate 
eligible Medicare drug plan enrollees and 
PDP enrollees who are not rebate eligible 
Medicare drug plan enrollees; and 
‘‘(iv) any additional information that 
the Secretary determines is necessary to 
enable the Secretary to calculate the aver-
age Medicare drug program rebate eligible 
rebate amount (as defined in paragraph 
(3)(C) of such section), and to determine 
the amount of the rebate required under 
this section, for such form, strength, and 
period. 
Such report shall be in a form consistent with 
a standard reporting format established by the 
Secretary. 
‘‘(C) SUBMISSION TO SECRETARY.—Each 
PDP sponsor shall promptly transmit a copy of 
the information reported under subparagraph 
(B) to the Secretary for the purpose of audit 
oversight and evaluation. 
‘‘(D) 
CONFIDENTIALITY
OF
INFORMA-
TION.—The provisions of subparagraph (D) of 
section 1927(b)(3), relating to confidentiality of 
information, shall apply to information reported 
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by PDP sponsors under this paragraph in the 
same manner that such provisions apply to in-
formation disclosed by manufacturers or whole-
salers under such section, except— 
‘‘(i) that any reference to ‘this sec-
tion’ in clause (i) of such subparagraph 
shall be treated as being a reference to this 
section; 
‘‘(ii) the reference to the Director of 
the Congressional Budget Office in clause 
(iii) of such subparagraph shall be treated 
as including a reference to the Medicare 
Payment Advisory Commission; and 
‘‘(iii) clause (iv) of such subparagraph 
shall not apply. 
‘‘(E) OVERSIGHT.—Information reported 
under this paragraph may be used by the In-
spector General of the Department of Health 
and Human Services for the statutorily author-
ized purposes of audit, investigation, and eval-
uations. 
‘‘(F) PENALTIES
FOR
FAILURE
TO
PRO-
VIDE TIMELY INFORMATION AND PROVISION OF 
FALSE INFORMATION.—In the case of a PDP 
sponsor— 
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‘‘(i) that fails to provide information 
required under subparagraph (B) on a 
timely basis, the sponsor is subject to a 
civil money penalty in the amount of 
$10,000 for each day in which such infor-
mation has not been provided; or 
‘‘(ii) that knowingly (as defined in 
section 1128A(i)) provides false informa-
tion under such subparagraph, the sponsor 
is subject to a civil money penalty in an 
amount not to exceed $100,000 for each 
item of false information. 
Such civil money penalties are in addition to 
other penalties as may be prescribed by law. 
The provisions of section 1128A (other than 
subsections (a) and (b)) shall apply to a civil 
money penalty under this subparagraph in the 
same manner as such provisions apply to a pen-
alty or proceeding under section 1128A(a).’’. 
(2) APPLICATION TO MA ORGANIZATIONS.—Sec-
tion 1857(f)(3) of the Social Security Act (42 
U.S.C. 1395w–27(f)(3)) is amended by adding at 
the end the following: 
‘‘(D) REPORTING REQUIREMENT RELATED 
TO REBATE FOR REBATE ELIGIBLE MEDICARE 
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DRUG
PLAN
ENROLLEES.—Section 1860D– 
12(b)(7).’’. 
(c) DEPOSIT OF REBATES INTO MEDICARE PRE-
SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) of the 
Social Security Act (42 U.S.C. 1395w–116(c)) is amended 
by adding at the end the following new paragraph: 
‘‘(6) REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG PLAN ENROLLEES.—Amounts paid under a re-
bate agreement under section 1860D–2(f) shall be 
deposited into the Account.’’. 
(d) EXCLUSION FROM DETERMINATION
OF BEST 
PRICE
AND AVERAGE MANUFACTURER PRICE UNDER 
MEDICAID.— 
(1) EXCLUSION FROM BEST PRICE DETERMINA-
TION.—Section 1927(c)(1)(C)(ii)(I) of the Social Se-
curity Act (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is 
amended by inserting ‘‘and amounts paid under a 
rebate agreement under section 1860D–2(f)’’ after 
‘‘this section’’. 
(2) EXCLUSION
FROM
AVERAGE
MANUFAC-
TURER
PRICE
DETERMINATION.—Section 
1927(k)(1)(B)(i) of the Social Security Act (42 
U.S.C. 1396r–8(k)(1)(B)(i)) is amended— 
(A) in subclause (IV), by striking ‘‘and’’ 
after the semicolon; 
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(B) in subclause (V), by striking the period 
at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(VI) amounts paid under a re-
bate agreement under section 1860D– 
2(f).’’. 
Æ 
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