I 
117TH CONGRESS 
1ST SESSION H. R. 5237 
To amend titles XI, XVIII, and XIX of the Social Security Act to lower 
prescription drug prices in the Medicare and Medicaid programs, to 
improve transparency related to pharmaceutical prices and transactions, 
to lower patients’ out-of-pocket costs, and to ensure accountability to 
taxpayers, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 10, 2021 
Mr. PETERS (for himself, Mr. SCHRADER, Miss RICE of New York, Mrs. MUR-
PHY of Florida, and Mr. CORREA) introduced the following bill; which was 
referred to the Committee on Energy and Commerce, and in addition to 
the Committees on Ways and Means, and the Judiciary, for a period to 
be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend titles XI, XVIII, and XIX of the Social Security 
Act to lower prescription drug prices in the Medicare 
and Medicaid programs, to improve transparency related 
to pharmaceutical prices and transactions, to lower pa-
tients’ out-of-pocket costs, and to ensure accountability 
to taxpayers, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Reduced Costs and Continued Cures Act of 2021’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—ESTABLISHMENT OF PART B PAYMENT RULES FOR 
NEGOTIATION-ELIGIBLE DRUGS AND BIOLOGICALS 
Sec. 101. Establishment of part B payment rules for negotiation-eligible drugs 
and biologicals. 
TITLE II—MEDICARE 
Subtitle A—Part B 
Sec. 201. Inclusion of value of coupons in determination of average sales price 
for drugs and biologicals under Medicare part B. 
Sec. 202. Payment for biosimilar biological products during initial period. 
Sec. 203. Temporary increase in Medicare part B payment for biosimilar bio-
logical products. 
Sec. 204. Medicare part B rebate by manufacturers. 
Sec. 205. Requiring manufacturers of certain single-dose container or single-use 
package drugs payable under part B of the Medicare program 
to provide refunds with respect to discarded amounts of such 
drugs. 
Sec. 206. Establishment of maximum add-on payment for drugs and 
biologicals. 
Sec. 207. Treatment of drug administration services furnished by certain ex-
cepted off-campus outpatient departments of a provider. 
Sec. 208. GAO study and report on average sales price. 
Sec. 209. Authority to use alternative payment for drugs and biologicals to pre-
vent potential drug shortages. 
Subtitle B—Part D 
Sec. 221. Medicare part D modernization redesign. 
Sec. 222. Monthly out-of-pocket cost sharing maximum for enrollees who incur 
a significant portion of costs towards annual out-of-pocket 
threshold. 
Sec. 223. Public disclosure of drug discounts and other pharmacy benefit man-
ager (PBM) provisions. 
Sec. 224. Public disclosure of direct and indirect remuneration review and audit 
results. 
Sec. 225. Improvements to provision of parts A and B claims data to prescrip-
tion drug plans. 
Sec. 226. Medicare part D rebate by manufacturers. 
Sec. 227. Prohibiting branding on part D benefit cards. 
Sec. 228. Requiring prescription drug plans and MA–PD plans to report poten-
tial fraud, waste, and abuse to the Secretary of HHS. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6211
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
Sec. 229. Establishment of pharmacy quality measures under Medicare part D. 
Sec. 230. Addition of new measures based on access to biosimilar biological 
products to the 5-star rating system under Medicare Advan-
tage. 
Sec. 231. HHS study and report on the influence of pharmaceutical manufac-
turer third-party reimbursement hubs on health care providers 
who prescribe their drugs and biologicals. 
Sec. 232. Definition of strength for the purposes of determining interchange-
ability of biologic and biosimilar products. 
Subtitle C—Miscellaneous 
Sec. 233. Drug manufacturer price transparency. 
Sec. 234. Strengthening and expanding pharmacy benefit managers trans-
parency requirements. 
Sec. 235. Prescription drug pricing dashboards. 
Sec. 236. Improving coordination between the Food and Drug Administration 
and the Centers for Medicare & Medicaid Services. 
Sec. 237. Patient consultation in Medicare national and local coverage deter-
minations in order to mitigate barriers to inclusion of such per-
spectives. 
Sec. 238. GAO study on increases to Medicare and Medicaid spending due to 
copayment coupons and other patient assistance programs. 
Sec. 239. MedPAC report on shifting coverage of certain Medicare part B 
drugs to Medicare part D. 
Sec. 240. Taking steps to fulfill treaty obligations to Tribal communities. 
Sec. 241. Establishing a monthly cap on beneficiary incurred costs for insulin 
products and supplies under a prescription drug plan or MA– 
PD plan. 
TITLE III—MEDICAID 
Sec. 301. Medicaid pharmacy and therapeutics committee improvements. 
Sec. 302. Improving reporting requirements and developing standards for the 
use of drug use review boards in State Medicaid programs. 
Sec. 303. GAO report on conflicts of interest in State Medicaid program drug 
use review boards and pharmacy and therapeutics (P&T) com-
mittees. 
Sec. 304. Ensuring the accuracy of manufacturer price and drug product infor-
mation under the Medicaid drug rebate program. 
Sec. 305. T–MSIS drug data analytics reports. 
Sec. 306. Risk-sharing value-based payment agreements for covered outpatient 
drugs under Medicaid. 
Sec. 307. Modification of maximum rebate amount under Medicaid drug rebate 
program. 
Sec. 308. Applying Medicaid drug rebate requirement to drugs provided as part 
of outpatient hospital services. 
TITLE IV—ADDRESSING INTERMEDIARIES AND DRUG 
COMPETITION 
Sec. 401. Health plan oversight of pharmacy benefit manager services. 
Sec. 402. Study of pharmaceutical supply chain intermediaries and merger ac-
tivity. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6211
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
Sec. 403. Requirement that direct-to-consumer advertisements for prescription 
drugs and biological products include truthful and non-mis-
leading pricing information. 
Sec. 404. Change conditions of first generic exclusivity to spur access and com-
petition. 
Sec. 405. Ending the practice preventing market competition known as ‘‘Pay- 
for-Delay’’. 
Sec. 406. Empowering the FTC to prevent ‘‘product hopping’’. 
Sec. 407. Promoting competition by limiting patent thickets. 
TITLE V—BENEFICIARY COST SHARING FAIRNESS 
Sec. 501. Repealing of rule by the Department of Health and Human Services. 
Sec. 502. Defining cost under prescription drug plans under part D of Medi-
care. 
TITLE 
I—ESTABLISHMENT 
OF 
PART B PAYMENT RULES FOR 
NEGOTIATION-ELIGIBLE 
DRUGS AND BIOLOGICALS 
SEC. 101. ESTABLISHMENT OF PART B PAYMENT RULES 
FOR 
NEGOTIATION-ELIGIBLE 
DRUGS 
AND 
BIOLOGICALS. 
Section 1847A of the Social Security Act (42 U.S.C. 
1395w–3a) is amended— 
(1) in paragraph (1)— 
(A) in the matter preceding subparagraph 
(A), by striking ‘‘Subject to paragraph (7)’’ and 
inserting ‘‘Subject to paragraphs (7) and (9)’’; 
(B) in subparagraph (B), by striking at 
the end ‘‘or’’; 
(C) in subparagraph (C), by striking the 
period at the end and inserting ‘‘; or’’; and 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(D) by adding at the end the following new 
subparagraph: 
‘‘(D) in the case of a negotiation-eligible 
drug or biological, the maximum allowable cost 
determined under paragraph (9).’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(9) 
RULES
FOR
NEGOTIATION-ELIGIBLE 
DRUGS AND BIOLOGICALS.— 
‘‘(A) NOTIFICATION OF MANUFACTURERS 
OF
NEGOTIATION-ELIGIBLE
DRUGS
AND 
BIOLOGICALS.— 
‘‘(i) IN
GENERAL.—Not later than 
180 days after the date of the enactment 
of this paragraph, the Secretary shall no-
tify each manufacturer of each negotiation- 
eligible drug or biological that is subject to 
negotiation for payment under this part. 
‘‘(ii) NEGOTIATION-ELIGIBLE
DRUG 
OR
BIOLOGICAL.—In this paragraph, the 
term ‘negotiation-eligible drug or biologi-
cal’ means a single source drug or biologi-
cal for which each of the following have ex-
pired: 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(I) The period of regulatory 
data protections or exclusivity granted 
for such drug or biological (including 
for new chemical entities, biologics, 
orphan drugs, pediatric formulations, 
and clinical trials). 
‘‘(II) Subject to the succeeding 
sentence, the period of any patents 
issued for such drug or biological up 
to 1 year after the approval of such 
drug or biological. In the case of small 
molecule product that is a such a 
drug or biological, the period of any 
patents listed in the publication, Ap-
proved Drug Products With Thera-
peutic Equivalence Evaluations (re-
ferred to as the ‘Orange Book’). 
‘‘(B) NEGOTIATION.— 
‘‘(i) IN
GENERAL.—With respect to 
period during which the negotiated price of 
such drug or biological is not more than 75 
percent of the average sales price of such 
drug or biological (as determined on an an-
nual basis), the Secretary and the manu-
facturer of a negotiation-eligible drug or 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
biological shall during the negotiation pe-
riod negotiate a maximum allowable cost 
for such drug or biological. 
‘‘(ii) MAXIMUM ALLOWABLE COST.— 
In this subparagraph, the term ‘maximum 
allowable cost’ means the amount agreed 
to by the Secretary and the manufacturer 
of a negotiation-eligible drug or biological 
for a unit of such drug or biological that 
is not less than 65 percent and not more 
than 75 percent of the lowest average sales 
price of such drug or biological for the pre-
ceding 1-year period. 
‘‘(iii) EXCLUSIONS.—The maximum 
allowable cost under this section shall be 
excluded from the calculation of the manu-
facturer’s average sales price under section 
1847A(c), 
average 
manufacturer 
price 
under section 1927(k)(1), best price under 
section 1927(c)(1)(C), and non-Federal av-
erage manufacturer price under 38 U.S.C. 
8126(h).’’. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
TITLE II—MEDICARE 
Subtitle A—Part B 
SEC. 201. INCLUSION OF VALUE OF COUPONS IN DETER-
MINATION OF AVERAGE SALES PRICE FOR 
DRUGS AND BIOLOGICALS UNDER MEDICARE 
PART B. 
Section 1847A(c) of the Social Security Act (42 
U.S.C. 1395w–3a(c)) is amended— 
(1) in paragraph (3)— 
(A) by striking ‘‘DISCOUNTS.—In calcu-
lating’’ and inserting ‘‘DISCOUNTS
TO
PUR-
CHASERS
AND
COUPONS
PROVIDED
TO
PRI-
VATELY INSURED INDIVIDUALS.— 
‘‘(A) DISCOUNTS
TO
PURCHASERS.—In 
calculating’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(B) COUPONS
PROVIDED
TO
REDUCE 
COST-SHARING.—For calendar quarters begin-
ning on or after July 1, 2024, in calculating the 
manufacturer’s average sales price under this 
subsection, such price shall include the value 
(as defined in paragraph (6)(J)) of any coupons 
provided under a drug coupon program of a 
manufacturer (as those terms are defined in 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
subparagraphs (K) and (L), respectively, of 
paragraph (6)).’’; and 
(2) in paragraph (6), by adding at the end the 
following new subparagraphs: 
‘‘(J) VALUE.—The term ‘value’ means, 
with respect to a coupon (as defined in sub-
paragraph (K)), the difference, if any, be-
tween— 
‘‘(i) the amount of any reduction or 
elimination of cost-sharing or other out-of- 
pocket costs described in such subpara-
graph to a patient as a result of the use 
of such coupon; and 
‘‘(ii) any charge to the patient for the 
use of such coupon. 
‘‘(K) COUPON.—The term ‘coupon’ means 
any financial support that is provided to a pa-
tient, either directly to the patient or indirectly 
to the patient through a physician, prescriber, 
pharmacy, or other provider, under a drug cou-
pon program of a manufacturer (as defined in 
subparagraph (L)) that is used to reduce or 
eliminate cost-sharing or other out-of-pocket 
costs of the patient, including costs related to 
a deductible, coinsurance, or copayment, with 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
respect to a drug or biological, including a bio-
similar biological product, of the manufacturer. 
‘‘(L) DRUG COUPON PROGRAM.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the term ‘drug coupon program’ 
means, with respect to a manufacturer, a 
program through which the manufacturer 
provides coupons to patients as described 
in subparagraph (K). 
‘‘(ii) EXCLUSIONS.—Such term does 
not include— 
‘‘(I) a patient assistance program 
operated by a manufacturer that pro-
vides free or discounted drugs or 
biologicals, including biosimilar bio-
logical products, (through in-kind do-
nations) to patients of low income; or 
‘‘(II) a contribution by a manu-
facturer to a nonprofit or Foundation 
that provides free or discounted drugs 
or biologicals, including biosimilar bio-
logical products, (through in-kind do-
nations) to patients of low income.’’. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
SEC. 202. PAYMENT FOR BIOSIMILAR BIOLOGICAL PROD-
UCTS DURING INITIAL PERIOD. 
Section 1847A(c)(4) of the Social Security Act (42 
U.S.C. 1395w–3a(c)(4)) is amended— 
(1) in each of subparagraphs (A) and (B), by 
redesignating clauses (i) and (ii) as subclauses (I) 
and (II), respectively, and moving such subclauses 2 
ems to the right; 
(2) by redesignating subparagraphs (A) and 
(B) as clauses (i) and (ii) and moving such clauses 
2 ems to the right; 
(3) by striking ‘‘UNAVAILABLE.—In the case’’ 
and inserting ‘‘UNAVAILABLE.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), in the case’’; and 
(4) by adding at the end the following new sub-
paragraph: 
‘‘(B) LIMITATION
ON
PAYMENT
AMOUNT 
FOR BIOSIMILAR BIOLOGICAL PRODUCTS DUR-
ING
INITIAL
PERIOD.—In the case of a bio-
similar biological product furnished on or after 
July 1, 2023, in lieu of applying subparagraph 
(A) during the initial period described in such 
subparagraph with respect to the biosimilar bio-
logical product, the amount payable under this 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
section for the biosimilar biological product is 
the lesser of the following: 
‘‘(i) The amount determined under 
clause (ii) of such subparagraph for the 
biosimilar biological product. 
‘‘(ii) The amount determined under 
subsection (b)(1)(B) for the reference bio-
logical product.’’. 
SEC. 203. TEMPORARY INCREASE IN MEDICARE PART B 
PAYMENT 
FOR 
BIOSIMILAR 
BIOLOGICAL 
PRODUCTS. 
Section 1847A(b)(8) of the Social Security Act (42 
U.S.C. 1395w–3a(b)(8)) is amended— 
(1) by redesignating subparagraphs (A) and 
(B) as clauses (i) and (ii), respectively, and indent-
ing appropriately; 
(2) by striking ‘‘PRODUCT.—The amount’’ and 
inserting the following: ‘‘PRODUCT.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the amount’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(B) TEMPORARY PAYMENT INCREASE FOR 
BIOSIMILAR BIOLOGICAL PRODUCTS.— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(i) IN GENERAL.—Beginning Janu-
ary 1, 2023, in the case of a biosimilar bio-
logical product described in paragraph 
(1)(C) that is furnished during the applica-
ble 5-year period for such product, the 
amount specified in this paragraph for 
such product is an amount equal to the 
lesser of the following: 
‘‘(I) The amount specified in sub-
paragraph (A) for such product if 
clause (ii) of such subparagraph was 
applied by substituting ‘8 percent’ for 
‘6 percent’. 
‘‘(II) The amount determined 
under subsection (b)(1)(B) for the 
reference biological product. 
‘‘(ii) APPLICABLE 5-YEAR PERIOD.— 
For purposes of clause (i), the applicable 
5-year period for a biosimilar biological 
product is— 
‘‘(I) in the case of such a product 
for which payment was made under 
this paragraph as of December 31, 
2012, the 5-year period beginning on 
January 1, 2023; and 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(II) in the case of such a prod-
uct that is not described in subclause 
(I), the 5-year period beginning on the 
first day of the first calendar quarter 
in which payment was made for such 
product under this paragraph.’’. 
SEC. 204. MEDICARE PART B REBATE BY MANUFACTURERS. 
(a) IN GENERAL.—Section 1834 of the Social Secu-
rity Act (42 U.S.C. 1395m) is amended by adding at the 
end the following new subsection: 
‘‘(x) REBATE
BY MANUFACTURERS
FOR SINGLE 
SOURCE DRUGS WITH PRICES INCREASING FASTER 
THAN INFLATION.— 
‘‘(1) REQUIREMENTS.— 
‘‘(A) SECRETARIAL PROVISION OF INFOR-
MATION.—Not later than 6 months after the 
end of each calendar quarter beginning on or 
after July 1, 2024, the Secretary shall, for each 
part B rebatable drug, report to each manufac-
turer of such part B rebatable drug the fol-
lowing for such calendar quarter: 
‘‘(i) Information on the total number 
of units of the billing and payment code 
described in subparagraph (A)(i) of para-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
graph (3) with respect to such drug and 
calendar quarter. 
‘‘(ii) Information on the amount (if 
any) of the excess average sales price in-
crease described in subparagraph (A)(ii) of 
such paragraph for such drug and calendar 
quarter. 
‘‘(iii) The rebate amount specified 
under such paragraph for such part B 
rebatable drug and calendar quarter. 
‘‘(B) MANUFACTURER
REQUIREMENT.— 
For each calendar quarter beginning on or after 
July 1, 2024, the manufacturer of a part B 
rebatable drug shall, for such drug, not later 
than 30 days after the date of receipt from the 
Secretary of the information described in sub-
paragraph (A) for such calendar quarter, pro-
vide to the Secretary a rebate that is equal to 
the amount specified in paragraph (3) for such 
drug for such calendar quarter. 
‘‘(2) PART B REBATABLE DRUG DEFINED.— 
‘‘(A) IN GENERAL.—In this subsection, the 
term ‘part B rebatable drug’ means a single 
source drug or biological (as defined in sub-
paragraph (D) of section 1847A(c)(6)), includ-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
ing a biosimilar biological product (as defined 
in subparagraph (H) of such section), paid for 
under this part, except such term shall not in-
clude such a drug or biological— 
‘‘(i) if the average total allowed 
charges for a year per individual that uses 
such a drug or biological, as determined by 
the Secretary, are less than, subject to 
subparagraph (B), $100; or 
‘‘(ii) that is a vaccine described in 
subparagraph (A) or (B) of section 
1861(s)(10). 
‘‘(B) INCREASE.—The dollar amount ap-
plied under subparagraph (A)(i)— 
‘‘(i) for 2025, shall be the dollar 
amount specified under such subparagraph 
for 2024, 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 ending with 
June of the previous year; and 
‘‘(ii) for a subsequent year, shall be 
the dollar amount specified in this clause 
(or clause (i)) for the previous year, in-
creased by the percentage increase in the 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
consumer price index for all urban con-
sumers (United States city average) for 
the 12-month period ending with June of 
the previous year. 
Any dollar amount specified under this sub-
paragraph that is not a multiple of $10 shall be 
rounded to the nearest multiple of $10. 
‘‘(3) REBATE AMOUNT.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the amount specified in this para-
graph for a part B rebatable drug assigned to 
a billing and payment code for a calendar quar-
ter is, subject to paragraph (4), the amount 
equal to the product of— 
‘‘(i) subject to subparagraphs (B) and 
(G), the total number of units of the bill-
ing and payment code for such part B 
rebatable drug furnished under this part 
during the calendar quarter; and 
‘‘(ii) the amount (if any) by which— 
‘‘(I) the payment amount under 
subparagraph (B) or (C) of section 
1847A(b)(1), as applicable, for such 
part B rebatable drug during the cal-
endar quarter; exceeds 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(II) the inflation-adjusted pay-
ment amount determined under sub-
paragraph (C) for such part B 
rebatable drug during the calendar 
quarter. 
‘‘(B) EXCLUDED UNITS.—For purposes of 
subparagraph (A)(i), the total number of units 
of the billing and payment code for each part 
B rebatable drug furnished during a calendar 
quarter shall not include— 
‘‘(i) units packaged into the payment 
for a procedure or service under section 
1833(t) or under section 1833(i) (instead 
of separately payable under such respective 
section); 
‘‘(ii) units included under the single 
payment system for renal dialysis services 
under section 1881(b)(14); or 
‘‘(iii) units of a part B rebatable drug 
of a manufacturer furnished to an indi-
vidual, if such manufacturer, with respect 
to the furnishing of such units of such 
drug, provides for discounts under section 
340B of the Public Health Service Act or 
for rebates under section 1927. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(C) DETERMINATION OF INFLATION-AD-
JUSTED PAYMENT AMOUNT.—The inflation-ad-
justed payment amount determined under this 
subparagraph for a part B rebatable drug for 
a calendar quarter is— 
‘‘(i) the payment amount for the bill-
ing and payment code for such drug in the 
payment amount benchmark quarter (as 
defined in subparagraph (D)); increased by 
‘‘(ii) the percentage by which the re-
bate period CPI–U (as defined in subpara-
graph (F)) for the calendar quarter ex-
ceeds the benchmark period CPI–U (as de-
fined in subparagraph (E)). 
‘‘(D) 
PAYMENT
AMOUNT
BENCHMARK 
QUARTER.—The term ‘payment amount bench-
mark quarter’ means the calendar quarter be-
ginning January 1, 2016. 
‘‘(E) BENCHMARK
PERIOD
CPI–U.—The 
term ‘benchmark period CPI–U’ means the con-
sumer price index for all urban consumers 
(United States city average) for July 2015. 
‘‘(F) REBATE PERIOD CPI–U.—The term 
‘rebate period CPI–U’ means, with respect to a 
calendar quarter described in subparagraph 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(C), the greater of the benchmark period CPI– 
U and the consumer price index for all urban 
consumers (United States city average) for the 
first month of the calendar quarter that is two 
calendar quarters prior to such described cal-
endar quarter. 
‘‘(G) COUNTING UNITS.— 
‘‘(i) CUT-OFF
PERIOD
TO
COUNT 
UNITS.—For purposes of subparagraph 
(A)(i), subject to clause (ii), to count the 
total number of billing units for a part B 
rebatable drug for a quarter, the Secretary 
may use a cut-off period in order to ex-
clude from such total number of billing 
units for such quarter claims for services 
furnished during such quarter that were 
not processed at an appropriate time prior 
to the end of the cut-off period. 
‘‘(ii) COUNTING
UNITS
FOR
CLAIMS 
PROCESSED
AFTER
CUT-OFF
PERIOD.—If 
the Secretary uses a cut-off period pursu-
ant to clause (i), in the case of units of a 
part B rebatable drug furnished during a 
quarter but pursuant to application of such 
cut-off period excluded for purposes of sub-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
paragraph (A)(i) from the total number of 
billing units for the drug for such quarter, 
the Secretary shall count such units of 
such drug so furnished in the total number 
of billing units for such drug for a subse-
quent quarter, as the Secretary determines 
appropriate. 
‘‘(4) SPECIAL TREATMENT OF CERTAIN DRUGS 
AND EXEMPTION.— 
‘‘(A) SUBSEQUENTLY APPROVED DRUGS.— 
Subject to subparagraph (B), in the case of a 
part B rebatable drug first approved or licensed 
by the Food and Drug Administration after 
July 1, 2015, clause (i) of paragraph (3)(C) 
shall be applied as if the term ‘payment amount 
benchmark quarter’ were defined under para-
graph (3)(D) as the third full calendar quarter 
after the day on which the drug was first mar-
keted and clause (ii) of paragraph (3)(C) shall 
be applied as if the term ‘benchmark period 
CPI–U’ were defined under paragraph (3)(E) 
as if the reference to ‘July 2015’ under such 
paragraph were a reference to ‘the first month 
of the first full calendar quarter after the day 
on which the drug was first marketed’. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(B) TIMELINE
FOR
PROVISION
OF
RE-
BATES
FOR
SUBSEQUENTLY
APPROVED 
DRUGS.—In the case of a part B rebatable drug 
first approved or licensed by the Food and 
Drug Administration after July 1, 2015, para-
graph (1)(B) shall be applied as if the reference 
to ‘July 1, 2024’ under such paragraph were a 
reference to the later of the 6th full calendar 
quarter after the day on which the drug was 
first marketed or July 1, 2024. 
‘‘(C) EXEMPTION FOR SHORTAGES.—The 
Secretary may reduce or waive the rebate 
amount under paragraph (1)(B) with respect to 
a part B rebatable drug that is described as 
currently in shortage on the shortage list in ef-
fect under section 506E of the Federal Food, 
Drug, and Cosmetic Act or in the case of other 
exigent circumstances, as determined by the 
Secretary. 
‘‘(D) SELECTED DRUGS.—In the case of a 
part B 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))— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(i) for calendar quarters 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 
amount under paragraph (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, clause (i) of paragraph (3)(C) shall 
be applied as if the term ‘payment amount 
benchmark quarter’ were defined under 
paragraph (3)(D) as the calendar quarter 
beginning January 1 of the last year be-
ginning during such price applicability pe-
riod with respect to such selected drug and 
clause (ii) of paragraph (3)(C) shall be ap-
plied as if the term ‘benchmark period 
CPI–U’ were defined under paragraph 
(3)(E) as if the reference to ‘July 2015’ 
under such paragraph were a reference to 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
the July of the year preceding such last 
year. 
‘‘(5) APPLICATION TO BENEFICIARY COINSUR-
ANCE.—In the case of a part B rebatable drug, if 
the payment amount for a quarter exceeds the infla-
tion adjusted payment for such quarter— 
‘‘(A) in computing the amount of any coin-
surance applicable under this title to an indi-
vidual with respect to such drug, the computa-
tion of such coinsurance shall be based on the 
inflation-adjusted payment amount determined 
under paragraph (3)(C) for such part B 
rebatable drug; and 
‘‘(B) the amount of such coinsurance is 
equal to 20 percent of such inflation-adjusted 
payment amount so determined. 
‘‘(6) REBATE DEPOSITS.—Amounts paid as re-
bates under paragraph (1)(B) shall be deposited into 
the Federal Supplementary Medical Insurance Trust 
Fund established under section 1841. 
‘‘(7) CIVIL MONEY PENALTY.—If a manufac-
turer of a part B rebatable drug has failed to com-
ply with the requirements under paragraph (1)(B) 
for such drug for a calendar quarter, the manufac-
turer shall be subject to, in accordance with a proc-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
ess established by the Secretary pursuant to regula-
tions, a civil money penalty in an amount equal to 
at least 125 percent of the amount specified in para-
graph (3) for such drug for such calendar quarter. 
The provisions of section 1128A (other than sub-
sections (a) (with respect to amounts of penalties or 
additional assessments) 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). 
‘‘(8) STUDY AND REPORT.— 
‘‘(A) STUDY.—The Secretary shall conduct 
a study of the feasibility of and operational 
issues involved with the following: 
‘‘(i) Including multiple source drugs 
(as defined in section 1847A(c)(6)(C)) in 
the rebate system under this subsection. 
‘‘(ii) Including drugs and biologicals 
paid for under MA plans under part C in 
the rebate system under this subsection. 
‘‘(iii) Including drugs excluded under 
paragraph (2)(A) and units of the billing 
and payment code of the drugs excluded 
under paragraph (3)(B) in the rebate sys-
tem under this subsection. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(B) REPORT.—Not later than 3 years 
after the date of the enactment of this sub-
section, the Secretary shall submit to Congress 
a report on the study conducted under subpara-
graph (A). 
‘‘(9) APPLICATION
TO
MULTIPLE
SOURCE 
DRUGS.—The Secretary may, based on the report 
submitted under paragraph (8) and pursuant to 
rulemaking, apply the provisions of this subsection 
to multiple source drugs (as defined in section 
1847A(c)(6)(C)), including, for purposes of deter-
mining the rebate amount under paragraph (3), by 
calculating 
manufacturer-specific 
average 
sales 
prices for the benchmark period and the rebate pe-
riod.’’. 
(b) AMOUNTS PAYABLE; COST-SHARING.—Section 
1833 of the Social Security Act (42 U.S.C. 1395l) is 
amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) in subparagraph (S), by striking 
‘‘with respect to’’ and inserting ‘‘subject to 
subparagraph (DD), with respect to’’; 
(ii) by striking ‘‘and (CC)’’ and in-
serting ‘‘(CC)’’; and 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(iii) by inserting before the semicolon 
at the end the following: ‘‘, and (DD) with 
respect to a part B rebatable drug (as de-
fined in paragraph (2) of section 1834(x)) 
for which the payment amount for a cal-
endar 
quarter 
under 
paragraph 
(3)(A)(ii)(I) of such section for such quar-
ter exceeds the inflation-adjusted payment 
under paragraph (3)(A)(ii)(II) of such sec-
tion for such quarter, the amounts paid 
shall be the difference between (i) the pay-
ment 
amount 
under 
paragraph 
(3)(A)(ii)(I) of such section for such drug, 
and (ii) 20 percent of the inflation-ad-
justed payment amount under paragraph 
(3)(A)(ii)(II) of such section for such 
drug’’; and 
(B) by adding at the end of the flush left 
matter following paragraph (9) the following: 
‘‘For purposes of applying paragraph (1)(DD), sub-
sections (i)(9) and (t)(8)(F), and section 1834(x)(5), the 
Secretary shall make such estimates and use such data 
as the Secretary determines appropriate, and notwith-
standing any other provision of law, may do so by program 
instruction or otherwise.’’; 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(2) in subsection (i), by adding at the end the 
following new paragraph: 
‘‘(9) In the case of a part B rebatable drug (as 
defined in paragraph (2) of section 1834(x)) for 
which payment under this subsection is not pack-
aged into a payment for a covered OPD service (as 
defined in subsection (t)(1)(B)) (or group of serv-
ices) furnished on or after July 1, 2024, under the 
system under this subsection, in lieu of calculation 
of coinsurance and the amount of payment otherwise 
applicable under this subsection, the provisions of 
section 1834(x)(5), paragraph (1)(DD) of subsection 
(a), and the flush left matter following paragraph 
(9) of subsection (a), shall, as determined appro-
priate by the Secretary, apply under this subsection 
in the same manner as such provisions of section 
1834(x)(5) and subsection (a) apply under such sec-
tion and subsection.’’; and 
(3) in subsection (t)(8), by adding at the end 
the following new subparagraph: 
‘‘(F) PART B REBATABLE DRUGS.—In the 
case of a part B rebatable drug (as defined in 
paragraph (2) of section 1834(x)) for which 
payment under this part is not packaged into a 
payment for a service furnished on or after July 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
1, 2024, under the system under this sub-
section, in lieu of calculation of coinsurance and 
the amount of payment otherwise applicable 
under this subsection, the provisions of section 
1834(x)(5), paragraph (1)(DD) of subsection 
(a), and the flush left matter following para-
graph (9) of subsection (a), shall, as determined 
appropriate by the Secretary, apply under this 
subsection in the same manner as such provi-
sions of section 1834(x)(5) and subsection (a) 
apply under such section and subsection.’’. 
(c) CONFORMING AMENDMENTS.— 
(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(x)’’ after ‘‘section 1927’’. 
(2) EXCLUDING PART 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(x)’’ 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 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
out section 1847B’’ and inserting ‘‘to carry out sec-
tion 1847B or section 1834(x)’’. 
SEC. 205. REQUIRING MANUFACTURERS OF CERTAIN SIN-
GLE-DOSE CONTAINER OR SINGLE-USE PACK-
AGE DRUGS PAYABLE UNDER PART B OF THE 
MEDICARE PROGRAM TO PROVIDE REFUNDS 
WITH RESPECT TO DISCARDED AMOUNTS OF 
SUCH DRUGS. 
Section 1847A of the Social Security Act (42 U.S.C. 
1395–3a), as amended by section 206, is amended by add-
ing at the end the following new subsection: 
‘‘(i) REFUND
FOR CERTAIN DISCARDED SINGLE- 
DOSE CONTAINER OR SINGLE-USE PACKAGE DRUGS.— 
‘‘(1) SECRETARIAL
PROVISION
OF
INFORMA-
TION.— 
‘‘(A) IN
GENERAL.—For each calendar 
quarter beginning on or after July 1, 2024, the 
Secretary shall, with respect to a refundable 
single-dose container or single-use package drug 
(as defined in paragraph (8)), report to each 
manufacturer 
(as 
defined 
in 
subsection 
(c)(6)(A)) of such refundable single-dose con-
tainer or single-use package drug the following 
for the calendar quarter: 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(i) Subject to subparagraph (C), in-
formation on the total number of units of 
the billing and payment code of such drug, 
if any, that were discarded during such 
quarter, as determined using a mechanism 
such as the JW modifier used as of the 
date of enactment of this subsection (or 
any such successor modifier that includes 
such data as determined appropriate by 
the Secretary). 
‘‘(ii) The refund amount that the 
manufacturer is liable for pursuant to 
paragraph (3). 
‘‘(B) 
DETERMINATION
OF
DISCARDED 
AMOUNTS.—For 
purposes 
of 
subparagraph 
(A)(i), with respect to a refundable single-dose 
container or single-use package drug furnished 
during a quarter, the amount of such drug that 
was discarded shall be determined based on the 
amount of such drug that was unused and dis-
carded for each drug on the date of service. 
‘‘(C) EXCLUSION OF UNITS OF PACKAGED 
DRUGS.—The total number of units of the bill-
ing and payment code of a refundable single- 
dose container or single-use package drug of a 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
manufacturer furnished during a calendar quar-
ter for purposes of subparagraph (A)(i), and 
the determination of the estimated total allowed 
charges for the drug in the quarter for purposes 
of paragraph (3)(A)(ii), shall not include such 
units that are packaged into the payment 
amount for an item or service and are not sepa-
rately payable. 
‘‘(2) 
MANUFACTURER
REQUIREMENT.—For 
each calendar quarter beginning on or after July 1, 
2024, the manufacturer of a refundable single-dose 
container or single-use package drug shall, for such 
drug, provide to the Secretary a refund that is equal 
to the amount specified in paragraph (3) for such 
drug for such quarter. 
‘‘(3) REFUND AMOUNT.— 
‘‘(A) IN GENERAL.—The amount of the re-
fund specified in this paragraph is, with respect 
to a refundable single-dose container or single- 
use package drug of a manufacturer assigned to 
a billing and payment code for a calendar quar-
ter beginning on or after July 1, 2024, an 
amount equal to the estimated amount (if any) 
by which— 
‘‘(i) the product of— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(I) the total number of units of 
the billing and payment code for such 
drug that were discarded during such 
quarter (as determined under para-
graph (1)); and 
‘‘(II)(aa) in the case of a refund-
able single-dose container or single- 
use package drug that is a single 
source drug or biological, the amount 
determined for such drug under sub-
section (b)(4); or 
‘‘(bb) in the case of a refundable 
single-dose container or single-use 
package drug that is a biosimilar bio-
logical product, the average sales price 
determined 
under 
subsection 
(b)(8)(A); exceeds 
‘‘(ii) an amount equal to the applica-
ble percentage (as defined in subparagraph 
(B)) of the estimated total allowed charges 
for such drug during the quarter. 
‘‘(B) 
APPLICABLE
PERCENTAGE
DE-
FINED.— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A)(ii), the term ‘applicable 
percentage’ means— 
‘‘(I) subject to subclause (II), 10 
percent; and 
‘‘(II) in the case of a refundable 
single-dose container or single-use 
package drug described in subclause 
(I) of clause (iii) and, if applicable, a 
refundable single-dose container or 
single-use package drug described in 
subclause (II) of such clause, a per-
centage specified by the Secretary 
pursuant to clause (ii). 
‘‘(ii) TREATMENT
OF
DRUGS
THAT 
REQUIRE FILTRATION OR OTHER UNIQUE 
CIRCUMSTANCES.—The Secretary, through 
notice and comment rulemaking— 
‘‘(I) in the case of a refundable 
single-dose container or single-use 
package drug described in subclause 
(I) of clause (iii), shall increase the 
applicable percentage otherwise appli-
cable under clause (i)(I) as deter-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
mined appropriate by the Secretary; 
and 
‘‘(II) in the case of a refundable 
single-dose container or single-use 
package drug described in subclause 
(II) of clause (iii), may increase the 
applicable percentage otherwise appli-
cable under clause (i)(I) as deter-
mined appropriate by the Secretary. 
‘‘(iii) DRUG
DESCRIBED.—For pur-
poses of clause (ii), a refundable single- 
dose container or single-use package drug 
described in this clause is either of the fol-
lowing: 
‘‘(I) A refundable single-dose 
container or single-use package drug 
for which preparation instructions re-
quired and approved by the Commis-
sioner of the Food and Drug Adminis-
tration include filtration during the 
drug preparation process, prior to di-
lution and administration, and require 
that any unused portion of such drug 
after the filtration process be dis-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
carded after the completion of such 
filtration process. 
‘‘(II) Any other refundable sin-
gle-dose container or single-use pack-
age 
drug 
that 
has 
unique 
cir-
cumstances involving similar loss of 
product. 
‘‘(4) FREQUENCY.—Amounts required to be re-
funded pursuant to paragraph (2) shall be paid in 
regular intervals (as determined appropriate by the 
Secretary). 
‘‘(5) REFUND DEPOSITS.—Amounts paid as re-
funds pursuant to paragraph (2) shall be deposited 
into the Federal Supplementary Medical Insurance 
Trust Fund established under section 1841. 
‘‘(6) ENFORCEMENT.— 
‘‘(A) AUDITS.— 
‘‘(i) MANUFACTURER AUDITS.—Each 
manufacturer of a refundable single-dose 
container or single-use package drug that 
is required to provide a refund under this 
subsection shall be subject to periodic 
audit with respect to such drug and such 
refunds by the Secretary. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(ii) PROVIDER
AUDITS.—The Sec-
retary shall conduct periodic audits of 
claims submitted under this part with re-
spect to refundable single-dose container or 
single-use package drugs in accordance 
with the authority under section 1833(e) to 
ensure compliance with the requirements 
applicable under this subsection. 
‘‘(B) CIVIL MONEY PENALTY.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall impose a civil money penalty on a 
manufacturer of a refundable single-dose 
container or single-use package drug who 
has failed to comply with the requirement 
under paragraph (2) for such drug for a 
calendar quarter in an amount equal to the 
sum of— 
‘‘(I) the amount that the manu-
facturer would have paid under such 
paragraph with respect to such drug 
for such quarter; and 
‘‘(II) 25 percent of such amount. 
‘‘(ii) APPLICATION.—The provisions 
of section 1128A (other than subsections 
(a) and (b)) shall apply to a civil money 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
penalty under this subparagraph in the 
same manner as such provisions apply to a 
penalty 
or 
proceeding 
under 
section 
1128A(a). 
‘‘(7) IMPLEMENTATION.—The Secretary shall 
implement this subsection through notice and com-
ment rulemaking. 
‘‘(8) DEFINITION
OF
REFUNDABLE
SINGLE- 
DOSE CONTAINER OR SINGLE-USE PACKAGE DRUG.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), in this subsection, the term 
‘refundable single-dose container or single-use 
package drug’ means a single source drug or bi-
ological (as defined in section 1847A(c)(6)(D)) 
or a biosimilar biological product (as defined in 
section 1847A(c)(6)(H)) for which payment is 
established under this part and that is fur-
nished from a single-dose container or single- 
use package. 
‘‘(B) EXCLUSIONS.—The term ‘refundable 
single-dose container or single-use package 
drug’ does not include a drug or biological that 
is either a radiopharmaceutical or an imaging 
agent.’’. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
SEC. 206. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT 
FOR DRUGS AND BIOLOGICALS. 
(a) IN GENERAL.—Section 1847A of the Social Secu-
rity Act (42 U.S.C. 1395w–3a) is amended— 
(1) in subsection (b)— 
(A) in paragraph (1), in the matter pre-
ceding subparagraph (A), by striking ‘‘para-
graph (7)’’ and inserting ‘‘paragraphs (7) and 
(9)’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(9) MAXIMUM ADD-ON PAYMENT AMOUNT.— 
‘‘(A) IN
GENERAL.—In determining the 
payment amount under the provisions of sub-
paragraph (A), (B), or (C) of paragraph (1) of 
this subsection, subsection (c)(4)(A)(ii), or sub-
section (d)(3)(C) for a drug or biological fur-
nished on or after January 1, 2024, if the ap-
plicable add-on payment (as defined in subpara-
graph (B)) for each drug or biological on a 
claim for a date of service exceeds the max-
imum add-on payment amount specified under 
subparagraph (C) for the drug or biological, 
then the payment amount otherwise determined 
for the drug or biological under those provi-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
sions, as applicable, shall be reduced by the 
amount of such excess. 
‘‘(B) APPLICABLE ADD-ON PAYMENT DE-
FINED.—In this paragraph, the term ‘applicable 
add-on payment’ means the following amounts, 
determined without regard to the application of 
subparagraph (A): 
‘‘(i) In the case of a multiple source 
drug, an amount equal to the difference 
between— 
‘‘(I) the amount that would oth-
erwise be applied under paragraph 
(1)(A); and 
‘‘(II) the amount that would be 
applied under such paragraph if ‘100 
percent’ were substituted for ‘106 per-
cent’. 
‘‘(ii) In the case of a single source 
drug or biological, an amount equal to the 
difference between— 
‘‘(I) the amount that would oth-
erwise be applied under paragraph 
(1)(B); and 
‘‘(II) the amount that would be 
applied under such paragraph if ‘100 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00040
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
percent’ were substituted for ‘106 per-
cent’. 
‘‘(iii) In the case of a biosimilar bio-
logical product, the amount otherwise de-
termined under paragraph (8)(B). 
‘‘(iv) In the case of a drug or biologi-
cal during the initial period described in 
subsection (c)(4)(A), an amount equal to 
the difference between— 
‘‘(I) the amount that would oth-
erwise be applied under subsection 
(c)(4)(A)(ii); and 
‘‘(II) the amount that would be 
applied under such subsection if ‘100 
percent’ were substituted, as applica-
ble, for— 
‘‘(aa) ‘103 percent’ in sub-
clause (I) of such subsection; or 
‘‘(bb) any percent in excess 
of 100 percent applied under 
subclause (II) of such subsection. 
‘‘(v) In the case of a drug or biologi-
cal to which subsection (d)(3)(C) applies, 
an amount equal to the difference be-
tween— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00041
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(I) the amount that would oth-
erwise be applied under such sub-
section; and 
‘‘(II) the amount that would be 
applied under such subsection if ‘100 
percent’ were substituted, as applica-
ble, for— 
‘‘(aa) any percent in excess 
of 100 percent applied under 
clause (i) of such subsection; or 
‘‘(bb) ‘103 percent’ in clause 
(ii) of such subsection. 
‘‘(C) MAXIMUM ADD-ON PAYMENT AMOUNT 
SPECIFIED.—For purposes of subparagraph 
(A), the maximum add-on payment amount 
specified in this subparagraph is— 
‘‘(i) for each of 2024 through 2031, 
$1,000; and 
‘‘(ii) for a subsequent year, the 
amount specified in this subparagraph for 
the preceding year increased by the per-
centage increase in the consumer price 
index for all urban consumers (all items; 
United States city average) for the 12- 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00042
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
month period ending with June of the pre-
vious year. 
Any amount determined under this subpara-
graph that is not a multiple of $10 shall be 
rounded to the nearest multiple of $10.’’; and 
(2) in subsection (c)(4)(A)(ii), by striking ‘‘in 
the case’’ and inserting ‘‘subject to subsection 
(b)(9), in the case’’. 
(b) CONFORMING AMENDMENTS RELATING TO SEPA-
RATELY PAYABLE DRUGS.— 
(1) OPPS.—Section 1833(t)(14) of the Social 
Security Act (42 U.S.C. 1395l(t)(14)) is amended— 
(A) in subparagraph (A)(iii)(II), by insert-
ing ‘‘, subject to subparagraph (I)’’ after ‘‘are 
not available’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(I) APPLICATION
OF
MAXIMUM
ADD-ON 
PAYMENT
FOR
SEPARATELY
PAYABLE
DRUGS 
AND BIOLOGICALS.—In establishing the amount 
of payment under subparagraph (A) for a speci-
fied covered outpatient drug that is furnished 
as part of a covered OPD service (or group of 
services) on or after January 1, 2024, if such 
payment is determined based on the average 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00043
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
price for the year established under section 
1847A pursuant to clause (iii)(II) of such sub-
paragraph, the provisions of subsection (b)(9) 
of section 1847A shall apply to the amount of 
payment so established in the same manner as 
such provisions apply to the amount of payment 
under section 1847A.’’. 
(2) ASC.—Section 1833(i)(2)(D) of the Social 
Security Act (42 U.S.C. 1395l(i)(2)(D)) is amend-
ed— 
(A) by moving clause (v) 6 ems to the left; 
(B) by redesignating clause (vi) as clause 
(vii); and 
(C) by inserting after clause (v) the fol-
lowing new clause: 
‘‘(vi) If there is a separate payment under the system 
described in clause (i) for a drug or biological furnished 
on or after January 1, 2024, the provisions of subsection 
(t)(14)(I) shall apply to the establishment of the amount 
of payment for the drug or biological under such system 
in the same manner in which such provisions apply to the 
establishment of the amount of payment under subsection 
(t)(14)(A).’’. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00044
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
SEC. 207. TREATMENT OF DRUG ADMINISTRATION SERV-
ICES FURNISHED BY CERTAIN EXCEPTED 
OFF-CAMPUS OUTPATIENT DEPARTMENTS OF 
A PROVIDER. 
Section 1833(t)(16) of the Social Security Act (42 
U.S.C. 1395l(t)(16)) is amended by adding at the end the 
following new subparagraph: 
‘‘(G) SPECIAL PAYMENT RULE FOR DRUG 
ADMINISTRATION SERVICES FURNISHED BY AN 
EXCEPTED DEPARTMENT OF A PROVIDER.— 
‘‘(i) IN GENERAL.—In the case of a 
covered OPD service that is a drug admin-
istration service (as defined by the Sec-
retary) furnished by a department of a 
provider described in clause (ii) or (iv) of 
paragraph (21)(B), the payment amount 
for such service furnished on or after Jan-
uary 1, 2024, shall be the same payment 
amount (as determined in paragraph 
(21)(C)) that would apply if the drug ad-
ministration service was furnished by an 
off-campus outpatient department of a pro-
vider (as defined in paragraph (21)(B)). 
‘‘(ii) APPLICATION WITHOUT REGARD 
TO BUDGET NEUTRALITY.—The reductions 
made under this subparagraph— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00045
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(I) shall not be considered an 
adjustment under paragraph (2)(E); 
and 
‘‘(II) shall not be implemented in 
a budget neutral manner.’’. 
SEC. 208. GAO STUDY AND REPORT ON AVERAGE SALES 
PRICE. 
(a) STUDY.— 
(1) IN GENERAL.—The Comptroller General of 
the United States (in this section referred to as the 
‘‘Comptroller General’’) shall conduct a study on 
spending for applicable drugs under part B of title 
XVIII of the Social Security Act. 
(2) APPLICABLE DRUGS DEFINED.—In this sec-
tion, the term ‘‘applicable drugs’’ means drugs and 
biologicals— 
(A) for which reimbursement under such 
part B is based on the average sales price of 
the drug or biological; and 
(B) that account for the largest percentage 
of total spending on drugs and biologicals under 
such part B (as determined by the Comptroller 
General, but in no case less that 25 drugs or 
biologicals). 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00046
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(3) REQUIREMENTS.—The study under para-
graph (1) shall include an analysis of the following: 
(A) The extent to which each applicable 
drug is paid for— 
(i) under such part B for Medicare 
beneficiaries; or 
(ii) by private payers in the commer-
cial market. 
(B) Any change in Medicare spending or 
Medicare beneficiary cost-sharing that would 
occur if the average sales price of an applicable 
drug was based solely on payments by private 
payers in the commercial market. 
(C) The extent to which drug manufactur-
ers provide rebates, discounts, or other price 
concessions to private payers in the commercial 
market for applicable drugs, which the manu-
facturer includes in its average sales price cal-
culation, for— 
(i) formulary placement; 
(ii) utilization management consider-
ations; or 
(iii) other purposes. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00047
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(D) Barriers to drug manufacturers pro-
viding such price concessions for applicable 
drugs. 
(E) Other areas determined appropriate by 
the Comptroller General. 
(b) REPORT.—Not later than 2 years after the date 
of the enactment of this Act, the Comptroller General shall 
submit to Congress a report on the study conducted under 
subsection (a), together with recommendations for such 
legislation and administrative action as the Secretary de-
termines appropriate. 
SEC. 209. AUTHORITY TO USE ALTERNATIVE PAYMENT FOR 
DRUGS AND BIOLOGICALS TO PREVENT PO-
TENTIAL DRUG SHORTAGES. 
(a) IN GENERAL.—Section 1847A(e) of the Social 
Security Act (42 U.S.C. 1395w–3a(e)) is amended— 
(1) by striking ‘‘PAYMENT IN RESPONSE TO 
PUBLIC HEALTH EMERGENCY.—In the case’’ and 
inserting ‘‘PAYMENTS.— 
‘‘(1) IN RESPONSE TO PUBLIC HEALTH EMER-
GENCY.—In the case’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) PREVENTING
POTENTIAL
DRUG
SHORT-
AGES.— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00048
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(A) IN GENERAL.—In the case of a drug 
or biological that the Secretary determines is 
described in subparagraph (B) for one or more 
quarters beginning on or after January 1, 
2024, the Secretary may use wholesale acquisi-
tion cost (or other reasonable measure of a 
drug or biological price) instead of the manu-
facturer’s average sales price for such quarters 
and for subsequent quarters until the end of 
the quarter in which such drug or biological is 
removed from the drug shortage list under sec-
tion 506E of the Federal Food, Drug, and Cos-
metic Act, or in the case of a drug or biological 
described in subparagraph (B)(ii), the date on 
which the Secretary determines that the total 
manufacturing capacity or the total number of 
manufacturers of such drug or biological is suf-
ficient to mitigate a potential shortage of the 
drug or biological. 
‘‘(B) DRUG OR BIOLOGICAL DESCRIBED.— 
For purposes of subparagraph (A), a drug or 
biological described in this subparagraph is a 
drug or biological— 
‘‘(i) that is listed on the drug shortage 
list maintained by the Food and Drug Ad-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00049
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
ministration pursuant to section 506E of 
the Federal Food, Drug, and Cosmetic 
Act, and with respect to which any manu-
facturer of such drug or biological notifies 
the Secretary of a permanent discontinu-
ance or an interruption that is likely to 
lead to a meaningful disruption in the 
manufacturer’s supply of that drug pursu-
ant to section 506C(a) of such Act; or 
‘‘(ii) that— 
‘‘(I) 
is 
described 
in 
section 
506C(a) of such Act; 
‘‘(II) was listed on the drug 
shortage list maintained by the Food 
and Drug Administration pursuant to 
section 506E of such Act within the 
preceding 5 years; and 
‘‘(III) for which the total manu-
facturing capacity of all manufactur-
ers with an approved application for 
such drug or biological that is cur-
rently marketed or total number of 
manufacturers with an approved ap-
plication for such drug or biological 
that is currently marketed declines 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00050
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
during a 6-month period, as deter-
mined by the Secretary. 
‘‘(C) PROVISION OF ADDITIONAL INFORMA-
TION.—For each quarter in which the amount 
of payment for a drug or biological described in 
subparagraph (B) pursuant to subparagraph 
(A) exceeds the amount of payment for the 
drug or biological otherwise applicable under 
this section, each manufacturer of such drug or 
biological shall provide to the Secretary infor-
mation related to the potential cause or causes 
of the shortage and the expected duration of 
the shortage with respect to such drug.’’. 
(b) 
TRACKING
SHORTAGE
DRUGS
THROUGH 
CLAIMS.—The Secretary of Health and Human Services 
(referred to in this section as the ‘‘Secretary’’) shall estab-
lish a mechanism (such as a modifier) for purposes of 
tracking utilization under title XVIII of the Social Secu-
rity Act (42 U.S.C. 1395 et seq.) of drugs and biologicals 
listed on the drug shortage list maintained by the Food 
and Drug Administration pursuant to section 506E of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 356e). 
(c) HHS REPORT AND RECOMMENDATIONS.— 
(1) IN GENERAL.—Not later than July 1, 2024, 
the Secretary shall submit to Congress a report on 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00051
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
shortages of drugs within the Medicare program 
under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.). The report shall include— 
(A) an analysis of— 
(i) the effect of drug shortages on 
Medicare beneficiary access, quality, safe-
ty, and out-of-pocket costs; 
(ii) the effect of drug shortages on 
health providers, including hospitals and 
physicians, across the Medicare program; 
(iii) the current role of the Centers for 
Medicare & Medicaid Services (CMS) in 
addressing 
drug 
shortages, 
including 
CMS’s working relationship and commu-
nication with other Federal agencies and 
stakeholders; 
(iv) the role of all actors in the drug 
supply chain (including drug manufactur-
ers, distributors, wholesalers, secondary 
wholesalers, group purchasing organiza-
tions, hospitals, and physicians) on drug 
shortages within the Medicare program; 
and 
(v) payment structures and incentives 
under parts A, B, C, and D of the Medi-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00052
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
care program and their effect, if any, on 
drug shortages; and 
(B) relevant findings and recommendations 
to Congress. 
(2) PUBLIC AVAILABILITY.—The report under 
this subsection shall be made available to the public. 
(3) CONSULTATION.—The Secretary shall con-
sult with the drug shortage task force authorized 
under section 506D(a)(1)(A) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 356d(a)(1)(A)) 
in preparing the report under this subsection, as ap-
propriate. 
Subtitle B—Part D 
SEC. 221. MEDICARE PART D MODERNIZATION 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)’’; 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00053
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(B) in subparagraph (C)— 
(i) in clause (i), in the matter pre-
ceding subclause (I), by inserting ‘‘for a 
year preceding 2024,’’ after ‘‘paragraph 
(4),’’; and 
(ii) in clause (ii)(III), by striking 
‘‘and each subsequent year’’ and inserting 
‘‘, 2021, 2022, and 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)— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00054
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(A) in the matter preceding clause (i), by 
inserting ‘‘for a year preceding 2024,’’ after 
‘‘and (4),’’; and 
(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 indenting appro-
priately; 
(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: 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00055
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(II) for 2024 and each suc-
ceeding year, $0.’’; and 
(ii) in clause (ii)— 
(I) by striking ‘‘clause (i)(I)’’ and 
inserting ‘‘clause (i)(I)(aa)’’; and 
(II) by adding at the end the fol-
lowing new sentence: ‘‘The Secretary 
shall continue to calculate the dollar 
amounts specified in clause (i)(I)(aa), 
including with the adjustment under 
this clause, after 2023 for purposes of 
section 1860D–14(a)(1)(D)(iii).’’; 
(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 
2021, 2022, and 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: 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00056
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(VII) for 2024, is equal to: 
‘‘(aa) 
$3,100 
for 
bene-
ficiaries determined to have in-
come that is over 400 percent of 
the Federal poverty line applica-
ble to a family of the size in-
volved; 
‘‘(bb) 
$2,000 
for 
bene-
ficiaries determined to have in-
come that is between 300 to 400 
percent of the Federal poverty 
line applicable to a family of the 
size involved; or 
‘‘(cc) 
$1,200 
for 
bene-
ficiaries determined to have in-
come that is below 300 percent of 
the Federal poverty line applica-
ble to a family of the size in-
volved; 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 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00057
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(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 2011 
through 2023, in applying’’. 
(b) 
DECREASING
REINSURANCE
PAYMENT 
AMOUNT.—Section 1860D–15(b) of the Social Security 
Act (42 U.S.C. 1395w–115(b)) is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘equal to 80 percent’’ and 
inserting ‘‘equal to— 
‘‘(A) for a year preceding 2024, 80 per-
cent’’; 
(B) in subparagraph (A), as added by 
paragraph (1), by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(B) for 2024 and each subsequent year, 
the sum of— 
‘‘(i) an amount equal to the applicable 
percentage specified in paragraph (5)(A) of 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00058
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
such allowable reinsurance costs attrib-
utable to that portion of gross prescription 
drug costs as specified in paragraph (3) in-
curred in the coverage year after such indi-
vidual has incurred costs that exceed the 
annual out-of-pocket threshold specified in 
section 1860D–2(b)(4)(B) with respect to 
applicable drugs (as defined in section 
1860D–14B(g)(2)); and 
‘‘(ii) an amount equal to the applica-
ble percentage specified in paragraph 
(5)(B) of allowable reinsurance costs at-
tributable to that portion of gross prescrip-
tion drug costs as specified in paragraph 
(3) incurred in the coverage year after 
such individual has incurred costs that ex-
ceed the annual out-of-pocket threshold 
specified in section 1860D–2(b)(4)(B) with 
respect to covered part D drugs that are 
not applicable drugs (as so defined).’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(5) APPLICABLE
PERCENTAGE
SPECIFIED.— 
For purposes of paragraph (1)(B), the applicable 
percentage specified in this paragraph is— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00059
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(A) with respect to applicable drugs (as 
defined in section 1860D–14B(g)(2))— 
‘‘(i) for 2024, 60 percent; 
‘‘(ii) for 2025, 40 percent; and 
‘‘(iii) for 2026 and each subsequent 
year, 20 percent; and 
‘‘(B) with respect to covered part D drugs 
that are not applicable drugs (as so defined)— 
‘‘(i) for 2024, 80 percent; 
‘‘(ii) for 2025, 60 percent; and 
‘‘(iii) for 2026 and each subsequent 
year, 40 percent.’’. 
(c) MANUFACTURER DISCOUNT PROGRAM DURING 
INITIAL AND CATASTROPHIC PHASES OF COVERAGE.— 
(1) IN GENERAL.—Part D of title XVIII of the 
Social Security Act is amended by inserting after 
section 1860D–14A (42 U.S.C. 1495w–114) the fol-
lowing new section: 
‘‘SEC. 1860D–14B. 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 
of the duties described in subsection (c). The Secretary 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00060
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
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. 
‘‘(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. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00061
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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-
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. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00062
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
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 
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 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00063
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
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 
than 30 days before the effective date of 
such termination. 
‘‘(5) EFFECTIVE
DATE
OF
AGREEMENT.—An 
agreement under this section shall take effect on a 
date determined appropriate by the Secretary, which 
may be at the start of a calendar quarter. 
‘‘(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; 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00064
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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; 
‘‘(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). 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00065
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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). 
‘‘(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. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00066
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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 
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 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00067
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
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) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to the program 
under this section. 
‘‘(6) FUNDING.—For purposes of carrying out 
this section, the Secretary shall provide for the 
transfer, from the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 to the 
Centers for Medicare & Medicaid Services Program 
Management Account, of $4,000,000 for each of fis-
cal years 2021 through 2024, to remain available 
until expended.’’. 
‘‘(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.— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00068
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(A) IN
GENERAL.—The Secretary shall 
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 commensurate with 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. 
‘‘(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 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00069
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
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 for covered part D 
drugs in the year that are above the annual de-
ductible specified in section 1860D–2(b)(1) for 
such year. 
‘‘(2) APPLICABLE DRUG.—The term ‘applicable 
drug’ means, with respect to an applicable bene-
ficiary, a covered part D drug— 
‘‘(A) approved under a new drug applica-
tion under section 505(c) of the Federal Food, 
Drug, and Cosmetic Act or, in the case of a bio-
logic product, licensed under section 351 of the 
Public Health Service Act (including a product 
licensed under subsection (k) of such section 
351); and 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00070
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(B)(i) if the PDP sponsor of the prescrip-
tion drug plan or the MA organization offering 
the MA–PD plan uses a formulary, 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 prescrip-
tion drug plan or the MA organization offering 
the MA–PD plan does not use a formulary, for 
which benefits are available under the prescrip-
tion drug plan or MA–PD plan that the appli-
cable beneficiary is enrolled in; or 
‘‘(iii) is provided through an exception or 
appeal. 
‘‘(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.—Except as provided in 
subparagraph (B), the term ‘discounted price’ 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00071
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
means 90 percent of the negotiated price of the 
applicable drug of a manufacturer. 
‘‘(B) PHASE-IN FOR CERTAIN DRUGS DIS-
PENSED
FOR
SUBSIDY
ELIGIBLE
INDIVID-
UALS.— 
‘‘(i) IN GENERAL.—In the case of an 
applicable drug of a specified manufacturer 
(as defined in clause (ii)) that is dispensed 
for an applicable beneficiary who is a sub-
sidy eligible individual (as defined in sec-
tion 1860D–14(a)(3), the term ‘discounted 
price’ means the specified LIS percent (as 
defined in clause (iii)) of the negotiated 
price of the applicable drug of the manu-
facturer. 
‘‘(ii) SPECIFIED MANUFACTURER.—In 
this subparagraph, the term ‘specified 
manufacturer’ means a manufacturer of an 
applicable drug for which, in the calendar 
year 2 years prior to the current plan year 
(referred to in this clause as the ‘applicable 
period’), the total reimbursement under 
this title during the applicable period rep-
resented less than 1 percent of the total re-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00072
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
imbursement under this title for all pre-
scription drugs during such period. 
‘‘(iii) SPECIFIED
LIS
PERCENT.—In 
this subparagraph, the term ‘specified LIS 
percent’ means— 
‘‘(I) for 2024, 98 percent; 
‘‘(II) for 2025, 97 percent; 
‘‘(III) for 2026, 96 percent; 
‘‘(IV) for 2027, 95 percent; 
‘‘(V) for 2028, 94 percent; 
‘‘(VI) for 2029, 93 percent; 
‘‘(VII) for 2030, 92 percent; 
‘‘(VIII) for 2031, 91 percent; 
and 
‘‘(IX) for 2032 and each subse-
quent year, 90 percent. 
‘‘(C) 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. 
‘‘(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-
ucts, either directly or indirectly by extraction from 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00073
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
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 1860D–2(d)(1)(B), except that such negotiated 
price shall not include any dispensing fee for the ap-
plicable 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 
(B) by adding at the end the following new 
subsection: 
‘‘(h) SUNSET OF PROGRAM.— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00074
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(1) IN
GENERAL.—The program shall not 
apply to applicable drugs dispensed on or after Jan-
uary 1, 2024, and, subject to paragraph (2), agree-
ments under this section shall be terminated 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: 
‘‘(II) for 2024 and each subse-
quent year, the manufacturer dis-
counts provided under section 1860D– 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00075
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
14B 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 added 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–14B;’’. 
(4) CLARIFICATION REGARDING EXCLUSION OF 
MANUFACTURER DISCOUNTS FROM TROOP.—Section 
1860D–2(b)(4) of the Social Security Act (42 
U.S.C. 1395w–102(b)(4)) is amended— 
(A) in subparagraph (C), by inserting ‘‘and 
subject to subparagraph (F)’’ after ‘‘subpara-
graph (E)’’; and 
(B) by adding at the end the following new 
subparagraph: 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00076
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(F) CLARIFICATION REGARDING EXCLU-
SION OF MANUFACTURER DISCOUNTS.—In ap-
plying subparagraph (A), incurred costs shall 
not include any manufacturer discounts pro-
vided under section 1860D–14B.’’. 
(d) DETERMINATION OF ALLOWABLE REINSURANCE 
COSTS.—Section 1860D–15(b) of the Social Security Act 
(42 U.S.C. 1395w–115(b)) is amended— 
(1) in paragraph (2)— 
(A) by striking ‘‘COSTS.—For purposes’’ 
and inserting ‘‘COSTS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), for purposes’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(B) INCLUSION OF MANUFACTURER DIS-
COUNTS ON APPLICABLE DRUGS.—For purposes 
of applying subparagraph (A), the term ‘allow-
able reinsurance costs’ shall include the portion 
of the negotiated price (as defined in section 
1860D–14B(g)(6)) of an applicable drug (as 
defined in section 1860D–14B(g)(2)) that was 
paid by a manufacturer under the manufacturer 
discount program under section 1860D–14B.’’; 
and 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00077
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(2) in paragraph (3)— 
(A) in the first sentence, by striking ‘‘For 
purposes’’ and inserting ‘‘Subject to paragraph 
(2)(B), for purposes’’; and 
(B) in the second sentence, by inserting 
‘‘or, in the case of an applicable drug, by a 
manufacturer’’ after ‘‘by the individual or 
under the plan’’. 
(e) UPDATING RISK ADJUSTMENT METHODOLOGIES 
TO ACCOUNT
FOR PART D MODERNIZATION REDE-
SIGN.—Section 1860D–15(c) of the Social Security Act 
(42 U.S.C. 1395w–115(c)) is amended by adding at the 
end the following new paragraph: 
‘‘(3) UPDATING
RISK
ADJUSTMENT
METH-
ODOLOGIES TO ACCOUNT FOR PART D MODERNIZA-
TION REDESIGN.—The Secretary shall update the 
risk adjustment methodologies used to adjust bid 
amounts pursuant to this subsection as appropriate 
to take into account changes in benefits under this 
part pursuant to the amendments made by section 
2 of the Seniors Prescription Drug Relief Act.’’. 
(f) CONDITIONS FOR COVERAGE OF DRUGS UNDER 
THIS PART.—Section 1860D–43 of the Social Security 
Act (42 U.S.C. 1395w–153) is amended— 
(1) in subsection (a)— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00078
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(A) in paragraph (2), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (3), by striking the pe-
riod at the end and inserting a semicolon; and 
(C) by adding at the end the following new 
paragraphs: 
‘‘(4) participate in the manufacturer discount 
program under section 1860D–14B; 
‘‘(5) have entered into and have in effect an 
agreement described in subsection (b) of such sec-
tion 1860D–14B with the Secretary; and 
‘‘(6) have entered into and have in effect, under 
terms and conditions specified by the Secretary, a 
contract with a third party that the Secretary has 
entered into a contract with under subsection (d)(3) 
of such section 1860D–14B.’’; 
(2) by striking subsection (b) and inserting the 
following: 
‘‘(b) EFFECTIVE DATE.—Paragraphs (1) through (3) 
of subsection (a) shall apply to covered part D drugs dis-
pensed under this part on or after January 1, 2011, and 
before January 1, 2024, and paragraphs (4) through (6) 
of such subsection shall apply to covered part D drugs 
dispensed on or after January 1, 2024.’’; and 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00079
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
(3) in subsection (c), by striking paragraph (2) 
and inserting the following: 
‘‘(2) the Secretary determines that in the period 
beginning on January 1, 2011, and ending on De-
cember 31, 2011 (with respect to paragraphs (1) 
through (3) of subsection (a)), or the period begin-
ning on January 1, 2024, and ending December 31, 
2024 (with respect to paragraphs (4) through (6) of 
such subsection), there were extenuating cir-
cumstances.’’. 
(g) 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’’; 
(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’’ 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00080
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
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’’; 
(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 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00081
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
year preceding 2024, the continuation’’; 
and 
(ii) in subparagraph (E)— 
(I) by inserting ‘‘for a year pre-
ceding 2024,’’ after ‘‘subsection (c)’’; 
and 
(II) 
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)(B)(4)(B)(i)’’ and 
inserting ‘‘section 1860D–2(b)(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’’; and 
(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: 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00082
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(ii) for 2024 and each subsequent 
year, any discount provided pursuant to 
section 1860D–14B.’’. 
(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. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan year 2024 and subsequent 
plan years. 
SEC. 222. MONTHLY OUT-OF-POCKET COST SHARING MAX-
IMUM FOR ENROLLEES WHO INCUR A SIG-
NIFICANT PORTION OF COSTS TOWARDS AN-
NUAL OUT-OF-POCKET THRESHOLD. 
(a) IN GENERAL.—Section 1860D–2(b) of the Social 
Security Act (42 U.S.C. 1395w–102(b)), as amended by 
section 2, is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (A), by striking ‘‘and 
(D)’’ and inserting ‘‘, (D), and (E)’’; and 
(B) by adding at the end the following new 
subparagraph: 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00083
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(E) MONTHLY
OUT-OF-POCKET
COST 
SHARING
MAXIMUM
FOR
ENROLLEES
WHO 
INCUR A SIGNIFICANT PORTION OF COSTS TO-
WARDS
ANNUAL
OUT-OF-POCKET
THRESH-
OLD.— 
‘‘(i) ESTABLISHMENT OF PROCESS.— 
‘‘(I) IN
GENERAL.—For plan 
years beginning on or after January 
1, 2024, the Secretary shall, through 
notice and comment rulemaking, es-
tablish a process under which each 
PDP sponsor offering a prescription 
drug plan and each MA organization 
offering an MA–PD plan shall each 
plan year automatically enroll applica-
ble enrollees in the option to have 
their monthly out-of-pocket cost-shar-
ing under the plan capped and paid in 
monthly installments in accordance 
with this subparagraph (referred to in 
this subparagraph as the ‘monthly 
out-of-pocket cost sharing maximum 
option’). 
‘‘(II) OPT OUT.—The process es-
tablished under this clause shall per-
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00084
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
mit an applicable enrollee, prior to the 
beginning of the plan year or at any 
point during the plan year, to opt out 
of enrollment in the monthly out-of- 
pocket cost sharing maximum option 
and pay any out-of-pocket cost-shar-
ing otherwise applicable for any cov-
ered part D drug in full at the time 
of the dispensing of such drug (or at 
the time of such opt out in the case 
of costs incurred during such enroll-
ment that have not yet been billed to 
the enrollee). 
‘‘(ii) DEFINITIONS.— 
‘‘(I) APPLICABLE
ENROLLEE.— 
In this subparagraph, the term ‘appli-
cable enrollee’ means any enrollee in a 
prescription drug plan or an MA–PD 
plan, including an enrollee who is a 
subsidy eligible individual (as defined 
in paragraph (3) of section 1860D– 
14(a)), who incurs or is likely to incur 
a significant percentage of costs for 
covered part D drugs. 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00085
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(II) 
SIGNIFICANT
PERCENT-
AGE.—For purposes of subclause (I), 
the Secretary shall, in the rulemaking 
under clause (i), define the term ‘sig-
nificant percentage’ with respect to a 
percentage of the annual out-of-pocket 
threshold 
specified 
in 
paragraph 
(4)(B) but in no case shall the ‘sig-
nificant percentage’ be less than 50 
percent or more than 100 percent of 
the annual out-of-pocket threshold. 
‘‘(iii) DETERMINATION OF MONTHLY 
OUT-OF-POCKET
COST
SHARING
MAX-
IMUM.—For each month in a plan year in 
which an applicable enrollee is enrolled in 
the monthly out-of-pocket cost sharing 
maximum option, the PDP sponsor or MA 
organization shall determine a monthly 
out-of-pocket cost sharing maximum (as 
defined in clause (v)) for such enrollee. 
‘‘(iv) BENEFICIARY
MONTHLY
PAY-
MENTS.—With respect to an applicable en-
rollee who is enrolled in the monthly out- 
of-pocket cost sharing maximum option, 
for each month described in clause (iii), 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00086
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
the PDP sponsor or MA organization shall 
bill such enrollee an amount (not to exceed 
the monthly out-of-pocket cost sharing 
maximum) for the out-of-pocket costs of 
such enrollee in such month. 
‘‘(v) MONTHLY OUT-OF-POCKET COST 
SHARING
MAXIMUM
DEFINED.—In this 
subparagraph, the term ‘monthly out-of- 
pocket cost sharing maximum’ means, with 
respect to an enrollee— 
‘‘(I) for the first month in which 
this subparagraph applies, an amount 
determined by calculating— 
‘‘(aa) the annual out-of- 
pocket 
threshold 
specified 
in 
paragraph (4)(B) minus the in-
curred costs of the enrollee as de-
scribed in paragraph (4)(C); di-
vided by 
‘‘(bb) the number of months 
remaining in the plan year; and 
‘‘(II) for a subsequent month, an 
amount determined by calculating— 
‘‘(aa) the sum of any re-
maining out-of-pocket costs owed 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00087
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
by the enrollee from a previous 
month that have not yet been 
billed to the enrollee and any ad-
ditional costs incurred by the en-
rollee; divided by 
‘‘(bb) the number of months 
remaining in the plan year. 
‘‘(vi) ADDITIONAL REQUIREMENTS.— 
The following requirements shall apply 
with respect to the monthly out-of-pocket 
cost sharing maximum option under this 
subparagraph: 
‘‘(I) SECRETARIAL RESPONSIBIL-
ITIES.—The Secretary shall provide 
information to part D eligible individ-
uals on the monthly out-of-pocket cost 
sharing maximum option through edu-
cational materials, including through 
the notices provided under section 
1804(a). 
‘‘(II) PDP SPONSOR AND MA OR-
GANIZATION
RESPONSIBILITIES.— 
Each PDP sponsor offering a pre-
scription drug plan or MA organiza-
tion offering an MA–PD plan— 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00088
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(aa) shall not limit the ap-
plication of the monthly out-of- 
pocket cost sharing maximum op-
tion to certain covered part D 
drugs; 
‘‘(bb) shall, prior to the plan 
year, notify prospective enrollees 
of such option, including the 
availability of the opt out under 
clause (i)(II); 
‘‘(cc) shall include informa-
tion on such option in enrollee 
educational materials, including 
the availability of the opt out 
under clause (i)(II); 
‘‘(dd) shall have in place a 
mechanism to notify a pharmacy 
during the plan year when an en-
rollee incurs out-of-pocket costs 
with respect to covered part D 
drugs that make it likely the en-
rollee is an applicable enrollee; 
‘‘(ee) shall provide that a 
pharmacy, after receiving a noti-
fication described in item (dd) 
VerDate Sep 11 2014 
20:49 Nov 03, 2021
Jkt 029200
PO 00000
Frm 00089
Fmt 6652
Sfmt 6201
E:\BILLS\H5237.IH
H5237
pamtmann on DSKBC07HB2PROD with BILLS