minister the benefits under this part in a 
region determined by the Secretary under 
subparagraph (B) or on a national basis. 
‘‘(ii) PARTIAL REGIONAL BASIS.— 
‘‘(I) IN
GENERAL.—If deter-
mined appropriate by the Secretary, 
the Secretary may permit the benefits 
to be administered in a partial region 
determined appropriate by the Sec-
retary. 
‘‘(II) 
REQUIREMENTS.—If 
the 
Secretary permits administration pur-
suant to subclause (I), the Secretary 
shall ensure that the partial region in 
which administration is effected is no 
smaller than a State and is at least 
the size of the commercial service area 
of the contractor for that area. 
‘‘(B) DETERMINATION.— 
‘‘(i) IN GENERAL.—In determining re-
gions for contracts under this part, the 
Secretary shall— 
‘‘(I) take into account the num-
ber of individuals enrolled under this 
part in an area in order to encourage
participation by pharmacy contrac-
tors; and 
‘‘(II) ensure that there are at 
least 10 different regions in the 
United States. 
‘‘(ii) NO
ADMINISTRATIVE
OR
JUDI-
CIAL REVIEW.—The determination of ad-
ministrative areas under this paragraph 
shall not be subject to administrative or ju-
dicial review. 
‘‘(7) SUBMISSION OF BIDS.— 
‘‘ (A) SUBMISSION.— 
‘‘(i) IN
GENERAL.—Subject to sub-
paragraph (B), each entity desiring to 
serve as a pharmacy contractor under this 
part in an area shall submit a bid with re-
spect to such area to the Secretary at such 
time, in such manner, and accompanied by 
such information as the Secretary may rea-
sonably require. 
‘‘(ii) BID
THAT
COVERS
MULTIPLE 
AREAS.—The Secretary shall permit an en-
tity to submit a single bid for multiple 
areas if the bid is applicable to all such 
areas.
‘‘(B) REQUIRED INFORMATION.—The bids 
described in subparagraph (A) shall include— 
‘‘(i) a proposal for the estimated 
prices of covered outpatient prescription 
drugs and the projected annual increases 
in such prices, including the additional re-
duction in price negotiated below the Sec-
retary’s maximum price and differentials 
between preferred and nonpreferred prices, 
if applicable; 
‘‘(ii) 
a 
statement 
regarding 
the 
amount that the entity will charge the Sec-
retary for administering the benefits under 
the contract; 
‘‘(iii) a statement regarding whether 
the entity will reduce the applicable coin-
surance percentage pursuant to section 
1860D–6(a)(1)(A)(ii) 
and 
if 
so, 
the 
amount of such reduction and how such re-
duction is tied to the performance require-
ments described in subsection (c)(4)(A)(ii); 
‘‘(iv) a detailed description of the per-
formance requirements for which the ad-
ministrative fee of the entity will be subject 
to risk pursuant to subsection (c)(4)(A)(ii);
‘‘(v) a detailed description of access to 
pharmacy services provided by the entity, 
including information regarding whether 
the pharmacy contractor will use a pre-
ferred pharmacy network, and, if so, how 
the pharmacy contractor will ensure access 
to pharmacies that choose to be outside of 
that network, and whether there will be in-
creased cost-sharing for beneficiaries if 
they obtain drugs at such pharmacies; 
‘‘(vi) a detailed description of the pro-
cedures and standards the entity will use 
for— 
‘‘(I) selecting preferred prescrip-
tion drugs; and 
‘‘(II) determining when and how 
often the list of preferred prescription 
drugs should be modified; 
‘‘(vii) a detailed description of any 
ownership or shared financial interests 
with pharmaceutical manufacturers, phar-
macies, and other entities involved in the 
administration or delivery of benefits under 
this part as proposed in the bid;
‘‘(viii) a detailed description of the en-
tity’s estimated marketing and advertising 
expenditures related to enrolling and re-
taining eligible beneficiaries; and 
‘‘(ix) such other information that the 
Secretary determines is necessary in order 
to carry out this part, including informa-
tion relating to the bidding process under 
this part. 
The procedures under clause (vi) shall include 
the use of a pharmaceutical and therapeutics 
committee the members of which include prac-
ticing pharmacists. 
‘‘(8) AWARDING OF CONTRACTS.— 
‘‘(A) NUMBER OF CONTRACTS.—The Sec-
retary shall, consistent with the requirements of 
this part and the goals of providing quality care 
and of containing costs under this part, award 
in a competitive manner at least 2 contracts to 
administer benefits under this part in each area 
specified under paragraph (6), unless only 1 
pharmacy contractor submitting a bid meets the 
minimum standards specified under this part 
and by the Secretary.
‘‘(B) DETERMINATION.—In determining 
which of the pharmacy contractors that sub-
mitted bids that meet the minimum standards 
specified under this part and by the Secretary 
to award a contract, the Secretary shall con-
sider the comparative merits of each bid, as de-
termined on the basis of relevant factors, with 
respect to— 
‘‘(i) how well the contractor meets 
such minimum standards; 
‘‘(ii) the amount that the contractor 
will charge the Secretary for administering 
the benefits under the contract; 
‘‘(iii) the performance standards es-
tablished under subsection (c)(2) and per-
formance requirements for which the ad-
ministrative fee of the entity will be subject 
to risk pursuant to subsection (c)(4)(A)(ii); 
‘‘(iv) the proposed negotiated prices of 
covered outpatient drugs and annual in-
creases in such prices; 
‘‘(v) factors relating to benefits, qual-
ity and performance, beneficiary cost-shar-
ing, and consumer satisfaction;
‘‘(vi) past performance and prior ex-
perience of the contractor in administering 
a prescription drug benefit program; 
‘‘(vii) effectiveness of the contractor 
in containing costs through pricing incen-
tives and utilization management; and 
‘‘(viii) such other factors as the Sec-
retary deems necessary to evaluate the 
merits of each bid. 
‘‘(C) EXCEPTION TO CONFLICT OF INTER-
EST RULES.—In awarding contracts with phar-
macy contractors under this part, the Secretary 
may waive conflict of interest laws generally ap-
plicable to Federal acquisitions (subject to such 
safeguards as the Secretary may find necessary 
to impose) in circumstances where the Sec-
retary finds that such waiver— 
‘‘(i) is not inconsistent with the— 
‘‘(I) purposes of the programs 
under this part; or 
‘‘(II) best interests of bene-
ficiaries enrolled under this part; and 
‘‘(ii) permits a sufficient level of com-
petition for such contracts, promotes effi-
ciency of benefits administration, or other-
wise serves the objectives of the program 
under this part. 
‘‘(D) NO
ADMINISTRATIVE
OR
JUDICIAL 
REVIEW.—The determination of the Secretary 
to award or not award a contract to a phar-
macy contractor under this part shall not be 
subject to administrative or judicial review. 
‘‘(9) 
ACCESS
TO
BENEFITS
IN
CERTAIN 
AREAS.— 
‘‘(A) AREAS
NOT
COVERED
BY
CON-
TRACTS.—The Secretary shall develop proce-
dures for the provision of covered outpatient 
prescription drugs under this part to each eligi-
ble beneficiary enrolled under this part that re-
sides in an area that is not covered by any con-
tract under this part. 
‘‘(B) BENEFICIARIES
RESIDING
IN
DIF-
FERENT LOCATIONS.—The Secretary shall de-
velop procedures to ensure that each eligible 
beneficiary enrolled under this part that resides 
in different areas in a year is provided the ben-
efits under this part throughout the entire year. 
‘‘(b) QUALITY, FINANCIAL, AND OTHER STANDARDS 
AND PROGRAMS.—In consultation with appropriate phar-
macy contractors, pharmacists, and health care profes-
sionals with expertise in prescribing, dispensing, and the 
appropriate use of prescription drugs, the Secretary shall 
establish standards and programs for the administration 
of this part to ensure appropriate prescribing, dispensing, 
and utilization of outpatient drugs under this part, to 
avoid adverse drug reactions, and to continually reduce er-
rors in the delivery of medically appropriate covered bene-
fits. The Secretary shall not award a contract to a phar-
macy contractor under this part unless the Secretary finds 
that the contractor agrees to comply with such standards 
and programs and other terms and conditions as the Sec-
retary shall specify. The standards and programs under 
this subsection shall be applied to any administrative 
agreements described in subsection (a) the Secretary en-
ters into. Such standards and programs shall include the 
following: 
‘‘(1) ACCESS.— 
‘‘(A) IN
GENERAL.—The pharmacy con-
tractor shall ensure that covered outpatient pre-
scription drugs are accessible and convenient to 
eligible beneficiaries enrolled under this part for 
whom benefits are administered by the phar-
macy contractor, including by offering the serv-
ices 24 hours a day and 7 days a week for 
emergencies.
‘‘(B) ON-LINE
REVIEW.—The pharmacy 
contractor shall provide for on-line prospective 
review available 24 hours a day and 7 days a 
week in order to evaluate each prescription for 
drug therapy problems due to duplication, inter-
action, or incorrect dosage or duration of ther-
apy. 
‘‘(C) GUARANTEED ACCESS TO DRUGS IN 
RURAL AND HARD-TO-SERVE AREAS.—The Sec-
retary shall ensure that all beneficiaries have 
guaranteed access to the full range of pharma-
ceuticals under this part, and shall give special 
attention to access, pharmacist counseling, and 
delivery in rural and hard-to-serve areas, in-
cluding through the use of incentives such as 
bonus payments to retail pharmacists in rural 
areas and extra payments to the pharmacy con-
tractor for the cost of rapid delivery of pharma-
ceuticals and any other actions necessary. 
‘‘(D) 
PREFERRED
PHARMACY
NET-
WORKS.— 
‘‘(i) IN
GENERAL.—If a pharmacy 
contractor uses a preferred pharmacy net-
work to deliver benefits under this part,
such network shall meet minimum access 
standards established by the Secretary. 
‘‘(ii) 
STANDARDS.—In 
establishing 
standards under clause (i), the Secretary 
shall take into account reasonable dis-
tances to pharmacy services in both urban 
and rural areas. 
‘‘(E) 
ADHERENCE
TO
NEGOTIATED 
PRICES.—The pharmacy contractor shall have 
in place procedures to assure compliance of 
pharmacies with the requirements of subsection 
(d)(3)(C) (relating to adherence to negotiated 
prices). 
‘‘(F) CONTINUITY OF CARE.— 
‘‘(i) IN
GENERAL.—The pharmacy 
contractor shall ensure that, in the case of 
an eligible beneficiary who loses coverage 
under this part with such entity under cir-
cumstances that would permit a special 
election period (as established by the Sec-
retary under section 1860D–4(b)(3)), the 
contractor will continue to provide cov-
erage under this part to such beneficiary 
until the beneficiary enrolls and receives 
such coverage with another pharmacy con-
tractor under this part or, if eligible, with 
a MedicareAdvantage organization. 
‘‘(ii) LIMITED PERIOD.—In no event 
shall a pharmacy contractor be required to 
provide the extended coverage required 
under clause (i) beyond the date which is 
30 days after the coverage with such con-
tractor would have terminated but for this 
subparagraph. 
‘‘(2) ENROLLEE GUIDELINES.—The pharmacy 
contractor shall, consistent with State law, apply 
guidelines for counseling enrollees regarding— 
‘‘(A) the proper use of covered outpatient 
prescription drugs; and 
‘‘(B) interactions and contra-indications. 
‘‘(3) EDUCATION.—The pharmacy contractor 
shall apply methods to identify and educate pro-
viders, pharmacists, and enrollees regarding— 
‘‘(A) instances or patterns concerning the 
unnecessary or inappropriate prescribing or dis-
pensing of covered outpatient prescription 
drugs; 
‘‘(B) instances or patterns of substandard 
care;