‘‘(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, 2022, 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— 
‘‘(I) shall not be considered an 
adjustment under paragraph (2)(E); 
and 
‘‘(II) shall not be implemented in 
a budget neutral manner.’’. 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
Subtitle B—Drug Price 
Transparency 
SEC. 111. REPORTING ON EXPLANATION FOR DRUG PRICE 
INCREASES. 
(a) IN GENERAL.—Title III of the Public Health 
Service Act (42 U.S.C. 241 et seq.) is amended by adding 
at the end the following: 
‘‘PART W—DRUG PRICE REPORTING; DRUG 
VALUE FUND 
‘‘SEC. 399OO. REPORTING ON EXPLANATION FOR DRUG 
PRICE INCREASES. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) MANUFACTURER.—The term ‘manufac-
turer’ means the person— 
‘‘(A) that holds the application for a drug 
approved under section 505 of the Federal 
Food, Drug, and Cosmetic Act or licensed 
under section 351 of this Act; or 
‘‘(B) who is responsible for setting the 
wholesale acquisition cost for the drug. 
‘‘(2) QUALIFYING DRUG.—The term ‘qualifying 
drug’ means any drug that is approved under sub-
section (c) or (j) of section 505 of the Federal Food, 
Drug, and Cosmetic Act or licensed under subsection 
(a) or (k) of section 351 of this Act— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(A) that has a wholesale acquisition cost 
of $100 or more, adjusted for inflation occur-
ring after the date of enactment of this section, 
for a month’s supply or a typical course of 
treatment that lasts less than a month, and 
is— 
‘‘(i) subject to section 503(b)(1) of 
the Federal Food, Drug, and Cosmetic 
Act; 
‘‘(ii) administered or otherwise dis-
pensed to treat a disease or condition af-
fecting more than 200,000 persons in the 
United States; and 
‘‘(iii) not a vaccine; and 
‘‘(B) for which, during the previous cal-
endar year, at least 1 dollar of the total amount 
of sales were for individuals enrolled under the 
Medicare program under title XVIII of the So-
cial Security Act (42 U.S.C. 1395 et seq.) or 
under a State Medicaid plan under title XIX of 
such Act (42 U.S.C. 1396 et seq.) or under a 
waiver of such plan. 
‘‘(3) WHOLESALE
ACQUISITION
COST.—The 
term ‘wholesale acquisition cost’ has the meaning 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
given that term in section 1847A(c)(6)(B) of the So-
cial Security Act (42 U.S.C. 1395w–3a(c)(6)(B)). 
‘‘(b) REPORT.— 
‘‘(1) REPORT REQUIRED.—The manufacturer of 
a qualifying drug shall submit a report to the Sec-
retary for each increase in the price of a qualifying 
drug that results in an increase in the wholesale ac-
quisition cost of that drug that is equal to— 
‘‘(A) 10 percent or more within a single 
calendar year beginning on or after January 1, 
2021; or 
‘‘(B) 25 percent or more within three con-
secutive calendar years for which the first such 
calendar year begins on or after January 1, 
2021. 
‘‘(2) REPORT
DEADLINE.—Each report de-
scribed in paragraph (1) shall be submitted to the 
Secretary— 
‘‘(A) in the case of a report with respect 
to an increase in the price of a qualifying drug 
that occurs during the period beginning on Jan-
uary 1, 2021, and ending on the day that is 60 
days after the date of enactment of this section, 
not later than 90 days after such date of enact-
ment; and 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(B) in the case of a report with respect 
to an increase in the price of a qualifying drug 
that occurs after the period described in sub-
paragraph (A), not later than 30 days prior to 
the planned effective date of such price increase 
for such qualifying drug. 
‘‘(c) CONTENTS.—A report under subsection (b), con-
sistent with the standard for disclosures described in sec-
tion 213.3(d) of title 12, Code of Federal Regulations (as 
in effect on the date of enactment of this section), shall, 
at a minimum, include— 
‘‘(1) with respect to the qualifying drug— 
‘‘(A) the percentage by which the manufac-
turer will raise the wholesale acquisition cost of 
the drug within the calendar year or three con-
secutive calendar years as described in sub-
section (b)(1)(A) or (b)(1)(B), if applicable, and 
the effective date of such price increase; 
‘‘(B) an explanation for, and description 
of, each price increase for such drug that will 
occur during the calendar year period described 
in subsection (b)(1)(A) or the three consecutive 
calendar year period described in subsection 
(b)(1)(B), as applicable; 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(C) if known and different from the man-
ufacturer of the qualifying drug, the identity 
of— 
‘‘(i) the sponsor or sponsors of any in-
vestigational new drug applications under 
section 505(i) of the Federal Food, Drug, 
and Cosmetic Act for clinical investigations 
with respect to such drug, for which the 
full reports are submitted as part of the 
application— 
‘‘(I) for approval of the drug 
under section 505 of such Act; or 
‘‘(II) for licensure of the drug 
under section 351 of this Act; and 
‘‘(ii) the sponsor of an application for 
the drug approved under such section 505 
of the Federal Food, Drug, and Cosmetic 
Act or licensed under section 351 of this 
Act; 
‘‘(D) a description of the history of the 
manufacturer’s price increases for the drug 
since the approval of the application for the 
drug under section 505 of the Federal Food, 
Drug, and Cosmetic Act or the issuance of the 
license for the drug under section 351 of this 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
Act, or since the manufacturer acquired such 
approved application or license, if applicable; 
‘‘(E) the current wholesale acquisition cost 
of the drug; 
‘‘(F) the total expenditures of the manu-
facturer on— 
‘‘(i) materials and manufacturing for 
such drug; and 
‘‘(ii) acquiring patents and licensing 
for such drug; 
‘‘(G) the percentage of total expenditures 
of the manufacturer on research and develop-
ment for such drug that was derived from Fed-
eral funds; 
‘‘(H) the total expenditures of the manu-
facturer on research and development for such 
drug that is necessary to demonstrate that it 
meets applicable statutory standards for ap-
proval under section 505 of the Federal Food, 
Drug, and Cosmetic Act or licensure under sec-
tion 351 of this Act, as applicable; 
‘‘(I) the total expenditures of the manufac-
turer on pursuing new or expanded indications 
or dosage changes for such drug under section 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
505 of the Federal Food, Drug, and Cosmetic 
Act or section 351 of this Act; 
‘‘(J) the total expenditures of the manufac-
turer on carrying out postmarket requirements 
related to such drug, including under section 
505(o)(3) of the Federal Food, Drug, and Cos-
metic Act; 
‘‘(K) the total revenue and the net profit 
generated from the qualifying drug for each cal-
endar year since the approval of the application 
for the drug under section 505 of the Federal 
Food, Drug, and Cosmetic Act or the issuance 
of the license for the drug under section 351, 
or since the manufacturer acquired such ap-
proved application or license; and 
‘‘(L) the total costs associated with mar-
keting and advertising for the qualifying drug; 
‘‘(2) with respect to the manufacturer— 
‘‘(A) the total revenue and the net profit 
of the manufacturer for each of the 1-year pe-
riod described in subsection (b)(1)(A) or the 3- 
year period described in subsection (b)(1)(B), 
as applicable; 
‘‘(B) all stock-based performance metrics 
used by the manufacturer to determine execu-
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
tive compensation for each of the 1-year period 
described in subsection (b)(1)(A) or the 3-year 
period described in subsection (b)(1)(B), as ap-
plicable; and 
‘‘(C) any additional information the manu-
facturer chooses to provide related to drug pric-
ing decisions, such as total expenditures on— 
‘‘(i) drug research and development; 
or 
‘‘(ii) clinical trials, including on drugs 
that failed to receive approval by the Food 
and Drug Administration; and 
‘‘(3) such other related information as the Sec-
retary considers appropriate and as specified by the 
Secretary through notice-and-comment rulemaking. 
‘‘(d) INFORMATION PROVIDED.—The manufacturer 
of a qualifying drug that is required to submit a report 
under subsection (b), shall ensure that such report and 
any explanation for, and description of, each price increase 
described in subsection (c)(1)(B) shall be truthful, not 
misleading, and accurate. 
‘‘(e) CIVIL MONETARY PENALTY.—Any manufac-
turer of a qualifying drug that fails to submit a report 
for the drug as required by this section, following notifica-
tion by the Secretary to the manufacturer that the manu-
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
facturer is not in compliance with this section, shall be 
subject to a civil monetary penalty of $75,000 for each 
day on which the violation continues. 
‘‘(f) FALSE INFORMATION.—Any manufacturer that 
submits a report for a drug as required by this section 
that knowingly provides false information in such report 
is subject to a civil monetary penalty in an amount not 
to exceed $75,000 for each item of false information. 
‘‘(g) PUBLIC POSTING.— 
‘‘(1) IN GENERAL.—Subject to paragraph (3), 
the Secretary shall post each report submitted under 
subsection (b) on the public website of the Depart-
ment of Health and Human Services the day the 
price increase of a qualifying drug is scheduled to go 
into effect. 
‘‘(2) FORMAT.—In developing the format in 
which reports will be publicly posted under para-
graph (1), the Secretary shall consult with stake-
holders, including beneficiary groups, and shall seek 
feedback from consumer advocates and readability 
experts on the format and presentation of the con-
tent of such reports to ensure that such reports 
are— 
‘‘(A) user-friendly to the public; and 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(B) written in plain language that con-
sumers can readily understand. 
‘‘(3) PROTECTED
INFORMATION.—Nothing in 
this section shall be construed to authorize the pub-
lic disclosure of information submitted by a manu-
facturer that is prohibited from disclosure by appli-
cable laws concerning the protection of trade secrets, 
commercial information, and other information cov-
ered under such laws. 
‘‘SEC. 399OO–1. ANNUAL REPORT TO CONGRESS. 
‘‘(a) IN GENERAL.—Subject to subsection (b), the 
Secretary shall submit to Congress, and post on the public 
website of the Department of Health and Human Services 
in a way that is user-friendly to the public and written 
in plain language that consumers can readily understand, 
an annual report— 
‘‘(1) summarizing the information reported pur-
suant to section 399OO; 
‘‘(2) including copies of the reports and sup-
porting detailed economic analyses submitted pursu-
ant to such section; 
‘‘(3) detailing the costs and expenditures in-
curred by the Department of Health and Human 
Services in carrying out section 399OO; and 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(4) explaining how the Department of Health 
and Human Services is improving consumer and 
provider information about drug value and drug 
price transparency. 
‘‘(b) PROTECTED INFORMATION.—Nothing in this 
section shall be construed to authorize the public disclo-
sure of information submitted by a manufacturer that is 
prohibited from disclosure by applicable laws concerning 
the protection of trade secrets, commercial information, 
and other information covered under such laws.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) takes effect on the date of enactment of 
this Act. 
SEC. 112. PUBLIC DISCLOSURE OF DRUG DISCOUNTS. 
Section 1150A of the Social Security Act (42 U.S.C. 
1320b–23) is amended— 
(1) in subsection (c), in the matter preceding 
paragraph (1), by inserting ‘‘(other than as per-
mitted under subsection (e))’’ after ‘‘disclosed by the 
Secretary’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(e) PUBLIC AVAILABILITY OF CERTAIN INFORMA-
TION.— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(1) IN GENERAL.—In order to allow the com-
parison of PBMs’ ability to negotiate rebates, dis-
counts, direct and indirect remuneration fees, ad-
ministrative fees, and price concessions and the 
amount of such rebates, discounts, direct and indi-
rect remuneration fees, administrative fees, and 
price concessions that are passed through to plan 
sponsors, beginning January 1, 2022, the Secretary 
shall make available on the Internet website of the 
Department of Health and Human Services the in-
formation with respect to the second preceding cal-
endar year provided to the Secretary on generic dis-
pensing rates (as described in paragraph (1) of sub-
section (b)) and information provided to the Sec-
retary under paragraphs (2) and (3) of such sub-
section that, as determined by the Secretary, is with 
respect to each PBM. 
‘‘(2) AVAILABILITY OF DATA.—In carrying out 
paragraph (1), the Secretary shall ensure the fol-
lowing: 
‘‘(A) CONFIDENTIALITY.—The information 
described in such paragraph is displayed in a 
manner that prevents the disclosure of informa-
tion, with respect to an individual drug or an 
individual plan, on rebates, discounts, direct 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00040
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
and indirect remuneration fees, administrative 
fees, and price concessions. 
‘‘(B) CLASS OF DRUG.—The information 
described in such paragraph is made available 
by class of drug, using an existing classification 
system, but only if the class contains such num-
ber of drugs, as specified by the Secretary (but 
not fewer than three drugs), to ensure confiden-
tiality of proprietary information or other infor-
mation that is prevented to be disclosed under 
subparagraph (A).’’. 
SEC. 113. STUDY OF PHARMACEUTICAL SUPPLY CHAIN 
INTERMEDIARIES AND MERGER ACTIVITY. 
(a) INITIAL REPORT.—Not later than 1 year after 
the date of enactment of this Act, the Commission shall 
submit to the appropriate committees of Congress a report 
that— 
(1) addresses at minimum— 
(A) whether pharmacy benefit managers— 
(i) charge payers a higher price than 
the reimbursement rate at which the phar-
macy benefit managers reimburse com-
peting pharmacies; 
(ii) steer patients for anticompetitive 
purposes to any pharmacies, including re-
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00041
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
tail, mail-order, or any other type of phar-
macy, in which the pharmacy benefit man-
ager has an ownership interest; 
(iii) audit or review proprietary data, 
including acquisition costs, patient infor-
mation, or dispensing information, of com-
peting pharmacies that can be used for 
anticompetitive purposes; or 
(iv) use formulary designs to increase 
the market share of higher cost prescrip-
tion drugs and depress the market share of 
lower cost prescription drugs (each net of 
rebates and discounts); 
(B) how companies and payers assess the 
benefits, costs, and risks of contracting with 
intermediaries, including pharmacy services ad-
ministrative organizations, and whether more 
information about the roles of intermediaries 
should be available to consumers and payers; 
and 
(C) whether there are any specific legal or 
regulatory obstacles the Commission currently 
faces in ensuring a competitive and transparent 
marketplace in the pharmaceutical supply 
chain, including the pharmacy benefit manager 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00042
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
marketplace and pharmacy services administra-
tive organizations; and 
(2) provides— 
(A) observations or conclusions drawn 
from the November 2017 roundtable entitled 
‘‘Understanding Competition in Prescription 
Drug Markets: Entry and Supply Chain Dy-
namics’’, and any similar efforts; 
(B) specific actions the Commission in-
tends to take as a result of the November 2017 
roundtable, and any similar efforts, including a 
detailed description of relevant forthcoming ac-
tions, additional research or roundtable discus-
sions, consumer education efforts, or enforce-
ment actions; and 
(C) policy or legislative recommendations 
to— 
(i) improve transparency and competi-
tion in the pharmaceutical supply chain; 
(ii) prevent and deter anticompetitive 
behavior in the pharmaceutical supply 
chain; and 
(iii) best ensure that consumers ben-
efit from any cost savings or efficiencies 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00043
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
that may result from mergers and consoli-
dations. 
(b) INTERIM REPORT.—Not later than 180 days 
after the date of enactment of this Act, the Commission 
shall submit to the appropriate committees of Congress 
an interim report on the progress of the report required 
by subsection (a), along with preliminary findings and 
conclusions based on information collected to that date. 
(c) DEFINITIONS.—In this section: 
(1) 
APPROPRIATE
COMMITTEES
OF
CON-
GRESS.—The term ‘‘appropriate committees of Con-
gress’’ means— 
(A) the Committee on Energy and Com-
merce of the House of Representatives; 
(B) the Committee on the Judiciary of the 
Senate; and 
(C) the Committee on the Judiciary of the 
House of Representatives. 
(2) COMMISSION.—The term ‘‘Commission’’ 
means the Federal Trade Commission. 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00044
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
SEC. 114. MAKING PRESCRIPTION DRUG MARKETING SAM-
PLE INFORMATION REPORTED BY MANUFAC-
TURERS AVAILABLE TO CERTAIN INDIVID-
UALS AND ENTITIES. 
(a) IN GENERAL.—Section 1128H of the Social Secu-
rity Act (42 U.S.C. 1320a–7i) is amended— 
(1) by redesignating subsection (b) as sub-
section (e); and 
(2) by inserting after subsection (a) the fol-
lowing new subsections: 
‘‘(b) DATA SHARING AGREEMENTS.— 
‘‘(1) IN GENERAL.—The Secretary shall enter 
into agreements with the specified data sharing indi-
viduals and entities described in paragraph (2) 
under which— 
‘‘(A) upon request of such an individual or 
entity, as applicable, the Secretary makes avail-
able to such individual or entity the information 
submitted under subsection (a) by manufactur-
ers and authorized distributors of record; and 
‘‘(B) such individual or entity agrees to 
not disclose publicly or to another individual or 
entity any information that identifies a par-
ticular practitioner or health care facility. 
‘‘(2) SPECIFIED
DATA
SHARING
INDIVIDUALS 
AND ENTITIES.—For purposes of paragraph (1), the 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00045
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
specified data sharing individuals and entities de-
scribed in this paragraph are the following: 
‘‘(A) OVERSIGHT AGENCIES.—Health over-
sight agencies (as defined in section 164.501 of 
title 45, Code of Federal Regulations), includ-
ing the Centers for Medicare & Medicaid Serv-
ices, the Office of the Inspector General of the 
Department of Health and Human Services, the 
Government Accountability Office, the Congres-
sional Budget Office, the Medicare Payment 
Advisory Commission, and the Medicaid and 
CHIP Payment and Access Commission. 
‘‘(B) 
RESEARCHERS.—Individuals 
who 
conduct scientific research (as defined in sec-
tion 164.501 of title 45, Code of Federal Regu-
lations) in relevant areas as determined by the 
Secretary. 
‘‘(C) PAYERS.—Private and public health 
care payers, including group health plans, 
health insurance coverage offered by health in-
surance issuers, Federal health programs, and 
State health programs. 
‘‘(3) EXEMPTION FROM FREEDOM OF INFORMA-
TION ACT.—Except as described in paragraph (1), 
the Secretary may not be compelled to disclose the 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00046
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
information submitted under subsection (a) to any 
individual or entity. For purposes of section 552 of 
title 5, United States Code (commonly referred to as 
the Freedom of Information Act), this paragraph 
shall be considered a statute described in subsection 
(b)(3)(B) of such section. 
‘‘(c) PENALTIES.— 
‘‘(1) DATA SHARING AGREEMENTS.—Subject to 
paragraph (3), any specified data sharing individual 
or entity described in subsection (b)(2) that violates 
the terms of a data sharing agreement the individual 
or entity has with the Secretary under subsection 
(b)(1) shall be subject to a civil money penalty of 
not less than $1,000, but not more than $10,000, 
for each such violation. Such penalty shall be im-
posed and collected in the same manner as civil 
money penalties under subsection (a) of section 
1128A are imposed and collected under that section. 
‘‘(2) FAILURE TO REPORT.—Subject to para-
graph (3), any manufacturer or authorized dis-
tributor of record of an applicable drug under sub-
section (a) that fails to submit information required 
under such subsection in a timely manner in accord-
ance with rules or regulations promulgated to carry 
out such subsection shall be subject to a civil money 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00047
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
penalty of not less than $1,000, but not more than 
$10,000, for each such failure. Such penalty shall be 
imposed and collected in the same manner as civil 
money penalties under subsection (a) of section 
1128A are imposed and collected under that section. 
‘‘(3) LIMITATION.—The total amount of civil 
money penalties imposed under paragraph (1) or (2) 
with respect to a year and an individual or entity de-
scribed in paragraph (1) or a manufacturer or dis-
tributor described in paragraph (2), respectively, 
shall not exceed $150,000. 
‘‘(d) DRUG SAMPLE DISTRIBUTION INFORMATION.— 
‘‘(1) IN GENERAL.—Not later than January 1 
of each year (beginning with 2022), the Secretary 
shall maintain a list containing information related 
to the distribution of samples of applicable drugs. 
Such list shall provide the following information with 
respect to the preceding year: 
‘‘(A) The name of the manufacturer or au-
thorized distributor of record of an applicable 
drug for which samples were requested or dis-
tributed under this section. 
‘‘(B) The quantity and class of drug sam-
ples requested. 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00048
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(C) The quantity and class of drug sam-
ples distributed. 
‘‘(2) PUBLIC
AVAILABILITY.—The Secretary 
shall make the information in such list available to 
the public on the Internet website of the Food and 
Drug Administration.’’. 
(b) FDA MAINTENANCE
OF INFORMATION.—The 
Food and Drug Administration shall maintain information 
available to affected reporting companies to ensure their 
ability to fully comply with the requirements of section 
1128H of the Social Security Act. 
(c) PROHIBITION ON DISTRIBUTION OF SAMPLES OF 
OPIOIDS.—Section 503(d) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 353(d)) is amended— 
(1) by moving the margin of paragraph (4) 2 
ems to the left; and 
(2) by adding at the end the following: 
‘‘(5) No person may distribute a drug sample of a 
drug that is— 
‘‘(A) an applicable drug (as defined in section 
1128H(e) of the Social Security Act); 
‘‘(B) a controlled substance (as defined in sec-
tion 102 of the Controlled Substances Act) for which 
the findings required under section 202(b)(2) of 
such Act have been made; and 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00049
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(C) approved under section 505 for use in the 
management or treatment of pain (other than for 
the management or treatment of a substance use 
disorder).’’. 
(d) MEDPAC REPORT.—Not later than 3 years after 
the date of the enactment of this Act, the Medicare Pay-
ment Advisory Commission shall conduct a study on the 
impact of drug samples on provider prescribing practices 
and health care costs and may, as the Commission deems 
appropriate, make recommendations on such study. 
SEC. 115. SENSE OF CONGRESS REGARDING THE NEED TO 
EXPAND COMMERCIALLY AVAILABLE DRUG 
PRICING COMPARISON PLATFORMS. 
It is the sense of Congress that— 
(1) commercially available drug pricing com-
parison platforms can, at no cost, help patients find 
the lowest price for their medications at their local 
pharmacy; 
(2) such platforms should be integrated, to the 
maximum extent possible, in the health care delivery 
ecosystem; and 
(3) pharmacy benefit managers should work to 
disclose generic and brand name drug prices to such 
platforms to ensure that— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00050
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(A) patients can benefit from the lowest 
possible price available to them; and 
(B) overall drug prices can be reduced as 
more educated purchasing decisions are made 
based on price transparency. 
Subtitle C—Medicare Part D 
Benefit Redesign 
SEC. 121. MEDICARE PART D BENEFIT 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)— 
(i) in the matter preceding clause (i), 
by inserting ‘‘for a year preceding 2022 
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 2022 and each subse-
quent year’’ after ‘‘paragraph (3)’’; 
(ii) in clause (i), by inserting after 
‘‘25 percent’’ the following: ‘‘(or, for 2022 
and each subsequent year, 15 percent)’’; 
and 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00051
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(iii) in clause (ii), by inserting ‘‘(or, 
for 2022 and each subsequent year, 15 
percent)’’ after ‘‘25 percent’’; 
(B) in subparagraph (C)— 
(i) in clause (i), in the matter pre-
ceding subclause (I), by inserting ‘‘for a 
year preceding 2022,’’ after ‘‘paragraph 
(4),’’; and 
(ii) in clause (ii)(III), by striking 
‘‘and each subsequent year’’ and inserting 
‘‘and 2021’’; and 
(C) in subparagraph (D)— 
(i) in clause (i)— 
(I) in the matter preceding sub-
clause (I), by inserting ‘‘for a year 
preceding 2022,’’ after ‘‘paragraph 
(4),’’; and 
(II) in subclause (I)(bb), by 
striking ‘‘a year after 2018’’ and in-
serting ‘‘each of years 2018 through 
2021’’; and 
(ii) in clause (ii)(V), by striking 
‘‘2019 and each subsequent year’’ and in-
serting ‘‘each of years 2019 through 
2021’’; 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00052
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(2) in paragraph (3)(A)— 
(A) in the matter preceding clause (i), by 
inserting ‘‘for a year preceding 2022,’’ after 
‘‘and (4),’’; and 
(B) in clause (ii), by striking ‘‘for a subse-
quent year’’ and inserting ‘‘for each of years 
2007 through 2021’’; 
(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 2022, 
the greater of—’’; 
(III) by striking the period at the 
end of item (bb), as redesignated by 
subclause (I), and inserting ‘‘; and’’; 
and 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00053
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(IV) by adding at the end the fol-
lowing: 
‘‘(II) for 2022 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 2021 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’’; and 
(bb) by striking the period 
at the end and inserting a semi-
colon; and 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00054
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(III) by adding at the end the 
following new subclauses: 
‘‘(VII) for 2022, is equal to 
$3,100; 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 
(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 2022 for amounts’’; and 
(D) in subparagraph (E), by striking ‘‘In 
applying’’ and inserting ‘‘For each of 2011 
through 2021, in applying’’. 
(b) 
DECREASING
REINSURANCE
PAYMENT 
AMOUNT.—Section 1860D–15(b)(1) of the Social Security 
Act (42 U.S.C. 1395w–115(b)(1)) is amended— 
(1) by striking ‘‘equal to 80 percent’’ and in-
serting ‘‘equal to– 
‘‘(A) for a year preceding 2022, 80 per-
cent’’; 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00055
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(2) in subparagraph (A), as added by para-
graph (1), by striking the period at the end and in-
serting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(B) for 2022 and each subsequent year, 
the sum of— 
‘‘(i) an amount equal to 20 percent of 
the allowable reinsurance costs (as speci-
fied in paragraph (2)) attributable to that 
portion of gross covered 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 30 percent of 
the allowable reinsurance costs (as speci-
fied in paragraph (2)) attributable to that 
portion of gross covered prescription drug 
costs as specified in paragraph (3) in-
curred in the coverage year after such indi-
vidual has incurred costs that exceed the 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00056
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
annual out-of-pocket threshold specified in 
section 1860D–2(b)(4)(B) with respect to 
covered part D drugs that are not applica-
ble drugs (as so defined).’’. 
(c) MANUFACTURER DISCOUNT PROGRAM.— 
(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 
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-
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00057
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
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. 
‘‘(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.— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00058
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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. 
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 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00059
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
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 
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 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00060
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
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; 
‘‘(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; 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00061
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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). 
‘‘(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). 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00062
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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. 
‘‘(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 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00063
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
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 
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. 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00064
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(5) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code, shall not apply to the program 
under this section. 
‘‘(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.— 
‘‘(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 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00065
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
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 on 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 equal to or exceed 
the annual deductible 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— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00066
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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); 
and 
‘‘(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— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00067
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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.—The term ‘discounted 
price’ means, with respect to an applicable drug 
of a manufacturer furnished during a year to 
an applicable beneficiary, 90 percent of the ne-
gotiated price of such drug. 
‘‘(B) 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. 
‘‘(C) SPECIAL CASE FOR CLAIMS SPANNING 
DEDUCTIBLE.—In the case where the entire 
amount of the negotiated price of an individual 
claim for an applicable drug with respect to an 
applicable beneficiary does not fall at or above 
the annual deductible specified in section 
1860D–2(b)(1) for the year, the manufacturer 
of the applicable drug shall provide the dis-
counted price under this section on only the 
portion of the negotiated price of the applicable 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00068
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
drug that falls at or above such annual deduct-
ible. 
‘‘(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 
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 an ap-
plicable drug. 
‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG 
PLAN.—The term ‘qualified retiree prescription drug 
plan’ has the meaning given such term in section 
11860D–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— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00069
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(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.— 
‘‘(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— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00070
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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– 
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— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00071
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(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: 
‘‘(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 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00072
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
1860D–14B(g)(6)) of an applicable drug (as 
defined in section 1860D–14(g)(2)) that was 
paid by a manufacturer under the manufacturer 
discount program under section 1860D–14B.’’; 
and 
(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 REDESIGN.— 
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 model used to adjust bid amounts 
pursuant to this subsection as appropriate to take 
into account changes in benefits under this part pur-
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00073
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
suant to the amendments made by section 121 of 
the Lower Costs, More Cures Act of 2021.’’. 
(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)— 
(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: 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00074
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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 
(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)— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00075
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(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 
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)(4)(B)(i)’’ and in-
serting ‘‘section 1860D–2(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— 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00077
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(i) for years prior to 2024, any dis-
count’’; 
(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: 
‘‘(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. 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00078
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
Subtitle D—Other Medicare Part D 
Provisions 
SEC. 131. ALLOWING THE OFFERING OF ADDITIONAL PRE-
SCRIPTION DRUG PLANS UNDER MEDICARE 
PART D. 
(a) RESCINDING
AND ISSUANCE
OF NEW GUID-
ANCE.—Not later than one year after the date of the en-
actment of this Act, the Secretary of Health and Human 
Services (in this section referred to as the ‘‘Secretary’’) 
shall— 
(1) rescind sections of any sub-regulatory guid-
ance that limit the number of prescription drug 
plans in each PDP region that may be offered by a 
PDP sponsor under part D of title XVIII of the So-
cial Security Act (42 U.S.C. 1395w–101 et seq.); 
and 
(2) issue new guidance specifying that a PDP 
sponsor may offer up to 4 (or a greater number if 
determined appropriate by the Secretary) prescrip-
tion drug plans in each PDP region, except in cases 
where the PDP sponsor may offer up to 2 additional 
plans in a PDP region pursuant to section 1860D– 
11(d)(4) of the Social Security Act (42 U.S.C. 
1395w–111(d)(4)), as added by subsection (b). 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00079
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
(b) OFFERING
OF ADDITIONAL PLANS.—Section 
1860D–11(d) of the Social Security Act (42 U.S.C. 
1395w–111(d)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) OFFERING OF ADDITIONAL PLANS.— 
‘‘(A) IN GENERAL.—For plan year 2022 
and each subsequent plan year, a PDP sponsor 
may offer up to 2 additional prescription drug 
plans in a PDP region (in addition to any limit 
established by the Secretary under this part) 
provided that the PDP sponsor complies with 
subparagraph (B) with respect to at least one 
such prescription drug plan. 
‘‘(B) REQUIREMENTS.—In order to be eli-
gible to offer up to 2 additional plans in a PDP 
region pursuant to subparagraph (A), a PDP 
sponsor must ensure that, with respect to at 
least one such prescription drug plan, the spon-
sor or any entity that provides pharmacy bene-
fits management services under a contract with 
any such sponsor or plan does not receive direct 
or indirect remuneration, as defined in section 
423.308 of title 42, Code of Federal Regula-
tions (or any successor regulation), unless at 
least 25 percent of the aggregate reductions in 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00080
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS
price or other remuneration received by the 
PDP sponsor or entity from drug manufactur-
ers with respect to the plan and plan year— 
‘‘(i) are reflected at the point-of-sale 
to the enrollee; or 
‘‘(ii) are used to reduce total bene-
ficiary cost-sharing estimated by the PDP 
sponsor for prescription drug coverage 
under the plan in the annual bid submitted 
by the PDP sponsor under section 1860D– 
11(b). 
‘‘(C) DEFINITION
OF
REDUCTIONS
IN 
PRICE.—For purposes of subparagraph (B), the 
term ‘reductions in price’ refers only to collect-
ible amounts, as determined by the Secretary, 
which excludes amounts which after adjudica-
tion and reconciliation with pharmacies and 
manufacturers are duplicate in nature, contrary 
to other contractual clauses, or otherwise ineli-
gible (such as due to beneficiary disenrollment 
or coordination of benefits).’’. 
(c) RULE OF CONSTRUCTION.—Nothing in the provi-
sions of, or amendments made by, this section shall be 
construed as limiting the ability of the Secretary to in-
crease any limit otherwise applicable on the number of 
VerDate Sep 11 2014 
00:26 Apr 24, 2021
Jkt 019200
PO 00000
Frm 00081
Fmt 6652
Sfmt 6201
E:\BILLS\H19.IH
H19
pamtmann on DSKBC07HB2PROD with BILLS