I 
117TH CONGRESS 
1ST SESSION H. R. 2139 
To amend title XVIII of the Social Security Act to provide for the negotiation 
of lower covered part D drug prices on behalf of Medicare beneficiaries 
and the establishment and application of a formulary by the Secretary 
of Health and Human Services under Medicare part D, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 23, 2021 
Mr. DOGGETT (for himself, Mr. WELCH, Ms. BUSH, Mr. KHANNA, Mr. 
POCAN, Ms. JAYAPAL, Mr. COHEN, Ms. DELAURO, Ms. TLAIB, Ms. 
WASSERMAN SCHULTZ, Mr. NEGUSE, Ms. OMAR, Ms. SCHAKOWSKY, and 
Mr. DEFAZIO) introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committee 
on Ways and Means, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to provide 
for the negotiation of lower covered part D drug prices 
on behalf of Medicare beneficiaries and the establishment 
and application of a formulary by the Secretary of 
Health and Human Services under Medicare part D, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medicare Drug Price 
Negotiation Act’’. 
SEC. 2. NEGOTIATION OF LOWER COVERED PART D DRUG 
PRICES ON BEHALF OF MEDICARE BENE-
FICIARIES; ESTABLISHMENT AND APPLICA-
TION OF FORMULARY BY THE SECRETARY OF 
HEALTH 
AND 
HUMAN 
SERVICES 
UNDER 
MEDICARE PART D. 
(a) IN GENERAL.—Section 1860D–11 of the Social 
Security Act (42 U.S.C. 1395w–111) is amended by strik-
ing subsection (i) (relating to noninterference) and insert-
ing the following: 
‘‘(i) NEGOTIATION OF LOWER DRUG PRICES; ESTAB-
LISHMENT AND APPLICATION OF FORMULARY.— 
‘‘(1) NEGOTIATION.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, subject to subparagraph 
(B), the Secretary shall, for plan years begin-
ning with plan year 2023— 
‘‘(i) negotiate with pharmaceutical 
manufacturers the prices (including dis-
counts, rebates, and all other price conces-
sions) that may be charged to PDP spon-
sors and MA organizations for covered 
part D drugs furnished to enrollees; and 
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‘‘(ii) complete such negotiations for a 
plan year not less than 30 days before the 
first day of the application review process 
for such plan year for new contracts or ex-
panding existing contracts with PDP spon-
sors and MA organizations to offer pre-
scription drug plans or MA–PD plans, re-
spectively. 
‘‘(B) USE OF FALLBACK IF NEGOTIATIONS 
FAIL.— 
‘‘(i) IN GENERAL.—If, after negotia-
tions under subparagraph (A), the Sec-
retary is not successful in obtaining a rea-
sonable price for covered part D drugs in 
accordance with clause (iii), the price that 
may be charged to PDP sponsors and MA 
organizations for such covered part D 
drugs furnished to enrollees shall be the 
lowest of the following: 
‘‘(I) The price applied pursuant 
to section 8126 of title 38, United 
States Code, for such drug for the 
year. 
‘‘(II) The median price available, 
during the most recent 12-month pe-
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riod for which data is available from 
the manufacturer to any wholesaler, 
retailer, provider, health maintenance 
organization, nonprofit entity, or gov-
ernmental entity in Canada, the 
United Kingdom, Germany, France, 
and Japan. 
‘‘(III) The average manufacturer 
price (as defined in subsection (k) of 
section 1927) for such drug for the 
most recent rebate period (as defined 
in such subsection) applicable to such 
plan year, reduced by the sum of the 
applicable rebate factors for the drug 
and rebate period. 
‘‘(ii) APPLICABLE REBATE FACTOR.— 
For purposes of clause (i)(III), the term 
‘applicable rebate factor’ means, with re-
spect to a covered part D drug and a re-
bate period (as defined in section 1927(k)), 
a dollar amount that applies for purposes 
of determining the amount of a rebate that 
is applicable to such drug for such rebate 
period under— 
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‘‘(II) The budgetary impact of 
providing coverage under this part for 
such covered part D drug. 
‘‘(III) The number of similarly 
effective drug or alternative treatment 
regimens for each approved use of 
such covered part D drug. 
‘‘(IV) Associated unmet need or 
severity of illness. 
‘‘(C) IDENTIFICATION OF COVERED PART 
D DRUGS SUBJECT TO NEGOTIATION AND AP-
PLICATION OF NEGOTIATED PRICE.— 
‘‘(i) IDENTIFICATION.—The Secretary 
shall, for each plan year, in accordance 
with the subsequent clauses of this sub-
paragraph, and pursuant to rulemaking, 
identify covered part D drugs for which ne-
gotiations under subparagraph (A) shall be 
conducted. 
‘‘(ii) APPLICATION
OF
NEGOTIATED 
PRICE.—Except as provided in clause (iii), 
the negotiated price of a covered Part D 
drug shall be in effect for each subsequent 
plan year, and may be adjusted for infla-
tion, as measured by the percentage in-
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crease in the consumer price index for all 
urban consumers over the preceding year. 
‘‘(iii) 
PROCESS
FOR
RENEGOTI-
ATION.—The Secretary may establish a 
process whereby stakeholders may petition 
for the negotiated price of a covered Part 
D to be renegotiated after an appropriate 
length of time and only if evidence justi-
fying the need for such renegotiation is 
provided. 
‘‘(iv) REASONABLE
NOTIFICATION.— 
The Secretary shall carry out this subpara-
graph in such manner as to provide for 
public notification of the covered part D 
drugs subject to negotiations for a plan 
year within a reasonable period before the 
beginning of such negotiations. 
‘‘(D) PRIORITIZATION
OF
CERTAIN
COV-
ERED PART D DRUGS.—For purposes of sub-
paragraph (C)(i), the Secretary shall prioritize 
negotiating the prices of covered part D 
drugs— 
‘‘(i) that are among— 
‘‘(I) the 40 covered part D drugs 
that are utilized by at least 1,000 
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Medicare part D beneficiaries and 
with respect to which there were the 
highest total expenditures under this 
part during the most recent 12-month 
period for which data is available; 
‘‘(II) the 40 covered part D 
drugs that are utilized by at least 
1,000 Medicare part D beneficiaries 
with respect to whom the total annual 
spending per such a beneficiary under 
this part for coverage of such a drug 
is at least $10,000; or 
‘‘(III) the 20 covered part D 
drugs that are utilized by at least 
1,000 Medicare part D beneficiaries 
and with respect to which there are 
unit cost increases at or above the 
95th percentile of overall covered part 
D drug unit cost increases during the 
most recent 12-month period for 
which data is available; 
‘‘(ii) with respect to which the cost of 
such a drug to the part D eligible indi-
vidual involved would exceed the annual 
out-of-pocket threshold applicable under 
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section 1860D–2(b)(4)(B) for such plan 
year, if the drug were prescribed to the in-
dividual for the period of the year or with 
respect to which a single treatment regi-
men is priced above such annual out-of- 
pocket threshold applicable under such sec-
tion 1860D–2(b)(4)(B) for the year; or 
‘‘(iii) that are single-source drugs or 
biologicals 
(as 
defined 
in 
section 
1847A(c)(6)(D)) and that satisfy at least 
one other criterion described in a previous 
clause of this subparagraph. 
‘‘(E) ANNUAL
REPORT
TO
CONGRESS.— 
Not later than 30 days after the date on which 
the Secretary completes negotiations under this 
paragraph for the first plan year and each sub-
sequent plan year, the Secretary shall submit to 
Congress and make available to the public a re-
port describing the negotiations during the pre-
ceding year, including— 
‘‘(i) the number of covered part D 
drug prices negotiated; 
‘‘(ii) 
the 
magnitude 
of 
savings 
achieved as a result of such negotiations; 
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‘‘(iii) the number of times price nego-
tiations failed (based on the criteria in-
cluded in the guidance issued pursuant to 
clause (iii) of subparagraph (B)) and re-
sulted in the use of fallback prices under 
clause (i) of such subparagraph, and the 
rationale for any such decisions; 
‘‘(iv) the progress made toward nego-
tiating the prices of covered part D drugs 
that are prioritized under subparagraph 
(D); and 
‘‘(v) the barriers, if any, to achieving 
savings through negotiations. 
‘‘(F) EVALUATION.—Not later than De-
cember 31, 2026, the Inspector General of the 
Department of Health and Human Services 
shall submit to Congress a report evaluating the 
negotiations conducted by the Secretary under 
this paragraph, including a description and 
analysis of— 
‘‘(i) the extent to which such price ne-
gotiations are achieving lower prices for 
covered part D drugs for enrollees; 
‘‘(ii) the parties benefitting from such 
lower prices, such as enrollees, the Federal 
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Government, States, prescription drug 
plans and MA–PD plans, or other entities; 
‘‘(iii) how such price negotiations are 
affecting— 
‘‘(I) the list price of covered part 
D drugs; and 
‘‘(II) drug prices in the private 
market; and 
‘‘(iv) recommendations for improving 
price negotiations, if applicable. 
‘‘(2) ESTABLISHMENT
AND
APPLICATION
OF 
FORMULARY BY THE SECRETARY OR CHANGES IN 
FORMULARIES TO BE REQUIRED BY SECRETARY.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
for plan years beginning with plan year 2023— 
‘‘(i) subject to subparagraphs (B) and 
(C), establish and apply a formulary for 
required use by sponsors of prescription 
drug plans and organizations offering MA– 
PD plans under this part; or 
‘‘(ii) require changes, as necessary, in 
the covered part D drugs included on 
formularies of PDP sponsors of prescrip-
tion drug plans (including changes, as nec-
essary, in the preferred or tiered cost-shar-
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ing status of such a drug) to take into ac-
count negotiations carried out by the Sec-
retary pursuant to paragraph (1), regard-
less of whether such a covered part D drug 
is the subject of such negotiations. 
‘‘(B) REQUIRED INCLUSION OF DRUGS IN 
ALL THERAPEUTIC CATEGORIES.—A formulary 
established and applied under subparagraph 
(A)(i) shall include at least two covered part D 
drugs in each category and class of covered part 
D 
drugs 
as 
described 
in 
section 
423.120(b)(2)(i) of title 42, Code of Federal 
Regulations (as in effect on January 1, 2019). 
‘‘(C) APPLICATION OF DEVELOPMENT AND 
REVISION REQUIREMENTS AND REQUIRED IN-
CLUSION
OF
ALL
DRUGS
IN
CERTAIN
CAT-
EGORIES AND CLASSES.—The requirements de-
scribed in subparagraphs (A) and (B) of section 
1860D–4(b)(3) (relating to development and re-
vision requirements of the formulary) and sub-
paragraph (G) of such section (relating to re-
quired inclusion of all drugs in certain cat-
egories and classes) shall apply to a formulary 
established and applied under subparagraph 
(A)(i) of this paragraph. 
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‘‘(3) PLAN FLEXIBILITY TO NEGOTIATE GREAT-
ER DISCOUNTS.—Nothing in this subsection shall be 
construed as preventing the sponsor of a prescrip-
tion drug plan, or an organization offering an MA– 
PD plan, from obtaining a discount or reduction of 
the price for a covered part D drug below the price 
negotiated under paragraph (1), if applicable, in-
cluding through the use of preferred or tiered cost- 
sharing status. 
‘‘(4) ENSURING
BENEFICIARY
ACCESS
TO 
NEEDED DRUGS.—Beginning with plan year 2023, 
each PDP sponsor of a prescription drug plan and 
organization offering an MA–PD plan shall have in 
place a process under which an enrollee in the plan 
may request coverage under the plan for a covered 
part D drug that is not on the formulary, or is sub-
ject to utilization management controls, such as 
tiered pricing, prior authorization, or step therapy.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) IN GENERAL.—Section 1860D–4 of the So-
cial Security Act (42 U.S.C. 1395w–104) is amend-
ed— 
(A) in subsection (b)(3), in the matter pre-
ceding subparagraph (A), by striking ‘‘If a 
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PDP’’ and inserting ‘‘Subject to section 
1860D–11(i)(2), if a PDP’’; 
(B) in subsection (g)— 
(i) in paragraph (1), by inserting be-
fore the period at the end the following: ‘‘, 
except that the PDP sponsor of a prescrip-
tion drug plan shall treat the presentation 
of a prescription to a participating phar-
macy, which is transmitted to the plan by 
the pharmacy, as a request for a coverage 
determination (including with respect to 
prior authorization, step therapy, or quan-
tity limits) and, in applying such para-
graphs of section 1852(g), the response to 
such transmittal shall be treated as a de-
termination by the sponsor’’; and 
(ii) in paragraph (2), in the first sen-
tence, by inserting ‘‘(or a participating 
pharmacy, on behalf of such individual, 
through transmission of a prescription as 
described in paragraph (1))’’ after ‘‘a part 
D eligible individual who is enrolled in the 
plan’’; and 
(C) in subsection (h)— 
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(i) in paragraph (1), in the second 
sentence, by inserting ‘‘(or a participating 
pharmacy, on behalf of such individual)’’ 
after ‘‘the part D eligible individual’’; and 
(ii) in paragraph (2), by inserting 
‘‘(or a participating pharmacy, on behalf of 
such individual)’’ after ‘‘A part D eligible 
individual who is enrolled in a prescription 
drug plan offered by a PDP sponsor’’. 
(2) EFFECTIVE DATE.—The amendments made 
by subparagraphs (B) and (C) of paragraph (1) 
shall apply to plan years beginning on or after Janu-
ary 1, 2023. 
SEC. 3. REQUIRING DRUG MANUFACTURERS TO PROVIDE 
DRUG REBATES FOR DRUGS DISPENSED TO 
LOW-INCOME INDIVIDUALS. 
(a) IN GENERAL.—Section 1860D–2 of the Social 
Security Act (42 U.S.C. 1395w–102) is amended— 
(1) in subsection (e)(1), in the matter preceding 
subparagraph (A), by inserting ‘‘and subsection (f)’’ 
after ‘‘this subsection’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR 
REBATE ELIGIBLE INDIVIDUALS.— 
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‘‘(1) REQUIREMENT.— 
‘‘(A) IN GENERAL.—For plan years begin-
ning on or after January 1, 2023, in this part, 
the term ‘covered part D drug’ does not include 
any drug or biological product that is manufac-
tured by a manufacturer that has not entered 
into and have in effect a rebate agreement de-
scribed in paragraph (2). 
‘‘(B) 2023 PLAN YEAR REQUIREMENT.— 
Any drug or biological product manufactured by 
a manufacturer that declines to enter into a re-
bate agreement described in paragraph (2) for 
the period beginning on January 1, 2023, and 
ending on December 31, 2023, shall not be in-
cluded as a ‘covered part D drug’ for the subse-
quent plan year. 
‘‘(2) REBATE
AGREEMENT.—A rebate agree-
ment under this subsection shall require the manu-
facturer to provide to the Secretary a rebate for 
each rebate period (as defined in paragraph (6)(B)) 
ending after December 31, 2022, in the amount 
specified in paragraph (3) for any covered part D 
drug of the manufacturer dispensed after December 
31, 2022, to any rebate eligible individual (as de-
fined in paragraph (6)(A)) for which payment was 
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made by a PDP sponsor or MA organization under 
this part for such period, including payments passed 
through the low-income and reinsurance subsidies 
under sections 1860D–14 and 1860D–15(b), respec-
tively. Such rebate shall be paid by the manufac-
turer to the Secretary not later than 30 days after 
the date of receipt of the information described in 
section 1860D–12(b)(8), including as such section is 
applied under section 1857(f)(3), or 30 days after 
the receipt of information under subparagraph (D) 
of paragraph (3), as determined by the Secretary. 
Insofar as not inconsistent with this subsection, the 
Secretary shall establish terms and conditions of 
such agreement relating to compliance, penalties, 
and program evaluations, investigations, and audits 
that are similar to the terms and conditions for re-
bate agreements under paragraphs (3) and (4) of 
section 1927(b). 
‘‘(3) REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG PLAN ENROLLEES.— 
‘‘(A) IN GENERAL.—The amount of the re-
bate specified under this paragraph for a manu-
facturer for a rebate period, with respect to 
each dosage form and strength of any covered 
part D drug provided by such manufacturer 
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and dispensed to a rebate eligible individual, 
shall be equal to the product of— 
‘‘(i) the total number of units of such 
dosage form and strength of the drug so 
provided and dispensed for which payment 
was made by a PDP sponsor or an MA or-
ganization under this part for the rebate 
period, including payments passed through 
the low-income and reinsurance subsidies 
under sections 1860D–14 and 1860D– 
15(b), respectively; and 
‘‘(ii) the amount (if any) by which— 
‘‘(I) the Medicaid rebate amount 
(as defined in subparagraph (B)) for 
such form, strength, and period, ex-
ceeds 
‘‘(II) the average Medicare drug 
program rebate eligible rebate amount 
(as defined in subparagraph (C)) for 
such form, strength, and period. 
‘‘(B) MEDICAID
REBATE
AMOUNT.—For 
purposes of this paragraph, the term ‘Medicaid 
rebate amount’ means, with respect to each 
dosage form and strength of a covered part D 
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drug provided by the manufacturer for a rebate 
period— 
‘‘(i) in the case of a single source 
drug or an innovator multiple source drug, 
the 
amount 
specified 
in 
paragraph 
(1)(A)(ii)(II) or (2)(C) of section 1927(c) 
plus the amount, if any, specified in sub-
paragraph (A)(ii) of paragraph (2) of such 
section, for such form, strength, and pe-
riod; or 
‘‘(ii) in the case of any other covered 
outpatient drug, the amount specified in 
paragraph (3)(A)(i) of such section for 
such form, strength, and period. 
‘‘(C) AVERAGE MEDICARE DRUG PROGRAM 
REBATE ELIGIBLE REBATE AMOUNT.—For pur-
poses of this subsection, the term ‘average 
Medicare drug program rebate eligible rebate 
amount’ means, with respect to each dosage 
form and strength of a covered part D drug 
provided by a manufacturer for a rebate period, 
the sum, for all PDP sponsors under part D 
and MA organizations administering an MA– 
PD plan under part C, of— 
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‘‘(i) the product, for each such spon-
sor or organization, of— 
‘‘(I) the sum of all rebates, dis-
counts, or other price concessions (not 
taking into account any rebate pro-
vided under paragraph (2) or any dis-
counts under the program under sec-
tion 1860D–14A) for such dosage 
form and strength of the drug dis-
pensed, calculated on a per-unit basis, 
but only to the extent that any such 
rebate, discount, or other price con-
cession applies equally to drugs dis-
pensed to rebate eligible Medicare 
drug plan enrollees and drugs dis-
pensed to PDP and MA–PD enrollees 
who are not rebate eligible individuals; 
and 
‘‘(II) the number of the units of 
such dosage and strength of the drug 
dispensed during the rebate period to 
rebate eligible individuals enrolled in 
the prescription drug plans adminis-
tered by the PDP sponsor or the MA– 
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PD plans administered by the MA or-
ganization; divided by 
‘‘(ii) the total number of units of such 
dosage and strength of the drug dispensed 
during the rebate period to rebate eligible 
individuals enrolled in all prescription drug 
plans administered by PDP sponsors and 
all MA–PD plans administered by MA or-
ganizations. 
‘‘(D) USE OF ESTIMATES.—The Secretary 
may establish a methodology for estimating the 
average Medicare drug program rebate eligible 
rebate amounts for each rebate period based on 
bid and utilization information under this part 
and may use these estimates as the basis for 
determining the rebates under this section. If 
the Secretary elects to estimate the average 
Medicare drug program rebate eligible rebate 
amounts, the Secretary shall establish a rec-
onciliation process for adjusting manufacturer 
rebate payments not later than 3 months after 
the date that manufacturers receive the infor-
mation 
collected 
under 
section 
1860D– 
12(b)(8)(B). 
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‘‘(4) LENGTH OF AGREEMENT.—The provisions 
of paragraph (4) of section 1927(b) (other than 
clauses (iv) and (v) of subparagraph (B)) shall apply 
to rebate agreements under this subsection in the 
same manner as such paragraph applies to a rebate 
agreement under such section. 
‘‘(5) OTHER
TERMS
AND
CONDITIONS.—The 
Secretary shall establish other terms and conditions 
of the rebate agreement under this subsection, in-
cluding terms and conditions related to compliance, 
that are consistent with this subsection. 
‘‘(6) DEFINITIONS.—In this subsection and sec-
tion 1860D–12(b)(8): 
‘‘(A) REBATE ELIGIBLE INDIVIDUAL.—The 
term ‘rebate eligible individual’ means— 
‘‘(i) a subsidy eligible individual (as 
defined in section 1860D–14(a)(3)(A)); 
‘‘(ii) a Medicaid beneficiary treated as 
a subsidy eligible individual under clause 
(v) of section 1860D–14(a)(3)(B); and 
‘‘(iii) any part D eligible individual 
not described in clause (i) or (ii) who is de-
termined for purposes of the State plan 
under title XIX to be eligible for medical 
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assistance under clause (i), (iii), or (iv) of 
section 1902(a)(10)(E). 
‘‘(B) REBATE PERIOD.—The term ‘rebate 
period’ has the meaning given such term in sec-
tion 1927(k)(8).’’. 
(b) REPORTING REQUIREMENT
FOR
THE DETER-
MINATION AND PAYMENT OF REBATES BY MANUFACTUR-
ERS RELATED TO REBATE FOR REBATE ELIGIBLE MEDI-
CARE DRUG PLAN ENROLLEES.— 
(1) REQUIREMENTS FOR PDP SPONSORS.—Sec-
tion 1860D–12(b) of the Social Security Act (42 
U.S.C. 1395w–112(b)) is amended by adding at the 
end the following new paragraph: 
‘‘(8) REPORTING REQUIREMENT FOR THE DE-
TERMINATION AND PAYMENT OF REBATES BY MANU-
FACTURERS RELATED TO REBATE FOR REBATE ELI-
GIBLE MEDICARE DRUG PLAN ENROLLEES.— 
‘‘(A) IN GENERAL.—For purposes of the 
rebate under section 1860D–2(f) for contract 
years beginning on or after January 1, 2023, 
each contract entered into with a PDP sponsor 
under this part with respect to a prescription 
drug plan shall require that the sponsor comply 
with subparagraphs (B) and (C). 
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age Medicare drug program rebate eligible 
rebate amount (as defined in paragraph 
(3)(C) of such section), and to determine 
the amount of the rebate required under 
this section, for such form, strength, and 
period. 
Such report shall be in a form consistent with 
a standard reporting format established by the 
Secretary. 
‘‘(C) SUBMISSION TO SECRETARY.—Each 
PDP sponsor shall promptly transmit a copy of 
the information reported under subparagraph 
(B) to the Secretary for the purpose of audit 
oversight and evaluation. 
‘‘(D) 
CONFIDENTIALITY
OF
INFORMA-
TION.—The provisions of subparagraph (D) of 
section 1927(b)(3), relating to confidentiality of 
information, shall apply to information reported 
by PDP sponsors under this paragraph in the 
same manner that such provisions apply to in-
formation disclosed by manufacturers or whole-
salers under such section, except— 
‘‘(i) that any reference to ‘this sec-
tion’ in clause (i) of such subparagraph 
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shall be treated as being a reference to this 
section; 
‘‘(ii) the reference to the Director of 
the Congressional Budget Office in clause 
(iii) of such subparagraph shall be treated 
as including a reference to the Medicare 
Payment Advisory Commission; and 
‘‘(iii) clause (iv) of such subparagraph 
shall not apply. 
‘‘(E) OVERSIGHT.—Information reported 
under this paragraph may be used by the In-
spector General of the Department of Health 
and Human Services for the statutorily author-
ized purposes of audit, investigation, and eval-
uations. 
‘‘(F) PENALTIES
FOR
FAILURE
TO
PRO-
VIDE TIMELY INFORMATION AND PROVISION OF 
FALSE INFORMATION.—In the case of a PDP 
sponsor— 
‘‘(i) that fails to provide information 
required under subparagraph (B) on a 
timely basis, the sponsor is subject to a 
civil money penalty in the amount of 
$10,000 for each day in which such infor-
mation has not been provided; or 
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‘‘(ii) that knowingly (as defined in 
section 1128A(i)) provides false informa-
tion under such subparagraph, the sponsor 
is subject to a civil money penalty in an 
amount not to exceed $100,000 for each 
item of false information. 
Such civil money penalties are in addition to 
other penalties as may be prescribed by law. 
The provisions of section 1128A (other than 
subsections (a) and (b)) shall apply to a civil 
money penalty under this subparagraph in the 
same manner as such provisions apply to a pen-
alty or proceeding under section 1128A(a).’’. 
(2) APPLICATION TO MA ORGANIZATIONS.—Sec-
tion 1857(f)(3) of the Social Security Act (42 
U.S.C. 1395w–27(f)(3)) is amended by adding at 
the end the following: 
‘‘(E) REPORTING REQUIREMENT RELATED 
TO REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG
PLAN
ENROLLEES.—Section 1860D– 
12(b)(8).’’. 
(c) DEPOSIT OF REBATES INTO MEDICARE PRE-
SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) of the 
Social Security Act (42 U.S.C. 1395w–116(c)) is amended 
by adding at the end the following new paragraph: 
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‘‘(6) REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG PLAN ENROLLEES.—Amounts paid under a re-
bate agreement under section 1860D–2(f) shall be 
deposited into the Account.’’. 
(d) EXCLUSION FROM DETERMINATION
OF BEST 
PRICE
AND AVERAGE MANUFACTURER PRICE UNDER 
MEDICAID.— 
(1) EXCLUSION FROM BEST PRICE DETERMINA-
TION.—Section 1927(c)(1)(C)(ii)(I) of the Social Se-
curity Act (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is 
amended by inserting ‘‘and amounts paid under a 
rebate agreement under section 1860D–2(f)’’ after 
‘‘this section’’. 
(2) EXCLUSION
FROM
AVERAGE
MANUFAC-
TURER
PRICE
DETERMINATION.—Section 
1927(k)(1)(B)(i) of the Social Security Act (42 
U.S.C. 1396r–8(k)(1)(B)(i)) is amended— 
(A) in subclause (IV), by striking ‘‘and’’ 
after the semicolon; 
(B) in subclause (V), by striking the period 
at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
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‘‘(VI) amounts paid under a re-
bate agreement under section 1860D– 
2(f).’’. 
Æ 
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