2448 
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). 
‘‘(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). 
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‘‘(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 
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 
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‘‘(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. 
‘‘(5) IMPLEMENTATION.—The Secretary may 
implement the program under this section by pro-
gram instruction or otherwise. 
‘‘(6) 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 may 
impose a civil money penalty on a manufacturer 
that fails to provide applicable beneficiaries dis-
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2451 
counts for applicable drugs of the manufacturer 
in accordance with such agreement for each 
such failure in an amount the Secretary deter-
mines is equal to the sum of— 
‘‘(i) the amount that the manufac-
turer would have paid with respect to such 
discounts under the agreement, which will 
then be used to pay the discounts which 
the manufacturer had failed to provide; 
and 
‘‘(ii) 25 percent of such amount. 
‘‘(B) APPLICATION.—The provisions of 
section 1128A (other than subsections (a) and 
(b)) shall apply to a civil money penalty under 
this paragraph in the same manner as such 
provisions apply to a penalty or proceeding 
under section 1128A(a). 
‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF 
OTHER COVERED PART D DRUGS.—Nothing in this sec-
tion shall prevent an applicable beneficiary from pur-
chasing a covered part D drug that is not an applicable 
drug (including a generic drug or a drug that is not on 
the formulary of the prescription drug plan or MA–PD 
plan that the applicable beneficiary is enrolled in). 
‘‘(g) DEFINITIONS.—In this section: 
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‘‘(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, as determined in 
accordance with section 1860D–2(b)(4)(C), for 
covered part D drugs in the year that exceed 
the annual deductible with respect to such indi-
vidual for such year, as specified in section 
1860D–2(b)(1), section 1860D–14(a)(1)(B), or 
section 1860D–14(a)(2)(B), as applicable. 
‘‘(2) APPLICABLE DRUG.—The term ‘applicable 
drug’, with respect to an applicable beneficiary— 
‘‘(A) means a covered part D drug— 
‘‘(i) approved under a new drug appli-
cation under section 505(c) of the Federal 
Food, Drug, and Cosmetic Act or, in the 
case of a biologic product, licensed under 
section 351 of the Public Health Service 
Act; and 
‘‘(ii)(I) if the PDP sponsor of the pre-
scription drug plan or the MA organization 
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2453 
offering the MA–PD plan uses a for-
mulary, 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 pre-
scription drug plan or the MA organization 
offering the MA–PD plan does not use a 
formulary, for which benefits are available 
under the prescription drug plan or MA– 
PD plan that the applicable beneficiary is 
enrolled in; or 
‘‘(III) is provided through an excep-
tion or appeal; and 
‘‘(B) does not include a selected drug (as 
defined in section 1192(c)) during a price appli-
cability 
period 
(as 
defined 
in 
section 
1191(b)(2)) with respect to such drug. 
‘‘(3) APPLICABLE
NUMBER
OF
CALENDAR 
DAYS.—The term ‘applicable number of calendar 
days’ means— 
‘‘(A) with respect to claims for reimburse-
ment submitted electronically, 14 days; and 
‘‘(B) with respect to claims for reimburse-
ment submitted otherwise, 30 days. 
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‘‘(4) DISCOUNTED PRICE.— 
‘‘(A) IN GENERAL.—The term ‘discounted 
price’ means, with respect to an applicable drug 
of a manufacturer dispensed during a year to 
an applicable beneficiary— 
‘‘(i) who has not incurred costs, as de-
termined 
in 
accordance 
with 
section 
1860D–2(b)(4)(C), for covered part D 
drugs in the year that are equal to or ex-
ceed the annual out-of-pocket threshold 
specified in section 1860D–2(b)(4)(B)(i) 
for the year, 90 percent of the negotiated 
price of such drug; and 
‘‘(ii) who has incurred such costs, as 
so determined, in the year that are equal 
to or exceed such threshold for the year, 
70 percent of the negotiated 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
CERTAIN 
CLAIMS.— 
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‘‘(i) 
CLAIMS
SPANNING
DEDUCT-
IBLE.—In the case where the entire 
amount of the negotiated price of an indi-
vidual claim for an applicable drug with re-
spect to an applicable beneficiary does not 
fall above the annual deductible specified 
in section 1860D–2(b)(1) for the year, the 
manufacturer of the applicable drug shall 
provide the discounted price under this 
section on only the portion of the nego-
tiated price of the applicable drug that 
falls above such annual deductible. 
‘‘(ii) CLAIMS SPANNING OUT-OF-POCK-
ET THRESHOLD.—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 entirely below or entirely 
above the annual out-of-pocket threshold 
specified in section 1860D–2(b)(4)(B)(i) 
for the year, the manufacturer of the ap-
plicable drug shall provide the discounted 
price— 
‘‘(I) in accordance with subpara-
graph (A)(i) on the portion of the ne-
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gotiated price of the applicable drug 
that falls below such threshold; and 
‘‘(II) in accordance with subpara-
graph (A)(ii) on the portion of such 
price of such drug that falls at or 
above such threshold. 
‘‘(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 423.100 of title 42, Code of Federal Regula-
tions (or any successor regulation), except that, with 
respect to an applicable drug, such negotiated price 
shall not include any dispensing fee for the applica-
ble drug. 
‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG 
PLAN.—The term ‘qualified retiree prescription drug 
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plan’ has the meaning given such term in section 
1860D–22(a)(2).’’. 
(2) SUNSET OF MEDICARE COVERAGE GAP DIS-
COUNT PROGRAM.—Section 1860D–14A of the So-
cial Security Act (42 U.S.C. 1395–114a) is amend-
ed— 
(A) in subsection (a), in the first sentence, 
by striking ‘‘The Secretary’’ and inserting 
‘‘Subject to subsection (h), the Secretary’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(h) SUNSET OF PROGRAM.— 
‘‘(1) IN
GENERAL.—The program shall not 
apply with respect to applicable drugs dispensed on 
or after January 1, 2024, and, subject to paragraph 
(2), agreements under this section shall be termi-
nated 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 
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of the Social Security Act (42 U.S.C. 1395w–111) 
is amended— 
(A) in subsection (b)(2)(C)(iii)— 
(i) by striking ‘‘assumptions regarding 
the reinsurance’’ and inserting ‘‘assump-
tions regarding— 
‘‘(I) the reinsurance’’; and 
(ii) by adding at the end the fol-
lowing: 
‘‘(II) for 2024 and each subse-
quent year, the manufacturer dis-
counts provided under section 1860D– 
14C 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 inserted by clause 
(i) of this subparagraph, by adding ‘‘and’’ 
at the end; and 
(iii) by adding at the end the fol-
lowing: 
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‘‘(ii) for 2024 and each subsequent 
year, the manufacturer discounts provided 
under section 1860D–14C;’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 1860D–2 of the Social Security Act 
(42 U.S.C. 1395w–102) is amended— 
(A) in subsection (a)(2)(A)(i)(I), by strik-
ing ‘‘, or an increase in the initial’’ and insert-
ing ‘‘or, for a year preceding 2024, an increase 
in the initial’’; 
(B) in subsection (c)(1)(C)— 
(i) in the subparagraph heading, by 
striking ‘‘AT
INITIAL
COVERAGE
LIMIT’’; 
and 
(ii) by inserting ‘‘for a year preceding 
2024 or the annual out-of-pocket threshold 
specified in subsection (b)(4)(B) for the 
year for 2024 and each subsequent year’’ 
after ‘‘subsection (b)(3) for the year’’ each 
place it appears; and 
(C) in subsection (d)(1)(A), by striking ‘‘or 
an initial’’ and inserting ‘‘or, for a year pre-
ceding 2024, an initial’’. 
(2) Section 1860D–4(a)(4)(B)(i) of the Social 
Security Act (42 U.S.C. 1395w–104(a)(4)(B)(i)) is 
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amended by striking ‘‘the initial’’ and inserting ‘‘for 
a year preceding 2024, the initial’’. 
(3) Section 1860D–14(a) of the Social Security 
Act (42 U.S.C. 1395w–114(a)) is amended— 
(A) in paragraph (1)— 
(i) in subparagraph (C), by striking 
‘‘The continuation’’ and inserting ‘‘For a 
year preceding 2024, the continuation’’; 
(ii) in subparagraph (D)(iii), by strik-
ing ‘‘1860D–2(b)(4)(A)(i)(I)’’ and insert-
ing ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’; and 
(iii) in subparagraph (E), by striking 
‘‘The elimination’’ and inserting ‘‘For a 
year preceding 2024, the elimination’’; and 
(B) in paragraph (2)— 
(i) in subparagraph (C), by striking 
‘‘The continuation’’ and inserting ‘‘For a 
year preceding 2024, the continuation’’; 
and 
(ii) in subparagraph (E), 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 
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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— 
‘‘(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–14C.’’. 
(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. 
(7) Section 1860D–43 of the Social Security 
Act (42 U.S.C. 1395w–153) is amended— 
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(A) in subsection (a)— 
(i) by striking paragraph (1) and in-
serting the following: 
‘‘(1) participate in— 
‘‘(A) for 2011 through 2023, the Medicare 
coverage gap discount program under section 
1860D–14A; and 
‘‘(B) for 2024 and each subsequent year, 
the manufacturer discount program under sec-
tion 1860D–14C;’’; 
(ii) by striking paragraph (2) and in-
serting the following: 
‘‘(2) have entered into and have in effect— 
‘‘(A) for 2011 through 2023, an agreement 
described in subsection (b) of section 1860D– 
14A with the Secretary; and 
‘‘(B) for 2024 and each subsequent year, 
an agreement described in subsection (b) of sec-
tion 1860D–14C with the Secretary; and’’; and 
(iii) by striking paragraph (3) and in-
serting the following: 
‘‘(3) have entered into and have in effect, under 
terms and conditions specified by the Secretary— 
‘‘(A) for 2011 through 2023, a contract 
with a third party that the Secretary has en-
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tered into a contract with under subsection 
(d)(3) of section 1860D–14A; and 
‘‘(B) for 2024 and each subsequent year, 
a contract with a third party that the Secretary 
has entered into a contract with under sub-
section (d)(3) of section 1860D–14C.’’; and 
(B) by striking subsection (b) and insert-
ing the following: 
‘‘(b) EFFECTIVE DATE.—Paragraphs (1)(A), (2)(A), 
and (3)(A) of subsection (a) shall apply to covered part 
D drugs dispensed under this part on or after January 
1, 2011, and before January 1, 2024, and paragraphs 
(1)(B), (2)(B), and (3)(B) of such subsection shall apply 
to covered part D drugs dispensed under this part on or 
after January 1, 2024.’’. 
(8) Section 1927 of the Social Security Act (42 
U.S.C. 1396r–8) is amended— 
(A) in subsection (c)(1)(C)(i)(VI), by in-
serting before the period at the end the fol-
lowing: ‘‘or under the manufacturer discount 
program under section 1860D–14C’’; and 
(B) in subsection (k)(1)(B)(i)(V), by in-
serting before the period at the end the fol-
lowing: ‘‘or under section 1860D–14C’’. 
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2464 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plan year 2024 and 
subsequent plan years. 
SEC. 139202. ALLOWING CERTAIN ENROLLEES OF PRE-
SCRIPTION DRUG PLANS AND MA–PD PLANS 
UNDER MEDICARE PROGRAM TO SPREAD 
OUT COST-SHARING UNDER CERTAIN CIR-
CUMSTANCES. 
Section 1860D–2(b)(2) of the Social Security Act (42 
U.S.C. 1395w–102(b)(2)), as amended by section 139201, 
is further amended— 
(1) in subparagraph (A), by striking ‘‘Subject 
to subparagraphs (C) and (D)’’ and inserting ‘‘Sub-
ject to subparagraphs (C), (D), and (E)’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(E) 
ENROLLEE
OPTION
REGARDING 
SPREADING
COST-SHARING.—The 
Secretary 
shall establish by regulation a process under 
which, with respect to plan year 2024 and sub-
sequent plan years, a prescription drug plan or 
an MA–PD plan shall, in the case of a part D 
eligible individual enrolled with such plan for 
such plan year who is not a subsidy eligible in-
dividual (as defined in section 1860D–14(a)(3)) 
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and with respect to whom the plan projects that 
the dispensing of the first fill of a covered part 
D drug to such individual will result in the indi-
vidual incurring costs that are equal to or above 
the annual out-of-pocket threshold specified in 
paragraph (4)(B) for such plan year, provide 
such individual with the option to make the co-
insurance payment required under subpara-
graph (A) (for the portion of such costs that 
are not above such annual out-of-pocket thresh-
old) in the form of periodic installments over 
the remainder of such plan year.’’. 
PART 4—REPEAL OF CERTAIN PRESCRIPTION 
DRUG REBATE RULE 
SEC. 139301. PROHIBITING IMPLEMENTATION OF RULE RE-
LATING TO ELIMINATING THE ANTI-KICK-
BACK STATUTE SAFE HARBOR PROTECTION 
FOR PRESCRIPTION DRUG REBATES. 
Beginning January 1, 2026, the Secretary of Health 
and Human Services shall not implement, administer, or 
enforce the provisions of the final rule published by the 
Office of the Inspector General of the Department of 
Health and Human Services on November 30, 2020, and 
titled ‘‘Fraud and Abuse; Removal of Safe Harbor Protec-
tion for Rebates Involving Prescription Pharmaceuticals 
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2466 
and Creation of New Safe Harbor Protection for Certain 
Point-of-Sale Reductions in Price on Prescription Phar-
maceuticals and Certain Pharmacy Benefit Manager Serv-
ice Fees’’ (85 Fed. Reg. 76666). 
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Union Calendar No. 94 
117TH CONGRESS 
1ST SESSION 
H. R. 5376 
[Report No. 117–130] 
A BILL 
To provide for reconciliation pursuant to title II of 
S. Con. Res. 14. 
SEPTEMBER 27, 2021 
Committed to the Committee of the Whole House on the 
State of the Union and ordered to be printed 
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