2408 
‘‘(2) UNITED
STATES.—The term ‘United 
States’ has the meaning given such term by section 
4612(a)(4). 
‘‘(3) COORDINATION WITH RULES FOR POSSES-
SIONS OF THE UNITED STATES.—Rules similar to 
the rules of paragraphs (2) and (4) of section 
4132(c) shall apply for purposes of this section. 
‘‘(e) OTHER DEFINITIONS.—For purposes of this 
section, the terms ‘selected drug publication date’ and 
‘maximum fair price’ have the meaning given such terms 
in section 1191 of the Social Security Act. 
‘‘(f) ANTI-ABUSE RULE.—In the case of a sale which 
was timed for the purpose of avoiding the tax imposed by 
this section, the Secretary may treat such sale as occur-
ring during a day described in subsection (b).’’. 
(b) NO DEDUCTION FOR EXCISE TAX PAYMENTS.— 
Section 275 of the Internal Revenue Code of 1986 is 
amended by adding ‘‘or by section 4192’’ before the period 
at the end of subsection (a)(6). 
(c) CONFORMING AMENDMENTS.— 
(1) Section 4221(a) of the Internal Revenue 
Code of 1986 is amended by inserting ‘‘or 4192’’ 
after ‘‘section 4191’’. 
(2) Section 6416(b)(2) of such Code is amend-
ed by inserting ‘‘or 4192’’ after ‘‘section 4191’’. 
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(d) CLERICAL AMENDMENTS.— 
(1) The heading of subchapter E of chapter 32 
of the Internal Revenue Code of 1986 is amended by 
striking 
‘‘Medical 
Devices’’ 
and 
inserting 
‘‘Other Medical Products’’. 
(2) The table of subchapters for chapter 32 of 
such Code is amended by striking the item relating 
to subchapter E and inserting the following new 
item: 
‘‘SUBCHAPTER E. OTHER MEDICAL PRODUCTS’’. 
(3) The table of sections for subchapter E of 
chapter 32 of such Code is amended by adding at 
the end the following new item: 
‘‘Sec. 4192. Selected drugs during noncompliance periods.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after the date of the enact-
ment of this Act. 
SEC. 139003. FAIR PRICE NEGOTIATION IMPLEMENTATION 
FUND. 
(a) IN GENERAL.—There is hereby established a Fair 
Price Negotiation Implementation Fund (referred to in 
this section as the ‘‘Fund’’). The Secretary of Health and 
Human Services may obligate and expend amounts in the 
Fund to carry out this part and parts 2 and 3 (and the 
amendments made by such parts). 
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(b) FUNDING.—There is authorized to be appro-
priated, and there is hereby appropriated, out of any mon-
ies in the Treasury not otherwise appropriated, to the 
Fund $3,000,000,000, to remain available until expended, 
of which— 
(1) $600,000,000 shall become available on the 
date of the enactment of this Act; 
(2) $600,000,000 shall become available on Oc-
tober 1, 2023; 
(3) $600,000,000 shall become available on Oc-
tober 1, 2024; 
(4) $600,000,000 shall become available on Oc-
tober 1, 2025; and 
(5) $600,000,000 shall become available on Oc-
tober 1, 2026. 
(c) SUPPLEMENT NOT SUPPLANT.—Any amounts 
appropriated pursuant to this section shall be in addition 
to any other amounts otherwise appropriated pursuant to 
any other provision of law. 
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PART 2—PRESCRIPTION DRUG INFLATION 
REBATES 
SEC. 139101. MEDICARE PART B REBATE BY MANUFACTUR-
ERS. 
(a) IN GENERAL.—Section 1834 of the Social Secu-
rity Act (42 U.S.C. 1395m) is amended by adding at the 
end the following new subsection: 
‘‘(z) REBATE
BY MANUFACTURERS
FOR SINGLE 
SOURCE DRUGS WITH PRICES INCREASING FASTER 
THAN INFLATION.— 
‘‘(1) REQUIREMENTS.— 
‘‘(A) SECRETARIAL PROVISION OF INFOR-
MATION.—Not later than 6 months after the 
end of each calendar quarter beginning on or 
after July 1, 2023, the Secretary shall, for each 
part B rebatable drug, report to each manufac-
turer of such part B rebatable drug the fol-
lowing for such calendar quarter: 
‘‘(i) Information on the total number 
of units of the billing and payment code 
described in subparagraph (A)(i) of para-
graph (3) with respect to such drug and 
calendar quarter. 
‘‘(ii) Information on the amount (if 
any) of the excess average sales price in-
crease described in subparagraph (A)(ii) of 
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such paragraph for such drug and calendar 
quarter. 
‘‘(iii) The rebate amount specified 
under such paragraph for such part B 
rebatable drug and calendar quarter. 
‘‘(B) MANUFACTURER
REQUIREMENT.— 
For each calendar quarter beginning on or after 
July 1, 2023, the manufacturer of a part B 
rebatable drug shall, for such drug, not later 
than 30 days after the date of receipt from the 
Secretary of the information described in sub-
paragraph (A) for such calendar quarter, pro-
vide to the Secretary a rebate that is equal to 
the amount specified in paragraph (3) for such 
drug for such calendar quarter. 
‘‘(2) PART B REBATABLE DRUG DEFINED.— 
‘‘(A) IN GENERAL.—In this subsection, the 
term ‘part B rebatable drug’ means a single 
source drug or biological (as defined in sub-
paragraph (D) of section 1847A(c)(6)), includ-
ing a biosimilar biological product (as defined 
in subparagraph (H) of such section), payable 
(if such drug were furnished to an individual 
enrolled under this part) under this part, except 
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such term shall not include such a drug or bio-
logical— 
‘‘(i) if the average total allowed 
charges under this part as determined by 
the Secretary for a year per individual that 
uses such a drug or biological, as deter-
mined by the Secretary, are less than, sub-
ject to subparagraph (B), $100; or 
‘‘(ii) that is a vaccine described in 
subparagraph (A) or (B) of section 
1861(s)(10). 
‘‘(B) INCREASE.—The dollar amount ap-
plied under subparagraph (A)(i)— 
‘‘(i) for 2024, shall be the dollar 
amount specified under such subparagraph 
for 2023, increased by the percentage in-
crease in the consumer price index for all 
urban consumers (United States city aver-
age) for the 12-month period ending with 
June of the previous year; and 
‘‘(ii) for a subsequent year, shall be 
the dollar amount specified in this clause 
(or clause (i)) for the previous year, in-
creased by the percentage increase in the 
consumer price index for all urban con-
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sumers (United States city average) for 
the 12-month period ending with June of 
the previous year. 
Any dollar amount specified under this sub-
paragraph that is not a multiple of $10 shall be 
rounded to the nearest multiple of $10. 
‘‘(3) REBATE AMOUNT.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the amount specified in this para-
graph for a part B rebatable drug assigned to 
a billing and payment code for a calendar quar-
ter is, subject to subparagraph (B) and para-
graph (4), the amount equal to the product 
of— 
‘‘(i) the total number of units, as de-
scribed in section 1847A(c)(1)(B), with re-
spect to such drug during the calendar 
quarter; and 
‘‘(ii) the amount (if any) by which— 
‘‘(I) the payment amount under 
subparagraph (B) or (C) of section 
1847A(b)(1), as applicable, for such 
part B rebatable drug during the cal-
endar quarter; exceeds 
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‘‘(II) the inflation-adjusted pay-
ment amount determined under sub-
paragraph (C) for such part B 
rebatable drug during the calendar 
quarter. 
‘‘(B) EXCLUDED UNITS.—For purposes of 
subparagraph (A)(i), the Secretary shall exclude 
from the total number of units with respect to 
a part B rebatable drug and calendar quarter 
units of such part B rebatable drug for which 
payment was made under a State plan under 
title XIX (or waiver of such plan), as reported 
by States under section 1927(b)(2)(A) for the 
most recent rebate period. 
‘‘(C) DETERMINATION OF INFLATION-AD-
JUSTED PAYMENT AMOUNT.—The inflation-ad-
justed payment amount determined under this 
subparagraph for a part B rebatable drug for 
a calendar quarter is— 
‘‘(i) the payment amount for the bill-
ing and payment code for such drug in the 
payment amount benchmark quarter (as 
defined in subparagraph (D)); increased by 
‘‘(ii) the percentage by which the re-
bate period CPI–U (as defined in subpara-
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graph (F)) for the calendar quarter ex-
ceeds the benchmark period CPI–U (as de-
fined in subparagraph (E)). 
‘‘(D) 
PAYMENT
AMOUNT
BENCHMARK 
QUARTER.—The term ‘payment amount bench-
mark quarter’ means the calendar quarter be-
ginning January 1, 2016. 
‘‘(E) BENCHMARK
PERIOD
CPI–U.—The 
term ‘benchmark period CPI–U’ means the con-
sumer price index for all urban consumers 
(United States city average) for July 2015. 
‘‘(F) REBATE PERIOD CPI–U.—The term 
‘rebate period CPI–U’ means, with respect to a 
calendar quarter described in subparagraph 
(C), the greater of the benchmark period CPI– 
U and the consumer price index for all urban 
consumers (United States city average) for the 
first month of the calendar quarter that is two 
calendar quarters prior to such described cal-
endar quarter. 
‘‘(4) SPECIAL TREATMENT OF CERTAIN DRUGS 
AND EXEMPTION.— 
‘‘(A) SUBSEQUENTLY APPROVED DRUGS.— 
Subject to subparagraph (B), in the case of a 
part B rebatable drug first approved or licensed 
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by the Food and Drug Administration after 
July 1, 2015, clause (i) of paragraph (3)(C) 
shall be applied as if the term ‘payment amount 
benchmark quarter’ were defined under para-
graph (3)(D) as the third full calendar quarter 
after the day on which the drug was first mar-
keted and clause (ii) of paragraph (3)(C) shall 
be applied as if the term ‘benchmark period 
CPI–U’ were defined under paragraph (3)(E) 
as if the reference to ‘July 2015’ under such 
paragraph were a reference to ‘the first month 
of the first full calendar quarter after the day 
on which the drug was first marketed’. 
‘‘(B) TIMELINE
FOR
PROVISION
OF
RE-
BATES
FOR
SUBSEQUENTLY
APPROVED 
DRUGS.—In the case of a part B rebatable drug 
first approved or licensed by the Food and 
Drug Administration after July 1, 2015, para-
graph (1)(B) shall be applied as if the reference 
to ‘July 1, 2023’ under such paragraph were a 
reference to the later of the 6th full calendar 
quarter after the day on which the drug was 
first marketed or July 1, 2023. 
‘‘(C) EXEMPTION FOR SHORTAGES.—The 
Secretary may reduce or waive the rebate 
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amount under paragraph (1)(B) with respect to 
a part B rebatable drug that is described as 
currently in shortage on the shortage list in ef-
fect under section 506E of the Federal Food, 
Drug, and Cosmetic Act or in the case of other 
exigent circumstances, as determined by the 
Secretary. 
‘‘(D) SELECTED DRUGS.—In the case of a 
part B rebatable drug that is a selected drug 
(as defined in section 1192(c)) for a price appli-
cability 
period 
(as 
defined 
in 
section 
1191(b)(2))— 
‘‘(i) for calendar quarters during such 
period for which a maximum fair price (as 
defined in section 1191(c)(2)) for such 
drug has been determined and is applied 
under part E of title XI, the rebate 
amount under paragraph (1)(B) shall be 
waived; and 
‘‘(ii) in the case such drug is deter-
mined (pursuant to such section 1192(c)) 
to no longer be a selected drug, for each 
applicable year beginning after the price 
applicability period with respect to such 
drug, clause (i) of paragraph (3)(C) shall 
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be applied as if the term ‘payment amount 
benchmark quarter’ were defined under 
paragraph (3)(D) as the calendar quarter 
beginning January 1 of the last year be-
ginning during such price applicability pe-
riod with respect to such selected drug and 
clause (ii) of paragraph (3)(C) shall be ap-
plied as if the term ‘benchmark period 
CPI–U’ were defined under paragraph 
(3)(E) as if the reference to ‘July 2015’ 
under such paragraph were a reference to 
the July of the year preceding such last 
year. 
‘‘(5) APPLICATION TO BENEFICIARY COINSUR-
ANCE.—In the case of a part B rebatable drug, if 
the payment amount under this part for a quarter 
exceeds the inflation adjusted payment for such 
quarter— 
‘‘(A) in computing the amount of any coin-
surance applicable under this part to an indi-
vidual to whom such drug is furnished, the 
computation of such coinsurance shall be based 
on the inflation-adjusted payment amount de-
termined under paragraph (3)(C) for such part 
B rebatable drug; and 
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‘‘(B) the amount of such coinsurance is 
equal to 20 percent of such inflation-adjusted 
payment amount so determined. 
‘‘(6) REBATE DEPOSITS.—Amounts paid as re-
bates under paragraph (1)(B) shall be deposited into 
the Federal Supplementary Medical Insurance Trust 
Fund established under section 1841. 
‘‘(7) CIVIL MONEY PENALTY.—If a manufac-
turer of a part B rebatable drug has failed to com-
ply with the requirements under paragraph (1)(B) 
for such drug for a calendar quarter, the manufac-
turer shall be subject to, in accordance with a proc-
ess established by the Secretary pursuant to regula-
tions, a civil money penalty in an amount equal to 
at least 125 percent of the amount specified in para-
graph (3) for such drug for such calendar quarter. 
The provisions of section 1128A (other than sub-
sections (a) (with respect to amounts of penalties or 
additional assessments) and (b)) shall apply to a 
civil money penalty under this paragraph in the 
same manner as such provisions apply to a penalty 
or proceeding under section 1128A(a). 
‘‘(8) APPLICATION
TO
MULTIPLE
SOURCE 
DRUGS.—The Secretary may, pursuant to rule-
making, apply the provisions of this subsection to 
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multiple source drugs (as defined in section 
1847A(c)(6)(C)), including, for purposes of deter-
mining the rebate amount under paragraph (3), by 
calculating 
manufacturer-specific 
average 
sales 
prices for the benchmark period and the rebate pe-
riod.’’. 
(b) AMOUNTS PAYABLE; COST-SHARING.—Section 
1833 of the Social Security Act (42 U.S.C. 1395l) is 
amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) in subparagraph (G), by inserting 
‘‘, subject to subsection (i)(9),’’ after ‘‘the 
amounts paid’’; 
(ii) in subparagraph (S), by striking 
‘‘with respect to’’ and inserting ‘‘subject to 
subparagraph (DD), with respect to’’; 
(iii) by striking ‘‘and (DD)’’ and in-
serting ‘‘(EE)’’; and 
(iv) by inserting before the semicolon 
at the end the following: ‘‘, and (EE) with 
respect to a part B rebatable drug (as de-
fined in paragraph (2) of section 1834(z)) 
for which the payment amount for a cal-
endar 
quarter 
under 
paragraph 
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(3)(A)(ii)(I) of such section for such quar-
ter exceeds the inflation-adjusted payment 
under paragraph (3)(A)(ii)(II) of such sec-
tion for such quarter, the amounts paid 
shall be the difference between (i) the pay-
ment 
amount 
under 
paragraph 
(3)(A)(ii)(I) of such section for such drug, 
and (ii) 20 percent of the inflation-ad-
justed payment amount under paragraph 
(3)(A)(ii)(II) of such section for such 
drug’’; and 
(B) by adding at the end of the flush left 
matter following paragraph (9), the following: 
‘‘For purposes of applying paragraph (1)(EE), sub-
sections (i)(9) and (t)(8)(F), and section 1834(z)(5), the 
Secretary shall make such estimates and use such data 
as the Secretary determines appropriate, and may do so 
by program instruction or otherwise.’’; 
(2) in subsection (i), by adding at the end the 
following new paragraph: 
‘‘(9) In the case of a part B rebatable drug (as de-
fined in paragraph (2) of section 1834(z)) for which pay-
ment under this subsection is not packaged into a payment 
for a covered OPD service (as defined in subsection 
(t)(1)(B)) (or group of services) furnished on or after July 
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1, 2023, under the system under this subsection, in lieu 
of calculation of coinsurance and the amount of payment 
otherwise applicable under this subsection, the provisions 
of section 1834(z)(5), paragraph (1)(EE) of subsection 
(a), and the flush left matter following paragraph (9) of 
subsection (a), shall, as determined appropriate by the 
Secretary, apply under this subsection in the same manner 
as such provisions of section 1834(z)(5) and subsection 
(a) apply under such section and subsection.’’; and 
(3) in subsection (t)(8), by adding at the end 
the following new subparagraph: 
‘‘(F) PART B REBATABLE DRUGS.—In the 
case of a part B rebatable drug (as defined in 
paragraph (2) of section 1834(z)) for which 
payment under this part is not packaged into a 
payment for a service furnished on or after July 
1, 2023, under the system under this sub-
section, in lieu of calculation of coinsurance and 
the amount of payment otherwise applicable 
under this subsection, the provisions of section 
1834(z)(5), paragraph (1)(EE) of subsection 
(a), and the flush left matter following para-
graph (9) of subsection (a), shall, as determined 
appropriate by the Secretary, apply under this 
subsection in the same manner as such provi-
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sions of section 1834(z)(5) and subsection (a) 
apply under such section and subsection.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) TO
PART
B
ASP
CALCULATION.—Section 
1847A(c)(3) of the Social Security Act (42 U.S.C. 
1395w–3a(c)(3)) is amended by inserting ‘‘or section 
1834(z)’’ after ‘‘section 1927’’. 
(2) EXCLUDING PARTS B DRUG INFLATION RE-
BATE
FROM
BEST
PRICE.—Section 
1927(c)(1)(C)(ii)(I) of the Social Security Act (42 
U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is amended by in-
serting ‘‘or section 1834(z)’’ after ‘‘this section’’. 
(3) COORDINATION WITH MEDICAID REBATE IN-
FORMATION DISCLOSURE.—Section 1927(b)(3)(D)(i) 
of the Social Security Act (42 U.S.C. 1396r– 
8(b)(3)(D)(i)) is amended by striking ‘‘or to carry 
out section 1847B’’ and inserting ‘‘to carry out sec-
tion 1847B or section 1834(z)’’. 
SEC. 139102. MEDICARE PART D REBATE BY MANUFACTUR-
ERS. 
(a) IN GENERAL.—Part D of title XVIII of the Social 
Security Act is amended by inserting after section 1860D– 
14A (42 U.S.C. 1395w–114a) the following new section: 
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‘‘SEC. 1860D–14B. MANUFACTURER REBATE FOR CERTAIN 
DRUGS WITH PRICES INCREASING FASTER 
THAN INFLATION. 
‘‘(a) REQUIREMENTS.— 
‘‘(1) SECRETARIAL
PROVISION
OF
INFORMA-
TION.—Not later than 9 months after the end of 
each applicable year (as defined in subsection 
(g)(7)), the Secretary shall, for each part D 
rebatable drug, report to each manufacturer of such 
part D rebatable drug the following for such year: 
‘‘(A) Information on the amount (if any) 
of the excess average manufacturer price in-
crease described in subsection (b)(1)(B) for 
each dosage form and strength with respect to 
such drug and year. 
‘‘(B) The rebate amount specified under 
subsection (b) for each dosage form and 
strength with respect to such drug and year. 
‘‘(2) MANUFACTURER
REQUIREMENTS.—For 
each applicable year, the manufacturer of a part D 
rebatable drug, for each dosage form and strength 
with respect to such drug, not later than 30 days 
after the date of receipt from the Secretary of the 
information described in paragraph (1) for such 
year, shall provide to the Secretary a rebate that is 
equal to the amount specified in subsection (b) for 
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such dosage form and strength with respect to such 
drug for such year. 
‘‘(b) REBATE AMOUNT.— 
‘‘(1) IN GENERAL.— 
‘‘(A) CALCULATION.—For purposes of this 
section, the amount specified in this subsection 
for a dosage form and strength with respect to 
a part D rebatable drug and applicable year is, 
subject to subparagraph (B) of this paragraph 
and subparagraphs (B) and (C) of paragraph 
(5), the amount equal to the product of— 
‘‘(i) the total number of units that are 
used to calculate the average manufacturer 
price of such dosage form and strength 
with respect to such part D rebatable 
drug, as reported by the manufacturer of 
such drug under section 1927 for each re-
cent rebate period under such section, with 
respect to such year, under such section 
for which such information is available; 
and 
‘‘(ii) the amount (if any) by which— 
‘‘(I) the annual manufacturer 
price (as determined in paragraph 
(2)) paid for such dosage form and 
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strength with respect to such part D 
rebatable drug for the year; exceeds 
‘‘(II) the inflation-adjusted pay-
ment amount determined under para-
graph (3) for such dosage form and 
strength with respect to such part D 
rebatable drug for the year. 
‘‘(B) EXCLUDED UNITS.—For purposes of 
subparagraph (A)(i), the Secretary shall exclude 
from the total number of units for a dosage 
form and strength with respect to a part D 
rebatable drug and the most recent rebate pe-
riod under section 1927, with respect to an ap-
plicable year, for which such information is 
available, units of each dosage form and 
strength of such part D rebatable drug, for 
which payment was made under a State plan 
under title XIX (or waiver of such plan), as re-
ported by States under section 1927(b)(2)(A) 
for such rebate period. 
‘‘(2) DETERMINATION OF ANNUAL MANUFAC-
TURER PRICE.—The annual manufacturer price de-
termined under this paragraph for a dosage form 
and strength, with respect to a part D rebatable 
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‘‘(A) the benchmark year manufacturer 
price determined under paragraph (4) for such 
dosage form and strength with respect to such 
drug and year; increased by 
‘‘(B) the percentage by which the applica-
ble year CPI–U (as defined in subsection 
(g)(5)) for the year exceeds the benchmark pe-
riod CPI–U (as defined in subsection (g)(4)). 
‘‘(4) DETERMINATION
OF
BENCHMARK
YEAR 
MANUFACTURER PRICE.—The benchmark year man-
ufacturer price determined under this paragraph for 
a dosage form and strength, with respect to a part 
D rebatable drug and an applicable year, is the sum 
of the products of— 
‘‘(A) the average manufacturer price (as 
defined in subsection (g)(6)) of such dosage 
form and strength, as calculated for a unit of 
such drug, with respect to each of the calendar 
quarters of the payment amount benchmark 
year (as defined in subsection (g)(3)); and 
‘‘(B) the ratio of— 
‘‘(i) the total number of units of such 
dosage form and strength dispensed during 
each such calendar quarter of such pay-
ment amount benchmark year; to 
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‘‘(ii) the total number of units of such 
dosage form and strength dispensed during 
such payment amount benchmark year. 
‘‘(5) SPECIAL TREATMENT OF CERTAIN DRUGS 
AND EXEMPTION.— 
‘‘(A) SUBSEQUENTLY APPROVED DRUGS.— 
In the case of a part D rebatable drug first ap-
proved or licensed by the Food and Drug Ad-
ministration after January 1, 2016, subpara-
graphs (A) and (B) of paragraph (4) shall be 
applied as if the term ‘payment amount bench-
mark year’ were defined under subsection 
(g)(3) as the first calendar year beginning after 
the day on which the drug was first marketed 
by any manufacturer and subparagraph (B) of 
paragraph (3) shall be applied as if the term 
‘benchmark period CPI–U’ were defined under 
subsection (g)(4) as if the reference to ‘January 
2016’ under such subsection were a reference to 
‘January of the first year beginning after the 
date on which the drug was first marketed by 
any manufacturer’. 
‘‘(B) EXEMPTION FOR SHORTAGES.—The 
Secretary may reduce or waive the rebate under 
paragraph (1) with respect to a part D 
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rebatable drug that is described as currently in 
shortage on the shortage list in effect under 
section 506E of the Federal Food, Drug, and 
Cosmetic Act or in the case of other exigent cir-
cumstances, as determined by the Secretary. 
‘‘(C) TREATMENT
OF
NEW
FORMULA-
TIONS.— 
‘‘(i) IN GENERAL.—In the case of a 
part D rebatable drug that is a line exten-
sion of a part D rebatable drug that is an 
oral solid dosage form, the Secretary shall 
establish a formula for determining the 
amount specified in this subsection with 
respect to such part D rebatable drug and 
an applicable year with consideration of 
the original part D rebatable drug. 
‘‘(ii) LINE EXTENSION DEFINED.—In 
this subparagraph, the term ‘line exten-
sion’ means, with respect to a part D 
rebatable drug, a new formulation of the 
drug, such as an extended release formula-
tion, but does not include an abuse-deter-
rent formulation of the drug (as deter-
mined by the Secretary), regardless of 
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whether such abuse-deterrent formulation 
is an extended release formulation. 
‘‘(D) SELECTED DRUGS.—In the case of a 
part D rebatable drug that is a selected drug 
(as defined in section 1192(c)) for a price appli-
cability 
period 
(as 
defined 
in 
section 
1191(b)(2))— 
‘‘(i) for plan years during such period 
for which a maximum fair price (as defined 
in section 1191(c)(2)) for such drug has 
been determined and is applied under part 
E of title XI, the rebate under subsection 
(a)(1)(B) shall be waived; and 
‘‘(ii) in the case such drug is deter-
mined (pursuant to such section 1192(c)) 
to no longer be a selected drug, for each 
applicable year beginning after the price 
applicability period with respect to such 
drug, subparagraphs (A) and (B) of para-
graph (4) shall be applied as if the term 
‘payment amount benchmark year’ were 
defined under subsection (g)(3) as the last 
year beginning during such price applica-
bility period with respect to such selected 
drug and subparagraph (B) of paragraph 
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(3) shall be applied as if the term ‘bench-
mark period CPI–U’ were defined under 
subsection (g)(4) as if the reference to 
‘January 2016’ under such subsection were 
a reference to January of the last year be-
ginning during such price applicability pe-
riod with respect to such drug. 
‘‘(c) REBATE DEPOSITS.—Amounts paid as rebates 
under subsection (b) shall be deposited into the Medicare 
Prescription Drug Account in the Federal Supplementary 
Medical Insurance Trust Fund established under section 
1841. 
‘‘(d) INFORMATION.—For purposes of carrying out 
this section, the Secretary shall use information submitted 
by manufacturers under section 1927(b)(3) and informa-
tion submitted by States under section 1927(b)(2)(A). 
‘‘(e) CIVIL MONEY PENALTY.—If a manufacturer of 
a part D rebatable drug has failed to comply with the re-
quirement under subsection (a)(1)(B) with respect to such 
drug for an applicable year, the manufacturer shall be 
subject to, in accordance with a process established by the 
Secretary pursuant to regulations, a civil money penalty 
in an amount equal to 125 percent of the amount specified 
in subsection (b) for such drug for such year. The provi-
sions of section 1128A (other than subsections (a) (with 
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respect to amounts of penalties or additional assessments) 
and (b)) shall apply to a civil money penalty under this 
subsection in the same manner as such provisions apply 
to a penalty or proceeding under section 1128A(a). 
‘‘(f) JUDICIAL REVIEW.—There shall be no judicial 
review of the following: 
‘‘(1) The determination of units under this sec-
tion. 
‘‘(2) The determination of whether a drug is a 
part D rebatable drug under this section. 
‘‘(3) The calculation of the rebate amount 
under this section. 
‘‘(g) DEFINITIONS.—In this section: 
‘‘(1) PART D REBATABLE DRUG DEFINED.— 
‘‘(A) IN
GENERAL.—The term ‘part D 
rebatable drug’ means a drug or biological that 
would (without application of this section) be a 
covered part D drug, except such term shall, 
with respect to an applicable year, not include 
such a drug or biological if the average annual 
total cost under this part for such year per in-
dividual who uses such a drug or biological, as 
determined by the Secretary, is less than, sub-
ject to subparagraph (B), $100, as determined 
by the Secretary using the most recent data 
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available or, if data is not available, as esti-
mated by the Secretary. 
‘‘(B) INCREASE.—The dollar amount ap-
plied under subparagraph (A)— 
‘‘(i) for 2024, shall be the dollar 
amount specified under such subparagraph 
for 2023, increased by the percentage in-
crease in the consumer price index for all 
urban consumers (United States city aver-
age) for the 12-month period beginning 
with January of 2023; and 
‘‘(ii) for a subsequent year, shall be 
the dollar amount specified in this sub-
paragraph for the previous year, increased 
by the percentage increase in the consumer 
price index for all urban consumers 
(United States city average) for the 12- 
month period beginning with January of 
the previous year. 
Any dollar amount specified under this sub-
paragraph that is not a multiple of $10 shall be 
rounded to the nearest multiple of $10. 
‘‘(2) UNIT DEFINED.—The term ‘unit’ means, 
with respect to a part D rebatable drug, the lowest 
identifiable quantity (such as a capsule or tablet, 
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milligram of molecules, or grams) of the part D 
rebatable drug, including data reported under sec-
tion 1927. 
‘‘(3) PAYMENT AMOUNT BENCHMARK YEAR.— 
The term ‘payment amount benchmark year’ means 
the year beginning January 1, 2016. 
‘‘(4) BENCHMARK
PERIOD
CPI–U.—The term 
‘benchmark period CPI–U’ means the consumer 
price index for all urban consumers (United States 
city average) for January 2016. 
‘‘(5) APPLICABLE YEAR CPI–U.—The term ‘ap-
plicable year CPI–U’ means, with respect to an ap-
plicable year, the consumer price index for all urban 
consumers (United States city average) for January 
of such year. 
‘‘(6) AVERAGE
MANUFACTURER
PRICE.—The 
term ‘average manufacturer price’ has the meaning, 
with respect to a part D rebatable drug of a manu-
facturer, given such term in section 1927(k)(1), with 
respect to a covered outpatient drug of a manufac-
turer for a rebate period under section 1927. 
‘‘(7) APPLICABLE YEAR.—The term ‘applicable 
year’ means a year beginning with 2023.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) TO
PART
B
ASP
CALCULATION.—Section 
1847A(c)(3) of the Social Security Act (42 U.S.C. 
1395w–3a(c)(3)), 
as 
amended 
by 
section 
139101(c)(1), is further amended by striking ‘‘sec-
tion 1927 or section 1834(z)’’ and inserting ‘‘section 
1927, section 1834(z), or section 1860D–14B’’. 
(2) EXCLUDING PART D DRUG INFLATION RE-
BATE
FROM
BEST
PRICE.—Section 
1927(c)(1)(C)(ii)(I) of the Social Security Act (42 
U.S.C. 1396r–8(c)(1)(C)(ii)(I)), as amended by sec-
tion 139101(c)(2), is further amended by striking 
‘‘or section 1834(z)’’ and inserting ‘‘, section 
1834(z), or section 1860D–14B’’. 
(3) COORDINATION WITH MEDICAID REBATE IN-
FORMATION DISCLOSURE.—Section 1927(b)(3)(D)(i) 
of the Social Security Act (42 U.S.C. 1396r– 
8(b)(3)(D)(i)), as amended by section 139101(c)(3), 
is further amended by striking ‘‘or section 1834(z)’’ 
and inserting ‘‘, section 1834(z), or section 1860D– 
14B’’. 
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2438 
PART 3—PART D IMPROVEMENTS AND MAXIMUM 
OUT-OF-POCKET CAP FOR MEDICARE BENE-
FICIARIES 
SEC. 139201. 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), in the matter 
preceding clause (i), by inserting ‘‘for a year 
preceding 2024 and for costs above the annual 
deductible specified in paragraph (1) and up to 
the annual out-of-pocket threshold specified in 
paragraph (4)(B) for 2024 and each subsequent 
year’’ after ‘‘paragraph (3)’’; 
(B) in subparagraph (C)— 
(i) in clause (i), in the matter pre-
ceding subclause (I), by inserting ‘‘for a 
year preceding 2024,’’ after ‘‘paragraph 
(4),’’; and 
(ii) in clause (ii)(III), by striking 
‘‘and each subsequent year’’ and inserting 
‘‘through 2023’’; and 
(C) in subparagraph (D)— 
(i) in clause (i)— 
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(I) in the matter preceding sub-
clause (I), by inserting ‘‘for a year 
preceding 2024,’’ after ‘‘paragraph 
(4),’’; and 
(II) in subclause (I)(bb), by 
striking ‘‘a year after 2018’’ and in-
serting ‘‘each of years 2018 through 
2023’’; and 
(ii) in clause (ii)(V), by striking 
‘‘2019 and each subsequent year’’ and in-
serting ‘‘each of years 2019 through 
2023’’; 
(2) in paragraph (3)(A)— 
(A) in the matter preceding clause (i), by 
inserting ‘‘for a year preceding 2024,’’ after 
‘‘and (4),’’; and 
(B) in clause (ii), by striking ‘‘for a subse-
quent year’’ and inserting ‘‘for each of years 
2007 through 2023’’; and 
(3) in paragraph (4)— 
(A) in subparagraph (A)— 
(i) in clause (i)— 
(I) by redesignating subclauses 
(I) and (II) as items (aa) and (bb), 
respectively, and moving the margin 
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of each such redesignated item 2 ems 
to the right; 
(II) in the matter preceding item 
(aa), as redesignated by subclause (I), 
by striking ‘‘is equal to the greater 
of—’’ and inserting ‘‘is equal to— 
‘‘(I) for a year preceding 2024, 
the greater of—’’; 
(III) by striking the period at the 
end of item (bb), as redesignated by 
subclause (I), and inserting ‘‘; and’’; 
and 
(IV) by adding at the end the fol-
lowing: 
‘‘(II) for 2024 and each suc-
ceeding year, $0.’’; and 
(ii) in clause (ii), by striking ‘‘clause 
(i)(I)’’ and inserting ‘‘clause (i)(I)(aa)’’; 
(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 
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Act (42 U.S.C. 1395w–115(b)(1)) is amended by inserting 
after ‘‘80 percent’’ the following: ‘‘(or, with respect to a 
coverage year after 2023, 20 percent)’’. 
(c) MANUFACTURER DISCOUNT PROGRAM.— 
(1) IN GENERAL.—Part D of title XVIII of the 
Social Security Act (42 U.S.C. 1395w–101 et seq.), 
as amended by section 139102, is further amended 
by inserting after section 1860D–14B the following 
new section: 
‘‘SEC. 1860D–14C. 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-
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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. 
‘‘(C) TIMING OF AGREEMENT.— 
‘‘(i) SPECIAL
RULE
FOR
2024.—In 
order for an agreement with a manufac-
turer to be in effect under this section with 
respect to the period beginning on January 
1, 2024, and ending on December 31, 
2024, the manufacturer shall enter into 
such agreement not later than 30 days 
after the date of the establishment of a 
model agreement under subsection (a). 
‘‘(ii) 
2025 
AND
SUBSEQUENT 
YEARS.—In order for an agreement with a 
manufacturer to be in effect under this 
section with respect to plan year 2025 or 
a subsequent plan year, the manufacturer 
shall enter into such agreement (or such 
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agreement shall be renewed under para-
graph (4)(A)) not later than January 30 of 
the preceding year. 
‘‘(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.— 
‘‘(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). 
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‘‘(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 
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 
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‘‘(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. 
‘‘(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 
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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; 
‘‘(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-
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