Make Medicine Affordable Act
Bill: H.R.7497 | Sponsor: Rep. Slotkin, Elissa (D-MI)
Policy area: Health

Summary:
Make Medicine Affordable Act
This bill establishes several programs and requirements to address the prices of prescription drugs, including (1) requiring the Centers for Medicare & Medicaid Services to negotiate the prices of certain brand-name drugs and insulin under Medicare, (2) capping annual out-of-pocket spending under the Medicare prescription drug benefit, and (3) limiting cost-sharing for insulin products.

To provide for lower prices for drugs through drug price negotiation, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Make Medicine 
Affordable Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
        TITLE I--LOWERING PRICES THROUGH DRUG PRICE NEGOTIATION

Sec. 101. Providing for lower prices for certain high-priced single 
                            source drugs.
Sec. 102. Selected drug manufacturer excise tax imposed during 
                            noncompliance periods.
Sec. 103. Funding.
             TITLE II--PRESCRIPTION DRUG INFLATION REBATES

Sec. 201. Medicare part B rebate by manufacturers.
Sec. 202. Medicare part D rebate by manufacturers.
   TITLE III--PART D IMPROVEMENTS AND MAXIMUM OUT-OF-POCKET CAP FOR 
                         MEDICARE BENEFICIARIES

Sec. 301. Medicare part D benefit redesign.
Sec. 302. Maximum monthly cap on cost-sharing payments under 
                            prescription drug plans and MA-PD plans.
       TITLE IV--REPEAL OF CERTAIN PRESCRIPTION DRUG REBATE RULE

Sec. 401. Prohibiting implementation of rule relating to eliminating 
                            the anti-kickback statute safe harbor 
                            protection for prescription drug rebates.
                         TITLE V--MISCELLANEOUS

Sec. 501. Appropriate cost-sharing for certain insulin products under 
                            Medicare part D.
Sec. 502. Coverage of adult vaccines recommended by the Advisory 
                            Committee on Immunization Practices under 
                            Medicare part D.
Sec. 503. Payment for biosimilar biological products during initial 
                            period.
Sec. 504. Temporary increase in Medicare part B payment for certain 
                            biosimilar biological products.
Sec. 505. Improving access to adult vaccines under Medicaid and CHIP.
                 TITLE VI--ADDITIONAL INSULIN POLICIES

Sec. 601. ERISA requirements with respect to cost-sharing for certain 
                            insulin products.
Sec. 602. Public Health Service Act requirements with respect to cost-
                            sharing for insulin products.
Sec. 603. IRC requirements with respect to cost-sharing for certain 
                            insulin products.

        TITLE I--LOWERING PRICES THROUGH DRUG PRICE NEGOTIATION

SEC. 101. PROVIDING FOR LOWER PRICES FOR CERTAIN HIGH-PRICED SINGLE 
              SOURCE DRUGS.

    (a) Program To Lower Prices for Certain High-Priced Single Source 
Drugs.--Title XI of the Social Security Act is amended by adding after 
section 1184 (42 U.S.C. 1320e-3) the following new part:

 ``PART E--PRICE NEGOTIATION PROGRAM TO LOWER PRICES FOR CERTAIN HIGH-
                       PRICED SINGLE SOURCE DRUGS

``SEC. 1191. ESTABLISHMENT OF PROGRAM.

    ``(a) In General.--The Secretary shall establish a Drug Price 
Negotiation Program (in this part referred to as the `program'). Under 
the program, with respect to each price applicability period, the 
Secretary shall--
            ``(1) publish a list of negotiation-eligible drugs and 
        selected drugs in accordance with section 1192;
            ``(2) enter into agreements with manufacturers of selected 
        drugs with respect to such period, in accordance with section 
        1193;
            ``(3) negotiate and, if applicable, renegotiate maximum 
        fair prices for such selected drugs, in accordance with section 
        1194; and
            ``(4) carry out the administrative duties described in 
        section 1196.
    ``(b) Definitions Relating to Timing.--For purposes of this part:
            ``(1) Initial price applicability year.--The term `initial 
        price applicability year' means a year (beginning with 2025).
            ``(2) Price applicability period.--The term `price 
        applicability period' means, with respect to a qualifying 
        single source drug, the period beginning with the first initial 
        price applicability year with respect to which such drug is a 
        selected drug and ending with the last year during which the 
        drug is a selected drug.
            ``(3) Selected drug publication date.--The term `selected 
        drug publication date' means, with respect to each initial 
        price applicability year, February 1 of the year that begins 2 
        years prior to such year.
            ``(4) Negotiation period.--The term `negotiation period' 
        means, with respect to an initial price applicability year with 
        respect to a selected drug, the period--
                    ``(A) beginning on the sooner of--
                            ``(i) the date on which the manufacturer of 
                        the drug and the Secretary enter into an 
                        agreement under section 1193 with respect to 
                        such drug; or
                            ``(ii) February 28 following the selected 
                        drug publication date with respect to such 
                        selected drug; and
                    ``(B) ending on November 1 of the year that begins 
                2 years prior to the initial price applicability year.
    ``(c) Other Definitions.--For purposes of this part:
            ``(1) Maximum fair price eligible individual.--The term 
        `maximum fair price eligible individual' means, with respect to 
        a selected drug--
                    ``(A) in the case such drug is dispensed to the 
                individual at a pharmacy, by a mail order service, or 
                by another dispenser, an individual who is enrolled 
                under a prescription drug plan under part D of title 
                XVIII or an MA-PD plan under part C of such title if 
                coverage is provided under such plan for such selected 
                drug; and
                    ``(B) in the case such drug is furnished or 
                administered to the individual by a hospital, 
                physician, or other provider of services or supplier, 
                an individual who is enrolled under part B of title 
                XVIII, including an individual who is enrolled under an 
                MA plan under part C of such title, if such selected 
                drug is covered under such part.
            ``(2) Maximum fair price.--The term `maximum fair price' 
        means, with respect to a year during a price applicability 
        period and with respect to a selected drug (as defined in 
        section 1192(c)) with respect to such period, the price 
        published pursuant to section 1195 in the Federal Register for 
        such drug and year.
            ``(3) Unit.--The term `unit' means, with respect to a drug 
        or biological, the lowest identifiable amount (such as a 
        capsule or tablet, milligram of molecules, or grams) of the 
        drug or biological that is dispensed or furnished. The 
        determination of a unit, with respect to a drug or biological, 
        pursuant to this paragraph shall not be subject to 
        administrative or judicial review.
            ``(4) Total expenditures.--The term `total expenditures' 
        includes, in the case of expenditures with respect to part D of 
        title XVIII, ingredient costs, dispensing fees, sales tax, and 
        if applicable, vaccine administration fees. The term `total 
        expenditures' excludes, in the case of expenditures with 
        respect to part B of such title, expenditures for a drug or 
        biological that are bundled or packaged into the payment for 
        another service.

``SEC. 1192. SELECTION OF NEGOTIATION-ELIGIBLE DRUGS AS SELECTED DRUGS.

    ``(a) In General.--Not later than the selected drug publication 
date with respect to an initial price applicability year, in accordance 
with subsection (b), the Secretary shall select and publish in the 
Federal Register a list of--
            ``(1)(A) with respect to the initial price applicability 
        year 2025, not more than 10 negotiation-eligible drugs 
        described in subparagraph (A)(i) of subsection (d)(1), but not 
        subparagraph (B) of such subsection, with respect to such year;
            ``(B) with respect to the initial price applicability year 
        2026, not more than 15 negotiation-eligible drugs described in 
        subparagraph (A)(i) of subsection (d)(1), but not subparagraph 
        (B) of such subsection, with respect to such year;
            ``(C) with respect to the initial price applicability year 
        2027, not more than 15 negotiation-eligible drugs described in 
        subparagraph (A) of subsection (d)(1), but not subparagraph (B) 
        of such subsection, with respect to such year; and
            ``(D) with respect to the initial price applicability year 
        2028 or a subsequent year, not more than 20 negotiation-
        eligible drugs described in subparagraph (A) of subsection 
        (d)(1), but not subparagraph (B) of such subsection, with 
        respect to such year; and
            ``(2) all negotiation-eligible drugs described in 
        subparagraph (B) of such subsection with respect to such year.
Subject to subsection (c)(2) and section 1194(f)(5), each drug 
published on the list pursuant to the previous sentence shall be 
subject to the negotiation process under section 1194 for the 
negotiation period with respect to such initial price applicability 
year (and the renegotiation process under such section as applicable 
for any subsequent year during the applicable price applicability 
period).
    ``(b) Selection of Drugs.--
            ``(1) In general.--In carrying out subsection (a)(1), 
        subject to paragraph (2), the Secretary shall, with respect to 
        an initial price applicability year--
                    ``(A) rank a combined list of negotiation-eligible 
                drugs described in subsection (d)(1)(A) according to 
                the total expenditures for such drugs under parts B and 
                D of title XVIII, as determined by the Secretary, 
                during the most recent period of 12 months prior to the 
                selected drug publication date (but ending not later 
                than October 31 of the year prior to the year of such 
                drug publication date), with respect to such year, for 
                which data are available, with the negotiation-eligible 
                drugs with the highest total expenditures being ranked 
                the highest; and
                    ``(B) select from such ranked combined list for 
                inclusion on the published list described in subsection 
                (a) with respect to such year the negotiation-eligible 
                drugs with the highest such rankings.
            ``(2) High spend part d drugs for 2025 and 2026.--With 
        respect to the initial price applicability year 2025 and with 
        respect to the initial price applicability year 2026, the 
        Secretary shall apply paragraph (1) as if the reference to 
        `negotiation-eligible drugs described in subsection (d)(1)(A)' 
        were a reference to `negotiation-eligible drugs described in 
        subsection (d)(1)(A)(i)' and as if the reference to `total 
        expenditures for such drugs under parts B and D of title XVIII' 
        were a reference to `total expenditures for such drugs under 
        part D of title XVIII'.
    ``(c) Selected Drug.--
            ``(1) In general.--For purposes of this part, consistent 
        with subsection (e)(2) and subject to paragraph (2), each 
        negotiation-eligible drug included on the list published under 
        subsection (a) with respect to an initial price applicability 
        year shall be referred to as a `selected drug' with respect to 
        such year and each subsequent year beginning before the first 
        year that begins after the date on which the Secretary 
        determines at least one drug or biological product--
                    ``(A) is approved or licensed (as applicable)--
                            ``(i) under section 505(j) of the Federal 
                        Food, Drug, and Cosmetic Act using such drug as 
                        the listed drug; or
                            ``(ii) under section 351(k) of the Public 
                        Health Service Act using such drug as the 
                        reference product; and
                    ``(B) is marketed pursuant to such approval or 
                licensure.
            ``(2) Clarification.--A negotiation-eligible drug--
                    ``(A) that is included on the list published under 
                subsection (a) with respect to an initial price 
                applicability year; and
                    ``(B) for which the Secretary makes a determination 
                described in paragraph (1) before or during the 
                negotiation period with respect to such initial price 
                applicability year,
        shall not be subject to the negotiation process under section 
        1194 with respect to such negotiation period and shall continue 
        to be considered a selected drug under this part with respect 
        to the number of negotiation-eligible drugs published on the 
        list under subsection (a) with respect to such initial price 
        applicability year.
    ``(d) Negotiation-Eligible Drug.--
            ``(1) In general.--For purposes of this part, subject to 
        paragraph (2), the term `negotiation-eligible drug' means, with 
        respect to the selected drug publication date with respect to 
        an initial price applicability year, a qualifying single source 
        drug, as defined in subsection (e), that is described in either 
        of the following subparagraphs (or, with respect to the initial 
        price applicability year 2025 or 2026, that is described in 
        subparagraph (A)(i) or (B)):
                    ``(A) High spend drugs.--The qualifying single 
                source drug is, determined in accordance with 
                subsection (e)(2)--
                            ``(i) among the 50 qualifying single source 
                        drugs with the highest total expenditures under 
                        part D of title XVIII, as determined by the 
                        Secretary in accordance with paragraph (3), 
                        during the most recent period for which data 
                        are available of at least 12 months prior to 
                        the selected drug publication date (but ending 
                        no later than October 31 of the year prior to 
                        the year of such drug publication date), with 
                        respect to such year; or
                            ``(ii) among the 50 qualifying single 
                        source drugs with the highest total 
                        expenditures under part B of title XVIII, as 
                        determined by the Secretary in accordance with 
                        paragraph (3), during such most recent period, 
                        as described in clause (i).
                    ``(B) Insulin.--The qualifying single source drug 
                is described in subsection (e)(1)(C).
            ``(2) Exception for small biotech drugs.--
                    ``(A) In general.--Subject to subparagraph (C), the 
                term `negotiation-eligible drug' shall not include, 
                with respect to the initial price applicability years 
                2025, 2026, and 2027, a qualifying single source drug 
                that meets either of the following:
                            ``(i) Part d drugs.--The total expenditures 
                        for the qualifying single source drug under 
                        part D of title XVIII, as determined by the 
                        Secretary in accordance with paragraph (3), 
                        during 2021--
                                    ``(I) are equal to or less than 1 
                                percent of the total expenditures under 
                                such part D, as so determined, for all 
                                covered part D drugs during such year; 
                                and
                                    ``(II) are equal to at least 80 
                                percent of the total expenditures under 
                                such part D, as so determined, for all 
                                covered part D drugs for which the 
                                manufacturer of the drug has an 
                                agreement in effect under section 
                                1860D-14A during such year.
                            ``(ii) Part b drugs.--The total 
                        expenditures for the qualifying single source 
                        drug under part B of title XVIII, as determined 
                        by the Secretary in accordance with paragraph 
                        (3), during 2021--
                                    ``(I) are equal to or less than 1 
                                percent of the total expenditures under 
                                such part B, as so determined, for all 
                                qualifying single source drugs covered 
                                under such part B during such year; and
                                    ``(II) are equal to at least 80 
                                percent of the total expenditures under 
                                such part B, as so determined, for all 
                                qualifying single source drugs of the 
                                manufacturer that are covered under 
                                such part B during such year.
                    ``(B) Clarifications relating to manufacturers.--
                            ``(i) Aggregation rule.--All persons 
                        treated as a single employer under subsection 
                        (a) or (b) of section 52 of the Internal 
                        Revenue Code of 1986 shall be treated as one 
                        manufacturer for purposes of this paragraph.
                            ``(ii) Limitation.--A qualifying single 
                        source drug described in subparagraph (A) shall 
                        not include a qualifying single source drug of 
                        a manufacturer if such manufacturer is acquired 
                        after 2021 by another manufacturer that does 
                        not meet the definition of a specified 
                        manufacturer under section 1860D-
                        14C(g)(4)(B)(ii), effective at the beginning of 
                        the plan year immediately following such 
                        acquisition or, in the case of an acquisition 
                        before 2024, effective January 1, 2024.
                    ``(C) Drugs not included as small biotech drugs.--
                The following shall not be considered a qualifying 
                single source drug described in subparagraph (A):
                            ``(i) A vaccine that is licensed under 
                        section 351 of the Public Health Service Act 
                        and is marketed pursuant to such section.
                            ``(ii) A new formulation, such as an 
                        extended release formulation, of a qualifying 
                        single source drug.
                            ``(iii) A qualifying single source drug 
                        described in subsection (e)(1)(C).
            ``(3) Clarifications and determinations.--
                    ``(A) Previously selected drugs and small biotech 
                drugs excluded.--In applying clauses (i) and (ii) of 
                paragraph (1)(A), the Secretary shall not consider or 
                count--
                            ``(i) drugs that are already selected 
                        drugs; and
                            ``(ii) for initial price applicability 
                        years 2025, 2026, and 2027, qualifying single 
                        source drugs described in paragraph (2)(A).
                    ``(B) Use of data.--In determining whether a 
                qualifying single source drug satisfies any of the 
                criteria described in paragraph (1) or (2), the 
                Secretary shall use data that is aggregated across 
                dosage forms and strengths of the drug, including new 
                formulations of the drug, such as an extended release 
                formulation, and not based on the specific formulation 
                or package size or package type of the drug.
            ``(4) Publication.--Not later than the selected drug 
        publication date with respect to an initial price applicability 
        year, the Secretary shall publish in the Federal Register a 
        list of negotiation-eligible drugs with respect to such 
        selected drug publication date.
    ``(e) Qualifying Single Source Drug.--
            ``(1) In general.--For purposes of this part, the term 
        `qualifying single source drug' means, with respect to an 
        initial price applicability year, subject to paragraphs (2) and 
        (3), a covered part D drug (as defined in section 1860D-2(e)) 
        that is described in any of the following or a drug or 
        biological product covered under part B of title XVIII that is 
        described in any of the following:
                    ``(A) Drug products.--A drug--
                            ``(i) that is approved under section 505(c) 
                        of the Federal Food, Drug, and Cosmetic Act and 
                        is marketed pursuant to such approval;
                            ``(ii) for which, as of the selected drug 
                        publication date with respect to such initial 
                        price applicability year, at least 7 years will 
                        have elapsed since the date of such approval; 
                        and
                            ``(iii) that is not the listed drug for any 
                        drug that is approved and marketed under 
                        section 505(j) of such Act.
                    ``(B) Biological products.--A biological product--
                            ``(i) that is licensed under section 351(a) 
                        of the Public Health Service Act and is 
                        marketed under section 351 of such Act;
                            ``(ii) for which, as of the selected drug 
                        publication date with respect to such initial 
                        price applicability year, at least 11 years 
                        will have elapsed since the date of such 
                        licensure; and
                            ``(iii) that is not the reference product 
                        for any biological product that is licensed and 
                        marketed under section 351(k) of such Act.
                    ``(C) Insulin product.--Any insulin product that is 
                approved under section 505 of the Federal Food, Drug, 
                and Cosmetic Act or licensed under section 351 of the 
                Public Health Service Act and marketed pursuant to such 
                approval or licensure, including any insulin product 
                that has been deemed to be licensed under section 351 
                of the Public Health Service Act pursuant to section 
                7002(e)(4) of the Biologics Price Competition and 
                Innovation Act of 2009 and is marketed pursuant to such 
                section, regardless of whether such insulin product 
                would be described in subparagraph (A) or (B).
            ``(2) Treatment of authorized generic drugs.--
                    ``(A) In general.--In the case of a qualifying 
                single source drug described in subparagraph (A) or (B) 
                of paragraph (1) that is the listed drug (as such term 
                is used in section 505(j) of the Federal Food, Drug, 
                and Cosmetic Act) or the reference product (as defined 
                in section 351(i) of the Public Health Service Act), 
                with respect to an authorized generic drug, in applying 
                the provisions of this part, such authorized generic 
                drug and such listed drug or reference product shall be 
                treated as the same qualifying single source drug.
                    ``(B) Authorized generic drug defined.--For 
                purposes of this paragraph, the term `authorized 
                generic drug' means--
                            ``(i) in the case of a drug, an authorized 
                        generic drug (as such term is defined in 
                        section 505(t)(3) of the Federal Food, Drug, 
                        and Cosmetic Act); and
                            ``(ii) in the case of a biological product, 
                        a reference product (as such term is defined in 
                        section 351(i) of the Public Health Service 
                        Act) that--
                                    ``(I) has been licensed under 
                                section 351(a) of such Act; and
                                    ``(II) is marketed, sold, or 
                                distributed directly or indirectly to 
                                retail class of trade under a different 
                                labeling, packaging (other than 
                                repackaging as the reference product in 
                                blister packs, unit doses, or similar 
                                packaging for use in institutions), 
                                product code, labeler code, trade name, 
                                or trade mark than the reference 
                                product.
            ``(3) Exclusions.--In this part, the term `qualifying 
        single source drug' does not include any of the following:
                    ``(A) Certain orphan drugs.--A drug that is 
                designated as a drug for only one rare disease or 
                condition under section 526 of the Federal Food, Drug, 
                and Cosmetic Act and for which the only approved 
                indication (or indications) is for such disease or 
                condition.
                    ``(B) Low spend medicare drugs.--A drug or 
                biological product (other than an insulin product 
                described in paragraph (1)(C)) with respect to which 
                the total expenditures under parts B and D of title 
                XVIII, as determined by the Secretary, during the most 
                recent period for which data are available of at least 
                12 months prior to the selected drug publication date 
                (but ending no later than October 31 of the year prior 
                to the year of such drug publication date), with 
                respect to such year is less than--
                            ``(i) with respect to 2021, $200,000,000; 
                        or
                            ``(ii) with respect to a subsequent year, 
                        the dollar amount specified in this 
                        subparagraph for the previous year increased by 
                        the annual percentage increase in the consumer 
                        price index (all items; U.S. city average) as 
                        of December of such previous year.
    ``(f) No Administrative or Judicial Review of Determinations and 
Selections.--The determination of negotiation-eligible drugs under 
subsection (d) and the selection of drugs under this section are not 
subject to administrative or judicial review.

``SEC. 1193. MANUFACTURER AGREEMENTS.

    ``(a) In General.--For purposes of section 1191(a)(2), the 
Secretary shall enter into agreements with manufacturers of selected 
drugs with respect to a price applicability period, by not later than 
February 28 following the selected drug publication date with respect 
to such selected drug, under which--
            ``(1) during the negotiation period for the initial price 
        applicability year for the selected drug, the Secretary and 
        manufacturer, in accordance with section 1194, negotiate to 
        determine (and, by not later than the last date of such period, 
        agree to) a maximum fair price for such selected drug of the 
        manufacturer in order for the manufacturer to provide access to 
        such price--
                    ``(A) to maximum fair price eligible individuals 
                who with respect to such drug are described in 
                subparagraph (A) of section 1191(c)(1) and are 
                dispensed such drug (and to pharmacies, mail order 
                services, and other dispensers, with respect to such 
                maximum fair price eligible individuals who are 
                dispensed such drugs) during, subject to subparagraph 
                (2), the price applicability period; and
                    ``(B) to hospitals, physicians, and other providers 
                of services and suppliers with respect to maximum fair 
                price eligible individuals who with respect to such 
                drug are described in subparagraph (B) of such section 
                and are furnished or administered such drug during, 
                subject to subparagraph (2), the price applicability 
                period;
            ``(2) the Secretary and the manufacturer shall, in 
        accordance with section 1194, renegotiate (and, by not later 
        than the last date of such period, agree to) the maximum fair 
        price for such drug, in order for the manufacturer to provide 
        access to such maximum fair price (as so renegotiated)--
                    ``(A) to maximum fair price eligible individuals 
                who with respect to such drug are described in 
                subparagraph (A) of section 1191(c)(1) and are 
                dispensed such drug (and to pharmacies, mail order 
                services, and other dispensers, with respect to such 
                maximum fair price eligible individuals who are 
                dispensed such drugs) during any year during the price 
                applicability period (beginning after such 
                renegotiation) with respect to such selected drug; and
                    ``(B) to hospitals, physicians, and other providers 
                of services and suppliers with respect to maximum fair 
                price eligible individuals who with respect to such 
                drug are described in subparagraph (B) of such section 
                and are furnished or administered such drug during any 
                year described in subparagraph (A);
            ``(3) access to the maximum fair price (including as 
        renegotiated pursuant to paragraph (2)), with respect to such a 
        selected drug, shall be provided by the manufacturer to--
                    ``(A) maximum fair price eligible individuals, who 
                with respect to such drug are described in subparagraph 
                (A) of section 1191(c)(1), at the pharmacy, mail order 
                service, or other dispenser at the point-of-sale of 
                such drug (and shall be provided by the manufacturer to 
                the pharmacy, mail order service, or other dispenser, 
                with respect to such maximum fair price eligible 
                individuals who are dispensed such drugs), as described 
                in paragraph (1)(A) or (2)(A), as applicable; and
                    ``(B) hospitals, physicians, and other providers of 
                services and suppliers with respect to maximum fair 
                price eligible individuals who with respect to such 
                drug are described in subparagraph (B) of such section 
                and are furnished or administered such drug, as 
                described in paragraph (1)(B) or (2)(B), as applicable;
            ``(4) the manufacturer, subject to subsection (d), submits 
        to the Secretary, through an online portal established by the 
        Secretary or other form and manner specified by the Secretary, 
        for the negotiation period for the price applicability period 
        (and, if applicable, before any period of renegotiation 
        pursuant to section 1194(f)) with respect to such drug--
                    ``(A) information on the non-Federal average 
                manufacturer price for the drug for the applicable year 
                or period; and
                    ``(B) all other information that the Secretary 
                requires to carry out the negotiation (or renegotiation 
                process) under this part, including information 
                described in section 1194(e)(1); and
            ``(5) the manufacturer complies with requirements imposed 
        by the Secretary for purposes of administering the program, 
        including with respect to the duties described in section 1196.
    ``(b) Agreement in Effect Until Drug Is No Longer a Selected 
Drug.--An agreement entered into under this section shall be effective, 
with respect to a selected drug, until such drug is no longer 
considered a selected drug under section 1192(c).
    ``(c) Confidentiality of Information.--Information submitted to the 
Secretary under this part by a manufacturer of a selected drug that is 
proprietary information of such manufacturer (as determined by the 
Secretary) shall be used only by the Secretary or disclosed to and used 
by the Comptroller General of the United States or the Medicare Payment 
Advisory Commission for purposes of carrying out this part.
    ``(d) Implementation for 2025 and 2026.--Notwithstanding any other 
provision of this part, the Secretary shall implement this section for 
2025 and 2026 by program instruction or otherwise.

``SEC. 1194. NEGOTIATION AND RENEGOTIATION PROCESS.

    ``(a) In General.--For purposes of this part, under an agreement 
under section 1193 between the Secretary and a manufacturer of a 
selected drug, with respect to the period for which such agreement is 
in effect and in accordance with subsections (b), (c), and (d), the 
Secretary and the manufacturer--
            ``(1) shall during the negotiation period with respect to 
        such drug, in accordance with this section, negotiate a maximum 
        fair price for such drug for the purpose described in section 
        1193(a)(1); and
            ``(2) renegotiate, in accordance with the process specified 
        pursuant to subsection (f), such maximum fair price for such 
        drug if such drug is a renegotiation-eligible drug under such 
        subsection.
    ``(b) Negotiation Process Requirements.--
            ``(1) Methodology and process.--The Secretary shall develop 
        and use a consistent methodology and process, in accordance 
        with paragraph (2), for negotiations under subsection (a) that 
        aims to achieve the lowest maximum fair price for each selected 
        drug.
            ``(2) Specific elements of negotiation process.--As part of 
        the negotiation process under this section, with respect to a 
        selected drug and the negotiation period with respect to the 
        initial price applicability year with respect to such drug, the 
        following shall apply:
                    ``(A) Submission of information.--Not later than 
                March 1 of the year of the selected drug publication 
                date, with respect to the selected drug, the 
                manufacturer of the drug shall submit to the Secretary, 
                in accordance with section 1193(a)(4), the information 
                described in such section.
                    ``(B) Initial offer by secretary.--Not later than 
                the June 1 following the selected drug publication 
                date, the Secretary shall provide the manufacturer of a 
                selected drug with a written initial offer that 
                contains the Secretary's proposal for the maximum fair 
                price of the drug and a list of the considerations 
                described in section 1194(e) that were used in 
                developing such offer.
                    ``(C) Response to initial offer.--
                            ``(i) In general.--Not later than 30 days 
                        after the date of receipt of an initial offer 
                        under subparagraph (B), the manufacturer shall 
                        either accept such offer or propose a 
                        counteroffer to such offer.
                            ``(ii) Counteroffer requirements.--If a 
                        manufacturer proposes a counteroffer, such 
                        counteroffer--
                                    ``(I) shall be in writing; and
                                    ``(II) shall be justified based on 
                                the factors described in subsection 
                                (e).
                    ``(D) Response to counteroffer.--After receiving a 
                counteroffer under subparagraph (C), the Secretary 
                shall respond in writing to such counteroffer.
                    ``(E) Deadline.--All negotiations shall end prior 
                to the first day of November following the selected 
                drug publication date, with respect to the initial 
                price applicability year.
                    ``(F) Limitations on offer amount.--In negotiating 
                the maximum fair price of a selected drug, with respect 
                to an initial price applicability year for the selected 
                drug, and, as applicable, in renegotiating the maximum 
                fair price for such drug, with respect to a subsequent 
                year during the price applicability period for such 
                drug, the Secretary shall not offer (or agree to a 
                counteroffer for) a maximum fair price for the selected 
                drug that--
                            ``(i) exceeds the ceiling determined under 
                        subsection (c) for the selected drug and year; 
                        or
                            ``(ii) as applicable, is less than the 
                        floor determined under subsection (d) for the 
                        selected drug and year.
                    ``(G) Treatment of determination.--The 
                establishment of a maximum fair price under this 
                section is not subject to administrative or judicial 
                review.
    ``(c) Ceiling for Maximum Fair Price.--
            ``(1) In general.--The maximum fair price negotiated under 
        this section for a selected drug, with respect to the first 
        year of the price applicability period with respect to such 
        drug, shall not exceed the applicable percent described in 
        paragraph (2), with respect to such drug, of the following:
                    ``(A) Initial price applicability year 2025.--In 
                the case of a selected drug with respect to which such 
                initial price applicability year is 2025, the average 
                of the non-Federal average manufacturer price for such 
                drug for the first 3 calendar quarters of 2021 (or, in 
                the case that there is not a non-Federal average 
                manufacturer price available for such drug for any of 
                such first 3 calendar quarters of 2021, for the first 
                full year following the market entry for such drug), 
                increased by the percentage increase in the consumer 
                price index for all urban consumers (all items; United 
                States city average) from September 2021 (or such first 
                full year following the market entry), as applicable, 
                to the year prior to the selected drug publication date 
                with respect to such initial price applicability year.
                    ``(B) Initial price applicability year 2026 and 
                subsequent years.--In the case of a selected drug with 
                respect to which such initial price applicability year 
                is 2026 or a subsequent year, the lower of--
                            ``(i) the average of the non-Federal 
                        average manufacturer price for such drug for 
                        the first 3 calendar quarters of 2021 (or, in 
                        the case that there is not a non-Federal 
                        average manufacturer price available for such 
                        drug for any of such first 3 calendar quarters 
                        of 2021, for the first full year following the 
                        market entry for such drug), increased by the 
                        percentage increase in the consumer price index 
                        for all urban consumers (all items; United 
                        States city average) from September 2021 (or 
                        such first full year following the market 
                        entry), as applicable, to the year prior to the 
                        selected drug publication date with respect to 
                        such initial price applicability year; or
                            ``(ii) the non-Federal average manufacturer 
                        price for such drug for the year prior to the 
                        selected drug publication date with respect to 
                        such initial price applicability year.
            ``(2) Applicable percent described.--For purposes of 
        paragraph (1), the applicable percent described in this 
        paragraph is the following:
                    ``(A) Short-monopoly drugs.--With respect to a 
                selected drug (other than a post-exclusivity drug and a 
                long-monopoly drug), 75 percent.
                    ``(B) Post-exclusivity drugs.--With respect to a 
                post-exclusivity drug, 65 percent.
                    ``(C) Long-monopoly drugs.--With respect to a long-
                monopoly drug, 40 percent.
            ``(3) Post-exclusivity drug defined.--
                    ``(A) In general.--In this part, subject to 
                subparagraph (B), the term `post-exclusivity drug' 
                means, with respect to an initial price applicability 
                year, a selected drug for which at least 12 years, but 
                fewer than 16 years, have elapsed since the date of 
                approval of such drug under section 505(c) of the 
                Federal Food, Drug, and Cosmetic Act or since the date 
                of licensure of such drug under section 351(a) of the 
                Public Health Service Act, as applicable.
                    ``(B) Exclusions.--The term `post-exclusivity drug' 
                shall not include any of the following:
                            ``(i) A vaccine that is licensed under 
                        section 351 of the Public Health Service Act 
                        and marketed pursuant to such section.
                            ``(ii) A selected drug that had an 
                        agreement under this part with the Secretary 
                        prior to the initial price applicability year 
                        2030.
                    ``(C) Clarification.--Nothing in subparagraph 
                (B)(ii) shall limit the transition of a selected drug 
                described in paragraph (2)(A) to a long-monopoly drug 
                if the selected drug meets the definition of a long-
                monopoly drug.
            ``(4) Long-monopoly drug defined.--
                    ``(A) In general.--In this part, subject to 
                subparagraph (B), the term `long-monopoly drug' means, 
                with respect to an initial price applicability year, a 
                selected drug for which at least 16 years have elapsed 
                since the date of approval of such drug under section 
                505(c) of the Federal Food, Drug, and Cosmetic Act or 
                since the date of licensure of such drug under section 
                351(a) of the Public Health Service Act, as applicable.
                    ``(B) Exclusion.--The term `long-monopoly drug' 
                shall not include a vaccine that is licensed under 
                section 351 of the Public Health Service Act and 
                marketed pursuant to such section.
            ``(5) Non-federal average manufacturer price.--In this 
        part, the term `non-Federal average manufacturer price' has the 
        meaning given such term in section 8126(h)(5) of title 38, 
        United States Code.
    ``(d) Temporary Floor for Small Biotech Drugs.--In the case of a 
selected drug that is a qualifying single source drug described in 
section 1192(d)(2) and with respect to which the first initial price 
applicability year of the price applicability period with respect to 
such drug is 2028 or 2029, the maximum fair price negotiated under this 
section for such drug for such initial price applicability year may not 
be less than 66 percent of the average of the non-Federal average 
manufacturer price for such drug (as defined and applied in subsection 
(c)(4)) for the first 3 calendar quarters of 2021 (or, in the case that 
there is not a non-Federal average manufacturer price available for 
such drug for any of such first 3 calendar quarters of 2021, for the 
first full year following the market entry for such drug), increased by 
the percentage increase in the consumer price index for all urban 
consumers (all items; United States city average) from September 2021 
(or such first full year following the market entry), as applicable, to 
the year prior to the selected drug publication date with respect to 
the initial price applicability year.
    ``(e) Considerations.--For purposes of negotiating the maximum fair 
price of a selected drug under this part with the manufacturer of the 
drug, the Secretary shall consider the following factors (and, with 
respect to post-exclusivity drugs and long-monopoly drugs, shall not 
consider factors other than those described in subparagraphs (B) and 
(C) of paragraph (1)):
            ``(1) Manufacturer-specific information.--The following 
        information, with respect to such selected drug, including as 
        submitted by the manufacturer:
                    ``(A) Research and development costs of the 
                manufacturer for the drug and the extent to which the 
                manufacturer has recouped research and development 
                costs.
                    ``(B) Market data for the drug, including the 
                distribution of sales across different programs and 
                purchasers and projected future revenues for the drug.
                    ``(C) Unit costs of production and distribution of 
                the drug.
                    ``(D) Prior Federal financial support for novel 
                therapeutic discovery and development with respect to 
                the drug.
                    ``(E) Data on patents and on existing and pending 
                exclusivity for the drug.
                    ``(F) National sales data for the drug.
                    ``(G) Information on clinical trials for the drug.
            ``(2) Information on unmet medical needs and alternative 
        treatments.--The following information, with respect to such 
        selected drug:
                    ``(A) The extent to which the drug represents a 
                therapeutic advance as compared to existing therapeutic 
                alternatives and, to the extent such information is 
                available, the costs of such existing therapeutic 
                alternatives.
                    ``(B) Information on approval by the Food and Drug 
                Administration of alternative drug products or 
                biological products.
                    ``(C) Information on comparative effectiveness 
                analysis for such products, taking into consideration 
                the effects of such products on specific populations, 
                such as individuals with disabilities, the elderly, the 
                terminally ill, children, and other patient 
                populations.
                    ``(D) The extent to which the drug addresses unmet 
                medical needs for a condition for which treatment or 
                diagnosis is not addressed adequately by available 
                therapy.
        In considering information described in subparagraph (C), the 
        Secretary shall not use evidence or findings from comparative 
        clinical effectiveness research in a manner that treats 
        extending the life of an elderly, disabled, or terminally ill 
        individual as of lower value than extending the life of an 
        individual who is younger, nondisabled, or not terminally ill.
            ``(3) Additional information.--Information submitted to the 
        Secretary, in accordance with a process specified by the 
        Secretary, by other parties that are affected by the 
        establishment of a maximum fair price for the selected drug.
    ``(f) Renegotiation Process.--
            ``(1) In general.--In the case of a renegotiation-eligible 
        drug (as defined in paragraph (2)) that is selected under 
        paragraph (3), the Secretary shall provide for a process of 
        renegotiation (for years (beginning with 2027) during the price 
        applicability period, with respect to such drug) of the maximum 
        fair price for such drug consistent with paragraph (4).
            ``(2) Renegotiation-eligible drug defined.--In this 
        section, the term `renegotiation-eligible drug' means a 
        selected drug that is any of the following:
                    ``(A) Addition of new indication.--A selected drug 
                for which a new indication is added to the drug.
                    ``(B) Change of status to a post-exclusivity 
                drug.--A selected drug that is described in section 
                1192(d)(1)(A) that--
                            ``(i) is not a post-exclusivity drug or a 
                        long-monopoly drug; and
                            ``(ii) for which there is a change in 
                        status to that of a post-exclusivity drug.
                    ``(C) Change of status to a long-monopoly drug.--A 
                selected drug that is described in section 
                1192(d)(1)(A) that--
                            ``(i) is not a long-monopoly drug; and
                            ``(ii) for which there is a change in 
                        status to that of a long-monopoly drug.
                    ``(D) Material changes.--A selected drug for which 
                the Secretary determines there has been a material 
                change of factors described in paragraph (1) or (2) of 
                subsection (e).
            ``(3) Selection of drugs for renegotiation.--Each year the 
        Secretary shall select among renegotiation-eligible drugs for 
        renegotiation as follows:
                    ``(A) All post-exclusivity negotiation-eligible 
                drugs.--The Secretary shall select all renegotiation-
                eligible drugs described in paragraph (2)(B).
                    ``(B) All long-monopoly negotiation-eligible 
                drugs.--The Secretary shall select all renegotiation-
                eligible drugs described in paragraph (2)(C).
                    ``(C) Remaining drugs.--Among the remaining 
                renegotiation-eligible drugs described in subparagraphs 
                (A) and (D) of paragraph (2), the Secretary shall 
                select renegotiation-eligible drugs for which the 
                Secretary expects renegotiation is likely to result in 
                a significant change in the maximum fair price 
                otherwise negotiated.
            ``(4) Renegotiation process.--The Secretary shall specify 
        the process for renegotiation of maximum fair prices with the 
        manufacturer of a renegotiation-eligible drug selected for 
        renegotiation under this subsection. Such process shall, to the 
        extent practicable, be consistent with the methodology and 
        process established under subsection (b) and in accordance with 
        subsections (c) and (d), and for purposes of applying 
        subsections (c) and (d), the reference to the first initial 
        price applicability year of the price applicability period with 
        respect to such drug shall be treated as the first initial 
        price applicability year of such period for which the maximum 
        fair price established pursuant to such renegotiation applies, 
        including for applying subsection (c)(2)(B) in the case of 
        renegotiation-eligible drugs described in paragraph (3)(A) of 
        this subsection and subsection (c)(2)(C) in the case of 
        renegotiation-eligible drugs described in paragraph (3)(B) of 
        this subsection.
            ``(5) Clarification.--A renegotiation-eligible drug for 
        which the Secretary makes a determination described in section 
        1192(c)(1) before or during the period of renegotiation shall 
        not be subject to the renegotiation process under this section.
            ``(6) No administrative or judicial review.--The 
        determination of renegotiation-eligible drugs under paragraph 
        (2) and the selection of renegotiation-eligible drugs under 
        paragraph (3) are not subject to administrative or judicial 
        review.
    ``(g) Request for Information.--For purposes of negotiating and, as 
applicable, renegotiating (including for purposes of determining 
whether to renegotiate) the maximum fair price of a selected drug under 
this part with the manufacturer of the drug, with respect to a price 
applicability period, and other relevant data for purposes of this 
section--
            ``(1) the Secretary shall, not later than the selected drug 
        publication date with respect to the initial price 
        applicability year of such period, request drug pricing 
        information from the manufacturer of such selected drug, 
        including information described in subsection (e)(1); and
            ``(2) by not later than March 1 following the selected drug 
        publication date, the manufacturer of such selected drug shall 
        submit to the Secretary such requested information in such form 
        and manner as the Secretary requires.
The Secretary shall request, from the manufacturer or others, all 
additional information needed to carry out the negotiation and 
renegotiation process under this section.
    ``(h) Clarification.--In no case shall the maximum fair price 
negotiated under this section for a selected drug that is a qualifying 
single source drug described in subparagraph (A) or (B) of section 
1192(e)(1) apply before--
            ``(1) in the case the selected drug is a qualifying single 
        source drug described in such subparagraph (A), the date that 
        is 9 years after the date on which the drug was approved under 
        section 505(c) of the Federal Food, Drug, and Cosmetic Act; and
            ``(2) in the case the selected drug is a qualifying single 
        source drug described in such subparagraph (B), the date that 
        is 13 years after the date on which the drug was licensed under 
        section 351(a) of the Public Health Service Act.
    ``(i) Implementation for 2025 and 2026.--Notwithstanding any other 
provision of this part, the Secretary shall implement this section for 
2025 and 2026 by program instruction or otherwise.

``SEC. 1195. PUBLICATION OF MAXIMUM FAIR PRICES.

    ``(a) In General.--With respect to an initial price applicability 
year and a selected drug with respect to such year--
            ``(1) not later than November 15 of the year that is 2 
        years prior to such initial price applicability year, the 
        Secretary shall publish on CMS.gov the maximum fair price for 
        such drug negotiated under this part with the manufacturer of 
        such drug;
            ``(2) not later than November 30 of the year that is 2 
        years prior to such initial price applicability year, the 
        Secretary shall publish in the Federal Register the maximum 
        fair price for such drug described in paragraph (1); and
            ``(3) not later than March 1 of the year prior to such 
        initial price applicability year, the Secretary shall publish 
        in the Federal Register, subject to section 1193(c) and based 
        on the considerations as described in section 1194(e), the 
        explanation for the maximum fair price for such drug described 
        in paragraphs (1) and (2).
    ``(b) Updates.--
            ``(1) Subsequent year maximum fair prices.--For a selected 
        drug, for each year subsequent to first initial price 
        applicability year of the price applicability period with 
        respect to such drug, with respect to which an agreement for 
        such drug is in effect under section 1193, not later than 
        November 30 of the year that is 2 years prior to such 
        subsequent year, the Secretary shall publish in the Federal 
        Register the maximum fair price applicable to such drug and 
        year, which shall be--
                    ``(A) subject to subparagraph (B), the amount equal 
                to the maximum fair price published for such drug for 
                the previous year, increased by the annual percentage 
                increase in the consumer price index for all urban 
                consumers (all items; U.S. city average) as of 
                September of such previous year; or
                    ``(B) in the case the maximum fair price for such 
                drug was renegotiated, for the first year for which 
                such price as so renegotiated applies, such 
                renegotiated maximum fair price.
            ``(2) Prices negotiated after deadline.--In the case of a 
        selected drug with respect to an initial price applicability 
        year for which the maximum fair price is determined under this 
        part after the date of publication under this section, the 
        Secretary shall publish such maximum fair price in the Federal 
        Register by not later than 30 days after the date such maximum 
        price is so determined.

``SEC. 1196. ADMINISTRATIVE DUTIES; COORDINATION PROVISIONS.

    ``(a) Administrative Duties.--
            ``(1) In general.--For purposes of section 1191, the 
        administrative duties described in this section are the 
        following:
                    ``(A) The establishment of procedures to ensure 
                that the maximum fair price for a selected drug is 
                applied before--
                            ``(i) any coverage or financial assistance 
                        under other health benefit plans or programs 
                        that provide coverage or financial assistance 
                        for the purchase or provision of prescription 
                        drug coverage on behalf of maximum fair price 
                        eligible individuals; and
                            ``(ii) any other discounts.
                    ``(B) The establishment of procedures to compute 
                and apply the maximum fair price across different 
                strengths and dosage forms of a selected drug and not 
                based on the specific formulation or package size or 
                package type of the drug.
                    ``(C) The establishment of procedures to carry out 
                the provisions of this part, as applicable, with 
                respect to--
                            ``(i) maximum fair price eligible 
                        individuals who are enrolled under a 
                        prescription drug plan under part D of title 
                        XVIII or an MA-PD plan under part C of such 
                        title; and
                            ``(ii) maximum fair price eligible 
                        individuals who are enrolled under part B of 
                        such title, including who are enrolled under an 
                        MA plan under part C of such title.
                    ``(D) The establishment of a negotiation process 
                and renegotiation process in accordance with section 
                1194, including a process for acquiring information 
                described in subsection (e) of such section.
                    ``(E) The establishment of an online portal which 
                manufacturers shall be required to use to submit 
                information described in section 1194(b)(2)(A).
                    ``(F) The sharing with the Secretary of the 
                Treasury of such information as is necessary to 
                determine the tax imposed by section 4192 of the 
                Internal Revenue Code of 1986 (relating to enforcement 
                of this part).
                    ``(G) The establishment of an attestation and 
                verification process for purposes of applying section 
                1192(d)(2)(B).
            ``(2) Monitoring compliance.--The Secretary shall monitor 
        compliance by a manufacturer with the terms of an agreement 
        under section 1193, including by establishing a mechanism 
        through which violations of such terms shall be reported.
    ``(b) Implementation for 2025 and 2026.--Notwithstanding any other 
provision of this part, the Secretary shall implement this section for 
2025 and 2026 by program instruction or otherwise.

``SEC. 1197. CIVIL MONETARY PENALTY.

    ``(a) Violations Relating to Offering of Maximum Fair Price.--Any 
manufacturer of a selected drug that has entered into an agreement 
under section 1193, with respect to a year during the price 
applicability period with respect to such drug, that does not provide 
access to a price that is not more than the maximum fair price (or a 
lesser price) for such drug for such year--
            ``(1) to a maximum fair price eligible individual who with 
        respect to such drug is described in subparagraph (A) of 
        section 1191(c)(1) and who is dispensed such drug during such 
        year (and to pharmacies, mail order services, and other 
        dispensers, with respect to such maximum fair price eligible 
        individuals who are dispensed such drugs); or
            ``(2) to a hospital, physician, or other provider of 
        services or supplier with respect to maximum fair price 
        eligible individuals who with respect to such drug is described 
        in subparagraph (B) of such section and is furnished or 
        administered such drug by such hospital, physician, or provider 
        or supplier during such year,
shall be subject to a civil monetary penalty equal to ten times the 
amount equal to the product of the number of units of such drug so 
furnished, dispensed, or administered during such year and the 
difference between the price for such drug made available for such year 
by such manufacturer with respect to such individual or hospital, 
physician, provider of services, or supplier and the maximum fair price 
for such drug for such year.
    ``(b) Violations of Certain Terms of Agreement.--Any manufacturer 
of a selected drug that has entered into an agreement under section 
1193, with respect to a year during the price applicability period with 
respect to such drug, that is in violation of a requirement imposed 
pursuant to section 1193(a)(5), including the requirement to submit 
information pursuant to section 1193(a)(4), shall be subject to a civil 
monetary penalty equal to $1,000,000 for each day of such violation.
    ``(c) False Information.--Any manufacturer that knowingly provides 
false information for the attestation process or verification process 
established pursuant to section 1196(a)(1)(H), shall be subject to a 
civil monetary penalty equal to $100,000,000 for each item of such 
false information.
    ``(d) Application.--The provisions of section 1128A (other than 
subsections (a) and (b)) shall apply to a civil monetary penalty under 
this section in the same manner as such provisions apply to a penalty 
or proceeding under section 1128A(a).''.
    (b) Application of Maximum Fair Prices and Conforming Amendments.--
            (1) Under medicare.--
                    (A) Application to payments under part b.--Section 
                1847A(b)(1)(B) of the Social Security Act (42 U.S.C. 
                1395w-3a(b)(1)(B)) is amended by inserting ``or in the 
                case of such a drug or biological that is a selected 
                drug (as referred to in section 1192(c)), with respect 
                to a price applicability period (as defined in section 
                1191(b)(2)), 106 percent of the maximum fair price (as 
                defined in section 1191(c)(2)) applicable for such drug 
                and a year during such period'' after ``paragraph 
                (4)''.
                    (B) Application under ma of cost-sharing for part b 
                drugs based off of negotiated price.--Section 
                1852(a)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
                1395w-22(a)(1)(B)(iv)) is amended--
                            (i) by redesignating subclause (VII) as 
                        subclause (VIII); and
                            (ii) by inserting after subclause (VI) the 
                        following subclause:
                                    ``(VII) A drug or biological that 
                                is a selected drug (as referred to in 
                                section 1192(c)).''.
                    (C) Exception to part d non-interference.--Section 
                1860D-11(i) of the Social Security Act (42 U.S.C. 
                1395w-111(i)) is amended--
                            (i) in paragraph (1), by striking ``and'' 
                        at the end;
                            (ii) in paragraph (2), by striking ``or 
                        institute a price structure for the 
                        reimbursement of covered part D drugs'' and 
                        inserting ``for covered part D drugs; and''; 
                        and
                            (iii) by adding at the end the following:
            ``(3) may not institute a price structure for the 
        reimbursement of covered part D drugs, except as provided under 
        part E of title XI.''.
                    (D) Application as negotiated price under part d.--
                Section 1860D-2(d)(1) of the Social Security Act (42 
                U.S.C. 1395w-102(d)(1)) is amended--
                            (i) in subparagraph (B), by inserting ``, 
                        subject to subparagraph (D),'' after 
                        ``negotiated prices''; and
                            (ii) by adding at the end the following new 
                        subparagraph:
                    ``(D) Application of maximum fair price for 
                selected drugs.--In applying this section, in the case 
                of a covered part D drug that is a selected drug (as 
                referred to in section 1192(c)), with respect to a 
                price applicability period (as defined in section 
                1191(b)(2)), the negotiated prices used for payment (as 
                described in this subsection) shall be no greater than 
                the maximum fair price (as defined in section 
                1191(c)(2)) for such drug and for each year during such 
                period plus any dispensing fees for such drug.''.
                    (E) Coverage of selected drugs.--Section 1860D-
                4(b)(3) of the Social Security Act (42 U.S.C. 1395w-
                104(b)(3)) is amended by adding at the end the 
                following new subparagraph:
                    ``(I) Required inclusion of selected drugs.--For 
                2025 and each subsequent year, the PDP sponsor offering 
                a prescription drug plan shall include each covered 
                part D drug that is a selected drug under section 1192 
                for which an agreement for such drug is in effect under 
                section 1193 with respect to the year.''.
                    (F) Information from prescription drug plans and 
                ma-pd plans required.--
                            (i) Prescription drug plans.--Section 
                        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) Provision of information related to maximum fair 
        prices.--Each contract entered into with a PDP sponsor under 
        this part with respect to a prescription drug plan offered by 
        such sponsor shall require the sponsor to provide information 
        to the Secretary as requested by the Secretary in accordance 
        with section 1194(g).''.
                            (ii) MA-PD plans.--Section 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 new subparagraph:
                    ``(E) Provision of information related to maximum 
                fair prices.--Section 1860D-12(b)(8).''.
            (2) Drug price negotiation program prices included in best 
        price.--Section 1927(c)(1)(C) of the Social Security Act (42 
        U.S.C. 1396r-8(c)(1)(C)) is amended--
                    (A) in clause (i)(VI), by striking ``any prices 
                charged'' and inserting ``subject to clause (ii)(V), 
                any prices charged''; and
                    (B) in clause (ii)--
                            (i) in subclause (III), by striking at the 
                        end ``; and'';
                            (ii) in subclause (IV), by striking at the 
                        end the period and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(V) in the case of a rebate 
                                period and a covered outpatient drug 
                                that is a selected drug (as referred to 
                                in section 1192(c)) during such rebate 
                                period, shall be inclusive of the 
                                maximum fair price (as defined in 
                                section 1191(c)(2)) for such drug with 
                                respect to such period.''.

SEC. 102. SELECTED DRUG MANUFACTURER EXCISE TAX IMPOSED DURING 
              NONCOMPLIANCE PERIODS.

    (a) In General.--Chapter 32 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subchapter:

                      ``Subchapter E--Other Items

``Sec. 4192. Selected drugs during noncompliance periods.

``SEC. 4192. SELECTED DRUGS DURING NONCOMPLIANCE PERIODS.

    ``(a) In General.--There is hereby imposed on the sale by the 
manufacturer, producer, or importer of any selected drug during a day 
described in subsection (b) a tax in an amount such that the applicable 
percentage is equal to the ratio of--
            ``(1) such tax, divided by
            ``(2) the sum of such tax and the price for which so sold.
    ``(b) Noncompliance Periods.--A day is described in this subsection 
with respect to a selected drug if it is a day during one of the 
following periods:
            ``(1) The period beginning on the March 1st immediately 
        following the selected drug publication date and ending on the 
        first date during which the manufacturer of the drug has in 
        place an agreement described in subsection (a) of section 1193 
        of the Social Security Act with respect to such drug.
            ``(2) The period beginning on the November 2nd immediately 
        following the March 1st described in paragraph (1) and ending 
        on the first date during which the manufacturer of the drug and 
        the Secretary have agreed to a maximum fair price under such 
        agreement.
            ``(3) In the case of a selected drug with respect to which 
        the Secretary of Health and Human Services has specified a 
        renegotiation period under such agreement, the period beginning 
        on the first date after the last date of such renegotiation 
        period and ending on the first date during which the 
        manufacturer of the drug has agreed to a renegotiated maximum 
        fair price under such agreement.
            ``(4) With respect to information that is required to be 
        submitted to the Secretary of Health and Human Services under 
        such agreement, the period beginning on the date on which such 
        Secretary certifies that such information is overdue and ending 
        on the date that such information is so submitted.
    ``(c) Applicable Percentage.--For purposes of this section, the 
term `applicable percentage' means--
            ``(1) in the case of sales of a selected drug during the 
        first 90 days described in subsection (b) with respect to such 
        drug, 65 percent,
            ``(2) in the case of sales of such drug during the 91st day 
        through the 180th day described in subsection (b) with respect 
        to such drug, 75 percent,
            ``(3) in the case of sales of such drug during the 181st 
        day through the 270th day described in subsection (b) with 
        respect to such drug, 85 percent, and
            ``(4) in the case of sales of such drug during any 
        subsequent day, 95 percent.
    ``(d) Selected Drug.--For purposes of this section--
            ``(1) In general.--The term `selected drug' means any 
        selected drug (within the meaning of section 1192 of the Social 
        Security Act) which is manufactured or produced in the United 
        States or entered into the United States for consumption, use, 
        or warehousing.
            ``(2) United states.--The term `United States' has the 
        meaning given such term by section 4612(a)(4).
            ``(3) Coordination with rules for possessions 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 occurring during a day described in subsection 
(b).''.
    (b) No Deduction for Excise Tax Payments.--Section 275(a)(6) of the 
Internal Revenue Code of 1986 is amended by inserting ``or by section 
4192'' before the period at the end.
    (c) Certain Exemptions From Tax Not Applicable.--
            (1) Section 4221(a) of the Internal Revenue Code of 1986 is 
        amended by adding at the end the following: ``In the case of 
        the tax imposed by section 4192, paragraphs (3), (4), (5), and 
        (6) shall not apply.''.
            (2) Section 6416(b)(2) of such Code is amended by adding at 
        the end the following: ``In the case of the tax imposed by 
        section 4192, subparagraphs (B), (C), (D), and (E) shall not 
        apply.''.
    (d) Clerical Amendment.--The table of subchapters for chapter 32 of 
such Code is amended by adding at the end the following new item:

                     ``subchapter e. other items''.

    (e) Effective Date.--The amendments made by this section shall 
apply to sales after the date of the enactment of this Act.

SEC. 103. FUNDING.

    In addition to amounts otherwise available, there is appropriated 
for fiscal year 2022, out of any money in the Treasury not otherwise 
appropriated, to remain available until expended--
            (1) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2022;
            (2) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2023;
            (3) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2024;
            (4) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2025;
            (5) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2026;
            (6) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2027;
            (7) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2028;
            (8) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2029;
            (9) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2030; and
            (10) $300,000,000 to carry out the provisions of, including 
        the amendments made by, this part in fiscal year 2031.

             TITLE II--PRESCRIPTION DRUG INFLATION REBATES

SEC. 201. MEDICARE PART B REBATE BY MANUFACTURERS.

    (a) In General.--Section 1847A of the Social Security Act (42 
U.S.C. 1395w-3a) is amended--
            (1) by redesignating subsection (h) as subsection (i) and 
        by inserting after subsection (g) the following subsection:
    ``(h) Rebate by Manufacturers for Single Source Drugs and 
Biologicals With Prices Increasing Faster Than Inflation.--
            ``(1) Requirements.--
                    ``(A) Secretarial provision of information.--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 manufacturer of such part B rebatable drug the 
                following for such calendar quarter:
                            ``(i) Information on the total number of 
                        billing units of the billing and payment code 
                        described in subparagraph (A)(i) of paragraph 
                        (3) with respect to such drug and calendar 
                        quarter.
                            ``(ii) Information on the amount (if any) 
                        of the excess average sales price increase 
                        described in subparagraph (A)(ii) of 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 
                subparagraph (A) for such calendar quarter, provide 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 subparagraph (D) of 
                subsection (c)(6)), including a biosimilar biological 
                product (as defined in subparagraph (H) of such 
                subsection) but excluding a qualifying biosimilar 
                biological product (as defined in subsection 
                (b)(8)(B)(iii)), that would be payable under this part 
                if such drug were furnished to an individual enrolled 
                under this part, except such term shall not include 
                such a drug or biological--
                            ``(i) if, as determined by the Secretary, 
                        the average total allowed charges for such drug 
                        or biological under this part for a year per 
                        individual that uses such a drug or biological 
                        are less than, subject 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 applied under 
                subparagraph (A)(i)--
                            ``(i) for 2024, shall be the dollar amount 
                        specified under such subparagraph for 2023, 
                        increased by the percentage increase in the 
                        consumer price index for all urban consumers 
                        (United States city average) 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 (without 
                        application of subparagraph (C)), increased by 
                        the percentage increase in the consumer price 
                        index for all urban consumers (United States 
                        city average) for the 12-month period ending 
                        with June of the previous year.
                    ``(C) Rounding.--Any dollar amount determined under 
                subparagraph (B) 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 paragraph (1), 
                the amount specified in this paragraph for a part B 
                rebatable drug assigned to a billing and payment code 
                for a calendar quarter is, subject to subparagraphs (B) 
                and (G) and paragraph (4), the amount equal to the 
                product of--
                            ``(i) the total number of billing units 
                        determined under subparagraph (B) for the 
                        billing and payment code of such drug; and
                            ``(ii) the amount (if any) by which--
                                    ``(I) the amount equal to--
                                            ``(aa) in the case of a 
                                        part B rebatable drug described 
                                        in paragraph (1)(B) of section 
                                        1847A(b), 106 percent of the 
                                        amount determined under 
                                        paragraph (4) of such section 
                                        for such drug during the 
                                        calendar quarter; or
                                            ``(bb) in the case of a 
                                        part B rebatable drug described 
                                        in paragraph (1)(C) of such 
                                        section, the payment amount 
                                        under such paragraph for such 
                                        drug during the calendar 
                                        quarter; exceeds
                                    ``(II) the inflation-adjusted 
                                payment amount determined under 
                                subparagraph (C) for such part B 
                                rebatable drug during the calendar 
                                quarter.
                    ``(B) Total number of billing units.--For purposes 
                of subparagraph (A)(i), the total number of billing 
                units with respect to a part B rebatable drug is 
                determined as follows:
                            ``(i) Determine the total number of units 
                        equal to--
                                    ``(I) the total number of units, as 
                                reported under subsection (c)(1)(B) for 
                                each National Drug Code of such drug 
                                during the calendar quarter that is two 
                                calendar quarters prior to the calendar 
                                quarter as described in subparagraph 
                                (A), minus
                                    ``(II) the total number of units 
                                with respect to each National Drug Code 
                                of such 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 rebate period that is the same 
                                calendar quarter as described in 
                                subclause (I).
                            ``(ii) Convert the units determined under 
                        clause (i) to billing units for the billing and 
                        payment code of such drug, using a methodology 
                        similar to the methodology used under this 
                        section, by dividing the units determined under 
                        clause (i) for each National Drug Code of such 
                        drug by the billing unit for the billing and 
                        payment code of such drug.
                            ``(iii) Compute the sum of the billing 
                        units for each National Drug Code of such drug 
                        in clause (ii).
                    ``(C) Determination of inflation-adjusted payment 
                amount.--The inflation-adjusted payment amount 
                determined under this subparagraph for a part B 
                rebatable drug for a calendar quarter is--
                            ``(i) the payment amount for the billing 
                        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 rebate 
                        period CPI-U (as defined in subparagraph (F)) 
                        for the calendar quarter exceeds the benchmark 
                        period CPI-U (as defined in subparagraph (E)).
                    ``(D) Payment amount benchmark quarter.--The term 
                `payment amount benchmark quarter' means the calendar 
                quarter immediately prior to the calendar quarter 
                beginning October 1, 2021.
                    ``(E) Benchmark period cpi-u.--The term `benchmark 
                period CPI-U' means the consumer price index for all 
                urban consumers (United States city average) for the 
                last month of the calendar quarter beginning October 1, 
                2021.
                    ``(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 calendar 
                quarter.
                    ``(G) Exemption for shortages and severe supply 
                chain disruptions.--The Secretary shall reduce or waive 
                the amount under subparagraph (A) with respect to a 
                part B 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 a biosimilar biological product, when the 
                Secretary determines there are severe supply chain 
                disruptions.
            ``(4) Special treatment of certain drugs and exemption.--
                    ``(A) Subsequently approved drugs.--In the case of 
                a part B rebatable drug first approved or licensed by 
                the Food and Drug Administration after March 1, 2021, 
                clause (i) of paragraph (3)(C) shall be applied as if 
                the term `payment amount benchmark quarter' were 
                defined under paragraph (3)(D) as the third full 
                calendar quarter after the day on which the drug was 
                first marketed 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 `the last month of the calendar quarter 
                immediately prior to the calendar quarter beginning 
                October 1, 2021' 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 rebates for 
                subsequently approved drugs.--In the case of a part B 
                rebatable drug first approved or licensed by the Food 
                and Drug Administration after March 1, 2021, paragraph 
                (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) 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 applicability period (as 
                defined in section 1191(b)(2)), in the case such drug 
                is determined (pursuant to such section 1192(c)) to no 
                longer be a selected drug, beginning the first calendar 
                quarter after the price applicability period with 
                respect to such drug, clause (i) of paragraph (3)(C) 
                shall 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 beginning during such price applicability period 
                with respect to such selected drug 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 `the last month of the 
                calendar quarter immediately prior to the calendar 
                quarter beginning October 1, 2021' under such paragraph 
                were a reference to the March of the year preceding 
                such last year.
            ``(5) Application to beneficiary coinsurance.--In the case 
        of a part B rebatable drug, if the payment amount described in 
        paragraph (3)(A)(ii)(I) (or, in the case of a part B rebatable 
        drug that is a selected drug (as defined in section 1192(c)), 
        the payment amount described in subsection (b)(1)(B) for such 
        drug) for a calendar quarter exceeds the inflation adjusted 
        payment for such quarter--
                    ``(A) in computing the amount of any coinsurance 
                applicable under this part to an individual to whom 
                such drug is furnished, the computation of such 
                coinsurance shall be equal to 20 percent of the 
                inflation-adjusted payment amount determined under 
                paragraph (3)(C) for such part B rebatable drug; and
                    ``(B) the amount of such coinsurance for such 
                calendar quarter, as computed under subparagraph (A), 
                shall be applied as a percent, as determined by the 
                Secretary, to the payment amount that would otherwise 
                apply under subparagraph (B) or (C) of subsection 
                (b)(1).
            ``(6) Rebate deposits.--Amounts paid as rebates 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 manufacturer of a part B 
        rebatable drug has failed to comply with the requirements under 
        paragraph (1)(B) for such drug for a calendar quarter, 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 at least 125 percent of the 
        amount specified in paragraph (3) for such drug for such 
        calendar quarter. The provisions of section 1128A (other than 
        subsections (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).''; and
            (2) in subsection (i), as redesignated by paragraph (1)--
                    (A) in paragraph (4), by striking at the end 
                ``and'';
                    (B) in paragraph (5), by striking at the end the 
                period and inserting a semicolon; and
                    (C) by adding at the end the following new 
                paragraphs:
            ``(6) the determination of units under subsection (h);
            ``(7) the determination of whether a drug is a part B 
        rebatable drug under subsection (h);
            ``(8) the calculation of the rebate amount under subsection 
        (h);
            ``(9) the computation of coinsurance under subsection 
        (h)(5); and
            ``(10) the computation of amounts paid under section 
        1833(a)(1)(EE).''.
    (b) Amounts Payable; Cost-Sharing.--Section 1833 of the Social 
Security Act (42 U.S.C. 1395l) is amended--
            (1) in subsection (a)(1)--
                    (A) in subparagraph (G), by inserting ``, subject 
                to subsection (i)(9),'' after ``the amounts paid'';
                    (B) in subparagraph (S), by striking ``with respect 
                to'' and inserting ``subject to subparagraph (EE), with 
                respect to'';
                    (C) by striking ``and (DD)'' and inserting 
                ``(DD)''; and
                    (D) by inserting before the semicolon at the end 
                the following: ``, and (EE) with respect to a part B 
                rebatable drug (as defined in paragraph (2) of section 
                1847A(h)) for which the payment amount for a calendar 
                quarter under paragraph (3)(A)(ii)(I) of such section 
                (or, in the case of a part B rebatable drug that is a 
                selected drug (as defined in section 1192(c)) for 
                which, the payment amount described in section 
                1847A(b)(1)(B)) for such drug for such quarter exceeds 
                the inflation-adjusted payment under paragraph 
                (3)(A)(ii)(II) of such section for such quarter, the 
                amounts paid shall be equal to the percent of the 
                payment amount under paragraph (3)(A)(ii)(I) of such 
                section or section 1847A(b)(1)(B), as applicable, that 
                equals the difference between (i) 100 percent, and (ii) 
                the percent applied under section 1847A(h)(5)(B)'';
            (2) in subsection (i), by adding at the end the following 
        new paragraph:
    ``(9) In the case of a part B rebatable drug (as defined in 
paragraph (2) of section 1847A(h)) for which payment under this 
subsection is not packaged into a payment for a service furnished on or 
after July 1, 2023, under the revised payment system under this 
subsection, in lieu of calculation of coinsurance and the amount of 
payment otherwise applicable under this subsection, the provisions of 
section 1847A(h)(5) and paragraph (1)(EE) of subsection (a), shall, as 
determined appropriate by the Secretary, apply under this subsection in 
the same manner as such provisions of section 1847A(h)(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 1847A(h), except if such drug does not have a 
                copayment amount as a result of application of 
                subparagraph (E)) for which payment under this part is 
                not packaged into a payment for a covered OPD service 
                (or group of services) furnished on or after July 1, 
                2023, and the payment for such drug under this 
                subsection is the same as the amount for a calendar 
                quarter under paragraph (3)(A)(ii)(I) of section 
                1847A(h), under the system under this subsection, in 
                lieu of calculation of the copayment amount and the 
                amount of payment otherwise applicable under this 
                subsection (other than the application of the 
                limitation described in subparagraph (C)), the 
                provisions of section 1847A(h)(5) and paragraph (1)(EE) 
                of subsection (a), shall, as determined appropriate by 
                the Secretary, apply under this subsection in the same 
                manner as such provisions of section 1847A(h)(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 ``subsection (h) or'' before ``section 1927''.
            (2) Excluding part b drug inflation rebate 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 inserting 
        ``or section 1847A(h)'' after ``this section''.
            (3) Coordination with medicaid rebate information 
        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 inserting 
        ``and the rebate'' after ``the payment amount''.
            (4) Excluding part b drug inflation rebates from average 
        manufacturer price.--Section 1927(k)(1)(B)(i) of the Social 
        Security Act (42 U.S.C. 1396r-8(k)(1)(B)(i)), as previously 
        amended, is further amended--
                    (A) in subclause (IV), by striking ``and'';
                    (B) in subclause (V), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(VI) rebates paid by 
                                manufacturers under section 1847A(h); 
                                and''.
    (d) Funding.--In addition to amounts otherwise available, there are 
appropriated to the Centers for Medicare & Medicaid Services, out of 
any money in the Treasury not otherwise appropriated, $12,500,000 for 
fiscal year 2022 and $7,500,000 for each of fiscal years 2023 through 
2031, to remain available until expended, to carry out the provisions 
of, including the amendments made by, this section.

SEC. 202. MEDICARE PART D REBATE BY MANUFACTURERS.

    (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:

``SEC. 1860D-14B. MANUFACTURER REBATE FOR CERTAIN DRUGS WITH PRICES 
              INCREASING FASTER THAN INFLATION.

    ``(a) Requirements.--
            ``(1) Secretarial provision of information.--Not later than 
        9 months after the end of each applicable year (as defined in 
        subsection (g)(7)), subject to paragraph (3), 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) The amount (if any) of the excess annual 
                manufacturer price increase described in subsection 
                (b)(1)(A)(ii) 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 such dosage form and strength 
        with respect to such drug for such year.
            ``(3) Transition rule for reporting.--The Secretary may, 
        for each rebatable covered part D drug, delay the timeframe for 
        reporting the information and rebate amount described in 
        subparagraphs (A) and (B) of such paragraph for the applicable 
        year of 2023 until not later than September 30, 2025.
    ``(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 
                (C), paragraph (5)(B), and paragraph (6), the amount 
                equal to the product of--
                            ``(i) subject to subparagraph (B) of this 
                        paragraph, 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 month, with respect to 
                        such year; and
                            ``(ii) the amount (if any) by which--
                                    ``(I) the annual manufacturer price 
                                (as determined in paragraph (2)) paid 
                                for such dosage form and strength with 
                                respect to such part D rebatable drug 
                                for the year; exceeds
                                    ``(II) the inflation-adjusted 
                                payment amount determined under 
                                paragraph (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, with respect to an 
                applicable year, the following:
                            ``(i) 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 reported 
                        by States under section 1927(b)(2)(A).
                            ``(ii) Units of each dosage form and 
                        strength of such part D rebatable drug for 
                        which a rebate is paid under section 1847A(h).
                    ``(C) Exemption for shortages and severe supply 
                chain disruptions.--The Secretary shall reduce or waive 
                the amount under subparagraph (A) with respect to a 
                part D 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 a generic drug, when the Secretary 
                determines there are severe supply chain disruptions.
            ``(2) Determination of annual manufacturer price.--The 
        annual manufacturer 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 such year; and
                    ``(B) the ratio of--
                            ``(i) the total number of units of such 
                        dosage form and strength reported under section 
                        1927 with respect to each such calendar quarter 
                        of such year; to
                            ``(ii) the total number of units of such 
                        dosage form and strength reported under section 
                        1927 with respect to such year, as determined 
                        by the Secretary.
            ``(3) Determination of inflation-adjusted payment amount.--
        The inflation-adjusted payment amount determined under this 
        paragraph for a dosage form and strength with respect to a part 
        D rebatable drug for an applicable year, subject to paragraph 
        (5), is--
                    ``(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 applicable year 
                CPI-U (as defined in subsection (g)(5)) for the year 
                exceeds the benchmark period CPI-U (as defined in 
                subsection (g)(4)).
            ``(4) Determination of benchmark year manufacturer price.--
        The benchmark year manufacturer 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 reported 
                        under section 1927 of such dosage form and 
                        strength with respect to each such calendar 
                        quarter of such payment amount benchmark year; 
                        to
                            ``(ii) the total number of units reported 
                        under section 1927 of such dosage form and 
                        strength with respect to 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 approved or licensed by 
                the Food and Drug Administration after October 1, 2021, 
                subparagraphs (A) and (B) of paragraph (4) shall be 
                applied as if the term `payment amount benchmark 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 `the month immediately 
                prior to October 2021' 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) Treatment of new formulations.--
                            ``(i) In general.--In the case of a part D 
                        rebatable drug that is a line extension of a 
                        part D rebatable drug that is an oral solid 
                        dosage form, the Secretary shall establish a 
                        formula for determining the rebate amount under 
                        paragraph (1) and the inflation adjusted 
                        payment amount under paragraph (3) with respect 
                        to such part D rebatable drug and an applicable 
                        year, consistent with the formula applied under 
                        subsection (c)(2)(C) of section 1927 for 
                        determining a rebate obligation for a rebate 
                        period under such section.
                            ``(ii) Line extension defined.--In this 
                        subparagraph, the term `line extension' means, 
                        with respect to a part D rebatable drug, a new 
                        formulation of the drug, such as an extended 
                        release formulation, but does not include an 
                        abuse-deterrent formulation of the drug (as 
                        determined by the Secretary), regardless of 
                        whether such abuse-deterrent formulation is an 
                        extended release formulation.
                    ``(C) 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 applicability period (as 
                defined in section 1191(b)(2)), in the case such drug 
                is determined (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 
                paragraph (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 
                applicability period with respect to such selected drug 
                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 `the 
                month immediately prior to October 1, 2021' under such 
                subsection were a reference to January of the last year 
                beginning during such price applicability period with 
                respect to such drug.
            ``(6) Reconciliation in case of revised amp reports.--The 
        Secretary shall provide for a method and process under which, 
        in the case of a manufacturer of a part D rebatable drug that 
        submits revisions to information submitted under section 1927 
        by the manufacturer with respect to such drug, the Secretary 
        determines, pursuant to such revisions, adjustments, if any, to 
        the calculation of the amount specified in this subsection for 
        a dosage form and strength with respect to such part D 
        rebatable drug and an applicable year and reconciles any 
        overpayments or underpayments in amounts paid as rebates under 
        this subsection. Any identified underpayment shall be rectified 
        by the manufacturer not later than 30 days after the date of 
        receipt from the Secretary of information on such underpayment.
    ``(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 information 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 requirement under subsection (a)(2) 
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 provisions of section 1128A (other than 
subsections (a) (with 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) No Administrative or Judicial Review.--There shall be no 
administrative or judicial review of the following:
            ``(1) The determination of units under this section.
            ``(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.--
                    ``(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 individual who uses such a drug or biological, as 
                determined by the Secretary, is less than, subject to 
                subparagraph (B), $100, as determined by the Secretary 
                using the most recent data available or, if data is not 
                available, as estimated by the Secretary.
                    ``(B) Increase.--The dollar amount applied under 
                subparagraph (A)--
                            ``(i) for 2024, shall be the dollar amount 
                        specified under such subparagraph for 2023, 
                        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 2023; and
                            ``(ii) for a subsequent year, shall be the 
                        dollar amount specified in this subparagraph 
                        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 subparagraph 
                that is not a multiple of $10 shall be rounded to the 
                nearest multiple of $10.
            ``(2) Unit.--The term `unit' means, with respect to a part 
        D rebatable drug, the lowest dispensable amount (such as a 
        capsule or tablet, milligram of molecules, or grams) of the 
        part D rebatable drug, as reported under section 1927.
            ``(3) Payment amount benchmark year.--The term `payment 
        amount benchmark year' means the year ending in the month 
        immediately prior to October 1, 2021.
            ``(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 the month immediately prior to 
        October 2021.
            ``(5) Applicable year cpi-u.--The term `applicable year 
        CPI-U' means, with respect to an applicable 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 manufacturer, given such term in section 
        1927(k)(1), with respect to a covered outpatient drug of a 
        manufacturer for a rebate period under section 1927.
            ``(7) Applicable year.--The term `applicable year' means a 
        calendar year beginning with 2023.
    ``(h) Implementation for 2023 and 2024.--Notwithstanding any other 
provision of this section, the Secretary shall implement this section 
for 2023 and 2024 by program instruction or otherwise.''.
    (b) 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)), as amended by 
        section 201(c)(1), is further amended by striking ``subsection 
        (h) or section 1927'' and inserting ``subsection (h), section 
        1927, or section 1860D-14B''.
            (2) Excluding part d drug inflation rebate 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 section 
        201(c)(2), is further amended by striking ``or section 
        1847A(h)'' and inserting ``, section 1847A(h), or section 
        1860D-14B''.
            (3) Coordination with medicaid rebate information 
        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 
        201(c)(3), is further amended by striking ``or to carry out 
        section 1847B'' and inserting ``or to carry out section 1847B 
        or section 1860D-14B''.
            (4) Excluding part d drug inflation rebates from average 
        manufacturer price.--Section 1927(k)(1)(B)(i) of the Social 
        Security Act (42 U.S.C. 1396r-8(k)(1)(B)(i)), as previously 
        amended, is further amended by adding at the end the following 
        new subclause:
                                    ``(VII) rebates paid by 
                                manufacturers under section 1860D-
                                14B.''.
    (c) Funding.--In addition to amounts otherwise available, there are 
appropriated to the Centers for Medicare & Medicaid Services, out of 
any money in the Treasury not otherwise appropriated, $12,500,000 for 
fiscal year 2022 and $7,500,000 for each of fiscal years 2023 through 
2031, to remain available until expended, to carry out the provisions 
of, including the amendments made by, this section.

   TITLE III--PART D IMPROVEMENTS AND MAXIMUM OUT-OF-POCKET CAP FOR 
                         MEDICARE BENEFICIARIES

SEC. 301. 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 preceding 
                        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)--
                                    (I) in the matter preceding 
                                subclause (I), by inserting ``for a 
                                year preceding 2024,'' after 
                                ``paragraph (4),''; and
                                    (II) in subclause (I)(bb), by 
                                striking ``a year after 2018'' and 
                                inserting ``each of years 2019 through 
                                2023''; and
                            (ii) in clause (ii)(V), by striking ``2019 
                        and each subsequent year'' and inserting ``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 subsequent 
                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 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 
                                following:
                                    ``(II) for 2024 and each succeeding 
                                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 
                                following 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 2023 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 
                                        subsequent year'' and inserting 
                                        ``for each of years 2021 
                                        through 2023''; and
                                            (bb) by striking the period 
                                        at the end and inserting a 
                                        semicolon; and
                                    (III) by adding at the end the 
                                following new subclauses:
                                    ``(VII) for 2024, is equal to 
                                $2,000; or
                                    ``(VIII) for a subsequent year, is 
                                equal to the amount specified in this 
                                subparagraph for the previous year, 
                                increased by the annual percentage 
                                increase 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 
                2024, for amounts''; and
                    (D) in subparagraph (E), by striking ``In 
                applying'' and inserting ``For each of years 2011 
                through 2023, in applying''.
    (b) Reinsurance Payment Amount.--Section 1860D-15(b) of the Social 
Security Act (42 U.S.C. 1395w-115(b)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``equal to 80 percent'' and 
                inserting ``equal to--
                    ``(A) for a year preceding 2024, 80 percent'';
                    (B) in subparagraph (A), as added by subparagraph 
                (A), by striking the period at the end and inserting 
                ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(B) for 2024 and each subsequent year, the sum 
                of--
                            ``(i) an amount equal to 20 percent of such 
                        allowable reinsurance costs attributable to 
                        that portion of gross prescription drug costs 
                        as specified in paragraph (3) incurred in the 
                        coverage year after such individual 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-14C(g)(2)); and
                            ``(ii) an amount equal to 40 percent of 
                        such allowable reinsurance costs attributable 
                        to that portion of gross prescription drug 
                        costs as specified in paragraph (3) incurred in 
                        the coverage year after such individual has 
                        incurred costs that exceed the annual out-of-
                        pocket threshold specified in section 1860D-
                        2(b)(4)(B) with respect to covered part D drugs 
                        that are not applicable drugs (as so 
                        defined).'';
            (2) in paragraph (2)--
                    (A) by striking ``COSTS.--For purposes'' and 
                inserting ``Costs.--
                    ``(A) In general.--Subject to subparagraph (B), for 
                purposes''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(B) Inclusion of manufacturer discounts on 
                applicable drugs.--For purposes of applying 
                subparagraph (A), the term `allowable reinsurance 
                costs' shall include the portion of the negotiated 
                price (as defined in section 1860D-14C(g)(6)) of an 
                applicable drug (as defined in section 1860D-14C(g)(2)) 
                that was paid by a manufacturer under the manufacturer 
                discount program under section 1860D-14C.''; and
            (3) 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, 
                with respect to 2024 and subsequent years, in the case 
                of an applicable drug, as defined in section 1860D-
                14C(g)(2), by a manufacturer)'' after ``by the 
                individual or under the plan''.
    (c) Reduced Cost-Sharing; Beneficiary Premium Percentage.--
            (1) Cost-sharing.--
                    (A) In general.--Section 1860D-2(b)(2)(A) of the 
                Social Security Act (42 U.S.C. 1395w-102(b)(2)(A)) is 
                amended--
                            (i) in the subparagraph header, by striking 
                        ``25 percent coinsurance'' and inserting 
                        ``Coinsurance'';
                            (ii) in clause (i), by inserting ``(or, for 
                        2024 and each subsequent year, 23 percent)'' 
                        after ``25 percent''; and
                            (iii) in clause (ii), by inserting ``(or, 
                        for 2024 and each subsequent year, 23 
                        percent)'' after ``25 percent''.
                    (B) Conforming amendment.--Section 1860D-
                14(a)(2)(D) of the Social Security Act (42 U.S.C. 
                1395w-114(a)(2)(D)) is amended by inserting ``(or, for 
                2024 and each subsequent year, instead of coinsurance 
                of `23 percent')'' after ``instead of coinsurance of 
                `25 percent'''.
            (2) Beneficiary premium percentage.--
                    (A) In general.--Section 1860D-13(a)(3)(A) of the 
                Social Security Act (42 U.S.C. 1395w-113(a)(3)(A)) is 
                amended by inserting ``(or, for 2024 and each 
                subsequent year, 23.5 percent)'' after ``25.5 
                percent''.
                    (B) Conforming amendments.--
                            (i) Section 1860D-11(g)(6) of the Social 
                        Security Act (42 U.S.C. 1395w-111(g)(6)) is 
                        amended by inserting ``(or, for 2024 and each 
                        subsequent year, 23.5 percent)'' after ``25.5 
                        percent''.
                            (ii) Section 1860D-13(a)(7)(B)(i) of the 
                        Social Security Act (42 U.S.C. 1395w-
                        113(a)(7)(B)(i)) is amended--
                                    (I) in subclause (I), by inserting 
                                ``(or, for 2024 and each subsequent 
                                year, 23.5 percent)'' after ``25.5 
                                percent''; and
                                    (II) in subclause (II), by 
                                inserting ``(or, for 2024 and each 
                                subsequent year, 23.5 percent)'' after 
                                ``25.5 percent''.
                            (iii) Section 1860D-15(a) of the Social 
                        Security Act (42 U.S.C. 1395w-115(a)) is 
                        amended by inserting ``(or, for 2024 and each 
                        subsequent year, 76.5 percent)'' after ``74.5 
                        percent''.
    (d) Manufacturer Discount Program.--
            (1) In general.--Part D of title XVIII of the Social 
        Security Act (42 U.S.C. 1395w-101 through 42 U.S.C. 1395w-153), 
        as amended by section 202, is further amended by inserting 
        after section 1860D-14B the following new sections:

``SEC. 1860D-14C. MANUFACTURER DISCOUNT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish a manufacturer 
discount program (in this section referred to as the `program'). Under 
the program, the Secretary 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 program 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, in 
                accordance with this section, discounted prices for 
                applicable drugs of the manufacturer that are dispensed 
                to applicable beneficiaries on or after January 1, 
                2024.
                    ``(B) Clarification.--Nothing in this section shall 
                be construed as affecting--
                            ``(i) the application of a coinsurance of 
                        23 percent of the negotiated price, as applied 
                        under paragraph (2)(A) of section 1860D-2(b), 
                        for costs described in such paragraph; or
                            ``(ii) the application of the copayment 
                        amount described in paragraph (4)(A) of such 
                        section, with respect to costs described in 
                        such paragraph.
                    ``(C) Timing of agreement.--
                            ``(i) Special rule for 2024.--In order for 
                        an agreement with a manufacturer 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 
                        not later than a calendar quarter or semi-
                        annual deadline established by the Secretary.
            ``(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 manufacturer with an agreement in effect under 
        this section shall comply with requirements imposed by the 
        Secretary or a third party with a contract under subsection 
        (d)(3), as applicable, for purposes of administering the 
        program, including any determination under subparagraph (A) of 
        subsection (c)(1) or procedures established under such 
        subsection (c)(1).
            ``(4) Length of agreement.--
                    ``(A) In general.--An agreement under this section 
                shall be effective for an initial period of not less 
                than 12 months and shall be automatically renewed for a 
                period of not less than 1 year unless terminated under 
                subparagraph (B).
                    ``(B) Termination.--
                            ``(i) By the secretary.--The Secretary 
                        shall 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 earlier 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 Secretary 
                        determines appropriate.
                            ``(ii) By a manufacturer.--A manufacturer 
                        may terminate an agreement under this section 
                        for any reason. Any such termination shall be 
                        effective, with respect to a plan year--
                                    ``(I) if the termination occurs 
                                before January 31 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 31 of a plan year, as 
                                of the day after the end of the 
                                succeeding plan year.
                            ``(iii) Effectiveness of termination.--Any 
                        termination under this subparagraph shall not 
                        affect discounts for applicable drugs of the 
                        manufacturer that are due under the agreement 
                        before the effective date of its termination.
                            ``(iv) Notice to third party.--The 
                        Secretary shall provide notice of such 
                        termination 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.--Administering 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 to ensure 
                that, not later than the applicable number 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 
                difference between--
                            ``(i) the negotiated price of the 
                        applicable drug; and
                            ``(ii) the discounted price of the 
                        applicable drug;
                    ``(C) the establishment of procedures to ensure 
                that the discounted price for an applicable 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 purchase or provision of 
                prescription drug coverage on behalf of applicable 
                beneficiaries as specified by the Secretary; and
                    ``(D) providing a reasonable dispute resolution 
                mechanism to resolve disagreements between 
                manufacturers, applicable beneficiaries, and the third 
                party with a contract under subsection (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) determines that the 
                manufacturer is not in compliance with such agreement, 
                the third party shall notify the Secretary of such 
                noncompliance for appropriate enforcement under 
                subsection (e).
            ``(3) Collection of data from prescription drug plans and 
        ma-pd plans.--The Secretary may collect appropriate data from 
        prescription 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 implementation of 
        this section, the Secretary shall not receive 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 established 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 between the 
                Secretary, manufacturers, and other individuals or 
                entities the Secretary determines appropriate;
                    ``(B) receive, distribute, or facilitate the 
                distribution of funds of manufacturers to appropriate 
                individuals or entities in order to meet the 
                obligations of manufacturers under agreements under 
                this section;
                    ``(C) provide adequate and timely information 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.
            ``(5) Implementation.--The Secretary shall implement the 
        program under this section for 2024 and 2025 by program 
        instruction or otherwise.
    ``(e) Enforcement.--
            ``(1) Audits.--Each manufacturer with an agreement in 
        effect under this section shall be subject to periodic audit by 
        the Secretary.
            ``(2) Civil money penalty.--
                    ``(A) In general.--A manufacturer that fails to 
                provide discounted prices for applicable drugs of the 
                manufacturer dispensed to applicable beneficiaries in 
                accordance with such agreement shall be subject to a 
                civil money penalty for each such failure in an amount 
                the Secretary determines is equal to the sum of--
                            ``(i) the amount that the manufacturer 
                        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 section shall prevent an applicable beneficiary 
from purchasing 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:
            ``(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) as if clause 
                (iii) of such section included a reference to costs 
                reimbursed through insurance, a group health plan, or 
                certain other third-party payment arrangements, for 
                covered part D drugs in the year that exceed--
                            ``(i) in the case of an individual not 
                        described in clause (ii) or (iii), the annual 
                        deductible for such year, as specified in 
                        section 1860D-2(b)(1);
                            ``(ii) in the case of a subsidy eligible 
                        individual described in section 1860D-14(a)(1), 
                        the annual deductible for such year, as 
                        specified in subparagraph (B) of such section; 
                        and
                            ``(iii) in the case of a subsidy eligible 
                        individual described in section 1860D-14(a)(2), 
                        the annual deductible for such year, as 
                        specified in subparagraph (B) of such section.
            ``(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 application 
                        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 
                        prescription 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 
                        prescription 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 exception or 
                        appeal; and
                    ``(B) does not include a selected drug (as referred 
                to under section 1192(c)) during a price applicability 
                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 reimbursement 
                submitted electronically, 14 days; and
                    ``(B) with respect to claims for reimbursement 
                submitted otherwise, 30 days.
            ``(4) Discounted price.--
                    ``(A) In general.--The term `discounted price' 
                means, subject to subparagraphs (B) and (C), with 
                respect to an applicable drug of a manufacturer 
                dispensed during a year to an applicable beneficiary--
                            ``(i) who has not incurred costs, as 
                        determined in accordance with section 1860D-
                        2(b)(4)(C), for covered part D drugs in the 
                        year that are equal to or exceed 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, 80 percent 
                        of the negotiated price of such drug.
                    ``(B) Phase-in for certain drugs dispensed to lis 
                beneficiaries.--
                            ``(i) In general.--In the case of an 
                        applicable drug of a specified manufacturer (as 
                        defined in clause (ii)) that is marketed as of 
                        the date of enactment of this subparagraph and 
                        dispensed for an applicable beneficiary who is 
                        a subsidy eligible individual (as defined in 
                        section 1860D-14(a)(3)), the term `discounted 
                        price' means the specified LIS percent (as 
                        defined in clause (iii)) of the negotiated 
                        price of the applicable drug of the 
                        manufacturer.
                            ``(ii) Specified manufacturer.--
                                    ``(I) In general.--In this 
                                subparagraph, subject to subclause 
                                (II), the term `specified manufacturer' 
                                means a manufacturer of an applicable 
                                drug for which, in 2021--
                                            ``(aa) the manufacturer had 
                                        a coverage gap discount 
                                        agreement under section 1860D-
                                        14A;
                                            ``(bb) the total 
                                        expenditures for all of the 
                                        specified drugs of the 
                                        manufacturer covered by such 
                                        agreement or agreements for 
                                        such year and covered under 
                                        this part during such year 
                                        represented less than 1.0 
                                        percent of the total 
                                        expenditures under this part 
                                        for all covered Part D drugs 
                                        during such year; and
                                            ``(cc) the total 
                                        expenditures for all of the 
                                        specified drugs of the 
                                        manufacturer that are single 
                                        source drugs and biological 
                                        products covered under part B 
                                        during such year represented 
                                        less than 1.0 percent of the 
                                        total expenditures under part B 
                                        for all drugs or biological 
                                        products covered under such 
                                        part during such year.
                                    ``(II) Specified drugs.--
                                            ``(aa) In general.--For 
                                        purposes of this clause, the 
                                        term `specified drug' means, 
                                        with respect to a specified 
                                        manufacturer, for 2021, an 
                                        applicable drug that is 
                                        produced, prepared, propagated, 
                                        compounded, converted, or 
                                        processed by the manufacturer.
                                            ``(bb) Aggregation rule.--
                                        All persons treated as a single 
                                        employer under subsection (a) 
                                        or (b) of section 52 of the 
                                        Internal Revenue Code of 1986 
                                        shall be treated as one 
                                        manufacturer for purposes of 
                                        this subparagraph. For purposes 
                                        of making a determination 
                                        pursuant to the previous 
                                        sentence, an agreement under 
                                        this section shall require that 
                                        a manufacturer provide and 
                                        attest to such information as 
                                        specified by the Secretary as 
                                        necessary.
                                    ``(III) Limitation.--The term 
                                `specified manufacturer' shall not 
                                include a manufacturer described in 
                                subclause (I) if such manufacturer is 
                                acquired after 2021 by another 
                                manufacturer that is not a specified 
                                manufacturer, effective at the 
                                beginning of the plan year immediately 
                                following such acquisition or, in the 
                                case of an acquisition before 2024, 
                                effective January 1, 2024.
                            ``(iii) Specified lis percent.--In this 
                        subparagraph, the `specified LIS percent' 
                        means, with respect to a year--
                                    ``(I) for an applicable drug 
                                dispensed for an applicable beneficiary 
                                described in clause (i) who has not 
                                incurred costs, as determined in 
                                accordance with section 1860D-
                                2(b)(4)(C), for covered part D drugs in 
                                the year that are equal to or exceed 
                                the annual out-of-pocket threshold 
                                specified in section 1860D-
                                2(b)(4)(B)(i) for the year--
                                            ``(aa) for 2024, 99 
                                        percent;
                                            ``(bb) for 2025, 98 
                                        percent;
                                            ``(cc) for 2026, 95 
                                        percent;
                                            ``(dd) for 2027, 92 
                                        percent; and
                                            ``(ee) for 2028 and each 
                                        subsequent year, 90 percent; 
                                        and
                                    ``(II) for an applicable drug 
                                dispensed for an applicable beneficiary 
                                described in clause (i) who has 
                                incurred costs, as determined in 
                                accordance with section 1860D-
                                2(b)(4)(C), for covered part D drugs in 
                                the year that are equal to or exceed 
                                the annual out-of-pocket threshold 
                                specified in section 1860D-
                                2(b)(4)(B)(i) for the year--
                                            ``(aa) for 2024, 99 
                                        percent;
                                            ``(bb) for 2025, 98 
                                        percent;
                                            ``(cc) for 2026, 95 
                                        percent;
                                            ``(dd) for 2027, 92 
                                        percent;
                                            ``(ee) for 2028, 90 
                                        percent;
                                            ``(ff) for 2029, 85 
                                        percent; and
                                            ``(gg) for 2030 and each 
                                        subsequent year, 80 percent.
                    ``(C) Phase-in for specified small manufacturers.--
                            ``(i) In general.--In the case of an 
                        applicable drug of a specified small 
                        manufacturer (as defined in clause (ii)) that 
                        is marketed as of the date of enactment of this 
                        subparagraph and dispensed for an applicable 
                        beneficiary, the term `discounted price' means 
                        the specified small manufacturer percent (as 
                        defined in clause (iii)) of the negotiated 
                        price of the applicable drug of the 
                        manufacturer.
                            ``(ii) Specified small manufacturer.--
                                    ``(I) In general.--In this 
                                subparagraph, subject to subclause 
                                (III), the term `specified small 
                                manufacturer' means a manufacturer of 
                                an applicable drug for which, in 2021--
                                            ``(aa) the manufacturer is 
                                        a specified manufacturer (as 
                                        defined in subparagraph 
                                        (B)(ii)); and
                                            ``(bb) the total 
                                        expenditures under part D for 
                                        any one of the specified small 
                                        manufacturer drugs of the 
                                        manufacturer that are covered 
                                        by the agreement or agreements 
                                        under section 1860D-14A of such 
                                        manufacturer for such year and 
                                        covered under this part during 
                                        such year are equal to or more 
                                        than 80 percent of the total 
                                        expenditures under this part 
                                        for all specified small 
                                        manufacturer drugs of the 
                                        manufacturer that are covered 
                                        by such agreement or agreements 
                                        for such year and covered under 
                                        this part during such year.
                                    ``(II) Specified small manufacturer 
                                drugs.--
                                            ``(aa) In general.--For 
                                        purposes of this clause, the 
                                        term `specified small 
                                        manufacturer drugs' means, with 
                                        respect to a specified small 
                                        manufacturer, for 2021, an 
                                        applicable drug that is 
                                        produced, prepared, propagated, 
                                        compounded, converted, or 
                                        processed by the manufacturer.
                                            ``(bb) Aggregation rule.--
                                        All persons treated as a single 
                                        employer under subsection (a) 
                                        or (b) of section 52 of the 
                                        Internal Revenue Code of 1986 
                                        shall be treated as one 
                                        manufacturer for purposes of 
                                        this subparagraph. For purposes 
                                        of making a determination 
                                        pursuant to the previous 
                                        sentence, an agreement under 
                                        this section shall require that 
                                        a manufacturer provide and 
                                        attest to such information as 
                                        specified by the Secretary as 
                                        necessary.
                                    ``(III) Limitation.--The term 
                                `specified small manufacturer' shall 
                                not include a manufacturer described in 
                                subclause (I) if such manufacturer is 
                                acquired after 2021 by another 
                                manufacturer that is not a specified 
                                small manufacturer, effective at the 
                                beginning of the plan year immediately 
                                following such acquisition or, in the 
                                case of an acquisition before 2024, 
                                effective January 1, 2024.
                            ``(iii) Specified small manufacturer 
                        percent.--In this subparagraph, the term 
                        `specified small manufacturer percent' means, 
                        with respect to a year--
                                    ``(I) for an applicable drug 
                                dispensed for an applicable beneficiary 
                                who has not incurred costs, as 
                                determined in accordance with section 
                                1860D-2(b)(4)(C), for covered part D 
                                drugs in the year that are equal to or 
                                exceed the annual out-of-pocket 
                                threshold specified in section 1860D-
                                2(b)(4)(B)(i) for the year--
                                            ``(aa) for 2024, 99 
                                        percent;
                                            ``(bb) for 2025, 98 
                                        percent;
                                            ``(cc) for 2026, 95 
                                        percent;
                                            ``(dd) for 2027, 92 
                                        percent; and
                                            ``(ee) for 2028 and each 
                                        subsequent year, 90 percent; 
                                        and
                                    ``(II) for an applicable drug 
                                dispensed for an applicable beneficiary 
                                who has incurred costs, as determined 
                                in accordance with section 1860D-
                                2(b)(4)(C), for covered part D drugs in 
                                the year that are equal to or exceed 
                                the annual out-of-pocket threshold 
                                specified in section 1860D-
                                2(b)(4)(B)(i) for the year--
                                            ``(aa) for 2024, 99 
                                        percent;
                                            ``(bb) for 2025, 98 
                                        percent;
                                            ``(cc) for 2026, 95 
                                        percent;
                                            ``(dd) for 2027, 92 
                                        percent;
                                            ``(ee) for 2028, 90 
                                        percent;
                                            ``(ff) for 2029, 85 
                                        percent; and
                                            ``(gg) for 2030 and each 
                                        subsequent year, 80 percent.
                    ``(D) Total expenditures.--For purposes of this 
                paragraph, the term `total expenditures' includes, in 
                the case of expenditures with respect to part D, 
                ingredient costs, dispensing fees, sales tax, and, if 
                applicable, vaccine administration fees. The term 
                `total expenditures' excludes, in the case of 
                expenditures with respect to part B, expenditures for a 
                drug or biological that are bundled or packaged into 
                the payment for another service.
                    ``(E) Special case for certain claims.--
                            ``(i) 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 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 negotiated 
                        price of the applicable drug that falls above 
                        such annual deductible.
                            ``(ii) Claims spanning out-of-pocket 
                        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 applicable drug shall provide the 
                        discounted price--
                                    ``(I) in accordance with 
                                subparagraph (A)(i) on the portion of 
                                the negotiated price of the applicable 
                                drug that falls below such threshold; 
                                and
                                    ``(II) in accordance with 
                                subparagraph (A)(ii) on the portion of 
                                such price of such drug that falls at 
                                or above such threshold.
            ``(5) Manufacturer.--The term `manufacturer' means any 
        entity which is engaged in the production, preparation, 
        propagation, compounding, conversion, or processing of 
        prescription drug products, 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 retail pharmacy licensed 
        under State law.
            ``(6) Negotiated price.--The term `negotiated price' has 
        the meaning given such term in section 423.100 of title 42, 
        Code of Federal Regulations (or any successor regulation) and, 
        with respect to an applicable drug, such negotiated price shall 
        include any dispensing fee and, if applicable, any vaccine 
        administration fee for the applicable drug.
            ``(7) Qualified retiree prescription drug plan.--The term 
        `qualified retiree prescription drug plan' has the meaning 
        given such term in section 1860D-22(a)(2).

``SEC. 1860D-14D. SELECTED DRUG SUBSIDY PROGRAM.

    ``With respect to covered part D drugs that would be applicable 
drugs (as defined in section 1860D-14C(g)(2)) but for the application 
of subparagraph (B) of such section, the Secretary shall provide a 
process whereby, in the case of an applicable beneficiary (as defined 
in section 1860D-14C(g)(1)) who, with respect to a year, is enrolled in 
a prescription drug plan or is enrolled in an MA-PD plan, has not 
incurred costs that are equal to or exceed the annual out-of-pocket 
threshold specified in section 1860D-2(b)(4)(B)(i), and is dispensed 
such a drug the Secretary (periodically and on a timely basis) provides 
the PDP sponsor or the MA organization offering the plan, a subsidy 
with respect to such drug that is equal to 10 percent of the negotiated 
price (as defined in section 1860D-14C(g)(6)) of such drug.''.
            (2) Sunset of medicare coverage gap discount program.--
        Section 1860D-14A of the Social Security Act (42 U.S.C. 1395-
        114a) is amended--
                    (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 terminated as of such date.
            ``(2) Continued application for applicable drugs dispensed 
        prior to sunset.--The provisions of this section (including all 
        responsibilities and duties) shall continue to apply on and 
        after January 1, 2024, with respect to applicable drugs 
        dispensed prior to such date.''.
            (3) Inclusion of actuarial value of manufacturer 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 ``assumptions 
                        regarding--
                                    ``(I) the reinsurance''; and
                            (ii) by adding at the end the following:
                                    ``(II) for 2024 and each subsequent 
                                year, the manufacturer discounts 
                                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 actuarial 
                        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 following:
                            ``(ii) for 2024 and each subsequent year, 
                        the manufacturer discounts provided under 
                        section 1860D-14C;''.
    (e) 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 striking ``, 
                or an increase in the initial'' and inserting ``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 preceding 
                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 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 striking 
                        ``1860D-2(b)(4)(A)(i)(I)'' and inserting 
                        ``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 Security Act (42 
        U.S.C. 1395w-131(d)(7)) is amended by striking ``section 1860D-
        2(b)(4)(B)(i)'' and inserting ``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 
                        discount'';
                    (B) in clause (i), as inserted by subparagraph (A) 
                of this paragraph, by striking the period 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 Security 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--
                    (A) in subsection (a)--
                            (i) by striking paragraph (1) and inserting 
                        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 section 1860D-
                14C;'';
                            (ii) by striking paragraph (2) and 
                        inserting 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 section 1860D-
                14C with the Secretary; and''; and
                            (iii) by striking paragraph (3) and 
                        inserting 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 entered 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 subsection (d)(3) of section 
                1860D-14C.''; and
                    (B) by striking subsection (b) and inserting 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 inserting 
                before the period at the end the following: ``or under 
                the manufacturer discount program under section 1860D-
                14C''; and
                    (B) in subsection (k)(1)(B)(i)(V), by inserting 
                before the period at the end the following: ``or under 
                section 1860D-14C''.
    (f) Implementation for 2024 and 2025.--Notwithstanding any other 
provision of this section, the Secretary shall implement this section, 
including the amendments made by this section, for 2024 and 2025 by 
program instruction or otherwise.
    (g) Funding.--In addition to amounts otherwise available, there are 
appropriated to the Centers for Medicare & Medicaid Services, out of 
any money in the Treasury not otherwise appropriated, $44,000,000 for 
fiscal year 2022, $38,000,000 for fiscal year 2023, and $32,000,000 for 
each of fiscal years 2024 through 2031, to remain available until 
expended, to carry out the provisions of, including the amendments made 
by, this section.

SEC. 302. MAXIMUM MONTHLY CAP ON COST-SHARING PAYMENTS UNDER 
              PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-2(b) of the Social Security Act (42 
U.S.C. 1395w-102(b)), as amended by section 301, is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (A), by striking ``and (D)'' 
                and inserting ``, (D), and (E)''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(E) Maximum monthly cap on cost-sharing 
                payments.--
                            ``(i) In general.--For plan years beginning 
                        on or after January 1, 2025, each PDP sponsor 
                        offering a prescription drug plan and each MA 
                        organization offering an MA-PD plan shall 
                        provide to any enrollee of such plan, including 
                        an enrollee who is a subsidy eligible 
                        individual (as defined in paragraph (3) of 
                        section 1860D-14(a)), the option to elect with 
                        respect to a plan year to pay cost-sharing 
                        under the plan in monthly amounts that are 
                        capped in accordance with this subparagraph.
                            ``(ii) Determination of maximum monthly 
                        cap.--For each month in the plan year for which 
                        an enrollee in a prescription drug plan or an 
                        MA-PD plan has made an election pursuant to 
                        clause (i), the PDP sponsor or MA organization 
                        shall determine a maximum monthly cap (as 
                        defined in clause (iv)) for such enrollee.
                            ``(iii) Beneficiary monthly payments.--With 
                        respect to an enrollee who has made an election 
                        pursuant to clause (i), for each month 
                        described in clause (ii), the PDP sponsor or MA 
                        organization shall bill such enrollee an amount 
                        (not to exceed the maximum monthly cap) for the 
                        out-of-pocket costs of such enrollee in such 
                        month.
                            ``(iv) Maximum monthly cap defined.--In 
                        this subparagraph, the term `maximum monthly 
                        cap' means, with respect to an enrollee--
                                    ``(I) for the first month for which 
                                the enrollee has made an election 
                                pursuant to clause (i), an amount 
                                determined by calculating--
                                            ``(aa) the annual out-of-
                                        pocket threshold specified in 
                                        paragraph (4)(B) minus the 
                                        incurred costs of the enrollee 
                                        as described in paragraph 
                                        (4)(C); divided by
                                            ``(bb) the number of months 
                                        remaining in the plan year; and
                                    ``(II) for a subsequent month, an 
                                amount determined by calculating--
                                            ``(aa) the sum of any 
                                        remaining out-of-pocket costs 
                                        owed by the enrollee from a 
                                        previous month that have not 
                                        yet been billed to the enrollee 
                                        and any additional out-of-
                                        pocket costs incurred by the 
                                        enrollee; divided by
                                            ``(bb) the number of months 
                                        remaining in the plan year.
                            ``(v) Additional requirements.--The 
                        following requirements shall apply with respect 
                        to the option to make an election pursuant to 
                        clause (i) under this subparagraph:
                                    ``(I) Secretarial 
                                responsibilities.--The Secretary shall 
                                provide information to part D eligible 
                                individuals on the option to make such 
                                election through educational materials, 
                                including through the notices provided 
                                under section 1804(a).
                                    ``(II) Timing of election.--An 
                                enrollee in a prescription drug plan or 
                                an MA-PD plan may make such an 
                                election--
                                            ``(aa) prior to the 
                                        beginning of the plan year; or
                                            ``(bb) in any month during 
                                        the plan year.
                                    ``(III) PDP sponsor and ma 
                                organization responsibilities.--Each 
                                PDP sponsor offering a prescription 
                                drug plan or MA organization offering 
                                an MA-PD plan--
                                            ``(aa) may not limit the 
                                        option for an enrollee to make 
                                        such an election to certain 
                                        covered part D drugs;
                                            ``(bb) shall, prior to the 
                                        plan year, notify prospective 
                                        enrollees of the option to make 
                                        such an election in promotional 
                                        materials;
                                            ``(cc) shall include 
                                        information on such option in 
                                        enrollee educational materials;
                                            ``(dd) shall have in place 
                                        a mechanism to notify a 
                                        pharmacy during the plan year 
                                        when an enrollee incurs out-of-
                                        pocket costs with respect to 
                                        covered part D drugs that make 
                                        it likely the enrollee may 
                                        benefit from making such an 
                                        election;
                                            ``(ee) shall provide that a 
                                        pharmacy, after receiving a 
                                        notification described in item 
                                        (dd) with respect to an 
                                        enrollee, informs the enrollee 
                                        of such notification;
                                            ``(ff) shall ensure that 
                                        such an election by an enrollee 
                                        has no effect on the amount 
                                        paid to pharmacies (or the 
                                        timing of such payments) with 
                                        respect to covered part D drugs 
                                        dispensed to the enrollee; and
                                            ``(gg) shall have in place 
                                        a financial reconciliation 
                                        process to correct inaccuracies 
                                        in payments made by an enrollee 
                                        under this subparagraph with 
                                        respect to covered part D drugs 
                                        during the plan year.
                                    ``(IV) Failure to pay amount 
                                billed.--If an enrollee fails to pay 
                                the amount billed for a month as 
                                required under this subparagraph, the 
                                election of the enrollee pursuant to 
                                clause (i) shall be terminated and the 
                                enrollee shall pay the cost-sharing 
                                otherwise applicable for any covered 
                                part D drugs subsequently dispensed to 
                                the enrollee up to the annual out-of-
                                pocket threshold specified in paragraph 
                                (4)(B).
                                    ``(V) Clarification regarding past 
                                due amounts.--Nothing in this 
                                subparagraph shall be construed as 
                                prohibiting a PDP sponsor or an MA 
                                organization from billing an enrollee 
                                for an amount owed under this 
                                subparagraph.
                                    ``(VI) Treatment of unsettled 
                                balances.--Any unsettled balances with 
                                respect to amounts owed under this 
                                subparagraph shall be treated as plan 
                                losses and the Secretary shall not be 
                                liable for any such balances outside of 
                                those assumed as losses estimated in 
                                plan bids.''; and
            (2) in paragraph (4)--
                    (A) in subparagraph (C), by striking ``in 
                subparagraph (E)'' and inserting ``in subparagraph (E) 
                and subject to subparagraph (F)''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(F) Inclusion of costs paid under maximum monthly 
                cap option.--In applying subparagraph (A), with respect 
                to an enrollee who has made an election pursuant to 
                clause (i) of paragraph (2)(E), costs shall be treated 
                as incurred if such costs are paid by a PDP sponsor or 
                an MA organization under the option provided under such 
                paragraph.''.
    (b) Application to Alternative Prescription Drug Coverage.--Section 
1860D-2(c) of the Social Security Act (42 U.S.C. 1395w-102(c)) is 
amended by adding at the end the following new paragraph:
            ``(4) Same maximum monthly cap on cost-sharing.--For plan 
        years beginning on or after January 1, 2025, the maximum 
        monthly cap on cost-sharing payments under the option provided 
        under subsection (b)(2)(E) shall apply to such coverage.''.
    (c) Implementation for 2025.--The Secretary shall implement this 
section, including the amendments made by this section, for 2025 by 
program instruction or otherwise.
    (d) Funding.--In addition to amounts otherwise available, there are 
appropriated to the Centers for Medicare & Medicaid Services, out of 
any money in the Treasury not otherwise appropriated, $1,000,000 for 
each of fiscal years 2022 through 2031, to remain available until 
expended, to carry out the provisions of, including the amendments made 
by, this section.

       TITLE IV--REPEAL OF CERTAIN PRESCRIPTION DRUG REBATE RULE

SEC. 401. PROHIBITING IMPLEMENTATION OF RULE RELATING TO ELIMINATING 
              THE ANTI-KICKBACK 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 Protection for Rebates 
Involving Prescription Pharmaceuticals and Creation of New Safe Harbor 
Protection for Certain Point-of-Sale Reductions in Price on 
Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager 
Service Fees'' (85 Fed. Reg. 76666).

                         TITLE V--MISCELLANEOUS

SEC. 501. APPROPRIATE COST-SHARING FOR CERTAIN INSULIN PRODUCTS UNDER 
              MEDICARE PART D.

    (a) In General.--Section 1860D-2 of the Social Security Act (42 
U.S.C. 1395w-102) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)(A), by striking ``The 
                coverage'' and inserting ``Subject to paragraph (8), 
                the coverage'';
                    (B) in paragraph (2)(A), by striking ``and (D)'' 
                and inserting ``and (D) and paragraph (8)'';
                    (C) in paragraph (3)(A), by striking ``and (4)'' 
                and inserting ``(4), and (8)'';
                    (D) in paragraph (4)(A)(i), by striking ``The 
                coverage'' and inserting ``Subject to paragraph (8), 
                the coverage''; and
                    (E) by adding at the end the following new 
                paragraph:
            ``(8) Treatment of cost-sharing for certain insulin 
        products.--
                    ``(A) In general.--For plan years beginning on or 
                after January 1, 2023, the following shall apply with 
                respect to insulin products (as defined in subparagraph 
                (B)):
                            ``(i) No application of deductible.--The 
                        deductible under paragraph (1) shall not apply 
                        with respect to such insulin products.
                            ``(ii) Application of cost-sharing.--
                                    ``(I) Plan year 2023.--For plan 
                                year 2023, the coverage provides 
                                benefits for such insulin products, 
                                regardless of whether an individual has 
                                reached the initial coverage limit 
                                under paragraph (3) or the out-of-
                                pocket threshold under paragraph (4), 
                                with cost-sharing that is equal to the 
                                applicable copayment amount.
                                    ``(II) Plan year 2024 and 
                                subsequent plan years.--For plan year 
                                2024 and subsequent plan years, the 
                                coverage provides benefits for such 
                                insulin products, prior to an 
                                individual reaching the out-of-pocket 
                                threshold under paragraph (4), with 
                                cost-sharing that is equal to the 
                                applicable copayment amount.
                                    ``(III) Applicable copayment 
                                amount.--For purposes of this clause, 
                                the term `applicable copayment amount' 
                                means, with respect to an insulin 
                                product under a prescription drug plan 
                                or an MA-PD plan, an amount that is not 
                                more than $35.
                    ``(B) Insulin product.--For purposes of this 
                paragraph, the term `insulin product' means an insulin 
                product that is approved under section 505 of the 
                Federal Food, Drug, and Cosmetic Act or licensed under 
                section 351 of the Public Health Service Act and 
                marketed pursuant to such approval or licensure, 
                including any insulin product that has been deemed to 
                be licensed under section 351 of the Public Health 
                Service Act pursuant to section 7002(e)(4) of the 
                Biologics Price Competition and Innovation Act of 2009 
                and marketed pursuant to such section.''; and
            (2) in subsection (c), by adding at the end the following 
        new paragraph:
            ``(4) Treatment of cost-sharing for insulin products.--The 
        coverage is provided in accordance with subsection (b)(8).''.
    (b) Conforming Amendments to Cost-Sharing for Low-Income 
Individuals.--Section 1860D-14(a) of the Social Security Act (42 U.S.C. 
1395w-114(a)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (D)(iii), by adding at the end 
                the following new sentence: ``For plan year 2023 and 
                subsequent plan years, the copayment amount applicable 
                under the preceding sentence to an insulin product (as 
                defined in section 1860D-2(b)(8)(B)) furnished to the 
                individual may not exceed the applicable copayment 
                amount for the product under the prescription drug plan 
                or MA-PD plan in which the individual is enrolled.''; 
                and
                    (B) in subparagraph (E), by inserting the following 
                before the period at the end ``or under section 1860D-
                2(b)(8) in the case of an insulin product (as defined 
                in subparagraph (B) of such section)''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (D), by adding at the end the 
                following new sentence: ``For plan year 2023 and 
                subsequent plan years, the amount of the coinsurance 
                applicable under the preceding sentence to an insulin 
                product (as defined in section 1860D-2(b)(8)(B)) 
                furnished to the individual may not exceed the 
                applicable copayment amount for the product under the 
                prescription drug plan or MA-PD plan in which the 
                individual is enrolled.''; and
                    (B) in subparagraph (E), by adding at the end the 
                following new sentence: ``For plan year 2023, the 
                amount of the copayment or coinsurance applicable under 
                the preceding sentence to an insulin product (as 
                defined in section 1860D-2(b)(8)(B)) furnished to the 
                individual may not exceed the applicable copayment 
                amount for the product under the prescription drug plan 
                or MA-PD plan in which the individual is enrolled.''.
    (c) Implementation.--The Secretary shall implement this section for 
plan years 2023 and 2024 by program instruction or otherwise.

SEC. 502. COVERAGE OF ADULT VACCINES RECOMMENDED BY THE ADVISORY 
              COMMITTEE ON IMMUNIZATION PRACTICES UNDER MEDICARE PART 
              D.

    (a) Ensuring Treatment of Cost-Sharing Is Consistent With Treatment 
of Vaccines Under Medicare Part B.--Section 1860D-2 of the Social 
Security Act (42 U.S.C. 1395w-102), as amended by section 501, is 
further amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)(A), by striking ``paragraph 
                (8)'' and inserting ``paragraphs (8) and (9)'';
                    (B) in paragraph (2)(A), by striking ``paragraph 
                (8)'' and inserting ``paragraphs (8) and (9)'';
                    (C) in paragraph (3)(A), by striking ``and (8)'' 
                and inserting ``(8), and (9)'';
                    (D) in paragraph (4)(A)(i), by striking ``paragraph 
                (8)'' and inserting ``paragraphs (8) and (9)''; and
                    (E) by adding at the end the following new 
                paragraph:
            ``(9) Treatment of cost-sharing for adult vaccines 
        recommended by the advisory committee on immunization practices 
        consistent with treatment of vaccines under part b.--
                    ``(A) In general.--For plan years beginning on or 
                after January 1, 2024, the following shall apply with 
                respect to an adult vaccine recommended by the Advisory 
                Committee on Immunization Practices (as defined in 
                subparagraph (B)):
                            ``(i) No application of deductible.--The 
                        deductible under paragraph (1) shall not apply 
                        with respect to such vaccine.
                            ``(ii) No application of coinsurance or any 
                        other cost-sharing.--There shall be no 
                        coinsurance or other cost-sharing under this 
                        part with respect to such vaccine, regardless 
                        of whether for costs below, at, or above the 
                        initial coverage limit under paragraph (3) or 
                        the out-of-pocket threshold under paragraph 
                        (4).
                    ``(B) Adult vaccines recommended by the advisory 
                committee on immunization practices.--For purposes of 
                this paragraph, the term `adult vaccine recommended by 
                the Advisory Committee on Immunization Practices' means 
                a covered part D drug that is a vaccine licensed under 
                section 351 of the Public Health Service Act for use by 
                adult populations and administered in accordance with 
                recommendations of the Advisory Committee on 
                Immunization Practices of the Centers for Disease 
                Control and Prevention.''; and
            (2) in subsection (c), by adding at the end the following 
        new paragraph:
            ``(5) Treatment of cost-sharing for adult vaccines 
        recommended by the advisory committee on immunization 
        practices.--The coverage is in accordance with subsection 
        (b)(9).''.
    (b) Conforming Amendments to Cost-Sharing for Low-Income 
Individuals.--Section 1860D-14(a) of the Social Security Act (42 U.S.C. 
1395w-114(a)), as amended by section 501, is further amended--
            (1) in paragraph (1)(D), in each of clauses (ii) and (iii), 
        by striking ``In the case'' and inserting ``Subject to 
        paragraph (6), in the case'';
            (2) in paragraph (2)--
                    (A) in subparagraph (B), by striking ``A 
                reduction'' and inserting ``Subject to paragraph (6), a 
                reduction'';
                    (B) in subparagraph (D), by striking ``The 
                substitution'' and inserting ``Subject to paragraph 
                (6), the substitution''; and
                    (C) in subparagraph (E), by striking ``subsection 
                (c)'' and inserting ``paragraph (6) and subsection 
                (c)''; and
            (3) by adding at the end the following new paragraph:
            ``(6) No application of cost-sharing for adult vaccines 
        recommended by the advisory committee on immunization 
        practices.--For plan years beginning on or after January 1, 
        2024, there shall be no cost-sharing under this section, 
        including no annual deductible applicable under this section, 
        with respect to an adult vaccine recommended by the Advisory 
        Committee on Immunization Practices (as defined in subparagraph 
        (B) of such section).''.
    (c) Rule of Construction.--Nothing in this section shall be 
construed as limiting coverage under part D of title XVIII of the 
Social Security Act for vaccines that are not recommended by the 
Advisory Committee on Immunization Practices.
    (d) Implementation for 2024.--The Secretary shall implement this 
section, including the amendments made by this section, for 2024 by 
program instruction or otherwise.

SEC. 503. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS DURING INITIAL 
              PERIOD.

    Section 1847A(c)(4) of the Social Security Act (42 U.S.C. 1395w-
3a(c)(4)) is amended--
            (1) in each of subparagraphs (A) and (B), by redesignating 
        clauses (i) and (ii) as subclauses (I) and (II), respectively, 
        and moving such subclauses 2 ems to the right;
            (2) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii) and moving such clauses 2 ems to the right;
            (3) by striking ``unavailable.--In the case'' and inserting 
        ``unavailable.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                the case''; and
            (4) by adding at the end the following new subparagraph:
                    ``(B) Limitation on payment amount for biosimilar 
                biological products during initial period.--In the case 
                of a biosimilar biological product furnished on or 
                after July 1, 2023, during the initial period described 
                in subparagraph (A) with respect to the biosimilar 
                biological product, the amount payable under this 
                section for the biosimilar biological product is the 
                lesser of the following:
                            ``(i) The amount determined under clause 
                        (ii) of such subparagraph for the biosimilar 
                        biological product.
                            ``(ii) The amount determined under 
                        subsection (b)(1)(B) for the reference 
                        biological product.''.

SEC. 504. TEMPORARY INCREASE IN MEDICARE PART B PAYMENT FOR CERTAIN 
              BIOSIMILAR BIOLOGICAL PRODUCTS.

    Section 1847A(b)(8) of the Social Security Act (42 U.S.C. 1395w-
3a(b)(8)) is amended--
            (1) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively, and moving the margin of each such 
        redesignated clause 2 ems to the right;
            (2) by striking ``product.--The amount'' and inserting the 
        following: ``product.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                amount''; and
            (3) by adding at the end the following new subparagraph:
                    ``(B) Temporary payment increase.--
                            ``(i) In general.--In the case of a 
                        qualifying biosimilar biological product that 
                        is furnished during the applicable 5-year 
                        period for such product, the amount specified 
                        in this paragraph for such product with respect 
                        to such period is the sum determined under 
                        subparagraph (A), except that clause (ii) of 
                        such subparagraph shall be applied by 
                        substituting `8 percent' for `6 percent'.
                            ``(ii) Applicable 5-year period.--For 
                        purposes of clause (i), the applicable 5-year 
                        period for a qualifying biosimilar biological 
                        product is--
                                    ``(I) in the case of such a product 
                                for which payment was made under this 
                                paragraph as of March 31, 2022, the 5-
                                year period beginning on April 1, 2022; 
                                and
                                    ``(II) in the case of such a 
                                product for which payment is first made 
                                under this paragraph during a calendar 
                                quarter during the period beginning 
                                April 1, 2022, and ending March 31, 
                                2027, the 5-year period beginning on 
                                the first day of such calendar quarter 
                                during which such payment is first 
                                made.
                            ``(iii) Qualifying biosimilar biological 
                        product defined.--For purposes of this 
                        subparagraph, the term `qualifying biosimilar 
                        biological product' means a biosimilar 
                        biological product described in paragraph 
                        (1)(C) with respect to which--
                                    ``(I) in the case of a product 
                                described in clause (ii)(I), the 
                                average sales price under paragraph 
                                (8)(A)(i) for a calendar quarter during 
                                the 5-year period described in such 
                                clause is not more than the average 
                                sales price under paragraph (4)(A) for 
                                such quarter for the reference 
                                biological product; and
                                    ``(II) in the case of a product 
                                described in clause (ii)(II), the 
                                average sales price under paragraph 
                                (8)(A)(i) for a calendar quarter during 
                                the 5-year period described in such 
                                clause is not more than the average 
                                sales price under paragraph (4)(A) for 
                                such quarter for the reference 
                                biological product.''.

SEC. 505. IMPROVING ACCESS TO ADULT VACCINES UNDER MEDICAID AND CHIP.

    (a) Medicaid.--
            (1) Requiring coverage of adult vaccinations.--
                    (A) In general.--Section 1902(a)(10)(A) of the 
                Social Security Act (42 U.S.C. 1396a(a)(10)(A)) is 
                amended in the matter preceding clause (i) by inserting 
                ``(13)(B),'' after ``(5),''.
                    (B) Medically needy.--Section 1902(a)(10)(C)(iv) of 
                such Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is amended by 
                inserting ``, (13)(B),'' after ``(5)''.
            (2) No cost-sharing for vaccinations.--
                    (A) General cost-sharing limitations.--Section 1916 
                of the Social Security Act (42 U.S.C. 1396o) is 
                amended--
                            (i) in subsection (a)(2)--
                                    (I) in subparagraph (G), by 
                                inserting a comma after ``State plan'';
                                    (II) in subparagraph (H), by 
                                striking ``; or'' and inserting a 
                                comma;
                                    (III) in subparagraph (I), by 
                                striking ``; and'' and inserting ``, 
                                or''; and
                                    (IV) by adding at the end the 
                                following new subparagraph:
                    ``(J) vaccines described in section 1905(a)(13)(B) 
                and the administration of such vaccines; and''; and
                            (ii) in subsection (b)(2)--
                                    (I) in subparagraph (G), by 
                                inserting a comma after ``State plan'';
                                    (II) in subparagraph (H), by 
                                striking ``; or'' and inserting a 
                                comma;
                                    (III) in subparagraph (I), by 
                                striking ``; and'' and inserting ``, 
                                or''; and
                                    (IV) by adding at the end the 
                                following new subparagraph:
                    ``(J) vaccines described in section 1905(a)(13)(B) 
                and the administration of such vaccines; and''.
                    (B) Application to alternative cost-sharing.--
                Section 1916A(b)(3)(B) of the Social Security Act (42 
                U.S.C. 1396o-1(b)(3)(B)) is amended by adding at the 
                end the following new clause:
                            ``(xiv) Vaccines described in section 
                        1905(a)(13)(B) and the administration of such 
                        vaccines.''.
            (3) Increased fmap for adult vaccines.--Section 1905(b) of 
        the Social Security Act (42 U.S.C. 1396d(b)) is amended--
                    (A) by striking ``and (5)'' and inserting ``(5)'';
                    (B) by striking ``services and vaccines described 
                in subparagraphs (A) and (B) of subsection (a)(13), and 
                prohibits cost-sharing for such services and vaccines'' 
                and inserting ``services described in subsection 
                (a)(13)(A), and prohibits cost-sharing for such 
                services'';
                    (C) by striking ``medical assistance for such 
                services and vaccines'' and inserting ``medical 
                assistance for such services''; and
                    (D) by inserting ``, and (6) during the first 8 
                fiscal quarters beginning on or after the effective 
                date of this clause, in the case of a State which, as 
                of the date of enactment of the Act titled `An Act to 
                provide for reconciliation pursuant to title II of S. 
                Con. Res. 14', provides medical assistance for vaccines 
                described in subsection (a)(13)(B) and their 
                administration and prohibits cost-sharing for such 
                vaccines, the Federal medical assistance percentage, as 
                determined under this subsection and subsection (y), 
                shall be increased by 1 percentage point with respect 
                to medical assistance for such vaccines'' before the 
                first period.
    (b) CHIP.--
            (1) Requiring coverage of adult vaccinations.--Section 
        2103(c) of the Social Security Act (42 U.S.C. 1397cc(c)) is 
        amended by adding at the end the following paragraph:
            ``(12) Required coverage of approved, recommended adult 
        vaccines and their administration.--Regardless of the type of 
        coverage elected by a State under subsection (a), if the State 
        child health plan or a waiver of such plan provides child 
        health assistance or pregnancy-related assistance (as defined 
        in section 2112) to an individual who is 19 years of age or 
        older, such assistance shall include coverage of vaccines 
        described in section 1905(a)(13)(B) and their 
        administration.''.
            (2) No cost-sharing for vaccinations.--Section 2103(e)(2) 
        of such Act (42 U.S.C. 1397cc(e)(2)) is amended by inserting 
        ``vaccines described in subsection (c)(12) (and the 
        administration of such vaccines),'' after ``in vitro diagnostic 
        products described in subsection (c)(10) (and administration of 
        such products),''.
    (c) Effective Date.--The amendments made by this section take 
effect on the 1st day of the 1st fiscal quarter that begins on or after 
the date that is 1 year after the date of enactment of this Act and 
shall apply to expenditures made under a State plan or waiver of such 
plan under title XIX of the Social Security Act (42 U.S.C. 1396 through 
1396w-6) or under a State child health plan or waiver of such plan 
under title XXI of such Act (42 U.S.C. 1397aa through 1397mm) on or 
after such effective date.

                 TITLE VI--ADDITIONAL INSULIN POLICIES

SEC. 601. ERISA REQUIREMENTS WITH RESPECT TO COST-SHARING FOR CERTAIN 
              INSULIN PRODUCTS.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et 
seq.) is amended by adding at the end the following:

``SEC. 726. REQUIREMENTS WITH RESPECT TO COST-SHARING FOR CERTAIN 
              INSULIN PRODUCTS.

    ``(a) In General.--For plan years beginning on or after January 1, 
2023, a group health plan or health insurance issuer offering group 
health insurance coverage shall provide coverage of selected insulin 
products, and with respect to such products, shall not--
            ``(1) apply any deductible; or
            ``(2) impose any cost-sharing in excess of the lesser of, 
        per 30-day supply--
                    ``(A) $35; or
                    ``(B) the amount equal to 25 percent of the 
                negotiated price of the selected insulin product net of 
                all price concessions received by or on behalf of the 
                plan or coverage, including price concessions received 
                by or on behalf of third-party entities providing 
                services to the plan or coverage, such as pharmacy 
                benefit management services.
    ``(b) Definitions.--In this section:
            ``(1) Selected insulin products.--The term `selected 
        insulin products' means at least one of each dosage form (such 
        as vial, pump, or inhaler dosage forms) of each different type 
        (such as rapid-acting, short-acting, intermediate-acting, long-
        acting, ultra long-acting, and premixed) of insulin (as defined 
        below), when available, as selected by the group health plan or 
        health insurance issuer.
            ``(2) Insulin defined.--The term `insulin' means insulin 
        that is licensed under subsection (a) or (k) of section 351 of 
        the Public Health Service Act (42 U.S.C. 262) and continues to 
        be marketed under such section, including any insulin product 
        that has been deemed to be licensed under section 351(a) of 
        such Act pursuant to section 7002(e)(4) of the Biologics Price 
        Competition and Innovation Act of 2009 (Public Law 111-148) and 
        continues to be marketed pursuant to such licensure.
    ``(c) Out-of-Network Providers.--Nothing in this section requires a 
plan or issuer that has a network of providers to provide benefits for 
selected insulin products described in this section that are delivered 
by an out-of-network provider, or precludes a plan or issuer that has a 
network of providers from imposing higher cost-sharing than the levels 
specified in subsection (a) for selected insulin products described in 
this section that are delivered by an out-of-network provider.
    ``(d) Rule of Construction.--Subsection (a) shall not be construed 
to require coverage of, or prevent a group health plan or health 
insurance coverage from imposing cost-sharing other than the levels 
specified in subsection (a) on, insulin products that are not selected 
insulin products, to the extent that such coverage is not otherwise 
required and such cost-sharing is otherwise permitted under Federal and 
applicable State law.
    ``(e) Application of Cost-Sharing Towards Deductibles and Out-of-
Pocket Maximums.--Any cost-sharing payments made pursuant to subsection 
(a)(2) shall be counted toward any deductible or out-of-pocket maximum 
that applies under the plan or coverage.''.
    (b) Clerical Amendment.--The table of contents in section 1 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et 
seq.) is amended by inserting after the item relating to section 725 
the following:

``Sec. 726. Requirements with respect to cost-sharing for certain 
                            insulin products.''.

SEC. 602. PUBLIC HEALTH SERVICE ACT REQUIREMENTS WITH RESPECT TO COST-
              SHARING FOR INSULIN PRODUCTS.

    (a) In General.--Part D of title XXVII of the Public Health Service 
Act (42 U.S.C. 300gg-111 et seq.) is amended by adding at the end the 
following:

``SEC. 2799A-11. REQUIREMENTS WITH RESPECT TO COST-SHARING FOR CERTAIN 
              INSULIN PRODUCTS.

    ``(a) In General.--For plan years beginning on or after January 1, 
2023, a group health plan or health insurance issuer offering group or 
individual health insurance coverage shall provide coverage of selected 
insulin products, and with respect to such products, shall not--
            ``(1) apply any deductible; or
            ``(2) impose any cost-sharing in excess of the lesser of, 
        per 30-day supply--
                    ``(A) $35; or
                    ``(B) the amount equal to 25 percent of the 
                negotiated price of the selected insulin product net of 
                all price concessions received by or on behalf of the 
                plan or coverage, including price concessions received 
                by or on behalf of third-party entities providing 
                services to the plan or coverage, such as pharmacy 
                benefit management services.
    ``(b) Definitions.--In this section:
            ``(1) Selected insulin products.--The term `selected 
        insulin products' means at least one of each dosage form (such 
        as vial, pump, or inhaler dosage forms) of each different type 
        (such as rapid-acting, short-acting, intermediate-acting, long-
        acting, ultra long-acting, and premixed) of insulin (as defined 
        below), when available, as selected by the group health plan or 
        health insurance issuer.
            ``(2) Insulin defined.--The term `insulin' means insulin 
        that is licensed under subsection (a) or (k) of section 351 and 
        continues to be marketed under such section, including any 
        insulin product that has been deemed to be licensed under 
        section 351(a) pursuant to section 7002(e)(4) of the Biologics 
        Price Competition and Innovation Act of 2009 and continues to 
        be marketed pursuant to such licensure.
    ``(c) Out-of-Network Providers.--Nothing in this section requires a 
plan or issuer that has a network of providers to provide benefits for 
selected insulin products described in this section that are delivered 
by an out-of-network provider, or precludes a plan or issuer that has a 
network of providers from imposing higher cost-sharing than the levels 
specified in subsection (a) for selected insulin products described in 
this section that are delivered by an out-of-network provider.
    ``(d) Rule of Construction.--Subsection (a) shall not be construed 
to require coverage of, or prevent a group health plan or health 
insurance coverage from imposing cost-sharing other than the levels 
specified in subsection (a) on, insulin products that are not selected 
insulin products, to the extent that such coverage is not otherwise 
required and such cost-sharing is otherwise permitted under Federal and 
applicable State law.
    ``(e) Application of Cost-Sharing Towards Deductibles and Out-of-
Pocket Maximums.--Any cost-sharing payments made pursuant to subsection 
(a)(2) shall be counted toward any deductible or out-of-pocket maximum 
that applies under the plan or coverage.''.
    (b) No Effect on Other Cost-Sharing.--Section 1302(d)(2) of the 
Patient Protection and Affordable Care Act (42 U.S.C. 18022(d)(2)) is 
amended by adding at the end the following new subparagraph:
                    ``(D) Special rule relating to insulin coverage.--
                The exemption of coverage of selected insulin products 
                (as defined in section 2799A-11(b) of the Public Health 
                Service Act) from the application of any deductible 
                pursuant to section 2799A-11(a)(1) of such Act, section 
                726(a)(1) of the Employee Retirement Income Security 
                Act of 1974, or section 9826(a)(1) of the Internal 
                Revenue Code of 1986 shall not be considered when 
                determining the actuarial value of a qualified health 
                plan under this subsection.''.
    (c) Coverage of Certain Insulin Products Under Catastrophic 
Plans.--Section 1302(e) of the Patient Protection and Affordable Care 
Act (42 U.S.C. 18022(e)) is amended by adding at the end the following:
            ``(4) Coverage of certain insulin products.--
                    ``(A) In general.--Notwithstanding paragraph 
                (1)(B)(i), a health plan described in paragraph (1) 
                shall provide coverage of selected insulin products, in 
                accordance with section 2799A-11 of the Public Health 
                Service Act, for a plan year before an enrolled 
                individual has incurred cost-sharing expenses in an 
                amount equal to the annual limitation in effect under 
                subsection (c)(1) for the plan year.
                    ``(B) Terminology.--For purposes of subparagraph 
                (A)--
                            ``(i) the term `selected insulin products' 
                        has the meaning given such term in section 
                        2799A-11(b) of the Public Health Service Act; 
                        and
                            ``(ii) the requirements of section 2799A-11 
                        of such Act shall be applied by deeming each 
                        reference in such section to `individual health 
                        insurance coverage' to be a reference to a plan 
                        described in paragraph (1).''.

SEC. 603. IRC REQUIREMENTS WITH RESPECT TO COST-SHARING FOR CERTAIN 
              INSULIN PRODUCTS.

    (a) In General.--Subchapter B of chapter 100 is amended by adding 
at the end the following new section:

``SEC. 9826. REQUIREMENTS WITH RESPECT TO COST-SHARING FOR CERTAIN 
              INSULIN PRODUCTS.

    ``(a) In General.--For plan years beginning on or after January 1, 
2023, a group health plan shall provide coverage of selected insulin 
products, and with respect to such products, shall not--
            ``(1) apply any deductible; or
            ``(2) impose any cost-sharing in excess of the lesser of, 
        per 30-day supply--
                    ``(A) $35; or
                    ``(B) the amount equal to 25 percent of the 
                negotiated price of the selected insulin product net of 
                all price concessions received by or on behalf of the 
                plan, including price concessions received by or on 
                behalf of third-party entities providing services to 
                the plan, such as pharmacy benefit management services.
    ``(b) Definitions.--In this section:
            ``(1) Selected insulin products.--The term `selected 
        insulin products' means at least one of each dosage form (such 
        as vial, pump, or inhaler dosage forms) of each different type 
        (such as rapid-acting, short-acting, intermediate-acting, long-
        acting, ultra long-acting, and premixed) of insulin (as defined 
        below), when available, as selected by the group health plan.
            ``(2) Insulin defined.--The term `insulin' means insulin 
        that is licensed under subsection (a) or (k) of section 351 of 
        the Public Health Service Act (42 U.S.C. 262) and continues to 
        be marketed under such section, including any insulin product 
        that has been deemed to be licensed under section 351(a) of 
        such Act pursuant to section 7002(e)(4) of the Biologics Price 
        Competition and Innovation Act of 2009 (Public Law 111-148) and 
        continues to be marketed pursuant to such licensure.
    ``(c) Out-of-Network Providers.--Nothing in this section requires a 
plan that has a network of providers to provide benefits for selected 
insulin products described in this section that are delivered by an 
out-of-network provider, or precludes a plan that has a network of 
providers from imposing higher cost-sharing than the levels specified 
in subsection (a) for selected insulin products described in this 
section that are delivered by an out-of-network provider.
    ``(d) Rule of Construction.--Subsection (a) shall not be construed 
to require coverage of, or prevent a group health plan from imposing 
cost-sharing other than the levels specified in subsection (a) on, 
insulin products that are not selected insulin products, to the extent 
that such coverage is not otherwise required and such cost-sharing is 
otherwise permitted under Federal and applicable State law.
    ``(e) Application of Cost-Sharing Towards Deductibles and Out-of-
Pocket Maximums.--Any cost-sharing payments made pursuant to subsection 
(a)(2) shall be counted toward any deductible or out-of-pocket maximum 
that applies under the plan.''.
    (b) Clerical Amendment.--The table of sections for subchapter B of 
chapter 100 is amended by adding at the end the following new item:

``Sec. 9826. Requirements with respect to cost-sharing for certain 
                            insulin products.''.
                                 <all>