Title: Lowering Prescription Drug Prices for America’s Seniors and Families Act of 2020
Policy area: Health

Summary:
Lowering Prescription Drug Prices for America's Seniors and Families Act of 2020
This bill makes a series of changes to requirements relating to prescription drug prices. Among other changes, the bill requires the Centers for Medicare & Medicaid Services to negotiate the prices of certain covered drugs under the Medicare prescription drug benefit, allows individuals to import certain drugs from Canada to fill personal prescriptions, and establishes specific enforcement actions against patent infringement agreements that involve generic drug manufacturers and have anticompetitive effects.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3384 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  2d Session
                                S. 3384

To allow for negotiation of prices for certain covered Medicare part D 
 drugs, to allow for importation by individuals of prescription drugs 
from Canada, to preserve access to affordable generics and biosimilars, 
  to increase the use of real-time benefit tools to lower beneficiary 
  costs, to establish a manufacturer discount program, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 3, 2020

  Ms. McSally introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To allow for negotiation of prices for certain covered Medicare part D 
 drugs, to allow for importation by individuals of prescription drugs 
from Canada, to preserve access to affordable generics and biosimilars, 
  to increase the use of real-time benefit tools to lower beneficiary 
  costs, to establish a manufacturer discount program, 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.

    This Act may be cited as the ``Lowering Prescription Drug Prices 
for America's Seniors and Families Act of 2020''.

SEC. 2. NEGOTIATION OF PRICES FOR CERTAIN COVERED PART D DRUGS 
              FOLLOWING PERIOD OF EXCLUSIVITY.

    (a) In General.--Section 1860D-11 of the Social Security Act (42 
U.S.C. 1395w-111) is amended--
            (1) in subsection (i), by striking ``In order'' and 
        inserting ``Except as provided in subsection (k), in order''; 
        and
            (2) by adding at the end the following new subsection:
    ``(k) Negotiation of Prices for Certain Covered Part D Drugs 
Following Period of Exclusivity.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, subject to paragraph (2), the Secretary shall, for plan 
        years beginning on or after the date on which the applicable 
        period with respect to an applicable covered part D drug (as 
        those terms are defined in paragraph (3)) expires--
                    ``(A) negotiate directly with pharmaceutical 
                manufacturers the prices that may be charged to PDP 
                sponsors and MA organizations for such applicable 
                covered part D drug; and
                    ``(B) complete such negotiations not later than 3 
                months prior to the beginning of each such plan year.
            ``(2) Use of medicaid best price if negotiations fail.--In 
        the case where the Secretary is not able to reach an agreement 
        under paragraph (1) with respect to an applicable covered part 
        D drug for a plan year by the date specified in paragraph 
        (1)(B), the price that a pharmaceutical manufacturer may charge 
        to PDP sponsors and MA organizations for such applicable 
        covered part D drug for the plan year shall be determined using 
        the methodology used to determine the best price of a covered 
        outpatient drug under section 1927(c)(1)(C).
            ``(3) Definitions.--In this subsection:
                    ``(A) Applicable covered part d drug.--The term 
                `applicable covered part D drug' means a covered part D 
                drug for which there is in effect--
                            ``(i) in the case of a drug approved under 
                        section 505 of the Federal Food, Drug, and 
                        Cosmetic Act, a patent on an active ingredient 
                        of the drug; or
                            ``(ii) in the case of a biological product, 
                        a patent on the structure of the biological 
                        product.
                A patent shall be considered to be in effect for 
                purposes of this subparagraph during any extension of 
                the patent term under section 156 of title 35, United 
                States Code.
                    ``(B) Applicable period.--The term `applicable 
                period' means, with respect to an applicable covered 
                part D drug, any applicable patent described in 
                subparagraph (A).
            ``(4) Condition of coverage.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                order for coverage to be available under this part for 
                an applicable covered part D drug (as defined in 
                section 1860D-2(e)) of a manufacturer with respect to a 
                plan year beginning on or after the date on which the 
                applicable period with respect to such covered part D 
                drug expires, the manufacturer must provide such 
                applicable covered part D drug to PDP sponsors and MA 
                organizations at the price negotiated under paragraph 
                (1) or the price determined under paragraph (2), if 
                applicable, for the plan year.
                    ``(B) Authorizing coverage in certain 
                circumstances.--Subparagraph (A) shall not apply to the 
                dispensing of a covered part D drug if the Secretary 
                has made a determination that the availability of the 
                drug is essential to the health of beneficiaries under 
                this part.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to covered part D drugs dispensed on or after January 1, 2021.

SEC. 3. DRUG IMPORTATION.

    Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
381 et seq.) is amended by adding at the end the following:

``SEC. 810. IMPORTATION BY INDIVIDUALS OF PRESCRIPTION DRUGS FROM 
              CANADA.

    ``(a) In General.--Notwithstanding any other provision of this Act, 
not later than 180 days after the date of enactment of this section, 
the Secretary shall promulgate regulations permitting individuals to 
safely import into the United States a prescription drug described in 
subsection (b).
    ``(b) Prescription Drug.--A prescription drug described in this 
subsection--
            ``(1) is a prescription drug that--
                    ``(A) is purchased from an approved Canadian 
                pharmacy;
                    ``(B) is dispensed by a pharmacist licensed to 
                practice pharmacy and dispense prescription drugs in 
                Canada;
                    ``(C) is purchased for personal use by the 
                individual, not for resale, in quantities that do not 
                exceed a 90-day supply;
                    ``(D) is filled using a valid prescription issued 
                by a physician licensed to practice in a State in the 
                United States; and
                    ``(E) has the same active ingredient or 
                ingredients, route of administration, dosage form, and 
                strength as a prescription drug approved by the 
                Secretary under chapter V; and
            ``(2) does not include--
                    ``(A) a controlled substance (as defined in section 
                102 of the Controlled Substances Act);
                    ``(B) a biological product (as defined in section 
                351 of the Public Health Service Act);
                    ``(C) an infused drug (including a peritoneal 
                dialysis solution);
                    ``(D) an intravenously injected drug;
                    ``(E) a drug that is inhaled during surgery;
                    ``(F) a parenteral drug;
                    ``(G) a drug manufactured through one or more 
                biotechnology processes, including--
                            ``(i) a therapeutic DNA plasmid product;
                            ``(ii) a therapeutic synthetic peptide 
                        product of not more than 40 amino acids;
                            ``(iii) a monoclonal antibody product for 
                        in vivo use; and
                            ``(iv) a therapeutic recombinant DNA-
                        derived product;
                    ``(H) a drug required to be refrigerated at any 
                time during manufacturing, packing, processing, or 
                holding; or
                    ``(I) a photoreactive drug.
    ``(c) Approved Canadian Pharmacy.--
            ``(1) In general.--In this section, an approved Canadian 
        pharmacy is a pharmacy that--
                    ``(A) is located in Canada; and
                    ``(B) the Secretary certifies--
                            ``(i) is licensed to operate and dispense 
                        prescription drugs to individuals in Canada; 
                        and
                            ``(ii) meets the criteria under paragraph 
                        (3).
            ``(2) Publication of approved canadian pharmacies.--The 
        Secretary shall publish on the internet website of the Food and 
        Drug Administration a list of approved Canadian pharmacies, 
        including the internet website address of each such approved 
        Canadian pharmacy, from which individuals may purchase 
        prescription drugs in accordance with subsection (a).
            ``(3) Additional criteria.--To be an approved Canadian 
        pharmacy, the Secretary shall certify that the pharmacy--
                    ``(A) has been in existence for a period of at 
                least 5 years preceding the date of such certification 
                and has a purpose other than to participate in the 
                program established under this section;
                    ``(B) operates in accordance with pharmacy 
                standards set forth by the provincial pharmacy rules 
                and regulations enacted in Canada;
                    ``(C) has processes established by the pharmacy, or 
                participates in another established process, to certify 
                that the physical premises and data reporting 
                procedures and licenses are in compliance with all 
                applicable laws and regulations, and has implemented 
                policies designed to monitor ongoing compliance with 
                such laws and regulations;
                    ``(D) conducts or commits to participate in ongoing 
                and comprehensive quality assurance programs and 
                implements such quality assurance measures, including 
                blind testing, to ensure the veracity and reliability 
                of the findings of the quality assurance program;
                    ``(E) agrees that laboratories approved by the 
                Secretary shall be used to conduct product testing to 
                determine the safety and efficacy of sample 
                pharmaceutical products;
                    ``(F) has established, or will establish or 
                participate in, a process for resolving grievances and 
                will be held accountable for violations of established 
                guidelines and rules;
                    ``(G) does not resell products from online 
                pharmacies located outside Canada to customers in the 
                United States; and
                    ``(H) meets any other criteria established by the 
                Secretary.''.

SEC. 4. PRESERVING ACCESS THROUGH FTC ACTIONS.

    (a) Preserve Access to Affordable Generics and Biosimilars.--
            (1) Unlawful compensation for delay.--
                    (A) In general.--The Federal Trade Commission Act 
                (15 U.S.C. 41 et seq.) is amended by inserting after 
                section 26 (15 U.S.C. 57c-2) the following:

``SEC. 27. PRESERVING ACCESS TO AFFORDABLE GENERICS AND BIOSIMILARS.

    ``(a) In General.--
            ``(1) Enforcement proceeding.--The Commission may initiate 
        a proceeding to enforce the provisions of this section against 
        the parties to any agreement resolving or settling, on a final 
        or interim basis, a patent infringement claim, in connection 
        with the sale of a drug product or biological product.
            ``(2) Presumption and violation.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                such a proceeding, an agreement shall be presumed to 
                have anticompetitive effects and shall be a violation 
                of this section if--
                            ``(i) an ANDA filer or a biosimilar 
                        biological product application filer receives 
                        anything of value, including an exclusive 
                        license; and
                            ``(ii) the ANDA filer or biosimilar 
                        biological product application filer agrees to 
                        limit or forego research, development, 
                        manufacturing, marketing, or sales of the ANDA 
                        product or biosimilar biological product, as 
                        applicable, for any period of time.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                if the parties to such agreement demonstrate by clear 
                and convincing evidence that--
                            ``(i) the value described in subparagraph 
                        (A)(i) is compensation solely for other goods 
                        or services that the ANDA filer or biosimilar 
                        biological product application filer has 
                        promised to provide; or
                            ``(ii) the procompetitive benefits of the 
                        agreement outweigh the anticompetitive effects 
                        of the agreement.
    ``(b) Limitations.--In determining whether the settling parties 
have met their burden under subsection (a)(2)(B), the fact finder shall 
not presume--
            ``(1) that entry would not have occurred until the 
        expiration of the relevant patent or statutory exclusivity; or
            ``(2) that the agreement's provision for entry of the ANDA 
        product or biosimilar biological product prior to the 
        expiration of the relevant patent or statutory exclusivity 
        means that the agreement is procompetitive.
    ``(c) Exclusions.--Nothing in this section shall prohibit a 
resolution or settlement of a patent infringement claim in which the 
consideration granted by the NDA holder or biological product license 
holder to the ANDA filer or biosimilar biological product application 
filer, respectively, as part of the resolution or settlement includes 
only one or more of the following:
            ``(1) The right to market the ANDA product or biosimilar 
        biological product in the United States prior to the expiration 
        of--
                    ``(A) any patent that is the basis for the patent 
                infringement claim; or
                    ``(B) any patent right or other statutory 
                exclusivity that would prevent the marketing of such 
                ANDA product or biosimilar biological product.
            ``(2) A payment for reasonable litigation expenses not to 
        exceed $7,500,000.
            ``(3) A covenant not to sue on any claim that the ANDA 
        product or biosimilar biological product infringes a United 
        States patent.
    ``(d) Enforcement.--
            ``(1) Enforcement.--A violation of this section shall be 
        treated as a violation of section 5.
            ``(2) Judicial review.--
                    ``(A) In general.--Any party that is subject to a 
                final order of the Commission, issued in an 
                administrative adjudicative proceeding under the 
                authority of subsection (a)(1), may, within 30 days of 
                the issuance of such order, petition for review of such 
                order in--
                            ``(i) the United States Court of Appeals 
                        for the District of Columbia Circuit;
                            ``(ii) the United States Court of Appeals 
                        for the circuit in which the ultimate parent 
                        entity, as defined in section 801.1(a)(3) of 
                        title 16, Code of Federal Regulations, or any 
                        successor thereto, of the NDA holder or 
                        biological product license holder is 
                        incorporated as of the date that the NDA or 
                        biological product license application, as 
                        applicable, is filed with the Commissioner of 
                        Food and Drugs; or
                            ``(iii) the United States Court of Appeals 
                        for the circuit in which the ultimate parent 
                        entity of the ANDA filer or biosimilar 
                        biological product application filer is 
                        incorporated as of the date that the ANDA or 
                        biosimilar biological product application is 
                        filed with the Commissioner of Food and Drugs.
                    ``(B) Treatment of findings.--In a proceeding for 
                judicial review of a final order of the Commission, the 
                findings of the Commission as to the facts, if 
                supported by evidence, shall be conclusive.
    ``(e) Antitrust Laws.--Nothing in this section shall modify, 
impair, limit, or supersede the applicability of the antitrust laws as 
defined in subsection (a) of the first section of the Clayton Act (15 
U.S.C. 12(a)), and of section 5 of this Act to the extent that section 
5 applies to unfair methods of competition. Nothing in this section 
shall modify, impair, limit, or supersede the right of an ANDA filer or 
biosimilar biological product application filer to assert claims or 
counterclaims against any person, under the antitrust laws or other 
laws relating to unfair competition.
    ``(f) Penalties.--
            ``(1) Forfeiture.--Each party that violates or assists in 
        the violation of this section shall forfeit and pay to the 
        United States a civil penalty sufficient to deter violations of 
        this section, but in no event greater than 3 times the value 
        received by the party that is reasonably attributable to the 
        violation of this section. If no such value has been received 
        by the NDA holder or biological product license holder, the 
        penalty to the NDA holder or biological product license holder 
        shall be sufficient to deter violations, but in no event 
        greater than 3 times the value given to the ANDA filer or 
        biosimilar biological product application filer reasonably 
        attributable to the violation of this section. Such penalty 
        shall accrue to the United States and may be recovered in a 
        civil action brought by the Commission, in its own name by any 
        of its attorneys designated by it for such purpose, in a 
        district court of the United States against any party that 
        violates this section. In such actions, the United States 
        district courts are empowered to grant mandatory injunctions 
        and such other and further equitable relief as they deem 
        appropriate.
            ``(2) Cease and desist.--
                    ``(A) In general.--If the Commission has issued a 
                cease and desist order with respect to a party in an 
                administrative adjudicative proceeding under the 
                authority of subsection (a)(1), an action brought 
                pursuant to paragraph (1) may be commenced against such 
                party at any time before the expiration of 1 year after 
                such order becomes final pursuant to section 5(g).
                    ``(B) Exception.--In an action under subparagraph 
                (A), the findings of the Commission as to the material 
                facts in the administrative adjudicative proceeding 
                with respect to the violation of this section by a 
                party shall be conclusive unless--
                            ``(i) the terms of such cease and desist 
                        order expressly provide that the Commission's 
                        findings shall not be conclusive; or
                            ``(ii) the order became final by reason of 
                        section 5(g)(1), in which case such finding 
                        shall be conclusive if supported by evidence.
            ``(3) Civil penalty.--In determining the amount of the 
        civil penalty described in this section, the court shall take 
        into account--
                    ``(A) the nature, circumstances, extent, and 
                gravity of the violation;
                    ``(B) with respect to the violator, the degree of 
                culpability, any history of violations, the ability to 
                pay, any effect on the ability to continue doing 
                business, profits earned by the NDA holder or 
                biological product license holder, compensation 
                received by the ANDA filer or biosimilar biological 
                product application filer, and the amount of commerce 
                affected; and
                    ``(C) other matters that justice requires.
            ``(4) Remedies in addition.--Remedies provided in this 
        subsection are in addition to, and not in lieu of, any other 
        remedy provided by Federal law. Nothing in this paragraph shall 
        be construed to affect any authority of the Commission under 
        any other provision of law.
    ``(g) Definitions.--In this section:
            ``(1) Agreement.--The term `agreement' means anything that 
        would constitute an agreement under section 1 of the Sherman 
        Act (15 U.S.C. 1) or section 5 of this Act.
            ``(2) Agreement resolving or settling a patent infringement 
        claim.--The term `agreement resolving or settling a patent 
        infringement claim' includes any agreement that is entered into 
        within 30 days of the resolution or the settlement of the 
        claim, or any other agreement that is contingent upon, provides 
        a contingent condition for, or is otherwise related to the 
        resolution or settlement of the claim.
            ``(3) ANDA.--The term `ANDA' means an abbreviated new drug 
        application filed under section 505(j) of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 355(j)) or a new drug 
        application filed under section 505(b)(2) of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 355(b)(2)).
            ``(4) ANDA filer.--The term `ANDA filer' means a party that 
        owns or controls an ANDA filed with the Food and Drug 
        Administration or has the exclusive rights under such ANDA to 
        distribute the ANDA product.
            ``(5) ANDA product.--The term `ANDA product' means the 
        product to be manufactured under the ANDA that is the subject 
        of the patent infringement claim.
            ``(6) Biological product.--The term `biological product' 
        has the meaning given such term in section 351(i)(1) of the 
        Public Health Service Act (42 U.S.C. 262(i)(1)).
            ``(7) Biological product license application.--The term 
        `biological product license application' means an application 
        under section 351(a) of the Public Health Service Act (42 
        U.S.C. 262(a)).
            ``(8) Biological product license holder.--The term 
        `biological product license holder' means--
                    ``(A) the holder of an approved biological product 
                license application for a biological product;
                    ``(B) a person owning or controlling enforcement of 
                any patents that claim the biological product that is 
                the subject of such approved application; or
                    ``(C) the predecessors, subsidiaries, divisions, 
                groups, and affiliates controlled by, controlling, or 
                under common control with any of the entities described 
                in subparagraphs (A) and (B) (such control to be 
                presumed by direct or indirect share ownership of 50 
                percent or greater), as well as the licensees, 
                licensors, successors, and assigns of each of the 
                entities.
            ``(9) Biosimilar biological product.--The term `biosimilar 
        biological product' means the product to be manufactured under 
        the biosimilar biological product application that is the 
        subject of the patent infringement claim.
            ``(10) Biosimilar biological product application.--The term 
        `biosimilar biological product application' means an 
        application under section 351(k) of the Public Health Service 
        Act (42 U.S.C. 262(k)) for licensure of a biological product as 
        biosimilar to, or interchangeable with, a reference product.
            ``(11) Biosimilar biological product application filer.--
        The term `biosimilar biological product application filer' 
        means a party that owns or controls a biosimilar biological 
        product application filed with the Food and Drug Administration 
        or has the exclusive rights under such application to 
        distribute the biosimilar biological product.
            ``(12) Drug product.--The term `drug product' has the 
        meaning given such term in section 314.3(b) of title 21, Code 
        of Federal Regulations (or any successor regulation).
            ``(13) NDA.--The term `NDA' means a new drug application 
        filed under section 505(b) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355(b)).
            ``(14) NDA holder.--The term `NDA holder' means--
                    ``(A) the holder of an approved NDA application for 
                a drug product;
                    ``(B) a person owning or controlling enforcement of 
                the patent listed in the Approved Drug Products With 
                Therapeutic Equivalence Evaluations (commonly known as 
                the `FDA Orange Book') in connection with the NDA; or
                    ``(C) the predecessors, subsidiaries, divisions, 
                groups, and affiliates controlled by, controlling, or 
                under common control with any of the entities described 
                in subparagraphs (A) and (B) (such control to be 
                presumed by direct or indirect share ownership of 50 
                percent or greater), as well as the licensees, 
                licensors, successors, and assigns of each of the 
                entities.
            ``(15) Party.--The term `party' means any person, 
        partnership, corporation, or other legal entity.
            ``(16) Patent infringement.--The term `patent infringement' 
        means infringement of any patent or of any filed patent 
        application, extension, reissue, renewal, division, 
        continuation, continuation in part, reexamination, patent term 
        restoration, patents of addition, and extensions thereof.
            ``(17) Patent infringement claim.--The term `patent 
        infringement claim' means any allegation made to an ANDA filer 
        or biosimilar biological product application filer, whether or 
        not included in a complaint filed with a court of law, that its 
        ANDA or ANDA product, or biological product license application 
        or biological product, may infringe any patent held by, or 
        exclusively licensed to, the NDA holder or biological product 
        license holder of the drug product or biological product, as 
        applicable.
            ``(18) Statutory exclusivity.--The term `statutory 
        exclusivity' means those prohibitions on the approval of drug 
        applications under clauses (ii) through (iv) of section 
        505(c)(3)(E) (5- and 3-year data exclusivity), section 527 
        (orphan drug exclusivity), or section 505A (pediatric 
        exclusivity) of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 355(c)(3)(E), 360cc, 355a), or on the licensing of 
        biological product applications under section 351(k)(7) (12-
        year exclusivity) or paragraph (2) or (3) of section 351(m) 
        (pediatric exclusivity) of the Public Health Service Act (42 
        U.S.C. 262) or under section 527 of the Federal Food, Drug, and 
        Cosmetic Act (orphan drug exclusivity).''.
                    (B) Effective date.--Section 27 of the Federal 
                Trade Commission Act, as added by this paragraph, shall 
                apply to all agreements described in section 27(a)(1) 
                of that Act entered into after June 17, 2013. Section 
                27(f) of the Federal Trade Commission Act, as added by 
                this paragraph, shall apply to agreements entered into 
                on or after the date of enactment of this Act.
            (2) Certification of agreements.--Section 1112 of the 
        Medicare Prescription Drug, Improvement, and Modernization Act 
        of 2003 (21 U.S.C. 355 note) is amended by adding at the end 
        the following:
    ``(d) Certification.--The Chief Executive Officer or the company 
official responsible for negotiating any agreement under subsection (a) 
or (b) that is required to be filed under subsection (c), within 30 
days after such filing, shall execute and file with the Assistant 
Attorney General and the Commission a certification as follows: `I 
declare that the following is true, correct, and complete to the best 
of my knowledge: The materials filed with the Federal Trade Commission 
and the Department of Justice under section 1112 of subtitle B of title 
XI of the Medicare Prescription Drug, Improvement, and Modernization 
Act of 2003, with respect to the agreement referenced in this 
certification--
            ```(1) represent the complete, final, and exclusive 
        agreement between the parties;
            ```(2) include any ancillary agreements that are contingent 
        upon, provide a contingent condition for, or are otherwise 
        related to, the referenced agreement; and
            ```(3) include written descriptions of any oral agreements, 
        representations, commitments, or promises between the parties 
        that are responsive to subsection (a) or (b) of such section 
        1112 and have not been reduced to writing.'.''.
            (3) Forfeiture of 180-day exclusivity period.--Section 
        505(j)(5)(D)(i)(V) of the Federal Food, Drug, and Cosmetic Act 
        (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by inserting 
        ``section 27 of the Federal Trade Commission Act or'' after 
        ``that the agreement has violated''.
            (4) Commission litigation authority.--Section 16(a)(2) of 
        the Federal Trade Commission Act (15 U.S.C. 56(a)(2)) is 
        amended--
                    (A) in subparagraph (D), by striking ``or'' after 
                the semicolon;
                    (B) in subparagraph (E), by inserting ``or'' after 
                the semicolon; and
                    (C) inserting after subparagraph (E) the following:
                    ``(F) under section 27;''.
            (5) Statute of limitations.--The Federal Trade Commission 
        shall commence any enforcement proceeding described in section 
        27 of the Federal Trade Commission Act, as added by paragraph 
        (1), except for an action described in section 27(f)(2) of the 
        Federal Trade Commission Act, not later than 6 years after the 
        date on which the parties to the agreement file the 
        certification under section 1112(d) of the Medicare 
        Prescription Drug Improvement and Modernization Act of 2003 (21 
        U.S.C. 355 note).
    (b) Citizen Petitions.--Section 505(q)(1) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 355(q)(1)) is amended--
            (1) in subparagraph (E)--
                    (A) by striking ``If the Secretary'' and inserting 
                the following:
                            ``(i) In general.--If the Secretary'';
                    (B) by striking the second sentence and inserting 
                the following:
                            ``(ii) Factors.--In determining whether a 
                        petition was submitted with the primary purpose 
                        of delaying the approval of an application, the 
                        Secretary shall consider--
                                    ``(I) whether it appears, based on 
                                the date that relevant information 
                                relied upon in the petition became 
                                known to the petitioner (or reasonably 
                                should have been known to the 
                                petitioner), as certified by the 
                                petitioner in accordance with 
                                subparagraph (H), that the petitioner 
                                has taken an unreasonable length of 
                                time to submit the petition;
                                    ``(II) whether the petitioner has 
                                submitted multiple or serial petitions 
                                raising issues that reasonably could 
                                have been known to the petitioner at 
                                the time of submission of the earlier 
                                petition or petitions;
                                    ``(III) whether the petition was 
                                submitted close in time to a known, 
                                first date upon which an application 
                                under subsection (b)(2) of this section 
                                or section 351(k) of the Public Health 
                                Service Act could be approved;
                                    ``(IV) whether the petition was 
                                submitted without any data or 
                                information in support of the 
                                scientific positions set forth in the 
                                petition;
                                    ``(V) whether the petition raises 
                                the same or substantially similar 
                                issues as a prior petition to which the 
                                Secretary has responded substantively 
                                already, particularly if the subsequent 
                                submission follows the earlier response 
                                closely in time;
                                    ``(VI) whether the petition 
                                concerns standards for approval of a 
                                drug for which the Secretary has 
                                provided an opportunity for public 
                                input, such as draft or final product-
                                specific guidance applicable to the 
                                drug, and the petitioner has not 
                                provided comment other than through the 
                                petition;
                                    ``(VII) whether the petition 
                                requests that other applicants meet 
                                standards for testing, data, or 
                                labeling for a drug that are more 
                                onerous or rigorous than the standards 
                                applicable to, as applicable, the 
                                listed drug, reference product, or 
                                petitioner's version of the same drug;
                                    ``(VIII) the history of the 
                                petitioner with the Food and Drug 
                                Administration, such as whether the 
                                petitioner has a history of submitting 
                                petitions that the Secretary has 
                                determined were submitted with the 
                                primary purpose of delay; and
                                    ``(IX) other relevant 
                                considerations, as the Secretary may 
                                describe in guidance.''; and
                    (C) by adding at the end the following:
                            ``(iii) Public availability.--The Secretary 
                        shall publish on the internet website of the 
                        Food and Drug Administration a list of any 
                        petitions that the Secretary determines were 
                        submitted for the primary purpose of delaying 
                        the approval of an application.
                            ``(iv) Referral to the federal trade 
                        commission.--The Secretary shall establish 
                        procedures for referring to the Federal Trade 
                        Commission any petition or supplement to a 
                        petition that the Secretary determines was 
                        submitted with the primary purpose of delaying 
                        approval of an application. Such procedures 
                        shall include notification to the petitioner 
                        and an opportunity for the petitioner to 
                        respond to the Secretary prior to referral to 
                        the Federal Trade Commission.''; and
            (2) by adding at the end the following:
                    ``(J) Timeline for submitting petitions.--The 
                Secretary may establish a time period after the 
                relevant information relied upon in a petition became 
                known to the petitioner (or reasonably should have been 
                known to a petitioner), as certified by the petitioner 
                in accordance with subparagraph (H), and any petition 
                that is submitted after such time period has passed 
                shall be summarily denied.''.
    (c) Federal Trade Commission Enforcement Against Sham Petitions.--
            (1) Definitions.--In this subsection:
                    (A) Commission.--The term ``Commission'' means the 
                Federal Trade Commission.
                    (B) Covered application.--The term ``covered 
                application'' means an application filed pursuant to 
                subsection (b)(2) or (j) of section 505 of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 355) or section 
                351(k) of the Public Health Service Act (42 U.S.C. 
                262(k)).
                    (C) Covered petition.--The term ``covered 
                petition'' means a petition, or a supplement to a 
                petition, filed under section 505(q) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 355(q)).
                    (D) Person.--The term ``person''--
                            (i) means an individual or entity; and
                            (ii) includes--
                                    (I) a successor and an assign of an 
                                entity; and
                                    (II) a joint venture, subsidiary, 
                                partnership, division, group, and 
                                affiliate controlled by an entity, and
                                    (III) a successor and an assign of 
                                a joint venture, subsidiary, 
                                partnership, division, group, and 
                                affiliate controlled by an entity.
                    (E) Series of covered petitions.--The term ``series 
                of covered petitions'' means any group of more than 1 
                covered petition relating to the same covered 
                application.
                    (F) Sham.--The term ``sham'' means a covered 
                petition that is objectively baseless and that attempts 
                to use a governmental process, as opposed to the 
                outcome of that process, to interfere with the business 
                of a competitor, or a series of covered petitions that 
                attempts to use a governmental process, as opposed to 
                the outcome of that process, to interfere with the 
                business of a competitor.
            (2) Violation.--A person submitting or causing the 
        submission of a covered petition or a series of covered 
        petitions that is a sham shall be liable for engaging in an 
        unfair method of competition under section 5(a)(1) of the 
        Federal Trade Commission Act (15 U.S.C. 45(a)(1)).
            (3) Civil action.--
                    (A) In general.--If the Commission has reason to 
                believe that the submission of a covered petition or a 
                series of covered petitions constitutes a violation of 
                section 5(a)(1) of the Federal Trade Commission Act (15 
                U.S.C. 45(a)(1)), the Commission may commence a civil 
                action to recover a civil penalty and seek other 
                appropriate relief in a district court of the United 
                States against any person that submitted or caused to 
                be submitted such covered petition or such series of 
                covered petitions, including successors or assigns.
                    (B) Presumption.--In a civil action under 
                subparagraph (A), a covered petition shall be presumed 
                to be part of a series of covered petitions that is a 
                sham under paragraph (2) of this subsection if--
                            (i) the Secretary of Health and Human 
                        Services--
                                    (I) has determined that the covered 
                                petition was submitted with the primary 
                                purpose of delaying the approval of a 
                                covered application; and
                                    (II) has referred such 
                                determination to the Federal Trade 
                                Commission in writing, including a 
                                reasoned basis for the determination; 
                                and
                            (ii) the covered petition was part of a 
                        series of covered petitions.
                    (C) Exception.--The presumption in subparagraph (B) 
                shall not apply if the defendant establishes, by a 
                preponderance of the evidence, that the series of 
                covered petitions that includes the covered petition 
                referred to the Commission by the Secretary of Health 
                and Human Services is not a sham.
                    (D) Civil penalty.--In an action under subparagraph 
                (A), any person that has been found liable for a 
                violation of section 5(a)(1) of the Federal Trade 
                Commission Act (15 U.S.C. 45(a)(1)) shall be subject to 
                a civil penalty for each violation of not more than the 
                greater of--
                            (i) any revenue earned from the sale by 
                        such person of any drug product, referenced in 
                        a covered application that was the subject of a 
                        covered petition or a series of covered 
                        petitions that is a sham, during the period in 
                        which the covered petition or series of covered 
                        petitions was under review by the Secretary of 
                        Health and Human Services; or
                            (ii) $50,000 for each calendar day that 
                        each covered petition that is a sham or that 
                        was part of a series of covered petitions that 
                        is a sham was under review by the Secretary of 
                        Health and Human Services.
                    (E) Antitrust laws.--Nothing in this subsection 
                shall modify, impair, limit, or supersede the 
                applicability of the antitrust laws as defined in 
                subsection (a) of the first section of the Clayton Act 
                (15 U.S.C. 12(a)), and of section 5 of the Federal 
                Trade Commission Act (15 U.S.C. 45) to the extent that 
                it applies to unfair methods of competition.
                    (F) Rule of construction.--The civil penalty 
                provided in this paragraph is in addition to, and not 
                in lieu of, any other remedies provided by Federal law, 
                including under section 16 of the Clayton Act (15 
                U.S.C. 26) or under section 13(b) of the Federal Trade 
                Commission Act (15 U.S.C. 53(b)). Nothing in this 
                subparagraph shall be construed to affect any authority 
                of the Commission under any other provision of law.
            (4) Applicability.--This subsection shall apply to any 
        covered petition submitted on or after the date of enactment of 
        this Act.

SEC. 5. INCREASING THE USE OF REAL-TIME BENEFIT TOOLS TO LOWER 
              BENEFICIARY COSTS.

    (a) Requiring Prescription Drug Plan Sponsors and Medicare 
Advantage Organizations To Include Real-Time Benefit Information Under 
Medicare Part D.--Section 1860D-4 of the Social Security Act (42 U.S.C. 
1395w-104) is amended--
            (1) by redesignating subsection (m) (relating to program 
        integrity transparency measures), as added by section 6063(c) 
        of the Substance Use-Disorder Prevention that Promotes Opioid 
        Recovery and Treatment for Patients and Communities Act (Public 
        Law 115-271), as subsection (n); and
            (2) by adding at the end the following new subsection:
    ``(o) Real-Time Benefit Information.--
            ``(1) In general.--After the Secretary has adopted a 
        standard under paragraph (3) for electronic real-time benefit 
        tools, and at a time determined appropriate by the Secretary, a 
        PDP sponsor of a prescription drug plan shall implement one or 
        more of such tools that meet the requirements described in 
        paragraph (2).
            ``(2) Requirements.--For purposes of paragraph (1), the 
        requirements described in this paragraph, with respect to an 
        electronic real-time benefit tool, are that the tool is capable 
        of--
                    ``(A) integrating with electronic prescribing and 
                electronic health record systems of prescribing health 
                care professionals for the transmission of eligibility 
                and formulary and benefit information in real time to 
                such professionals; and
                    ``(B) with respect to a covered part D drug, 
                transmitting such information specific to an individual 
                enrolled in a prescription drug plan, including the 
                following:
                            ``(i) A list of any clinically appropriate 
                        alternatives to such drug included in the 
                        formulary of such plan.
                            ``(ii) Cost-sharing information and the 
                        negotiated price for such drug and such 
                        alternatives at--
                                    ``(I) multiple pharmacy options, 
                                including the individual's preferred 
                                pharmacy and, as applicable, other 
                                retail pharmacies and a mail order 
                                pharmacy; and
                                    ``(II) the formulary status of such 
                                drug and such alternatives and any 
                                prior authorization or other 
                                utilization management requirements 
                                applicable to such drug and such 
                                alternatives included in the formulary 
                                of such plan.
            ``(3) Standards.--In order to be treated (for purposes of 
        this subsection) as an electronic real-time benefit tool 
        described in paragraph (1), such tool shall comply with 
        technical standards adopted by the Secretary in consultation 
        with the National Coordinator for Health Information 
        Technology, the National Council for Prescription Drug 
        Programs, other standard setting organizations determined 
        appropriate by the Secretary, and stakeholders including PDP 
        sponsors, Medicare Advantage organizations, health care 
        professionals, and health information technology software 
        vendors.
            ``(4) Rule of construction.--Nothing in this subsection 
        shall be construed to prohibit the application of paragraph 
        (b)(7) of section 423.160 of title 42, Code of Federal 
        Regulations, as is to be added to such section pursuant to the 
        final rule published in the Federal Register on May 23, 2019, 
        and titled `Modernizing Part D and Medicare Advantage To Lower 
        Drug Prices and Reduce Out-of-Pocket Expenses' (84 Fed. Reg. 
        23832 through 23884).''.
    (b) Requiring Qualified Electronic Health Records To Include Real-
Time Benefit Tools.--Section 3000(13) of the Public Health Service Act 
(42 U.S.C. 300jj(13)) is amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) in subparagraph (B), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(C) includes, or is capable of including, a real-
                time benefit tool that conveys patient-specific real-
                time cost and coverage information with respect to 
                prescription drugs that, with respect to any health 
                information technology certified for electronic 
                prescribing, the technology shall be capable of 
                incorporating the information described in clauses (i) 
                and (ii) of paragraph (2)(B) of section 1860D-4(o) of 
                the Social Security Act at a time specified by the 
                Secretary but not before the Secretary adopts a 
                standard for such tools as described in paragraph (1) 
                of such section.''.
    (c) Inclusion of Use of Real-Time Electronic Information in Shared 
Decision Making Under MIPS.--Section 1848(q)(2)(B)(iii)(IV) of the 
Social Security Act (42 U.S.C. 1395w-4(q)(2)(B)(iii)(IV)) is amended by 
adding at the end the following new sentence: ``This subcategory shall 
include as an activity option, beginning with the performance period 
starting on January 1, 2021, use of a real-time benefit tool as 
described in 1860D-4(o).''.

SEC. 6. MEDICARE PART D MODERNIZATION 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 2022 
                and for costs above the annual deductible specified in 
                paragraph (1) and up to the annual out-of-pocket 
                threshold specified in paragraph (4)(B) for 2022 and 
                each 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 2022,'' after ``paragraph (4),''; and
                            (ii) in clause (ii)(III), by striking ``and 
                        each subsequent year'' and inserting ``and 
                        2021''; and
                    (C) in subparagraph (D)--
                            (i) in clause (i)--
                                    (I) in the matter preceding 
                                subclause (I), by inserting ``for a 
                                year preceding 2022,'' after 
                                ``paragraph (4),''; and
                                    (II) in subclause (I)(bb), by 
                                striking ``a year after 2018'' and 
                                inserting ``each of years 2018 through 
                                2021''; and
                            (ii) in clause (ii)(V), by striking ``2019 
                        and each subsequent year'' and inserting ``each 
                        of years 2019 through 2021'';
            (2) in paragraph (3)(A)--
                    (A) in the matter preceding clause (i), by 
                inserting ``for a year preceding 2022,'' after ``and 
                (4),''; and
                    (B) in clause (ii), by striking ``for a subsequent 
                year'' and inserting ``for each of years 2007 through 
                2021'';
            (3) in paragraph (4)--
                    (A) in subparagraph (A)--
                            (i) in clause (i)--
                                    (I) by redesignating subclauses (I) 
                                and (II) as items (aa) and (bb), 
                                respectively, and indenting 
                                appropriately;
                                    (II) in the matter preceding item 
                                (aa), as redesignated by subclause (I), 
                                by striking ``is equal to the greater 
                                of--'' and inserting ``is equal to--
                                    ``(I) for a year preceding 2022, 
                                the greater of--'';
                                    (III) by striking the period at the 
                                end of item (bb), as redesignated by 
                                subclause (I), and inserting ``; and''; 
                                and
                                    (IV) by adding at the end the 
                                following:
                                    ``(II) for 2022 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 2021 for purposes of 
                                section 1860D-14(a)(1)(D)(iii).'';
                    (B) in subparagraph (B)--
                            (i) in clause (i)--
                                    (I) in subclause (V), by striking 
                                ``or'' at the end;
                                    (II) in subclause (VI)--
                                            (aa) by striking ``for a 
                                        subsequent year'' and inserting 
                                        ``for 2021''; 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 2022, is equal to 
                                $3,100; or
                                    ``(VIII) for a subsequent year, is 
                                equal to the amount specified in this 
                                subparagraph for the previous year, 
                                increased by the annual percentage 
                                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 2022 
                for amounts''; and
                    (D) in subparagraph (E), by striking ``In 
                applying'' and inserting ``For each of 2011 through 
                2021, in applying''.
    (b) Reduction in Beneficiary Coinsurance.--
            (1) In general.--Section 1860D-2(b)(2)(A) of the Social 
        Security Act (42 U.S.C. 1395w-102(b)(2)(A)), as amended by 
        subsection (a), is amended--
                    (A) by redesignating clauses (i) and (ii) as 
                subclauses (I) and (II) and moving such subclauses 2 
                ems to the right;
                    (B) by striking ``25 percent coinsurance.--Subject 
                to'' and inserting ``Coinsurance.--
                            ``(i) In general.--Subject to'';
                    (C) in each of subclauses (I) and (II), as 
                redesignated by subparagraph (A), by striking ``25 
                percent'' and inserting ``the applicable percentage (as 
                defined in clause (ii))''; and
                    (D) by adding at the end the following new clause:
                            ``(ii) Applicable percentage defined.--For 
                        purposes of clause (i), the term `applicable 
                        percentage' means--
                                    ``(I) for a year preceding 2022, 25 
                                percent; and
                                    ``(II) for 2022 and each subsequent 
                                year, 20 percent.''.
            (2) 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 striking ``25 percent'' and inserting ``the applicable 
        percentage''.
    (c) Decreasing 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 2022, 80 percent'';
                    (B) in subparagraph (A), as added by paragraph (1), 
                by striking the period at the end and inserting ``; 
                and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(B) for a subsequent year, the sum of--
                            ``(i) an amount equal to the applicable 
                        percentage specified in paragraph (5)(A) 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-14B(g)(2)); and
                            ``(ii) an amount equal to the applicable 
                        percentage specified in paragraph (5)(B) of 
                        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).''; and
            (2) by adding at the end the following new paragraph:
            ``(5) Applicable percentage specified.--For purposes of 
        paragraph (1)(B), the applicable percentage specified in this 
        paragraph is--
                    ``(A) with respect to applicable drugs (as defined 
                in section 1860D-14B(g)(2))--
                            ``(i) for 2022, 60 percent;
                            ``(ii) for 2023, 40 percent; and
                            ``(iii) for 2024 and each subsequent year, 
                        20 percent; and
                    ``(B) with respect to covered part D drugs that are 
                not applicable drugs (as so defined)--
                            ``(i) for 2022, 80 percent;
                            ``(ii) for 2023, 60 percent; and
                            ``(iii) for 2024 and each subsequent year, 
                        40 percent.''.
    (d) Manufacturer Discount Program During Initial and Catastrophic 
Phases of Coverage.--
            (1) In general.--Part D of title XVIII of the Social 
        Security Act is amended by inserting after section 1860D-14A 
        (42 U.S.C. 1495w-114) the following new section:

``SEC. 1860D-14B. 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, 
2021, in consultation with manufacturers, and allow for comment on such 
model agreement.
    ``(b) Terms of Agreement.--
            ``(1) In general.--
                    ``(A) Agreement.--An agreement under this section 
                shall require the manufacturer to provide applicable 
                beneficiaries access to discounted prices for 
                applicable drugs of the manufacturer that are dispensed 
                on or after January 1, 2022.
                    ``(B) Provision of discounted prices at the point-
                of-sale.--The discounted prices described in 
                subparagraph (A) shall be provided to the applicable 
                beneficiary at the pharmacy or by the mail order 
                service at the point-of-sale of an applicable drug.
            ``(2) Provision of appropriate data.--Each manufacturer 
        with an agreement in effect under this section shall collect 
        and have available appropriate data, as determined by the 
        Secretary, to ensure that it can demonstrate to the Secretary 
        compliance with the requirements under the program.
            ``(3) Compliance with requirements for administration of 
        program.--Each 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 may 
                        provide for termination of an agreement under 
                        this section for a knowing and willful 
                        violation of the requirements of the agreement 
                        or other good cause shown. Such termination 
                        shall not be effective 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 30 of a plan year, as of 
                                the day after the end of the plan year; 
                                and
                                    ``(II) if the termination occurs on 
                                or after January 30 of a plan year, as 
                                of the day after the end of the 
                                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.
            ``(5) Effective date of agreement.--An agreement under this 
        section shall take effect on a date determined appropriate by 
        the Secretary, which may be at the start of a calendar quarter.
    ``(c) Duties Described.--The duties described in this subsection 
are the following:
            ``(1) Administration of program.--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 under which 
                discounted prices are provided to applicable 
                beneficiaries at pharmacies or by mail order service at 
                the point-of-sale of an applicable drug;
                    ``(C) 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;
                    ``(D) 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 the Secretary may specify; and
                    ``(E) 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 one 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) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to the program under this section.
            ``(6) Funding.--For purposes of carrying out this section, 
        the Secretary shall provide for the transfer, from the Federal 
        Supplementary Medical Insurance Trust Fund under section 1841 
        to the Centers for Medicare & Medicaid Services Program 
        Management Account, of $4,000,000 for each of fiscal years 2020 
        through 2023, to remain available until expended.''.
    ``(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.--The Secretary shall impose a 
                civil money penalty on a manufacturer that fails to 
                provide applicable beneficiaries discounts for 
                applicable drugs of the manufacturer in accordance with 
                such agreement for each such failure in an amount the 
                Secretary determines is commensurate with 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 for covered part D drugs 
                in the year that are above the annual deductible 
                specified in section 1860D-2(b)(1).
            ``(2) Applicable drug.--The term `applicable drug' means, 
        with respect to an applicable beneficiary, a covered part D 
        drug--
                    ``(A) 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 
                (including a product licensed under subsection (k) of 
                such section 351); and
                    ``(B)(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.
            ``(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--
                            ``(i) with respect to an applicable drug 
                        dispensed for an applicable beneficiary who has 
                        incurred costs that are below the annual out-
                        of-pocket threshold specified in section 1860D-
                        2(b)(4)(B), 93 percent of the negotiated price 
                        of the applicable drug of a manufacturer; and
                            ``(ii) with respect to an applicable drug 
                        dispensed for an applicable beneficiary who has 
                        incurred costs 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), 86 percent of the negotiated 
                        price of the applicable drug of a manufacturer.
                    ``(B) Clarification.--Nothing in this section shall 
                be construed as affecting the responsibility of an 
                applicable beneficiary for payment of a dispensing fee 
                for an applicable drug.
                    ``(C) Clarification for certain claims.--With 
                respect to the amount of the negotiated price of an 
                individual claim for an applicable drug with respect to 
                an applicable beneficiary, the manufacturer of the 
                applicable drug shall provide--
                            ``(i) the discounted price under clause (i) 
                        of subparagraph (A) only on the portion of the 
                        negotiated price of the applicable drug that 
                        falls above the deductible specified in section 
                        1860D-2(b)(1) and below the annual out-of-
                        pocket threshold specified in section 1860D-
                        2(b)(4)(B); and
                            ``(ii) the discounted price under clause 
                        (ii) of subparagraph (A) only on the portion of 
                        the negotiated price of the applicable drug 
                        that falls at or above such annual out-of-
                        pocket 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 1860D-2(d)(1)(B), except 
        that such negotiated price shall not include any dispensing 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).''.
            (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 to 
        applicable drugs dispensed on or after January 1, 2022, 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 after 
        January 1, 2022, 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'' an inserting ``assumptions 
                        regarding--
                                    ``(I) the reinsurance''; and
                            (ii) by adding at the end the following:
                                    ``(II) for 2022 and each subsequent 
                                year, the manufacturer discounts 
                                provided under section 1860D-14B 
                                subtracted from the actuarial value to 
                                produce such bid; and''; and
                    (B) in subsection (c)(1)(C)--
                            (i) by striking ``an actuarial valuation of 
                        the reinsurance'' and inserting ``an actuarial 
                        valuation of--
                            ``(i) the reinsurance'';
                            (ii) in clause (i), as added by clause (i) 
                        of this subparagraph, by adding ``and'' at the 
                        end; and
                            (iii) by adding at the end the following:
                            ``(ii) for 2022 and each subsequent year, 
                        the manufacturer discounts provided under 
                        section 1860D-14B;''.
            (4) Clarification regarding exclusion of manufacturer 
        discounts from troop.--Section 1860D-2(b)(4) of the Social 
        Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
                    (A) in subparagraph (C), by inserting `` and 
                subject to subparagraph (F)'' after ``subparagraph 
                (E)''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(F) Clarification regarding exclusion of 
                manufacturer discounts.--In applying subparagraph (A), 
                incurred costs shall not include any manufacturer 
                discounts provided under section 1860D-14B.''.
    (e) Determination of Allowable Reinsurance Costs.--Section 1860D-
15(b) of the Social Security Act (42 U.S.C. 1395w-115(b)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``costs.--For purposes'' and 
                inserting ``costs.--
                    ``(A) In general.--Subject to 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-14B(g)(6)) of an 
                applicable drug (as defined in section 1860D-14B(g)(2)) 
                that was paid by a manufacturer under the manufacturer 
                discount program under section 1860D-14B.''; and
            (2) in paragraph (3)--
                    (A) in the first sentence, by striking ``For 
                purposes'' and inserting ``Subject to paragraph (2)(B), 
                for purposes''; and
                    (B) in the second sentence, by inserting ``or, in 
                the case of an applicable drug, by a manufacturer'' 
                after ``by the individual or under the plan''.
    (f) Updating Risk Adjustment Methodologies To Account for Part D 
Modernization Redesign.--Section 1860D-15(c) of the Social Security Act 
(42 U.S.C. 1395w-115(c)) is amended by adding at the end the following 
new paragraph:
            ``(3) Updating risk adjustment methodologies to account for 
        part d modernization redesign.--The Secretary shall update the 
        risk adjustment methodologies used to adjust bid amounts 
        pursuant to this subsection as appropriate to take into account 
        changes in benefits under this part pursuant to the amendments 
        made by section 121 of the Lowering Prescription Drug Prices 
        for America's Seniors and Families Act of 2020.''.
    (g) Conforming Amendments.--
            (1) Section 1860D-2 of the Social Security Act (42 U.S.C. 
        1395w-102) is amended--
                    (A) in subsection (a)(2)(A)(i)(I), by striking ``, 
                or an increase in the initial'' and inserting ``or for 
                a year preceding 2022 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 
                        2022 or the annual out-of-pocket threshold 
                        specified in subsection (b)(4)(B) for the year 
                        for 2022 and each subsequent year'' after 
                        ``subsection (b)(3) for the year'' each place 
                        it appears;
                    (C) in subsection (d)(1)(A), by striking ``or an 
                initial'' and inserting ``or for a year preceding 2022 
                an initial''.
            (2) Section 1860D-4(a)(4)(B)(i) of the Social Security Act 
        (42 U.S.C. 1395w-104(a)(4)(B)) is amended by striking ``the 
        initial'' and inserting ``for a year preceding 2022, 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 2022, the continuation'';
                            (ii) in subparagraph (E), by striking ``The 
                        elimination'' and inserting ``For a year 
                        preceding 2022, the elimination''; and
                            (iii) in subparagraph (D)(iii), by striking 
                        ``1860D-2(b)(4)(A)(i)(I)'' and inserting 
                        ``1860D-2(b)(4)(A)(i)(I)(aa)''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (C), by striking ``The 
                        continuation'' and inserting ``For a year 
                        preceding 2022, the continuation''; and
                            (ii) in subparagraph (E)--
                                    (I) by inserting ``for a year 
                                preceding 2022,'' after ``subsection 
                                (c)''; and
                                    (II) by striking ``1860D-
                                2(b)(4)(A)(i)(I)'' and inserting 
                                ``1860D-2(b)(4)(A)(i)(I)(aa)''.
            (4) Section 1860D-21(d)(7) of the Social Security Act (42 
        U.S.C. 1395w-131(d)(7)) is amended by striking ``section 1860D-
        2(b)(B)(4)(B)(i)'' and inserting ``section 1860D-
        2(b)(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 2022, 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 2022 and each subsequent year, 
                        any discount provided pursuant to section 
                        1860D-14B.''.
            (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 2022'' after 
                ``1860D-2(b)(3)''; and
                    (B) by inserting ``for such year'' before the 
                period.
            (7) Section 1860D-43(a)(1) of the Social Security Act (42 
        U.S.C. 1395w-153(a)(1)) is amended to read as follows:
            ``(1) participate in--
                    ``(A) for 2011 through 2021, the Medicare coverage 
                gap discount program under section 1860D-14A; and
                    ``(B) for 2022 and each subsequent year, the 
                manufacturer discount program under section 1860D-
                14B;''.
    (h) Effective Date.--The amendments made by this section shall 
apply to plan year 2022 and subsequent plan years.

SEC. 7. SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of the provisions 
of such Act or amendments to any person or circumstance shall not be 
affected.
                                 <all>