Title: Reduced Costs and Continued Cures Act
Policy area: Health

Summary:
Reduced Costs and Continued Cures Act
This bill establishes and alters several programs and requirements relating to the prices of prescription drugs.
For example, the bill establishes and alters several requirements under Medicare and Medicaid, including
The bill also makes changes relating to market exclusivities and manufacturer price concessions for prescription drugs, including

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5260 Introduced in House (IH)]

<DOC>






117th CONGRESS
  1st Session
                                H. R. 5260

To amend titles XI, XVIII, and XIX of the Social Security Act to lower 
  prescription drug prices in the Medicare and Medicaid programs, to 
improve transparency related to pharmaceutical prices and transactions, 
to lower patients' out-of-pocket costs, and to ensure accountability to 
                   taxpayers, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 14, 2021

  Mr. Peters (for himself, Mr. Schrader, Miss Rice of New York, Mrs. 
Murphy of Florida, and Mr. Correa) introduced the following bill; which 
 was referred to the Committee on Energy and Commerce, and in addition 
to the Committees on Ways and Means, and the Judiciary, for a period to 
      be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend titles XI, XVIII, and XIX of the Social Security Act to lower 
  prescription drug prices in the Medicare and Medicaid programs, to 
improve transparency related to pharmaceutical prices and transactions, 
to lower patients' out-of-pocket costs, and to ensure accountability to 
                   taxpayers, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Reduced Costs and 
Continued Cures Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
TITLE I--ESTABLISHMENT OF PART B PAYMENT RULES FOR NEGOTIATION-ELIGIBLE 
                         DRUGS AND BIOLOGICALS

Sec. 101. Establishment of part B payment rules for negotiation-
                            eligible drugs and biologicals.
                           TITLE II--MEDICARE

                           Subtitle A--Part B

Sec. 201. Inclusion of value of coupons in determination of average 
                            sales price for drugs and biologicals under 
                            Medicare part B.
Sec. 202. Payment for biosimilar biological products during initial 
                            period.
Sec. 203. Temporary increase in Medicare part B payment for biosimilar 
                            biological products.
Sec. 204. Medicare part B rebate by manufacturers.
Sec. 205. Establishment of maximum add-on payment for drugs and 
                            biologicals.
Sec. 206. GAO study and report on average sales price.
Sec. 207. Authority to use alternative payment for drugs and 
                            biologicals to prevent potential drug 
                            shortages.
Sec. 208. Change in definition of strength for the purposes of 
                            determining interchangeability of 
                            biological and biosimilar products.
                           Subtitle B--Part D

Sec. 209. Medicare part D modernization redesign.
Sec. 210. Public disclosure of drug discounts and other pharmacy 
                            benefit manager (PBM) provisions.
Sec. 211. Public disclosure of direct and indirect remuneration review 
                            and audit results.
Sec. 212. Improvements to provision of parts A and B claims data to 
                            prescription drug plans.
Sec. 213. Medicare part D rebate by manufacturers.
Sec. 214. Prohibiting branding on part D benefit cards.
Sec. 215. Requiring prescription drug plans and MA-PD plans to report 
                            potential fraud, waste, and abuse to the 
                            Secretary of HHS.
Sec. 216. Establishment of pharmacy quality measures under Medicare 
                            part D.
Sec. 217. Addition of new measures based on access to biosimilar 
                            biological products to the 5-star rating 
                            system under Medicare Advantage.
Sec. 218. HHS study and report on the influence of pharmaceutical 
                            manufacturer third-party reimbursement hubs 
                            on health care providers who prescribe 
                            their drugs and biologicals.
Sec. 219. Establishing a monthly cap on beneficiary incurred costs for 
                            insulin products and supplies under a 
                            prescription drug plan or MA-PD plan.
Sec. 220. Monthly out-of-pocket cost sharing maximum for enrollees who 
                            incur a significant portion of costs 
                            towards annual out-of-pocket threshold.
                       Subtitle C--Miscellaneous

Sec. 221. Drug manufacturer price transparency.
Sec. 222. Strengthening and expanding pharmacy benefit managers 
                            transparency requirements.
Sec. 223. Prescription drug pricing dashboards.
Sec. 224. Improving coordination between the Food and Drug 
                            Administration and the Centers for Medicare 
                            & Medicaid Services.
Sec. 225. Patient consultation in Medicare national and local coverage 
                            determinations in order to mitigate 
                            barriers to inclusion of such perspectives.
Sec. 226. GAO study on increases to Medicare and Medicaid spending due 
                            to copayment coupons and other patient 
                            assistance programs.
Sec. 227. MedPAC report on shifting coverage of certain Medicare part B 
                            drugs to Medicare part D.
Sec. 228. Taking steps to fulfill treaty obligations to Tribal 
                            communities.
                          TITLE III--MEDICAID

Sec. 301. Medicaid pharmacy and therapeutics committee improvements.
Sec. 302. Improving reporting requirements and developing standards for 
                            the use of drug use review boards in State 
                            Medicaid programs.
Sec. 303. GAO report on conflicts of interest in State Medicaid program 
                            drug use review boards and pharmacy and 
                            therapeutics (P&T) committees.
Sec. 304. Ensuring the accuracy of manufacturer price and drug product 
                            information under the Medicaid drug rebate 
                            program.
Sec. 305. T-MSIS drug data analytics reports.
Sec. 306. Risk-sharing value-based payment agreements for covered 
                            outpatient drugs under Medicaid.
Sec. 307. Modification of maximum rebate amount under Medicaid drug 
                            rebate program.
        TITLE IV--ADDRESSING INTERMEDIARIES AND DRUG COMPETITION

Sec. 401. Health plan oversight of pharmacy benefit manager services.
Sec. 402. Study of pharmaceutical supply chain intermediaries and 
                            merger activity.
Sec. 403. Requirement that direct-to-consumer advertisements for 
                            prescription drugs and biological products 
                            include truthful and non-misleading pricing 
                            information.
Sec. 404. Change conditions of first generic exclusivity to spur access 
                            and competition.
Sec. 405. Ending the practice preventing market competition known as 
                            ``Pay-for-Delay''.
Sec. 406. Empowering the FTC to prevent ``product hopping''.
Sec. 407. Promoting competition by limiting patent thickets.
               TITLE V--BENEFICIARY COST SHARING FAIRNESS

Sec. 501. Repealing of rule by the Department of Health and Human 
                            Services.
Sec. 502. Defining cost under prescription drug plans under part D of 
                            Medicare.

TITLE I--ESTABLISHMENT OF PART B PAYMENT RULES FOR NEGOTIATION-ELIGIBLE 
                         DRUGS AND BIOLOGICALS

SEC. 101. ESTABLISHMENT OF PART B PAYMENT RULES FOR NEGOTIATION-
              ELIGIBLE DRUGS AND BIOLOGICALS.

    Section 1847A of the Social Security Act (42 U.S.C. 1395w-3a) is 
amended--
            (1) in paragraph (1)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``Subject to paragraph (7)'' and inserting 
                ``Subject to paragraphs (7) and (9)'';
                    (B) in subparagraph (B), by striking at the end 
                ``or'';
                    (C) in subparagraph (C), by striking the period at 
                the end and inserting ``; or''; and
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(D) in the case of a negotiation-eligible drug or 
                biological, the maximum allowable cost determined under 
                paragraph (9).''; and
            (2) by adding at the end the following new paragraph:
            ``(9) Rules for negotiation-eligible drugs and 
        biologicals.--
                    ``(A) Notification of manufacturers of negotiation-
                eligible drugs and biologicals.--
                            ``(i) In general.--Not later than 180 days 
                        after the date of the enactment of this 
                        paragraph, the Secretary shall notify each 
                        manufacturer of each negotiation-eligible drug 
                        or biological that is subject to negotiation 
                        for payment under this part.
                            ``(ii) Negotiation-eligible drug or 
                        biological.--In this paragraph, the term 
                        `negotiation-eligible drug or biological' means 
                        a single source drug or biological (as defined 
                        in subparagraph (C)) for which each of the 
                        following have expired:
                                    ``(I) The period of regulatory data 
                                protections or exclusivity granted for 
                                such drug or biological (including for 
                                new chemical entities, biologics, 
                                orphan drugs, pediatric formulations, 
                                and clinical trials).
                                    ``(II) Subject to the succeeding 
                                sentence, the period of any patents 
                                issued for such drug or biological up 
                                to 1 year after the approval of such 
                                drug or biological. In the case of 
                                small molecule product that is a such a 
                                drug or biological, the period of any 
                                patents listed in the publication, 
                                Approved Drug Products With Therapeutic 
                                Equivalence Evaluations (referred to as 
                                the `Orange Book').
                    ``(B) Negotiation.--
                            ``(i) In general.--The Secretary and the 
                        manufacturer of a negotiation-eligible drug or 
                        biological shall during the negotiation period 
                        negotiate a maximum allowable cost for such 
                        drug or biological. In the case that the 
                        Secretary and the manufacturer do not determine 
                        a maximum allowable cost for such drug or 
                        biological, the Secretary shall determine the 
                        maximum allowable cost for such drug or 
                        biological at an amount that is at least 65 
                        percent and not more than 75 percent of the 
                        average sales price of such drug or biological.
                            ``(ii) Maximum allowable cost.--In this 
                        subparagraph, the term `maximum allowable cost' 
                        means the amount agreed to by the Secretary and 
                        the manufacturer of a negotiation-eligible drug 
                        or biological for a unit of such drug or 
                        biological that is not less than 65 percent and 
                        not more than 75 percent of the lowest average 
                        sales price of such drug or biological for the 
                        preceding 1-year period.
                    ``(C) Single source drug or biological.--For 
                purposes of this paragraph, the term `single source 
                drug or biological' means--
                            ``(i) a drug or drug product that--
                                    ``(I) is approved under section 
                                505(c) of the Federal Food, Drug, and 
                                Cosmetic Act and is marketed pursuant 
                                to such approval; and
                                    ``(II) is not the listed drug for 
                                any drug that is approved under section 
                                505(j) and is marketed pursuant to such 
                                approval; or
                            ``(ii) a biological product that--
                                    ``(I) is licensed under section 
                                351(a) of the Public Health Service 
                                Act, including any product deemed to be 
                                licensed under such section pursuant to 
                                section 7002(e)(4) of the Biologics 
                                Price Competition and Innovation Act 
                                and is marketed pursuant to section 351 
                                of the Public Health Service Act; and
                                    ``(II) is not the reference product 
                                for any biological product that is 
                                licensed and is marketed pursuant to 
                                such section of such Act.''.

                           TITLE II--MEDICARE

                           Subtitle A--Part B

SEC. 201. INCLUSION OF VALUE OF COUPONS IN DETERMINATION OF AVERAGE 
              SALES PRICE FOR DRUGS AND BIOLOGICALS UNDER MEDICARE PART 
              B.

    Section 1847A(c) of the Social Security Act (42 U.S.C. 1395w-3a(c)) 
is amended--
            (1) in paragraph (3)--
                    (A) by striking ``discounts.--In calculating'' and 
                inserting ``discounts to purchasers and coupons 
                provided to privately insured individuals.--
                    ``(A) Discounts to purchasers.--In calculating''; 
                and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(B) Coupons provided to reduce cost-sharing.--For 
                calendar quarters beginning on or after July 1, 2024, 
                in calculating the manufacturer's average sales price 
                under this subsection, such price shall include the 
                value (as defined in paragraph (6)(J)) of any coupons 
                provided under a drug coupon program of a manufacturer 
                (as those terms are defined in subparagraphs (K) and 
                (L), respectively, of paragraph (6)).''; and
            (2) in paragraph (6), by adding at the end the following 
        new subparagraphs:
                    ``(J) Value.--The term `value' means, with respect 
                to a coupon (as defined in subparagraph (K)), the 
                difference, if any, between--
                            ``(i) the amount of any reduction or 
                        elimination of cost-sharing or other out-of-
                        pocket costs described in such subparagraph to 
                        a patient as a result of the use of such 
                        coupon; and
                            ``(ii) any charge to the patient for the 
                        use of such coupon.
                    ``(K) Coupon.--The term `coupon' means any 
                financial support that is provided to a patient, either 
                directly to the patient or indirectly to the patient 
                through a physician, prescriber, pharmacy, or other 
                provider, under a drug coupon program of a manufacturer 
                (as defined in subparagraph (L)) that is used to reduce 
                or eliminate cost-sharing or other out-of-pocket costs 
                of the patient, including costs related to a 
                deductible, coinsurance, or copayment, with respect to 
                a drug or biological, including a biosimilar biological 
                product, of the manufacturer.
                    ``(L) Drug coupon program.--
                            ``(i) In general.--Subject to clause (ii), 
                        the term `drug coupon program' means, with 
                        respect to a manufacturer, a program through 
                        which the manufacturer provides coupons to 
                        patients as described in subparagraph (K).
                            ``(ii) Exclusions.--Such term does not 
                        include--
                                    ``(I) a patient assistance program 
                                operated by a manufacturer that 
                                provides free or discounted drugs or 
                                biologicals, including biosimilar 
                                biological products, (through in-kind 
                                donations) to patients of low income; 
                                or
                                    ``(II) a contribution by a 
                                manufacturer to a nonprofit or 
                                Foundation that provides free or 
                                discounted drugs or biologicals, 
                                including biosimilar biological 
                                products, (through in-kind donations) 
                                to patients of low income.''.

SEC. 202. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS DURING INITIAL 
              PERIOD.

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

SEC. 203. TEMPORARY INCREASE IN MEDICARE PART B PAYMENT FOR BIOSIMILAR 
              BIOLOGICAL PRODUCTS.

    Section 1847A(b)(8) of the Social Security Act (42 U.S.C. 1395w-
3a(b)(8)) is amended--
            (1) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively, and indenting appropriately;
            (2) by striking ``product.--The amount'' and inserting the 
        following: ``product.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                amount''; and
            (3) by adding at the end the following new subparagraph:
                    ``(B) Temporary payment increase for biosimilar 
                biological products.--
                            ``(i) In general.--Beginning January 1, 
                        2023, in the case of a biosimilar biological 
                        product described in paragraph (1)(C) that is 
                        furnished during the applicable 5-year period 
                        for such product, the amount specified in this 
                        paragraph for such product is an amount equal 
                        to the lesser of the following:
                                    ``(I) The amount specified in 
                                subparagraph (A) for such product if 
                                clause (ii) of such subparagraph was 
                                applied by substituting `8 percent' for 
                                `6 percent'.
                                    ``(II) The amount determined under 
                                subsection (b)(1)(B) for the reference 
                                biological product.
                            ``(ii) Applicable 5-year period.--For 
                        purposes of clause (i), the applicable 5-year 
                        period for a biosimilar biological product is--
                                    ``(I) in the case of such a product 
                                for which payment was made under this 
                                paragraph as of December 31, 2012, the 
                                5-year period beginning on January 1, 
                                2023; and
                                    ``(II) in the case of such a 
                                product that is not described in 
                                subclause (I), the 5-year period 
                                beginning on the first day of the first 
                                calendar quarter in which payment was 
                                made for such product under this 
                                paragraph.''.

SEC. 204. MEDICARE PART B REBATE BY MANUFACTURERS.

    (a) In General.--Section 1834 of the Social Security Act (42 U.S.C. 
1395m) is amended by adding at the end the following new subsection:
    ``(x) Rebate by Manufacturers for Single Source Drugs With Prices 
Increasing Faster Than Inflation.--
            ``(1) Requirements.--
                    ``(A) Secretarial provision of information.--Not 
                later than 6 months after the end of each calendar 
                quarter beginning on or after July 1, 2024, the 
                Secretary shall, for each part B rebatable drug, report 
                to each manufacturer of such part B rebatable drug the 
                following for such calendar quarter:
                            ``(i) Information on the total number of 
                        units of the billing and payment code described 
                        in subparagraph (A)(i) of paragraph (3) with 
                        respect to such drug and calendar quarter.
                            ``(ii) Information on the amount (if any) 
                        of the excess average sales price increase 
                        described in subparagraph (A)(ii) of such 
                        paragraph for such drug and calendar quarter.
                            ``(iii) The rebate amount specified under 
                        such paragraph for such part B rebatable drug 
                        and calendar quarter.
                    ``(B) Manufacturer requirement.--For each calendar 
                quarter beginning on or after July 1, 2024, the 
                manufacturer of a part B rebatable drug shall, for such 
                drug, not later than 30 days after the date of receipt 
                from the Secretary of the information described in 
                subparagraph (A) for such calendar quarter, provide to 
                the Secretary a rebate that is equal to the amount 
                specified in paragraph (3) for such drug for such 
                calendar quarter.
            ``(2) Part b rebatable drug defined.--
                    ``(A) In general.--In this subsection, the term 
                `part B rebatable drug' means a single source drug or 
                biological (as defined in subparagraph (D) of section 
                1847A(c)(6)), including a biosimilar biological product 
                (as defined in subparagraph (H) of such section), paid 
                for under this part, except such term shall not include 
                such a drug or biological--
                            ``(i) if the average total allowed charges 
                        for a year per individual that uses such a drug 
                        or biological, as determined by the Secretary, 
                        are less than, subject to subparagraph (B), 
                        $100; or
                            ``(ii) that is a vaccine described in 
                        subparagraph (A) or (B) of section 1861(s)(10).
                    ``(B) Increase.--The dollar amount applied under 
                subparagraph (A)(i)--
                            ``(i) for 2025, shall be the dollar amount 
                        specified under such subparagraph for 2024, 
                        increased by the percentage increase in the 
                        consumer price index for all urban consumers 
                        (United States city average) for the 12-month 
                        period ending with June of the previous year; 
                        and
                            ``(ii) for a subsequent year, shall be the 
                        dollar amount specified in this clause (or 
                        clause (i)) for the previous year, increased by 
                        the percentage increase in the consumer price 
                        index for all urban consumers (United States 
                        city average) for the 12-month period ending 
                        with June of the previous year.
                Any dollar amount specified under this subparagraph 
                that is not a multiple of $10 shall be rounded to the 
                nearest multiple of $10.
            ``(3) Rebate amount.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the amount specified in this paragraph for a part B 
                rebatable drug assigned to a billing and payment code 
                for a calendar quarter is, subject to paragraph (4), 
                the amount equal to the product of--
                            ``(i) subject to subparagraphs (B) and (G), 
                        the total number of units of the billing and 
                        payment code for such part B rebatable drug 
                        furnished under this part during the calendar 
                        quarter; and
                            ``(ii) the amount (if any) by which--
                                    ``(I) the payment amount under 
                                subparagraph (B) or (C) of section 
                                1847A(b)(1), as applicable, for such 
                                part B rebatable drug during the 
                                calendar quarter; exceeds
                                    ``(II) the inflation-adjusted 
                                payment amount determined under 
                                subparagraph (C) for such part B 
                                rebatable drug during the calendar 
                                quarter.
                    ``(B) Excluded units.--For purposes of subparagraph 
                (A)(i), the total number of units of the billing and 
                payment code for each part B rebatable drug furnished 
                during a calendar quarter shall not include--
                            ``(i) units packaged into the payment for a 
                        procedure or service under section 1833(t) or 
                        under section 1833(i) (instead of separately 
                        payable under such respective section);
                            ``(ii) units included under the single 
                        payment system for renal dialysis services 
                        under section 1881(b)(14); or
                            ``(iii) units of a part B rebatable drug of 
                        a manufacturer furnished to an individual, if 
                        such manufacturer, with respect to the 
                        furnishing of such units of such drug, provides 
                        for discounts under section 340B of the Public 
                        Health Service Act or for rebates under section 
                        1927.
                    ``(C) Determination of inflation-adjusted payment 
                amount.--The inflation-adjusted payment amount 
                determined under this subparagraph for a part B 
                rebatable drug for a calendar quarter is--
                            ``(i) the payment amount for the billing 
                        and payment code for such drug in the payment 
                        amount benchmark quarter (as defined in 
                        subparagraph (D)); increased by
                            ``(ii) the percentage by which the rebate 
                        period CPI-U (as defined in subparagraph (F)) 
                        for the calendar quarter exceeds the benchmark 
                        period CPI-U (as defined in subparagraph (E)).
                    ``(D) Prospective payment amount benchmark 
                quarter.--The term `prospective payment amount 
                benchmark quarter' means the calendar quarter beginning 
                January 1, 2016.
                    ``(E) Benchmark period cpi-u.--The term `benchmark 
                period CPI-U' means the consumer price index for all 
                urban consumers (United States city average) for July 
                2015.
                    ``(F) Rebate period cpi-u.--The term `rebate period 
                CPI-U' means, with respect to a calendar quarter 
                described in subparagraph (C), the greater of the 
                benchmark period CPI-U and the consumer price index for 
                all urban consumers (United States city average) for 
                the first month of the calendar quarter that is two 
                calendar quarters prior to such described calendar 
                quarter.
                    ``(G) Counting units.--
                            ``(i) Cut-off period to count units.--For 
                        purposes of subparagraph (A)(i), subject to 
                        clause (ii), to count the total number of 
                        billing units for a part B rebatable drug for a 
                        quarter, the Secretary may use a cut-off period 
                        in order to exclude from such total number of 
                        billing units for such quarter claims for 
                        services furnished during such quarter that 
                        were not processed at an appropriate time prior 
                        to the end of the cut-off period.
                            ``(ii) Counting units for claims processed 
                        after cut-off period.--If the Secretary uses a 
                        cut-off period pursuant to clause (i), in the 
                        case of units of a part B rebatable drug 
                        furnished during a quarter but pursuant to 
                        application of such cut-off period excluded for 
                        purposes of subparagraph (A)(i) from the total 
                        number of billing units for the drug for such 
                        quarter, the Secretary shall count such units 
                        of such drug so furnished in the total number 
                        of billing units for such drug for a subsequent 
                        quarter, as the Secretary determines 
                        appropriate.
            ``(4) Special treatment of certain drugs and exemption.--
                    ``(A) Subsequently approved drugs.--Subject to 
                subparagraph (B), in the case of a part B rebatable 
                drug first approved or licensed by the Food and Drug 
                Administration after July 1, 2015, clause (i) of 
                paragraph (3)(C) shall be applied as if the term 
                `payment amount benchmark quarter' were defined under 
                paragraph (3)(D) as the third full calendar quarter 
                after the day on which the drug was first marketed and 
                clause (ii) of paragraph (3)(C) shall be applied as if 
                the term `benchmark period CPI-U' were defined under 
                paragraph (3)(E) as if the reference to `July 2015' 
                under such paragraph were a reference to `the first 
                month of the first full calendar quarter after the day 
                on which the drug was first marketed'.
                    ``(B) Timeline for provision of rebates for 
                subsequently approved drugs.--In the case of a part B 
                rebatable drug first approved or licensed by the Food 
                and Drug Administration after July 1, 2015, paragraph 
                (1)(B) shall be applied as if the reference to `July 1, 
                2024' under such paragraph were a reference to the 
                later of the 6th full calendar quarter after the day on 
                which the drug was first marketed or July 1, 2024.
                    ``(C) Exemption for shortages.--The Secretary may 
                reduce or waive the rebate amount under paragraph 
                (1)(B) with respect to a part B rebatable drug that is 
                described as currently in shortage on the shortage list 
                in effect under section 506E of the Federal Food, Drug, 
                and Cosmetic Act or in the case of other exigent 
                circumstances, as determined by the Secretary.
                    ``(D) Selected drugs.--In the case of a part B 
                rebatable drug that is a selected drug (as defined in 
                section 1192(c)) for a price applicability period (as 
                defined in section 1191(b)(2))--
                            ``(i) for calendar quarters during such 
                        period for which a maximum fair price (as 
                        defined in section 1191(c)(2)) for such drug 
                        has been determined and is applied under part E 
                        of title XI, the rebate amount under paragraph 
                        (1)(B) shall be waived; and
                            ``(ii) in the case such drug is determined 
                        (pursuant to such section 1192(c)) to no longer 
                        be a selected drug, for each applicable year 
                        beginning after the price applicability period 
                        with respect to such drug, clause (i) of 
                        paragraph (3)(C) shall be applied as if the 
                        term `payment amount benchmark quarter' were 
                        defined under paragraph (3)(D) as the calendar 
                        quarter beginning January 1 of the last year 
                        beginning during such price applicability 
                        period with respect to such selected drug and 
                        clause (ii) of paragraph (3)(C) shall be 
                        applied as if the term `benchmark period CPI-U' 
                        were defined under paragraph (3)(E) as if the 
                        reference to `July 2015' under such paragraph 
                        were a reference to the July of the year 
                        preceding such last year.
            ``(5) Application to beneficiary coinsurance.--In the case 
        of a part B rebatable drug, if the payment amount for a quarter 
        exceeds the inflation adjusted payment for such quarter--
                    ``(A) in computing the amount of any coinsurance 
                applicable under this title to an individual with 
                respect to such drug, the computation of such 
                coinsurance shall be based on the inflation-adjusted 
                payment amount determined under paragraph (3)(C) for 
                such part B rebatable drug; and
                    ``(B) the amount of such coinsurance is equal to 20 
                percent of such inflation-adjusted payment amount so 
                determined.
            ``(6) Rebate deposits.--Amounts paid as rebates under 
        paragraph (1)(B) shall be deposited into the Federal 
        Supplementary Medical Insurance Trust Fund established under 
        section 1841.
            ``(7) Civil money penalty.--If a manufacturer of a part B 
        rebatable drug has failed to comply with the requirements under 
        paragraph (1)(B) for such drug for a calendar quarter, the 
        manufacturer shall be subject to, in accordance with a process 
        established by the Secretary pursuant to regulations, a civil 
        money penalty in an amount equal to at least 125 percent of the 
        amount specified in paragraph (3) for such drug for such 
        calendar quarter. The provisions of section 1128A (other than 
        subsections (a) (with respect to amounts of penalties or 
        additional assessments) and (b)) shall apply to a civil money 
        penalty under this paragraph in the same manner as such 
        provisions apply to a penalty or proceeding under section 
        1128A(a).
            ``(8) Study and report.--
                    ``(A) Study.--The Secretary shall conduct a study 
                of the feasibility of and operational issues involved 
                with the following:
                            ``(i) Including multiple source drugs (as 
                        defined in section 1847A(c)(6)(C)) in the 
                        rebate system under this subsection.
                            ``(ii) Including drugs and biologicals paid 
                        for under MA plans under part C in the rebate 
                        system under this subsection.
                            ``(iii) Including drugs excluded under 
                        paragraph (2)(A) and units of the billing and 
                        payment code of the drugs excluded under 
                        paragraph (3)(B) in the rebate system under 
                        this subsection.
                    ``(B) Report.--Not later than 3 years after the 
                date of the enactment of this subsection, the Secretary 
                shall submit to Congress a report on the study 
                conducted under subparagraph (A).
            ``(9) Application to multiple source drugs.--The Secretary 
        may, based on the report submitted under paragraph (8) and 
        pursuant to rulemaking, apply the provisions of this subsection 
        to multiple source drugs (as defined in section 
        1847A(c)(6)(C)), including, for purposes of determining the 
        rebate amount under paragraph (3), by calculating manufacturer-
        specific average sales prices for the benchmark period and the 
        rebate period.''.
    (b) Amounts Payable; Cost-Sharing.--Section 1833 of the Social 
Security Act (42 U.S.C. 1395l) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (S), by striking ``with 
                        respect to'' and inserting ``subject to 
                        subparagraph (DD), with respect to'';
                            (ii) by striking ``and (CC)'' and inserting 
                        ``(CC)''; and
                            (iii) by inserting before the semicolon at 
                        the end the following: ``, and (DD) with 
                        respect to a part B rebatable drug (as defined 
                        in paragraph (2) of section 1834(x)) for which 
                        the payment amount for a calendar quarter under 
                        paragraph (3)(A)(ii)(I) of such section for 
                        such quarter exceeds the inflation-adjusted 
                        payment under paragraph (3)(A)(ii)(II) of such 
                        section for such quarter, the amounts paid 
                        shall be the difference between (i) the payment 
                        amount under paragraph (3)(A)(ii)(I) of such 
                        section for such drug, and (ii) 20 percent of 
                        the inflation-adjusted payment amount under 
                        paragraph (3)(A)(ii)(II) of such section for 
                        such drug''; and
                    (B) by adding at the end of the flush left matter 
                following paragraph (9) the following:
    ``For purposes of applying paragraph (1)(DD), subsections (i)(9) 
and (t)(8)(F), and section 1834(x)(5), the Secretary shall make such 
estimates and use such data as the Secretary determines appropriate, 
and notwithstanding any other provision of law, may do so by program 
instruction or otherwise.'';
            (2) in subsection (i), by adding at the end the following 
        new paragraph:
            ``(9) In the case of a part B rebatable drug (as defined in 
        paragraph (2) of section 1834(x)) for which payment under this 
        subsection is not packaged into a payment for a covered OPD 
        service (as defined in subsection (t)(1)(B)) (or group of 
        services) furnished on or after July 1, 2024, under the system 
        under this subsection, in lieu of calculation of coinsurance 
        and the amount of payment otherwise applicable under this 
        subsection, the provisions of section 1834(x)(5), paragraph 
        (1)(DD) of subsection (a), and the flush left matter following 
        paragraph (9) of subsection (a), shall, as determined 
        appropriate by the Secretary, apply under this subsection in 
        the same manner as such provisions of section 1834(x)(5) and 
        subsection (a) apply under such section and subsection.''; and
            (3) in subsection (t)(8), by adding at the end the 
        following new subparagraph:
                    ``(F) Part b rebatable drugs.--In the case of a 
                part B rebatable drug (as defined in paragraph (2) of 
                section 1834(x)) for which payment under this part is 
                not packaged into a payment for a service furnished on 
                or after July 1, 2024, under the system under this 
                subsection, in lieu of calculation of coinsurance and 
                the amount of payment otherwise applicable under this 
                subsection, the provisions of section 1834(x)(5), 
                paragraph (1)(DD) of subsection (a), and the flush left 
                matter following paragraph (9) of subsection (a), 
                shall, as determined appropriate by the Secretary, 
                apply under this subsection in the same manner as such 
                provisions of section 1834(x)(5) and subsection (a) 
                apply under such section and subsection.''.
    (c) Conforming Amendments.--
            (1) To part b asp calculation.--Section 1847A(c)(3) of the 
        Social Security Act (42 U.S.C. 1395w-3a(c)(3)) is amended by 
        inserting ``or section 1834(x)'' after ``section 1927''.
            (2) Excluding part b drug inflation rebate from best 
        price.--Section 1927(c)(1)(C)(ii)(I) of the Social Security Act 
        (42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)) is amended by inserting 
        ``or section 1834(x)'' after ``this section''.
            (3) Coordination with medicaid rebate information 
        disclosure.--Section 1927(b)(3)(D)(i) of the Social Security 
        Act (42 U.S.C. 1396r-8(b)(3)(D)(i)) is amended by striking ``or 
        to carry out section 1847B'' and inserting ``to carry out 
        section 1847B or section 1834(x)''.

SEC. 205. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT FOR DRUGS AND 
              BIOLOGICALS.

    (a) In General.--Section 1847A of the Social Security Act (42 
U.S.C. 1395w-3a) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by striking ``paragraph (7)'' and 
                inserting ``paragraphs (7) and (9)''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(9) Maximum add-on payment amount.--
                    ``(A) In general.--In determining the payment 
                amount under the provisions of subparagraph (A), (B), 
                or (C) of paragraph (1) of this subsection, subsection 
                (c)(4)(A)(ii), or subsection (d)(3)(C) for a drug or 
                biological furnished on or after January 1, 2024, if 
                the applicable add-on payment (as defined in 
                subparagraph (B)) for each drug or biological on a 
                claim for a date of service exceeds the maximum add-on 
                payment amount specified under subparagraph (C) for the 
                drug or biological, then the payment amount otherwise 
                determined for the drug or biological under those 
                provisions, as applicable, shall be reduced by the 
                amount of such excess.
                    ``(B) Applicable add-on payment defined.--In this 
                paragraph, the term `applicable add-on payment' means 
                the following amounts, determined without regard to the 
                application of subparagraph (A):
                            ``(i) In the case of a multiple source 
                        drug, an amount equal to the difference 
                        between--
                                    ``(I) the amount that would 
                                otherwise be applied under paragraph 
                                (1)(A); and
                                    ``(II) the amount that would be 
                                applied under such paragraph if `100 
                                percent' were substituted for `106 
                                percent'.
                            ``(ii) In the case of a single source drug 
                        or biological, an amount equal to the 
                        difference between--
                                    ``(I) the amount that would 
                                otherwise be applied under paragraph 
                                (1)(B); and
                                    ``(II) the amount that would be 
                                applied under such paragraph if `100 
                                percent' were substituted for `106 
                                percent'.
                            ``(iii) In the case of a biosimilar 
                        biological product, the amount otherwise 
                        determined under paragraph (8)(B).
                            ``(iv) In the case of a drug or biological 
                        during the initial period described in 
                        subsection (c)(4)(A), an amount equal to the 
                        difference between--
                                    ``(I) the amount that would 
                                otherwise be applied under subsection 
                                (c)(4)(A)(ii); and
                                    ``(II) the amount that would be 
                                applied under such subsection if `100 
                                percent' were substituted, as 
                                applicable, for--
                                            ``(aa) `103 percent' in 
                                        subclause (I) of such 
                                        subsection; or
                                            ``(bb) any percent in 
                                        excess of 100 percent applied 
                                        under subclause (II) of such 
                                        subsection.
                            ``(v) In the case of a drug or biological 
                        to which subsection (d)(3)(C) applies, an 
                        amount equal to the difference between--
                                    ``(I) the amount that would 
                                otherwise be applied under such 
                                subsection; and
                                    ``(II) the amount that would be 
                                applied under such subsection if `100 
                                percent' were substituted, as 
                                applicable, for--
                                            ``(aa) any percent in 
                                        excess of 100 percent applied 
                                        under clause (i) of such 
                                        subsection; or
                                            ``(bb) `103 percent' in 
                                        clause (ii) of such subsection.
                    ``(C) Maximum add-on payment amount specified.--For 
                purposes of subparagraph (A), the maximum add-on 
                payment amount specified in this subparagraph is--
                            ``(i) for each of 2024 through 2031, 
                        $1,000; and
                            ``(ii) for a subsequent year, the amount 
                        specified in this subparagraph for the 
                        preceding year increased by the percentage 
                        increase in the consumer price index for all 
                        urban consumers (all items; United States city 
                        average) for the 12-month period ending with 
                        June of the previous year.
                Any amount determined under this subparagraph that is 
                not a multiple of $10 shall be rounded to the nearest 
                multiple of $10.''; and
            (2) in subsection (c)(4)(A)(ii), by striking ``in the 
        case'' and inserting ``subject to subsection (b)(9), in the 
        case''.
    (b) Conforming Amendments Relating to Separately Payable Drugs.--
            (1) OPPS.--Section 1833(t)(14) of the Social Security Act 
        (42 U.S.C. 1395l(t)(14)) is amended--
                    (A) in subparagraph (A)(iii)(II), by inserting ``, 
                subject to subparagraph (I)'' after ``are not 
                available''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(I) Application of maximum add-on payment for 
                separately payable drugs and biologicals.--In 
                establishing the amount of payment under subparagraph 
                (A) for a specified covered outpatient drug that is 
                furnished as part of a covered OPD service (or group of 
                services) on or after January 1, 2024, if such payment 
                is determined based on the average price for the year 
                established under section 1847A pursuant to clause 
                (iii)(II) of such subparagraph, the provisions of 
                subsection (b)(9) of section 1847A shall apply to the 
                amount of payment so established in the same manner as 
                such provisions apply to the amount of payment under 
                section 1847A.''.
            (2) ASC.--Section 1833(i)(2)(D) of the Social Security Act 
        (42 U.S.C. 1395l(i)(2)(D)) is amended--
                    (A) by moving clause (v) 6 ems to the left;
                    (B) by redesignating clause (vi) as clause (vii); 
                and
                    (C) by inserting after clause (v) the following new 
                clause:
    ``(vi) If there is a separate payment under the system described in 
clause (i) for a drug or biological furnished on or after January 1, 
2024, the provisions of subsection (t)(14)(I) shall apply to the 
establishment of the amount of payment for the drug or biological under 
such system in the same manner in which such provisions apply to the 
establishment of the amount of payment under subsection (t)(14)(A).''.

SEC. 206. GAO STUDY AND REPORT ON AVERAGE SALES PRICE.

    (a) Study.--
            (1) In general.--The Comptroller General of the United 
        States (in this section referred to as the ``Comptroller 
        General'') shall conduct a study on spending for applicable 
        drugs under part B of title XVIII of the Social Security Act.
            (2) Applicable drugs defined.--In this section, the term 
        ``applicable drugs'' means drugs and biologicals--
                    (A) for which reimbursement under such part B is 
                based on the average sales price of the drug or 
                biological; and
                    (B) that account for the largest percentage of 
                total spending on drugs and biologicals under such part 
                B (as determined by the Comptroller General, but in no 
                case less that 25 drugs or biologicals).
            (3) Requirements.--The study under paragraph (1) shall 
        include an analysis of the following:
                    (A) The extent to which each applicable drug is 
                paid for--
                            (i) under such part B for Medicare 
                        beneficiaries; or
                            (ii) by private payers in the commercial 
                        market.
                    (B) Any change in Medicare spending or Medicare 
                beneficiary cost-sharing that would occur if the 
                average sales price of an applicable drug was based 
                solely on payments by private payers in the commercial 
                market.
                    (C) The extent to which drug manufacturers provide 
                rebates, discounts, or other price concessions to 
                private payers in the commercial market for applicable 
                drugs, which the manufacturer includes in its average 
                sales price calculation, for--
                            (i) formulary placement;
                            (ii) utilization management considerations; 
                        or
                            (iii) other purposes.
                    (D) Barriers to drug manufacturers providing such 
                price concessions for applicable drugs.
                    (E) Other areas determined appropriate by the 
                Comptroller General.
    (b) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Comptroller General shall submit to Congress a report 
on the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

SEC. 207. AUTHORITY TO USE ALTERNATIVE PAYMENT FOR DRUGS AND 
              BIOLOGICALS TO PREVENT POTENTIAL DRUG SHORTAGES.

    (a) In General.--Section 1847A(e) of the Social Security Act (42 
U.S.C. 1395w-3a(e)) is amended--
            (1) by striking ``Payment in Response to Public Health 
        Emergency.--In the case'' and inserting ``Payments.--
            ``(1) In response to public health emergency.--In the 
        case''; and
            (2) by adding at the end the following new paragraph:
            ``(2) Preventing potential drug shortages.--
                    ``(A) In general.--In the case of a drug or 
                biological that the Secretary determines is described 
                in subparagraph (B) for one or more quarters beginning 
                on or after January 1, 2024, the Secretary may use 
                wholesale acquisition cost (or other reasonable measure 
                of a drug or biological price) instead of the 
                manufacturer's average sales price for such quarters 
                and for subsequent quarters until the end of the 
                quarter in which such drug or biological is removed 
                from the drug shortage list under section 506E of the 
                Federal Food, Drug, and Cosmetic Act, or in the case of 
                a drug or biological described in subparagraph (B)(ii), 
                the date on which the Secretary determines that the 
                total manufacturing capacity or the total number of 
                manufacturers of such drug or biological is sufficient 
                to mitigate a potential shortage of the drug or 
                biological.
                    ``(B) Drug or biological described.--For purposes 
                of subparagraph (A), a drug or biological described in 
                this subparagraph is a drug or biological--
                            ``(i) that is listed on the drug shortage 
                        list maintained by the Food and Drug 
                        Administration pursuant to section 506E of the 
                        Federal Food, Drug, and Cosmetic Act, and with 
                        respect to which any manufacturer of such drug 
                        or biological notifies the Secretary of a 
                        permanent discontinuance or an interruption 
                        that is likely to lead to a meaningful 
                        disruption in the manufacturer's supply of that 
                        drug pursuant to section 506C(a) of such Act; 
                        or
                            ``(ii) that--
                                    ``(I) is described in section 
                                506C(a) of such Act;
                                    ``(II) was listed on the drug 
                                shortage list maintained by the Food 
                                and Drug Administration pursuant to 
                                section 506E of such Act within the 
                                preceding 5 years; and
                                    ``(III) for which the total 
                                manufacturing capacity of all 
                                manufacturers with an approved 
                                application for such drug or biological 
                                that is currently marketed or total 
                                number of manufacturers with an 
                                approved application for such drug or 
                                biological that is currently marketed 
                                declines during a 6-month period, as 
                                determined by the Secretary.
                    ``(C) Provision of additional information.--For 
                each quarter in which the amount of payment for a drug 
                or biological described in subparagraph (B) pursuant to 
                subparagraph (A) exceeds the amount of payment for the 
                drug or biological otherwise applicable under this 
                section, each manufacturer of such drug or biological 
                shall provide to the Secretary information related to 
                the potential cause or causes of the shortage and the 
                expected duration of the shortage with respect to such 
                drug.''.
    (b) Tracking Shortage Drugs Through Claims.--The Secretary of 
Health and Human Services (referred to in this section as the 
``Secretary'') shall establish a mechanism (such as a modifier) for 
purposes of tracking utilization under title XVIII of the Social 
Security Act (42 U.S.C. 1395 et seq.) of drugs and biologicals listed 
on the drug shortage list maintained by the Food and Drug 
Administration pursuant to section 506E of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 356e).
    (c) HHS Report and Recommendations.--
            (1) In general.--Not later than July 1, 2024, the Secretary 
        shall submit to Congress a report on shortages of drugs within 
        the Medicare program under title XVIII of the Social Security 
        Act (42 U.S.C. 1395 et seq.). The report shall include--
                    (A) an analysis of--
                            (i) the effect of drug shortages on 
                        Medicare beneficiary access, quality, safety, 
                        and out-of-pocket costs;
                            (ii) the effect of drug shortages on health 
                        providers, including hospitals and physicians, 
                        across the Medicare program;
                            (iii) the current role of the Centers for 
                        Medicare & Medicaid Services (CMS) in 
                        addressing drug shortages, including CMS's 
                        working relationship and communication with 
                        other Federal agencies and stakeholders;
                            (iv) the role of all actors in the drug 
                        supply chain (including drug manufacturers, 
                        distributors, wholesalers, secondary 
                        wholesalers, group purchasing organizations, 
                        hospitals, and physicians) on drug shortages 
                        within the Medicare program; and
                            (v) payment structures and incentives under 
                        parts A, B, C, and D of the Medicare program 
                        and their effect, if any, on drug shortages; 
                        and
                    (B) relevant findings and recommendations to 
                Congress.
            (2) Public availability.--The report under this subsection 
        shall be made available to the public.
            (3) Consultation.--The Secretary shall consult with the 
        drug shortage task force authorized under section 506D(a)(1)(A) 
        of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        356d(a)(1)(A)) in preparing the report under this subsection, 
        as appropriate.

SEC. 208. CHANGE IN DEFINITION OF STRENGTH FOR THE PURPOSES OF 
              DETERMINING INTERCHANGEABILITY OF BIOLOGICAL AND 
              BIOSIMILAR PRODUCTS.

    (a) Section 351(i) of the Public Health Service Act is amended by 
inserting the following after paragraph (4):
            ``(5) The term `strength', in reference to a biological 
        product intended for administration by injection, means the 
        total content of drug substance in the dosage form without 
        regard to the concentration of drug substance or total volume 
        of the biological product.''.
    (b) Section 351(k)(7)(C)(ii)(I) of the Public Health Service Act is 
amended by inserting ``concentration,'' after ``delivery device,''.

                           Subtitle B--Part D

SEC. 209. 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 2024 
                and for costs above the annual deductible specified in 
                paragraph (1) and up to the annual out-of-pocket 
                threshold specified in paragraph (4)(B) for 2024 and 
                each subsequent year'' after ``paragraph (3)'';
                    (B) in subparagraph (C)--
                            (i) in clause (i), in the matter preceding 
                        subclause (I), by inserting ``for a year 
                        preceding 2024,'' after ``paragraph (4),''; and
                            (ii) in clause (ii)(III), by striking ``and 
                        each subsequent year'' and inserting ``, 2021, 
                        2022, and 2023''; and
                    (C) in subparagraph (D)--
                            (i) in clause (i)--
                                    (I) in the matter preceding 
                                subclause (I), by inserting ``for a 
                                year preceding 2024,'' after 
                                ``paragraph (4),''; and
                                    (II) in subclause (I)(bb), by 
                                striking ``a year after 2018'' and 
                                inserting ``each of years 2018 through 
                                2023''; and
                            (ii) in clause (ii)(V), by striking ``2019 
                        and each subsequent year'' and inserting ``each 
                        of years through 2023'';
            (2) in paragraph (3)(A)--
                    (A) in the matter preceding clause (i), by 
                inserting ``for a year preceding 2024,'' after ``and 
                (4),''; and
                    (B) in clause (ii), by striking ``for a subsequent 
                year'' and inserting ``for each of years 2007 through 
                2023''; and
            (3) in paragraph (4)--
                    (A) in subparagraph (A)--
                            (i) in clause (i)--
                                    (I) by redesignating subclauses (I) 
                                and (II) as items (aa) and (bb), 
                                respectively, and 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 2024, 
                                the greater of--'';
                                    (III) by striking the period at the 
                                end of item (bb), as redesignated by 
                                subclause (I), and inserting ``; and''; 
                                and
                                    (IV) by adding at the end the 
                                following:
                                    ``(II) for and each succeeding 
                                year, $0.''; and
                            (ii) in clause (ii)--
                                    (I) by striking ``clause (i)(I)'' 
                                and inserting ``clause (i)(I)(aa)''; 
                                and
                                    (II) by adding at the end the 
                                following new sentence: ``The Secretary 
                                shall continue to calculate the dollar 
                                amounts specified in clause (i)(I)(aa), 
                                including with the adjustment under 
                                this clause, after 2023 for purposes of 
                                section 1860D-14(a)(1)(D)(iii).'';
                    (B) in subparagraph (B)--
                            (i) in clause (i)--
                                    (I) in subclause (V), by striking 
                                ``or'' at the end;
                                    (II) in subclause (VI)--
                                            (aa) by striking ``for a 
                                        subsequent year'' and inserting 
                                        ``for 2021, 2022, and 2023''; 
                                        and
                                            (bb) by striking the period 
                                        at the end and inserting a 
                                        semicolon; and
                                    (III) by adding at the end the 
                                following new subclauses:
                                    ``(VII) for 2024, is equal to--
                                            ``(aa) $3,100 for 
                                        beneficiaries determined to 
                                        have income that is over 400 
                                        percent of the Federal poverty 
                                        line applicable to a family of 
                                        the size involved;
                                            ``(bb) $1,800 for 
                                        beneficiaries determined to 
                                        have income that is between 300 
                                        to 400 percent of the Federal 
                                        poverty line applicable to a 
                                        family of the size involved; or
                                            ``(cc) $1,200 for 
                                        beneficiaries determined to 
                                        have income that is below 300 
                                        percent of the Federal poverty 
                                        line applicable to a family of 
                                        the size involved; or
                                    ``(VIII) for a subsequent year, is 
                                equal to the amount specified in this 
                                subparagraph for the previous year, 
                                increased by the annual percentage 
                                increase described in paragraph (6) for 
                                the year involved.''; and
                            (ii) in clause (ii), by striking ``clause 
                        (i)(II)'' and inserting ``clause (i)'';
                    (C) in subparagraph (C)(i), by striking ``and for 
                amounts'' and inserting ``and for a year preceding 2024 
                for amounts''; and
                    (D) in subparagraph (E), by striking ``In 
                applying'' and inserting ``For each of 2011 through 
                2023, in applying''.
    (b) 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 2024, 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 2024 and each 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 2024, 60 percent;
                            ``(ii) for 2025, 40 percent; and
                            ``(iii) for 2026 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 2024, 80 percent;
                            ``(ii) for 2025, 60 percent; and
                            ``(iii) for 2026 and each subsequent year, 
                        40 percent.''.
    (c) 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, 
2023, in consultation with manufacturers, and allow for comment on such 
model agreement.
    ``(b) Terms of Agreement.--
            ``(1) In general.--
                    ``(A) Agreement.--An agreement under this section 
                shall require the manufacturer to provide applicable 
                beneficiaries access to discounted prices for 
                applicable drugs of the manufacturer that are dispensed 
                on or after January 1, 2024.
                    ``(B) Provision of discounted prices at the point-
                of-sale.--The discounted prices described in 
                subparagraph (A) shall be provided to the applicable 
                beneficiary at the pharmacy or by the mail order 
                service at the point-of-sale of an applicable drug.
            ``(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 1 or more third parties to 
        administer the requirements established by the Secretary in 
        order to carry out this section. At a minimum, the contract 
        with a third party under the preceding sentence shall require 
        that the third party--
                    ``(A) receive and transmit information between the 
                Secretary, manufacturers, and other individuals or 
                entities the Secretary determines appropriate;
                    ``(B) receive, distribute, or facilitate the 
                distribution of funds of manufacturers to appropriate 
                individuals or entities in order to meet the 
                obligations of manufacturers under agreements under 
                this section;
                    ``(C) provide adequate and timely information to 
                manufacturers, consistent with the agreement with the 
                manufacturer under this section, as necessary for the 
                manufacturer to fulfill its obligations under this 
                section; and
                    ``(D) permit manufacturers to conduct periodic 
                audits, directly or through contracts, of the data and 
                information used by the third party to determine 
                discounts for applicable drugs of the manufacturer 
                under the program.
            ``(4) Performance requirements.--The Secretary shall 
        establish performance requirements for a third party with a 
        contract under paragraph (3) and safeguards to protect the 
        independence and integrity of the activities carried out by the 
        third party under the program under this section.
            ``(5) 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 2021 
        through 2024, 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) for such year.
            ``(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.--Except as provided in 
                subparagraph (B), the term `discounted price' means 90 
                percent of the negotiated price of the applicable drug 
                of a manufacturer.
                    ``(B) Phase-in for certain drugs dispensed for 
                subsidy eligible individuals.--
                            ``(i) In general.--In the case of an 
                        applicable drug of a specified manufacturer (as 
                        defined in clause (ii)) that is dispensed for 
                        an applicable beneficiary who is a subsidy 
                        eligible individual (as defined in section 
                        1860D-14(a)(3), the term `discounted price' 
                        means the specified LIS percent (as defined in 
                        clause (iii)) of the negotiated price of the 
                        applicable drug of the manufacturer.
                            ``(ii) Specified manufacturer.--In this 
                        subparagraph, the term `specified manufacturer' 
                        means a manufacturer of an applicable drug for 
                        which, in the calendar year 2 years prior to 
                        the current plan year (referred to in this 
                        clause as the `applicable period'), the total 
                        reimbursement under this title during the 
                        applicable period represented less than 1 
                        percent of the total reimbursement under this 
                        title for all prescription drugs during such 
                        period.
                            ``(iii) Specified lis percent.--In this 
                        subparagraph, the term `specified LIS percent' 
                        means--
                                    ``(I) for 2024, 98 percent;
                                    ``(II) for 2025, 97 percent;
                                    ``(III) for 2026, 96 percent;
                                    ``(IV) for 2027, 95 percent;
                                    ``(V) for 2028, 94 percent;
                                    ``(VI) for 2029, 93 percent;
                                    ``(VII) for 2030, 92 percent;
                                    ``(VIII) for 2031, 91 percent; and
                                    ``(IX) for 2032 and each subsequent 
                                year, 90 percent.
                    ``(C) 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.
            ``(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, 2024, and, 
        subject to paragraph (2), agreements under this section shall 
        be terminated as of such date.
            ``(2) Continued application for applicable drugs dispensed 
        prior to sunset.--The provisions of this section (including all 
        responsibilities and duties) shall continue to apply after 
        January 1, 2024, with respect to applicable drugs dispensed 
        prior to such date.''.
            (3) Inclusion of actuarial value of manufacturer discounts 
        in bids.--Section 1860D-11 of the Social Security Act (42 
        U.S.C. 1395w-111) is amended--
                    (A) in subsection (b)(2)(C)(iii)--
                            (i) by striking ``assumptions regarding the 
                        reinsurance'' and inserting ``an actuarial 
                        valuation of--
                                    ``(I) the reinsurance''; and
                            (ii) by adding at the end the following:
                                    ``(II) for 2024 and each subsequent 
                                year, the manufacturer discounts 
                                provided under section 1860D-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 2024 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.''.
    (d) 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''.
    (e) 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 2 of the Seniors Prescription Drug Relief 
        Act.''.
    (f) Conditions for Coverage of Drugs Under This Part.--Section 
1860D-43 of the Social Security Act (42 U.S.C. 1395w-153) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``and'' at the 
                end;
                    (B) in paragraph (3), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                paragraphs:
            ``(4) participate in the manufacturer discount program 
        under section 1860D-14B;
            ``(5) have entered into and have in effect an agreement 
        described in subsection (b) of such section 1860D-14B with the 
        Secretary; and
            ``(6) have entered into and have in effect, under terms and 
        conditions specified by the Secretary, a contract with a third 
        party that the Secretary has entered into a contract with under 
        subsection (d)(3) of such section 1860D-14B.'';
            (2) by striking subsection (b) and inserting the following:
    ``(b) Effective Date.--Paragraphs (1) through (3) of subsection (a) 
shall apply to covered part D drugs dispensed under this part on or 
after January 1, 2011, and before January 1, 2024, and paragraphs (4) 
through (6) of such subsection shall apply to covered part D drugs 
dispensed on or after January 1, 2024.''; and
            (3) in subsection (c), by striking paragraph (2) and 
        inserting the following:
            ``(2) the Secretary determines that in the period beginning 
        on January 1, 2011, and ending on December 31, 2011 (with 
        respect to paragraphs (1) through (3) of subsection (a)), or 
        the period beginning on January 1, 2024, and ending December 
        31, 2024 (with respect to paragraphs (4) through (6) of such 
        subsection), there were extenuating circumstances.''.
    (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 2024 an increase in the initial'';
                    (B) in subsection (c)(1)(C)--
                            (i) in the subparagraph heading, by 
                        striking ``at initial coverage limit''; and
                            (ii) by inserting ``for a year preceding 
                        2024 or the annual out-of-pocket threshold 
                        specified in subsection (b)(4)(B) for the year 
                        for 2024 and each subsequent year'' after 
                        ``subsection (b)(3) for the year'' each place 
                        it appears; and
                    (C) in subsection (d)(1)(A), by striking ``or an 
                initial'' and inserting ``or for a year preceding 2024 
                an initial''.
            (2) Section 1860D-4(a)(4)(B)(i) of the Social Security Act 
        (42 U.S.C. 1395w-104(a)(4)(B)(i)) is amended by striking ``the 
        initial'' and inserting ``for a year preceding 2024, the 
        initial''.
            (3) Section 1860D-14(a) of the Social Security Act (42 
        U.S.C. 1395w-114(a)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (C), by striking ``The 
                        continuation'' and inserting ``For a year 
                        preceding 2024, the continuation'';
                            (ii) in subparagraph (D)(iii), by striking 
                        ``1860D-2(b)(4)(A)(i)(I)'' and inserting 
                        ``1860D-2(b)(4)(A)(i)(I)(aa)''; and
                            (iii) in subparagraph (E), by striking 
                        ``The elimination'' and inserting ``For a year 
                        preceding 2024, the elimination''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (C), by striking ``The 
                        continuation'' and inserting ``For a year 
                        preceding 2024, the continuation''; and
                            (ii) in subparagraph (E)--
                                    (I) by inserting ``for a year 
                                preceding 2024,'' 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 2024, any 
                        discount'';
                    (B) in clause (i), as inserted by subparagraph (A) 
                of this paragraph, by striking the period at the end 
                and inserting ``; and''; and
                    (C) by adding at the end the following new clause:
                            ``(ii) for 2024 and each subsequent year, 
                        any discount provided pursuant to section 
                        1860D-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 2024'' after 
                ``1860D-2(b)(3)''; and
                    (B) by inserting ``for such year'' before the 
                period.
    (h) Effective Date.--The amendments made by this section shall 
apply to plan year 2024 and subsequent plan years.

SEC. 210. PUBLIC DISCLOSURE OF DRUG DISCOUNTS AND OTHER PHARMACY 
              BENEFIT MANAGER (PBM) PROVISIONS.

    (a) Public Disclosure of Drug Discounts.--
            (1) In general.--Section 1150A of the Social Security Act 
        (42 U.S.C. 1320b-23) is amended--
                    (A) in subsection (c), in the matter preceding 
                paragraph (1), by striking ``this section'' and 
                inserting ``subsection (b)(1)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(e) Public Availability of Certain Information.--
            ``(1) In general.--Subject to paragraphs (2) and (3), in 
        order to allow patients and employers to compare PBMs' ability 
        to negotiate rebates, discounts, and price concessions and the 
        amount of such rebates, discounts, and price concessions that 
        are passed through to plan sponsors, not later than July 1, 
        2025, the Secretary shall make available on the Internet 
        website of the Department of Health and Human Services the 
        information provided to the Secretary and described in 
        paragraphs (2) and (3) of subsection (b) with respect to each 
        PBM.
            ``(2) Lag in data.--The information made available in a 
        plan year under paragraph (1) shall not include information 
        with respect to such plan year or the two preceding plan years.
            ``(3) Confidentiality.--The Secretary shall ensure that 
        such information is displayed in a manner that prevents the 
        disclosure of information on rebates, discounts, and price 
        concessions with respect to an individual drug or an individual 
        PDP sponsor, MA organization, or qualified health benefits 
        plan.''.
            (2) Effective date.--The amendment made by paragraph (1)(A) 
        shall take effect on January 1, 2025.
    (b) Plan Audit of Pharmacy Benefit Manager Data.--Section 1860D-
2(d)(3) of the Social Security Act (42 U.S.C. 1395w-102(d)(3)) is 
amended--
            (1) by striking ``Audits.--To protect'' and inserting the 
        following: ``Audits.--
                    ``(A) Audits of plans by the secretary.--To 
                protect''; and
            (2) by adding at the end the following new subparagraph:
                    ``(B) Audits of pharmacy benefit managers by pdp 
                sponsors and ma organizations.--
                            ``(i) In general.--Beginning January 1, 
                        2025, in order to ensure that--
                                    ``(I) contracting terms between a 
                                PDP sponsor offering a prescription 
                                drug plan or an MA organization 
                                offering an MA-PD plan and its 
                                contracted or owned pharmacy benefit 
                                manager are met; and
                                    ``(II) the PDP sponsor and MA 
                                organization can account for the cost 
                                of each covered part D drug net of all 
                                direct and indirect remuneration,
                        the PDP sponsor or MA organization shall 
                        conduct financial audits.
                            ``(ii) Independent third party.--An audit 
                        described in clause (i) shall--
                                    ``(I) be conducted by an 
                                independent third party; and
                                    ``(II) account and reconcile flows 
                                of funds that determine the net cost of 
                                covered part D drugs, including direct 
                                and indirect remuneration from drug 
                                manufacturers and pharmacies or 
                                provided to pharmacies.
                            ``(iii) Rebate agreements.--A PDP sponsor 
                        and an MA organization shall require pharmacy 
                        benefit managers to make rebate contracts with 
                        drug manufacturers made on their behalf 
                        available under audits described in clause (i).
                            ``(iv) Confidentiality agreements.--Audits 
                        described in clause (i) shall be subject to 
                        confidentiality agreements to prevent, except 
                        as required under clause (vii), the 
                        redisclosure of data transmitted under the 
                        audit.
                            ``(v) Frequency.--A financial audit under 
                        clause (i) shall be conducted periodically (but 
                        in no case less frequently than once every 2 
                        years).
                            ``(vi) Timeframe for pbm to provide 
                        information.--A PDP sponsor and an MA 
                        organization shall require that a pharmacy 
                        benefit manager that is being audited under 
                        clause (i) provide (as part of their 
                        contracting agreement) the requested 
                        information to the independent third party 
                        conducting the audit within 45 days of the date 
                        of the request.
                            ``(vii) Submission of audit reports to the 
                        secretary.--
                                    ``(I) In general.--A PDP sponsor 
                                and an MA organization shall submit to 
                                the Secretary the final report on any 
                                audit conducted under clause (i) within 
                                30 days of the PDP sponsor or MA 
                                organization receiving the report from 
                                the independent third party conducting 
                                the audit.
                                    ``(II) Review.--The Secretary shall 
                                review final reports submitted under 
                                clause (i) to determine the extent to 
                                which the goals specified in subclauses 
                                (I) and (II) of subparagraph (B)(i) are 
                                met.
                                    ``(III) Confidentiality.--
                                Notwithstanding any other provision of 
                                law, information disclosed in a report 
                                submitted under clause (i) related to 
                                the net cost of a covered part D drug 
                                is confidential and shall not be 
                                disclosed by the Secretary or a 
                                Medicare contractor.
                            ``(viii) Notice of noncompliance.--A PDP 
                        sponsor and an MA organization shall notify the 
                        Secretary if any pharmacy benefit manager is 
                        not complying with requests for access to 
                        information required under an audit under 
                        clause (i).
                            ``(ix) Civil monetary penalties.--
                                    ``(I) In general.--Subject to 
                                subclause (II), if the Secretary 
                                determines that a PDP sponsor or an MA 
                                organization has failed to conduct an 
                                audit under clause (i), the Secretary 
                                may impose a civil monetary penalty of 
                                not more than $10,000 for each day of 
                                such noncompliance.
                                    ``(II) Procedure.--The provisions 
                                of section 1128A, other than 
                                subsections (a) and (b) and the first 
                                sentence of subsection (c)(1) of such 
                                section, shall apply to civil monetary 
                                penalties under this clause in the same 
                                manner as such provisions apply to a 
                                penalty or proceeding under section 
                                1128A.''.
    (c) Disclosure to Pharmacy of Post-Point-of-Sale Pharmacy Price 
Concessions and Incentive Payments.--Section 1860D-2(d)(2) of the 
Social Security Act (42 U.S.C. 1395w-102(d)(2)) is amended--
            (1) by striking ``Disclosure.--A PDP sponsor'' and 
        inserting the following: ``Disclosure.--
                    ``(A) To the secretary.--A PDP sponsor''; and
            (2) by adding at the end the following new subparagraph:
                    ``(B) To pharmacies.--
                            ``(i) In general.--For plan year 2025 and 
                        subsequent plan years, a PDP sponsor offering a 
                        prescription drug plan and an MA organization 
                        offering an MA-PD plan shall report any 
                        pharmacy price concession or incentive payment 
                        that occurs with respect to a pharmacy after 
                        payment for covered part D drugs at the point-
                        of-sale, including by an intermediary 
                        organization with which a PDP sponsor or MA 
                        organization has contracted, to the pharmacy.
                            ``(ii) Timing.--The reporting of price 
                        concessions and incentive payments to a 
                        pharmacy under clause (i) shall be made on a 
                        periodic basis (but in no case less frequently 
                        than annually).
                            ``(iii) Claim level.--The reporting of 
                        price concessions and incentive payments to a 
                        pharmacy under clause (i) shall be at the claim 
                        level or approximated at the claim level if the 
                        price concession or incentive payment was 
                        applied at a level other than at the claim 
                        level.''.
    (d) Disclosure of P&T Committee Conflicts of Interest.--
            (1) In general.--Section 1860D-4(b)(3)(A) of the Social 
        Security Act (42 U.S.C. 1395w-104(b)(3)(A)) is amended by 
        adding at the end the following new clause:
                            ``(iii) Disclosure of conflicts of 
                        interest.--With respect to plan year 2025 and 
                        subsequent plan years, a PDP sponsor of a 
                        prescription drug plan and an MA organization 
                        offering an MA-PD plan shall, as part of its 
                        bid submission under section 1860D-11(b), 
                        provide the Secretary with a completed 
                        statement of financial conflicts of interest, 
                        including with manufacturers, from each member 
                        of any pharmacy and therapeutic committee used 
                        by the sponsor or organization pursuant to this 
                        paragraph.''.
            (2) Inclusion in bid.--Section 1860D-11(b)(2) of the Social 
        Security Act (42 U.S.C. 1395w-111(b)(2)) is amended--
                    (A) by redesignating subparagraph (F) as 
                subparagraph (G); and
                    (B) by inserting after subparagraph (E) the 
                following new subparagraph:
                    ``(F) P&T committee conflicts of interest.--The 
                information required to be disclosed under section 
                1860D-4(b)(3)(A)(iii).''.
    (e) Information on Direct and Indirect Remuneration Required To Be 
Included in Bid.--Section 1860D-11(b) of the Social Security Act (42 
U.S.C. 1395w-111(b)) is amended--
            (1) in paragraph (1), by adding at the end the following 
        new sentence: ``With respect to actual amounts of direct and 
        indirect remuneration submitted pursuant to clause (v) of 
        paragraph (2), such amounts shall be consistent with data 
        reported to the Secretary in a prior year.''; and
            (2) in paragraph (2)(C)--
                    (A) in clause (iii), by striking ``and'' at the 
                end;
                    (B) in clause (iv), by striking the period at the 
                end and inserting the following: ``, and, with respect 
                to plan year 2025 and subsequent plan years, actual and 
                projected administrative expenses assumed in the bid, 
                categorized by the type of such expense, including 
                actual and projected price concessions retained by a 
                pharmacy benefit manager; and''; and
                    (C) by adding at the end the following new clause:
                            ``(v) with respect to plan year 2025 and 
                        subsequent plan years, actual and projected 
                        direct and indirect remuneration, categorized 
                        as received from each of the following:
                                    ``(I) A pharmacy.
                                    ``(II) A manufacturer.
                                    ``(III) A pharmacy benefit manager.
                                    ``(IV) Other entities, as 
                                determined by the Secretary.''.

SEC. 211. PUBLIC DISCLOSURE OF DIRECT AND INDIRECT REMUNERATION REVIEW 
              AND AUDIT RESULTS.

    Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152) 
is amended by adding at the end the following new subsection:
    ``(e) Public Disclosure of Direct and Indirect Remuneration Review 
and Financial Audit Results.--
            ``(1) DIR review results.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in 2023 and each subsequent year, the 
                Secretary shall make available to the public on the 
                Internet website of the Centers for Medicare & Medicaid 
                Services information on discrepancies related to 
                summary and detailed DIR reports submitted by PDP 
                sponsors pursuant to section 1860D-15 across all 
                prescription drug plans based on the most recent data 
                available. Information made available under this 
                subparagraph shall include the following:
                            ``(i) The number of potential errors 
                        identified by the Secretary for PDP sponsors to 
                        review.
                            ``(ii) The extent to which PDP sponsors 
                        resubmitted DIR reports to make changes for 
                        previous contract years.
                            ``(iii) The extent to which resubmitted DIR 
                        reports resulted in an increase or decrease in 
                        DIR in a previous contract year.
                    ``(B) Exclusion of certain submissions in 
                calculation.--The Secretary shall exclude any 
                information in DIR reports submitted with respect to 
                PACE programs under section 1894 (pursuant to section 
                1860D-21(f)) and qualified retiree prescription drug 
                plans (as defined in section 1860D-22(a)(2)) from the 
                information that is made available to the public under 
                subparagraph (A).
            ``(2) Financial audit results.--In 2023 and each subsequent 
        year, the Secretary shall make available to the public on the 
        Internet website of the Centers for Medicare & Medicaid 
        Services the results of DIR audits required under section 
        1860D-12(b)(3)(C). Information made available under this 
        paragraph shall include the following:
                    ``(A) With respect to the year, the number of PDP 
                sponsors that received each of the following:
                            ``(i) A notice of observations or findings 
                        that required the sponsor to make DIR report 
                        corrections.
                            ``(ii) An unqualified audit opinion that 
                        renders the audit closed.
                            ``(iii) A qualified audit opinion that 
                        requires the sponsor to submit a corrective 
                        action plan to the Secretary.
                            ``(iv) An adverse opinion, with a 
                        description of the types of actions that the 
                        Secretary takes when issuing an adverse 
                        opinion.
                    ``(B) With respect to a preceding year:
                            ``(i) The number of PDP sponsors that 
                        reopened a previously closed reconciliation as 
                        a result of an audit, including as a result of 
                        DIR changes.
                            ``(ii) The extent to which the Secretary 
                        recouped an overpayment or made an underpayment 
                        as a result of a reopening of a previously 
                        closed reconciliation.
            ``(3) Definition of dir.--For purposes of this subsection, 
        the term `DIR' means direct and indirect remuneration as 
        defined in section 423.308 of title 42, Code of Federal 
        Regulations, or any successor regulation.''.

SEC. 212. IMPROVEMENTS TO PROVISION OF PARTS A AND B CLAIMS DATA TO 
              PRESCRIPTION DRUG PLANS.

    (a) Data Use.--
            (1) In general.--Paragraph (6) of section 1860D-4(c) of the 
        Social Security Act (42 U.S.C. 1395w-104(c)), as added by 
        section 50354 of division E of the Bipartisan Budget Act of 
        2018 (Public Law 115-123), relating to providing prescription 
        drug plans with parts A and B claims data to promote the 
        appropriate use of medications and improve health outcomes, is 
        amended--
                    (A) in subparagraph (B)--
                            (i) by redesignating clauses (i), (ii), and 
                        (iii) as subclauses (I), (II), and (III), 
                        respectively, and moving such subclauses 2 ems 
                        to the right;
                            (ii) by striking ``Purposes.--A PDP 
                        sponsor'' and inserting ``Purposes.--
                            ``(i) In general.--A PDP sponsor.''; and
                            (iii) by adding at the end the following 
                        new clause:
                            ``(ii) Clarification.--The limitation on 
                        data use under subparagraph (C)(i) shall not 
                        apply to the extent that the PDP sponsor is 
                        using the data provided to carry out any of the 
                        purposes described in clause (i).''; and
                    (B) in subparagraph (C)(i), by striking ``To 
                inform'' and inserting ``Subject to subparagraph 
                (B)(ii), to inform''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to plan years beginning on or after January 1, 
        2025.
    (b) Manner of Provision.--Subparagraph (D) of such paragraph (6) is 
amended--
            (1) by striking ``described.--The data described in this 
        clause'' and inserting ``described.--
                            ``(i) In general.--The data described in 
                        this subparagraph''; and
            (2) by adding at the end the following new clause:
                            ``(ii) Manner of provision.--
                                    ``(I) In general.--Such data may be 
                                provided pursuant to this paragraph in 
                                the same manner as data under the Part 
                                D Enhanced Medication Therapy 
                                Management model tested under section 
                                1115A, through Application Programming 
                                Interface, or in another manner as 
                                determined by the Secretary.
                                    ``(II) Implementation.--
                                Notwithstanding any other provision of 
                                law, the Secretary may implement this 
                                clause by program instruction or 
                                otherwise.''.
    (c) Technical Correction.--Such paragraph (6) is redesignated as 
paragraph (7).

SEC. 213. MEDICARE PART D REBATE BY MANUFACTURERS.

    (a) In General.--Part D of title XVIII of the Social Security Act 
is amended by inserting after section 1860D-14A (42 U.S.C. 1395w-114a) 
the following new section:

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

    ``(a) In General.--
            ``(1) In general.--Subject to the provisions of this 
        section, in order for coverage to be available under this part 
        for a part D rebatable drug (as defined in subsection (h)(1)) 
        of a manufacturer (as defined in section 1927(k)(5)) dispensed 
        during an applicable year, the manufacturer must have entered 
        into and have in effect an agreement described in subsection 
        (b).
            ``(2) Authorizing coverage for drugs not covered under 
        agreements.--Paragraph (1) shall not apply to the dispensing of 
        a covered part D drug if--
                    ``(A) the Secretary has made a determination that 
                the availability of the drug is essential to the health 
                of beneficiaries under this part; or
                    ``(B) the Secretary determines that in the period 
                beginning on January 1, 2025, and ending on December 
                31, 2025, there were extenuating circumstances.
            ``(3) Applicable year.--For purposes of this section the 
        term `applicable year' means a year beginning with 2025.
    ``(b) Agreements.--
            ``(1) Terms of agreement.--An agreement described in this 
        subsection, with respect to a manufacturer of a part D 
        rebatable drug, is an agreement under which the following shall 
        apply:
                    ``(A) Secretarial provision of information.--Not 
                later than 9 months after the end of each applicable 
                year with respect to which the agreement is in effect, 
                the Secretary, for each part D rebatable drug of the 
                manufacturer, shall report to the manufacturer the 
                following for such year:
                            ``(i) Information on the total number of 
                        units (as defined in subsection (h)(2)) for 
                        each dosage form and strength with respect to 
                        such part D rebatable drug and year.
                            ``(ii) Information on the amount (if any) 
                        of the excess average manufacturer price 
                        increase described in subsection (c)(1)(B) for 
                        each dosage form and strength with respect to 
                        such drug and year.
                            ``(iii) The rebate amount specified under 
                        subsection (c) for each dosage form and 
                        strength with respect to such drug and year.
                    ``(B) Manufacturer requirements.--For each 
                applicable year with respect to which the agreement is 
                in effect, the manufacturer of the part D rebatable 
                drug, for each dosage form and strength with respect to 
                such drug, not later than 30 days after the date of 
                receipt from the Secretary of the information described 
                in subparagraph (A) for such year, shall provide to the 
                Secretary a rebate that is equal to the amount 
                specified in subsection (c) for such dosage form and 
                strength with respect to such drug for such year.
            ``(2) Length of agreement.--
                    ``(A) In general.--An agreement under this section, 
                with respect to a part D rebatable drug, shall be 
                effective for an initial period of not less than one 
                year and shall be automatically renewed for a period of 
                not less than one year unless terminated under 
                subparagraph (B).
                    ``(B) Termination.--
                            ``(i) By secretary.--The Secretary may 
                        provide for termination of an agreement under 
                        this section for 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 of such 
                        termination. The Secretary shall provide, upon 
                        request, a manufacturer with a hearing 
                        concerning such a termination, but such hearing 
                        shall not delay the effective date of the 
                        termination.
                            ``(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 the 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 the plan year, 
                                as of the day after the end of the 
                                succeeding plan year.
                    ``(C) Effectiveness of termination.--Any 
                termination under this paragraph shall not affect 
                rebates due under the agreement under this section 
                before the effective date of its termination.
                    ``(D) Delay before reentry.--In the case of any 
                agreement under this section with a manufacturer that 
                is terminated in a plan year, the Secretary may not 
                enter into another such agreement with the manufacturer 
                (or a successor manufacturer) before the subsequent 
                plan year, unless the Secretary finds good cause for an 
                earlier reinstatement of such an agreement.
    ``(c) Rebate Amount.--
            ``(1) In general.--For purposes of this section, the amount 
        specified in this subsection for a dosage form and strength 
        with respect to a part D rebatable drug and applicable year is, 
        subject to subparagraphs (B) and (C) of paragraph (5), the 
        amount equal to the product of--
                    ``(A) the total number of units of such dosage form 
                and strength with respect to such part D rebatable drug 
                and year; and
                    ``(B) the amount (if any) by which--
                            ``(i) the annual manufacturer price (as 
                        determined in paragraph (2)) paid for such 
                        dosage form and strength with respect to such 
                        part D rebatable drug for the year; exceeds
                            ``(ii) the inflation-adjusted payment 
                        amount determined under paragraph (3) for such 
                        dosage form and strength with respect to such 
                        part D rebatable drug for the year.
            ``(2) Determination of annual manufacturer price.--The 
        annual manufacturer price determined under this paragraph for a 
        dosage form and strength, with respect to a part D rebatable 
        drug and an applicable year, is the sum of the products of--
                    ``(A) the average manufacturer price (as defined in 
                subsection (h)(6)) of such dosage form and strength, as 
                calculated for a unit of such drug, with respect to 
                each of the calendar quarters of such year; and
                    ``(B) the ratio of--
                            ``(i) the total number of units of such 
                        dosage form and strength dispensed during each 
                        such calendar quarter of such year; to
                            ``(ii) the total number of units of such 
                        dosage form and strength dispensed during such 
                        year.
            ``(3) Determination of inflation-adjusted payment amount.--
        The inflation-adjusted payment amount determined under this 
        paragraph for a dosage form and strength with respect to a part 
        D rebatable drug for an applicable year, subject to 
        subparagraphs (A) and (D) of paragraph (5), is--
                    ``(A) the benchmark year manufacturer price 
                determined under paragraph (4) for such dosage form and 
                strength with respect to such drug and an applicable 
                year; increased by
                    ``(B) the percentage by which the applicable year 
                CPI-U (as defined in subsection (h)(5)) for the 
                applicable year exceeds the benchmark period CPI-U (as 
                defined in subsection (h)(4)).
            ``(4) Determination of benchmark year manufacturer price.--
        The benchmark year manufacturer price determined under this 
        paragraph for a dosage form and strength, with respect to a 
        part D rebatable drug and an applicable year, is the sum of the 
        products of--
                    ``(A) the average manufacturer price (as defined in 
                subsection (h)(6)) of such dosage form and strength, as 
                calculated for a unit of such drug, with respect to 
                each of the calendar quarters of the payment amount 
                benchmark year (as defined in subsection (h)(3)); and
                    ``(B) the ratio of--
                            ``(i) the total number of units of such 
                        dosage form and strength dispensed during each 
                        such calendar quarter of such payment amount 
                        benchmark year; to
                            ``(ii) the total number of units of such 
                        dosage form and strength dispensed during such 
                        payment amount benchmark year.
            ``(5) Special treatment of certain drugs and exemption.--
                    ``(A) Subsequently approved drugs.--In the case of 
                a part D rebatable drug first approved or licensed by 
                the Food and Drug Administration after January 1, 2016, 
                subparagraphs (A) and (B) of paragraph (4) shall be 
                applied as if the term `payment amount benchmark year' 
                were defined under subsection (h)(3) as the first 
                calendar year beginning after the day on which the drug 
                was first marketed by any manufacturer and subparagraph 
                (B) of paragraph (3) shall be applied as if the term 
                `benchmark period CPI-U' were defined under subsection 
                (h)(4) as if the reference to `January 2016' under such 
                subsection were a reference to `January of the first 
                year beginning after the date on which the drug was 
                first marketed by any manufacturer'.
                    ``(B) Exemption for shortages.--The Secretary may 
                reduce or waive the rebate under paragraph (1) with 
                respect to a part D rebatable drug that is described as 
                currently in shortage on the shortage list in effect 
                under section 506E of the Federal Food, Drug, and 
                Cosmetic Act or in the case of other exigent 
                circumstances, as determined by the Secretary.
                    ``(C) Treatment of new formulations.--
                            ``(i) In general.--In the case of a part D 
                        rebatable drug that is a line extension of a 
                        part D rebatable drug that is an oral solid 
                        dosage form, the Secretary shall establish a 
                        formula for determining the amount specified in 
                        this subsection with respect to such part D 
                        rebatable drug and an applicable year with 
                        consideration of the original part D rebatable 
                        drug.
                            ``(ii) Line extension defined.--In this 
                        subparagraph, the term `line extension' means, 
                        with respect to a part D rebatable drug, a new 
                        formulation of the drug (as determined by the 
                        Secretary), such as an extended release 
                        formulation, but does not include an abuse-
                        deterrent formulation of the drug (as 
                        determined by the Secretary), regardless of 
                        whether such abuse-deterrent formulation is an 
                        extended release formulation.
                    ``(D) Selected drugs.--In the case of a part D 
                rebatable drug that is a selected drug (as defined in 
                section 1192(c)) for a price applicability period (as 
                defined in section 1191(b)(2))--
                            ``(i) for plan years during such period for 
                        which a maximum fair price (as defined in 
                        section 1191(c)(2)) for such drug has been 
                        determined and is applied under part E of title 
                        XI, the rebate under subsection (b)(1)(B) shall 
                        be waived; and
                            ``(ii) in the case such drug is determined 
                        (pursuant to such section 1192(c)) to no longer 
                        be a selected drug, for each applicable year 
                        beginning after the price applicability period 
                        with respect to such drug, subparagraphs (A) 
                        and (B) of paragraph (4) shall be applied as if 
                        the term `payment amount benchmark year' were 
                        defined under subsection (h)(3) as the last 
                        year beginning during such price applicability 
                        period with respect to such selected drug and 
                        subparagraph (B) of paragraph (3) shall be 
                        applied as if the term `benchmark period CPI-U' 
                        were defined under subsection (h)(4) as if the 
                        reference to `January 2016' under such 
                        subsection were a reference to January of the 
                        last year beginning during such price 
                        applicability period with respect to such drug.
    ``(d) Rebate Deposits.--Amounts paid as rebates under subsection 
(c) shall be deposited into the Medicare Prescription Drug Account in 
the Federal Supplementary Medical Insurance Trust Fund established 
under section 1841.
    ``(e) Information.--For purposes of carrying out this section, the 
Secretary shall use information submitted by manufacturers under 
section 1927(b)(3).
    ``(f) Civil Money Penalty.--In the case of a manufacturer of a part 
D rebatable drug with an agreement in effect under this section who has 
failed to comply with the terms of the agreement under subsection 
(b)(1)(B) with respect to such drug for an applicable year, the 
Secretary may impose a civil money penalty on such manufacturer in an 
amount equal to 125 percent of the amount specified in subsection (c) 
for such drug for such year. The provisions of section 1128A (other 
than subsections (a) (with respect to amounts of penalties or 
additional assessments) and (b)) shall apply to a civil money penalty 
under this subsection in the same manner as such provisions apply to a 
penalty or proceeding under section 1128A(a).
    ``(g) Judicial Review.--There shall be no judicial review of the 
following:
            ``(1) The determination of units under this section.
            ``(2) The determination of whether a drug is a part D 
        rebatable drug under this section.
            ``(3) The calculation of the rebate amount under this 
        section.
    ``(h) Definitions.--In this section:
            ``(1) Part d rebatable drug defined.--
                    ``(A) In general.--The term `part D rebatable drug' 
                means a drug or biological that would (without 
                application of this section) be a covered part D drug, 
                except such term shall, with respect to an applicable 
                year, not include such a drug or biological if the 
                average annual total cost under this part for such year 
                per individual who uses such a drug or biological, as 
                determined by the Secretary, is less than, subject to 
                subparagraph (B), $100, as determined by the Secretary 
                using the most recent data available or, if data is not 
                available, as estimated by the Secretary.
                    ``(B) Increase.--The dollar amount applied under 
                subparagraph (A)--
                            ``(i) for 2026, shall be the dollar amount 
                        specified under such subparagraph for 2025, 
                        increased by the percentage increase in the 
                        consumer price index for all urban consumers 
                        (United States city average) for the 12-month 
                        period beginning with January of 2025; and
                            ``(ii) for a subsequent year, shall be the 
                        dollar amount specified in this subparagraph 
                        for the previous year, increased by the 
                        percentage increase in the consumer price index 
                        for all urban consumers (United States city 
                        average) for the 12-month period beginning with 
                        January of the previous year.
                Any dollar amount specified under this subparagraph 
                that is not a multiple of $10 shall be rounded to the 
                nearest multiple of $10.
            ``(2) Unit defined.--The term `unit' means, with respect to 
        a part D rebatable drug, the lowest identifiable quantity (such 
        as a capsule or tablet, milligram of molecules, or grams) of 
        the part D rebatable drug that is dispensed to individuals 
        under this part.
            ``(3) Payment amount benchmark year.--The term `payment 
        amount benchmark year' means the year beginning January 1, 
        2016.
            ``(4) Benchmark period cpi-u.--The term `benchmark period 
        CPI-U' means the consumer price index for all urban consumers 
        (United States city average) for January 2016.
            ``(5) Applicable year cpi-u.--The term `applicable year 
        CPI-U' means, with respect to an applicable year, the consumer 
        price index for all urban consumers (United States city 
        average) for January of such year.
            ``(6) Average manufacturer price.--The term `average 
        manufacturer price' has the meaning, with respect to a part D 
        rebatable drug of a manufacturer, given such term in section 
        1927(k)(1), with respect to a covered outpatient drug of a 
        manufacturer for a rebate period under section 1927.''.
    (b) Conforming Amendments.--
            (1) To part b asp calculation.--Section 1847A(c)(3) of the 
        Social Security Act (42 U.S.C. 1395w-3a(c)(3)), as amended by 
        section 201(c)(1), is further amended by striking ``section 
        1927 or section 1834(x)'' and inserting ``section 1927, section 
        1834(x), or section 1860D-14B''.
            (2) Excluding part d drug inflation rebate from best 
        price.--Section 1927(c)(1)(C)(ii)(I) of the Social Security Act 
        (42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)), as amended by section 
        201(c)(2), is further amended by striking ``or section 
        1834(x)'' and inserting ``, section 1834(x), or section 1860D-
        14B''.
            (3) Coordination with medicaid rebate information 
        disclosure.--Section 1927(b)(3)(D)(i) of the Social Security 
        Act (42 U.S.C. 1396r-8(b)(3)(D)(i)), as amended by section 
        201(c)(3), is further amended by striking ``or section 
        1834(x)'' and inserting ``, section 1834(x), or section 1860D-
        14B''.

SEC. 214. PROHIBITING BRANDING ON PART D BENEFIT CARDS.

    (a) In General.--Section 1851(j)(2)(B) of the Social Security Act 
(42 U.S.C. 1395w-21(j)(2)(B)) is amended by striking ``co-branded 
network provider'' and inserting ``co-branded, co-owned, or affiliated 
network provider, pharmacy, or pharmacy benefit manager''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to plan years beginning on or after January 1, 2025.

SEC. 215. REQUIRING PRESCRIPTION DRUG PLANS AND MA-PD PLANS TO REPORT 
              POTENTIAL FRAUD, WASTE, AND ABUSE TO THE SECRETARY OF 
              HHS.

    Section 1860D-4 of the Social Security Act (42 U.S.C. 1395w-104), 
as amended by section 225, is amended by adding at the end the 
following new subsection:
    ``(p) Reporting Potential Fraud, Waste, and Abuse.--Beginning 
January 1, 2024, the PDP sponsor of a prescription drug plan shall 
report to the Secretary, as specified by the Secretary--
            ``(1) any substantiated or suspicious activities (as 
        defined by the Secretary) with respect to the program under 
        this part as it relates to fraud, waste, and abuse; and
            ``(2) any steps made by the PDP sponsor after identifying 
        such activities to take corrective actions.''.

SEC. 216. ESTABLISHMENT OF PHARMACY QUALITY MEASURES UNDER MEDICARE 
              PART D.

    Section 1860D-4(c) of the Social Security Act (42 U.S.C. 1395w-
104(c)), as amended by section 226, is amended by adding at the end the 
following new paragraph:
            ``(8) Application of pharmacy quality measures.--
                    ``(A) In general.--A PDP sponsor that implements 
                incentive payments to a pharmacy or price concessions 
                paid by a pharmacy based on quality measures shall use 
                measures established or approved by the Secretary under 
                subparagraph (B) with respect to payment for covered 
                part D drugs dispensed by such pharmacy.
                    ``(B) Standard pharmacy quality measures.--The 
                Secretary shall establish or approve standard quality 
                measures from a consensus and evidence-based 
                organization for payments described in subparagraph 
                (A). Such measures shall focus on patient health 
                outcomes and be based on proven criteria measuring 
                pharmacy performance.
                    ``(C) Effective date.--The requirement under 
                subparagraph (A) shall take effect for plan years 
                beginning on or after January 1, 2026, or such earlier 
                date specified by the Secretary if the Secretary 
                determines there are sufficient measures established or 
                approved under subparagraph (B) to meet the requirement 
                under subparagraph (A).''.

SEC. 217. ADDITION OF NEW MEASURES BASED ON ACCESS TO BIOSIMILAR 
              BIOLOGICAL PRODUCTS TO THE 5-STAR RATING SYSTEM UNDER 
              MEDICARE ADVANTAGE.

    (a) In General.--Section 1853(o)(4) of the Social Security Act (42 
U.S.C. 1395w-23(o)(4)) is amended by adding at the end the following 
new subparagraph:
                    ``(E) Addition of new measures based on access to 
                biosimilar biological products.--
                            ``(i) In general.--For 2028 and subsequent 
                        years, the Secretary shall add a new set of 
                        measures to the 5-star rating system based on 
                        access to biosimilar biological products 
                        covered under part B and, in the case of MA-PD 
                        plans, such products that are covered part D 
                        drugs. Such measures shall assess the impact a 
                        plan's benefit structure may have on enrollees' 
                        utilization of or ability to access biosimilar 
                        biological products, including in comparison to 
                        the reference biological product, and shall 
                        include measures, as applicable, with respect 
                        to the following:
                                    ``(I) Coverage.--Assessing whether 
                                a biosimilar biological product is on 
                                the plan formulary in lieu of or in 
                                addition to the reference biological 
                                product.
                                    ``(II) Preferencing.--Assessing 
                                tier placement or cost-sharing for a 
                                biosimilar biological product relative 
                                to the reference biological product.
                                    ``(III) Utilization management 
                                tools.--Assessing whether and how 
                                utilization management tools are used 
                                with respect to a biosimilar biological 
                                product relative to the reference 
                                biological product.
                                    ``(IV) Utilization.--Assessing the 
                                percentage of enrollees prescribed the 
                                biosimilar biological product and the 
                                percentage of enrollees prescribed the 
                                reference biological product when the 
                                reference biological product is also on 
                                the plan formulary.
                            ``(ii) Definitions.--In this subparagraph, 
                        the terms `biosimilar biological product' and 
                        `reference biological product' have the meaning 
                        given those terms in section 1847A(c)(6).
                            ``(iii) Protecting patient interests.--In 
                        developing such measures, the Secretary shall 
                        ensure that each measure developed to address 
                        coverage, preferencing, or utilization 
                        management is constructed such that patients 
                        retain access to appropriate therapeutic 
                        options without undue administrative burden.''.
    (b) Clarification Regarding Application to Prescription Drug 
Plans.--To the extent the Secretary of Health and Human Services 
applies the 5-star rating system under section 1853(o)(4) of the Social 
Security Act (42 U.S.C. 1395w-23(o)(4)), or a similar system, to 
prescription drug plans under part D of title XVIII of such Act, the 
provisions of subparagraph (E) of such section, as added by subsection 
(a) of this section, shall apply under the system with respect to such 
plans in the same manner as such provisions apply to the 5-star rating 
system under such section 1853(o)(4).

SEC. 218. HHS STUDY AND REPORT ON THE INFLUENCE OF PHARMACEUTICAL 
              MANUFACTURER THIRD-PARTY REIMBURSEMENT HUBS ON HEALTH 
              CARE PROVIDERS WHO PRESCRIBE THEIR DRUGS AND BIOLOGICALS.

    (a) Study.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        conduct a study on the influence of pharmaceutical manufacturer 
        distribution models that provide third-party reimbursement hub 
        services on health care providers who prescribe the 
        manufacturer's drugs and biologicals, including for Medicare 
        part D beneficiaries.
            (2) Requirements.--The study under paragraph (1) shall 
        include an analysis of the following:
                    (A) The influence of pharmaceutical manufacturer 
                distribution models that provide third-party 
                reimbursement hub services to health care providers who 
                prescribe the manufacturer's drugs and biologicals, 
                including--
                            (i) the operations of pharmaceutical 
                        manufacturer distribution models that provide 
                        reimbursement hub services for health care 
                        providers who prescribe the manufacturer's 
                        products;
                            (ii) Federal laws affecting these 
                        pharmaceutical manufacturer distribution 
                        models; and
                            (iii) whether hub services could improperly 
                        incentivize health care providers to deem a 
                        drug or biological as medically necessary under 
                        section 423.578 of title 42, Code of Federal 
                        Regulations.
                    (B) Other areas determined appropriate by the 
                Secretary.
    (b) Report.--Not later than January 1, 2024, the Secretary shall 
submit to Congress a report on the study conducted under subsection 
(a), together with recommendations for such legislation and 
administrative action as the Secretary determines appropriate.
    (c) Consultation.--In conducting the study under subsection (a) and 
preparing the report under subsection (b), the Secretary shall consult 
with the Attorney General.

SEC. 219. ESTABLISHING A MONTHLY CAP ON BENEFICIARY INCURRED COSTS FOR 
              INSULIN PRODUCTS AND SUPPLIES UNDER A PRESCRIPTION DRUG 
              PLAN OR MA-PD PLAN.

    (a) In General.--Section 1860D-2 of the Social Security Act (42 
U.S.C. 1395w-102), as amended by sections 121 and 133, is further 
amended--
            (1) in subsection (b)(2)--
                    (A) in subparagraph (A), by striking ``and (E)'' 
                and inserting ``(E), and (F)'';
                    (B) in subparagraph (B), by striking ``and (D)'' 
                and inserting ``(D), and (F)''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F) Cap on incurred costs for insulin products 
                and supplies.--
                            ``(i) In general.--The coverage provides 
                        benefits, for costs above the annual deductible 
                        specified in paragraph (1) and up to the annual 
                        out-of-pocket threshold described in paragraph 
                        (4)(B) and with respect to a month (beginning 
                        with January of 2022), with cost sharing that 
                        is equal to $0 for a specified covered part D 
                        drug (as defined in clause (iii)) furnished to 
                        an individual who has incurred costs during 
                        such month with respect to specified covered 
                        part D drugs equal to--
                                    ``(I) for months occurring in 2022, 
                                $50; or
                                    ``(II) for months occurring in a 
                                subsequent year, the amount applicable 
                                under this clause for months occurring 
                                in the year preceding such subsequent 
                                year, increased by the annual 
                                percentage increase specified in 
                                paragraph (6) for such subsequent year 
                                and rounded to the nearest dollar.
                            ``(ii) Application.--The provisions of 
                        clauses (i) through (iii) of paragraph (4)(C) 
                        shall apply with respect to the determination 
                        of the incurred costs for specified covered 
                        part D drugs for purposes of clause (i) in the 
                        same manner as such provisions apply with 
                        respect to the determination of incurred costs 
                        for covered part D drugs for purposes of 
                        paragraph (4)(A).
                            ``(iii) Specified covered part d drug.--For 
                        purposes of this subparagraph, the term 
                        `specified covered part D drug' means a covered 
                        part D drug that is--
                                    ``(I) insulin; or
                                    ``(II) a medical supply associated 
                                with the injection of insulin (as 
                                defined in regulations of the Secretary 
                                promulgated pursuant to subsection 
                                (e)(1)(B)).''; and
            (2) in subsection (c), by adding at the end the following 
        new paragraph:
            ``(5) Same protection with respect to expenditures for 
        insulin and certain medical supplies.--The coverage provides 
        the coverage required under subsection (b)(2)(F).''.
    (b) Conforming Amendments.--
            (1) In general.--Section 1860D-14(a)(1)(D) of the Social 
        Security Act (42 U.S.C. 1395w-114(a)(1)(D)), as amended by 
        section 121, is further amended--
                    (A) in clause (ii), by striking ``section 1860D-
                2(b)(2)'' and inserting ``section 1860D-2(b)(2)(A)''; 
                and
                    (B) in clause (iii), by striking ``section 1860D-
                2(b)(2)'' and inserting ``section 1860D-2(b)(2)(A)''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply with respect to plan year 2022 and each subsequent 
        plan year.

SEC. 220. MONTHLY OUT-OF-POCKET COST SHARING MAXIMUM FOR ENROLLEES WHO 
              INCUR A SIGNIFICANT PORTION OF COSTS TOWARDS ANNUAL OUT-
              OF-POCKET THRESHOLD.

    (a) In General.--Section 1860D-2(b) of the Social Security Act (42 
U.S.C. 1395w-102(b)), as amended by section 2, is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (A), by striking ``and (D)'' 
                and inserting ``, (D), and (E)''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(E) Monthly out-of-pocket cost sharing maximum 
                for enrollees who incur a significant portion of costs 
                towards annual out-of-pocket threshold.--
                            ``(i) Establishment of process.--
                                    ``(I) In general.--For plan years 
                                beginning on or after January 1, 2024, 
                                the Secretary shall, through notice and 
                                comment rulemaking, establish a process 
                                under which each PDP sponsor offering a 
                                prescription drug plan and each MA 
                                organization offering an MA-PD plan 
                                shall each plan year automatically 
                                enroll applicable enrollees in the 
                                option to have their monthly out-of-
                                pocket cost-sharing under the plan 
                                capped and paid in monthly installments 
                                in accordance with this subparagraph 
                                (referred to in this subparagraph as 
                                the `monthly out-of-pocket cost sharing 
                                maximum option').
                                    ``(II) Opt out.--The process 
                                established under this clause shall 
                                permit an applicable enrollee, prior to 
                                the beginning of the plan year or at 
                                any point during the plan year, to opt 
                                out of enrollment in the monthly out-
                                of-pocket cost sharing maximum option 
                                and pay any out-of-pocket cost-sharing 
                                otherwise applicable for any covered 
                                part D drug in full at the time of the 
                                dispensing of such drug (or at the time 
                                of such opt out in the case of costs 
                                incurred during such enrollment that 
                                have not yet been billed to the 
                                enrollee).
                            ``(ii) Definitions.--
                                    ``(I) Applicable enrollee.--In this 
                                subparagraph, the term `applicable 
                                enrollee' means any enrollee in a 
                                prescription drug plan or an MA-PD 
                                plan, including an enrollee who is a 
                                subsidy eligible individual (as defined 
                                in paragraph (3) of section 1860D-
                                14(a)), who incurs or is likely to 
                                incur a significant percentage of costs 
                                for covered part D drugs.
                                    ``(II) Significant percentage.--For 
                                purposes of subclause (I), the 
                                Secretary shall, in the rulemaking 
                                under clause (i), define the term 
                                `significant percentage' with respect 
                                to a percentage of the annual out-of-
                                pocket threshold specified in paragraph 
                                (4)(B) but in no case shall the 
                                `significant percentage' be less than 
                                50 percent or more than 100 percent of 
                                the annual out-of-pocket threshold.
                            ``(iii) Determination of monthly out-of-
                        pocket cost sharing maximum.--For each month in 
                        a plan year in which an applicable enrollee is 
                        enrolled in the monthly out-of-pocket cost 
                        sharing maximum option, the PDP sponsor or MA 
                        organization shall determine a monthly out-of-
                        pocket cost sharing maximum (as defined in 
                        clause (v)) for such enrollee.
                            ``(iv) Beneficiary monthly payments.--With 
                        respect to an applicable enrollee who is 
                        enrolled in the monthly out-of-pocket cost 
                        sharing maximum option, for each month 
                        described in clause (iii), the PDP sponsor or 
                        MA organization shall bill such enrollee an 
                        amount (not to exceed the monthly out-of-pocket 
                        cost sharing maximum) for the out-of-pocket 
                        costs of such enrollee in such month.
                            ``(v) Monthly out-of-pocket cost sharing 
                        maximum defined.--In this subparagraph, the 
                        term `monthly out-of-pocket cost sharing 
                        maximum' means, with respect to an enrollee--
                                    ``(I) for the first month in which 
                                this subparagraph applies, an amount 
                                determined by calculating--
                                            ``(aa) the annual out-of-
                                        pocket threshold specified in 
                                        paragraph (4)(B) minus the 
                                        incurred costs of the enrollee 
                                        as described in paragraph 
                                        (4)(C); divided by
                                            ``(bb) the number of months 
                                        remaining in the plan year; and
                                    ``(II) for a subsequent month, an 
                                amount determined by calculating--
                                            ``(aa) the sum of any 
                                        remaining out-of-pocket costs 
                                        owed by the enrollee from a 
                                        previous month that have not 
                                        yet been billed to the enrollee 
                                        and any additional costs 
                                        incurred by the enrollee; 
                                        divided by
                                            ``(bb) the number of months 
                                        remaining in the plan year.
                            ``(vi) Additional requirements.--The 
                        following requirements shall apply with respect 
                        to the monthly out-of-pocket cost sharing 
                        maximum option under this subparagraph:
                                    ``(I) Secretarial 
                                responsibilities.--The Secretary shall 
                                provide information to part D eligible 
                                individuals on the monthly out-of-
                                pocket cost sharing maximum option 
                                through educational materials, 
                                including through the notices provided 
                                under section 1804(a).
                                    ``(II) PDP sponsor and ma 
                                organization responsibilities.--Each 
                                PDP sponsor offering a prescription 
                                drug plan or MA organization offering 
                                an MA-PD plan--
                                            ``(aa) shall not limit the 
                                        application of the monthly out-
                                        of-pocket cost sharing maximum 
                                        option to certain covered part 
                                        D drugs;
                                            ``(bb) shall, prior to the 
                                        plan year, notify prospective 
                                        enrollees of such option, 
                                        including the availability of 
                                        the opt out under clause 
                                        (i)(II);
                                            ``(cc) shall include 
                                        information on such option in 
                                        enrollee educational materials, 
                                        including the availability of 
                                        the opt out under clause 
                                        (i)(II);
                                            ``(dd) shall have in place 
                                        a mechanism to notify a 
                                        pharmacy during the plan year 
                                        when an enrollee incurs out-of-
                                        pocket costs with respect to 
                                        covered part D drugs that make 
                                        it likely the enrollee is an 
                                        applicable enrollee;
                                            ``(ee) shall provide that a 
                                        pharmacy, after receiving a 
                                        notification described in item 
                                        (dd) with respect to an 
                                        enrollee, informs the enrollee 
                                        of such notification;
                                            ``(ff) shall ensure that 
                                        the application of this 
                                        subparagraph has no effect on 
                                        the amount paid to pharmacies 
                                        (or the timing of such 
                                        payments) with respect to 
                                        covered part D drugs dispensed 
                                        to the enrollee; and
                                            ``(gg) shall have in place 
                                        a financial reconciliation 
                                        process to correct inaccuracies 
                                        in payments made by an enrollee 
                                        under this subparagraph with 
                                        respect to covered part D drugs 
                                        during the plan year.
                                    ``(III) Failure to pay amount 
                                billed under monthly out-of-pocket cost 
                                sharing maximum option.--If an 
                                applicable enrollee fails to pay the 
                                amount billed for a month as required 
                                under this subparagraph, the applicable 
                                enrollee's enrollment in the monthly 
                                out-of-pocket cost sharing maximum 
                                option shall be terminated and the 
                                enrollee shall pay the cost-sharing 
                                otherwise applicable for any covered 
                                part D drugs subsequently dispensed to 
                                the enrollee up to the annual out-of-
                                pocket threshold specified in paragraph 
                                (4)(B).
                                    ``(IV) Clarification regarding past 
                                due amounts.--Nothing in this 
                                subparagraph shall be construed as 
                                prohibiting a PDP sponsor or an MA 
                                organization from billing an enrollee 
                                for an amount owed under this 
                                subparagraph.
                                    ``(V) Treatment of unsettled 
                                balances.--Any unsettled balances with 
                                respect to amounts owed under this 
                                subparagraph shall be treated as plan 
                                losses and the Secretary shall not be 
                                liable for any such balances outside of 
                                those assumed as losses estimated in 
                                plan bids.''; and
            (2) in paragraph (4)--
                    (A) in subparagraph (C), by striking ``and subject 
                to subparagraph (F)'' and inserting ``and subject to 
                subparagraphs (F) and (G)''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(G) Inclusion of costs paid under monthly out-of-
                pocket cost sharing maximum option.--In applying 
                subparagraph (A), with respect to an applicable 
                enrollee who is enrolled in the monthly out-of-pocket 
                cost sharing maximum option described in clause (i)(I) 
                of paragraph (2)(E), costs shall be treated as incurred 
                if such costs are paid by a PDP sponsor or an MA 
                organization under the process provided under such 
                paragraph.''.
    (b) Application to Alternative Prescription Drug Coverage.--Section 
1860D-2(c) of the Social Security Act (42 U.S.C. 1395w-102(c)) is 
amended by adding at the end the following new paragraph:
            ``(4) Same monthly out-of-pocket cost sharing maximum.--For 
        plan years beginning on or after January 1, 2024, the monthly 
        out-of-pocket cost sharing maximum for applicable enrollees 
        under the process provided under subsection (b)(2)(E) shall 
        apply to such coverage.''.

                       Subtitle C--Miscellaneous

SEC. 221. DRUG MANUFACTURER PRICE TRANSPARENCY.

    Title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is 
amended by inserting after section 1128K the following new section:

``SEC. 1128L. DRUG MANUFACTURER PRICE TRANSPARENCY.

    ``(a) In General.--
            ``(1) Determinations.--Beginning July 1, 2025, the 
        Secretary shall make determinations as to whether a drug is an 
        applicable drug as described in subsection (b).
            ``(2) Required justification.--If the Secretary determines 
        under paragraph (1) that an applicable drug is described in 
        subsection (b), the manufacturer of the applicable drug shall 
        submit to the Secretary the justification described in 
        subsection (c) in accordance with the timing described in 
        subsection (d).
    ``(b) Applicable Drug Described.--
            ``(1) In general.--An applicable drug is described in this 
        subsection if it meets any of the following at the time of the 
        determination:
                    ``(A) Large increase.--The drug (per dose)--
                            ``(i) has a wholesale acquisition cost of 
                        at least $10; and
                            ``(ii) had an increase in the wholesale 
                        acquisition cost, with respect to 
                        determinations made--
                                    ``(I) during 2023, of at least 100 
                                percent since the date of the enactment 
                                of this section;
                                    ``(II) during 2024, of at least 100 
                                percent in the preceding 12 months or 
                                of at least 150 percent in the 
                                preceding 24 months;
                                    ``(III) during 2025, of at least 
                                100 percent in the preceding 12 months 
                                or of at least 200 percent in the 
                                preceding 36 months;
                                    ``(IV) during 2026, of at least 100 
                                percent in the preceding 12 months or 
                                of at least 250 percent in the 
                                preceding 48 months; or
                                    ``(V) on or after January 1, 2027, 
                                of at least 100 percent in the 
                                preceding 12 months or of at least 300 
                                percent in the preceding 60 months.
                    ``(B) High spending with increase.--The drug--
                            ``(i) was in the top 50th percentile of net 
                        spending under title XVIII or XIX (to the 
                        extent data is available) during any 12-month 
                        period in the preceding 60 months; and
                            ``(ii) per dose, had an increase in the 
                        wholesale acquisition cost, with respect to 
                        determinations made--
                                    ``(I) during 2023, of at least 15 
                                percent since the date of the enactment 
                                of this section;
                                    ``(II) during 2024, of at least 15 
                                percent in the preceding 12 months or 
                                of at least 20 percent in the preceding 
                                24 months;
                                    ``(III) during 2025, of at least 15 
                                percent in the preceding 12 months or 
                                of at least 30 percent in the preceding 
                                36 months;
                                    ``(IV) during 2026, of at least 15 
                                percent in the preceding 12 months or 
                                of at least 40 percent in the preceding 
                                48 months; or
                                    ``(V) on or after January 1, 2027, 
                                of at least 15 percent in the preceding 
                                12 months or of at least 50 percent in 
                                the preceding 60 months.
                    ``(C) High launch price for new drugs.--In the case 
                of a drug that is marketed for the first time on or 
                after January 1, 2023, and for which the manufacturer 
                has established the first wholesale acquisition cost on 
                or after such date, such wholesale acquisition cost for 
                a year's supply or a course of treatment for such drug 
                exceeds the gross spending for covered part D drugs at 
                which the annual out-of-pocket threshold under section 
                1860D-2(b)(4)(B) would be met for the year.
            ``(2) Special rules.--
                    ``(A) Authority of secretary to substitute 
                percentages within a de minimis range.--For purposes of 
                applying paragraph (1), the Secretary may substitute 
                for each percentage described in subparagraph (A) or 
                (B) of such paragraph (other than the percentile 
                described subparagraph (B)(i) of such paragraph) a 
                percentage within a de minimis range specified by the 
                Secretary below the percentage so described.
                    ``(B) Drugs with high launch prices annually report 
                until a therapeutic equivalent is available.--In the 
                case of a drug that the Secretary determines is an 
                applicable drug described in subparagraph (C) of 
                paragraph (1), such drug shall remain described in such 
                subparagraph (C) (and the manufacturer of such drug 
                shall annually report the justification under 
                subsection (c)(2)) until the Secretary determines that 
                there is a therapeutic equivalent (as defined in 
                section 314.3 of title 21, Code of Federal Regulations, 
                or any successor regulation) for such drug.
            ``(3) Dose.--For purposes of applying paragraph (1), the 
        Secretary shall establish a definition of the term `dose'.
    ``(c) Justification Described.--
            ``(1) Increase in wac.--In the case of a drug that the 
        Secretary determines is an applicable drug described in 
        subparagraph (A) or (B) of subsection (b)(1), the justification 
        described in this subsection is all relevant, truthful, and 
        nonmisleading information and supporting documentation 
        necessary to justify the increase in the wholesale acquisition 
        cost of the applicable drug of the manufacturer, as determined 
        appropriate by the Secretary and which may include the 
        following:
                    ``(A) The individual factors that have contributed 
                to the increase in the wholesale acquisition cost.
                    ``(B) An explanation of the role of each factor in 
                contributing to such increase.
                    ``(C) Total expenditures of the manufacturer on--
                            ``(i) materials and manufacturing for such 
                        drug;
                            ``(ii) acquiring patents and licensing for 
                        each drug of the manufacturer; and
                            ``(iii) costs to purchase or acquire the 
                        drug from another company, if applicable.
                    ``(D) The percentage of total expenditures of the 
                manufacturer on research and development for such drug 
                that was derived from Federal funds.
                    ``(E) The total expenditures of the manufacturer on 
                research and development for such drug.
                    ``(F) The total revenue and net profit generated 
                from the applicable drug for each calendar year since 
                drug approval.
                    ``(G) The total expenditures of the manufacturer 
                that are associated with marketing and advertising for 
                the applicable drug.
                    ``(H) Additional information specific to the 
                manufacturer of the applicable drug, such as--
                            ``(i) the total revenue and net profit of 
                        the manufacturer for the period of such 
                        increase, as determined by the Secretary;
                            ``(ii) metrics used to determine executive 
                        compensation; and
                            ``(iii) any additional information related 
                        to drug pricing decisions of the manufacturer, 
                        such as total expenditures on--
                                    ``(I) drug research and 
                                development; or
                                    ``(II) clinical trials on drugs 
                                that failed to receive approval by the 
                                Food and Drug Administration.
            ``(2) High launch price.--In the case of a drug that the 
        Secretary determines is an applicable drug described in 
        subparagraph (C) of subsection (b)(1), the justification 
        described in this subsection is all relevant, truthful, and 
        nonmisleading information and supporting documentation 
        necessary to justify the wholesale acquisition cost of the 
        applicable drug of the manufacturer, as determined by the 
        Secretary and which may include the items described in 
        subparagraph (C) through (H) of paragraph (1).
    ``(d) Timing.--
            ``(1) Notification.--Not later than 60 days after the date 
        on which the Secretary makes the determination that a drug is 
        an applicable drug under subsection (b), the Secretary shall 
        notify the manufacturer of the applicable drug of such 
        determination.
            ``(2) Submission of justification.--Not later than 180 days 
        after the date on which a manufacturer receives a notification 
        under paragraph (1), the manufacturer shall submit to the 
        Secretary the justification required under subsection (a).
            ``(3) Posting on internet website.--
                    ``(A) In general.--Subject to subparagraph (B), not 
                later than 30 days after receiving the justification 
                under paragraph (2), the Secretary shall post on the 
                Internet website of the Centers for Medicare & Medicaid 
                Services the justification, together with a summary of 
                such justification that is written and formatted using 
                language that is easily understandable by beneficiaries 
                under titles XVIII and XIX.
                    ``(B) Exclusion of proprietary information.--The 
                Secretary shall exclude proprietary information, such 
                as trade secrets and intellectual property, submitted 
                by the manufacturer in the justification under 
                paragraph (2) from the posting described in 
                subparagraph (A).
    ``(e) Exception to Requirement for Submission.--In the case of a 
drug that the Secretary determines is an applicable drug described in 
subparagraph (A) or (B) of subsection (b)(1), the requirement to submit 
a justification under subsection (a) shall not apply where the 
manufacturer, after receiving the notification under subsection (d)(1) 
with respect to the applicable drug of the manufacturer, reduces the 
wholesale acquisition cost of a drug so that it no longer is described 
in such subparagraph (A) or (B) for at least a 4-month period, as 
determined by the Secretary.
    ``(f) Penalties.--
            ``(1) Failure to submit timely justification.--If the 
        Secretary determines that a manufacturer has failed to submit a 
        justification as required under this section, including in 
        accordance with the timing and form required, with respect to 
        an applicable drug, the Secretary shall apply a civil monetary 
        penalty in an amount of $10,000 for each day the manufacturer 
        has failed to submit such justification as so required.
            ``(2) False information.--Any manufacturer that submits a 
        justification under this section and knowingly provides false 
        information in such justification is subject to a civil 
        monetary penalty in an amount not to exceed $100,000 for each 
        item of false information.
            ``(3) Application of procedures.--The provisions of section 
        1128A (other than subsections (a) and (b)) shall apply to a 
        civil monetary penalty under this subsection in the same manner 
        as such provisions apply to a penalty or proceeding under 
        section 1128A(a). Civil monetary penalties imposed under this 
        subsection are in addition to other penalties as may be 
        prescribed by law.
    ``(g) Definitions.--In this section:
            ``(1) Drug.--The term `drug' means a drug, as defined in 
        section 201(g) of the Federal Food, Drug, and Cosmetic Act, 
        that is intended for human use and subject to section 503(b)(1) 
        of such Act, including a product licensed under section 351 of 
        the Public Health Service Act.
            ``(2) Manufacturer.--The term `manufacturer' has the 
        meaning given that term in section 1847A(c)(6)(A).
            ``(3) Wholesale acquisition cost.--The term `wholesale 
        acquisition cost' has the meaning given that term in section 
        1847A(c)(6)(B).''.

SEC. 222. STRENGTHENING AND EXPANDING PHARMACY BENEFIT MANAGERS 
              TRANSPARENCY REQUIREMENTS.

    Section 1150A of the Social Security Act (42 U.S.C. 1320b-23), as 
amended by section 223, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``or'' at then 
                end;
                    (B) in paragraph (2), by striking the comma at the 
                end and inserting ``; or''; and
                    (C) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) a State plan under title XIX, including a managed 
        care entity (as defined in section 1932(a)(1)(B)),'';
            (2) in subsection (b)--
                    (A) in paragraph (2)--
                            (i) by striking ``(excluding bona fide'' 
                        and all that follows through ``patient 
                        education programs))''; and
                            (ii) by striking ``aggregate amount of'' 
                        and inserting ``aggregate amount and percentage 
                        of'';
                    (B) in paragraph (3), by striking ``aggregate 
                amount of'' and inserting ``aggregate amount and 
                percentage (defined as a share of gross drug costs) 
                of''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(4) The aggregate amount of bona fide service fees (which 
        include distribution service fees, inventory management fees, 
        product stocking allowances, and fees associated with 
        administrative services agreements and patient care programs 
        (such as medication compliance programs and patient education 
        programs)) the PBM received from--
                    ``(A) PDP sponsors;
                    ``(B) qualified health benefit plans;
                    ``(C) managed care entities (as defined in section 
                1932(a)(1)(b)); and
                    ``(D) drug manufacturers.'';
            (3) in subsection (c), by adding at the end the following 
        new paragraphs:
            ``(5) To States to carry out their administration and 
        oversight of the State plan under title XIX.
            ``(6) To the Federal Trade Commission to carry out section 
        5(a) of the Federal Trade Commission Act (15 U.S.C. 45a) and 
        any other relevant consumer protection or antitrust authorities 
        enforced by such Commission, including reviewing proposed 
        mergers in the prescription drug sector.
            ``(7) To assist the Department of Justice to carry out its 
        antitrust authorities, including reviewing proposed mergers in 
        the prescription drug sector.''; and
            (4) by adding at the end the following new subsection:
    ``(f) Annual OIG Evaluation and Report.--
            ``(1) Analysis.--The Inspector General of the Department of 
        Health and Human Services shall conduct an annual evaluation of 
        the information provided to the Secretary under this section. 
        Such evaluation shall include an analysis of--
                    ``(A) PBM rebates;
                    ``(B) administrative fees;
                    ``(C) the difference between what plans pay PBMs 
                and what PBMs pay pharmacies;
                    ``(D) generic dispensing rates; and
                    ``(E) other areas determined appropriate by the 
                Inspector General.
            ``(2) Report.--Not later than July 1, 2023, and annually 
        thereafter, the Inspector General of the Department of Health 
        and Human Services shall submit to Congress a report containing 
        the results of the evaluation conducted under paragraph (1), 
        together with recommendations for such legislation and 
        administrative action as the Inspector General determines 
        appropriate. Such report shall not disclose the identity of a 
        specific PBM, plan, or price charged for a drug.''.

SEC. 223. PRESCRIPTION DRUG PRICING DASHBOARDS.

    Part A of title XI of the Social Security Act is amended by adding 
at the end the following new section:

``SEC. 1150C. PRESCRIPTION DRUG PRICING DASHBOARDS.

    ``(a) In General.--Beginning not later than January 1, 2023, the 
Secretary shall establish, and annually update, internet website-based 
dashboards, through which beneficiaries, clinicians, researchers, and 
the public can review information on spending for, and utilization of, 
prescription drugs and biologicals (and related supplies and mechanisms 
of delivery) covered under each of parts B and D of title XVIII and 
under a State program under title XIX, including information on trends 
of such spending and utilization over time.
    ``(b) Medicare Part B Drug and Biological Dashboard.--
            ``(1) In general.--The dashboard established under 
        subsection (a) for part B of title XVIII shall provide the 
        information described in paragraph (2).
            ``(2) Information described.--The information described in 
        this paragraph is the following information with respect to 
        drug or biologicals covered under such part B:
                    ``(A) The brand name and, if applicable, the 
                generic names of the drug or biological.
                    ``(B) Consumer-friendly information on the uses and 
                clinical indications of the drug or biological.
                    ``(C) The manufacturer or labeler of the drug or 
                biological.
                    ``(D) To the extent feasible, the following 
                information:
                            ``(i) Average total spending per dosage 
                        unit of the drug or biological in the most 
                        recent 2 calendar years for which data is 
                        available.
                            ``(ii) The percentage change in average 
                        spending on the drug or biological per dosage 
                        unit between the most recent calendar year for 
                        which data is available and--
                                    ``(I) the preceding calendar year; 
                                and
                                    ``(II) the preceding 5 and 10 
                                calendar years.
                            ``(iii) The annual growth rate in average 
                        spending per dosage unit of the drug or 
                        biological in the most recent 5 or 10 calendar 
                        years for which data is available.
                            ``(iv) Total spending for the drug or 
                        biological for the most recent calendar year 
                        for which data is available.
                            ``(v) The number of beneficiaries receiving 
                        the drug or biological in the most recent 
                        calendar year for which data is available.
                            ``(vi) Average spending on the drug per 
                        beneficiary for the most recent calendar year 
                        for which data is available.
                    ``(E) The average sales price of the drug or 
                biological (as determined under section 1847A) for the 
                most recent quarter.
                    ``(F) Consumer-friendly information about the 
                coinsurance amount for the drug or biological for 
                beneficiaries for the most recent quarter. Such 
                information shall not include coinsurance amounts for 
                qualified medicare beneficiaries (as defined in section 
                1905(p)(1)).
                    ``(G) For the most recent calendar year for which 
                data is available--
                            ``(i) the 15 drugs and biologicals with the 
                        highest total spending under such part; and
                            ``(ii) any drug or biological for which the 
                        average annual per beneficiary spending exceeds 
                        the gross spending for covered part D drugs at 
                        which the annual out-of-pocket threshold under 
                        section 1860D-2(b)(4)(B) would be met for the 
                        year.
                    ``(H) Other information (not otherwise prohibited 
                in law from being disclosed) that the Secretary 
                determines would provide beneficiaries, clinicians, 
                researchers, and the public with helpful information 
                about drug and biological spending and utilization 
                (including trends of such spending and utilization).
    ``(c) Medicare Covered Part D Drug Dashboard.--
            ``(1) In general.--The dashboard established under 
        subsection (a) for part D of title XVIII shall provide the 
        information described in paragraph (2).
            ``(2) Information described.--The information described in 
        this paragraph is the following information with respect to 
        covered part D drugs under such part D:
                    ``(A) The information described in subparagraphs 
                (A) through (D) of subsection (b)(2).
                    ``(B) Information on average annual beneficiary 
                out-of-pocket costs below and above the annual out-of-
                pocket threshold under section 1860D-2(b)(4)(B) for the 
                current plan year. Such information shall not include 
                out-of-pocket costs for subsidy eligible individuals 
                under section 1860D-14.
                    ``(C) Information on how to access resources as 
                described in sections 1860D-1(c) and 1851(d).
                    ``(D) For the most recent calendar year for which 
                data is available--
                            ``(i) the 15 covered part D drugs with the 
                        highest total spending under such part; and
                            ``(ii) any covered part D drug for which 
                        the average annual per beneficiary spending 
                        exceeds the gross spending for covered part D 
                        drugs at which the annual out-of-pocket 
                        threshold under section 1860D-2(b)(4)(B) would 
                        be met for the year.
                    ``(E) Other information (not otherwise prohibited 
                in law from being disclosed) that the Secretary 
                determines would provide beneficiaries, clinicians, 
                researchers, and the public with helpful information 
                about covered part D drug spending and utilization 
                (including trends of such spending and utilization).
    ``(d) Medicaid Covered Outpatient Drug Dashboard.--
            ``(1) In general.--The dashboard established under 
        subsection (a) for title XIX shall provide the information 
        described in paragraph (2).
            ``(2) Information described.--The information described in 
        this paragraph is the following information with respect to 
        covered outpatient drugs under such title:
                    ``(A) The information described in subparagraphs 
                (A) through (D) of subsection (b)(2).
                    ``(B) For the most recent calendar year for which 
                data is available, the 15 covered outpatient drugs with 
                the highest total spending under such title.
                    ``(C) Other information (not otherwise prohibited 
                in law from being disclosed) that the Secretary 
                determines would provide beneficiaries, clinicians, 
                researchers, and the public with helpful information 
                about covered outpatient drug spending and utilization 
                (including trends of such spending and utilization).
    ``(e) Data Files.--The Secretary shall make available the 
underlying data for each dashboard established under subsection (a) in 
a machine-readable format.''.

SEC. 224. IMPROVING COORDINATION BETWEEN THE FOOD AND DRUG 
              ADMINISTRATION AND THE CENTERS FOR MEDICARE & MEDICAID 
              SERVICES.

    (a) In General.--
            (1) Public meeting.--
                    (A) In general.--Not later than 12 months after the 
                date of the enactment of this Act, the Secretary of 
                Health and Human Services (referred to in this section 
                as the ``Secretary'') shall convene a public meeting 
                for the purposes of discussing and providing input on 
                improvements to coordination between the Food and Drug 
                Administration and the Centers for Medicare & Medicaid 
                Services in preparing for the availability of novel 
                medical products described in subsection (c) on the 
                market in the United States.
                    (B) Attendees.--The public meeting shall include--
                            (i) representatives of relevant Federal 
                        agencies, including representatives from each 
                        of the medical product centers within the Food 
                        and Drug Administration and representatives 
                        from the coding, coverage, and payment offices 
                        within the Centers for Medicare & Medicaid 
                        Services;
                            (ii) stakeholders with expertise in the 
                        research and development of novel medical 
                        products, including manufacturers of such 
                        products;
                            (iii) representatives of commercial health 
                        insurance payers;
                            (iv) stakeholders with expertise in the 
                        administration and use of novel medical 
                        products, including physicians; and
                            (v) stakeholders representing patients and 
                        with expertise in the utilization of patient 
                        experience data in medical product development.
                    (C) Topics.--The public meeting shall include a 
                discussion of--
                            (i) the status of the drug and medical 
                        device development pipeline related to the 
                        availability of novel medical products;
                            (ii) the anticipated expertise necessary to 
                        review the safety and effectiveness of such 
                        products at the Food and Drug Administration 
                        and current gaps in such expertise, if any;
                            (iii) the expertise necessary to make 
                        coding, coverage, and payment decisions with 
                        respect to such products within the Centers for 
                        Medicare & Medicaid Services, and current gaps 
                        in such expertise, if any;
                            (iv) trends in the differences in the data 
                        necessary to determine the safety and 
                        effectiveness of a novel medical product and 
                        the data necessary to determine whether a novel 
                        medical product meets the reasonable and 
                        necessary requirements for coverage and payment 
                        under title XVIII of the Social Security Act 
                        pursuant to section 1862(a)(1)(A) of such Act 
                        (42 U.S.C. 1395y(a)(1)(A));
                            (v) the availability of information for 
                        sponsors of such novel medical products to meet 
                        each of those requirements; and
                            (vi) the coordination of information 
                        related to significant clinical improvement 
                        over existing therapies for patients between 
                        the Food and Drug Administration and the 
                        Centers for Medicare & Medicaid Services with 
                        respect to novel medical products.
                    (D) Trade secrets and confidential information.--No 
                information discussed as a part of the public meeting 
                under this paragraph shall be construed as authorizing 
                the Secretary to disclose any information that is a 
                trade secret or confidential information subject to 
                section 552(b)(4) of title 5, United States Code.
            (2) Improving transparency of criteria for medicare 
        coverage.--
                    (A) Draft guidance.--Not later than 18 months after 
                the public meeting under paragraph (1), the Secretary 
                shall update the final guidance titled ``National 
                Coverage Determinations with Data Collection as a 
                Condition of Coverage: Coverage with Evidence 
                Development'' to address any opportunities to improve 
                the availability and coordination of information as 
                described in clauses (iv) through (vi) of paragraph 
                (1)(C).
                    (B) Final guidance.--Not later than 12 months after 
                issuing draft guidance under subparagraph (A), the 
                Secretary shall finalize the updated guidance to 
                address any such opportunities.
    (b) Report on Coding, Coverage, and Payment Processes Under 
Medicare for Novel Medical Products.--Not later than 12 months after 
the date of the enactment of this Act, the Secretary shall publish a 
report on the Internet website of the Department of Health and Human 
Services regarding processes under the Medicare program under title 
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) with respect 
to the coding, coverage, and payment of novel medical products 
described in subsection (c). Such report shall include the following:
            (1) A description of challenges in the coding, coverage, 
        and payment processes under the Medicare program for novel 
        medical products.
            (2) Recommendations to--
                    (A) incorporate patient experience data (such as 
                the impact of a disease or condition on the lives of 
                patients and patient treatment preferences) into the 
                coverage and payment processes within the Centers for 
                Medicare & Medicaid Services;
                    (B) decrease the length of time to make national 
                and local coverage determinations under the Medicare 
                program (as those terms are defined in subparagraph (A) 
                and (B), respectively, of section 1862(l)(6) of the 
                Social Security Act (42 U.S.C. 1395y(l)(6)));
                    (C) streamline the coverage process under the 
                Medicare program and incorporate input from relevant 
                stakeholders into such coverage determinations; and
                    (D) identify potential mechanisms to incorporate 
                novel payment designs similar to those in development 
                in commercial insurance plans and State plans under 
                title XIX of such Act (42 U.S.C. 1396 et seq.) into the 
                Medicare program.
    (c) Novel Medical Products Described.--For purposes of this 
section, a novel medical product described in this subsection is a 
medical product, including a drug, biological (including gene and cell 
therapy), or medical device, that has been designated as a breakthrough 
therapy under section 506(a) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 356(a)), a breakthrough device under section 515B of 
such Act (21 U.S.C. 360e-3), or a regenerative advanced therapy under 
section 506(g) of such Act (21 U.S.C. 356(g)).

SEC. 225. PATIENT CONSULTATION IN MEDICARE NATIONAL AND LOCAL COVERAGE 
              DETERMINATIONS IN ORDER TO MITIGATE BARRIERS TO INCLUSION 
              OF SUCH PERSPECTIVES.

    Section 1862(l) of the Social Security Act (42 U.S.C. 1395y(l)) is 
amended by adding at the end the following new paragraph:
            ``(7) Patient consultation in national and local coverage 
        determinations.--The Secretary may consult with patients and 
        organizations representing patients in making national and 
        local coverage determinations.''.

SEC. 226. GAO STUDY ON INCREASES TO MEDICARE AND MEDICAID SPENDING DUE 
              TO COPAYMENT COUPONS AND OTHER PATIENT ASSISTANCE 
              PROGRAMS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the impact of copayment coupons and other patient 
assistance programs on prescription drug pricing and expenditures 
within the Medicare and Medicaid programs. The study shall assess the 
following:
            (1) The extent to which copayment coupons and other patient 
        assistance programs contribute to inflated prescription drug 
        prices under such programs.
            (2) The impact copayment coupons and other patient 
        assistance programs have in the Medicare Part D program 
        established under part D of title XVIII of the Social Security 
        Act (42 U.S.C. 1395w-101 et seq.) on utilization of higher-cost 
        brand drugs and lower utilization of generic drugs in that 
        program.
            (3) The extent to which manufacturers report or obtain tax 
        benefits, including deductions of business expenses and 
        charitable contributions, for any of the following:
                    (A) Offering copayment coupons or other patient 
                assistance programs.
                    (B) Sponsoring manufacturer patient assistance 
                programs.
                    (C) Paying for sponsorships at outreach and 
                advocacy events organized by patient assistance 
                programs.
            (4) The efficacy of oversight conducted to ensure that 
        independent charity patient assistance programs adhere to 
        guidance from the Office of the Inspector General of the 
        Department of Health and Human Services on avoiding waste, 
        fraud, and abuse.
    (b) Definitions.--In this section:
            (1) Independent charity patient assistance program.--The 
        term ``independent charity patient assistance program'' means 
        any organization described in section 501(c)(3) of the Internal 
        Revenue Code of 1986 and exempt from taxation under section 
        501(a) of such Code and which is not a private foundation (as 
        defined in section 509(a) of such Code) that offers patient 
        assistance.
            (2) Manufacturer.--The term ``manufacturer'' has the 
        meaning given that term in section 1927(k)(5) of the Social 
        Security Act (42 U.S.C. 1396r-8(k)(5)).
            (3) Manufacturer patient assistance program.--The term 
        ``manufacturer patient assistance program'' means an 
        organization, including a private foundation (as so defined), 
        that is sponsored by, or receives funding from, a manufacturer 
        and that offers patient assistance. Such term does not include 
        an independent charity patient assistance program.
            (4) Patient assistance.--The term ``patient assistance'' 
        means assistance provided to offset the cost of drugs for 
        individuals. Such term includes free products, coupons, 
        rebates, copay or discount cards, and other means of providing 
        assistance to individuals related to drug costs, as determined 
        by the Secretary of Health and Human Services.
    (c) Report.--Not later than 24 months after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall submit to Congress a report describing the findings of the study 
required under subsection (a).

SEC. 227. MEDPAC REPORT ON SHIFTING COVERAGE OF CERTAIN MEDICARE PART B 
              DRUGS TO MEDICARE PART D.

    (a) Study.--The Medicare Payment Advisory Commission (in this 
section referred to as the ``Commission'') shall conduct a study on 
shifting coverage of certain drugs and biologicals for which payment is 
currently made under part B of title XVIII of the Social Security Act 
(42 U.S.C. 1395j et seq.) to part D of such title (42 U.S.C. 1395w-21 
et seq.). Such study shall include an analysis of--
            (1) differences in program structures and payment methods 
        for drugs and biologicals covered under such parts B and D, 
        including effects of such a shift on program spending, 
        beneficiary cost-sharing liability, and utilization management 
        techniques for such drugs and biologicals; and
            (2) the feasibility and policy implications of shifting 
        coverage of drugs and biologicals for which payment is 
        currently made under such part B to such part D.
    (b) Report.--
            (1) In general.--Not later than June 30, 2024, the 
        Commission shall submit to Congress a report containing the 
        results of the study conducted under subsection (a).
            (2) Contents.--The report under paragraph (1) shall include 
        information, and recommendations as the Commission deems 
        appropriate, regarding--
                    (A) formulary design under such part D;
                    (B) the ability of the benefit structure under such 
                part D to control total spending on drugs and 
                biologicals for which payment is currently made under 
                such part B;
                    (C) changes to the bid process under such part D, 
                if any, that may be necessary to integrate coverage of 
                such drugs and biologicals into such part D; and
                    (D) any other changes to the program that Congress 
                should consider in determining whether to shift 
                coverage of such drugs and biologicals from such part B 
                to such part D.

SEC. 228. TAKING STEPS TO FULFILL TREATY OBLIGATIONS TO TRIBAL 
              COMMUNITIES.

    (a) GAO Study.--The Comptroller General shall conduct a study 
regarding access to, and the cost of, prescription drugs among Indians. 
The study shall include--
            (1) a review of what Indian health programs pay for 
        prescription drugs on reservations and in urban centers 
        relative to other consumers;
            (2) recommendations to align the value of prescription drug 
        discounts available under the Medicaid drug rebate program 
        established under section 1927 of the Social Security Act (42 
        U.S.C. 1396r-8) with prescription drug discounts available to 
        Tribal communities through the purchased/referred care program 
        of the Indian Health Service for physician administered drugs; 
        and
            (3) an examination of how Tribal communities and urban 
        Indian organizations utilize the Medicare part D program 
        established under title XVIII of the Social Security Act (42 
        U.S.C. 1395w-101 et seq.) and recommendations to improve 
        enrollment among Indians in that program.
    (b) Report.--Not later than 18 months after the date of the 
enactment of this Act, the Comptroller General shall submit to Congress 
a report containing the results of the study conducted under subsection 
(a), together with recommendations for such legislation and 
administrative action as the Comptroller General determines 
appropriate.
    (c) Definitions.--In this section:
            (1) Comptroller general.--The term ``Comptroller General'' 
        means the Comptroller General of the United States.
            (2) Indian; indian health program; indian tribe.--The terms 
        ``Indian'', ``Indian health program'', and ``Indian tribe'' 
        have the meanings given those terms in section 4 of the Indian 
        Health Care Improvement Act (25 U.S.C. 1603).

                          TITLE III--MEDICAID

SEC. 301. MEDICAID PHARMACY AND THERAPEUTICS COMMITTEE IMPROVEMENTS.

    (a) In General.--Subparagraph (A) of section 1927(d)(4) of the 
Social Security Act (42 U.S.C. 1396r-8(d)(4)) is amended to read as 
follows:
                    ``(A)(i) The formulary is developed and reviewed by 
                a pharmacy and therapeutics committee consisting of 
                physicians, pharmacists, and other appropriate 
                individuals appointed by the Governor of the State.
                    ``(ii) Subject to clause (vi), the State 
                establishes and implements a conflict of interest 
                policy for the pharmacy and therapeutics committee 
                that--
                            ``(I) is publicly accessible;
                            ``(II) requires all committee members to 
                        complete, on at least an annual basis, a 
                        disclosure of relationships, associations, and 
                        financial dealings that may affect their 
                        independence of judgement in committee matters; 
                        and
                            ``(III) contains clear processes, such as 
                        recusal from voting or discussion, for those 
                        members who report a conflict of interest, 
                        along with appropriate processes to address any 
                        instance where a member fails to report a 
                        conflict of interest.
                    ``(iii) The membership of the pharmacy and 
                therapeutics committee--
                            ``(I) includes at least 1 actively 
                        practicing physician and at least 1 actively 
                        practicing pharmacist, each of whom--
                                    ``(aa) is independent and free of 
                                conflict with respect to manufacturers 
                                and Medicaid participating plans or 
                                subcontractors, including pharmacy 
                                benefit managers; and
                                    ``(bb) has expertise in the care of 
                                1 or more Medicaid-specific populations 
                                such as elderly or disabled 
                                individuals, children with complex 
                                medical needs, or low-income 
                                individuals with chronic illnesses; and
                            ``(II) is made publicly available.
                    ``(iv) At the option of the State, the State's drug 
                use review board established under subsection (g)(3) 
                may serve as the pharmacy and therapeutics committee 
                provided the State ensures that such board meets the 
                requirements of clauses (ii) and (iii).
                    ``(v) The State reviews and has final approval of 
                the formulary established by the pharmacy and 
                therapeutics committee.
                    ``(vi) If the Secretary determines it appropriate 
                or necessary based on the findings and recommendations 
                of the Comptroller General of the United States in the 
                report submitted to Congress under section 303 of the 
                Reduced Costs and Continued Cures Act, the Secretary 
                shall issue guidance that States must follow for 
                establishing conflict of interest policies for the 
                pharmacy and therapeutics committee in accordance with 
                the requirements of clause (ii), including appropriate 
                standards and requirements for identifying, addressing, 
                and reporting on conflicts of interest.''.
    (b) Application to Medicaid Managed Care Organizations.--Clause 
(xiii) of section 1903(m)(2)(A) of the Social Security Act (42 U.S.C. 
1396b(m)(2)(A)) is amended--
            (1) by striking ``and (III)'' and inserting ``(III)'';
            (2) by striking the period at the end and inserting ``, and 
        (IV) any formulary used by the entity for covered outpatient 
        drugs dispensed to individuals eligible for medical assistance 
        who are enrolled with the entity is developed and reviewed by a 
        pharmacy and therapeutics committee that meets the requirements 
        of clauses (ii) and (iii) of section 1927(d)(4)(A).''; and
            (3) by moving the left margin 2 ems to the left.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date that is 1 year after the date of enactment of this 
Act.

SEC. 302. IMPROVING REPORTING REQUIREMENTS AND DEVELOPING STANDARDS FOR 
              THE USE OF DRUG USE REVIEW BOARDS IN STATE MEDICAID 
              PROGRAMS.

    (a) In General.--Section 1927(g)(3) of the Social Security Act (42 
U.S.C. 1396r-8(g)(3)) is amended--
            (1) by amending subparagraph (B) to read as follows:
                    ``(B) Membership.--
                            ``(i) In general.--The membership of the 
                        DUR Board shall include health care 
                        professionals who have recognized knowledge and 
                        expertise in one or more of the following:
                                    ``(I) The clinically appropriate 
                                prescribing of covered outpatient 
                                drugs.
                                    ``(II) The clinically appropriate 
                                dispensing and monitoring of covered 
                                outpatient drugs.
                                    ``(III) Drug use review, 
                                evaluation, and intervention.
                                    ``(IV) Medical quality assurance.
                            ``(ii) Membership requirements.--The 
                        membership of the DUR Board shall--
                                    ``(I) be made up of at least \1/3\ 
                                but no more than 51 percent members who 
                                are licensed and actively practicing 
                                physicians and at least \1/3\ members 
                                who are licensed and actively 
                                practicing pharmacists;
                                    ``(II) include at least 1 licensed 
                                and actively practicing physician and 
                                at least 1 licensed and actively 
                                practicing pharmacist, each of whom--
                                            ``(aa) is independent and 
                                        free of any conflict, including 
                                        with respect to manufacturers, 
                                        medicaid managed care entities, 
                                        or pharmacy benefit managers; 
                                        and
                                            ``(bb) has expertise in the 
                                        care of 1 or more categories of 
                                        individuals who are likely to 
                                        be eligible for benefits under 
                                        this title, including elderly 
                                        or disabled individuals, 
                                        children with complex medical 
                                        needs, or low-income 
                                        individuals with chronic 
                                        illnesses; and
                                    ``(III) be made publicly available.
                            ``(iii) Conflict of interest policy.--The 
                        State shall establish and implement a conflict 
                        of interest policy for the DUR Board that--
                                    ``(I) is publicly accessible;
                                    ``(II) requires all board members 
                                to complete, on at least an annual 
                                basis, a disclosure of relationships, 
                                associations, and financial dealings 
                                that may affect their independence of 
                                judgement in board matters; and
                                    ``(III) contains clear processes, 
                                such as recusal from voting or 
                                discussion, for those members who 
                                report a conflict of interest, along 
                                with appropriate processes to address 
                                any instance where a member fails to 
                                report a conflict of interest.''; and
            (2) by adding at the end the following new subparagraph:
                    ``(E) DUR board membership reports.--
                            ``(i) DUR board reports.--Each State shall 
                        require the DUR Board to prepare and submit to 
                        the State an annual report on the DUR Board 
                        membership. Each such report shall include any 
                        conflicts of interest with respect to members 
                        of the DUR Board that the DUR Board recorded or 
                        was aware of during the period that is the 
                        subject of the report, and the process applied 
                        to address such conflicts of interest, in 
                        addition to any other information required by 
                        the State.
                            ``(ii) Inclusion of dur board membership 
                        information in state reports.--Each annual 
                        State report to the Secretary required under 
                        subparagraph (D) shall include--
                                    ``(I) the number of individuals 
                                serving on the State's DUR Board;
                                    ``(II) the names and professions of 
                                the individuals serving on such DUR 
                                Board;
                                    ``(III) any conflicts of interest 
                                or recusals with respect to members of 
                                such DUR Board reported by the DUR 
                                Board or that the State was aware of 
                                during the period that is the subject 
                                of the report; and
                                    ``(IV) whether the State has 
                                elected for such DUR Board to serve as 
                                the committee responsible for 
                                developing a State formulary under 
                                subsection (d)(4)(A).''.
    (b) Managed Care Requirements.--Section 1932(i) of the Social 
Security Act (42 U.S.C. 1396u-2(i)) is amended--
            (1) by striking ``section 483.3(s)(4)'' and inserting 
        ``section 438.3(s)(4)'';
            (2) by striking ``483.3(s)(5)'' and inserting 
        ``438.3(s)(5)''; and
            (3) by adding at the end the following: ``Such a managed 
        care entity shall not be considered to be in compliance with 
        the requirement of such section 438.3(s)(5) that the entity 
        provide a detailed description of its drug utilization review 
        activities unless the entity includes a description of the 
        prospective drug review activities described in paragraph 
        (2)(A) of section 1927(g) and the activities listed in 
        paragraph (3)(C) of section 1927(g), makes the underlying drug 
        utilization review data available to the State and the 
        Secretary, and provides such other information as deemed 
        appropriate by the Secretary.''.
    (c) Development of National Standards for Medicaid Drug Use 
Review.--The Secretary of Health and Human Services may promulgate 
regulations or guidance establishing national standards for Medicaid 
drug use review programs under section 1927(g) of the Social Security 
Act (42 U.S.C. 1396r-8) and drug utilization review activities and 
requirements under section 1932(i) of such Act (42 U.S.C. 1396u-2(i)), 
for the purpose of aligning review criteria for prospective and 
retrospective drug use review across all State Medicaid programs.
    (d) CMS Guidance.--Not later than 18 months after the date of 
enactment of this Act, the Secretary of Health and Human Services shall 
issue guidance--
            (1) outlining steps that States must take to come into 
        compliance with statutory and regulatory requirements for 
        prospective and retrospective drug use review under section 
        1927(g) of the Social Security Act (42 U.S.C. 1396r-8(g)) and 
        drug utilization review activities and requirements under 
        section 1932(i) of such Act (42 U.S.C. 1396u-2(i)) (including 
        with respect to requirements that were in effect before the 
        date of enactment of this Act); and
            (2) describing the actions that the Secretary will take to 
        enforce such requirements.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date that is 1 year after the date of enactment of this 
Act.

SEC. 303. GAO REPORT ON CONFLICTS OF INTEREST IN STATE MEDICAID PROGRAM 
              DRUG USE REVIEW BOARDS AND PHARMACY AND THERAPEUTICS 
              (P&T) COMMITTEES.

    (a) Investigation.--The Comptroller General of the United States 
shall conduct an investigation of potential or existing conflicts of 
interest among members of State Medicaid program State drug use review 
boards (in this section referred to as ``DUR Boards'') and pharmacy and 
therapeutics committees (in this section referred to as ``P&T 
Committees'').
    (b) Report.--Not later than 24 months after the date of enactment 
of this Act, the Comptroller General shall submit to Congress a report 
on the investigation conducted under subsection (a) that includes the 
following:
            (1) A description outlining how DUR Boards and P&T 
        Committees operate in States, including details with respect 
        to--
                    (A) the structure and operation of DUR Boards and 
                statewide P&T Committees;
                    (B) States that operate separate P&T Committees for 
                their fee-for-service Medicaid program and their 
                Medicaid managed care organizations or other Medicaid 
                managed care arrangements (collectively referred to in 
                this section as ``Medicaid MCOs)''; and
                    (C) States that allow Medicaid MCOs to have their 
                own P&T Committees and the extent to which pharmacy 
                benefit managers administer or participate in such P&T 
                Committees.
            (2) A description outlining the differences between DUR 
        Boards established in accordance with section 1927(g)(3) of the 
        Social Security Act (42 U.S.C. 1396r(g)(3)) and P&T Committees.
            (3) A description outlining the tools P&T Committees may 
        use to determine Medicaid drug coverage and utilization 
        management policies.
            (4) An analysis of whether and how States or P&T Committees 
        establish participation and independence requirements for DUR 
        Boards and P&T Committees, including with respect to entities 
        with connections with drug manufacturers, State Medicaid 
        programs, managed care organizations, and other entities or 
        individuals in the pharmaceutical industry.
            (5) A description outlining how States, DUR Boards, or P&T 
        Committees define conflicts of interest.
            (6) A description of how DUR Boards and P&T Committees 
        address conflicts of interest, including who is responsible for 
        implementing such policies.
            (7) A description of the tools, if any, States use to 
        ensure that there are no conflicts of interest on DUR Boards 
        and P&T Committees.
            (8) An analysis of the effectiveness of tools States use to 
        ensure that there are no conflicts of interest on DUR Boards 
        and P&T Committees and, if applicable, recommendations as to 
        how such tools could be improved.
            (9) A review of strategies States may use to guard against 
        conflicts of interest on DUR Boards and P&T Committees and to 
        ensure compliance with the requirements of titles XI and XIX of 
        the Social Security Act (42 U.S.C. 1301 et seq., 1396 et seq.) 
        and access to effective, clinically appropriate, and medically 
        necessary drug treatments for Medicaid beneficiaries, including 
        recommendations for such legislative and administrative actions 
        as the Comptroller General determines appropriate.

SEC. 304. ENSURING THE ACCURACY OF MANUFACTURER PRICE AND DRUG PRODUCT 
              INFORMATION UNDER THE MEDICAID DRUG REBATE PROGRAM.

    (a) Audit of Manufacturer Price and Drug Product Information.--
            (1) In general.--Subparagraph (B) of section 1927(b)(3) of 
        the Social Security Act (42 U.S.C. 1396r-8(b)(3)) is amended to 
        read as follows:
                    ``(B) Audits and surveys of manufacturer price and 
                drug product information.--
                            ``(i) Audits.--The Secretary shall conduct 
                        ongoing audits of the price and drug product 
                        information reported by manufacturers under 
                        subparagraph (A) for the most recently ended 
                        rebate period to ensure the accuracy and 
                        timeliness of such information. In conducting 
                        such audits, the Secretary may employ 
                        evaluations, surveys, statistical sampling, 
                        predictive analytics, and other relevant tools 
                        and methods.
                            ``(ii) Verifications surveys of average 
                        manufacturer price and manufacturer's average 
                        sales price.--In addition to the audits 
                        required under clause (i), the Secretary may 
                        survey wholesalers and manufacturers (including 
                        manufacturers that directly distribute their 
                        covered outpatient drugs (in this subparagraph 
                        referred to as `direct sellers')), when 
                        necessary, to verify manufacturer prices and 
                        manufacturer's average sales prices (including 
                        wholesale acquisition cost) to make payment 
                        reported under subparagraph (A).
                            ``(iii) Penalties.--In addition to other 
                        penalties as may be prescribed by law, 
                        including under subparagraph (C) of this 
                        paragraph, the Secretary may impose a civil 
                        monetary penalty in an amount not to exceed 
                        $185,000 on an annual basis on a wholesaler, 
                        manufacturer, or direct seller, if the 
                        wholesaler, manufacturer, or direct seller of a 
                        covered outpatient drug refuses a request for 
                        information about charges or prices by the 
                        Secretary in connection with an audit or survey 
                        under this subparagraph or knowingly provides 
                        false information. The provisions of section 
                        1128A (other than subsections (a) (with respect 
                        to amounts of penalties or additional 
                        assessments) and (b)) shall apply to a civil 
                        money penalty under this clause in the same 
                        manner as such provisions apply to a penalty or 
                        proceeding under section 1128A(a).
                            ``(iv) Reports.--
                                    ``(I) Report to congress.--The 
                                Secretary shall, not later than 18 
                                months after date of enactment of this 
                                subparagraph, submit a report to the 
                                Committee on Energy and Commerce of the 
                                House of Representatives and the 
                                Committee on Finance of the Senate 
                                regarding additional regulatory or 
                                statutory changes that may be required 
                                in order to ensure accurate and timely 
                                reporting and oversight of manufacturer 
                                price and drug product information, 
                                including whether changes should be 
                                made to reasonable assumption 
                                requirements to ensure such assumptions 
                                are reasonable and accurate or whether 
                                another methodology for ensuring 
                                accurate and timely reporting of price 
                                and drug product information should be 
                                considered to ensure the integrity of 
                                the drug rebate program under this 
                                section.
                                    ``(II) Annual reports.--The 
                                Secretary shall, on at least an annual 
                                basis, submit a report to the Committee 
                                on Energy and Commerce of the House of 
                                Representatives and the Committee on 
                                Finance of the Senate summarizing the 
                                results of the audits and surveys 
                                conducted under this subparagraph 
                                during the period that is the subject 
                                of the report.
                                    ``(III) Content.--Each report 
                                submitted under subclause (II) shall, 
                                with respect to the period that is the 
                                subject of the report, include 
                                summaries of--
                                            ``(aa) error rates in the 
                                        price, drug product, and other 
                                        relevant information supplied 
                                        by manufacturers under 
                                        subparagraph (A);
                                            ``(bb) the timeliness with 
                                        which manufacturers, 
                                        wholesalers, and direct sellers 
                                        provide information required 
                                        under subparagraph (A) or under 
                                        clause (i) or (ii) of this 
                                        subparagraph;
                                            ``(cc) the number of 
                                        manufacturers, wholesalers, and 
                                        direct sellers and drug 
                                        products audited under this 
                                        subparagraph;
                                            ``(dd) the types of price 
                                        and drug product information 
                                        reviewed under the audits 
                                        conducted under this 
                                        subparagraph;
                                            ``(ee) the tools and 
                                        methodologies employed in such 
                                        audits;
                                            ``(ff) the findings of such 
                                        audits, including which 
                                        manufacturers, if any, were 
                                        penalized under this 
                                        subparagraph; and
                                            ``(gg) such other relevant 
                                        information as the Secretary 
                                        shall deem appropriate.
                                    ``(IV) Protection of information.--
                                In preparing a report required under 
                                subclause (II), the Secretary shall 
                                redact such proprietary information as 
                                the Secretary determines appropriate to 
                                prevent disclosure of, and to 
                                safeguard, such information.
                            ``(v) Appropriations.--Out of any funds in 
                        the Treasury not otherwise appropriated, there 
                        is appropriated to the Secretary $2,000,000 for 
                        fiscal year 2023 and each fiscal year 
                        thereafter to carry out this subparagraph.''.
            (2) Effective date.--The amendments made by this subsection 
        shall take effect on the first day of the first fiscal quarter 
        that begins after the date of enactment of this Act.
    (b) Increased Penalties for Noncompliance With Reporting 
Requirements.--
            (1) Increased penalty for late reporting of information.--
        Section 1927(b)(3)(C)(i) of the Social Security Act (42 U.S.C. 
        1396r-8(b)(3)(C)(i)) is amended by striking ``increased by 
        $10,000 for each day in which such information has not been 
        provided and such amount shall be paid to the Treasury'' and 
        inserting ``, for each covered outpatient drug with respect to 
        which such information is not provided, $50,000 for the first 
        day that such information is not provided on a timely basis and 
        $19,000 for each subsequent day that such information is not 
        provided''.
            (2) Increased penalty for knowingly reporting false 
        information.--Section 1927(b)(3)(C)(ii) of the Social Security 
        Act (42 U.S.C. 1396r-8(b)(3)(C)(ii)) is amended by striking 
        ``$100,000'' and inserting ``$500,000''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the first day of the first fiscal quarter 
        that begins after the date of enactment of this Act.

SEC. 305. T-MSIS DRUG DATA ANALYTICS REPORTS.

    (a) In General.--Not later than May 1 of each calendar year 
beginning with calendar year 2024, the Secretary of Health and Human 
Services (in this section referred to as the ``Secretary'') shall 
publish on the Internet website of the Centers for Medicare & Medicaid 
Services that is accessible to the public a report of the most recently 
available data on provider prescribing patterns under the Medicaid 
program.
    (b) Content of Report.--
            (1) Required content.--Each report required under 
        subsection (a) for a calendar year shall include the following 
        information with respect to each State (and, to the extent 
        available, with respect to Puerto Rico, the United States 
        Virgin Islands, Guam, the Northern Mariana Islands, and 
        American Samoa):
                    (A) A comparison of covered outpatient drug (as 
                defined in section 1927(k)(2) of the Social Security 
                Act (42 U.S.C. 1396r-8(k)(2))) prescribing patterns 
                under the State Medicaid plan or waiver of such plan 
                (including drugs prescribed on a fee-for-service basis 
                and drugs prescribed under managed care arrangements 
                under such plan or waiver)--
                            (i) across all forms or models of 
                        reimbursement used under the plan or waiver;
                            (ii) within specialties and subspecialties, 
                        as defined by the Secretary;
                            (iii) by episodes of care for--
                                    (I) each chronic disease category, 
                                as defined by the Secretary, that is 
                                represented in the 10 conditions that 
                                accounted for the greatest share of 
                                total spending under the plan or waiver 
                                during the year that is the subject of 
                                the report;
                                    (II) procedural groupings; and
                                    (III) rare disease diagnosis codes;
                            (iv) by patient demographic 
                        characteristics, including race (to the extent 
                        that the Secretary determines that there is 
                        sufficient data available with respect to such 
                        characteristic in a majority of States), 
                        gender, and age;
                            (v) by patient high-utilizer or risk 
                        status; and
                            (vi) by high and low resource settings by 
                        facility and place of service categories, as 
                        determined by the Secretary.
                    (B) In the case of medical assistance for covered 
                outpatient drugs (as so defined) provided under a State 
                Medicaid plan or waiver of such plan in a managed care 
                setting, an analysis of the differences in managed care 
                prescribing patterns when a covered outpatient drug is 
                prescribed in a managed care setting as compared to 
                when the drug is prescribed in a fee-for-service 
                setting.
            (2) Additional content.--A report required under subsection 
        (a) for a calendar year may include State-specific information 
        about prescription utilization management tools under State 
        Medicaid plans or waivers of such plans, including--
                    (A) a description of prescription utilization 
                management tools under State programs to provide long-
                term services and supports under a State Medicaid plan 
                or a waiver of such plan;
                    (B) a comparison of prescription utilization 
                management tools applicable to populations covered 
                under a State Medicaid plan waiver under section 1115 
                of the Social Security Act (42 U.S.C. 1315) and the 
                models applicable to populations that are not covered 
                under the waiver;
                    (C) a comparison of the prescription utilization 
                management tools employed by different Medicaid managed 
                care organizations, pharmacy benefit managers, and 
                related entities within the State;
                    (D) a comparison of the prescription utilization 
                management tools applicable to each enrollment category 
                under a State Medicaid plan or waiver; and
                    (E) a comparison of the prescription utilization 
                management tools applicable under the State Medicaid 
                plan or waiver by patient high-utilizer or risk status.
            (3) Additional analysis.--To the extent practicable, the 
        Secretary shall include in each report published under 
        subsection (a)--
                    (A) analyses of national, State, and local patterns 
                of Medicaid population-based prescribing behaviors; and
                    (B) recommendations for administrative or 
                legislative action to improve the effectiveness of, and 
                reduce costs for, covered outpatient drugs under 
                Medicaid while ensuring timely beneficiary access to 
                medically necessary covered outpatient drugs.
    (c) Use of T-MSIS Data.--Each report required under subsection (a) 
shall--
            (1) be prepared using data and definitions from the 
        Transformed Medicaid Statistical Information System (``T-
        MSIS'') data set (or a successor data set) that is not more 
        than 24 months old on the date that the report is published; 
        and
            (2) as appropriate, include a description with respect to 
        each State of the quality and completeness of the data, as well 
        as any necessary caveats describing the limitations of the data 
        reported to the Secretary by the State that are sufficient to 
        communicate the appropriate uses for the information.
    (d) Preparation of Report.--Each report required under subsection 
(a) shall be prepared by the Administrator for the Centers for Medicare 
& Medicaid Services.
    (e) Appropriation.--For fiscal year 2023 and each fiscal year 
thereafter, there is appropriated to the Secretary $2,000,000 to carry 
out this section.

SEC. 306. RISK-SHARING VALUE-BASED PAYMENT AGREEMENTS FOR COVERED 
              OUTPATIENT DRUGS UNDER MEDICAID.

    (a) In General.--Section 1927 of the Social Security Act (42 U.S.C. 
1396r-8) is amended by adding at the end the following new subsection:
    ``(l) State Option To Pay for Covered Outpatient Drugs Through 
Risk-Sharing Value-Based Agreements.--
            ``(1) In general.--Beginning January 1, 2025, a State shall 
        have the option to pay (whether on a fee-for-service or managed 
        care basis) for covered outpatient drugs that are potentially 
        curative treatments intended for one-time use that are 
        administered to individuals under this title by entering into a 
        risk-sharing value-based payment agreement with the 
        manufacturer of the drug in accordance with the requirements of 
        this subsection.
            ``(2) Secretarial approval.--
                    ``(A) In general.--A State shall submit a request 
                to the Secretary to enter into a risk-sharing value 
                based payment agreement, and the Secretary shall not 
                approve a proposed risk-sharing value-based payment 
                agreement between a State and a manufacturer for 
                payment for a covered outpatient drug of the 
                manufacturer unless the following requirements are met:
                            ``(i) Manufacturer is party to rebate 
                        agreement and in compliance with 
                        requirements.--The manufacturer has a rebate 
                        agreement in effect as required under 
                        subsections (a) and (b) of this section and is 
                        in compliance with all applicable requirements 
                        under this title.
                            ``(ii) No increase to projected net federal 
                        spending.--
                                    ``(I) In general.--The Chief 
                                Actuary certifies that the projected 
                                payments for each covered outpatient 
                                drug under such proposed agreement 
                                would not result in greater estimated 
                                Federal spending under this title than 
                                the net Federal spending that would 
                                result in the absence of the agreement.
                                    ``(II) Net federal spending 
                                defined.--For purposes of this 
                                subsection, the term `net Federal 
                                spending' means the amount of Federal 
                                payments the Chief Actuary estimates 
                                would be made under this title for 
                                administering a covered outpatient drug 
                                to an individual eligible for medical 
                                assistance under a State plan or a 
                                waiver of such plan, reduced by the 
                                amount of all rebates the Chief Actuary 
                                estimates would be paid with respect to 
                                the administering of such drug, 
                                including all rebates under this title 
                                and any supplemental or other 
                                additional rebates, in the absence of 
                                such an agreement.
                                    ``(III) Information.--The Chief 
                                Actuary shall make the certifications 
                                required under this clause based on the 
                                most recently available and reliable 
                                drug pricing and product information. 
                                The State and manufacturer shall 
                                provide the Secretary and the Chief 
                                Actuary with all necessary information 
                                required to make the estimates needed 
                                for such certifications.
                            ``(iii) Launch and list price 
                        justifications.--The manufacturer submits all 
                        relevant information and supporting 
                        documentation necessary for pricing decisions 
                        as deemed appropriate by the Secretary, which 
                        shall be truthful and non-misleading, including 
                        manufacturer information and supporting 
                        documentation for launch price or list price 
                        increases, and any applicable justification 
                        required under section 1128L.
                            ``(iv) Confidentiality of information; 
                        penalties.--The provisions of subparagraphs (C) 
                        and (D) of subsection (b)(3) shall apply to a 
                        manufacturer that fails to submit the 
                        information and documentation required under 
                        clauses (ii) and (iii) on a timely basis, or 
                        that knowingly provides false or misleading 
                        information, in the same manner as such 
                        provisions apply to a manufacturer with a 
                        rebate agreement under this section.
                    ``(B) Consideration of state request for 
                approval.--
                            ``(i) In general.--The Secretary shall 
                        treat a State request for approval of a risk-
                        sharing value-based payment agreement in the 
                        same manner that the Secretary treats a State 
                        plan amendment, and subpart B of part 430 of 
                        title 42, Code of Federal Regulations, 
                        including, subject to clause (ii), the timing 
                        requirements of section 430.16 of such title 
                        (as in effect on the date of enactment of this 
                        subsection), shall apply to a request for 
                        approval of a risk-sharing value-based payment 
                        agreement in the same manner as such subpart 
                        applies to a State plan amendment.
                            ``(ii) Timing.--The Secretary shall consult 
                        with the Commissioner of Food and Drugs as 
                        required under subparagraph (C) and make a 
                        determination on whether to approve a request 
                        from a State for approval of a proposed risk-
                        sharing value-based payment agreement (or 
                        request additional information necessary to 
                        allow the Secretary to make a determination 
                        with respect to such request for approval) 
                        within the time period, to the extent 
                        practicable, specified in section 430.16 of 
                        title 42, Code of Federal Regulations (as in 
                        effect on the date of enactment of this 
                        subsection), but in no case shall the Secretary 
                        take more than 180 days after the receipt of 
                        such request for approval or response to such 
                        request for additional information to make such 
                        a determination (or request additional 
                        information).
                    ``(C) Consultation with the commissioner of food 
                and drugs.--In considering whether to approve a risk-
                sharing value-based payment agreement, the Secretary, 
                to the extent necessary, shall consult with the 
                Commissioner of Food and Drugs to determine whether the 
                relevant clinical parameters specified in such 
                agreement are appropriate.
            ``(3) Installment-based payment structure.--
                    ``(A) In general.--A risk-sharing value-based 
                payment agreement shall provide for a payment structure 
                under which, for every installment year of the 
                agreement (subject to subparagraph (B)), the State 
                shall pay the total installment year amount in equal 
                installments to be paid at regular intervals over a 
                period of time that shall be specified in the 
                agreement.
                    ``(B) Requirements for installment payments.--
                            ``(i) Timing of first payment.--The State 
                        shall make the first of the installment 
                        payments described in subparagraph (A) for an 
                        installment year not later than 30 days after 
                        the end of such year.
                            ``(ii) Length of installment period.--The 
                        period of time over which the State shall make 
                        the installment payments described in 
                        subparagraph (A) for an installment year shall 
                        not be longer than 5 years.
                            ``(iii) Nonpayment or reduced payment of 
                        installments following a failure to meet 
                        clinical parameter.--If, prior to the payment 
                        date (as specified in the agreement) of any 
                        installment payment described in subparagraph 
                        (A) or any other alternative date or time frame 
                        (as otherwise specified in the agreement), the 
                        covered outpatient drug which is subject to the 
                        agreement fails to meet a relevant clinical 
                        parameter of the agreement, the agreement shall 
                        provide that--
                                    ``(I) the installment payment shall 
                                not be made; or
                                    ``(II) the installment payment 
                                shall be reduced by a percentage 
                                specified in the agreement that is 
                                based on the outcome achieved by the 
                                drug relative to the relevant clinical 
                                parameter.
            ``(4) Notice of intent.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                manufacturer of a covered outpatient drug shall not be 
                eligible to enter into a risk-sharing value-based 
                payment agreement under this subsection with respect to 
                such drug unless the manufacturer notifies the 
                Secretary that the manufacturer is interested in 
                entering into such an agreement with respect to such 
                drug. The decision to submit and timing of a request to 
                enter into a proposed risk-sharing value-based payment 
                agreement shall remain solely within the discretion of 
                the State and shall only be effective upon Secretarial 
                approval as required under this subsection.
                    ``(B) Treatment of subsequently approved drugs.--
                            ``(i) In general.--In the case of a 
                        manufacturer of a covered outpatient drug 
                        approved under section 505 of the Federal Food, 
                        Drug, and Cosmetic Act or licensed under 
                        section 351 of the Public Health Service Act 
                        after the date of enactment of this subsection, 
                        not more than 90 days after meeting with the 
                        Food and Drug Administration following phase II 
                        clinical trials for such drug (or, in the case 
                        of a drug described in clause (ii), not later 
                        than March 31, 2025), the manufacturer must 
                        notify the Secretary of the manufacturer's 
                        intent to enter into a risk-sharing value-based 
                        payment agreement under this subsection with 
                        respect to such drug. If no such meeting has 
                        occurred, the Secretary may use discretion as 
                        to whether a potentially curative treatment 
                        intended for one-time use may qualify for a 
                        risk-sharing value-based payment agreement 
                        under this section. A manufacturer notification 
                        of interest shall not have any influence on a 
                        decision for approval by the Food and Drug 
                        Administration.
                            ``(ii) Application to certain subsequently 
                        approved drugs.--A drug described in this 
                        clause is a covered outpatient drug of a 
                        manufacturer--
                                    ``(I) that is approved under 
                                section 505 of the Federal Food, Drug, 
                                and Cosmetic Act or licensed under 
                                section 351 of the Public Health 
                                Service Act after the date of enactment 
                                of this subsection; and
                                    ``(II) with respect to which, as of 
                                January 1, 2025, more than 90 days have 
                                passed after the manufacturer's meeting 
                                with the Food and Drug Administration 
                                following phase II clinical trials for 
                                such drug.
                            ``(iii) Parallel approval.--The Secretary, 
                        in coordination with the Administrator of the 
                        Centers for Medicare & Medicaid Services and 
                        the Commissioner of Food and Drugs, shall, to 
                        the extent practicable, approve a State's 
                        request to enter into a proposed risk-sharing 
                        value-based payment agreement that otherwise 
                        meets the requirements of this subsection at 
                        the time that such a drug is approved by the 
                        Food and Drug Administration to help provide 
                        that no State that wishes to enter into such an 
                        agreement is required to pay for the drug in 
                        full at one time if the State is seeking to pay 
                        over a period of time as outlined in the 
                        proposed agreement.
                            ``(iv) Rule of construction.--Nothing in 
                        this paragraph shall be applied or construed to 
                        modify or affect the timeframes or factors 
                        involved in the Secretary's determination of 
                        whether to approve or license a drug under 
                        section 505 of the Federal Food, Drug, and 
                        Cosmetic Act or section 351 of the Public 
                        Health Service Act.
            ``(5) Special payment rules.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, with respect to an individual who is 
                administered a unit of a covered outpatient drug that 
                is purchased under a State plan by a State Medicaid 
                agency under a risk-sharing value-based payment 
                agreement in an installment year, the State shall 
                remain liable to the manufacturer of such drug for 
                payment for such unit without regard to whether the 
                individual remains enrolled in the State plan under 
                this title (or a waiver of such plan) for each 
                installment year for which the State is to make 
                installment payments for covered outpatient drugs 
                purchased under the agreement in such year.
                    ``(B) Death.--In the case of an individual 
                described in subparagraph (A) who dies during the 
                period described in such subparagraph, the State plan 
                shall not be liable for any remaining payment for the 
                unit of the covered outpatient drug administered to the 
                individual which is owed under the agreement described 
                in such subparagraph.
                    ``(C) Withdrawal of approval.--In the case of a 
                covered outpatient drug that is the subject of a risk-
                sharing value-based agreement between a State and a 
                manufacturer under this subsection, including a drug 
                approved in accordance with section 506(c) of the 
                Federal Food, Drug, and Cosmetic Act, and such drug is 
                the subject of an application that has been withdrawn 
                by the Secretary, the State plan shall not be liable 
                for any remaining payment that is owed under the 
                agreement.
                    ``(D) Alternative arrangement under agreement.--
                Subject to approval by the Secretary, the terms of a 
                proposed risk-sharing value-based payment agreement 
                submitted for approval by a State may provide that 
                subparagraph (A) shall not apply.
                    ``(E) Guidance.--Not later than January 1, 2025, 
                the Secretary shall issue guidance to States 
                establishing a process for States to notify the 
                Secretary when an individual who is administered a unit 
                of a covered outpatient drug that is purchased by a 
                State plan under a risk-sharing value-based payment 
                agreement ceases to be enrolled under the State plan 
                under this title (or a waiver of such plan) or dies 
                before the end of the installment period applicable to 
                such unit under the agreement.
            ``(6) Treatment of payments under risk-sharing value-based 
        agreements for purposes of average manufacturer price; best 
        price.--The Secretary shall treat any payments made to the 
        manufacturer of a covered outpatient drug under a risk-sharing 
        value-based payment agreement under this subsection during a 
        rebate period in the same manner that the Secretary treats 
        payments made under a State supplemental rebate agreement under 
        sections 447.504(c)(19) and 447.505(c)(7) of title 42, Code of 
        Federal Regulations (or any successor regulations) for purposes 
        of determining average manufacturer price and best price under 
        this section with respect to the covered outpatient drug and a 
        rebate period and for purposes of offsets required under 
        subsection (b)(1)(B).
            ``(7) Assessments and report to congress.--
                    ``(A) Assessments.--
                            ``(i) In general.--Not later than 180 days 
                        after the end of each assessment period of any 
                        risk-sharing value-based payment agreement for 
                        a State approved under this subsection, the 
                        Secretary shall conduct an evaluation of such 
                        agreement which shall include an evaluation by 
                        the Chief Actuary to determine whether program 
                        spending under the risk-sharing value-based 
                        payment agreement aligned with the projections 
                        for the agreement made under paragraph 
                        (2)(A)(ii), including an assessment of whether 
                        actual Federal spending under this title under 
                        the agreement was less or more than net Federal 
                        spending would have been in the absence of the 
                        agreement.
                            ``(ii) Assessment period.--For purposes of 
                        clause (i)--
                                    ``(I) the first assessment period 
                                for a risk-sharing value-based payment 
                                agreement shall be the period of time 
                                over which payments are scheduled to be 
                                made under the agreement for the first 
                                10 individuals who are administered 
                                covered outpatient drugs under the 
                                agreement except that such period shall 
                                not exceed the 5-year period after the 
                                date on which the Secretary approves 
                                the agreement; and
                                    ``(II) each subsequent assessment 
                                period for a risk-sharing value-based 
                                payment agreement shall be the 5-year 
                                period following the end of the 
                                previous assessment period.
                    ``(B) Results of assessments.--
                            ``(i) Termination option.--If the Secretary 
                        determines as a result of the assessment by the 
                        Chief Actuary under subparagraph (A) that the 
                        actual Federal spending under this title for 
                        any covered outpatient drug that was the 
                        subject of the State's risk-sharing value-based 
                        payment agreement was greater than the net 
                        Federal spending that would have resulted in 
                        the absence of the agreement, the Secretary may 
                        terminate approval of such agreement and shall 
                        immediately conduct an assessment under this 
                        paragraph of any other ongoing risk-sharing 
                        value-based payment agreement to which the same 
                        manufacturer is a party.
                            ``(ii) Repayment required.--
                                    ``(I) In general.--If the Secretary 
                                determines as a result of the 
                                assessment by the Chief Actuary under 
                                subparagraph (A) that the Federal 
                                spending under the risk-sharing value-
                                based agreement for a covered 
                                outpatient drug that was subject to 
                                such agreement was greater than the net 
                                Federal spending that would have 
                                resulted in the absence of the 
                                agreement, the manufacturer shall repay 
                                the difference to the State and Federal 
                                governments in a timely manner as 
                                determined by the Secretary.
                                    ``(II) Termination for failure to 
                                pay.--The failure of a manufacturer to 
                                make repayments required under 
                                subclause (I) in a timely manner shall 
                                result in immediate termination of all 
                                risk-sharing value-based agreements to 
                                which the manufacturer is a party.
                                    ``(III) Additional penalties.--In 
                                the case of a manufacturer that fails 
                                to make repayments required under 
                                subclause (I), the Secretary may treat 
                                such manufacturer in the same manner as 
                                a manufacturer that fails to pay 
                                required rebates under this section, 
                                and the Secretary may--
                                            ``(aa) suspend or terminate 
                                        the manufacturer's rebate 
                                        agreement under this section; 
                                        and
                                            ``(bb) pursue any other 
                                        remedy that would be available 
                                        if the manufacturer had failed 
                                        to pay required rebates under 
                                        this section.
                    ``(C) Report to congress.--Not later than 5 years 
                after the first risk-sharing value-based payment 
                agreement is approved under this subsection, the 
                Secretary shall submit to Congress and make available 
                to the public a report that includes--
                            ``(i) an assessment of the impact of risk-
                        sharing value-based payment agreements on 
                        access for individuals who are eligible for 
                        benefits under a State plan or waiver under 
                        this title to medically necessary covered 
                        outpatient drugs and related treatments;
                            ``(ii) an analysis of the impact of such 
                        agreements on overall State and Federal 
                        spending under this title;
                            ``(iii) an assessment of the impact of such 
                        agreements on drug prices, including launch 
                        price and price increases; and
                            ``(iv) such recommendations to Congress as 
                        the Secretary deems appropriate.
            ``(8) Guidance and regulations.--
                    ``(A) In general.--Not later than January 1, 2025, 
                the Secretary shall issue guidance to States seeking to 
                enter into risk-sharing value-based payment agreements 
                under this subsection that includes a model template 
                for such agreements. The Secretary may issue any 
                additional guidance or promulgate regulations as 
                necessary to implement and enforce the provisions of 
                this subsection.
                    ``(B) Model agreements.--
                            ``(i) In general.--If a State expresses an 
                        interest in pursuing a risk-sharing value-based 
                        payment agreement under this subsection with a 
                        manufacturer for the purchase of a covered 
                        outpatient drug, the Secretary may share with 
                        such State any risk-sharing value-based 
                        agreement between a State and the manufacturer 
                        for the purchase of such drug that has been 
                        approved under this subsection. While such 
                        shared agreement may serve as a template for a 
                        State that wishes to propose, the use of a 
                        previously approved agreement shall not affect 
                        the submission and approval process for 
                        approval of a proposed risk-sharing value-based 
                        payment agreement under this subsection, 
                        including the requirements under paragraph 
                        (2)(A).
                            ``(ii) Confidentiality.--In the case of a 
                        risk-sharing value-based payment agreement that 
                        is disclosed to a State by the Secretary under 
                        this subparagraph and that is only in effect 
                        with respect to a single State, the 
                        confidentiality of information provisions 
                        described in subsection (b)(3)(D) shall apply 
                        to such information.
                    ``(C) OIG consultation.--
                            ``(i) In general.--The Secretary shall 
                        consult with the Office of the Inspector 
                        General of the Department of Health and Human 
                        Services to determine whether there are 
                        potential program integrity concerns with 
                        agreement approvals or templates and address 
                        accordingly.
                            ``(ii) OIG policy updates as necessary.--
                        The Inspector General of the Department of 
                        Health and Human Services shall review and 
                        update, as necessary, any policies or 
                        guidelines of the Office of the Inspector 
                        General of the Department of Human Services 
                        (including policies related to the enforcement 
                        of section 1128B) to accommodate the use of 
                        risk-sharing value-based payment agreements in 
                        accordance with this section.
            ``(9) Rules of construction.--
                    ``(A) Modifications.--Nothing in this subsection or 
                any regulations promulgated under this subsection shall 
                prohibit a State from requesting a modification from 
                the Secretary to the terms of a risk-sharing value-
                based payment agreement. A modification that is 
                expected to result in any increase to projected net 
                State or Federal spending under the agreement shall be 
                subject to recertification by the Chief Actuary as 
                described in paragraph (2)(A)(ii) before the 
                modification may be approved.
                    ``(B) Rebate agreements.--Nothing in this 
                subsection shall be construed as requiring a State to 
                enter into a risk-sharing value-based payment agreement 
                or as limiting or superseding the ability of a State to 
                enter into a supplemental rebate agreement for a 
                covered outpatient drug.
                    ``(C) FFP for payments under risk-sharing value-
                based payment agreements.--Federal financial 
                participation shall be available under this title for 
                any payment made by a State to a manufacturer for a 
                covered outpatient drug under a risk-sharing value-
                based payment agreement in accordance with this 
                subsection, except that no Federal financial 
                participation shall be available for any payment made 
                by a State to a manufacturer under such an agreement on 
                and after the effective date of a disapproval of such 
                agreement by the Secretary.
                    ``(D) Continued application of other provisions.--
                Except as expressly provided in this subsection, 
                nothing in this subsection or in any regulations 
                promulgated under this subsection shall affect the 
                application of any other provision of this Act.
            ``(10) Appropriations.--For fiscal year 2023 and each 
        fiscal year thereafter, there are appropriated to the Secretary 
        $5,000,000 for the purpose of carrying out this subsection.
            ``(11) Definitions.--In this subsection:
                    ``(A) Chief actuary.--The term `Chief Actuary' 
                means the Chief Actuary of the Centers for Medicare & 
                Medicaid Services.
                    ``(B) Installment year.--The term `installment 
                year' means, with respect to a risk-sharing value-based 
                payment agreement, a 12-month period during which a 
                covered outpatient drug is administered under the 
                agreement.
                    ``(C) Potentially curative treatment intended for 
                one-time use.--The term `potentially curative treatment 
                intended for one-time use' means a treatment that 
                consists of the administration of a covered outpatient 
                drug that--
                            ``(i) is a form of gene therapy for a rare 
                        disease, as defined by the Commissioner of Food 
                        and Drugs, designated under section 526 of the 
                        Federal Food, Drug, and Cosmetics Act, and 
                        approved under section 505 of such Act or 
                        licensed under subsection (a) or (k) of section 
                        351 of the Public Health Service Act to treat a 
                        serious or life-threatening disease or 
                        condition;
                            ``(ii) if administered in accordance with 
                        the labeling of such drug, is expected to 
                        result in either--
                                    ``(I) the cure of such disease or 
                                condition; or
                                    ``(II) a reduction in the symptoms 
                                of such disease or condition to the 
                                extent that such disease or condition 
                                is not expected to lead to early 
                                mortality; and
                            ``(iii) is expected to achieve a result 
                        described in clause (ii), which may be achieved 
                        over an extended period of time, after not more 
                        than 3 administrations.
                    ``(D) Relevant clinical parameter.--The term 
                `relevant clinical parameter' means, with respect to a 
                covered outpatient drug that is the subject of a risk-
                sharing value-based payment agreement--
                            ``(i) a clinical endpoint specified in the 
                        drug's labeling or supported by one or more of 
                        the compendia described in section 
                        1861(t)(2)(B)(ii)(I) that--
                                    ``(I) is able to be measured or 
                                evaluated on an annual basis for each 
                                year of the agreement on an independent 
                                basis by a provider or other entity; 
                                and
                                    ``(II) is required to be achieved 
                                (based on observed metrics in patient 
                                populations) under the terms of the 
                                agreement; or
                            ``(ii) a surrogate endpoint (as defined in 
                        section 507(e)(9) of the Federal Food, Drug, 
                        and Cosmetic Act), including those developed by 
                        patient-focused drug development tools, that--
                                    ``(I) is able to be measured or 
                                evaluated on an annual basis for each 
                                year of the agreement on an independent 
                                basis by a provider or other entity; 
                                and
                                    ``(II) has been qualified by the 
                                Food and Drug Administration.
                    ``(E) Risk-sharing value-based payment agreement.--
                The term `risk-sharing value-based payment agreement' 
                means an agreement between a State plan and a 
                manufacturer--
                            ``(i) for the purchase of a covered 
                        outpatient drug of the manufacturer that is a 
                        potentially curative treatment intended for 
                        one-time use;
                            ``(ii) under which payment for such drug 
                        shall be made pursuant to an installment-based 
                        payment structure that meets the requirements 
                        of paragraph (3);
                            ``(iii) which conditions payment on the 
                        achievement of at least 2 relevant clinical 
                        parameters (as defined in subparagraph (C));
                            ``(iv) which provides that--
                                    ``(I) the State plan will directly 
                                reimburse the manufacturer for the 
                                drug; or
                                    ``(II) a third party will reimburse 
                                the manufacture in a manner approved by 
                                the Secretary; and
                            ``(v) is approved by the Secretary in 
                        accordance with paragraph (2).
                    ``(F) Total installment year amount.--The term 
                `total installment year amount' means, with respect to 
                a risk-sharing value-based payment agreement for the 
                purchase of a covered outpatient drug and an 
                installment year, an amount equal to the product of--
                            ``(i) the unit price of the drug charged 
                        under the agreement; and
                            ``(ii) the number of units of such drug 
                        administered under the agreement during such 
                        installment year.''.
    (b) Conforming Amendments.--
            (1) Section 1903(i)(10)(A) of the Social Security Act (42 
        U.S.C. 1396b(i)(10)(A)) is amended by striking ``or unless 
        section 1927(a)(3) applies'' and inserting ``, section 
        1927(a)(3) applies with respect to such drugs, or such drugs 
        are the subject of a risk-sharing value-based payment agreement 
        under section 1927(l)''.
            (2) Section 1927(b) of the Social Security Act (42 U.S.C. 
        1396r-8(b)) is amended--
                    (A) in paragraph (1)(A), by inserting ``(except for 
                drugs for which payment is made by a State under a 
                risk-sharing value-based payment agreement under 
                subsection (l))'' after ``under the State plan for such 
                period''; and
                    (B) in paragraph (3)--
                            (i) in subparagraph (C)(i), by inserting 
                        ``or subsection (l)(2)(A)'' after 
                        ``subparagraph (A)''; and
                            (ii) in subparagraph (D), in the matter 
                        preceding clause (i), by inserting ``, under 
                        subsection (l)(2)(A),'' after ``under this 
                        paragraph''.

SEC. 307. MODIFICATION OF MAXIMUM REBATE AMOUNT UNDER MEDICAID DRUG 
              REBATE PROGRAM.

    (a) In General.--Subparagraph (D) of section 1927(c)(2) of the 
Social Security Act (42 U.S.C. 1396r-8(c)(2)) is amended to read as 
follows:
                    ``(D) Maximum rebate amount.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in no case shall the sum of the 
                        amounts applied under paragraph (1)(A)(ii) and 
                        this paragraph with respect to each dosage form 
                        and strength of a single source drug or an 
                        innovator multiple source drug for a rebate 
                        period exceed--
                                    ``(I) for rebate periods beginning 
                                after December 31, 2009, and before 
                                September 30, 2025, 100 percent of the 
                                average manufacturer price of the drug; 
                                and
                                    ``(II) for rebate periods beginning 
                                on or after October 1, 2025, 125 
                                percent of the average manufacturer 
                                price of the drug.
                            ``(ii) No maximum amount for drugs if amp 
                        increases outpace inflation.--
                                    ``(I) In general.--If the average 
                                manufacturer price with respect to each 
                                dosage form and strength of a single 
                                source drug or an innovator multiple 
                                source drug increases on or after 
                                October 1, 2024, and such increased 
                                average manufacturer price exceeds the 
                                inflation-adjusted average manufacturer 
                                price determined with respect to such 
                                drug under subclause (II) for the 
                                rebate period, clause (i) shall not 
                                apply and there shall be no limitation 
                                on the sum of the amounts applied under 
                                paragraph (1)(A)(ii) and this paragraph 
                                for the rebate period with respect to 
                                each dosage form and strength of the 
                                single source drug or innovator 
                                multiple source drug.
                                    ``(II) Inflation-adjusted average 
                                manufacturer price defined.--In this 
                                clause, the term `inflation-adjusted 
                                average manufacturer price' means, with 
                                respect to a single source drug or an 
                                innovator multiple source drug and a 
                                rebate period, the average manufacturer 
                                price for each dosage form and strength 
                                of the drug for the calendar quarter 
                                beginning July 1, 1990 (without regard 
                                to whether or not the drug has been 
                                sold or transferred to an entity, 
                                including a division or subsidiary of 
                                the manufacturer, after the 1\st\ day 
                                of such quarter), increased by the 
                                percentage by which the consumer price 
                                index for all urban consumers (United 
                                States city average) for the month 
                                before the month in which the rebate 
                                period begins exceeds such index for 
                                September 1990.''.
    (b) Treatment of Subsequently Approved Drugs.--Section 
1927(c)(2)(B) of the Social Security Act (42 U.S.C. 1396r-8(c)(2)(B)) 
is amended by inserting ``and clause (ii)(II) of subparagraph (D)'' 
after ``clause (ii)(II) of subparagraph (A)''.
    (c) Technical Amendments.--Section 1927(c)(3)(C)(ii)(IV) of the 
Social Security Act (42 U.S.C. 1396r-9(c)(3)(C)(ii)(IV)) is amended--
            (1) by striking ``subparagraph (A)'' and inserting 
        ``paragraph (3)(A)''; and
            (2) by striking ``this subparagraph'' and inserting 
        ``paragraph (3)(C)''.

        TITLE IV--ADDRESSING INTERMEDIARIES AND DRUG COMPETITION

SEC. 401. HEALTH PLAN OVERSIGHT OF PHARMACY BENEFIT MANAGER SERVICES.

    Subpart II of part A of title XXVII of the Public Health Service 
Act (42 U.S.C. 300gg-11 et seq.) is amended by adding at the end the 
following:

``SEC. 2729A. HEALTH PLAN OVERSIGHT OF PHARMACY BENEFIT MANAGER 
              SERVICES.

    ``(a) In General.--A group health plan or health insurance issuer 
offering group or individual health insurance coverage or an entity or 
subsidiary providing pharmacy benefits management services shall not 
enter into a contract with a drug manufacturer, distributor, 
wholesaler, subcontractor, rebate aggregator, or any associated third 
party that limits the disclosure of information to plan sponsors in 
such a manner that prevents the plan or coverage, or an entity or 
subsidiary providing pharmacy benefits management services on behalf of 
a plan or coverage from making the reports described in subsection (b).
    ``(b) Reports to Group Plan Sponsors.--
            ``(1) In general.--Beginning with the first plan year that 
        begins after the date of enactment of this section, not less 
        frequently than once every six months, a health insurance 
        issuer offering group health insurance coverage or an entity 
        providing pharmacy benefits management services on behalf of a 
        group health plan shall submit to the self-funded group health 
        plan and at the request of any other group health plan a report 
        in accordance with this subsection and make such report 
        available to the plan sponsor in a machine-readable format. 
        Each such report shall include, with respect to the applicable 
        group health plan or health insurance coverage--
                    ``(A) information collected from drug manufacturers 
                by such issuer or entity on the total amount of 
                copayment assistance dollars paid, or copayment cards 
                applied, that were funded by the drug manufacturer with 
                respect to the enrollees in such plan or coverage;
                    ``(B) a list of each covered drug dispensed during 
                the reporting period, including, with respect to each 
                such drug during the reporting period--
                            ``(i) the brand name, chemical entity, and 
                        National Drug Code;
                            ``(ii) the number of enrollees for whom the 
                        drug was filled during the plan year, the total 
                        number of prescription fills for the drug 
                        (including original prescriptions and refills), 
                        and the total number of dosage units of the 
                        drug dispensed across the plan year, including 
                        whether the dispensing channel was by retail, 
                        mail order, or specialty pharmacy;
                            ``(iii) the wholesale acquisition cost, 
                        listed as cost per days supply and cost per 
                        pill, or in the case of a drug in another form, 
                        per dose;
                            ``(iv) the total out-of-pocket spending by 
                        enrollees on such drug, including enrollee 
                        spending through copayments, coinsurance, and 
                        deductibles; and
                            ``(v) for any drug for which gross spending 
                        of the group health plan or health insurance 
                        coverage exceeded $10,000 during the reporting 
                        period--
                                    ``(I) a list of all other available 
                                drugs in the same therapeutic category 
                                or class, including brand name drugs 
                                and biological products and generic 
                                drugs or biosimilar biological products 
                                that are in the same therapeutic 
                                category or class; and
                                    ``(II) the rationale for preferred 
                                formulary placement of a particular 
                                drug or drugs in that therapeutic 
                                category or class;
                    ``(C) a list of each therapeutic category or class 
                of drugs that were dispensed under the health plan or 
                health insurance coverage during the reporting period, 
                and, with respect to each such therapeutic category or 
                class of drugs, during the reporting period--
                            ``(i) total gross spending by the plan, 
                        before manufacturer rebates, fees, or other 
                        manufacturer remuneration;
                            ``(ii) the number of enrollees who filled a 
                        prescription for a drug in that category or 
                        class;
                            ``(iii) if applicable to that category or 
                        class, a description of the formulary tiers and 
                        utilization mechanisms (such as prior 
                        authorization or step therapy) employed for 
                        drugs in that category or class;
                            ``(iv) the total out-of-pocket spending by 
                        enrollees, including enrollee spending through 
                        copayments, coinsurance, and deductibles; and
                            ``(v) for each therapeutic category or 
                        class under which three or more drugs are 
                        marketed and available--
                                    ``(I) the amount received, or 
                                expected to be received, from drug 
                                manufacturers in rebates, fees, 
                                alternative discounts, or other 
                                remuneration--
                                            ``(aa) to be paid by drug 
                                        manufacturers for claims 
                                        incurred during the reporting 
                                        period; or
                                            ``(bb) that is related to 
                                        utilization of drugs, in such 
                                        therapeutic category or class;
                                    ``(II) the total net spending by 
                                the health plan or health insurance 
                                coverage on that category or class of 
                                drugs; and
                                    ``(III) the net price per dosage 
                                unit or course of treatment incurred by 
                                the health plan or health insurance 
                                coverage and its enrollees, after 
                                manufacturer rebates, fees, and other 
                                remuneration for drugs dispensed within 
                                such therapeutic category or class 
                                during the reporting period;
                    ``(D) total gross spending on prescription drugs by 
                the plan or coverage during the reporting period, 
                before rebates and other manufacturer fees or 
                remuneration;
                    ``(E) total amount received, or expected to be 
                received, by the health plan or health insurance 
                coverage in drug manufacturer rebates, fees, 
                alternative discounts, and all other remuneration 
                received from the manufacturer or any third party 
                related to utilization of drug or drug spending under 
                that health plan or health insurance coverage during 
                the reporting period;
                    ``(F) the total net spending on prescription drugs 
                by the health plan or health insurance coverage during 
                the reporting period; and
                    ``(G) amounts paid directly or indirectly in 
                rebates, fees, or any other type of remuneration to 
                brokers, consultants, advisors, or any other individual 
                or firm who referred the group health plan's or health 
                insurance issuer's business to the pharmacy benefit 
                manager.
            ``(2) Privacy requirements.--Health insurance issuers 
        offering group health insurance coverage and entities providing 
        pharmacy benefits management services on behalf of a group 
        health plan shall provide information under paragraph (1) in a 
        manner consistent with the privacy, security, and breach 
        notification regulations promulgated under section 264(c) of 
        the Health Insurance Portability and Accountability Act of 1996 
        (or successor regulations), and shall restrict the use and 
        disclosure of such information according to such privacy 
        regulations.
            ``(3) Disclosure and redisclosure.--
                    ``(A) Limitation to business associates.--A group 
                health plan receiving a report under paragraph (1) may 
                disclose such information only to business associates 
                of such plan as defined in section 160.103 of title 45, 
                Code of Federal Regulations (or successor regulations).
                    ``(B) Clarification regarding public disclosure of 
                information.--Nothing in this section prevents a health 
                insurance issuer offering group health insurance 
                coverage or an entity providing pharmacy benefits 
                management services on behalf of a group health plan 
                from placing reasonable restrictions on the public 
                disclosure of the information contained in a report 
                described in paragraph (1).
    ``(c) Enforcement.--
            ``(1) In general.--The Secretary, in consultation with the 
        Secretary of Labor and the Secretary of the Treasury, shall 
        enforce this section.
            ``(2) Failure to provide timely information.--A health 
        insurance issuer or an entity providing pharmacy benefit 
        management services that violates subsection (a) or fails to 
        provide information required under subsection (b) or a drug 
        manufacturer that fails to provide information under subsection 
        (b)(1)(A), in a timely manner shall be subject to a civil 
        monetary penalty in the amount of $10,000 for each day during 
        which such violation continues or such information is not 
        disclosed or reported.
            ``(3) False information.--A health insurance issuer, entity 
        providing pharmacy benefit management services, or drug 
        manufacturer that knowingly provides false information under 
        this section shall be subject to a civil money penalty in an 
        amount not to exceed $100,000 for each item of false 
        information. Such civil money penalty shall be in addition to 
        other penalties as may be prescribed by law.
            ``(4) Procedure.--The provisions of section 1128A of the 
        Social Security Act, other than subsections (a) and (b) and the 
        first sentence of subsection (c)(1) of such section shall apply 
        to civil monetary penalties under this subsection in the same 
        manner as such provisions apply to a penalty or proceeding 
        under section 1128A of the Social Security Act.
            ``(5) Safe harbor.--The Secretary may waive penalties under 
        paragraph (2), or extend the period of time for compliance with 
        a requirement of this section, for an entity in violation of 
        this section that has made a good-faith effort to comply with 
        this section.
    ``(d) Rule of Construction.--Nothing in this section shall be 
construed to prohibit entities providing pharmacy benefits management 
services from retaining bona fide service fees, provided that such fees 
are transparent to group health plans and health insurance issuers and 
are not linked directly to the price or formulary placement or position 
of a drug.
    ``(e) Definitions.--In this section--
            ``(1) the term `similarly situated pharmacy' means, with 
        respect to a particular pharmacy, another pharmacy that is 
        approximately the same size (as measured by the number of 
        prescription drugs dispensed), and that serves patients in the 
        same geographical area, whether through physical locations or 
        mail order;
            ``(2) the term `wholesale acquisition cost' has the meaning 
        given such term in section 1847A(c)(6)(B) of the Social 
        Security Act; and
            ``(3) the term `bona fide service fees' means fees paid by 
        a manufacturer, customer, or client (other than a group health 
        plan or health insurance issuer) of an entity providing 
        pharmacy benefit management services, to an entity providing 
        pharmacy benefit management services, that represent fair 
        market value for bona fide, itemized services actually 
        performed on behalf of the manufacturer, customer, or client 
        would otherwise perform or contract for in the absence of the 
        service arrangement, without prior consent for any specific 
        arrangements.''.

SEC. 402. STUDY OF PHARMACEUTICAL SUPPLY CHAIN INTERMEDIARIES AND 
              MERGER ACTIVITY.

    (a) Initial Report.--Not later than 1 year after the date of 
enactment of this Act, the Commission shall submit to the appropriate 
committees of Congress a report that--
            (1) addresses at minimum--
                    (A) whether pharmacy benefit managers--
                            (i) charge payers a higher price than the 
                        reimbursement rate at which the pharmacy 
                        benefit managers reimburse competing 
                        pharmacies;
                            (ii) steer patients for anticompetitive 
                        purposes to any pharmacies, including retail, 
                        mail-order, or any other type of pharmacy, in 
                        which the pharmacy benefit manager has an 
                        ownership interest;
                            (iii) audit or review proprietary data, 
                        including acquisition costs, patient 
                        information, or dispensing information, of 
                        competing pharmacies that can be used for 
                        anticompetitive purposes; or
                            (iv) use formulary designs to increase the 
                        market share of higher cost prescription drugs 
                        and depress the market share of lower cost 
                        prescription drugs (each net of rebates and 
                        discounts);
                    (B) how companies and payers assess the benefits, 
                costs, and risks of contracting with intermediaries, 
                including pharmacy services administrative 
                organizations, and whether more information about the 
                roles of intermediaries should be available to 
                consumers and payers; and
                    (C) whether there are any specific legal or 
                regulatory obstacles the Commission currently faces in 
                ensuring a competitive and transparent marketplace in 
                the pharmaceutical supply chain, including the pharmacy 
                benefit manager marketplace and pharmacy services 
                administrative organizations; and
            (2) provides--
                    (A) observations or conclusions drawn from the 
                November 2017 roundtable entitled ``Understanding 
                Competition in Prescription Drug Markets: Entry and 
                Supply Chain Dynamics'', and any similar efforts;
                    (B) specific actions the Commission intends to take 
                as a result of the November 2017 roundtable, and any 
                similar efforts, including a detailed description of 
                relevant forthcoming actions, additional research or 
                roundtable discussions, consumer education efforts, or 
                enforcement actions; and
                    (C) policy or legislative recommendations to--
                            (i) improve transparency and competition in 
                        the pharmaceutical supply chain;
                            (ii) prevent and deter anticompetitive 
                        behavior in the pharmaceutical supply chain; 
                        and
                            (iii) best ensure that consumers benefit 
                        from any cost savings or efficiencies that may 
                        result from mergers and consolidations.
    (b) Interim Report.--Not later than 180 days after the date of 
enactment of this Act, the Commission shall submit to the appropriate 
committees of Congress an interim report on the progress of the report 
required by subsection (a), along with preliminary findings and 
conclusions based on information collected to that date.
    (c) Definitions.--In this section:
            (1) Appropriate committees of congress.--The term 
        ``appropriate committees of Congress'' means--
                    (A) the Committee on Energy and Commerce of the 
                House of Representatives;
                    (B) the Committee on the Judiciary of the Senate; 
                and
                    (C) the Committee on the Judiciary of the House of 
                Representatives.
            (2) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.

SEC. 403. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR 
              PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE 
              TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.

    Part A of title XI of the Social Security Act is amended by adding 
at the end the following new section:

``SEC. 1150D. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR 
              PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE 
              TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.

    ``(a) In General.--The Secretary shall require that each direct-to-
consumer advertisement for a prescription drug or biological product 
for which payment is available under title XVIII or XIX includes an 
appropriate disclosure of truthful and non-misleading pricing 
information with respect to the drug or product.
    ``(b) Determination by CMS.--The Secretary, acting through the 
Administrator of the Centers for Medicare & Medicaid Services, shall 
determine the components of the requirement under subsection (a), such 
as the forms of advertising, the manner of disclosure, the price point 
listing, and the price information for disclosure.''.

SEC. 404. CHANGE CONDITIONS OF FIRST GENERIC EXCLUSIVITY TO SPUR ACCESS 
              AND COMPETITION.

    Clause (iv) of section 505(j)(5)(B) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355(j)(5)(B)) is amended--
            (1) in subclause (I), after ``180 days after the date of 
        the first commercial marketing of the drug (including the 
        commercial marketing of the listed drug) by any first 
        applicant'' by inserting ``or by an applicant whose application 
        is approved pursuant to subclause (III)''; and
            (2) by adding at the end the following new subclause:
                    ``(III) Applicant approval.--An application 
                containing a certification described in paragraph 
                (2)(A)(vii)(IV) that is for a drug for which a first 
                applicant has submitted an application containing such 
                a certification can be approved notwithstanding the 
                eligibility of a first applicant for the 180-day 
                exclusivity period described in subclause (II)(aa) if 
                each of the following conditions is met:
                            ``(aa) The approval of such an application 
                        could be made effective, but for the 
                        eligibility of a first applicant for 180-day 
                        exclusivity under this clause.
                            ``(bb) At least 30 months have passed since 
                        the date of submission of an application for 
                        the drug by at least one first applicant.
                            ``(cc) Approval of an application for the 
                        drug submitted by at least one first applicant 
                        is not precluded under clause (iii).
                            ``(dd) No application for the drug 
                        submitted by any first applicant is approved at 
                        the time the conditions under items (aa), (bb), 
                        and (cc) are all met, regardless of whether 
                        such an application is subsequently 
                        approved.''.

SEC. 405. ENDING THE PRACTICE PREVENTING MARKET COMPETITION KNOWN AS 
              ``PAY-FOR-DELAY''.

    (a) Congressional Findings and Declaration of Purposes.--
            (1) Findings.--Congress finds the following:
                    (A) In 1984, the Drug Price Competition and Patent 
                Term Restoration Act (Public Law 98-417) (referred to 
                in this Act as the ``1984 Act''), was enacted with the 
                intent of facilitating the early entry of generic drugs 
                while preserving incentives for innovation.
                    (B) Prescription drugs make up approximately 10 
                percent of the national health care spending.
                    (C) Initially, the 1984 Act was successful in 
                facilitating generic competition to the benefit of 
                consumers and health care payers, although 88 percent 
                of all prescriptions dispensed in the United States are 
                generic drugs, they account for only 28 percent of all 
                expenditures.
                    (D) Generic drugs cost substantially less than 
                brand name drugs, with discounts off the brand price 
                averaging 80 to 85 percent.
                    (E) Federal dollars currently account for over 40 
                percent of the $325,000,000,000 spent on retail 
                prescription drugs, and this share is expected to rise 
                to 47 percent by 2025.
                    (F)(i) In recent years, the intent of the 1984 Act 
                has been subverted by certain settlement agreements in 
                which brand name companies transfer value to their 
                potential generic competitors to settle claims that the 
                generic company is infringing the branded company's 
                patents.
                    (ii) These ``reverse payment'' settlement 
                agreements--
                            (I) allow a branded company to share its 
                        monopoly profits with the generic company as a 
                        way to protect the branded company's monopoly; 
                        and
                            (II) have unduly delayed the marketing of 
                        low-cost generic drugs contrary to free 
                        competition, the interests of consumers, and 
                        the principles underlying antitrust law.
                    (iii) Because of the price disparity between brand 
                name and generic drugs, such agreements are more 
                profitable for both the brand and generic manufacturers 
                than competition and will become increasingly common 
                unless prohibited.
                    (iv) These agreements result in consumers losing 
                the benefits that the 1984 Act was intended to provide.
                    (G) In 2010, the Biologics Price Competition and 
                Innovation Act (Public Law 111-148) (referred to in 
                this Act as the ``BPCIA''), was enacted with the intent 
                of facilitating the early entry of biosimilar and 
                interchangeable follow-on versions of branded 
                biological products while preserving incentives for 
                innovation.
                    (H) Biological drugs play an important role in 
                treating many serious illnesses, from cancers to 
                genetic disorders. They are also expensive, 
                representing more than 40 percent of all prescription 
                drug spending.
                    (I) Competition from biosimilar and interchangeable 
                biological products promises to lower drug costs and 
                increase patient access to biological medicines. But 
                ``reverse payment'' settlement agreements also threaten 
                to delay the entry of biosimilar and interchangeable 
                biological products, which would undermine the goals of 
                BPCIA.
            (2) Purposes.--The purposes of this Act are--
                    (A) to enhance competition in the pharmaceutical 
                market by stopping anticompetitive agreements between 
                brand name and generic drug and biosimilar biological 
                product manufacturers that limit, delay, or otherwise 
                prevent competition from generic drugs and biosimilar 
                biological products; and
                    (B) to support the purpose and intent of antitrust 
                law by prohibiting anticompetitive practices in the 
                pharmaceutical industry that harm consumers.
    (b) Unlawful Compensation for Delay.--
            (1) In general.--The Federal Trade Commission Act (15 
        U.S.C. 44 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 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 forgo 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 that the ANDA filer or biosimilar biological product 
application filer, respectively, receives as part of the resolution or 
settlement includes only one or more of the following:
            ``(1) The right to market and secure final approval in the 
        United States for the ANDA product or biosimilar biological 
        product at a date, whether certain or contingent, 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--
                    ``(A) for calendar year 2021, $7,500,000; or
                    ``(B) for calendar year 2022 and each subsequent 
                calendar year, the amount determined for the preceding 
                calendar year adjusted to reflect the percentage 
                increase (if any) in the Producer Price Index for Legal 
                Services published by the Bureau of Labor Statistics of 
                the Department of Labor for the most recent calendar 
                year.
            ``(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 an unfair method of competition under section 
        5(a)(1).
            ``(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, the biological product license holder, the 
        ANDA filer, or the biosimilar biological product application 
        filer, the penalty to the NDA holder, the biological product 
        license holder, the ANDA filer, or the biosimilar biological 
        product application filer shall be sufficient to deter 
        violations, but in no event shall be greater than 3 times the 
        value given to an 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, the 
                biological product license holder, the ANDA filer, or 
                the biosimilar biological product application filer, 
                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) Market.--The term `market' means the promotion, 
        offering for sale, selling, or distribution of a drug product.
            ``(14) 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)).
            ``(15) 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.
            ``(16) Party.--The term `party' means any person, 
        partnership, corporation, or other legal entity.
            ``(17) Patent infringement.--The term `patent infringement' 
        means infringement of any patent or of any filed patent 
        application, including any extension, reissue, renewal, 
        division, continuation, continuation in part, reexamination, 
        patent term restoration, patents of addition, and extensions 
        thereof.
            ``(18) 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 biosimilar biological product license 
        application or biosimilar biological product, may infringe any 
        patent held by, or exclusively licensed to, the NDA holder, 
        biological product license holder, ANDA filer, or biosimilar 
        biological product application filer of the drug product or 
        biological product, as applicable.
            ``(19) 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 (21 U.S.C. 360cc) (orphan drug exclusivity).''.
            (2) Effective date.--Section 27 of the Federal Trade 
        Commission Act, as added by this section, shall apply to all 
        agreements described in section 27(a)(1) of that Act entered 
        into on or after the date of enactment of this Act.
    (c) Certification of Agreements.--
            (1) Notice of all agreements.--Section 1111(7) of the 
        Medicare Prescription Drug, Improvement, and Modernization Act 
        of 2003 (21 U.S.C. 355 note) is amended by inserting ``, or the 
        owner of a patent for which a claim of infringement could 
        reasonably be asserted against any person for making, using, 
        offering to sell, selling, or importing into the United States 
        a biological product that is the subject of a biosimilar 
        biological product application'' before the period at the end.
            (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.'.''.
    (d) Notification of Agreements.--Section 1112 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (21 
U.S.C. 355 note), as amended by section 4(b), is further amended by 
adding at the end the following:
    ``(e) Rule of Construction.--
            ``(1) In general.--An agreement that is required under 
        subsection (a) or (b) shall include agreements resolving any 
        outstanding disputes, including agreements resolving or 
        settling a Patent Trial and Appeal Board proceeding.
            ``(2) Definition.--For purposes of subparagraph (A), the 
        term `Patent Trial and Appeal Board proceeding' means a 
        proceeding conducted by the Patent Trial and Appeal Board of 
        the United States Patent and Trademark Office, including an 
        inter partes review instituted under chapter 31 of title 35, 
        United States Code, a post-grant review instituted under 
        chapter 32 of that title (including a proceeding instituted 
        pursuant to the transitional program for covered business 
        method patents, as described in section 18 of the Leahy-Smith 
        America Invents Act (35 U.S.C. 321 note)), and a derivation 
        proceeding instituted under section 135 of that title.''.
    (e) 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''.
    (f) Commission Litigation Authority.--Section 16(a)(2) of the 
Federal Trade Commission Act (15 U.S.C. 56(a)(2)) is amended--
            (1) in subparagraph (D), by striking ``or'' after the 
        semicolon;
            (2) in subparagraph (E), by inserting ``or'' after the 
        semicolon; and
            (3) inserting after subparagraph (E) the following:
            ``(F) under section 27,''.
    (g) Report on Additional Exclusion.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Federal Trade Commission shall 
        submit to the Committee on the Judiciary of the Senate and the 
        Committee on the Judiciary of the House of Representatives a 
        recommendation, and the Commission's basis for such 
        recommendation, regarding a potential amendment to include in 
        section 27(c) of the Federal Trade Commission Act (as added by 
        section 3 of this Act) an additional exclusion for 
        consideration granted by an NDA holder to a ANDA filer or by a 
        biological product license holder to a biosimilar biological 
        product application filer as part of the resolution or 
        settlement, a release, waiver, or limitation of a claim for 
        damages or other monetary relief.
            (2) Definitions.--In this section, the terms ``ANDA 
        filer'', ``biological product license holder'', ``biosimilar 
        biological product application filer'', and ``NDA holder'' have 
        the meanings given such terms in section 27(g) of the Federal 
        Trade Commission Act (as added by section 3 of this Act).
    (h) 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 section 3, 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).
    (i) 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.

SEC. 406. EMPOWERING THE FTC TO PREVENT ``PRODUCT HOPPING''.

    (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. PRODUCT HOPPING.

    ``(a) Definitions.--In this section:
            ``(1) Abbreviated new drug application.--The term 
        `abbreviated new drug application' means an application under 
        subsection (b)(2) or (j) of section 505 of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 355).
            ``(2) Biosimilar biological product.--The term `biosimilar 
        biological product' means a biological product licensed under 
        section 351(k) of the Public Health Service Act (42 U.S.C. 
        262(k)).
            ``(3) Biosimilar biological product license application.--
        The term `biosimilar biological product license application' 
        means an application submitted under section 351(k) of the 
        Public Health Service Act (42 U.S.C. 262(k)).
            ``(4) Follow-on product.--The term `follow-on product'--
                    ``(A) means a drug approved through an application 
                or supplement to an application submitted under section 
                505(b) of the Federal Food, Drug, and Cosmetic Act (21 
                U.S.C. 355(b)) or a biological product licensed through 
                an application or supplement to an application 
                submitted under section 351(a) of the Public Health 
                Service Act (42 U.S.C. 262(a)) for a change, 
                modification, or reformulation to the same 
                manufacturer's previously approved drug or biological 
                product that treats the same medical condition; and
                    ``(B) excludes such an application or supplement to 
                an application for a change, modification, or 
                reformulation of a drug or biological product that is 
                requested by the Secretary or necessary to comply with 
                law, including sections 505A and 505B of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 355a, 355c).
            ``(5) Generic drug.--The term `generic drug' means a drug 
        approved under an application submitted under subsection (b)(2) 
        or (j) of section 505 of the Federal Food, Drug, and Cosmetic 
        Act (21 U.S.C. 355).
            ``(6) Listed drug.--The term `listed drug' means a drug 
        listed under section 505(j)(7) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355(j)(7)).
            ``(7) Manufacturer.--The term `manufacturer' means the 
        holder, licensee, or assignee of--
                    ``(A) an approved application for a drug under 
                section 505(c) of the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 355(c)); or
                    ``(B) a biological product license under section 
                351(a) of the Public Health Service Act (42 U.S.C. 
                262(a)).
            ``(8) Reference product.--The term `reference product' has 
        the meaning given the term in section 351(i) of the Public 
        Health Service Act (42 U.S.C. 262(i)).
            ``(9) Ultimate parent entity.--The term `ultimate parent 
        entity' has the meaning given the term in section 801.1 of 
        title 16, Code of Federal Regulations, or any successor 
        regulation.
    ``(b) Prohibition on Product Hopping.--
            ``(1) Prima facie.--Except as provided in paragraph (2), a 
        manufacturer of a reference product or listed drug shall be 
        considered to have engaged in an unfair method of competition 
        in or affecting commerce in violation of section 5(a) if the 
        Commission demonstrates by a preponderance of the evidence in a 
        proceeding initiated by the Commission under subsection 
        (c)(1)(A), or in a suit brought under subparagraph (B) or (C) 
        of subsection (c)(1), that, during the period beginning on the 
        date on which the manufacturer of the reference product or 
        listed drug first receives notice that an applicant has 
        submitted to the Commissioner of Food and Drugs an abbreviated 
        new drug application or biosimilar biological product license 
        application and ending on the date that is 180 days after the 
        date on which that generic drug or biosimilar biological 
        product is first marketed, the manufacturer engaged in either 
        of the following actions:
                    ``(A) The manufacturer engaged in a hard switch, 
                which shall be established by demonstrating that the 
                manufacturer engaged in either of the following 
                actions:
                            ``(i) Upon the request of the manufacturer 
                        of the listed drug or reference product, the 
                        Commissioner of Food and Drugs withdrew the 
                        approval of the application for the listed drug 
                        or reference product or placed the listed drug 
                        or reference product on the discontinued 
                        products list and the manufacturer marketed or 
                        sold a follow-on product.
                            ``(ii) The manufacturer of the listed drug 
                        or reference product--
                                    ``(I)(aa) announced withdrawal of, 
                                discontinuance of the manufacture of, 
                                or intent to withdraw the application 
                                with respect to the drug or reference 
                                product in a manner that impedes 
                                competition from a generic drug or a 
                                biosimilar biological product, as 
                                established by objective circumstances; 
                                or
                                    ``(bb) destroyed the inventory of 
                                the listed drug or reference product in 
                                a manner that impedes competition from 
                                a generic drug or a biosimilar 
                                biological product, which may be 
                                established by objective circumstances; 
                                and
                                    ``(II) marketed or sold a follow-on 
                                product.
                    ``(B) The manufacturer engaged in a soft switch, 
                which shall be established by demonstrating that the 
                manufacturer engaged in both of the following actions:
                            ``(i) The manufacturer took actions with 
                        respect to the listed drug or reference product 
                        other than those described in subparagraph (A) 
                        that unfairly disadvantage the listed drug or 
                        reference product relative to the follow-on 
                        product described in clause (ii) in a manner 
                        that impedes competition from a generic drug or 
                        a biosimilar biological product that is highly 
                        similar to, and has no clinically meaningful 
                        difference with respect to safety, purity, and 
                        potency from, the reference product, which may 
                        be established by objective circumstances.
                            ``(ii) The manufacturer marketed or sold a 
                        follow-on product.
            ``(2) Justification.--
                    ``(A) In general.--Subject to paragraph (3), the 
                actions described in paragraph (1) by a manufacturer of 
                a listed drug or reference product shall not be 
                considered to be an unfair method of competition in or 
                affecting commerce if--
                            ``(i) the manufacturer demonstrates to the 
                        Commission or a district court of the United 
                        States, as applicable, by a preponderance of 
                        the evidence in a proceeding initiated by the 
                        Commission under subsection (c)(1)(A), or in a 
                        suit brought under subparagraph (B) or (C) of 
                        subsection (c)(1), that--
                                    ``(I) the manufacturer would have 
                                taken the actions regardless of whether 
                                a generic drug that references the 
                                listed drug or biosimilar biological 
                                product that references the reference 
                                product had already entered the market; 
                                and
                                    ``(II)(aa) with respect to a hard 
                                switch under paragraph (1)(A), the 
                                manufacturer took the action for 
                                reasons relating to the safety risk to 
                                patients of the listed drug or 
                                reference product;
                                    ``(bb) with respect to an action 
                                described in item (aa) or (bb) of 
                                paragraph (1)(A)(ii)(I), there is a 
                                supply disruption that--
                                            ``(AA) is outside of the 
                                        control of the manufacturer;
                                            ``(BB) prevents the 
                                        production or distribution of 
                                        the applicable listed drug or 
                                        reference product; and
                                            ``(CC) cannot be remedied 
                                        by reasonable efforts; or
                                    ``(cc) with respect to a soft 
                                switch under paragraph (1)(B), the 
                                manufacturer had legitimate pro-
                                competitive reasons, apart from the 
                                financial effects of reduced 
                                competition, to take the action.
                    ``(B) Rule of construction.--Nothing in 
                subparagraph (A) may be construed to limit the 
                information that the Commission may otherwise obtain in 
                any proceeding or action instituted with respect to a 
                violation of this section.
            ``(3) Response.--With respect to a justification offered by 
        a manufacturer under paragraph (2), the Commission may--
                    ``(A) rebut any evidence presented by a 
                manufacturer during that justification; or
                    ``(B) establish by a preponderance of the evidence 
                that, on balance, the pro-competitive benefits from the 
                conduct described in subparagraph (A) or (B) of 
                paragraph (1), as applicable, do not outweigh any 
                anticompetitive effects of the conduct, even in 
                consideration of the justification so offered.
    ``(c) Enforcement.--
            ``(1) In general.--If the Commission has reason to believe 
        that any manufacturer has violated, is violating, or is about 
        to violate this section, the Commission may take any of the 
        following actions:
                    ``(A) Institute a proceeding--
                            ``(i) that, except as provided in paragraph 
                        (2), complies with the requirements under 
                        section 5(b); and
                            ``(ii) in which the Commission may impose 
                        on the manufacturer any penalty that the 
                        Commission may impose for a violation of 
                        section 5.
                    ``(B) In the same manner and to the same extent as 
                provided in section 13(b), bring suit in a district 
                court of the United States to temporarily enjoin the 
                action of the manufacturer.
                    ``(C) Bring suit in a district court of the United 
                States, in which the Commission may seek--
                            ``(i) to permanently enjoin the action of 
                        the manufacturer;
                            ``(ii) any of the remedies described in 
                        paragraph (3); and
                            ``(iii) any other equitable remedy, 
                        including ancillary equitable relief.
            ``(2) Judicial review.--
                    ``(A) In general.--Notwithstanding any provision of 
                section 5, any manufacturer that is subject to a final 
                order of the Commission that is issued in a proceeding 
                instituted under paragraph (1)(A) may, not later than 
                30 days after the date on which the Commission issues 
                the order, petition for review of the order in--
                            ``(i) the United States Court of Appeals 
                        for the District of Columbia Circuit; or
                            ``(ii) the court of appeals of the United 
                        States for the circuit in which the ultimate 
                        parent entity of the manufacturer is 
                        incorporated.
                    ``(B) Treatment of findings.--In a review of an 
                order issued by the Commission conducted by a court of 
                appeals of the United States under subparagraph (A), 
                the factual findings of the Commission shall be 
                conclusive if those facts are supported by the 
                evidence.
            ``(3) Equitable remedies.--
                    ``(A) Disgorgement.--
                            ``(i) In general.--In a suit brought under 
                        paragraph (1)(C), the Commission may seek, and 
                        the court may order, disgorgement of any unjust 
                        enrichment that a person obtained as a result 
                        of the violation that gives rise to the suit.
                            ``(ii) Calculation.--Any disgorgement that 
                        is ordered with respect to a person under 
                        clause (i) shall be offset by any amount of 
                        restitution ordered under subparagraph (B).
                            ``(iii) Limitations period.--The Commission 
                        may seek disgorgement under this subparagraph 
                        not later than 5 years after the latest date on 
                        which the person from which the disgorgement is 
                        sought receives any unjust enrichment from the 
                        effects of the violation that gives rise to the 
                        suit in which the Commission seeks the 
                        disgorgement.
                    ``(B) Restitution.--
                            ``(i) In general.--In a suit brought under 
                        paragraph (1)(C), the Commission may seek, and 
                        the court may order, restitution with respect 
                        to the violation that gives rise to the suit.
                            ``(ii) Limitations period.--The Commission 
                        may seek restitution under this subparagraph 
                        not later than 5 years after the latest date on 
                        which the person from which the restitution is 
                        sought receives any unjust enrichment from the 
                        effects of the violation that gives rise to the 
                        suit in which the Commission seeks the 
                        restitution.
            ``(4) Rules of construction.--Nothing in this subsection 
        may be construed as--
                    ``(A) requiring the Commission to bring a suit 
                seeking a temporary injunction under paragraph (1)(B) 
                before bringing a suit seeking a permanent injunction 
                under paragraph (1)(C); or
                    ``(B) affecting any other authority of the 
                Commission under this Act to seek relief or obtain a 
                remedy with respect to a violation of this Act.''.
    (b) Applicability.--Section 27 of the Federal Trade Commission Act, 
as added by subsection (a), shall apply with respect to any--
            (1) conduct that occurs on or after the date of enactment 
        of this Act; and
            (2) action or proceeding that is commenced on or after the 
        date of enactment of this Act.
    (c) Antitrust Laws.--Nothing in this section, or the amendments 
made by 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 
the Federal Trade Commission Act (15 U.S.C. 45) to the extent that it 
applies to unfair methods of competition.
    (d) Rulemaking.--The Federal Trade Commission may issue rules under 
section 553 of title 5, United States Code, to carry out section 27 of 
the Federal Trade Commission Act, as added by subsection (a), including 
by defining any terms used in such section 27 (other than terms that 
are defined in subsection (a) of such section 27).

SEC. 407. PROMOTING COMPETITION BY LIMITING PATENT THICKETS.

    (a) In General.--Section 271(e) of title 35, United States Code, is 
amended--
            (1) in paragraph (2)(C), in the flush text following clause 
        (ii), by adding at the end the following: ``With respect to a 
        submission described in clause (ii), the act of infringement 
        shall extend to any patent that claims the biological product, 
        a method of using the biological product, or a method or 
        product used to manufacture the biological product.''; and
            (2) by adding at the end the following:
    ``(7)(A) Subject to subparagraphs (C), (D), and (E), if the sponsor 
of an approved application for a reference product, as defined in 
section 351(i) of the Public Health Service Act (42 U.S.C. 262(i)) 
(referred to in this paragraph as the `reference product sponsor'), 
brings an action for infringement under this section against an 
applicant for approval of a biological product under section 351(k) of 
such Act that references that reference product (referred to in this 
paragraph as the `subsection (k) applicant'), the reference product 
sponsor may assert in the action a total of not more than 20 patents of 
the type described in subparagraph (B), not more than 10 of which shall 
have issued after the date specified in section 351(l)(7)(A) of such 
Act.
    ``(B) The patents described in this subparagraph are patents that 
satisfy each of the following requirements:
            ``(i) Patents that claim the biological product that is the 
        subject of an application under section 351(k) of the Public 
        Health Service Act (42 U.S.C. 262(k)) (or a use of that 
        product) or a method or product used in the manufacture of such 
        biological product.
            ``(ii) Patents that are included on the list of patents 
        described in section 351(l)(3)(A) of the Public Health Service 
        Act (42 U.S.C. 262(l)(3)(A)), including as provided under 
        section 351(l)(7) of such Act.
            ``(iii) Patents that--
                    ``(I) have an actual filing date of more than 4 
                years after the date on which the reference product is 
                approved; or
                    ``(II) include a claim to a method in a 
                manufacturing process that is not used by the reference 
                product sponsor.
    ``(C) The court in which an action described in subparagraph (A) is 
brought may increase the number of patents limited under that 
subparagraph--
            ``(i) if the request to increase that number is made 
        without undue delay; and
            ``(ii)(I) if the interest of justice so requires; or
            ``(II) for good cause shown, which--
                    ``(aa) shall be established if the subsection (k) 
                applicant fails to provide information required under 
                section 351(l)(2)(A) of the Public Health Service Act 
                (42 U.S.C. 262(l)(2)(A)) that would enable the 
                reference product sponsor to form a reasonable belief 
                with respect to whether a claim of infringement under 
                this section could reasonably be asserted; and
                    ``(bb) may be established--
                            ``(AA) if there is a material change to the 
                        biological product (or process with respect to 
                        the biological product) of the subsection (k) 
                        applicant that is the subject of the 
                        application;
                            ``(BB) if, with respect to a patent on the 
                        supplemental list described in section 
                        351(l)(7)(A) of Public Health Service Act (42 
                        U.S.C. 262(l)(7)(A)), the patent would have 
                        issued before the date specified in such 
                        section 351(l)(7)(A) but for the failure of the 
                        Office to issue the patent or a delay in the 
                        issuance of the patent, as described in 
                        paragraph (1) of section 154(b) and subject to 
                        the limitations under paragraph (2) of such 
                        section 154(b); or
                            ``(CC) for another reason that shows good 
                        cause, as determined appropriate by the court.
    ``(D) In determining whether good cause has been shown for the 
purposes of subparagraph (C)(ii)(II), a court may consider whether the 
reference product sponsor has provided a reasonable description of the 
identity and relevance of any information beyond the subsection (k) 
application that the court believes is necessary to enable the court to 
form a belief with respect to whether a claim of infringement under 
this section could reasonably be asserted.
    ``(E) The limitation imposed under subparagraph (A)--
            ``(i) shall apply only if the subsection (k) applicant 
        completes all actions required under paragraphs (2)(A), 
        (3)(B)(ii), (5), (6)(C)(i), (7), and (8)(A) of section 351(l) 
        of the Public Health Service Act (42 U.S.C. 262(l)); and
            ``(ii) shall not apply with respect to any patent that 
        claims, with respect to a biological product, a method for 
        using that product in therapy, diagnosis, or prophylaxis, such 
        as an indication or method of treatment or other condition of 
        use.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply with respect to an application submitted under section 351(k) of 
the Public Health Service Act (42 U.S.C. 262(k)) on or after the date 
of enactment of this Act.

               TITLE V--BENEFICIARY COST SHARING FAIRNESS

SEC. 501. REPEALING OF RULE BY THE DEPARTMENT OF HEALTH AND HUMAN 
              SERVICES.

    The final rule of the Department of Health and Human Services 
titled ``Fraud And Abuse; Removal of Safe Harbor Protection for Rebates 
Involving Prescription Pharmaceuticals And Creation of New Safe Harbor 
Protection for Certain Point-of-Sale Reductions in Price on 
Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager 
Service Fees; Additional Delayed Effective Date'' published on November 
30, 2020 (85 Fed. Reg. 76666-76731), shall have no force or effect of 
law.

SEC. 502. DEFINING COST UNDER PRESCRIPTION DRUG PLANS UNDER PART D OF 
              MEDICARE.

    Section 1860D-2(b)(2)(A) of the Social Security Act (42 U.S.C. 
1395w-102(b)(2)(A)) is amended--
            (1) in clause (i), by inserting ``of the net costs to the 
        plan, inclusive of all direct and indirect remuneration, 
        including rebates paid by manufacturers to the plan sponsor, 
        either directly or through a pharmacy benefit manager or other 
        third party'' before the semicolon; and
            (2) in clause (ii), by inserting ``net'' before ``costs''.
                                 <all>