Title: Capping Drug Costs for Seniors Act of 2022
Policy area: Health

Summary:
Capping Drug Costs for Seniors Act of 2022
This bill caps annual out-of-pocket spending under the Medicare prescription drug benefit.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 4011 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  2d Session
                                S. 4011

To amend title XVIII of the Social Security Act to provide for a cap on 
  beneficiary liability under part D of the Medicare program, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 6, 2022

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

_______________________________________________________________________

                                 A BILL


 
To amend title XVIII of the Social Security Act to provide for a cap on 
  beneficiary liability under part D of the Medicare program, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Capping Drug Costs for Seniors Act 
of 2022''.

SEC. 2. MEDICARE PART D BENEFIT REDESIGN.

    (a) Benefit Structure Redesign.--Section 1860D-2(b) of the Social 
Security Act (42 U.S.C. 1395w-102(b)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (A), in the matter preceding 
                clause (i), by inserting ``for a year preceding 2025 
                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 2025 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 2025,'' after ``paragraph (4),''; and
                            (ii) in clause (ii)(III), by striking 
                        ``2020 and each subsequent year'' and inserting 
                        ``each of years 2020 through 2024,''; and
                    (C) in subparagraph (D)--
                            (i) in clause (i)--
                                    (I) in the matter preceding 
                                subclause (I), by inserting ``for a 
                                year preceding 2025,'' after 
                                ``paragraph (4),''; and
                                    (II) in subclause (I)(bb), by 
                                striking ``a year after 2018'' and 
                                inserting ``each of years 2018 through 
                                2024''; and
                            (ii) in clause (ii)(V), by striking ``2019 
                        and each subsequent year'' and inserting ``each 
                        of years 2019 through 2024'';
            (2) in paragraph (3)(A)--
                    (A) in the matter preceding clause (i), by 
                inserting ``for a year preceding 2025,'' after ``and 
                (4),''; and
                    (B) in clause (ii), by striking ``for a subsequent 
                year'' and inserting ``for each of years 2007 through 
                2024''; and
            (3) in paragraph (4)--
                    (A) in subparagraph (A)--
                            (i) in clause (i)--
                                    (I) by redesignating subclauses (I) 
                                and (II) as items (aa) and (bb), 
                                respectively, and moving the margin of 
                                each such redesignated item 2 ems to 
                                the right;
                                    (II) in the matter preceding item 
                                (aa), as redesignated by subclause (I), 
                                by striking ``is equal to the greater 
                                of--'' and inserting ``is equal to--
                                    ``(I) for a year preceding 2025, 
                                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 2025 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 2024 for purposes of 
                                section 1860D-14(a)(1)(D)(iii).'';
                    (B) in subparagraph (B)--
                            (i) in clause (i)--
                                    (I) in subclause (V), by striking 
                                ``or'' at the end;
                                    (II) in subclause (VI)--
                                            (aa) by striking ``for a 
                                        subsequent year'' and inserting 
                                        ``for each of years 2021 
                                        through 2024''; 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 2025, is equal to 
                                $2,000; or
                                    ``(VIII) for a subsequent year, is 
                                equal to the amount specified in this 
                                subparagraph for the previous year, 
                                increased by the annual percentage 
                                increase described in paragraph (6) for 
                                the year involved.''; and
                            (ii) in clause (ii), by striking ``clause 
                        (i)(II)'' and inserting ``clause (i)'';
                    (C) in subparagraph (C)(i), by striking ``and for 
                amounts'' and inserting ``and, for a year preceding 
                2025, for amounts''; and
                    (D) in subparagraph (E), by striking ``In 
                applying'' and inserting ``For each of years 2011 
                through 2024, in applying''.
    (b) Reinsurance Payment Amount.--Section 1860D-15(b)(1) of the 
Social Security Act (42 U.S.C. 1395w-115(b)(1)) is amended--
            (1) by striking ``equal to 80 percent'' and inserting 
        ``equal to--
                    ``(A) for a year preceding 2025, 80 percent'';
            (2) in subparagraph (A), as added by subparagraph (A), by 
        striking the period at the end and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(B) for 2025 and each subsequent year, the sum 
                of--
                            ``(i) with respect to applicable drugs (as 
                        defined in section 1860D-14B(g)(2)), an amount 
                        equal to 20 percent of such allowable 
                        reinsurance costs attributable to that portion 
                        of gross covered 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); and
                            ``(ii) with respect to covered part D drugs 
                        that are not applicable drugs (as so defined), 
                        an amount equal to 40 percent of such allowable 
                        reinsurance costs attributable to that portion 
                        of gross covered 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).''.
    (c) Manufacturer Discount Program.--
            (1) In general.--Part D of title XVIII of the Social 
        Security Act (42 U.S.C. 1395w-101 et seq.) is amended by 
        inserting after section 1860D-14A 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).
    ``(b) Terms of Agreement.--
            ``(1) In general.--
                    ``(A) Agreement.--An agreement under this section 
                shall require the manufacturer to provide, in 
                accordance with this section, access to discounted 
                prices for applicable drugs of the manufacturer that 
                are dispensed to applicable beneficiaries on or after 
                January 1, 2025.
                    ``(B) Clarification.--Nothing in this section shall 
                be construed as affecting--
                            ``(i) the application of a coinsurance of 
                        25 percent of the negotiated price, as applied 
                        under paragraph (2)(A) of section 1860D-2(b), 
                        for costs described in such paragraph; or
                            ``(ii) the application of the copayment 
                        amount described in paragraph (4)(A) of such 
                        section, with respect to costs described in 
                        such paragraph.
                    ``(C) Timing of agreement.--
                            ``(i) Special rule for 2025.--In order for 
                        an agreement with a manufacturer to be in 
                        effect under this section with respect to the 
                        period beginning on January 1, 2025, and ending 
                        on December 31, 2025, the manufacturer shall 
                        enter into such agreement not later than March 
                        1, 2024.
                            ``(ii) 2026 and subsequent years.--In order 
                        for an agreement with a manufacturer to be in 
                        effect under this section with respect to plan 
                        year 2026 or a subsequent plan year, the 
                        manufacturer shall enter into such agreement 
                        (or such agreement shall be renewed under 
                        paragraph (4)(A)) not later than a calendar 
                        quarter or semi-annual deadline established by 
                        the Secretary.
            ``(2) Provision of appropriate data.--Each manufacturer 
        with an agreement in effect under this section shall collect 
        and have available appropriate data, as determined by the 
        Secretary, to ensure that it can demonstrate to the Secretary 
        compliance with the requirements under the program.
            ``(3) Compliance with requirements for administration of 
        program.--Each manufacturer with an agreement in effect under 
        this section shall comply with requirements imposed by the 
        Secretary 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 31 of a plan year, as of 
                                the day after the end of the plan year; 
                                and
                                    ``(II) if the termination occurs on 
                                or after January 31 of a plan year, as 
                                of the day after the end of the 
                                succeeding plan year.
                            ``(iii) Effectiveness of termination.--Any 
                        termination under this subparagraph shall not 
                        affect discounts for applicable drugs of the 
                        manufacturer that are due under the agreement 
                        before the effective date of its termination.
    ``(c) Duties Described.--The duties described in this subsection 
are the following:
            ``(1) Administration of program.--Administering the 
        program, including--
                    ``(A) the determination of the amount of the 
                discounted price of an applicable drug of a 
                manufacturer;
                    ``(B) the establishment of procedures to ensure 
                that, not later than the applicable number of calendar 
                days after the dispensing of an applicable drug by a 
                pharmacy or mail order service, the pharmacy or mail 
                order service is reimbursed for an amount equal to the 
                difference between--
                            ``(i) the negotiated price of the 
                        applicable drug; and
                            ``(ii) the discounted price of the 
                        applicable drug;
                    ``(C) the establishment of procedures to ensure 
                that the discounted price for an applicable drug under 
                this section is applied before any coverage or 
                financial assistance under other health benefit plans 
                or programs that provide coverage or financial 
                assistance for the purchase or provision of 
                prescription drug coverage on behalf of applicable 
                beneficiaries as the Secretary may specify; and
                    ``(D) providing a reasonable dispute resolution 
                mechanism to resolve disagreements between 
                manufacturers and applicable beneficiaries.
            ``(2) Monitoring compliance.--The Secretary shall monitor 
        compliance by a manufacturer with the terms of an agreement 
        under this section.
            ``(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) Implementation.--The Secretary may implement the 
        program under this section by program instruction or otherwise.
            ``(4) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to the program under this section.
    ``(e) Enforcement.--
            ``(1) Audits.--Each manufacturer with an agreement in 
        effect under this section shall be subject to periodic audit by 
        the Secretary.
            ``(2) Civil money penalty.--
                    ``(A) In general.--The Secretary may impose a civil 
                money penalty on a manufacturer that fails to provide 
                discounts for applicable drugs of the manufacturer 
                dispensed to applicable beneficiaries in accordance 
                with such agreement for each such failure in an amount 
                the Secretary determines is equal to the sum of--
                            ``(i) the amount that the manufacturer 
                        would have paid with respect to such discounts 
                        under the agreement, which will then be used to 
                        pay the discounts which the manufacturer had 
                        failed to provide; and
                            ``(ii) 25 percent of such amount.
                    ``(B) Application.--The provisions of section 1128A 
                (other than subsections (a) and (b)) shall apply to a 
                civil money penalty under this paragraph in the same 
                manner as such provisions apply to a penalty or 
                proceeding under section 1128A(a).
    ``(f) Clarification Regarding Availability of Other Covered Part D 
Drugs.--Nothing in this section shall prevent an applicable beneficiary 
from purchasing a covered part D drug that is not an applicable drug 
(including a generic drug or a drug that is not on the formulary of the 
prescription drug plan or MA-PD plan that the applicable beneficiary is 
enrolled in).
    ``(g) Definitions.--In this section:
            ``(1) Applicable beneficiary.--The term `applicable 
        beneficiary' means an individual who, on the date of dispensing 
        a covered part D drug--
                    ``(A) is enrolled in a prescription drug plan or an 
                MA-PD plan;
                    ``(B) is not enrolled in a qualified retiree 
                prescription drug plan; and
                    ``(C) has incurred costs, as determined in 
                accordance with section 1860D-2(b)(4)(C), for covered 
                part D drugs in the year that exceed the annual 
                deductible for such year, as specified in section 
                1860D-2(b)(1).
            ``(2) Applicable drug.--The term `applicable drug', with 
        respect to an applicable beneficiary, means 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; and
                    ``(B)(i) if the PDP sponsor of the prescription 
                drug plan or the MA organization offering the MA-PD 
                plan uses a formulary, which is on the formulary of the 
                prescription drug plan or MA-PD plan that the 
                applicable beneficiary is enrolled in;
                    ``(ii) if the PDP sponsor of the prescription drug 
                plan or the MA organization offering the MA-PD plan 
                does not use a formulary, for which benefits are 
                available under the prescription drug plan or MA-PD 
                plan that the applicable beneficiary is enrolled in; or
                    ``(iii) is provided through an exception or appeal.
            ``(3) Applicable number of calendar days.--The term 
        `applicable number of calendar days' means--
                    ``(A) with respect to claims for reimbursement 
                submitted electronically, 14 days; and
                    ``(B) with respect to claims for reimbursement 
                submitted otherwise, 30 days.
            ``(4) Discounted price.--
                    ``(A) In general.--The term `discounted price' 
                means, with respect to an applicable drug of a 
                manufacturer dispensed during a year to an applicable 
                beneficiary--
                            ``(i) who has not incurred costs, as 
                        determined in accordance with section 1860D-
                        2(b)(4)(C), for covered part D drugs in the 
                        year that are equal to or exceed the annual 
                        out-of-pocket threshold specified in section 
                        1860D-2(b)(4)(B)(i) for the year, 90 percent of 
                        the negotiated price of such drug; and
                            ``(ii) who has incurred such costs, as so 
                        determined, in the year that are equal to or 
                        exceed such threshold for the year, 80 percent 
                        of the negotiated price of such drug.
                    ``(B) Clarification.--Nothing in this section shall 
                be construed as affecting the responsibility of an 
                applicable beneficiary for payment of a dispensing fee 
                for an applicable drug.
                    ``(C) Special case for certain claims.--
                            ``(i) Claims spanning deductible.--In the 
                        case where the entire amount of the negotiated 
                        price of an individual claim for an applicable 
                        drug with respect to an applicable beneficiary 
                        does not fall above the annual deductible 
                        specified in section 1860D-2(b)(1) for the 
                        year, the manufacturer of the applicable drug 
                        shall provide the discounted price under this 
                        section on only the portion of the negotiated 
                        price of the applicable drug that falls above 
                        such annual deductible.
                            ``(ii) Claims spanning out-of-pocket 
                        threshold.--In the case where the entire amount 
                        of the negotiated price of an individual claim 
                        for an applicable drug with respect to an 
                        applicable beneficiary does not fall entirely 
                        below or entirely above the annual out-of-
                        pocket threshold specified in section 1860D-
                        2(b)(4)(B)(i) for the year, the manufacturer of 
                        the applicable drug shall provide the 
                        discounted price--
                                    ``(I) in accordance with 
                                subparagraph (A)(i) on the portion of 
                                the negotiated price of the applicable 
                                drug that falls below such threshold; 
                                and
                                    ``(II) in accordance with 
                                subparagraph (A)(ii) on the portion of 
                                such price of such drug that falls at 
                                or above such threshold.
            ``(5) Manufacturer.--The term `manufacturer' means any 
        entity which is engaged in the production, preparation, 
        propagation, compounding, conversion, or processing of 
        prescription drug products, either directly or indirectly by 
        extraction from substances of natural origin, or independently 
        by means of chemical synthesis, or by a combination of 
        extraction and chemical synthesis. Such term does not include a 
        wholesale distributor of drugs or a retail pharmacy licensed 
        under State law.
            ``(6) Negotiated price.--The term `negotiated price' has 
        the meaning given such term for purposes of 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 with respect 
        to applicable drugs dispensed on or after January 1, 2025, 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, 2025, with respect to applicable drugs dispensed 
        prior to such date.''.
            (3) Inclusion of actuarial value of manufacturer discounts 
        in bids.--Section 1860D-11 of the Social Security Act (42 
        U.S.C. 1395w-111) is amended--
                    (A) in subsection (b)(2)(C)(iii)--
                            (i) by striking ``assumptions regarding the 
                        reinsurance'' an inserting ``assumptions 
                        regarding--
                                    ``(I) the reinsurance''; and
                            (ii) by adding at the end the following:
                                    ``(II) for 2025 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 inserted by clause 
                        (i) of this subparagraph, by adding ``and'' at 
                        the end; and
                            (iii) by adding at the end the following:
                            ``(ii) for 2025 and each subsequent year, 
                        the manufacturer discounts provided under 
                        section 1860D-14B;''.
    (d) Conforming Amendments.--
            (1) Section 1860D-2 of the Social Security Act (42 U.S.C. 
        1395w-102) is amended--
                    (A) in subsection (a)(2)(A)(i)(I), by striking ``, 
                or an increase in the initial'' and inserting ``or, for 
                a year preceding 2025, 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 
                        2025 or the annual out-of-pocket threshold 
                        specified in subsection (b)(4)(B) for the year 
                        for 2025 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 
                2025, 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 2025, 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 2025, 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 2025, the elimination''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (C), by striking ``The 
                        continuation'' and inserting ``For a year 
                        preceding 2025, the continuation''; and
                            (ii) in subparagraph (E), by striking 
                        ``1860D-2(b)(4)(A)(i)(I)'' and inserting 
                        ``1860D-2(b)(4)(A)(i)(I)(aa) (for a year 
                        preceding 2025)''.
            (4) Section 1860D-21(d)(7) of the Social Security Act (42 
        U.S.C. 1395w-131(d)(7)) is amended by striking ``section 1860D-
        2(b)(4)(B)(i)'' and inserting ``section 1860D-2(b)(4)(C)(i)''.
            (5) Section 1860D-22(a)(2)(A) of the Social Security Act 
        (42 U.S.C. 1395w-132(a)(2)(A)) is amended--
                    (A) by striking ``the value of any discount'' and 
                inserting the following: ``the value of--
                            ``(i) for years prior to 2025, 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 2025 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 2025'' after 
                ``1860D-2(b)(3)''; and
                    (B) by inserting ``for such year'' before the 
                period.
            (7) Section 1860D-43 of the Social Security Act (42 U.S.C. 
        1395w-153) is amended--
                    (A) in subsection (a)--
                            (i) by striking paragraph (1) and inserting 
                        the following:
            ``(1) participate in--
                    ``(A) for 2011 through 2024, the Medicare coverage 
                gap discount program under section 1860D-14A; and
                    ``(B) for 2025 and each subsequent year, the 
                manufacturer discount program under section 1860D-
                14B;'';
                            (ii) by striking paragraph (2) and 
                        inserting the following:
            ``(2) have entered into and have in effect--
                    ``(A) for 2011 through 2024, an agreement described 
                in subsection (b) of section 1860D-14A with the 
                Secretary; and
                    ``(B) for 2025 and each subsequent year, an 
                agreement described in subsection (b) of section 1860D-
                14B with the Secretary; and''; and
                            (iii) in paragraph (3), by striking ``such 
                        section'' and inserting ``section 1860D-14A''; 
                        and
                    (B) by striking subsection (b) and inserting the 
                following:
    ``(b) Effective Date.--Paragraphs (1)(A), (2)(A), and (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, 2025, and 
paragraphs (1)(B) and (2)(B) of such subsection shall apply to covered 
part D drugs dispensed under this part on or after January 1, 2025.''.
            (8) Section 1927 of the Social Security Act (42 U.S.C. 
        1396r-8) is amended--
                    (A) in subsection (c)(1)(C)(i)(VI), by inserting 
                before the period at the end the following: ``or under 
                the manufacturer discount program under section 1860D-
                14B''; and
                    (B) in subsection (k)(1)(B)(i)(V), by inserting 
                before the period at the end the following: ``or under 
                section 1860D-14B''.
    (e) Effective Date.--The amendments made by this section shall 
apply with respect to plan year 2025 and subsequent plan years.
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