II 119th CONGRESS 1st Session S. 1186 IN THE SENATE OF THE UNITED STATES March 27, 2025 Ms. Cortez Masto (for herself, Ms. Klobuchar , Mr. Wyden , Ms. Baldwin , Mr. Reed , Ms. Smith , Mr. Blumenthal , Mr. King , Mr. Welch , Mr. Hickenlooper , Ms. Slotkin , and Mr. Gallego ) 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 apply prescription drug inflation rebates to drugs furnished in the commercial market and to change the base year for rebate calculations.

1. Short title This Act may be cited as the Lower Drug Costs for Families Act . 2. Application of prescription drug inflation rebates to drugs furnished in the commercial market (a) Part B drugs (1) Application of prescription drug inflation rebates to drugs furnished in the commercial market Section 1847A(i) of the Social Security Act (42 U.S.C. 1395w–3a(i)) is amended— (A) in paragraph (1)(A)(i), by striking units and inserting billing units ; (B) in paragraph (2)(A), by striking for which payment is made under this part and inserting that would be payable under this part if such drug were furnished to an individual enrolled under this part ; and (C) in paragraph (3)— (i) in subparagraph (A)(i), by striking units and inserting billing units ; and (ii) by striking subparagraph (B) and inserting the following: (B) Total number of billing units For purposes of subparagraph (A)(i), the total number of billing units with respect to a part B rebatable drug is determined as follows: (i) Determine the total number of units equal to— (I) the total number of units, as reported under subsection (c)(1)(B) for each National Drug Code of such drug during the calendar quarter that is two calendar quarters prior to the calendar quarter as described in subparagraph (A), minus (II) the total number of units with respect to each National Drug Code of such drug for which payment was made under a State plan under title XIX (or waiver of such plan), as reported by States under section 1927(b)(2)(A) for the rebate period that is the same calendar quarter as described in subclause (I). (ii) Convert the units determined under clause (i) to billing units for the billing and payment code of such drug, using a methodology similar to the methodology used under this section, by dividing the units determined under clause (i) for each National Drug Code of such drug by the billing unit for the billing and payment code of such drug. (iii) Compute the sum of the billing units for each National Drug Code of such drug in clause (ii). . (2) Change of base year for rebate calculation Section 1847A(i) of the Social Security Act (42 U.S.C. 1395w–3a(i)) is amended— (A) in paragraph (3)— (i) in subparagraph (D), by striking July 1, 2021 and inserting July 1, 2016 ; and (ii) in subparagraph (E), by striking January 2021 and inserting January 2016 ; and (B) in paragraph (4)— (i) in subparagraph (A)— (I) by striking December 1, 2020 and inserting December 31, 2015 ; and (II) by striking January 2021 and inserting January 2016 ; (ii) in subparagraph (B), by striking December 1, 2020 and inserting December 31, 2015 ; and (iii) in subparagraph (C), by striking January 2021 and inserting January 2016 . (3) Effective date The amendments made by this subsection shall apply with respect to calendar quarters beginning on or after January 1, 2026. (b) Covered part D drugs (1) Application of prescription drug inflation rebates to drugs furnished in the commercial market Section 1860D–14B of the Social Security Act ( 42 U.S.C. 1395w–114b ) is amended— (A) in subsection (b)— (i) in paragraph (1)— (I) in subparagraph (A)(i), by striking the total number of units and all that follows through the semicolon and inserting the following: the total number of units that are used to calculate the average manufacturer price of such dosage form and strength with respect to such part D rebatable drug, as reported by the manufacturer of such drug under section 1927 for each month, with respect to such period; ; and (II) by striking subparagraph (B) and inserting the following: (B) Excluded units For purposes of subparagraph (A)(i), the Secretary shall exclude from the total number of units for a dosage form and strength with respect to a part D rebatable drug, with respect to an applicable period, the following: (i) Units of each dosage form and strength of such part D rebatable drug for which payment was made under a State plan under title XIX (or waiver of such plan), as reported by States under section 1927(b)(2)(A). (ii) Units of each dosage form and strength of such part D rebatable drug for which a rebate is paid under section 1847A(i). (iii) Beginning with plan year 2026, units of each dosage form and strength of such part D rebatable drug for which the manufacturer provides a discount under the program under section 340B of the Public Health Service Act. ; and (ii) in paragraph (6), by striking information .—The Secretary and all that follows through rebatable covered part D drug dispensed and inserting the following: AMP reports .—The Secretary shall provide for a method and process under which, in the case of a manufacturer of a part D rebatable drug that submits revisions to information submitted under section 1927 by the manufacturer with respect to such drug ; and (B) by striking subsection (d) and inserting the following: (d) Information For purposes of carrying out this section, the Secretary shall use information submitted by manufacturers under section 1927(b)(3) and information submitted by States under section 1927(b)(2)(A). . (2) Change of base year for rebate calculation Section 1860D–14B of the Social Security Act ( 42 U.S.C. 1395w–114b ) is amended— (A) in subsection (b)(5)— (i) in subparagraph (A)— (I) by striking October 1, 2021 and inserting October 1, 2016 ; and (II) by striking January 2021 and inserting January 2016 ; and (ii) in subparagraph (C), by striking January 2021 and inserting January 2016 ; and (B) in subsection (g)— (i) in paragraph (3)— (I) by striking January 1, 2021 and inserting January 1, 2016 ; and (II) by striking October 1, 2021 and inserting October 1, 2016 ; and (ii) in paragraph (4), by striking January 2021 and inserting January 2016 . (3) Effective date The amendments made by this subsection shall take apply with respect to applicable periods (as defined in section 1860D–14B(g)(7) of the Social Security Act (42 U.S.C. 1395w–114b(g)(7))) beginning on or after October 1, 2025.