        DEPARTMENT OF THE INTERIOR
        Fish and Wildlife Service
        50 CFR Part 17
        RIN 1018-AI71 and 1018-AI72

        Endangered and Threatened Wildlife and Plants; Notice of the Availability of Draft Economic Analyses, and of a Public Hearing for the Proposed Designations of Critical Habitat for the Coastal California Gnatcatcher (Polioptila californica californica) and the San Diego Fairy Shrimp (Branchinecta sandiegonensis)

          AGENCY:
          Fish and Wildlife Service, Interior.

          ACTION:
          Proposed rules; notice of availability of draft economic analyses, reopening of public comment periods, and notice of public hearings.

          SUMMARY:

          We, the U.S. Fish and Wildlife Service (Service) announce the availability of a draft economic analysis of the proposed designation of critical habitat for the coastal California gnatcatcher (Polioptila californica californica), the availability of a draft economic analysis of the proposed critical habitat designation for the San Diego fairy shrimp, and the reopening of the public comment periods on the proposed rules to designate critical habitat for the coastal California gnatcatcher and the San Diego fairy shrimp. The comment period will provide the public, Federal, State, and local agencies, and Tribes with an opportunity to submit written comments on these two proposals and their respective draft economic analyses. Comments previously submitted for these proposed rules need not be resubmitted as they have already been incorporated into the public record and will be fully considered in any final decision.
          We are also announcing that public hearings will be held on both proposed rules and their respective draft economic analyses.

          DATES:
          The public comment period for these two proposed rules is now reopened, and we will accept comments and information until 5 p.m. May 10, 2004. Any comments received after the closing date may not be considered in the final decisions on these actions.
          The public hearings will take place on April 29, 2004, from 1 p.m. to 3 p.m. and from 6 p.m. to 8 p.m. in Carlsbad, California. Both public hearings will address both proposed rules.

          ADDRESSES:
          The public hearings will be held at the Carlsbad Fish and Wildlife Office, 6010 Hidden Valley Road, Carlsbad, California.
          Written comments and materials may be submitted to us by any one of the following methods:
          1. You may submit written comments and information to the Field Supervisor, Carlsbad Fish and Wildlife Office, 6010 Hidden Valley Road, Carlsbad, CA 92009.
          2. You may hand-deliver written comments and information to our Carlsbad Fish and Wildlife Office at the above address, or fax your comments to 760/431-9618.
          Comments and materials received, as well as supporting documentation used in preparation of the proposed critical habitat rules for the coastal California gnatcatcher and San Diego fairy shrimp, will be available for public inspection, by appointment, during normal business hours at the above address. You may obtain copies of the draft economic analyses for the coastal California gnatcatcher and San Diego fairy shrimp by contacting the Carlsbad Fish and Wildlife Office at the above address.

          FOR FURTHER INFORMATION CONTACT:
          Jim Bartel, Field Supervisor, Carlsbad Fish and Wildlife Office, at the above address (telephone 760/431-9440; facsimile 760/431-9618).

        SUPPLEMENTARY INFORMATION:
        Public Comments Solicited
        We solicit comments or suggestions from the public, other concerned governmental agencies, Tribes, the scientific community, industry, or any other interested parties concerning our proposed designation of critical habitat and/or the draft economic analysis of the proposed designation of critical habitat for both the coastal California gnatcatcher and San Diego fairy shrimp. With regard to the proposed rules and draft economic analyses for the coastal California gnatcatcher and San Diego fairy shrimp, we particularly seek comments concerning:
        (1) Specific information on the amount and distribution of the gnatcatcher and its habitat, and which habitat is essential to the conservation of this species and why; and
        (2) Whether habitat currently preserved in various conservation areas within the range of the coastal California gnatcatcher is sufficient for the conservation of the species;

        (3) The reasons why any habitat should or should not be determined to be critical habitat for the coastal California gnatcatcher or the San Diego fairy shrimp as provided by section 4 of the Act, including whether the benefits of designation will outweigh any threats to these species resulting from designation;
        (4) Land use designations and current or planned activities in the subject areas and their possible impacts on areas proposed as critical habitat for these two species;
        (5) Any foreseeable economic, national security, or other impacts resulting from the proposed designation of critical habitat for the coastal California gnatcatcher or San Diego fairy shrimp, in particular, any impacts on small entities or families;
        (6) Do both economic analyses adequately address the likely effects and resulting costs arising from the California Environmental Quality Act and other State laws as a result of the proposed critical habitat designations;
        (7) Whether both economic analyses make appropriate assumptions regarding current practices and likely regulatory changes imposed as a result of the designation of critical habitat for the coastal California gnatcatcher and the San Diego fairy shrimp;
        (8) Any economic or other impacts associated with designating critical habitat on reserve, preserve, or other conservation lands within the boundaries of approved habitat conservation plans (HCP) that have been developed through cooperative, voluntary partnerships;
        (9) The benefits of including or excluding military lands covered by an Integrated Natural Resource Management Plan and Tribal lands, NCCP lands, HCP lands, or any other lands covered by an adequate management plan;

        (10) Do the analyses adequately address the indirect effects, e.g., property tax losses due to reduced home construction, losses to local business due to reduced construction activity;
        (11) Whether the economic analyses appropriately identify land and water use regulatory controls that could result from the proposed critical habitat designations for these species;
        (12) Do the analyses accurately define and capture opportunity costs;

        (13) Whether the economic analyses correctly assess the effect on regional costs (e.g., housing costs) associated with land use controls that could arise from the designation of critical habitat for these species;
        (14) Do the analyses adequately address the likelihood of “stigma effects” and costs associated with the proposed designations;
        (15) Whether the designation of critical habitat for either the coastal California gnatcatcher or San Diego fairy shrimp will result in disproportionate economic or other impacts to specific areas that should be evaluated for possible exclusion from the final designations;
        (16) The economic analyses should identify all costs related to the designation of critical habitat for the coastal California gnatcatcher and San Diego fairy shrimp. Those designations were intended to take place at the time these species were listed. As a result, the assumptions in the economic analyses should be consistent with the Service's listing regulations. Do these analyses achieve that consistency? And
        (17) Whether our approach to critical habitat designation could be improved or modified in any way to provide for greater public participation and understanding, or to assist us in accommodating public concern and comments.
        Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home address, which we will honor to the extent allowable by law. There also may be circumstances in which we would withhold a respondent's identity, as allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comments. However, we will not consider anonymous comments. To the extent consistent with applicable law, we will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety. Comments received will be available for public inspection, by appointment, during normal business hours at the above address.
        Background
        On April 24, 2003, we published a proposed rule in the Federal Register (68 FR 20228) to designate critical habitat for the coastal California gnatcatcher on approximately 495,795 acres (ac) (200,595 hectares (ha)) of land in Ventura, Los Angeles, Orange, Riverside, San Bernardino, and San Diego counties. The original comment period on the coastal California gnatcatcher proposed critical habitat rule closed on June 23, 2003.

        We published a proposed rule in the April 22, 2003, edition of the Federal Register (68 FR 19888) to designate critical habitat for the San Diego fairy shrimp on approximately 6,098 ac (2,468 ha) of land in Orange and San Diego counties. The original comment period on the San Diego fairy shrimp proposed critical habitat rule also closed on June 23, 2003.
        Critical habitat receives protection from destruction or adverse modification through required consultation under section 7 of the Endangered Species Act of 1973, as amended (Act), with regard to actions carried out, funded, or authorized by a Federal agency. Section 4(b)(2) of the Act requires that we designate or revise critical habitat on the basis of the best scientific and commercial data available, after taking into consideration economic and any other relevant impacts of specifying any particular area as critical habitat. Based upon the April 24, 2003, proposed rule to designate critical habitat for coastal California gnatcatcher, we have prepared a draft economic analysis of the proposed critical habitat designation. The economic analysis estimates that the proposed designation may result in a potential economic cost, resulting from section 7 of the Act, of approximately $915 million through the year 2025, with an estimated annualized cost of $114 million. Unit 10 of the proposed designation lies entirely within the proposed planning area of the Western Riverside County MSHCP. Based on very large projected growth estimates and other factors, the economic analysis suggests that approximately $460 million of the total $915 million estimated costs through 2025 occur in this unit.
        We have also prepared a draft economic analysis of the April 22, 2003, proposed rule to designate critical habitat for the San Diego fairy shrimp. The draft analysis of this proposed designation estimates that potential economic costs associated with section 7 of the Act range up to $54.6 million over the next 20 years.
        Section 4(b)(5)(E) of the Act (16 U.S.C. 1531 et seq.) requires that a public hearing be held if it is requested within 45 days of the publication of a proposed rule. In response to a request from the Natural Resources Defense Council, and a separate request from Citizens Against Recreational Eviction, we will conduct public hearings on the date and at the address described in the DATES and ADDRESSES sections above.

        Anyone wishing to make an oral statement for the record is encouraged to provide a written copy of their statement and present it to us at the hearings. In the event there is a large attendance, the time allotted for oral statements may be limited. Oral and written statements receive equal consideration. There are no limits on the length of written comments submitted to us. If you have any questions concerning the public hearings, please contact the Carlsbad Fish and Wildlife Office (see
          ADDRESSES section). This notice is being published in the Federal Register to provide the public and interested parties with a minimum of 15 days notification about the public hearings.
        Persons needing reasonable accommodations in order to attend and participate in the public hearings should contact Patti Carroll at 503/231-2080 as soon as possible. In order to allow sufficient time to process requests, please call no later than one week before the hearing date. Information regarding this proposal is available in alternative formats upon requests.

        We are reopening the comment period to allow all interested parties to comment simultaneously on the proposed rules for the coastal California gnatcatcher and San Diego fairy shrimp, potential exclusions and the draft economic analyses. The draft analyses are available by contacting the Carlsbad Fish and Wildlife Office as identified in the ADDRESSES section above.
        References Cited

        A complete list of all references cited herein, as well as others used in the development of the proposed critical habitat designations and the draft economic analyses of the proposed critical habitat designations for the coastal California gnatcatcher and San Diego fairy shrimp, are available upon request from the Carlsbad Fish and Wildlife Office (see
          ADDRESSES section).
        Author

        The primary authors of this notice are the staff of the Carlsbad Fish and Wildlife Office (see
          ADDRESSES section).
        Authority

        The authority for this action is the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.).

          Dated: March 30, 2004.
          Paul Hoffman,
          Acting Assistant Secretary for Fish and Wildlife and Parks.

      [FR Doc. 04-7992 Filed 4-7-04; 8:45 am]
      BILLING CODE 4310-55-P


        DEPARTMENT OF DEFENSE
        Office of the Secretary
        32 CFR Part 199
        [DoD-2008-HA-0029; 0720-AB22]
        Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)/TRICARE: Inclusion of TRICARE Retail Pharmacy Program in Federal Procurement of Pharmaceuticals

          AGENCY:
          Office of the Secretary, Department of Defense (DoD).

          ACTION:
          Proposed rule.

          SUMMARY:

          Section 703 of the National Defense Authorization Act for Fiscal Year 2008 (NDAA-08) states with respect to any prescription filled on or after the date of enactment of the NDAA, the TRICARE retail pharmacy program (TRRx) shall be treated as an element of the DoD for purposes of procurement of drugs by Federal agencies under section 8126 of title 38, United States Code (U.S.C.), to the extent necessary to ensure pharmaceuticals paid for by the DoD that are provided by network retail pharmacies under the program to eligible covered beneficiaries are subject to the pricing standards in such section 8126. NDAA-08 was enacted on January 28, 2008. The statute requires implementing regulations. This proposed rule is to implement section 703 of the NDAA 2008.

          DATES:
          Written comments received at the address indicated below by September 23, 2008 will be considered and addressed in the final rule.

          ADDRESSES:
          You may submit comments, identified by docket number and/or RIN number and title, by any of the following methods:

            Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

            Mail: Federal Docket Management System Office, 1160  Defense Pentagon, Washington, DC 20301-1160.

            Instructions: All submissions received must include the agency name and docket number or Regulatory Information Number (RIN) for this Federal Register document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the Internet at http://www.regulations.gov as they are received without change, including any personal identifiers or contact information.

          FOR FURTHER INFORMATION CONTACT:
          Captain William Blanche, TRICARE Management Activity, telephone (703) 681-2890.

        SUPPLEMENTARY INFORMATION:
        A. Background
        Section 703 of the National Defense Authorization Act for Fiscal Year 2008 (NDAA-08) (Pub. L. 110-181) enacted 10 U.S.C. 1074g(f). It provides that with respect to any prescription filled on or after the date of enactment of the NDAA, the TRRx shall be treated as an element of the DoD for purposes of procurement of drugs by Federal agencies under section 8126 of title 38, United States Code (U.S.C.), to the extent necessary to ensure pharmaceuticals paid for by the DoD that are provided by network retail pharmacies under the program to eligible covered beneficiaries are subject to the pricing standards in such section 8126. NDAA-08 was enacted on January 28, 2008. The statute requires implementing regulations.
        The Veterans Health Care Act (VHCA) of 1992, codified at 38 U.S.C. 8126, established Federal Ceiling Prices (FCPs) of covered pharmaceuticals (requiring a minimum 24% discount off non-Federal average manufacturing prices—“non-FAMP”) procured by the four designated agencies covered in the Act: Department of Veterans Affairs (VA), DoD, Coast Guard, and the Public Health Service/Indian Health Service. The non-FAMP is the average price paid to the manufacturer by wholesalers (or, if there are insufficient wholesale sales, others who purchase directly from the manufacturer) for drugs distributed to non-federal purchasers, taking into account any cash discounts or similar reductions given to those purchasers. The VA administers the VHCA discount program on behalf of the four specified agencies. The DoD consulted closely with the VA in the development of this proposed rule.
        The TRICARE Pharmacy Benefits Program operates under the authority of 10 U.S.C. 1074g. It provides outpatient drugs to TRICARE beneficiaries through Military Treatment Facility (MTF) pharmacies, the TRICARE mail order pharmacy program (TMOP), and a TRRx consisting of TRICARE Retail Pharmacy Network and retail non-network pharmacies. As implemented, the new statutory requirement will only apply to pharmaceuticals paid for by DoD and provided to eligible beneficiaries through the TRICARE Retail Pharmacy Network.
        The TRICARE Retail Pharmacy Network is managed under a single Pharmacy Benefits Manager contract, linked to the DoD Pharmacy Benefits Office, and enabled by a management information system to verify beneficiary eligibility, check for potential drug interactions, and authorize payment for the pharmaceuticals used to fill the beneficiary's prescription. The management information system also records data on all prescriptions filled through the Retail Pharmacy Network, permitting an accurate accounting of all retail network pharmaceuticals paid for by DoD under the TRICARE Pharmacy Benefits Program. Since the beginning of the FCP program, outpatient pharmaceuticals provided by DoD through MTF pharmacies have been subject to FCPs, as have those under the TMOP program since it began. Implementation of similar applicability to the TRICARE Retail Pharmacy Network component of the Program is the subject of this proposed regulation.
        B. Provisions of the Rule
        The proposed rule would add a new paragraph (q) to § 199.21. Paragraph (q)(1) repeats the new statutory requirement. Paragraph (q)(2) provides that an agreement by a manufacturer to honor the FCPs in the Retail Pharmacy Network component of the Pharmacy Benefits Program is a condition of inclusion of a drug on the uniform formulary. Further, it states that a drug not under such an agreement requires preauthorization to be provided through the Retail Pharmacy Network. In addition, it indicates that drugs covered by this requirement are TRICARE Retail Pharmacy Network provided drugs that are covered by the VA's FCP program, except any prescription for which the TRICARE Pharmacy Benefits Program is the second payer. While DoD proposes in this rulemaking to enter into voluntary agreements with manufacturers that would make prescriptions filled on or after the date of enactment of NDAA-08 subject to FCPs, the Department solicits comment regarding any other appropriate and legally permissible implementation approach and/or date from which to begin making prescriptions filled in the Retail Pharmacy Network subject to FCPs. DoD is specifically interested in the legal justification, including under section 703 of NDAA-08, for any alternative implementation approaches and/or dates that commenters may propose.
        Paragraph (q)(3) establishes refund procedures to, in the words of the statute, “ensure that pharmaceuticals paid for by the DoD that are provided by pharmacies under the program to eligible covered beneficiaries under this section are subject to the pricing standards” of the FCP program. The refund procedures will, to the extent practicable, incorporate common industry practices for implementing pricing agreements between manufacturers and large pharmacy benefit plan sponsors. Such procedures shall provide the manufacturer at least 70 days from the date of submission by TMA to the manufacturer (initially expected to be on a quarterly basis) of the TRICARE pharmaceutical utilization data needed to calculate the refund before the refund payment is due. The basis of the refund will be the difference between the average non-federal price of the drug sold by the manufacturer to wholesalers, as represented by the most recent annual non-FAMP (reported to VA) and the FCP or, in the discretion of the manufacturer, the difference between FCP and direct commercial contract sales prices specifically attributable to TRICARE paid pharmaceuticals, determined for each applicable National Drug Code (NDC) listing. Further, this paragraph of the rule provides that a refund due under the statute is subject to the overpayment recovery procedures of § 199.11 of the TRICARE regulation.

        Finally, paragraph (q)(4) states that in the case of the failure of a manufacturer of a covered drug to make or honor an agreement to ensure that DoD pays no more than the FCP for covered drugs provided through the TRICARE Retail Pharmacy Network component of the program, the Director, TMA, in addition to other actions referred to in the rule, may take any other action authorized by law.
        C. Regulatory Procedures
        Executive Order 12866, “Regulatory Planning and Review”
        Executive Order (EO) 12866 requires that a comprehensive regulatory impact analysis be performed on any economically significant regulatory action, defined primarily as one that would result in an effect of $100 million or more in any one year. The DoD has examined the economic, legal, and policy implications of this proposed rule and has concluded that it is an economically significant regulatory action under section 3(f)(1) of the EO. The economic impact of applying Federal Ceiling Prices to the TRICARE Retail Pharmacy Network is in the form of reducing the prices of drugs paid for by DoD in the retail pharmacy component of the TRICARE Pharmacy Benefits Program, making them comparable to the prices paid by DoD in the Military Treatment Facility and Mail Order Pharmacy components of the program.
        A recent Government Accountability Office Report, “DoD Pharmacy Program: Continued Efforts Needed to Reduce Growth in Spending at Retail Pharmacies,” April 2008 (GAO-08-327), found that DoD's drug spending “more than tripled from $1.6 billion in fiscal year 2000 to $6.2 billion in fiscal year 2006” and that retail pharmacy spending “drove most of this increase, rising almost nine-fold from $455 million to $3.9 billion and growing from 29 percent of overall drug spending to 63 percent.” DoD concurs in these findings. The principal economic impact of this proposed rule is to moderate somewhat the rate of growth in the retail pharmacy component of the program.
        DoD has estimated the reduced spending associated applying Federal Ceiling Prices to the Retail Pharmacy Network. DoD funds the Military Health System through two separate mechanisms. One is the Defense Health Program (DHP) appropriation, which pays for health care for all beneficiaries except those who are also eligible for Medicare. DoD-funded health care for DoD beneficiaries who are also eligible for Medicare is paid for by way of an accrual fund called the Medicare-Eligible Retiree Health Care Fund (MERHCF) under 10 U.S.C Chapter 56. Funds are paid into the MERHCF from military personnel appropriations and the general U.S. treasury. DoD estimated cost reductions from applying Federal Ceiling Prices to the TRICARE Retail Pharmacy Network in Fiscal Years 2009 through 2011 are:

            Millions

            FY-2009 DHP Reduced Spending
            $352

            FY-2009 MERHCF Reduced Spending
            367

            FY-2010 DHP Reduced Spending
            388

            FY-2010 MERHCF Reduced Spending
            404

            FY-2011 DHP Reduced Spending
            427

            FY-2011 MERHCF Reduced Spending
            444

        As a frame of reference, total TRICARE Pharmacy Benefits Program spending (incorporating these spending reductions) is estimated to be $8 billion in FY-2009, $8.4 billion in FY-2010, and $9.3 billion in FY-2011.
        Congressional Review Act, 5 U.S.C. 801, et seq.
        Under the Congressional Review Act, a major rule may not take effect until at least 60 days after submission to Congress of a report regarding the rule. A major rule is one that would have an annual effect on the economy of $100 million or more or have certain other impacts. This proposed rule is a major rule under the Congressional Review Act. As noted above, applying Federal Ceiling Prices to the TRICARE Retail Pharmacy Network will reduce DoD spending on pharmaceuticals by more than $100 million per year.
        Sec. 202, Pub. L. 104-4, “Unfunded Mandates Reform Act”
        This rule does not contain a Federal mandate that may result in the expenditure by State, local and tribunal governments, in aggregate, or by the private sector, of $100 million or more (adjusted for inflation) in any one year.
        Public Law 96-354, “Regulatory Flexibility Act” (5 U.S.C. 601)
        The Regulatory Flexibility Act (RFA) requires that each Federal agency prepare and make available for public comment, a regulatory flexibility analysis when the agency issues a regulation which would have a significant impact on a substantial number of small entities. DoD does not anticipate that this regulation will result in changes that would impact small entities, including retail pharmacies, whose reimbursements are not affected by the proposed rule. In addition, drugs newly subject to implementation of Federal Ceiling Prices under the proposed rule represent less than 2% of manufacturers' prescription drug sales. Therefore, this proposed rule is not expected to result in significant impacts on a substantial number of small entities.
        Public Law 96-511, “Paperwork Reduction Act” (44 U.S.C. Chapter 35)
        This proposed rule contains information collection requirements subject to the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3511). This consists of responding to the periodic TMA report of the TRICARE prescription utilization data needed to calculate the refund. This information collection has been approved with OMB Control Number 0720-0032. No person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.
        Executive Order 13132, “Federalism”
        This proposed rule does not have federalism implications, as set forth in Executive Order 13132. This rule does not have substantial direct effects on the States; the relationship between the National Government and the States; or the distribution of power and responsibilities among the various levels of Government.
        Public Comments Invited
        This is a proposed rule. DoD invites public comments on all of its provisions.

          List of Subjects in 32 CFR Part 199
          Claims, Health care, Health insurance, Military personnel, Pharmacy benefits.

        Accordingly, 32 CFR part 199 is proposed to be amended as follows:

          PART 199—[AMENDED]
          1. The authority citation for part 199 continues to read as follows:

            Authority:
            5 U.S.C. 301; 10 U.S.C. chapter 55.

          2. Section 199.21 is amended by adding a new paragraph (q), to read as follows:

            § 199.21.
            Pharmacy Benefits Program.

            (q) Pricing standards for retail pharmacy program.—(1) Statutory requirement.—As required by 10 U.S.C. 1074g(f), with respect to any prescription filled on or after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2008, the TRICARE retail pharmacy program shall be treated as an element of the DoD for purposes of the procurement of drugs by Federal agencies under 38 U.S.C. 8126 to the extent necessary to ensure pharmaceuticals paid for by the DoD that are provided by pharmacies under the program to eligible covered beneficiaries under this section are subject to the pricing standards in such section 8126.
            (2) Manufacturer written agreement. (i) A written agreement by a manufacturer to honor the pricing standards required by 10 U.S.C. 1074g(f) and referred to in paragraph (q)(1) of this section for pharmaceuticals provided through retail network pharmacies shall with respect to a particular covered drug be a condition for:
            (A) Inclusion of that drug on the uniform formulary under this section; and
            (B) Availability of that drug through retail network pharmacies without preauthorization under paragraph (k) of this section.
            (ii) A covered drug not under an agreement under paragraph (q)(2)(i) of this section requires preauthorization under paragraph (k) of this section to be provided through a retail network pharmacy under the Pharmacy Benefits Program. This preauthorization requirement does not apply to other points of service under the Pharmacy Benefits Program.
            (iii) For purposes of this paragraph (q)(2), a covered drug does not include:
            (A) A drug that is not a covered drug under 38 U.S.C. 8126;
            (B) A drug provided under a prescription that is not covered by 10 U.S.C. 1074g(f);
            (C) A drug that is not provided through a retail network pharmacy under this section;
            (D) Any pharmaceutical for which the TRICARE Pharmacy Benefits Program is the second payer under paragraph (m) of this section; and
            (E) Any other exception, consistent with law, established by the Director, TMA.
            (3) Refund procedures. (i) The agreement referred to in paragraph (q)(2) of this section shall include refund procedures to ensure that pharmaceuticals paid for by the DoD that are provided by retail network pharmacies under the pharmacy benefits program are subject to the pricing standards referred to in paragraph (q)(1) of this section.
            (ii) The refund procedures referred to in paragraph (q)(3)(i) of this section shall, to the extent practicable, incorporate common industry practices for implementing pricing agreements between manufacturers and large pharmacy benefit plan sponsors. Such procedures shall provide the manufacturer at least 70 days from the date of the submission of the TRICARE pharmaceutical utilization data needed to calculate the refund before the refund payment is due. The basis of the refund will be the difference between the average non-federal price of the drug sold by the manufacturer to wholesalers, as represented by the most recent annual non-Federal average manufacturing prices (non-FAMP) (reported to the Department of Veterans Affairs (VA)) and the FCP or, in the discretion of the manufacturer, the difference between the FCP and direct commercial contract sales prices specifically attributable to the reported TRICARE paid pharmaceuticals, determined for each applicable NDC listing.
            (iii) A refund due under this paragraph (q) is subject to § 199.11 of this part.
            (4) Remedies. In the case of the failure of a manufacturer of a covered drug to make or honor an agreement under this paragraph (q), the Director, TMA, in addition to other actions referred to in this paragraph (q), may take any other action authorized by law.

            Dated: July 18, 2008.
            Patricia L. Toppings,
            OSD Federal Register Liaison Officer, Department of Defense.

       [FR Doc. E8-17024 Filed 7-24-08; 8:45 am]
      BILLING CODE 5001-06-P