text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Medicare Fair Drug Pricing Act of 
  2015''.
  
  SEC. 2. REQUIREMENT TO DETERMINE LOWER COVERED PART D DRUG PRICES FOR 
                CERTAIN COVERED PART D DRUGS.
  
      (a) In General.--Section 1860D-11(i) of the Social Security Act (42 
  U.S.C. 1395w-111(i)) is amended--
              (1) by striking ``(i) Noninterference.--In'' and inserting 
          the following:
      ``(i) Noninterference.--
              ``(1) In general.--In'';
              (2) by inserting ``subject to paragraph (2),'' after 
          ``part,''; and
              (3) by adding at the end the following new paragraph:
              ``(2) Exception for specified drugs.--
                      ``(A) Requirement.--
                              ``(i) In general.--Notwithstanding 
                          paragraph (1), the part D price for specified 
                          drugs shall be determined in accordance with 
                          the process described in subparagraph (B).
                              ``(ii) Specified drugs.--For purposes of 
                          this paragraph, the term `specified drug' means 
                          a covered part D drug--
                                      ``(I) that is--
                                              ``(aa) a single source drug 
                                          or biological;
                                              ``(bb) not a biological 
                                          product licensed pursuant to an 
                                          application under section 
                                          351(k) of the Public Health 
                                          Service Act; and
                                              ``(cc) not both 
                                          manufactured by more than two 
                                          drug manufacturers and 
                                          manufactured by at least one 
                                          such manufacturer as a generic 
                                          drug; or
                                      ``(II) that--
                                              ``(aa) is selected by the 
                                          Secretary for purposes of this 
                                          paragraph; and
                                              ``(bb) the Secretary 
                                          determines is a covered part D 
                                          drug with respect to which 
                                          there is limited ability for 
                                          PDP sponsors and MA 
                                          organizations to negotiate 
                                          manufacturer rebates, such that 
                                          the Secretary determines that 
                                          the failure to apply this 
                                          paragraph will have a 
                                          significant fiscal impact on 
                                          the program under this title.
                              ``(iii) Part d price defined.--For purposes 
                          of this paragraph, the term `part D price' 
                          means, with respect to a covered part D drug, 
                          the price (including discounts, rebates, and 
                          other price concessions) that may be charged to 
                          PDP sponsors and MA organizations for such drug 
                          for part D eligible individuals who are 
                          enrolled under a prescription drug plan or 
                          under an MA-PD plan.
                              ``(iv) Regulations for identification of 
                          specified drugs.--The Secretary, not later than 
                          one year after the date of the enactment of 
                          this paragraph, shall promulgate regulations 
                          regarding the identification of single source 
                          drugs and biologicals as specified drugs.
                              ``(v) Process to petition that drug is no 
                          longer a specified drug.--The Secretary shall 
                          establish a process under which a manufacturer 
                          for a specified drug may petition the Secretary 
                          for the rescinding of a previous identification 
                          of a drug as a specified drug under clause (ii) 
                          based upon the drug involved no longer being a 
                          specified drug.
                      ``(B) Price determination process.--For purposes of 
                  subparagraph (A), the process described in this 
                  subparagraph, with respect to the part D price for a 
                  specified drug for a plan year, is the following:
                              ``(i) Limited period for negotiation for 
                          first plan year.--
                                      ``(I) In general.--The Secretary 
                                  shall negotiate such price with the 
                                  drug manufacturer involved for a period 
                                  of not more than 90 days beginning on 
                                  the date of identification of the drug 
                                  as a specified drug for such plan year 
                                  by the Secretary.
                                      ``(II) Successful negotiations.--In 
                                  the case that such negotiation with 
                                  respect to such 90-day period results 
                                  in a price that is agreed to by both 
                                  the Secretary and manufacturer, such 
                                  price shall be the maximum part D price 
                                  for such specified drug through the end 
                                  of the plan year beginning after such 
                                  period.
                              ``(ii) Secretary sets price for first plan 
                          year in case of failure to negotiate price.--In 
                          the case that negotiations under clause (i), 
                          with respect to a specified drug, do not result 
                          in a price for such specified drug that is so 
                          agreed to by the Secretary and drug 
                          manufacturer, the Secretary shall determine a 
                          price for such drug based on--
                                      ``(I) the information provided to 
                                  the Secretary by the drug manufacturer 
                                  during the 90-day period described in 
                                  clause (i)(I) regarding costs 
                                  associated with such drug that are 
                                  applicable with respect to such drug 
                                  manufacturer;
                                      ``(II) in the case that payment is 
                                  made for such drug by the Department of 
                                  Veterans Affairs or under title XIX, 
                                  the net priced paid for such drug by 
                                  such Department or under such title, as 
                                  applicable;
                                      ``(III) ensuring affordability of 
                                  such drug, and accessibility to such 
                                  drug, for individuals entitled to 
                                  benefits under part A or enrolled under 
                                  part B; and
                                      ``(IV) such other factors as the 
                                  Secretary determines appropriate.
                          The price determined under this clause shall be 
                          the maximum part D price for such specified 
                          drug through the end of the plan year beginning 
                          after such determination of such price.
                              ``(iii) Price in subsequent plan years.--
                          For each plan year that is subsequent to the 
                          plan year for which a price is determined for a 
                          specified drug under clause (i) or (ii) and in 
                          which, on the first day of such subsequent plan 
                          year, the identification of such drug as a 
                          specified drug still applies, the maximum price 
                          for such drug shall be the maximum part D price 
                          for the previous year determined under clause 
                          (i) or (ii), as applicable, increased by the 
                          percentage increase in the consumer price index 
                          for all urban consumers (all items; U.S. city 
                          average) for the 12-month period ending with 
                          June of the year before such subsequent plan 
                          year.
                              ``(iv) Consultation.--In determining a 
                          price for a specified drug under clause (ii), 
                          the Secretary may consult with the Comptroller 
                          General, the Medicare Payment Advisory 
                          Commission, the Medicaid and CHIP Payment and 
                          Access Commission, or other outside, 
                          independent experts.
                      ``(C) No change in rules for formularies.--
                              ``(i) In general.--Nothing in subparagraph 
                          (A) or (B) shall be construed to authorize the 
                          Secretary to establish or require a particular 
                          formulary.
                              ``(ii) Construction.--Clause (i) shall not 
                          be construed as affecting the Secretary's 
                          authority to ensure appropriate and adequate 
                          access to covered part D drugs under 
                          prescription drug plans and under MA-PD plans, 
                          including compliance of such plans with 
                          formulary requirements under section 1860D-
                          4(b)(3).
                      ``(D) Construction.--Nothing in this paragraph 
                  shall be construed as--
                              ``(i) preventing the sponsor of a 
                          prescription drug plan, or an organization 
                          offering an MA-PD plan, from obtaining a 
                          discount or reduction of the price for a 
                          covered part D drug described in subparagraph 
                          (A) below the price negotiated under such 
                          subparagraph or determined under subparagraph 
                          (B); or
                              ``(ii) permitting the Secretary to make 
                          proprietary data available to the public.
                      ``(E) Definitions.--In this paragraph:
                              ``(i) Drug manufacturer.--The term `drug 
                          manufacturer' has the meaning given the term 
                          `manufacturer' in section 1860D-14A(g)(5).
                              ``(ii) Single source drug or biological.--
                          The term `single source drug or biological' has 
                          the meaning given such term in section 
                          1847A(c)(6)(D).''.
      (b) Requiring Participation in Negotiation Process as Condition of 
  Part D Drug Coverage.--Section 1860D-14A(b) of the Social Security Act 
  (42 U.S.C. 1395w-114a(b)) is amended by adding at the end the following 
  new paragraph:
              ``(5) Participation in negotiation process.--Each agreement 
          under this subsection shall include, with respect to plans 
          years beginning with plan year 2017, an agreement by the 
          manufacturer, with respect to each specified drug of such 
          manufacturer under section 1860d-11(i)(2), to participate in 
          the negotiation process under such section for such drug, 
          including accepting the price resulting from the negotiation 
          (or, in the case that such negotiation does not result in a 
          price for such drug that is agreed to by the Secretary and the 
          manufacturer, the price resulting from the application of 
          subparagraph (B)(ii) of such section) as the maximum price for 
          such drug for the period provided under such section.''.
  
  SEC. 3. STUDY AND REPORT.
  
      (a) Study.--The Secretary of Health and Human Services shall 
  conduct a study examining--
              (1) the impact of the amendments made by section 2 on--
                      (A) the cost of single source drugs and biologicals 
                  (as defined in section 1847A(c)(6)(D) of the Social 
                  Security Act (42 U.S.C. 1395w-3a(c)(6)(D))) for which 
                  payment is made under part B of title XVIII of such 
                  Act; and
                      (B) the accessibility of such drugs and biologicals 
                  for individuals entitled to benefits under part A of 
                  such title or enrolled under part B of such title; and
              (2) options that would permit or require the Secretary to 
          create and implement, not later than one year after the date of 
          the report described in subsection (b)--
                      (A) a method to apply to such single source drugs 
                  and biologicals for which the Secretary determines 
                  appropriate--
                              (i) an authority similar to the authority 
                          granted to the Secretary under subparagraph (A) 
                          of section 1860D-11(i)(2) of such Act (relating 
                          to negotiating with drug manufacturers the part 
                          D prices for certain specified drugs); and
                              (ii) a negotiation process similar to the 
                          process under subparagraph (B) of such section; 
                          and
                      (B) a method, such as a rebate program, to 
                  incorporate the rate negotiated for such drugs and 
                  biologicals pursuant to the authority described in 
                  subparagraph (A) into payments for such drugs and 
                  biologicals under part B of such Act.
      (b) Report.--Not later than one year after the date of the 
  enactment of this Act, the Secretary of Health and Human Services shall 
  submit a report to Congress on the results of the study conducted under 
  subsection (a). Such report shall include recommendations regarding the 
  options examined pursuant to paragraph (2) of such subsection.
target: Medicare Fair Drug Pricing Act of 2015 This bill amends title XVIII (Medicare) of the Social Security Act to require the Centers for Medicare &amp; Medicaid Services (CMS) to negotiate with drug manufacturers in determining the price that may be charged for prescription drugs under the Medicare prescription drug benefit. Under current law, CMS may not interfere with negotiations between drug manufacturers and prescription drug plan (PDP) sponsors. The bill creates an exception to this prohibition with respect to specified drugs that: (1) are single-source or biological, (2) are not both manufactured by more than two drug manufacturers&nbsp;and manufactured by at least one manufacturer as a generic drug, and (3) meet other specified requirements. CMS must promulgate regulations regarding the identification of such drugs. With respect to&nbsp;these drugs, CMS shall negotiate the price that may be charged to PDP sponsors and Medicare Advantage (MA) organizations for Medicare and MA enrollees. The bill establishes processes for negotiation and price determination in the initial plan year and subsequent plan years. A manufacturer must participate in the negotiation process as a condition of coverage under the Medicare prescription drug benefit.
feat_title: Medicare Fair Drug Pricing Act of 2015